File Photo Somali Times. Somalia corrupt president Hasan Sheikh
By MP Dr Abdillahi Hashi Abib
Recent claims by the Minister of Finance regarding a 30% increase in internal revenue under his leadership have raised serious concerns about fiscal transparency, accountability, and the overall financial health of Somalia. These statements, juxtaposed against official financial records, suggest discrepancies that require immediate scrutiny.
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A letter from the Minister of Finance dated January 16, 2025 (Ref: MOF/OM/0005/2025) states that the Treasury Single Account (TSA) at the Central Bank of Somalia (CBS) held a balance of zero at the start of the budget year on January 1, 2025. However, the minister is simultaneously requesting a $328,160 loan from CBS reserve funds – which are strictly designated for fiscal stability under the Somalia Debt Relief Program – to cover the President’s travel expenses.
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This request directly violates the conditional agreements with the World Bank and the International Monetary Fund (IMF), which prohibit the use of these reserve funds for budget deficits.
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The Minister of Finance must provide a clear and transparent explanation of the following:
1. Where is the 30% revenue increase?
o. If internal revenue has truly increased by 30% compared to 2024, why does the TSA show a zero balance at the start of 2025?
o. If taxpayers’ money has been collected, why is there a need to borrow for basic government expenditures?
2. What happened to the 2025 budget of $1 billion?
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o. In 2024, the Minister presented a $1 billion expenditure budget to Parliament for approval. If this budget was approved, why are government operations dependent on emergency borrowing from CBS reserves?
o. Was the Parliament misled regarding the availability of funds and revenue projections?
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3. How are salaries being paid?
o. If the government is struggling to find $326,800, how has it been paying the last two months of salaries for civil servants, security forces, and government officials?
Interviews with five whistle-blowers from the Central Bank of Somalia (CBS) indicate that, for the past eight to nine months, the Minister of Finance has been illegally borrowing from the $100 million CBS Reserve Fund to pay government salaries.
o. These funds are legally required to be repaid within 90 days, yet no repayments have been made.
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o. The Governor of CBS is reportedly concerned about the exposure of these transactions, keeping all related request letters in a secure safe in his office.
o. These borrowing directives allegedly come from both the President and the Prime Minister, raising serious governance and accountability concerns.
If these claims are substantiated, they reveal a pattern of financial mismanagement, misuse of critical reserves, and a high risk of fiscal insolvency.
The government is on the verge of financial collapse due to:
1. Diversion of Internal Revenue
o Significant portions of revenue are being channelled into the private networks of high-ranking officials rather than deposited into the TSA.
o The inner circle of Villa Somalia appears to be controlling key revenue streams, exacerbating budget shortfalls.
2. Dwindling CBS Reserve Funds
o If the CBS Reserve Fund continues to be used unsustainably, the remaining $100 million will soon be depleted.
o. With no repayment plans in place, CBS is at risk of insolvency, jeopardizing Somalia’s macroeconomic stability.
3. Risk of Civil Service and Security Force Salary Delays
o. The looming depletion of funds will result in delays or complete stoppages of salary payments for soldiers, police officers, intelligence personnel (NISA), and civil servants.
o. This will lead to mass discontent and potential destabilization, directly impacting national security.
The mismanagement of Somalia’s finances is further compounded by the incompetence of key financial officials:
o. The Minister of Finance lacks educational and professional qualifications in finance and economics (reportedly possessing only a high school certificate).
o. The Governor of CBS also lacks the expertise necessary to oversee complex fiscal policies, leading to reckless financial decisions.
o. Their inability to implement sound fiscal management has left the economy vulnerable to debt crises, liquidity shortages, and donor withdrawal.
The President’s continued support for the Minister of Finance and the Governor of CBS suggests a deliberate strategy to enable financial misconduct. These officials are allegedly prioritizing personal enrichment for the President, his family, and the ruling elite over national economic stability.
The World Bank and IMF must immediately investigate these violations of Somalia’s debt relief conditions and take swift action to:
o. Halt further misuse of CBS Reserve Funds
o. Enforce financial transparency and accountability
o. Ensure compliance with debt relief agreements
Failure to act could result in Somalia’s economic collapse, undoing 20 years of international investment in fiscal stability and governance reforms.
The Somali government is in a state of financial emergency. Without urgent intervention, the country risks:
o. Total depletion of CBS reserves
o. Inability to pay government employees
o. National instability and economic failure
The Somali people deserve full transparency and accountability regarding the use of public funds. It is time for international financial institutions, oversight bodies, and Parliament to demand answers and take corrective action before it is too late.
Dr. Abdillahi Hashi Abib
Member of Foreign Affairs Committee
Federal Republic of Somalia the House of People