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Good financial governance ‘crucial to Somali prosperity’

Public Finance International
Monday, June 24, 2013
By Vivienne Russell

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Improved public financial management is a key feature of Somalia’s plan for growth and stability, according to the country’s president Hassan Sheikh Mohamud.

In a speech, Mohamud said good governance came behind only security as his priority for the nation.
While ‘considerable progress’ had been made on improving security and rebuilding Somalia’s state institutions, Mohamud said he was under no illusion that significant challenges remain. ‘This is a job in progress but with much still to do,’ he said.

On financial capacity, the president said: ‘We are building strong public financial management systems, in particular increasing transparency and strengthening our controls over revenue collection, allocation of budgets, and expenditure of public money.’

Mohamud said debt clearance was a ‘crucial next step’ and was needed to allow Somalia to accelerate its governance and institution-building initiatives.

He said: ‘We appreciate the early work undertaken by the World Bank, African Development Bank and the International Monetary Fund to re-engage with Somalia and look forward to their further collaboration as we demonstrate progress on our financial management reform plan.

‘My vision is for a federal Somalia at peace with itself and its neighbours and which poses no threat to the world; with a resurgent economy, thriving business ventures and sustainable employment so that families are provided for.’

An IMF staff mission has been meeting Somali authorities in Nairobi, Kenya, over the past week following its formal recognition of the Federal Government of Somalia last April.

The IMF said in a statement that it was ready to provide technical assistance to meet Somalia’s ‘vast needs’.
‘Technical assistance would focus on supporting the finance ministry and the central bank to manage budget functions, to license and supervise commercial banks, and oversee basic monetary and foreign exchange transactions.

‘IMF staff will also assist the authorities with establishing systems to collect and process vital economic data in the areas of national accounts and price statistics, money and banking, public finance, and the balance of payments.’

The IMF said that Somalia was one of the poorest countries in the world, with a history of internal conflicts, but it had now found ‘an active resurgence of the private sector in the services industry, namely in the communications, construction, and money transfer sectors’.

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