By Abdi Ali
Thursday May 26, 2022
Why Somalia needs a central “Office for Financial and
Economic Reform” that is accountable for delivering change within government and
can push through reforms at speed.
Within the last four years, how much did
the Somali government spend on consultants, advising on reform programmes? How
many financial and economic reform programmes were successfully delivered in
the last four years, and what was their impact on Somalia’s economy – in terms
of job creation, financial management or economic development? More importantly,
who was ultimately responsible for the implementation of the government’s
reform agenda?
We know the answer to the first question,
thanks to Somalia’s budget. No one would be able to give the answers to the
second and third questions. One thing is certain though: there has never been anyone
within government that was ultimately accountable for the government’s reform
agenda. Indeed, if that were the case, Somalia would not be where it is today.
Over the last four years, the Somali
government spent a staggering over $100 million on “Consultancy and
Professional Fees”, all of which relating to advisory services. Over half of
this sum was signed off by the Ministry of Finance (MoF) alone, ostensibly to
be used for the various economic and financial reform projects the MoF was coordinating
on behalf of International Development Institutions (IDIs).
With these colossal sums of money being spent
on expensive consultants, we might well ask whether there is anything to show
for it. For proof on whether the $100 million was well-spent or not, just look
at the implementation of two of Somalia’s most important, and longest running, reform
milestones – currency reform and public financial management (PFM). Both
reforms have either floundered over the years or never took off the ground, wasting
millions of dollars in the process. Somalia still does not have a viable
national currency and Ministers use their personal Gmail accounts to conduct
government business. PFM is currently listed as a HIPC Completion Point Trigger
milestone for the debt relief, nearly a decade after the initiative first
started. No one knows when, if indeed ever, Somalia will have a viable national
currency.
Where things are going wrong
The successful implementation of financial
and economic initiatives, that are critical for Somalia’s development, are hampered
by two things: (i) the lack of Somali ownership of the reforms, and (ii) the
lack of a delivery body within the government that can act a centre of
expertise and is ultimately accountable for successful delivery of reform
programmes.
Start with the first problem. From the
start, the Somali government has no input into how the overall reform programme
should be delivered and what the intended outcomes should be. All of this is
largely left to IDIs to articulate – to be drafted by someone sitting at a
distance from the realities on the ground. There is also very little
understanding of how different reform programmes interact, impacting multiple
functions within government. This means there is no identification beforehand of
the key activities needed for the programme’s success or assessment of the
realism of what is being proposed. Without a coherent grasp of what needs to be
delivered, how long it would take and why, it often becomes impossible to measure
success, including whether agreed outcomes pass value-for-money tests.
The second issue points to the lack of delivery
body within the government that is dedicated to providing robust governance and
assurance over the quality of key reform projects, and seeing them through to conclusion.
As reforms take a long time to deliver and cut across government departments,
there is an obvious execution capability risk; various interdependencies emerge
and political priorities get in the way, to name a few. While so, given this
obvious execution risk, there is no support available to government Ministries
and agencies that are implementing reforms and no systematic way of dealing
with foreseeable risks and issues. A Minister whose department is supposed to implement
reforms would be looking over their shoulder, worried about the political
revolving door, rather than focusing on the job at hand. Risk of corruption
means project funding becomes a magnet and an all-too-consuming priority for
the Minister. What really matters – delivering the right outcomes for the
country – is pushed aside.
Related to this issue is how to support
organisational readiness and change with Somali skills. Most of the reform
projects come in with an IDI’s add-on of expensive consultants, explained away
as the best way to fill in important skills gaps. However, there is often no
Somali strategy that outlines how best to develop local skills to help deliver
the transformation needed – something that can be done at a fraction of the
cost of external consultants. When these consultants leave, important knowledge
is lost and succession planning becomes almost impossible.
Office for Financial and Economic
Reform
An Office for Financial and Economic Reform
(OFeR) would (i) create an effective and accountable central stewardship that
provides clear leadership and oversight, ensuring Somalis own and are
accountable for reform programmes; (ii) become a centre of expertise in the development
and delivery of critical government priority reform items; and (iii) review and
challenge whether reforms achieve desired outcomes for Somalia.
OFeR can only be successful if it has
relevant political sponsorship. The office needs to be at the centre of the new
government’s transformation agenda, and be led by a credible expert who brings
expertise and leadership to the role. OFeR’s role would be to set out
objectives, budgets and delivery timelines and priorities; develop workstreams
aligned to core financial and economic objectives; and be accountable for
pushing through reforms across the machinery of government.
The leadership of OFeR needs to have a dotted
line to the president through a seat at the National Economic Council, as well
as a non-ministerial seat at the cabinet. This is to ensure it can pull the
right political levers when roadblocks emerge. The office would need to have a
clear structure, roles and responsibilities which are endorsed by the political
sponsors. As the transparency for using
Somali money would also be key, OFeR would be able to publish programme
spending plans; progress updates on reforms; clear workstreams aligned to
specific reform initiatives; metrics on how individual government departments are
doing in implementing reforms; coordinate audit reviews; assess project costs,
risks and benefits.
The OFeR would also reduce implementation
risks considerably by supporting the training and development of Somali
resources. This will help with the transitioning of reform programmes
seamlessly from projects into mature business-as-usual processes, using local expertise.
Finally, OFeR would make success and
failure more visible and transparent through timely information, allowing the
political sponsors to hold others to account, supporting effective decision-making.
It would mean there is delivery accountability across the reform value-chain
through which ministers and other civil servants can be held responsible should
they fail to deliver on outcomes.
When $100 million is wasted, the cost falls
back on Somalis. It means $100 million less for investment in hospitals,
schools, security and indeed Somalia’s future. It is galling indeed.
The new government has an opportunity. Delivering
the right outcomes should be the priority.
Abdi Ali
[email protected]