Somaliland Budget 2018: another Missed Opportunity

[Deeq A.]

 

Before I look at the budget in detail, I must say a word or two about the definition of budget. Budget is a financial plan that articulates the objectives and goals of a government for a certain period of time usually a year.

In other words, it is the government’s economic strategy for that period. But there are occasions when planning, instead of helpful, becomes harmful and sinful. According to Wikipedia “government budget is a government document presenting the government’s proposed revenues and spending for a financial year that is often passed by the legislature, approved by the chief executive or the president and presented by the Finance Minister to the nation.

On 31st March 2018, the Somaliland Minister of Finance presented long-delayed 2018 National budget to House of Representatives,  in this article using budget data from the 2018 Financial Year, I will make a number of analysis regarding the budget source of revenues, allocations, mismatches, and budget priorities. This will allow us to understand how the 2018 Government Budget allocations differ from the National Development Plan II and realities on the ground.

Somaliland Budget 2018 revenue is 156,857,142.9 USD,   going forward, the picture is rosy. A Government which allocates close to one-third of its income to security 31.24% and also neglects production sectors is a bad image. It is a government, which never wants to turn out to be a fully and effective working nation.

The 2018 Budget which has been approved by House of Representatives in April has major faults. Even though the country is reeling from various issues/complication which are not limited but included: long electioneering year, recurrent droughts, regional instability, and Skye rocketing inflation but with these all-important issues in our calendar, the budget hardly has any meaningful or evocative relation or correlation with current realities on the ground or the so-called National Development Plan.

This budget shows clear gaps of not only tax collection at large but also the large discrepancy of income lines, even though it was expected the dividend of Berbera port 2017 and 2018, as well as 10% income tax for 2017 and 2018 years, will be shown; that expectation now seems as remote as ever.   The overall income contains $156,857,142   Customs account largest amount 67.6% while Inland Revenue contributes only 16.1% and the rest contain 16.3%.

Nevertheless, building the capacity of finance ministry will enable to increase the revenue collection without increasing the exchange rate and tariffs because our GDP has been estimated 1.4 billion in 2012 adding only 5% each year will put us on 1.87 billion; developing countries on average tax 15 to 20% of their GDP which can make our revenue to tilt approximately 300 to 400 million dollars.

Telecommunication and Financial sectors seem to the least under taxed and have limited contribution of overall income despite handling at least Billion dollar.
The current budget has generously allocated the presidency more than its share. The Presidency which includes: Presidential guard, office of the President and the Vice has more budget than; 11 paramount Ministries and four magnificent institutions which includes: Ministry of Justice 0.4%, National Planning 0.7%, Commerce and Industry 0.9%, Energy & Minerals 0.4%, Agriculture 0.8%, Sports 0.7%, Environment 0.8%, Water 0.9%, Investment 0.3%, Labor and Social Affairs 0.6%, Religious Affairs 0.3%, Auditor General 0.7%, Civil Service Commission 0.6%, Attorney General 0.4% and the Tender Board Committee 0.1%.

Presidential guard has been lavishly allocated $2, 271,584 while the entire Intelligence community has been billed merely $1,230,403 this is not only shocking and ill-advised but counter productive and outrageous!

Despite the close to 160 million dollar budget, Education and Health has been ear marked only $20,085,161 which is little more than 20 million dollars, or in other words, it is 12.8 percent which is roughly 5 dollars per citizen per annum

Apparently, the government prefers propaganda than the fundamental bona fide issues related to livelihood and survival of the nation. Take, for instance, Ministry of Information has been allocated the gigantic amount of $3,893,348 while the neglected Foreign Ministry which couples our diplomatic offices abroad, the cost of lobby groups that greatly help us and our miss-treated recognition has been allocated less than 3 million dollars (2,962,262) isn’t that astonishing. To make, matters worse, the nformation Ministry has more budget than the combined Ministry of Agriculture andLivestock and Fishery.

In other words, the allocation of huge resources for a non-productive Information Ministry while at same time, abandoning crucial productive Ministries shows the mismatch of plans and budgets. It is unambiguous that there is not an only little consultation for the budget crafting plenary meetings but also little relation of budgets and the much-taunted National Development II. Frankly speaking we have upside down priorities!

 

The price of stable diets increased dramatically, and the government loathes to attempt to take a remedial action start a fresh plans which are realistic, attainable, reliable, consistent and sustainable economically to add on that, there has been tremendous economic calamity, the taxation was on the rise, this year alone, official exchange rate has been increased 40% which will likely make life harder to the poor.

Any, thing I admired? Yes, the production of tree planting, construction of subsurface dams and earth Dams, prevention of erosion, Rig drillings and funding the printing of school text books which will be expected to be freely distributed pupils are studying government-managed school’s country wide.

Finally, Somaliland budget has not attracted the attention of, Academia, Civil Society, Opposition Parties, and Media and there was no meaningful debate at parliament floor. That is the price we are paying profoundly. It not astonishing to miss chance but clearly this is another missed opportunity which will have an spillover effect for the years to come.

Yassin Abdillahi ahmed

Yassin_abdillahi@hotmail.com

4476758