OLOL Posted August 16, 2005 August 15, 2005 First National Emergency Budget by the Ministry of Finance Background On 15 October 2002, with the support and participation of the International Community, the Intergovernmental Authority on Development (IGAD) sponsored Somali National Reconciliation Conference. The aim of the Conference held in Nairobi, Kenya was the creation of a broad-based all-inclusive government for Somalia that preserves the sovereignty, territorial integrity and unity of the country. Therefore, The formation of the Transitional Federal Government in accordance with the Transitional Federal Charter (TFC) signifies the end of the void created by the collapse of the Somali State beginning 1991 and return of civil order, rule of law and the provision of government services to the Somali Citizens. The Somali conflict that ravaged in varying intensity throughout Somalia during the last 14 years not only caused extensive and arbitrary loss of life and personal injury to innocents as well as physical destructions of properties but also fundamentally ripped apart the social fabric of the nation. In addition to deaths and destruction, the conflict resulted in the internal displacement of more than 370,000 people from their homes and places. Other 350,000 people are refugees in neighboring countries, while 1,000,000 are living in Diaspora. Somalia has the fifth lowest human development indicators in the world and it would therefore be appropriate to say that most Somalis spend most of their time trying to stay alive and keep their families alive . Introduction True, the long running Nairobi Somali National Peace and Reconciliation Conference has ushered a national government with the assistance of the international community but this government inherits a devastated country. Moreover, it has no basic facilities and resources to discharge its state duties and responsibilities. Nonetheless, it’s expected to function and show leadership, restore stability and order, re-establish the government institutions and structures, put in place appropriate legal and regulatory frameworks and mobilize resources to rebuild the shattered economy and social infrastructures. To meet some of the people’s high expectations, the reconstruction of the key sectors and the necessary basic institutions assume utmost priority. Budget Scope The Somali National Peace and Reconciliation Conference has approved with the knowledge of the international community a two-year program of Somalia’s Economic Recovery, Institutional Building and Resource Mobilization. Notwithstanding this, however, the Ministry of Finance on the consent of the Council of Ministers presents the financial requirement of TFG for the first-year, as budgets must be approved by the Parliament on yearly basis. Moreover, this exercise will afford the government with the opportunity to understand and more accurately determine its future successive budgetary requirements. In preparing this proposed financial requirement of the TFG for the first year and its physical relocation inside Somalia, the strategy was to identify the minimum needs for establishing the basic institutions and socio- economic infrastructure to adequately run the country. The attached estimates are expected to cover the initial needs of the TFG. Obviously, for the first year Somalia will entirely depend on the support and assistances of the international community. Effective mechanisms in utilizing this assistance will be put in place in a transparent and accountable manner. Such dependence will be reduced gradually to relieve the burden of international community, and for the purpose, the TFG will prepare revenue generation plan, strategies and procedures for collection of taxes, besides taping other sources of revenue. Qualified staff will be recruited and operational premises, such as offices at the airports; ports and boundary check points will be reactivated. Every effort will be made to generate sufficient resources locally in order to reduce the country’s dependence on external aid for budget support. Concept on developing the Budget Needless to say the requirements are immense and varied and the challenges, being posed by the fact that the government is at ground zero and everything must be started from scratch, are indeed enormous. Given the absence of reliable baseline data of the basic socio-economic statistics and information as well as the total inexistence of domestic revenue the first emergency budget will not provide macroeconomic information and analysis for projection. Because of this only reasonable guess-estimates are possible. Consequently, the figures presented hereunder are to be considered just as tentative and to the bare minimum. All areas of activity require studies that will take some time, and the Government, however, needs to start functioning and make a difference for the long-suffering people. It must initiate activities in all areas including, but not excluding, socio-economic, reconstitution of the state institutions and administrative structures, peace and reconciliation, restoration of law and order, legal and regulatory frameworks, capacity building, rehabilitation of the physical structures and social services. Most plans of action will be constantly monitored, adjusted and fine-tuned during the implementation stages. Constant monitoring and evaluation are key elements during the process of execution. As prescribed in the Transitional Federal Charter (TFC), the government’s responsibilities include the preparation of a budget to be submitted to the Parliament after the approval of the Council of Ministers. Therefore, TFG has decided to prepare its first budget called “First Emergency Budget 2005â€. The normal fiscal year is 1st January through 31st December each year, but the current budget will cover 1st May 2005 to 30th April 2006. The Budget allocation will be paid in local currency based on the market exchange rate at the time of payments. One of the main aims of the budget is to adopt good governance policies and practices at the early stages of the government’s activities. Therefore, the vision for the formulation of the budget is to ensure fiscal discipline, accountability, transparency, performance measurement, respect for the rule of law, sound financial management and accounting principles, and to underline the highest priorities that must receive available resources. Due consideration is also given to the inherent financial constraints obtaining at this crucial stage of the country’s history. The proposed program of action in the budget primarily concerns the revival of the socio-economic services, return to normalcy, restoration of law and order and the establishment of a properly functioning administrative apparatus. However, the underlying purpose of all these is to rebuild the Somali State, and to attain this objective, peace and security represent pre-requisite conditions. Consequently, some of the most plausible, logical and immediate tasks to be performed will include: 1. To demobilize and dissolve all organized and non-organized armed militia, regional and state forces not established in accordance with the Transitional Federal Charter, and to rehabilitate and reintegrate all the militia. 2. To form and train new forces prescribed in article 65 of the TFC to faithfully abide and preserve the Charter, the laws of the land and unity of the country. 3. To raise revenue in accordance with law to pay for the functioning of the state. 4. To create and train an administration capable of raising revenue and providing services to citizens and other inhabitants of the country. Article 71 (5) states that “ the Transitional Federal Government shall devote the necessary efforts to restore peace and security, free movement of people, goods and services, disarmament and collection of illegal weapons in the hands of the public for safekeeping, rehabilitation and reintegration of all militia in co-operation with regional administrations, traditional elders and members of the international communityâ€. Paragraph 8 of the same article states that “ Effective from the conclusion of the Somali National Reconciliation Conference held in Kenya, all militia organizations, armed groups and factions in the territory of the Somali Republic shall cease to exist and shall turn in their weapons to the Transitional Federal Government.†The Government is determined to carry out those duties in line with the spirit of the Transitional Federal Charter. Objectives of the Budget The main objectives of the proposed budget are: • Strengthening national reconciliation and peace building, democracy and human rights, gender equality and social justice, promotion of dialogue and peace negotiations. • There shall be no use of force against any group or regions that claim certain status and enjoy relative stability. But the national territorial integrity and sovereignty shall be inviolable and indivisible. • Building of Public Institutions or public administration with appropriate legal and regulatory frameworks. • Security, Disarmaments and demobilization. Reintegration of the militias coupled with job creation initiatives. • Setting up independent Justice system capable of administering the law fairly and justly. • Strict adherence to and promotion of the lofty principles of good governance. • Revival of the basic social services • Poverty reduction. • Undertaking of National registration, and demographic and economic data and statistics collection • Rehabilitation of basic infrastructures for immediate use. • Generating government revenue. • Promoting and supporting private sector in the production and delivery of services in the new free market economy. • Planning and promotion of reliable Power system and safe drinking water. • Soliciting International community’s diplomatic and financial support. Organizational structure of the State In conformity with the Charter and the Constitution of 1960 the State is organized and structured as follows: A. The Parliament comprising 275 members with officers (a Speaker and two deputies, a whip and two deputies, Three Secretaries and 10 Committees), plus ……………staff. B. The Presidency ( the President, one Chief Cabinet, …….. Advisors, …….. Staff. ) C. The Council of Ministers composed of the Prime Minister, 42 Ministers including three Deputy Prime Ministers, 11 Ministers of State, and 47 Assistant Ministers. D. The Judiciary composed of the Supreme Court, Appeals Court, Regional and District Courts. E. The bureaucracy or public administration. Each Institution will be allowed to employ a certain number of staff through the Civil Service Commission in accordance with the civil service law, regulations and procedures put in place before employment. F. Auxiliary organs: Governor of Central Bank, Accountant-General, Auditor-General, and Attorney General. G. National Commissions. H. Security Forces: Police 11,000, Army 12,000, Custodial Corps 500. I. 18 regions and 92 districts. The list of regions and districts is enclosed. The role of the international donor community The TFG will be entrusted with the execution of the budget provisions through accountability and transparency procedures. However, the budget implementation will depend on the availability of resources since all planned expenditures are subject to funding by donors. In the preparation of the budget, the TFG firmly believes that the International community is willing to support it in the fulfillment of its constitutional duties and responsibilities in order to gain legitimacy and the necessary acceptance of both the Somalis and the international donor community. It must be clear that lack of funding of the first emergency budget will undermine the successful functioning, legitimacy and credibility of the TFG as well as the declared willingness of the international community in restoring a viable Somali national Government. Therefore, it is important that the international community’s response to funding the budget is quick enough to consolidate the success so far achieved in the Somali National reconciliation Conference. The TFG is also fully conscious of the fact that the donor community has all the reasons to make sure the proper use of donated funds and, therefore, requests the international community to provide the necessary technical assistance to support the capacity building of TFI and the adherence to a sound management of the financial resources made available to TFG. Bloated civil service will be avoided by all means, and no payroll payments or other allocations can take place unless certain conditions are fulfilled. In the case of payroll, all staff must have employment decree certified by the General auditor and deposited with the General accountant and other concerned Government Institutions. Similarly, other expenditures shall have all required documentation and proper authorization issued by the legitimate organs concerned before budget execution. Government expenditure will be constantly contained within the limits of available funds earmarked in the approved budget and borrowing avoided. No one shall expend funds not provided for in the budget or for which financial resources are not available. The Central Bank is established for the purpose of supporting the government in the proper management of national financial resources as well as the establishment of financial and monetary system. Thus, a functioning Bank is necessary condition for ensuring proper management of public resources and attracting international support and investment. An efficient payment system based on the current electronic technologies facilitates the immediate revival and growth of our economy. This requires a credible Central Bank linked to the the international financial institutions, especially the International Monetary Fund and the World Bank. The capitalization of the Bank coupled with technical assistance will speed up the establishment of modern Central Bank, national currency reform and the establishment of financial system that supports the economy. Preventing and combating Clanism and Corruption The government is fully conscious of the true socio-political environment under which it must function. The current landscape is characterized by uncertainties, fear, diffidence and people’s lost faith in government institutions due to past experiences of gross mismanagement and corrupted practices of clanism and blunders of public resources. Clanism, which is synonymous with corruption, is characterized by deceit, nepotism, cronyism, hypocrisy and immorality. To prevent clanism and corruption the government will set up at early stages the necessary legal instruments and mechanisms. Especial attention will be given to the areas considered to be of high-risk for corruption such as recruitment of civil servants, procurement and public tenders, customs, concessions and disposal of state assets. Government officials, to gain the trust and respect of the people, must show honesty and managerial rectitude. The government will be guided by high standards of morality, ethics, and its actions will be governed by the rule of law. It will be just, fair, transparent, accountable and corruption free to the fullest extent possible. Based on this concept, procurement and tenders will be under strict control and continuous scrutiny of the government because of the inherent political implications and social sensitivities. For this purpose, the Board of Tenders will be re-established without delay. Similarly, personnel matters will be justly addressed and diligently handled. Before permanently employed, all prospective state employees shall undergo through the processes of the Civil Service Laws and Regulations administered by the Civil Service Commission, which will be established soonest. The reason is that these two questions are highly sensitive and potentially explosive. As we all know, injustice and mismanagement of these areas were the main culprits for the fall of the military regime and, as a consequence, the demise of the Somali State. Conclusion On behalf of the Somali People and Government, I would like to express our gratitude to the International Community for their support to establish a functional government in Somalia after 14 years. I also wish to appeal to them to secure a faster funding that will enable the Government to relocate in Somalia and start functioning. On its part, the Transitional Government will ensure that appropriated resources are properly and efficiently used to agreed uses. In this context, the Government pledges strong political commitment to good governance, sound economic management and zero-tolerance to corruption. Thank You. Signed by Dr. Salim Alio Ibro Deputy Prime Minster and Minister of Finance Quote Share this post Link to post Share on other sites
