$20 million missing from 2018 budget-parliamentary report

Report points fingers at Finance Minister Abdirahman Beileh over violation of budget regulations and misappropriation of funds.

By T. Roble

SUMMARY:

  • $20 million donated by Saudi Arabia in 2017 FY which Treasury said it would carry forward to 2018 FY not reflected in 2018 budget
  • Government officials withdrew $2.5 million from Contingency Fund to offset personal loans, hotel bills, overseas trips and purchase bullet proof cars
  • Government revenue dips by 14%
  • Multilateral and Bilateral donors safe for Turkey fail to honour pledges

The government cannot account for $20 million which was supposedly carried forward from the 2017 financial year, a new parliamentary report has revealed adding revenue mobilization had dipped by 14%  in the first eight months of 2018 casting doubts on much publicized revenue uptick by the government.

The Budget and Planning Committee report which puts Finance Minister Abdirahman Beileh on the spot over violations of the law and parliamentary resolutions on the execution of the 2018 budget also exposes instances where some budgetary allocations were used to offset personal loans and hotel bills.

“The Federal Government received $50 million from the Government of Saudi Arabia in 2017 and spent $30 million in that financial year,” the report says. “While the Ministry (of Finance) reported $20 million would be carried forward to the 2018 financial year, that amount is not reflected in the government’s revenue between January and August 2018. It (Treasury) seems not to have transmitted that amount to the 2018 budget,” the report says.

The Ali Abdi Osman led committee accuses Beileh of violation of the budget regulations citing instances where government ministries under-reported certain expenditure items in addition to over-billings. For example, the government drew $2.5 million dollars from the contingency fund for uses other than that set in budget such as overseas trips, offsetting personal loans and purchase of bullet proof cars. Parliament had approved $1 million contingency fund but the government withdrew $2.5 million between January and August 2018 for uses other than the intended purpose.

REVENUE DECREASE

On revenue, the committee notes that in the reporting period, the government missed the revenue thresholds collecting $157 million against projected $183 million translating to a 14 percentage points drop. This, the committee said is despite the government’s claims that it was recording an upward trajectory in revenue mobilization. Indeed the World Bank and IMF applauded the government when it announced it had collected $42 million in the first quarter of 2018.

To bridge the deficit, the report says, the government must mobilise $118 million in the last quarter of 2018 which is an equivalent of 43% of the budget.

Notable areas recording major revenue margins are khat tax which generated $8.8 million against expected $16 million, Mogadishu port fees-$7.3 million against budgeted $13 million and sales tax from the port which registered a deficit of $5.1 million against expected $22 million.

DONOR FATIGUE

But the budget seems to have suffered a major blow from expected donor support. Bilateral and multilateral support took a nosedive with the World Bank’s Recurrent Cost Fund covering salaries recording a paltry $7.9 million against a targeted $22.82 million. Part of the RCF pays salaries for government employees who are outside the civil service payroll.

Another World Bank support area, Capacity Injection Programme which helps to strengthen the staffing and institutional capacity of selected line ministries and central agencies to perform core government functions recorded minimal budget injection with only $1.9 million out of $7.6 million released between January and August 2018.

Saudi Arabia held back its $30 million pledge within the reporting period starving the government of much needed cash while Qatar donated $3.4 million against an expected $10 million budget support. Only Turkey fulfilled its promise injecting $20 million to the national purse.

The Ministry of Finance has deviated from the Appropriations Act 2018 and must therefore explain to the House the budgetary shortcomings and failure to implement it according to the law, the Committee said.

Also, the Committee has put to tasked Beileh to explain which law he used to collect taxes from remittance companies and banks and deposit the funds in an account within the Ministry of Finance.

 

 

 

 

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