Somali Prime Minister Hassan Khaire has challenged donors to channel their support to Somalia through the federal government noting the indirect financing is temporary and does not help build the legitimacy of the government.
Speaking in France in the ongoing Paris Peace Forum, Khaire chided donor partners for what he suggested as little investment in Somalia with virtually all of it going through non-state actors.
“Any assistance that’s given to any nation that doesn’t provide legitimacy to the government, it will never be sufficient and it’s going to be temporary,” the PM said in a public forum.
Noting that there was still little investments in Somalia by donor partners in realizing Sustainable Development Goals (SDGs), the PM called for new approaches to support poor countries and those emerging from conflict like Somalia.
According to the Aid Flows in Somalia report released by the Ministry of Finance in May 2019, Somalia received $4 billion in official development assistance (ODA) in 2017 and 2018. This was a 57% increase in total ODA compare with levels seen the previous five years (2012-2016), which averaged US$ 1.3 billion a year, the report says.
Out of these amounts, the report says, the value of aid on treasury (channelled through the federal government) rose from $ 105.5 in 2017 million to $114.2 million in 2018. Direct donor financing remains below 10% as a result of fiduciary risks and bureaucracy.
The Financial Governance Committee said in its report September most donors still shied away from directly channelling their aid through the federal government and instead opt for non-government organisations and community-based organisations.
“The FGC is concerned that a number of donors are currently providing funding to FGS agencies outside of the budget, with funds being disbursed to accounts held in Commercial Banks,” the FGC which includes World Bank, IMF and chaired by the Finance Minister said. “Likewise, a number of donors, sometimes through their implementing partners, provide funding direct to FMS, bypassing the intergovernmental transfer system.”