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Thursday, September 29, 2022

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    Regional governments in Somalia have severed connections with the Federal Ministry of Finance.

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    The Federal Ministry of Finance has been accused of violating earlier agreements between the Federation and the States over the unification of the Somali government’s budget.

    Both parties signed these five agreements in 2019 and 2020.

    The Federal Government is believed to have stopped funding regional governments’ budgets, which the Mogadishu-based government receives from the World Bank and the IMF.

    When it became clear that the Ministry of Finance of the Federal Government of Somalia has deliberately violated the agreements mentioned above, from today 30th August, 2022 the Ministries of Finance of the Member States of the Federal Government of Somalia; Puntland, Jubbaland, Galmudug, South-West and Hirshabeele have suspended all cooperation with the Ministry of Finance of the Federal Government of Somalia while the Ministry returns to the framework of the law and the implementation of the agreements mentioned above.

    THE STATEMENT ISSUED BY THE MINISTRIES OF FINANCE OF THE REGIONAL GOVERNMENTS

    The IMF authorised three-year arrangements for Somalia under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) in the amount of US$395.5 million in 2020.

    The Federal Government has received more World Bank funding; however, Somalia’s regional governments have stated that they have not received financial assistance.

    The World Bank authorised $143 million in International Development Assistance (IDA)* financing in June 2022 to assist vulnerable Somalis in overcoming the country’s rising drought and food crisis.

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