“$96M Taken From the Central Bank Remains Unaccounted For ” – Auditor General 2021 Financial Report

23.11.2022: Mogadishu, Somalia

Somalia’s Auditor General (AG) released a damning Financial Statement report in which he accuses the former government of removing millions of dollars from the Central Bank in 2021 amongst other findings.

In the statement, Auditor General Mohamed M. Ali outlined that there were borrowings made by the Ministry of Finance that totalled $96,365,574 and interests paid of $14,605,118 as reported in the financial statements for the year ended 31st December 2021.

The Auditor General went to say the Ministry of Finance borrowed $21,992,191 from the Central Bank of Somalia, and $74,373,383 from the International Monetary Fund under the Special Drawing Rights arrangement. He went on further to say that such financial borrowings must receive Parliamentary approval prior however the AG did not receive any evidence of such approvals nor the borrowing agreements for both loans.

The statement has created a frenzy in the Somali political arena as the old warring camps begin to blame one another for the above accusations.

Indeed, during the Caretaker Government period in 2021, the government was led by Prime Minister Roble and the Ministry of Finance was headed by Dr Beyle. The sole purpose of this government was to deliver the elections.

Therefore, one has to ask why the Ministry of Finance had to borrow such large quantities of money. Additionally, many are also profoundly perplexed as to how and why the Central Bank allowed such a transaction to be enabled despite its questionable nature, particularly during a period of elections.

If the central bank failed to assess the risk of such transactions, how can we expect such a bank to engage other international banks that have now began working in Somalia under this government?

The Auditor General has promised to conducted an investigation into the matter while the Finance Minister, Dr Elmi Nur says his Ministry will be assessing the AG findings before releasing a response.

It is best for analysts to wait for both findings before jumping into any conclusion.

Public Finance Management Act, 2019

A key point raised by the report was the limitation on the new Public Finance Management Act, 2019. The law replaced the old one that was based on unitary system of governance in Somalia – rather introducing a Federal model to represent Somalia’s current political system

However, the new law does not explicitly require ministries, departments, and agencies (MDAs) of the Federal Government of Somalia to submit annual financial statements for audit. As long as these ministries, departments, and agencies continue to get annual budget appropriations from parliament and use public funds for the FGS, recognised good practice require them to submit annual financial statements for audit by the Supreme Audit Institution (SAI) of Somalia to ensure accountability of such funds.

The simple fact that ministries, departments, and agencies of the FGS of Somalia are not even audited is shocking to say the least and it helps explain why corruption is so rampant in the Somali Government.

The reality is that in terms of financial laws, regulations and transparency, Somalia continues to lack decades behind the globe.

Ministry of Finance Response & Opposing IMF Report

The Somali Ministry of Finance released a short and robust response to the accusations alleged by the Auditor General. In a statement, the Ministry said the following:

“Respecting the independence of the Office of the Auditor General, the Ministry will conducted a thorough analysis of the report… will issue an appropriate response as soon as possible”.

Dr Elmi M. Nur, Minister of Finance

Additionally, the IMF report released in July 2022 is in complete contradiction of the Auditor General report released this week – bear in mind that the AG report was suppose to be released in July as well but was delayed.

In a statement, IMF explained that the Somali government had “preserved macroeconomic stability” and the “reform momentum” utilising the very Special Drawing Rights allocations that the AG accused the Finance Ministry of utilising the embezzle public funds.

Therefore, one has to ask themselves how the AG has found evidence of embezzlement when the very organisation that Ministry of Finance borrowed $74,373,383 using the Special Drawing Rights financial allocations has viewed such actions favourably, indicating that there is a clear paper trail.

Irrespective, as the Auditor General has accused the Somali Government led by Prime Minister Roble and Finance Minister Dr Beyle, he must provide evidence for all allegations aforementioned. Indeed, we have to see the findings of the investigation being conducted by the Office of the Auditor General before we can analyse, compare and contrast to reach a viable and informed conclusion.


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