Embezzlement of Public Funds Ruins the Somali Economy

[Deeq A.]

Somalia is one of the “bottom countries” in the Corruption Perceptions Index.  The negligible progress made by the Federal Government in the fight against corruption is cause for hope, but it is easier to forget the impact ill-gotten gains have on the Somali economy.                          

In a country like Somalia data on misappropriated public funds is hard to come by. The quality of administrations and their attitudes to embezzlement shed light on how authorities can combat corruption in the public sector.  Fighting corruption in the public sector hardly bears fruits if wealth generated from misappropriated public funds or the third sector remains wealth creation aspirations for many citizens.    

In Somalia embezzlement of public funds is a political taboo. Which makes anti-corruption measures tokenistic at best. In 2019 one of the priorities of the Federal Government of Somalia identified by the Financial Governance Committee was to conduct “a full inventory of the Federal Government property and public property sold or leased since 2012.”

Under Pressure: Mohamed Abdullahi Mohamed and the former Prime Minister Hassan Ali Khaire pulled the plug on the process to conduct “a full inventory of the Federal Government property and public property sold or leased since 2012.”

The incumbent Federal Government strengthened the perception that investigations into corruption in the government are only possible if people under investigation have no legal immunity from prosecution.  The Somali political classes at Federal Government and Federal Member State levels share indifference to the cost of corruption in the public sector. How can one take the Somali Federal Government’s anti-corruption measures seriously  if legal immunity grants leaders powers to block investigations into the sale or leasing of public properties?  

The picture gets gloomier at the Federal Member States where leasing of national infrastructures such as ports to foreign companies is commonplace.  In Puntland the problem of selling public properties to businesses came to light last month when soldiers based at former barracks in North Galka’yo had refused to vacate the barracks.   There is no a transparent system at the Federal Government or Federal Member State levels to ensure that sale of a public property is conducted fairly. Sometimes ministers or senior officials have a stake in properties being divested.    

Selling or leasing public properties is a different way politicians enrich themselves and their hangers-on.  It is embezzlement by a different name.  Somalia’s gradual recovery results from the entrepreneurial zeal of its citizens. State collapse predisposed many one-time under-developed regions in the periphery to rely on the ingenuity of locals and IDPs.  Entrepreneurs carried the self-reliance torch partly with the help of the Diaspora whose remittances constitute a key part of the consumer-driven Somali economy. 

Entrepreneurship is not as exciting in Somalia as it was a decade or two decades ago.  The capital that businesses raise through sale of shares gets diluted by money embezzled from the public sector.  Embezzlers seek to buy shares in old or new companies. The embezzled money being funneled into businesses in Somalia is crowding out the good money.  The aspiration to form a company through grit and hard-earned capital gives way to the dream to land a plush public sector job where accounts are perfunctorily audited. This trend sets a vicious economic cycle in motion — the rate of business creation decreases in Somalia as the search for public sector or third sector jobs increases.  In a country recovering from state collapse and still dependent upon peacekeeping forces, fewer jobs created by the Federal Government and Federal Member States cannot meet job demands of Somalia’s youth. The answer does not lie in the creation of more public sector jobs in a corruption-ridden public sector ecosystem.

The persistence of the embezzlement of public funds results from how political power gets exercised in Somalia today. Politicians from politically powerful clans have vested interest in giving their supporters an unfair advantage over the rest of the citizenry. Belonging to a clan with a Federal Member State is not enough to help one enrich himself/herself illegally; one must belong to the inner circle with powers and the  influence to decide who gets appointed to what position and awards contracts unfairly. What is disconcerting is the apathy of Somalis who pride themselves upon belonging to powerful clans. The clan identity and the symbolic political influence associated with a social group identity can desensitise victims of embezzlement to the poverty and fewer life opportunities resulting from misappropriation of public funds

Unscrupulous politicians and civil servants siphon off money earmarked for the construction of schools and hospitals. Left unaddressed the corruption in the public sector and the third sector can make many unemployed young men more susceptible to either embracing extremist ideologies or choosing a risky, illegal immigration. Corruption is directly correlated with increase of terrorism in war-torn countries where governments lack widespread legitimacy. Embezzlement of public funds is an economic and security strain on Somali citizens. The sooner the Somali political classes put premium on the rule of law the better. 

Liban Ahmad

libahm@icloud.com

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