The role of transparency institutions in strengthening governance in Somalia

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Wednesday March 12, 2025
By: Ali Haji Warsame

Introduction

Following the collapse of the Somalia central government in 1991, the capacity of public institutions has considerably weakened, including government agencies designated to promote good governance, create public trust, fight corruption and safeguard public resources. This lack of accountability and oversight has contributed to the increase in corruption and misuse of public assets and prolonged recovery. This, in turn, limited the institutions' ability to deliver critically needed public services to the community. These reasons, compounded with the ongoing civil war in Somalia, prompted the formation of regional administrations to provide much-needed leadership and basic social services.

Somalia's path toward peace and development has been hindered by decades of conflict, political instability, and systemic challenges. The country has experienced a prolonged period of civil war, a dysfunctional governance system, and a collapse of state authority. As a result, most of the public institutions entrusted with accountability and transparency, such as the Office of the Auditor General, the Accountant General, the Central Bank and the Anti-corruption committees, all deemed to exist. Today, Somalia remains one of the world's most fragile states, grappling with widespread corruption, rampant nepotism, significant insecurity, weak governance, and a deficit of public trust.

The first successful attempt to restore governance in Somalia was the Arta Conference in 2000, which ultimately led to the formation of the Transitional National Government (TNG) based on a power-sharing formula known as the 4.5 principle. However, this initiative was undermined by a lack of legitimacy, mismanagement, ineffective leadership, and international interference. In reality, the TNG's influence did not extend beyond Mogadishu. A new dynamic emerged in Somalia where political actors were incentivized to prolong conflict to maintain and divert associated revenue streams.

In 2004, the Transitional Federal Government (TFG) was established, introducing federalism as a form of governance and revitalizing essential public institutions. This period was significantly shaped by years of ongoing conflict, as the federal government fought against Al-Shabaab insurgents to gain full control over the southern part of the country.

Fast forward, and the adoption of the Provisional Constitution in 2012, shortly before the federal election, marked a significant milestone in the effort to rebuild the state through a federal system. At the same time, the controversial power-sharing formula of 4.5 was effectively legitimized. However, despite the progress made, serious challenges remain.

Challenges such as political fragmentation, corruption, and the persistent threat of extremism continue to impede development. Moreover, governance mechanisms and transparency institutions remain insufficient, which hampers their effectiveness.

These institutions are essential for restoring the rule of law and enabling the country to progress. Public transparency and effective governance institutions play a crucial role in ensuring openness, accountability, and trust in government actions. The absence or weakness of these essential institutions has significantly impaired the governance of the country and the effective functioning of its governing bodies at all levels. In this essay, the intention is to shed light on the impact of inadequate government transparency and accountability institutions in Somalia.

Transparency institutions in Somalia have a complex and often challenging history, largely shaped by the country's military rule, prolonged periods of conflict and political instability. These institutions aim to improve accountability and transparency in public financial management. However, their effectiveness has been significantly hindered by various challenges, including limited resources, political interference, and security concerns.

The effectiveness and proper functioning of essential public accountability and governance institutions—such as the government bodies responsible for enacting and implementing laws such as parliament and legislative bodies, the Central Bank, the Auditor General, the Accountant General, The Anti-Corruption Agencies, the Public Procurement Authority, proactive Civil Society Organizations, and responsible Media—are crucial for the country's ability to stand on its own. The efficient operation of these institutions directly influences the government's accountability to its citizens. Citizens have the right to access information about public administration activities and are also entitled to participate in the decision-making process.

1.) Legislative Branch

Key institutions include parliament and legislative bodies that hold the executive branch accountable through scrutiny, inquiries and investigations. The three branches of government—executive, judiciary, and legislative—are independent and each plays a vital role in maintaining a balanced and effective system of governance. The executive branch is responsible for implementing and enforcing laws. The judiciary interprets and applies the law, while the legislative branch creates these laws. To ensure checks and balances within the government, all three branches should operate independently of each other.

The legislative branch's independence from the executive branch is a cornerstone of healthy democracy, ensuring a system of checks and balances, that prevents any one branch from gaining excessive power. Somalia's constitution, like most democracies, was designed to explicitly separate the powers and functions of the legislative and executive branches. Even within the executive branch, the Council of Ministers holds the executive power.

Thus, it is essential to maintain the independence of the legislative branch to ensure effective governance, accountability, and the protection of democratic principles. For this reason, many parliamentarians worldwide resign from their Minister roles to clearly separate the two branches of the government.

One fundamental principle of the separation of powers in Somalia's constitution should be to prohibit individuals from simultaneously holding both powers as ministerial and parliamentary positions. At the moment, almost 60 out of 275 MPs are executive members, which limits the legislative body's ability to hold the government accountable on behalf of the public. As a result, the public trust in these institutions erodes. When the executive exerts control over the legislative body, the essential mechanism of checks and balances is undermined, resulting in a loss of accountability. Addressing this issue is crucial for nation-building in Somalia.

Governance is defined as the way rules, norms, and actions are structured, sustained, regulated, and held accountable. It refers to the measures that involve setting the rules for exercising power and settling conflict over such rules. According to the World Bank (1992), "Good governance is central to creating and sustaining an environment which fosters strong and equitable development, and it is an essential complement to sound economic policies." One of the key indicators of good governance in Africa is presented on the Ibrahim Index of African Governance (IIAG), which provides an assessment of the quality of governance in African countries.

The IIAG has compiled a total of 81 indicators and 265 variables from 54 data projects, drawing from 47 independent African and international data sources. In 2022, the index ranked Somalia at 23.20%, placing it 53rd out of 54 surveyed African countries and positioning it at the bottom of the list. This ranking highlights the current state of governance in Somalia, underscoring the urgent need to re-evaluate and improve governance practices in the country.

2.) Accountant General

The Accountant General plays a pivotal role in managing a government's financial health and accountability. The Accountant General's Office oversees the national budget's accounts, manages the finances of each public body, and disburses funds from the national consolidated fund after the Federal Parliament approves the budget. Furthermore, it is responsible for overseeing and controlling all government commitments by issuing instructions on a commitment control system, as well as monitoring the control, documentation, and reporting of commitments made by public bodies. Simultaneously, it oversees the compliance of budget agencies with financial regulations.

The Public Finance Management Act and its associated regulations provide a framework for the Accountant General's role and responsibilities. These regulations outline the powers and duties of the Accountant General and confirm its independence, including the management of public funds, oversight of financial reporting, and ensuring compliance with financial regulations. The Accountant General's independence is supported by the legal framework, operational autonomy and accountability mechanisms provided by the Act, ensuring that public financial management is conducted with the highest standards of integrity and accountability.

It is legally required to provide both general and specific instructions to the Heads of Ministries, Departments, and Agencies (MDAs) to ensure the effective implementation of the Act's purposes and provisions. Moreover, it should carry out its duties independently of the Ministry of Finance. However, successive Somali governments have traditionally restricted the independence of this Office by placing it under the authority of the Minister of Finance, contrary to the Act.

3.) Office of the Auditor General

The Office of the Auditor General, known as the Supreme Audit Institution (SAI), conducts audits of government accounts and operations to promote transparency and accountability in the use of public funds. Historically, Somalia's Office of Auditor General was established in the early 1960s following Somalia's independence in 1960. To empower it with related legislation, the Public Financial Act (Law No. 2) of December 29, 1961, was enacted to govern the financial agencies. In 1962, Law No. 317 came into effect, providing a framework for public financial management.

The collapse of state institutions in 1991 led to significant challenges for the OAG as all public institutions became ineffective. In 2012, the provisional constitution of the Federal Republic of Somalia recognized the autonomy of the Office of Auditor General, which aimed to play a pivotal role in ensuring the responsible management of public resources in Somalia. Article 114 of the constitution specifies the autonomy granted to the Office of the Auditor General and this recognition was intended to promote transparency, accountability, and good governance.

However, one of the significant challenges faced by the Office is its involvement in the approval process of public expenditure, which is contrary to its independence and effective oversight of the same government expenditures. This role conflicts with its independence and ability to effectively oversee government spending. Another issue is the lack of budgetary autonomy, as the Office doesn't have its own budget that is independent of the executive branch. This financial dependence subjects the Office of Auditor General to undue influence from the government. The process of recruiting and terminating the auditor general raises certain concerns. These factors compromise the Office's independence and create potential conflicts with the executive branch.

In a rare development, the INTOSAI Development Initiative (IDI) and AFROSAI-E have issued a joint statement regarding the appointment of a new Auditor General in Somalia after the Cabinet approved the appointment of Lawyer Ahmed Gutale as the country's new Auditor General, raising concern about the potential impact on the independence of the Office of Auditor General of the Federal Government of Somalia.

Both organizations noted that the current process for the removal and appointment of the Auditor General of Somalia contradicted the national efforts to establish a new legal framework in line with the globally accepted and endorsed principles of the INTOSAI Mexico Declaration on Supreme Audit Institution independence.

The situation puts at risk the establishment of an independent oversight institution capable of effectively addressing national challenges related to public resource use while promoting accountability, transparency and combating corruption.

4.) Anti-Corruption Commission

The Anti-Corruption Agencies investigate and prevent corruption, thereby fostering integrity and transparency in public administration. Their role is vital in promoting transparency, accountability and integrity within government and public institutions as they develop and implement policies and strategies to prevent corruption. They also conduct public education campaigns to raise awareness of the detrimental effects of corruption and promote ethical behaviour.

The best example indicating the importance of Anti-corruption agencies is Hong Kong's Independent Commission Against Corruption (ICAC), known for its effectiveness in reducing corruption through a combination of prevention, investigation, and prosecution and Singapore's Corrupt Practices Investigation Bureau (CPIB), another successful model that has significantly reduced corruption through stringent enforcement and public education. In Somalia, corruption has become widespread, largely driven by clan-based patronage networks that dominate the country's political and economic landscape. In 2019, President Mohamed Abdullahi Mohamed signed an anti-corruption bill into law.

As of 2021, Somalia had established an Independent Anti-Corruption Commission, aimed at leading the fight against corruption. However, this initiative faced criticism from opposition parties, who argued that the caretaker government lacked the mandate to approve members of the commission. Its effectiveness was further hindered by weak administrative capacity and lack of political will.

Unfortunately, President Hassan Sheikh Mohamud disbanded the country's anti-corruption commission in 2022 and instructed the Cabinet to form the commissions afresh in accordance with Article 112 of Somalia's Provisional Constitution. However, the commission has not yet been appointed. It is worth mentioning that Somalia became a state party to the United Nations Convention Against Corruption (UNCAC) in 2021, committing to strengthen and enhance its anti-corruption measures. Additionally, efforts to reform the Public Finance Management system have been integrated into the National Development Plan (NDP-9).

Despite these efforts, corruption continues to pose a significant barrier to stability and development in the country. Somalia still faces challenges in implementing effective anti-corruption measures and ensuring accountability.

According to Transparency International's 2023 Corruption Perceptions Index (CPI), Somalia scored 11 out of 100, placing it 180th out of 180 countries. Anti-corruption commissions play a vital role in preserving the integrity of public institutions and ensuring that government actions are transparent and accountable.

Their diverse functions contribute to fostering a culture of honesty and accountability, which is essential for a country's overall development and stability.

5.) The Central Bank

The Central Bank of Somalia (CBS) plays a crucial role in maintaining a country's financial and economic stability. It achieves that by managing monetary policy, ensuring financial stability, managing the currency, and facilitating government payment systems. Technically, the Central Bank is responsible for setting and implementing monetary policy, which includes controlling inflation and managing interest rates. Furthermore, the Central Bank is responsible to both the public and the government for meeting its objectives.

However, it must remain free and independent to make monetary policy decisions that serve the best interest of the economy, without being influenced by short-term political considerations. To promote transparency and accountability, the Central Bank regularly report its activities, decisions, and outcomes to the public and the government. It communicates its policies, decisions, and economic outlooks to the public through various channels, such as press releases, reports, and public speeches.

Additionally, the Central Bank provides access to economic data and financial information, allowing the public and market participants to make informed decisions. Its achievements include improved governance, strengthening the financial regulatory framework, and establishing national payment systems. It has given thirteen licensed active private banks in the country and is licensed to transfer and receive money to seven money transfer businesses, popularly known as "hawala."

It is important to note that the Central Banks typically operate independently from political influence to ensure unbiased decision-making. This independence is essential for maintaining economic stability and credibility because Central banks adhere to a high level of ethical standards and governance practices to help them prevent conflicts of interest and ensure integrity in their operations. The Central Banks oversee and regulate financial institutions to maintain financial stability and prevent systemic risks. They also play a crucial role in managing financial crises by providing liquidity support and implementing measures to stabilize the economy. It also collaborates with international organizations and other central banks to promote global financial stability and adhere to international standards.

Historically, the Central Bank of Somalia has been closely tied to the country's broader political and economic developments since its independence in 1960. The Central Bank of Somalia (CBS) was established on June 30, 1960, following the country's independence. Initially, it combined central banking activities with commercial banking. Before independence, several foreign banks operated in Somalia, including Banca d'Italia, Banco di Napoli, and National and Grindlays Bank. These banks were nationalized in 1970. This led to the establishment of two state-owned financial institutions: the Somali Commercial Bank and the Somali Savings and Credit Bank.

At its onset, the Somali National Bank focused on central banking functions, while commercial banking activities were handled by the newly established state-owned banks, but the collapse of the central government in 1991 led to a period of statelessness and civil war. The Central Bank was re-established in 2009 by the Transitional Federal Government as part of its efforts to restore national institutions, focusing on monetary policy, financial stability, and economic growth. The CBS has developed strategic plans to restructure the bank and reform the financial sector. This includes establishing monetary policies, regulatory frameworks, and governance structures to improve transparency and accountability.

Currently, the Central Bank of Somalia continues to work on improving its governance and transparency. Its notable achievements include its recent implementation of the Somalia Instant Payment System (SIPS), following the successful integration of the International Bank Account Numbers (IBAN), as well as joining the World Bank's Reserves Advisory and Management Program (RAMP). Additionally, about 10 commercial banks and 11 money transfer businesses (MTB) were licensed by the Central Bank of Somalia (CBS). It has also recruited highly qualified senior executives and established various policies to support its operations, but the main function of regulating the money and fighting inflation is missing due to the absence of national legal tender. Somalia faces significant challenges with its currency, primarily due to the lack of a staple and widely accepted national currency and faces the risk of a dollarized economy.

The Somali Shilling (SOSH) is the official currency, but its value has been highly volatile, and it is not widely used for transactions. Instead, the U.S. Dollar (USD), in the form of cash or electronic money, is commonly used for trade and savings. Despite the fact that Somali Shillings (SOSH) is not widely used for business transactions, the Central Bank of Somalia is responsible for regulating dollarized transactions in private financial institutions.

The Central Bank of Somalia faces challenges in introducing new currency or implementing effective monetary policies. The country has received support from international organisations to strengthen its financial sector and improve currency issues. However, the absence of a stable currency continues to be a significant barrier to economic development and financial stability in Somalia.

The process of printing new currency is hampered by a lack of political consensus within the country, and the Central Bank of Somalia faces limitations in its human, legal and material resources. The bank's role in promoting accountability, transparency, and good governance is essential for maintaining economic stability and public trust. Yet, without political independence or legally recognized national legal tender, the bank functions more as a treasury for the government, making it challenging to create a stable and transparent financial environment.

6.) Public Procurement Agency

Similarly, the Public Procurement Department or Agency is responsible for overseeing public procurement processes to ensure transparency and fair competition and prevent corruption. Somalia's Department of Public Procurement operates under the Ministry of Finance. The primary mandate of the Department is to arbitrate and award tenders for the federal government and any other institutions specified under the revised procurement and delivery of works, services, and supplies related to services laws. This is coupled with the registration and grading of contractors who are willing to do business with the government. The aim is to ensure that projects are prudentially managed to ensure value for money in the procurement and disposal of assets.

The Ministry shares the information on public sector procurement, including advice, guidance and business opportunities. However, Public Procurement faces several challenges, including political interference and a lack of authority to manage and award all tenders at the Federal Government of Somalia. There are also issues related to corruption, nepotism, and inadequate education and training for those involved in the procurement process.

Legislative constraints, especially those associated with procurement technology, further complicate the situation. Additionally, there is a lack of political support for reform efforts and a disregard for ethical and environmental considerations. These factors have slowed down the pace of reforms in the country's public procurement and reduced its effectiveness and public acceptance.

7.) Independent Election Commission

The Independent Electoral Commission organizes and supervises elections, ensuring they are free, fair, and transparent. The Election Commission monitors campaign activities to ensure compliance with electoral laws and regulations and to prevent unlawful and unfair practices. By conducting credible elections, the Election Commission supports the overall democratic process and strengthens political institutions. Its impartiality and professionalism help build public trust in the electoral system and the democratic process.

In short, the Election Commission is a cornerstone of good governance, ensuring that the electoral process is conducted with integrity, transparency, and accountability. By upholding these principles, it contributes to the overall stability and legitimacy of the political system. The history of Election Commissions in Somalia is quite discouraging, characterized by significant executive interference, rampant nepotism in the formation of the commissions and lack of capacity and integrity among the nominated election officials. As a result, there is a continuing absence of public trust in the electoral process. Consequently, Somalia's elections are often viewed as a milestone of corruption marked by widespread cases of vote-buying and other fraudulent activities.

8.) Civil Society Organisations

Civil Society Organizations (CSOs) advocate for transparency, good governance and accountability, often acting as watchdogs. In any given society, civil society entities play a crucial role in governance and development, acting as a bridge between the government and citizens.

It encompasses a wide range of organizations and institutions that advocate for the interests of the public, promote democratic values, and enhance citizen participation in decision-making processes. The concept of civil society has evolved over time, with roots in ancient political thought that emphasizes the importance of collective action for the common good. However, effective civil society organizations (CSOs) have rarely been developed in Somalia at the state and federal levels.

Often, these organizations function like self-centered, profit-driven NGOs, lacking public trust and failing to fulfill their role as the "third sector" of society, distinct from both government and business.

9.) The Media

The media plays a crucial role in informing the public, investigating and exposing corruption, and holding public officials accountable. Media plays a crucial role in governance, transparency, and accountability in the form of acting as a bridge between the government and the public by providing timely and accurate information about policies, decisions, and events. By investigating and reporting on government actions, the media can expose corruption, inefficiency, and abuse of power, holding officials accountable. In Somalia, successive governments often restricted media freedom by limiting opposition access to public media and imposing bureaucratic barriers on political gatherings.

While the Somali constitution guarantees freedom of speech and media, the situation for press freedom is concerning. Journalists face threats, arrests and violence from both federal and regional governments, as well as extremist militants like Al-Shabaab. These groups contribute to arbitrary arrests, censorship, persecution, political pressure and attempts of bribery, creating a challenging and dangerous environment for the media.

Furthermore, the media landscape in Somalia is heavily influenced by clan-based politics, which can result in biased reporting and the promotion of specific agendas over others. This fragmentation hinders the development of a free press with a cohesive national identity. It is unrealistic to expect the media to hold the governments accountable under the present circumstances.

Conclusion:

In summary, this essay aims to highlight the reasons behind the failure of public governance, accountability, and transparency institutions in Somalia.

The prolonged civil war in Somalia has systematically undermined and destroyed key governance and transparency institutions, significantly hindering the country's recovery from its fragile state. Despite efforts to re-establish Somalia's governance system, successive governments have utterly failed to properly rebuild these institutions, which have been detrimental to the country's survival.

Without the proper functioning of these institutions, the future of the country seems grim. Good governance and accountability are fundamental to a thriving society and essential for sustainable development. They foster trust, promote inclusivity, and ensure effective governance through transparency, participation, accountability, and equity. Together, these principles create systems that are just, effective, and responsive to societal needs.

The political leaders of the country at regional and federal levels should promote the rebuilding of public governance and accountability institutions to enable the country to stand on its own feet, protect its political independence and gain respect on the world stage.

Ali Haji Warsame (MBA MA CPA) is the Executive Director of Hiil Institute and a former Puntland Minister of Education.
Email: [email protected]

References:

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