Somalia: Corruption of public finance and property

During Hassan Sheikh Mahmoud administration Somalia ranked among the world’s most corrupt countries. Hassan sheikh M started with the corrupt process of bribing Somali MPs during the federal election by cash handout. The former Governor of the Central Bank of Somalia Ms. Yusra Abrar also resigned from her position after less than two months on the job citing that the Central Bank of Somalia was not allowed to function free of interference from the President’s office. Likewise, a U. N. report on Somalia released in July 2014, stated that eighty per cent (80%) of the withdrawals from the country’s Central Bank was used for private purposes. Prolonged absence on foreign visits and the waste of resources on airfares and hotels. While civil servants and members of the Somalia armed forces in the four years of his presidency were paid less than two years’ worth.

Insecurity was also a major issue; the instability at time greatly restricts business. Corrupt government officials tolerated illegal activities in return for bribes. Dysfunctional institutions facilitate an environment of lawlessness, and the absence of any form of regulatory framework hinders prospects of economic competitiveness. Business is based on patronage networks, and tight monopolies dominate the market. Somalia’s Provisional Constitution criminalizes several forms of corruption (including abuse of office, embezzlement and bribery); however, implementation these were not on Hassan Sheikh agenda they were is non-existent. The governing elite is continuously being involved in allegations of embezzlement of public funds from the already meagre Somalian coffers. Finally, it reached a point that bribery was commonplace in all sectors, and procurement contracts frequently involve corruption and close family and friends of Hassan Sheikh.

Hassan Sheikh Administration were incapable of protecting property rights. The construction boom the country is currently witnessing has further fuelled conflict as title deeds are either unavailable or forged). Forced evictions by both private and public actors, coupled with the absence of land deeds and corruption was common during Hassan Sheikhs Presidency. Land owned by the government were given to private individuals and some was sold another major problem for the government of Hassan Sheikh Mahmoud. And get up to 30,000 plots were sold illegally by his Administration. Since 2012, public land has been privatised without any transparency. This includes lands owned by ministries, local government, the custodial corps, government hotels, and schools. Some notable places are Hotel SYL, Hotel Uruba Hotel.

Businesses were likely to face extensive corruption in the customs sector. Bribery was common when clearing goods through the Mogadishu port. Generally, the diversion of revenue from ports is very common; for instance, revenue from the Mogadishu port totalled more than USD 5.5 million per month during 2013 (to put this in perspective, the Somali central bank in 2014 received an average of USD 4.6 million per month)

Public procurement in Somalia holds high corruption risks for business. The majority of public tenders are treated as confidential. “Secret contracting,” where officials or family members close to the Hassan Sheikh would get the deals in complete absence of transparency and oversight, it was a common practice

By: Abdullahi Mohamed Hurie