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Somalia : Conference by Ministry of Finance and Regional Government Adjourns in Nairobi

By Tajuddin
Jul 23rd, 2016
Workshop on regional fiscal relations

Workshop on regional fiscal relations

Nairobi, Kenya (DIPLOMAT.SO) – A delegation from the Federal Government of Somalia have today concluded a workshop on regional fiscal relations in Nairobi, Kenya. The delegation composed of representatives from the Ministries of Finances of the Federal Government, Interim Galmudug Administration (IGA), Puntland State, Interim South West Administration (ISWA) and Interim Jubaland Administration (IJA). The workshop is organized and facilitated by the Ministry of Finance of the Federal Government of Somalia.

The workshop would set up a technical committee that would undertake deeper discussion on how to strengthen an intergovernmental trust, discourse over the best way of fiscal arrangement, and propose mechanisms of resource distribution among federal and sub-national states. It would also sensitize an intergovernmental revenue assignment on what level of government is allowed to tax and what revenue resource in line with the Federal Law on resource Sharing Act and Federal Act on Public Finance Management. Also, the workshop would help enlighten the participants on the tools and methods of how to carry out the activities that would come under their domain. Experts on fiscal federalism would take them through major themes of fiscal affairs and how to approach them.

During the workshop a strong need to understand the functional assignment of the levels of governments as well as the revenue assignment by which governments are allowed to generate revenues has been emphasized.

Furthermore, experts showcased types of federalisms in different parts of the world and the best of them that fits the country with regard to fiscal federalism vis-à-vis equal distribution of resources in Somalia.

On the other hand, during the course of conference information on debts that Somalia owes has been presented. The Ministry of Finance of the Federal Government of Somalia reported that Somalia owes an external debt amounting US $ 5.3 billion to other countries of which 94% of the amount is an accumulated interests over the last 26 years and hence only 6% is the actual official outstanding debt.

The World Bank representing donors has technically supported this workshop and provided the know-how of the subject matter. It is further worth mentioning that the World Bank continuously supports the Federal Government of Somalia through wide range projects including Recurrent Cost Reform Financing Project of which carries fund earmarked for the sole of regional fiscal relations over span of five years.

Finally, the workshop produced the following anticipated outcomes:

 Detailed discussion on fiscal federalism and discourse on international best practices;
 An empowered intergovernmental technical committee that deals with intergovernmental fiscal affairs;
 Developed a ToR for the committee of what duties they are expected to accomplish on what duration of time;
 Provided recommendations to a road map for the adaptation and implementation of ad valorem across the country;
It has been agreed that the deliberations and recommendations from the workshop be discussed at the next meeting of the Ministries of Finance Fiscal Forum.

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