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Report of the Monitoring Group on Somalia and Eritrea

BY SEMG

Phenomenon of “secret contracting”

unsom-150x150The Monitoring Group is particularly concerned about the phenomenon of “secret contracting”, which has become a way of doing business for the Federal Government since at least mid-2013 and creates the opportunity for misappropriation. Contracts regarding national public assets affecting the public interest have been signed by government officials but kept highly confidential —from the Somali population, the parliament and, until now, international donors. Neither the process of signing the contracts nor their implementation, including the transparency and accountability of their revenue streams, is subject to public scrutiny or parliamentary oversight. While the Transitional Federal Government regularly entered into contracts of one kind or another, the political recognition accorded to the Federal Government has enabled it to enter into contracts of considerably greater value than could the Transitional Federal Government. One particular contract alone constitutes a value greater than the national budget. Abuse of the legitimacy of the Federal Government to enter into contracts that operate in the same way as private contracts outside the institutions of government has effectively created a parallel system of finances beyond and much greater than the realm of public financial management.

None of the contracts regarding national assets entered into in the name of the Federal Government have to date been officially published. Some have been shared for review by the Financial Governance Committee, which includes representatives of the Federal Government and international financial institutions. The Financial Governance Committee confidentially reviewed seven contracts for seismic data processing and marketing, Mogadishu port development and operations, Mogadishu airport development and operations, Mogadishu container port operations, oil and gas exploration and development, the construction of offshore patrol vessels and fisheries management and protection. According to the Financial Governance Committee, “the confidential reviews have established that all of the contracts/concessions reviewed suffer from two important omissions: lack of clear [Federal Government of Somalia] specifications/[terms of reference], and the absence of any competitive tendering process”.65Another significant problem is that the secrecy of contracts creates mistrust and uncertainty in the various regions of Somalia in terms of sharing of natural resources, which will be exacerbated with the prospects of oil contracts, marine resources and other potential mineral extraction from Somali soil.

Another significant problem is that the secrecy of contracts creates mistrust and uncertainty in the various regions of Somalia in terms of sharing of natural resources, which will be exacerbated with the prospects of oil contracts, marine resources and other potential mineral extraction from Somali soil. This can have detrimental effects, not least for the process of federalization. Other problems, given the secrecy of the contracts, are simply knowing how many there are, obtaining copies of them and determining who is actually involved and how. Sources have informed the Monitoring Group that dozens of contracts have been signed.66 For an overview of several contracts, see annex 5.1.

Read more: SEMG report

SEMG


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