The Central Bank of Somalia refutes in the strongest terms the allegations made in a Reuters article dated 2nd July 2013 citing a UN Monitoring Groups report with the headline ‘’ Somalia Central Bank a slush fund for private payments - U.N.” These baseless allegations leveled against Governor Abdusalam Omer and the Bank is tarnishing the view of the Central Bank as a professional and transparent institution. Let’s address one allegation at a time firstly: 1) Alleged ‘’ Khaki envelope’’ practice of managing Somali public funds: The Central Bank of Somalia has a deposit, transfer and withdrawal management services with full documentation in regards to the running of the governments Single Treasury Account. 2) ‘’$12 million USD could not be traced out of the $16.9 million USD that was transferred from PwC to the Central Bank of Somalia’’. No single dollar has been diverted from the Central Bank of Somalia. The total sum of 16.9 million dollars was received at the Central Bank of Somalia with four representatives, including the Central Bank, Ministry of Finance, Representative from PwC and the transfer agent, present as well as signing a declaration of proof of receipt. Included in this response will be the various documentations proving otherwise including spreadsheets detailing the fund transfers. 3) "On average, some 80 percent of withdrawals from the Central Bank are made for private purposes and not for the running of government, representing a patronage system and a set of social relations that defy institutionalization of the state," The Central Bank of Somalia does not execute transactions nor approve withdrawals on behalf of the Government from the Single Government Account (Treasury Account) by private individuals. Every withdrawal from the account is made by a designated Government employee with a Ministry of Finance voucher which is duly signed by that Ministry of Finance and the Accounting General of the Federal Republic of Somalia. It is not in the mandate of the Bank nor any of its statutory obligations to determine where expenditure is directed to or which Ministry or public office should receive money from the Government funds. This is a budgetary issue of which the prerogative lays with the Ministry of Finance. The Central Bank will execute withdrawals based on authorization from the Ministry of Finance in a lawful manner and according to the Ministry’s budget directive. Documentation of expenditures from these funds is available at CBS and all records will be included in a more detailed report to be published by the Bank in the following days. The Central Bank will also provide and furnish any relevant information requested or deemed necessary by any other independent auditors or authorities.
Posted on: Fri, 16 Aug 2013 13:38:46 +0000
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