Public finance management reforms in Somalia: a case study on Somalia's finance professionals

• Published date: 01 August 2017
• DOI: http://doi.org/10.1002/pa.1621
• Date: 01 August 2017
• Author: Edward Mugambi Ireri,Mohammed Hersi Warsame

ACADEMIC PAPER

Public finance management reforms in Somalia: a case study on

Somalia’s finance professionals

Mohammed Hersi Warsame

1

|Edward Mugambi Ireri

2

1

University of Sharjah, Sharjah, United Arab

Emirates

2

University of Kabianga, Kericho, Kenya

Correspondence

Mohammed Hersi Warsame, University of

Sharjah Box 27272, Sharjah, United Arab

Emirates.

Email: mhwarsame5@hotmail.com

There is an unprecedented and pressing need for a major legislative public financial management

reform in Somalia to bolster the technical and professional efforts of implementing a modern

system of public financial management across the country. Currently, there is no independent

auditing authority to enable citizens to access information on the use of public resources.

However, the success of any reform depends on establishing strong public budgeting systems

as well as developing strong public finance training programs and policy linkage on financial

management policies and procedures.

KEYWORDS

Public financial management, Public financial management reforms, Partial Least Squares (PLS)

modeling, Somalia

1|INTRODUCTION

Public financial management (PFM) systems facilitate the efficient

usage of resources, advocate for the highest level of transparency

and accountability and guarantee long‐term economic success. The

need for the reform and transformation of public sector management

in sub‐Sahara Africa has been motivated by the fact that state bureau-

cracies in Africa are corrupt and lack a sense of responsibility and

accountability (Goldsmith, 1999; Hope & Chikulo, 1999).

Published PFM studies have outlined the significance of effective

PFM systems to service delivery, poverty reduction, and the achieve-

ment of the millennium development goals. Although, a significant

amount of literature has been written on the topic of PFM reform in

Sub‐Saharan Africa, no work has been carried out recently to synthe-

size its impact on the economic and political status of some countries

in this region, especially its impact on countries like Somalia where

there has been a constant political and civil unrest.

Studies carried out by Mohamed and Sheikh‐Ali (2014), highlight

the importance of upgrading internal controls and financial reporting

systems in Somalia. Similarly, regular and timely publishing of budget

information to the public as well as the promotion of public participa-

tion in the budget process is crucial for effective public finance

transparency and parliamentary oversight.

The authors also support the idea for an active role by the civil

society organizations and donor agencies in promoting transparency

and financial accountability. The prevalent corruption in Somalia is

not a sudden phenomenon but rather has built over a long time and

dates back to all previous governments in Somalia. However, the

current government’s effort to improve public finance management

such as the purchase of the biometric payroll system which automated

the payment of the salary of the civil servants is a good step in the right

direction. Furthermore, President Hassan government’s call for the

positions of auditor and accountant general to be filled by competent

individuals who can meet the set criteria and the proposal to adopt

the standards of the International Organization of Supreme Audit Insti-

tutions (INTOSAI) is praiseworthy.

While the initiative to promote and develop public finance

management system in Somalia is welcomed, there has not been a

deliberate study to investigate its key success ingredients as well as

its economic and political stability implications in the country. This

study therefore intends to fill in this gap by interviewing Somali experts

in the field of financial management to give their opinion on the

necessary ingredients for the success of the proposed public finance

reform system in Somalia and the likelihood of achieving its objectives.

1.1 |Statement of the problem

Despite the sizable investment in public finance management reform

(PFMR) in Somalia, the mechanisms of monitoring and evaluation have

been fragile. The assessment of PFMR has been troubled by the

absence of performance‐based indicators Aziz (2003) and the unstable

political environment. Hence, the effect of this shaky PFMR structure

on the country’s economic and political stability is yet to be

established.

Received: 3 August 2016 Accepted: 11 August 2016

DOI: 10.1002/pa.1621

J Public Affairs. 2017;17:e1621. Copyright © 2016 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/pa 1of9

https://doi.org/10.1002/pa.1621