Presented by:
Abdirahman Shariff
Abdirizak Hassan
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Aid effectiveness is dependent upon:
◦ Ownership
◦ Alignment
◦ Harmonisation
We need manageable process in Somalia due to :
◦ High levels of aid dependency
◦ Uncoordinated Multiple donors
◦ Low level of capacity – systems, skilled staff, etc.
◦ Not enough own source of revenue – weak revenue collection
◦ Urgent need to deliver results – high public expectation
◦ Urgent need to rebuild trust – critical transparency
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Use of government system – bring all aid expenditures on
budget and in government system = best aid modality
◦ It ensures ownership, alignment and harmonisation
Measure of success is to determine how much is used in the
government system
There are eight measures to determine to what extent aid on
budget
On plan
Programme and project aid spending is integrated into spending agencies’ strategic
planning and supporting documentation for policy intentions behind the budget
submission
On budget
External financing including programme and project financing and its intended use are
reported in the budget documentation
On Parliament
External financing is included in the revenue and appropriations approved by Parliament
On Treasury
External financing is disbursed into the main revenue funds of government and
managed through government’s systems
On procurement
Externally financed procurement follows government procurement procedures
On accounting
External financing is recorded and accounted for in the government’s accounting
system in line with government’s classification system
On Audit
External financing is audited by the government’s auditing system
On report
External financing is included in ex-post reports by the government
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There have been innovative approaches in many countries
There are three “star” examples
◦ Sierra Leone
◦ Afghanistan
◦ Liberia
But also a range of other individual innovations in challenging
environments
◦ Zimbabwe
◦ Timor Leste
Liberia
Health
Pooled
Fund
Afghanistan
Trust Fund
Sierra Leone
Budget
Support
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Benefits included:
◦ a non-inflationary boost to public spending
◦ higher spending in MDG-related areas
◦ significant improvements in public financial management.
◦ provision of a robust donor coordination mechanism
But it was high-risk, high-benefit strategy:
◦ Based on very close relationship between UK and Sierra Leone
government at political and security level
◦ In general donors no longer willing to take such risks
◦ But EU is leading the way with new Statebuilding Contract
◦ And DFID is considering whether it needs a similar
instrument.
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Great success – originally designed to manage around $50m but
ended up managing $ 5 billion
Reasons for success:
◦ Enabled financing of recurrent expenditures including police
salaries which donors are normally reluctant to fund
◦ All expenditures were audited on monthly basis – if audit on
any item failed then the government was not reimbursed for
that item for that month – this ensured money was well spent
and any problems were picked up quickly
◦ Government used the trust fund as a bank account
◦ Limited earmarking (50% limit) so reflect government
priorities
◦ Flexible procurement
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Large share of donor assistance is for
humanitarian purposes
Uncoordinated aid expenditures- duplicative and
inefficient.
Many and sometime contradictory instruments in
existence (and new ones proposed)
Most aid flows outside the budget & Somali
government institutions
Inadequate information of how donor funds are
spent and what is their impact
No option to support recurrent costs of
Government
Fund Name
FGS Role
Somali Stability Fund
Unclear role on advisory board
Basket fund for the Rule of Law
Chairs Steering Committee
Somaliland Development Fund
Not clear/Consultative role at best
Peace-building Trust Fund for
Somalia
None - only consultation on
project choice
Fund for the Restructuring and
Rebuilding of the Somali Security
Sector
Unclear role on steering committee
Trust Fund in Support of the
Somali Transitional Security
Institutions
Not clear/Consultative role at best
Trust Fund in Support of the
African Union Mission to Somalia
Not clear/Consultative role at best
Trust Fund to Support Initiatives
of States
Not clear/Consultative role at best
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Bring together all fund instruments under one umbrella
coordination mechanism chaired by the Government
Establish Finance Committee chaired by Minister of Finance
and Planning
Establish government led joint secretariat in Mogadishu to
ensure transparency, accountability and effective monitoring
of impact
Integrate all government and donor funded activities into
single budget presentation
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Quickly (as in Afghanistan) and not slowly (as in
South Sudan)
According to the areas that Somalia prioritises and
not just to the traditional donor priorities
That maximises the use of the government’s own
systems
That builds government’s own capacity and doesn’t
undermine it
In a transparent and accountable way to all Somalis
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That delivers results in the most cost effective way
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Somali Development
and Reconstruction
Facility SDRF
Donor
Funds
are
combined into a single
Fund Account, managed
and administered by
Committee
Finance
Committee
Single Treasury Account
Priority Fund 1
Priority Fund 2
Project
Allocation
Project
Allocation
Priority Fund 3
Funds are allocated to
specific a priority fund,
e.g. Security. Priority
Funds are administered
by SFG and contributing
donor/s
Line
Ministries
and
regions submit project
proposals to request
funding from the Priority
Funds
High Level
Steering
Committee
Composed of SFR and
Donors and chaired by
SFG and Responsible
for
making
funding
decisions at the priority
level
Technical
Finance
Committee
Composed of SFG and
Donors and chaired by
SFG Responsible for
allocating funds from the
Priority level to Projects
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Incorporate the comments today
Continue the discussion with our partners
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Support the SFF and allow it to demonstrate its
effectiveness
Donors to place key decision makers in Mogadishu –
this is best way of developing trust that is
fundamental to effective aid partnership
Develop plan for service delivery
Thank You For Listening
Questions and Discussions