Somalia – The Institute of Public Finance

The recently released Open Budget Survey 2021 results rank Somalia at 101 of 120 countries with a transparency score of 20/100 points. Open Budget Survey (OBS) is the world’s only comparative, independent and regular assessment of the three components of budget accountability at the national level: Transparency, Public Participation and Budget Oversight. It is entrenched on the premise that open and accountable budget systems are transparent, offer opportunities for inclusive public participation and include effective oversight by independent institutions (legislative and audit institutions).

Somalia’s Transparency Index Score has increased from 3 percent in OBS 2019 to 20 percent in OBS 2021. The increase in the transparency index score has been necessitated by the increased number of budget documents that have been publicly made available to the citizens. Despite this increase, Somalia’s Transparency Index Score indicates that the country is not publishing/publishing scant material to support informed public debate on the budget.

Methodology

Globally, the Open Budget Survey questionnaire is completed by local civil society groups or independent researchers, and they provide responses to objective and fact-based questions. Each country’s results are then reviewed by an anonymous expert and government representatives are invited to provide their comments. The assessment covers all four stages of the budget process: formulation, approval, execution, and oversight.

OBS assesses transparency by evaluating the public’s access to eight key budget documents, which should be widely available during the budget cycle documents (Pre-Budget Statement; Executive Budget Proposal; Enacted Budget; Citizen Budget, In-Year Reports; Mid-Year Report; End-Year Report and Audit Report). The available budget documents are further assessed for the comprehensiveness of the information they present.

Each country is assigned a score from 0 to 100 based on the simple average of the responses to the 109 questions that assess budget transparency; a perfect score on a particular question is 100. The average scores result in a global ranking of budget transparency called the Open Budget Index.

An Open Budget Index score of 0-20% signifies that no information was provided or the information provided was scant, a score of 21-40% signifies that the information provided was minimal, and a score of 41-60% signifies that the information provided was limited, a score of 61-80% signifies that the information provided was substantial and a score of 81-100% signifies that information provided was extensive.

OBS Findings

Transparency Score

In the OBS 2021, the country made publicly available, 5 out of the 8 assessed budget documents. Only one budget document (Citizen Budget) was published late in 2021 as compared to three (Pre-Budget Statement, Citizen Budget, and In-Year Reports) in 2019 indicating improving timeliness in the provision of information to the citizens. The comprehensiveness of the published Enacted Budget has been improving over the years increasing from 56 in OBS 2017 to 61 in OBS 2019 and finally to 67 in OBS 2021. More needs to be done however to ensure the remaining budget documents are also made publicly available within the required statutory timelines rather than produced for internal use.

To enhance transparency in Somalia’s budget, the country needs to:

Publicly avail all the required budget documents especially those produced for internal use (Executive Budget Proposal and End-Year Report).
Improve comprehensiveness of the budget documents especially Mid-Year and In-Year Reports.
Publish Citizen Budget online in a timely manner.

Public Participation Score

Transparency alone is insufficient in improving governance in the budget process. Inclusive public participation is crucial to realizing the positive outcomes associated with greater budget transparency. Somalia’s public participation score has reduced from 2 percent in OBS 2019 to zero (0) in OBS 2021. This indicates that the executive, legislature and supreme audit institutions did not provide formal opportunities for public participation in the four stages of the budget i.e. formulation, approval, implementation, and oversight.

In 2019, formal participation opportunities were presented during the approval stages of the budget process by the legislature with a score of 11 percent while in 2017, the public was engaged only during the formulation stage by the executive with a score of 3 percent.

To enhance public participation in Somalia’s budget:

1. Somalia’s Ministry of Finance should prioritize:

Piloting mechanism to engage the public during the formulation and implementation stages of the budget.
Engaging vulnerable and underrepresented communities either directly or through organized groups representing them.

2. Somalia’s Federal Parliament should:

Allow members of the public, civil society organizations, or other organized groups to testify during the budget hearings prior to approvals by parliament.
Allow members of the public, civil society organizations, or other organized groups to testify during the hearing of the audit reports.

3. Somalia’s Office of the Auditor-General should:

Establish formal mechanisms for the public to assist in developing its audit programs and to contribute to relevant audit investigations.

Budget Oversight Score

Budget oversight has improved in Somalia increasing from 22 percent in OBS 2017 to 30 percent in OBS 2021. Despite this, the country’s legislature and supreme audit institutions provide weak budget oversight (<40 percent) hence a need to improve budget oversight during the budget process.

Comparing the individual scores of the legislature and supreme audit institutions, the legislature has slightly improved its budget oversight score from 33 percent in OBS 2019 to 36 percent in OBS 2021 while the audit oversight score has stagnated at 17 percent. Improved legislative oversight score has led to the composite score increasing from 28 percent in OBS 2019 to 30 percent in OBS 2021.

To improve budget oversight in Somalia
1. Somalia’s Federal Parliament should:

Examine In-Year Implementation Reports and publish their findings online.
Ensure the legislature is consulted before the executive shifts funds specified in the Enacted Budget between administrative units; spends any unanticipated revenue, or reduces spending due to revenue shortfalls during the budget year.
Examine Audit Reports and publish their findings online.

To enhance independence and oversight functions of the Office of the Auditor-General:

There should be a requirement for legislative/judicial approval to appoint or remove the Head of the Supreme Institution i.e. the Auditor General.
Ensure sufficient funding to the Supreme Audit Institution to adequately perform its oversight roles.

It is worth noting that Somalia does not have an Independent Fiscal Institution (IFIs) i.e. the Parliamentary Budget Office in Kenya. IFIs provide valuable nonpartisan information on the budget process to the Executive, Parliament, and Supreme Audit Institutions hence the need to establish one.