Close to $100m loan from IMF, CBS shrouded in secrecy- AG report

GOOBJOOG NEWS|MOGADISHU: The Federal Government under former President Mohamed Farmaajo borrowed $96.4 million from the IMF and the Central Bank without the approval of parliament and neither were the reasons for borrowing, interest rates and repayment periods disclosed, a new audit from the Auditor General reveals.

According to the Annual Financial Statement just released by Auditor General Mohamed Ali, the Ministry of Finance borrowed $74.4 million from the IMF during the 2021 financial year under the Special Drawing Rights arrangement. The SDR is an international reserve asset which is used by the IMF to supplement member countries’ official reserves.

The IMF allocated the largest SDR in 2021 amounting to US$650 billion to support countries’ to respond to the long-term effects of the COVID-19 pandemic.

Then Finance Minister Abdirahman Beileh also went on a borrowing spree to the Central Bank taking $22 million under similar circumstances, the report says. The report adds that the government paid interest of $13 million for the CBS loan and $1 million to ‘other borrowers’ who remain anonymous.

The Auditor General observed that evidence of parliamentary approval nor borrowing agreements for these two facilities were not presented to him. The AG says there was ‘no full disclosure of the reasons for the borrowings, the terms of these borrowings, interest rates, and repayment periods among others for users of the financial statements.’

These malpractices, the AG says are aided by gaps in the Public Finance Management Act, 2019 which ‘does not explicitly require ministries, departments, and agencies (MDAs) of the Federal Government of Somalia to submit annual financial statements for my audit.’