Slow recovery: Somalia eyes global support
15 April 2013, 15:26
Nairobi - Somalia's finance minister has his eye on
conferences in Washington, London and beyond in the next six months to shore up
international support for a slow recovery whose fragility was exposed by this
weekend's suicide bombings in Mogadishu.
Mohamud Hassan Suleiman can count on a wave of goodwill on
his travels but needs more than diplomatic backing to steady a nation emerging
from two decades of war and anarchy with debts of $2.2bn and state revenues of
just $84m a year.
For the first time in years, Western and other nations have
accredited ambassadors to the new government of President Hassan Sheikh
Mohamud, although most still live outside Somalia. His government has also won
recognition from the International Monetary Fund, an important step on the road
But gains on the ground are shaky, demonstrated in bloody
fashion on Sunday when al-Qaeda-affiliated bombers killed at least 30 people in
Mogadishu, a city without a single working fuel station and whole
neighbourhoods of wrecked buildings.
"Somalia is coming out from a dark period,"
Suleiman told Reuters in a telephone interview, adding Sunday's attacks in the
capital highlighted the need to support a government that still relies on
African peacekeepers to maintain security.
"They are giving us their attention but we are asking
them to change that to substance," said the 62-year-old minister, a banker
from the diaspora who once worked at Somalia's central bank, an institution he
is now seeking to resuscitate.
"It needs money to train the security forces, to equip
them properly and to pay them properly," he added.
Western states and others have focused on humanitarian aid
till now but efforts are shifting towards bilateral support for the new
government, whose ability to act could have an impact far beyond the borders of
the nation of 10 million people.
A more stable Somalia could help curb piracy, which has
flourished in the political vacuum and according to the World Bank costs the
global economy about $18bn a year. Western nations also worry a slide back to
chaos will allow al-Shabaab Islamists, ejected from Mogadishu two years ago, to
But Suleiman said the government needs to show Somalis it
can deliver change, if it is to extend its control beyond Mogadishu and other
urban centres, a difficult task when its revenues almost all come from a
battered port and tiny airport.
"We are doing everything we can, not to disappoint the
people," said Suleiman, who travels to a donor meeting hosted by the World
Bank in Washington on April 20 before attending a broader London conference to
build support for Somalia on May 7.
The Somali government also wants to draw more backing at a
June 1-3 meeting on African development in the Japanese city of Yokohama, and
at a gathering in September in Brussels.
The meetings will help gauge support for debt relief before
starting a formal process that could see Somalia qualify for the Heavily
Indebted Poor Countries initiative, known as HIPC, that could offer debt
forgiveness and restructuring.
To do that, Suleiman and his government must draw up a
sustainable poverty reduction programme and show Somalia has the backing of 70%
to 80% of its creditors, experts say.
"It is going to be a long process and we are just
starting that. HIPC is not something we can use immediately," he said.
Suleiman put Somalia's debt at $2.2bn, although experts said
that was based on a 2010 World Bank figure and interest accrued since then
meant it was probably higher.
About half the debt is owed to the World Bank, IMF and
African Development Bank. Arrears to international financial institutions
(IFIs) must be repaid, whether by Somalia or by creditors on its behalf, before
they can offer new funds.
But IMF recognition was a valuable start, Suleiman said,
adding it "opens doors for us to deal again with the IFIs".
The 2013 budget figures show revenues of about $84m, of
which about $54m is forecast to come from domestic sources and the remainder in
external assistance. Spending is put at $114m, leaving a $30m deficit.
"We are hoping to cover this gap by increasing the
revenue or by external assistance," said Suleiman, who spent more than 30
years as an international banker - most recently in Britain - before he joined
His former employer, the central bank, is in no position now
to help out with debt issuance. "We are just undertaking a comprehensive
public finance management reform and the bank is part of it," he said,
adding it was not yet "fully functioning."
But the central bank's freshly painted building is one sign
of a gradual recovery in Mogadishu, where traffic now sometimes clogs the
potholed roads and construction sites have sprouted.
At least one new petrol station has been built but has yet
to open so drivers still rely on vendors selling jerry cans of fuel on the
"I believe there is an opportunity," said the
minister. "We hope to use this opportunity."