May 18, 2017 | Daily Monitoring Report
Mogadishu Airport Loses More Than Half Million USD Each Month Due To Corruption, Minister Says
18 May – Source: Somali Update – 211 words
Somali Information Minister Abdirahman Omar Osman spoke with officials at the new customs management system in Mogadishu’s Aden Adde International Airport about $550,000 USD taxation revenues missing due to high levels of corruption from the Khat cargo flights as reported. This revelation came following a visit by the Ministers of State and Deputy Minister of Finance to supervise revenue taxes received from Kenya Khat flights, and to encourage customs officials for collecting $34,000 extra taxes.
“For the first two days of the new customs management taking office have collected more than $130,000, which shows an increase of $34,000 compared to previous days,” the minister said. “This means that over $550,000 or (30%) per month was missing, which could have helped the Federal Government to pay salaries of more than 5000 soldiers for ($100 per month),” he added. The Information Minister vowed that there will be a through investigation and accountability in order to stop corruption in our system. Ministers, who visited at customs office praised the excellent work of customs officials that saved $34,000 during their first two days in office. Ministers also encouraged officials for their bravery and promised that the government will recognize and reward their work in a bid to fight corruption behaviour.
Key Headlines
- Mogadishu Airport Loses More Than Half Million USD Each Month Due To Corruption Minister Says (Somali Update)
- Somali Military Court Executes A Man Involved In Mogadishu Market Explosion (Radio Dalsan)
- Security Forces Dismantle 26 Illegal Roadblocks In Lower And Middle Shabelle (Dhacdo.com
- Somali Authorities Investigate Explosion That Killed Three Policemen (CGTN)
- Somalis Needing Food Aid Increase To 6.7 Mln: UN (Xinhua)
- Indian Navy Thwarts Pirate Attack Off Somalia (Maritime Executive)
- The Rising Cost of Living in Somaliland: A Threat to Peace and Social Stability (Hiiraan Online)
NATIONAL MEDIA
Somali Military Court Executes A Man Involved Mogadishu Market Explosion
18 May – Source: Radio Dalsan – 136 words
A Somali military court has executed a man who was accused to be involved in a car bomb attack at garden market in Waberi district in Mogadishu. Addressing reporters at the scene of the execution, a military court official said they executed Mr. Abdulqadir Abdi Hassan by firing squad in Mogadishu. Mr. Hassan was the driver of the exploded vehicle the court told the reporters. Hassan has been in police custody since the day of the explosion.
The Market was bomb on 27th November 2016 killing 15 people while injuring 20 others who were most civilians. The military court previously executed soldiers charged with murder and suspected Al-Shabaab members convicted of carrying out assassinations against officials and lawmakers in Mogadishu over the past few years. The UN-backed Somalia’s Federal government has pledged to hold its forces to account for abuses.
Security Forces Dismantle 26 Illegal Roadblocks In Lower And Middle Shabelle
18 May – Source: Dhacdo.com – 164 words
Security forces in Middle and Lower Shabelle have dismantled up to 26 illegal roadblocks manned by militias and rogue government soldiers. Spearheading the operation in Middle Shabelle, the region’s governor Ahmed Mayre Makaran said most of the dismantled checkpoints were set up in Warseekh and surrounding areas. He vowed that they will continue the operation against illegal roadblocks sending a strong warning to individuals involved in the crime. “We’ll fight anyone manning roadblocks to harm and extort from the general public, we have so far removed up to 26 roadblocks and the remaining will be crushed soon,” he said. He further stated that security forces will soon launch an operation to remove roadblocks along the Mogadishu – Jowhar road. A similar operation has been conducted in parts of Lower Shabelle and a number of illegal roadblocks were destroyed. Security forces have intensified their fight against illegal roadblocks since President Mohamed Abdullahi Farmajo sent a strong warning to government soldiers engaged in robbery and illegal roadblocks.
INTERNATIONAL MEDIA
Somali Authorities Investigate Explosion That Killed Three Policemen
18 May – Source: CGTN – 203 words
Authorities in Somalia have launched an investigation into an explosion that left three policemen dead on Wednesday. The officers had discovered an improvised explosive device inside a vehicle in Mogadishu, but it went off while bomb experts were trying to defuse it. CGTN’s Abdulaziz Billow said that the city has been on high alert after al-Shabaab threatened to launch deadly attacks again. That day, police had been tracking a suspicious vehicle for the second time in three days. Mohamed Omar Madaale, Police Chief of Mogadishu, said security forces were in pursuit of the vehicle when the occupants opened fire. Police “fired back, killing the driver, (but) the two passengers fled,” and the vehicle turned out to be laden with explosives.
Bomb experts tried to defuse the device, but within minutes a huge blast rocked Mogadishu’s Wadajir neighborhood — a heavily populated area. Al-Shabaab has claimed responsibility, saying the blast killed Somali and Western bomb experts. Somalia is set to launch a nationwide offensive against the militants soon, and it has asked the international community to revoke a two-decade arms embargo as it seeks to rebuild its security institutions.
Somalis Needing Food Aid Increase To 6.7 Mln: UN
18 May – Source: Xinhua – 390 words
An estimated number of people in need of humanitarian assistance in Somalia has increased to 6.7 million, more than half the population of the country, the UN said on Wednesday. The UN humanitarian agency OCHA said the humanitarian situation continues to deteriorate despite the rains, which are below average in all areas. The OCHA said in its latest report on drought situation in Somalia that the ongoing drought also increases risk of famine-induced displacement in the region. Since November 2016, more than 683,000 people in Somalia have been internally displaced by drought, including more than 377,000 displaced during the first quarter of 2017. “The humanitarian situation in Somalia has deteriorated further and an elevated risk of famine in 2017 persists in some parts. The number of people in need of humanitarian assistance has increased to 6.7 million people, up from 6.2 million,” said the UN agency.
According to the OCHA, a total of 3.2 million people are expected to face “crisis and emergency levels” of food insecurity through June. The prolonged drought has led to a lack of water and the largest outbreak of cholera Somalia has seen in the last five years with nearly 38,000 cases and almost 683 deaths so far in 2017, according to World Health Organization (WHO). “With the beginning of the rainy season and projected flooding, these numbers are expected to increase to 50,000 cases by the end of June,” said the OCHA. Cases of measles are also on the rise with over 7,600 cases reported this year, 65 percent of them affecting children under five. The Gu rainfall started two weeks later than normal this year and has been below average in all areas, except in the northeast where rainfall totals have been near average.To respond to the growing needs, humanitarian partners in Somalia have revised the Humanitarian Response Plan for 2017. The revised HRP presented at the London Somalia Conference on May 11 seeks 1.5 billion U.S. dollars to reach 5.5 million people with life-saving assistance in 2017. In response to the early alarm that Somalia is at risk of famine at the beginning of the year, donors at the London conference provided 634 million dollars since the beginning of the year. The remaining gap is of 875 million dollars.
Indian Navy Thwarts Pirate Attack Off Somalia
18 May – Source: Maritime Executive – 244 words
On Tuesday, the Indian Navy patrol vessel INS Sharda rescued the Liberian-flagged bulker Lord Mountbatten from a pirate attack 150 nm off the northeastern tip of Somalia. The Mountbatten made a distress call at 16:45hours, Indian Navy officials said, and she reported two suspected mother ships accompanied by eight skiffs. The Sharda diverted to assist. The Mountbatten was about 30 nm away at the time of the call, and the Sharda arrived towards 19:00. She found all ten aggressor vessels on scene and launched an armed helicopter and special forces boarding units, which chased down the remaining pirates. Boarding teams found one gun aboard one of the dhows, according to an Indian Navy statement. The dhows reportedly lacked fishing gear.
Piracy off the coast of Somalia has resumed after a five-year lull, driven by famine and poverty onshore and enabled by falling investments in maritime security. Total expenditures on naval patrols and embarked maritime security contractors in the High Risk Area have fallen dramatically since the peak period of Somali piracy in 2011. Somali pirates have recently shown an ability to mount hijacking expeditions far out into the Gulf of Aden and the Indian Ocean, as demonstrated by the attack on the Mountbatten. In April, EU NAVFOR spokesperson Commander Jacqui Sherriff emphasized “the need for vigilance and adherence to the self-protection measures as laid down in Best Management Practices (BMP) 4. It is crucial that Somali pirates are denied opportunities to attack vessels.”
OPINION, ANALYSIS AND CULTURE
“The political leaders in Somaliland can no longer ignore this problem without putting Somaliland’s stability in greater risk.”
The Rising Cost of Living in Somaliland: A Threat to Peace and Social Stability
18 May – Source: Hiiraan Online – 1087 words
The cost of living has been going up steadily in Somaliland for the last few months due to depreciation of Somaliland Shillings against the U.S. Dollar since most of the goods are services, especially the imported goods, are priced in Dollars. In addition, local producers and service providers are pricing their goods and services in dollars since Somaliland Shilling fluctuates erratically and is therefore considered unreliable. Even private schools, universities, health centers, residential rentals (landlords) are pricing their goods and services in dollar instead of the local currency. Therefore, whenever the value of Dollar appreciates, the value of the Somaliland Shilling depreciates which hits, especially hard, on laborers, daily wagers and government employees including civil servants, police, correctional officers, coast guard and the military because their salaries are paid in Somaliland Shillings. If not addressed immediately and without further delay, this problem could have devastating negative effect on peace and social stability. The political leaders in Somaliland can no longer ignore this problem without putting Somaliland’s stability in greater risk.
The exchange rate of the Somaliland Shilling against the U.S. Dollar has increased from $1= SL Sh. 6,500 to over 1$ = SL Sh. 9,000, an increase of 40% from 2010 to 2017. Since there is no economic boom in the country which can cause inflation, there is a clear indication that there is an excess supply of Somaliland Shilling relative to the amount the market demands for. In order to address the problem, the Minister of the Presidency, Mahamoud Hashi, has issued two policy directives. First, he artificially fixed the exchange rate of U.S. Dollar against Somaliland Shilling to $1 = 7,000 SL. Sh. This directive has resulted the opposite effect: the local money exchangers immediately hoarded their U.S. Dollar holdings which eroded the supply of dollar in the market and further depreciated the value of Somaliland Shilling bringing the bad memory of Kadare (the one who made the situation worse) —- the failed economic policies of the then Somalia’s Finance Minister, Abdirahman Jama Barre, who miserably failed when he tried to artificially fix the prices of goods and services in the market thirty years ago.
Second, he has ordered Telesom and Dahabshil, which operate mobile money transfer/e-payment systems of Zaad and E-Dahab services, respectively, to restrict the ability of their customers to electronically send or buy goods and services in excess of $49. The logic goes that if this restriction is imposed, customers would buy goods and services that are less than $50 value in Somaliland Shilling which in turn would increase demand for the local currency and thereby result appreciation of its value. The Telesom Company has argued and has since convinced the government that it could not technically implement this policy without a major programming revamp of its IT systems which, they argued, could not happen right away. As of today, this directive has not been implemented. However, even if it is implemented, it would have little or no effect in the money market.
There are several factors contributing to this problems some of which are listed below:
The inability of the Central Bank to conduct Open Market Operations due to shortage of its reserved U.S. Dollars which is mainly the result of: Closure of Central Bank branches in the main airports where travelers used to pay immigration entry/exit fees in U.S. Dollars as well as mandatorily buy some local currency in exchange of their U.S. Dollars. This was a good source of U.S. Dollars currency for the Central Bank. The drastic reduction of government dollar revenue source from the export of livestock to Gulf States due to the drought and the health related ban imposed on Somali livestock by the Saudi Arabian health authorities. This reduction of this revenue stream again negatively impacted Dollar reserves of the Central Bank. The reckless policy of the government to pay some of its well-connected contractors/suppliers in U.S. Dollars instead of Somaliland Shillings which subsequently depletes Dollar reserves in the bank. The new decision of Ethiopian Qat traders to sale their “drug” in U.S. Dollars instead of their local currency, the Birr. This increased the demand for Dollar in the money market because of the buying spree of Qat importers from Somaliland who normally buy U.S. Dollars from the local market in exchange of Somaliland Shillings thereby reducing Dollar supply in the market and causing the appreciation of its value against the local currency, the Somaliland Shilling. The demand of the Ministry of Finance to collect some of taxes/fees in the form of U.S. Dollars. For instance, anyone applying a vehicle title transfer has to pay taxes/fees in Dollars. This increases the demand for dollar in the market and the appreciation of its value against the Somaliland Shilling. The inability of the government to recognize that this is an Economics problem and it needs an Economics solution. The government has to convene a council of economists to advise her on economic issues.
There are several policies that, if implemented, can address the problem. Below are some of those policy choices: Increase the U.S. Dollar reserves of the Central Bank of Somaliland to conduct Open Market Operation — a Monetary Policy tool whereby Central Bank buys local currency in exchange with dollars–whenever the market conditions demand in order to maintain the value of the Somaliland Shilling. This will require the government to take the following steps: Re-open Central Bank branches in main airports and restore its monopoly to collect government immigration entry/exit fees in Dollars. Pay all government contractors/suppliers in local currency, the Somaliland Shilling. This will stop the depletion of Dollar reserves in the bank. Negotiate with Government of Ethiopia to stop the demand of its Qat importers to sell their “drug” in Dollars. This will greatly reduce the demand for Dollar in the local market and subsequently result the depreciation of its value against the Somaliland Shilling. Put the blame on Telesom’s Zaad and Dahabshil’s E-Dahab, Somaliland’s e-commerce and money transfer brands, for the depreciation of Somaliland Shilling. Theoretically, restricting the use of electronic e-commerce in Dollars may increase the demand for Somaliland Shilling but it will not offset its excess supply in the market. I recommend that the government adopt policy alternative (1) listed above. The government should not re-invent the wheel since Open Market Operation was the most effective tool that previous governments have used with success to regulate the value of the Somaliland Shilling.
TOP TWEETS
@FarahMaalimM: Farmaajo Government in Mogadishu has rekindled the hopes & aspirations of Somalia. MPs’ in the pay of a regional power are rocking the boat.
@RodaDaud: #Somaliland celebrates 26 years of peace, promise & progress reaching new global heights. Happy 18 May. #MySomaliland #SaveSomalilandLives
@DalsanFM: Somali military court executes a man involved Mogadishu market explosion – http://radiodalsan.com/en/
@Daudoo: Right hands of Adam Nur, 42, & Isak Hassan, 23, amputated by #AlShabaab court, for stealing Sh.So 12m from a shop. It’s about $545. #Somalia
@Daudoo: BREAKING: Disgruntled Somali soldiers seal off access to #Somalia‘s Ministry of Defense HQ in #Mogadishu over unpaid salaries – Reports
@SalahOsman0: #Somalia ’s Election Outcome Hailed as Unique Chance to Overcome Insecurity, Humanitarian Crisis – UN #Mogadishu http://www.un.org/apps/news/
@MikaelLindvall: Notice on fed govt working hours, posted on a ministry’s wall. One step in strengthening efficiency of executive.
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IMAGE OF THE DAY
Italian navy train Somali maritime police off the coast of Bosaso city.
PHOTO: @HarunMaruf