The UNCDF team held a round of consultations with key national partners in Somaliland to discuss the progress of fiscal decentralization and subnational reform of public financial management and further elaborate the roadmap.
The consultations were organized in the context of the Joint Programme on Local Governance and Decentralized Service Delivery in Somalia (JPLG) where UNCDF participates together with ILO, UNICEF, UN-Habitat and UNDP. The team conducted discussions with the Vice President of Somaliland Abdirahman Saylici, the Minister of Finance Abdiaziz Mohamad Samale, the Minister of National Planning and Development Dr. Sa’ad Ali Shire as well as with the representatives of the Ministry of Interior, Ministry of Education, the Accountant General's Office, the Local Government Association of Somaliland, the UN sister agencies and the World Bank.
UNCDF has been supporting decentralization in Somaliland since 2011 through the Local Development Fund (LDF), a system of discretionary development grants to local governments. UNCDF is supporting further efforts to integrate the LDF into the national and local Public Financial Management (PFM) systems.
Starting from seven districts in 2011, the LDF has now expanded to 16 districts country-wide, eight of them in Somaliland. The basic PFM procedures introduced in the beginning of the programme have gained in scope and complexity and incorporated a performance-based component, which links annual allocations to the district governments' performances during the previous fiscal year.
At the same time, the absorption capacity of local governments has increased, bringing the average allocation per district from $100,000 to about $250,000 and the value of an average project from $20,000 to $100,000. The impact of the LDF extends beyond the infrastructures funded through the Joint Programme, as it has also contributed noticeably to the JPLG's efforts of enhancing equitable service delivery.
“The LDF has created transparency and accountability at the local level through orderly planning, procurement and reporting. We have noticed that district administrations have started applying LDF procedures to projects funded from other sources, including own revenues,” said Abdisamad Omar Mal, Director-General at the Ministry of Interior.
Since 2012, UNCDF has been providing technical support to the formulation of the decentralization policy and the elaboration of Somaliland's roadmap, including its fiscal aspects. The Decentralization Policy developed with the UNCDF support has been vetted by the key ministries and its approval by the Cabinet is expected before the end of June. Together with the World Bank, UNCDF is a member of the PFM donor group and has contributed to the formulation of the PFM reform action plan.
During the recent consultations, the Somaliland partners endorsed the increased support that UNCDF intends for advancing the decentralization agenda before the end of the year. This support includes designing of a comprehensive and transparent intergovernmental transfer system as well as launching of a Local Revenue Mobilization Initiative – a system of interventions along the PFM cycle designed to improve revenue planning, forecasting, data collection and reporting.
National counterparts specifically requested UNCDF for technical assistance in developing a government strategy for advancing fiscal decentralization in Somaliland. “We’re satisfied and happy with the UNCDF support and we confirm our strong commitment to decentralization,” said Vice President of Somaliland Abdirahman Saylici upon the conclusion of the mission.