Puntland suspends intergovernmental processes, citing failure of dialogue with FGS.

Garowe, Puntland,
Puntland suspends intergovernmental processes, citing a failure of dialogue with the Federal Government of Somalia (FGS). In a pivotal letter sent on 25 August to Kristina Svensson, the Somalia Country Manager for the World Bank Group, Mohamed Abdirahman, the Puntland Minister of Finance, outlined sweeping changes that signify a growing fissure between Puntland and the FGS.

This development is particularly resonant given the backdrop of the strained relationship that has festered since early January 2023, when Puntland severed relations with the FGS over issues related to constitutional discord, resource sharing, and power allocation.

The letter, seen by the Somali Digest, meticulously identifies the key points of contention. Central among these are disagreements on the Constitutional Review Process, Fiscal Federalism, and Power and Resources sharing models. The Minister lamented the FGS’s predilection to enact national bills without due consultative processes, a move he argues contravenes both the Provisional Federal Constitution of Somalia and the Constitution of Puntland.

Minister Abdirahman attributes the FGS’s unilateral decision-making to pressures stemming from Debt Relief requirements, a justification that Puntland finds unacceptable. Moreover, the letter criticizes the FGS for politicizing international development projects, specifically citing recent issues surrounding the European Union’s SRBC and DPO-2 budget support for Somalia.

Suspended processes

In a radical step indicative of the deepening crisis, the Puntland Ministry of Finance announced the suspension of participation in multiple intergovernmental processes:

Unification of Charts of Accounts (UCAs)Integrated Tax Administration System (ITAS)Tariff harmonizationDomestic Revenue MobilizationSomalia Customs Automation System (SOMCAS)

Minister Abdirahman specifies that these suspensions are neither an annulment nor a critique of the underlying projects themselves but rather a corrective measure designed to align them with Puntland’s Constitutional frameworks and the Federal Provisional Constitution of Somalia.

The path forward

The letter concludes with an assurance that Puntland will continue to operate its existing systems and collaborate with international partners on the modernization of systems and laws within its Public Financial Management (PFM), Domestic Revenue Mobilization (DRM), and Customs Infrastructures. The aim is to foster an environment conducive to improved revenue collection and financial accountability, even as the government pulls back from broader cooperation with the FGS.

Connecting dots with the January rift

This latest development can be read as a direct outcome of the tensions that initiated the breakdown of relations in January. The grievances expressed in the Minister’s letter mirror the initial concerns Puntland had regarding the FGS’s approach to constitutional matters, resource sharing, and power distribution. Given the history of complex federal relationships in Somalia, the move signifies a broader call for re-evaluating how decentralized governance structures interact with central authorities.

Implications for international partners

Puntland’s decision to suspend these key processes sends a resounding message to international bodies like the World Bank. It raises questions about the future of developmental projects and financial systems in a region where stability and cooperation are already precarious.

Final thoughts

As Somalia stands at the intersection of constitutional reform and financial modernization, the ramifications of Puntland’s decision could be far-reaching. International bodies and stakeholders must pay close attention to these evolving dynamics, as they pose significant challenges to the overarching aim of fostering a cohesive, stable, and economically viable Somalia. Whether Puntland’s bold step will prompt an earnest dialogue or deepen the divide remains to be seen, but what is abundantly clear is that the fissures in Somalia’s federal structure have reached a critical juncture.