CENTRAL BANK OF SOMALIA

Press Release

CBS/03/05
September 29, 2005

Dr. Mohamud M. Uluso
Governor
Central Bank of Somalia 

I would like to bring to the attention of Somalis, the International Community and the Media that my removal from the Office of Governor of the Central Bank of Somalia based on Presidential Decree No. 001 JS dated September 24, 2005 is unconstitutional and unlawful in accordance with the Transitional Federal Charter and the Central Bank Act No. 6 of 19 October 1968. It is a manifestation of abuse of power. Thus, I remain the legitimate Governor of the Central Bank of Somalia and seek your support.

Article 15 of Central Bank Act prescribes that the Governor of the Central Bank can only be removed from office following the procedures provided for his appointment. Article 44 of the Transitional Federal Charter provides the procedures for my appointment. As required, the Council of Ministers of TFG did not approve my removal.

In addition, the allegation of disobeying order from the Prime Minister, Prof Ali M Gedi is baseless and preposterous. The President of the Republic, whose responsibility is to ascertain accusations concerning government officials through due process, did not offer me the opportunity for rebuttal on the false allegation made against me. Aside, the Governor of the CB has the obligation and duty to refuse orders contrary to law from the Prime Minister. 

Furthermore, the Central Bank Act establishes the term of office of the Governor in order to protect him from such abuse of power, illegal removal on baseless accusations, and to let him fulfill his duty with integrity, independence and accountability. The claim that an official can be removed by the person who appointed him has no legal basis and it is erroneous belief. TFG is subject to the Transitional Federal Charter, the 1960 Constitution and all democratic laws passed before 1969.

There may have been differences of opinions or expectations on the issues briefly described in the annex such as printing new currency, management of government funds, opening of accounts in foreign countries, role of the Central Bank, opening of Central Bank Office in Jowhar, and preparation of government budget 

I call upon the international community – especially partners of Somalia to examine my unconstitutional, unlawful and without due process removal and to ensure that the Transitional Federal Government (Jowhar) adheres to the rule of law and good governance practice. It is also important that the International community publicly dissociates from any on-going unconstitutional and unlawful activity and condemns it for the advancement of the Somali National Reconciliation. Otherwise the international community will bear responsibility for potentially disastrous consequences.

I also call upon the media to take interest in my illegal removal from office for public interest. A government that disregards the legal protection afforded to public servants sets a dangerous precedent and encourages bad governance. Public officials without legal protection cannot properly serve the country and ultimately, corruption, poverty and civil war will mar our life.

Finally, I appeal for the Transitional Federal Parliament as representative of the Somali people to consider my unconstitutional and unlawful removal and lack of due process for appropriate resolution as soon as it convenes. 

Annex

1.  The Central Bank has the sole and exclusive right to issue banknotes and coins. Printing new currency is one of the critical issues the Bank faces. As Governor I had contacts and discussions with IMF, World Bank, reputable printing companies – De Le Rue and Giesecke & Devrient FZE-, experts on currency reform in post-conflict countries as an advancement preparation. Under current circumstances, the Bank took the position to cautiously proceed and not promote printing new currency until the institutional capacity of the Bank is established. The Bank also limited the involvement of private businessmen in currency issuance process for its sensitivity, integrity and security and advocated for open competition and transparency in the process. To eliminate recent public anxiety on the flood of fake and counterfeit banknotes in the country, it is absolutely necessary that the Leadership of Transitional Federal Government make public statement on its determination for preventing such event and taking concrete measures.

2.  I have questioned the role of the Minister of Planning and International Cooperation, Dr. Abdirizak Jurile and the Director of Finance and Administration of Prime Minister’s Office, Mr. Mohamed A. Americo as counterparts for the administration of “Somali Emergency Budgetary Support Project” that receives and disburses donor support fund on behalf of TFG, while the institutions responsible for the management of public resources had no role in any stage of the process. I have suggested discussing new procedures for proper resource management in line with the institutional responsibilities within the TFG. The current arrangement of financial management is sort of resource control without accountability, transparency and parliamentary oversight within the Transitional Federal Institutions. The Central Bank issued a memorandum outlining the government procedures on financial aid management and the ability of the Central Bank to fulfill its responsibilities on behalf of the government. But the Minister of Planning & International Cooperation opposed the Bank’s effort to improve the credibility of the government and sanctioned the current imperfect arrangement of financial management.

3.  I have also complained that opening of accounts in foreign countries by Government Institutions is against the law and pleaded with the President to stop. No action has been taken.

4.  The Central Bank Act requires that the Prime Minister and the Council of Ministers seek the advice of the Central Bank before deliberations on certain matters take place. I provided constructive comments on important government project proposals taking into account TFG and public interest. Paradoxically the Minister of Planning and International Cooperation waged a campaign forcing especially some donors to disregard the independent role and required advice of the Central Bank.   

5.  The Bank is a constitutional autonomous institution with fiduciary responsibility and works directly with all Transitional Federal Institutions. Like the Executive Branch, it is accountable to Parliament. Its legal/business headquarter is Mogadishu. In consideration of the facts that the Government has no control over Jowhar, the bank lacks resources and could not function properly anywhere in Somalia under current arrangement of financial management, we had to undertake other important tasks here in Nairobi for 3 months; the PM has been informed about our work plan in July 2005 and did not object to it.

6.  In fulfillment of the report of Economic recovery, institution building and resource mobilization committee of the Somalia National Reconciliation Process, I strongly recommended that the Ministry of Finance and Ministry of Revenue prepare a one-year government budget. This budget would spell out goals, objectives, priorities and financial requirement of the government. It will also represent a basic document for government operations, transparency and accountability. Since first years’ budgets should almost be financed through international aid, TFG must address the fund raising challenge in a planned, effective and responsible manner. My recommendation did not get consideration for a while. Then a budget document has been approved by the Council of Ministers without follow up through parliament approval and appeal to donors. In my judgment this has undermined the functioning and capacity building of the Transitional Federal Government in transparent, accountable and lawful way. 

       Cc: Hussein Warsame
           Minnesota
           KKE Architects, Inc.
           Hawars02@smumn.edu          

  


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