Tuesday August 6, 2024
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In the complex landscape of Somalia's governance, fostering collaboration and coordination among government entities is paramount for sustainable development. Recognizing this need, the Recurrent Cost and Reform Financing (RCRF1 ) Project supported the establishment of the Somalia Inter-governmental Fiscal Forum (IGFF) comprising two key components: The Intergovernmental Fiscal Federalism Technical Committee (IGFFTC) and the Finance Ministers’ Fiscal Forum (FMFF). The Finance Ministers’ Fiscal Forum (FMFF) provides a high-level forum for finance ministers from the FGS and Federal Member States to engage in strategic discussions and decision-making regarding fiscal matters, and the Inter-Governmental Fiscal Forum Technical Committee (IGFF-TC) functions at a technical level. Both bodies are assisted by the Secretariat in the coordination and execution of activities and functions. This committee has emerged as a pivotal mechanism to enhance intergovernmental relations, harmonize fiscal cooperation, and drive economic reforms.
At its core, the IGFF seeks to streamline the fiscal landscape by facilitating dialogue and cooperation between the Federal Government of Somalia (FGS) and the Federal Member States (FMS). Through the Intergovernmental Fiscal Federalism Technical Committee, technical experts from both levels of government convene to discuss and coordinate fiscal policies, revenue generation strategies, and resource allocation mechanisms. This platform serves as a forum for exchanging ideas, sharing best practices, and addressing challenges in fiscal management.
Simultaneously, the FMFF Level is central to political-level discussion and decision-making on fiscal relations. This platform enables policymakers to negotiate and finalize agreements on grant allocation, fiscal transfers, and revenue-sharing arrangements. By fostering direct engagement between key stakeholders, the FMFF promotes transparency, accountability, and mutual trust in fiscal relations.
One of the most significant achievements of the IGFF program is the establishment of a grant allocation and fiscal transfer mechanism. This mechanism ensures transparency and equity in the distribution of funds between the FGS and FMS, thereby addressing disparities in resource allocation and promoting fiscal balance across regions. By adopting a formula-based approach to grant allocation, the IGFF promotes fairness and accountability in the distribution of financial resources, aligning with principles of good governance and fiscal decentralization.
Furthermore, the IGFF has played a pivotal role in delineating functional and revenue assignments among the three levels of government. Through the National Consultative Council (NCC2), comprised of representatives from the FGS, the FMSs, and Banadir Regional Administration (BRA), the IGFF facilitated dialogue and negotiations to clarify the roles and responsibilities of each government entity. This process culminated in the successful conclusion of agreements on revenue-sharing, expenditure responsibilities, and service delivery mandates, laying the foundation for effective fiscal governance and decentralized decision-making. Such landscape agreements include the revenue assignment agreement and the functional assignment agreement signed on March 17th, 2023 in Baidoa and on December 28th, 2022 respectively.
Additional significant accomplishments comprise reaching an accord on a standardized sin tax rate policy, the endorsement of a Memorandum of Understanding between the FGS and the World Bank to bolster data transparency, monitoring, and reporting, and the facilitation of intergovernmental discussions leading to a consensus on the implementation of a unified Chart of Accounts.
The IGFF remains committed to advancing fiscal cooperation and economic reforms in Somalia. By strengthening intergovernmental relations, promoting transparency and accountability, and fostering consensus-building among stakeholders, the IGFF aims to create an enabling environment for sustainable development and inclusive growth. Through continued dialogue, collaboration, and mutual respect, Somalia's government entities can work together to address fiscal challenges, promote economic stability, and improve the well-being of all citizens.
In conclusion, the Somalia Inter-governmental Fiscal Forum (IGFF) catalyzes fiscal cooperation and coordination among government entities. By providing platforms for dialogue, negotiation, and decision-making, the IGFFTC under the auspices of RCRF PIU plays a crucial role in promoting transparency, equity, and accountability in fiscal relations. With its achievements in grant allocation, revenue-sharing, and functional assignments, the IGFFTC has laid the groundwork for effective fiscal governance and decentralized decision-making in Somalia. Moving forward, sustained efforts to strengthen intergovernmental relations will be essential for advancing economic reforms and achieving sustainable development goals.
RCRF PIU
Ministry of Finance