By Isha Qarsoon
The International Monetary Fund recently announced that it had completed a staff-level agreement with Somali authorities on the fourth review of the Extended Credit Facility. The IMF staff commended the government of Somalia for maintaining fiscal discipline and advancing reforms under the Program. This agreement is subject to approval by the Fund’s Executive Board. In IMF language, a staff-level agreement is a technical milestone — the moment when its mission team concludes that a country’s policies are broadly aligned with the program’s objectives. It signals that Somalia’s economy is stable enough for the next review. Once the IMF’s Executive Board in Washington endorses it, disbursement usually follows.
In theory, this agreement is meant to reward progress. Each agreement confirms that the country has met the agreed conditions and deserves continued support. In practice, it has become an administrative ritual. The IMF’s economists review government data, produce a cautiously optimistic report, and recommend further engagement. For donors, the announcement offers reassurance that things are moving in the right direction. For governments, it is validation — a seal of international approval. And for Somalia, it has become a predictable routine that hides an uncomfortable truth: these agreements are built on numbers that have never reflected the country’s real finances.
The contradiction is glaring. While the IMF celebrates fiscal progress, the Auditor General of Somalia continues to publish reports describing deep and systemic mismanagement. The 2024 audit cycle shows that the government cannot account for significant portions of its revenue or expenditure. Major public institutions operate outside the law. And some of the most important sources of state income are treated as personal fiefdoms by political elites. Despite persistent doubts about data credibility, as reflected in the Auditor General’s report, the IMF continues to signal confidence in Somalia’s reform trajectory, renewing programs and approving disbursements largely on the strength of reported compliance rather than verified financial performance.
To understand how misplaced that confidence is, one must look at what Somalia’s auditors actually found. The 2024 report discloses that the government claimed to have spent more than one hundred and fifty million dollars on social protection under the Baxnaano program — a flagship initiative designed to provide cash transfers to poor households. Yet the auditors could not verify whether the money reached its intended beneficiaries. The World Food Programme, which manages the program’s delivery, has not provided (upon request by the Auditor General’s Office) detailed data or proof of payments, leaving the government’s claims unverifiable.[1] That alone should have triggered alarm at the IMF, whose mandate includes transparency and accountability in public spending.
The same report exposes chronic opacity in revenues from national concessions. The foreign companies managing Mogadishu’s port and airport (two of Somalia’s most valuable assets) have not submitted audited financial accounts, and the government has made no effort to compel them. These facilities generate millions of dollars every year, but no one can say with certainty how much the treasury actually receives. Such arrangements not only rob the public of revenue but also destroy any basis for economic planning. The IMF, which congratulates the government for growing domestic revenue, does not seem to notice that much of that income may never reach the state’s coffers.
The auditors also documented pervasive procurement violations. Ministries split large contracts into smaller ones to avoid competitive bidding. Payments are made without documentation. Vehicles, equipment, and properties disappear from official registries. Some agencies maintain unauthorized bank accounts, effectively operating parallel treasuries. Even the judiciary (the institution expected to uphold legality) refused to provide its financial records, shielding millions of dollars in budget allocations from examination. It is a portrait of a government that cannot, or will not, follow its own rules.
These findings are not new. Similar patterns appeared in previous audits, and most recommendations remain unimplemented. Yet IMF staff reports continue to praise “steady progress” in financial management. The reason is simple: the IMF measures success through indicators that look impressive in isolation but mean little without integrity. When government data show higher revenue collection, the IMF applauds. When the government reports budget execution rates that appear better than those of the previous year, it is applauded once again. Yet no one asks the obvious question: what if the data themselves are unreliable? What if the apparent improvements are numerical illusions produced by the same ministries that failed the audit?
By treating self-reported numbers as evidence of reform, the IMF has become trapped in a cycle of self-deception. Its officials rely on data generated by the same political structures that manipulate those figures. The result is a comfortable fiction — a story of recovery that satisfies donors and protects the Fund from the charge of disengagement. It is easier to publish optimism than to confront the institutional rot that optimism conceals.
The Fund’s defenders will say Somalia is fragile, that progress must be measured in degrees, and that holding the government to higher standards might derail cooperation. But this is not patience; it is indulgence. Fragility is not an excuse for the disappearance of public money, or for the sale of public land without central bank oversight, or for concession revenues that never reach the Treasury. The IMF’s willingness to overlook such behavior sends a dangerous signal that the appearance of reform is enough. Over time, governments have learned this lesson, becoming experts in performance rather than in governance.
The political logic behind this tolerance is clear. The IMF and donor countries want Somalia to remain in a cooperative posture. They fear that suspension of support could lead to fiscal collapse or political instability. So they choose to see what is convenient to see. But stability built on deception is not stability at all. It is the illusion of order — a balance sheet that hides the cost of corruption.
Real fiscal reform would begin with honesty. Every dollar and shilling of public revenue, whether from land sales, port concessions, or donor programs, should pass through the Central Bank or the Treasury Single Account. All implementing agencies should be subject to annual independent audits, and those reports should be public before any IMF review. The Fund should treat the Auditor General’s findings as central evidence, not as background noise. If the IMF insists that it values governance, it must act like it.
Somalia’s current fiscal framework is fragile not because the country is poor but because the institutions managing its money are unaccountable. The President and his ministers can sell or lease public land without parliamentary authorization or central bank recording. Contracts worth millions can be signed without oversight. In such an environment, the idea of fiscal progress is absurd. Yet the IMF’s staff-level agreement treats this environment as normal, even commendable. It praises the numbers that conceal the behavior.
There is a deeper cost to this indulgence. Each time the IMF approves a new disbursement, it strengthens the hand of those who profit from opacity. It tells citizens that international partners care more about paperwork than justice. It discourages local oversight bodies, especially the Auditor General’s office, whose work is ignored by the very institutions that claim to champion accountability. When domestic watchdogs are sidelined, the public loses the only evidence-based voice it has.
Somalis understand the stakes. They see that roads, hospitals, and schools promised under reform programs rarely materialize. They know that revenues from ports, airports, and taxes do not translate into visible change. They hear the IMF’s praise and wonder which Somalia the Fund is talking about. The gap between international rhetoric and lived reality is not technical — it is moral.
The IMF’s new agreement, soon to be presented to its Executive Board, will likely be approved. It will release another round of funds, and another round of statements about progress will follow. But unless the Fund confronts the findings of Somalia’s own auditors, it will be complicit in a grand deception — one that trades integrity for convenience. Economic reform cannot be built on falsified confidence. Numbers can be managed; truth cannot.
Somalia’s future depends on rebuilding trust in its institutions, not merely balancing its books. The country’s citizens deserve to know that the public resources meant for them are not vanishing into private pockets. That knowledge will not come from IMF press releases; it will come from transparent, verifiable accounting. Until then, each technical agreement will mark not a victory for reform, but another step deeper into illusion — a polished mirage mistaken for progress, sustained by those who should have known better.
Isha Qarsoon
Email: Ishaqarsoon1@gmail.com
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Isha Qarsoon- is a platform dedicated to addressing critical issues pertaining to good governance, corruption, and social challenges. It emphasizes investigative journalism as a means to uncover and disseminate information, enabling the public to engage with and understand the realities of the country. Through its focus on transparency and accountability, the forum aims to foster informed public discourse and contribute to societal awareness and reform.
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[1] According to the auditor General, “[d]uring the audit, the Office of the Auditor General requested this information from both the Ministry of Labour and Social Affairs and the Ministry of Finance. However, it was confirmed that WFP had not yet submitted the required beneficiary data or payment confirmations. Consequently, the audit team was unable to independently verify whether the intended beneficiaries received the reported funds.” https://oag.gov.so/oags-releases-38-audit-reports-demonstrating-a-strong-commitment-to-accountability-and-transparency/?utm_source=chatgpt.com, last visited October 13, 2025