GetBudget Depletion: Coronavirus against Institutional Weaknesses
The government budget for this year might be dwindled by the Coronavirus impact on the economy as claimed by the ministry of finance.
Not the coronavirus but weak Institutions with the responsibility to manage the economy, including the finance ministry and the central banks are to blame the debilitating budget and the economy for contracting.
The country has been losing every year an estimated $550 million in collecting taxes by the inefficiency of the finance ministry. It has also been compounded by the central bank’s inability to have an effective monetary policy to respond to the cashless economy. The bank needs to look into the last financial crisis in 2007 that forced the USA Treasury, the Bank of England and the Eurozone to adopt quantitative easing program. However, do the weak institutions have the skills and knowledge to manage feeding huge cash into the economy to foster growth? Or do the institutions have the ability and efficacy to pursue the world financial institutions, including the world bank, the IMF and other international financial bodies to provide with loans or grants or both to stimulate the economy? It is strongly believed that the institutions (ministry of finance and central bank) lack the capacity to engage with international financial institutions.
In response to the institutional ineffectiveness, the international funders over the years prescribed Somaliland economic empowerment policy. That was claimed to resource the required skills to the departmental government officials to satisfactorily carried out their work. Nicholas Kay, the former UN envoy to Somalia and Somaliland claimed in interviews he gave about the economy, governance and among many other issues the inadequacy of officials to manage resources. He elaborated that every government departments he had met very few but all did not have the right skills to do their job. With this in mind, he said that poor people could not be helped to lift them up out of extreme poverty.
Nevertheless, I estimated that the country for the first quarter of this year to have lost an estimated $125 million based on my studies on economic activities. That would have created employment opportunities and provided a decent public service, including free education and health. Businesses, both large and small, have claimed to have experienced falling sales and also property prices have been falling over the past years.
Finally, it is intuitional weaknesses and not the coronavirus for the economy to have slowed down.
Ahmed Abdi Isse
As per usual the opinions expressed in this articale are those of the author and do not reflect the opinions of qarannews.com