Somalia government money 'goes missing'

Somali soldiers take position on 29 May, 2012 during a clash with al-Shabab insurgents The Somali government is fighting al-Shabab, which control much of the country

Large sums of money received by Somalia's interim UN-backed government have not been accounted for, a World Bank report says.

The report, seen by the BBC, is being circulated at talks in Turkey on how to end Somalia's decades of anarchy.

It alleges a discrepancy of about $130m (£85m) in the accounts over two years.

UK foreign minister William Hague told the BBC that an international board to oversee the distribution of aid funds needed to be established urgently.

Somalia's transitional government mandate expires in August when it is due to hand over to an elected president.

'Big question mark'

The revelations in the World Bank report come as several hundred Somali politicians meet representatives of more than 50 countries in Istanbul to try to win new funding for the long-term reconstruction of country.

The report stops short of making specific allegations, but does not rule out corruption as a possible explanation for the missing government revenue funds.

"There is a discrepancy in what comes in and there's a lack of accounting of how money has been spent," the report's author Joakim Gundel is quoted by US broadcaster Voice of America as saying.

"So that opens naturally a big question mark for sure."

The report, which looks at the years 2009 and 2010, also says the transitional government has no real accounting system nor does it publicly disclose financial statements.

Contacted by the BBC, Mr Gundel said he would not make any comment about the report until later on Friday.

But VOA reports him as saying that the missing millions could significantly bolster Somalia's security without relying on foreign donations.

The conference in Istanbul is the second major international gathering this year about Somalia's crisis.

In London in February, at talks hosted by the UK government, it was agreed that a financial management board to oversee aid should be established.

Map

"The details of this need to be finalised with the government of Somalia - and frankly I was hoping it could be done by now, by this conference in Istanbul - if it is not signed here, well then it needs to signed in the next few weeks," Mr Hague told the BBC Somali Service.

Last month, leaders of disparate Somali factions agreed to a timetable that will elect a new president by 20 August, ending the transition period of the interim government.

The Horn of Africa country has had no effective central government since 1991, and has been wracked by fighting ever since - a situation that has allowed piracy and lawlessness to flourish.

Mr Hague said it was important that those at the conference understood that deadlines were met and that the 18,000-strong African Union force in Somalia was properly funded.

"I hope it [the conference] will keep up the momentum, particularly towards a successful and legitimate political process in Somalia, towards making sure that development money can be spent properly and transparently in Somalia... And we'd like to see, of course, the continued success of African Union forces," the UK foreign secretary said.

All Somalia's rival groups have been invited to participate in the Istanbul talks, expect for the Islamist al-Shabab group, which joined al-Qaeda earlier this year.

Despite facing pressure on a number of military fronts, its fighters control much of the country.

In recent months, troops from Ethiopia and the African Union force, as well as pro-government militias, have helped government forces gain territory from al-Shabab but the militants continue to stage attacks in the capital, Mogadishu, and elsewhere.

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