2 May 2009

Somalia: Puntland Cabinet Passes 2009 Budget, Parliament Votes Next

The Council of Ministers in the Somali federal state of Puntland formally passed the 2009 budget presented by the Ministry of Finance, with President Abdirahman Mohamed "Farole" presenting the budget to parliament for ratification Saturday, Radio Garowe reports.

The Cabinet meeting was held Friday in the conference hall at the presidential compound, where President Farole, Vice President Abdisamad Ali Shire and members of the Cabinet listened to a presentation of the 2009 budget by Finance Minister Farah Ali Jama.

Out of 38 Cabinet ministers and deputies present, 32 voted in favor of passing the budget and six voted against thereby passing the budget.

On Saturday, parliament Speaker Abdirashid Mohamed Hersi formally opened the Puntland Parliament meeting with 52 out of 66 MPs present at parliament hall in Garowe, the administrative capital of Puntland.

President Farole addressed the lawmakers, saying: "As promised, we have brought the 2009 budget to parliament after taking into account global economic conditions and our [Puntland] resources."

Finance Minister Jama spoke next, explaining to lawmakers about changes made to increase the budget from 363billion Somali Shillings (US$11.7million) in 2008 to 545 Somali Shillings (US$17.6million) in 2009.

"We [Puntland] do not have a strong fiscal policy because the Central Bank that protects and mints currency does not exist [in Somalia], and therefore our budget is not one that reflects the economic reality in Puntland," the Finance Minister stated.

He divided the 2009 budget into two distinct periods, with the first period covering the temporary budget phase (Jan. to Apr.) and the second period covering the remaining months of 2009 (May to Dec.).

During the first period, the budget allocated 32billion Shillings (US$1.03million) per month of government expenditure and 52billion (US$1.7million) per month for the second period.

According to Finance Minister Jama, government revenue is expected to increase during the second period for a number of reasons.

"We will increase taxes on commercial goods, continue enhancing our revenue collection methods and estimate license costs collected from resource development initiatives," he explained.

The Ministry of Finance budget noted that license costs from resource development existed as a revenue source in recent years, but that "no allocation was ever included in the previous budgets."

Finance Minister Jama said the larger budget takes into account higher government expenditure for the ministries' day-to-day operations, and higher wages for government workers including parliamentarians, Cabinet ministers, civil services employees and security forces.

President Farole, who was elected in January as Puntland's third president, has promised to improve security, to balance the budget and to improve social services and infrastructure rehabilitation.

Puntland MPs are expected to review the 2009 budget and to convene for a parliamentary vote soon.

Last week, President Farole's government released The First 100 Days in Office report, detailing the new government's successes and ambitions since coming to power on a platform of change. REPORT: First 100 Days in Office

Located in northeastern Somalia, Puntland is a relatively stable region with a functioning government and a vision of being the role model state in a future Federal Republic of Somalia.

The region has been renowned as a center of piracy operations along the Gulf of Aden and Indian Ocean coastlines since 2007.

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