Somaliland: The scandal surrounding the 1st Round of the World Bank Grants (SBF)

By: Yumoha Pasha

HARGEISA (Somalilandsun) - A large number of our readers have written to us and drew our attention to the way the 1st round of the Somaliland Business Fund was handled by the World Bank and the implementing agency Landell Mills. There has been a considerable disappointment causing negative feeling among the business community in Somaliland as a result of the composition of the list of the successful grantees.

We have received a lot of complaints from people who have applied the grants and feeling that they have denied of the opportunities by corrupt financial analysts and World Bank staff who have mishandled the application process and the selection of the winners. The complaints ranged from the talk of an unfair and biased selection process to accusations of downright favoritism and regionalism from the part of the SBF implementing agency and the supervising World Bank staff in Somaliland. Some of the main complaints related to and verified by Somalilandsun are noted below:

• Lack of proper information regarding the priority sectors of the economy and the preferred areas for funding, this information was given to specific people with the intention to give them an unfair advantage over the rest of the applicants.

• Out of the 59 successful grantees 43 (73%) come from Hargeisa and its surrounding areas. 36 of those 43 grantees (61%) come from the Hargeisa town. The rest of the country got only 16 grantees (27%). This clearly shows that the system was so unfair and heavily biased towards Hargeisa and to a particular clan.

• Among the businesses who are complaining that there a large number of women businesses who believe that they been deliberately bypassed. They say that for example out of the 59 grantees only 11 (18.6%) are women and they see this as unfair and does not represent women in business.

• More assistance and supervision given to specific number of people which enabled them to complete their applications ahead of time and meet all the criteria required for shortlisting and increase their chances to get the grant.

• World Bank staff on the ground Interfered in the process and had a hand in all the decisions from start to finish. In fact there is some evidence that one senior World Bank representative in Somaliland Mr. ...(name withheld) personally benefitted from the grant scandal.

• There are some "facade companies" who were simply registered for the purpose of getting the grants from the SBF and never had any licenses from the Ministry of Commerce nor had any offices or businesses operating. Each of the financial analysts working in the SBF had one such company and the senior SBF staff member (names withheld) had four for himself.

While a number of Grant applicants alluded to demands for outset payment of kickbacks (between 10% and 20% of the grant value) if their applications were made successful and those who were felt to be "reliable" were then shortlisted for the final list, we have failed to ascertain this fact thus remains an insinuation.

These are serious allegation and while we at Somalilandsun have failed to get a response for official comment from SBF , it is imperative that the World Bank investigate the scandal surrounding the grants disbursement and rectify the situation by bringing in checks and balances in the grant process.

While It is incumbent for the World Bank to be fair and impartial as well as important that it should be seen as such, This is not the first private sector development program undertake by other donors. In fact there are various donors working in Somaliland now such as the USAID/DAI Partnership for Economic Growth, who have attracted positive reaction and dispersed its grants to all regions fairly. There are always some people who might not be happy if they don't get what they wanted but never before has the feeling of the community been so negative about a particular donor than the World Bank.

While there is a growing concern about the way this 1st round was handled based on the above noted complaints and in view of the original noble gesture behind the fund the donor partners should come clean and set the record straight since ignoring these concerns might impinge negatively on the credibility of the World Bank program in future.

Somalilandsun having managed to verify a number of the insinuated misdemeanors after acquiring relevant evidence to back these allegations hopes that the World Bank will heed to people's concerns and expedite necessary investigation to find out what happened and how the World Bank and their implementing agency got it wrong in the 1st round of the SBF.

It is also hoped that the Ministries of Planning and Commerce shall do their own investigations to get to the bottom of the scandal and give guidelines to future rounds of the grant.

• SBF SMALL GRANT AWARDS Rd 1