resignation. 

by Farhia Ali Abdi
Friday, October 17, 2014

Corruption is institutionalized in Somalia as the concept has lost the negative connotations and moral safeguards against it. In fact, corruption has become politically and socially acceptable. When Ms. Yusur Abrar joined the service of the Central bank of Somalia, Somalia was judged as one of the most corrupt nation in the world, according to Transparency International. Somalia has occupied this top rank in the Corruption Index for a good many years. The constant accusations against its political leaders of being engaged in corrupt activities are undeniable. The country has no effective system in place for accountability and transparency regarding the state’s financial transactions. Indeed, while corruption is illegal in Somalia – at least on paper – with the absence of law enforcement, the state apparatus makes a mockery of the law. The accused are never investigated and when there is clear evidence of wrongdoing, the matter is never pursued further.

It is within the framework of this tacit approval of corruption, at the highest level of the State machinery, that Ms. Abrar was appointed as a Governor of the Central Bank; a means to give confidence to donor countries aware of the extent to which the country is plagued by corruption. Ms. Abrar’s impeccable record was needed for the hundreds of millions of dollars allocated to the rebuilding of Somalia to be released to the custody of the Central Bank. The SEGM report tabled in July 2014 describes dealings and elaborate plans to seek and release the country’s frozen assets into the hands of the current Somali president.

The report outlines communications and contractual relationships between the Somali president’s office and a U.S. Law firm called Shulman Rogers. This relationship appears to be mutual and aimed at gaining access to Somalia’s frozen overseas assets. In this context, the authority of the governorship of the Central Bank of Somalia was not treated as a legitimate authority, but rather an illusory apparatus needed for illegal access to the Somalia’s assets and to garner the trust of international donors. The accusation contained within the report damages public trust in a government that was to be built on the hope and faith of the public.

The appointment and the resignation of Ms. Yussur Abrar as governor of the Somalia’s Central Bank:

Somalia has been wracked by civil war since the fall of Dictator Mohamed Siad Bare in 1991. The country is rebuilding its economy from ground zero and the appointment of Ms. Yussur Abrar as Governor of the Central Bank of Somalia on Sept 13, 2013, was seen as a welcome sign by the Somali people, particularly Somali women who have been traditionally sidelined from all Somali political and decision-making processes. Her nomination made Ms. Abrar not only the second high profile woman in President Hassan’s government, after the Foreign Minister Fowsia Haji Aden, but also one of a few women Central Bank governors in the world.

Ms. Abrar is highly regarded in international financial circles and brings over 30 years of experience in banking, insurance, and risk management to the Central Bank of Somalia. She took over from Abdusalam Omer, who resigned after a 2013 United Nations monitoring group accused him of mismanaging the public coffer.

As a Central Bank Governor, Ms. Abrar immediately put forward her priorities: working with relevant stakeholders to address an impending remittance crisis, rebuilding the country’s financial system by licensing banks and other financial institutions, developing a strong regulatory framework to ensure transparency and fiscal responsibility, and implementing a monetary policy centered on job creation, in an effort to spur economic growth and development.

In November 2013, only several months into her new position, Ms. Abrar’s tended her resignation to President Hassan Sheik Mohamoud, when misappropriation of funds resurfaced. In her letter of resignation, Ms. Abrar states:    

“It has become clear to me that my ability to act in the interests of the Somali people has been undermined and will continue to be undermined by various parties within the administration. From the moment I was appointed,; I have continually been asked to sanction deals and transactions that would contradict my personal values and violate my fiduciary responsibility to the Somali people as head of the nation’s monetary authority.”

Ms. Abrar’s indictment was validated by the SEMG’s report. The report emphasizes that “On average, some 80 per cent of withdrawals from the Central Bank are made for private purposes and not for the running of government, representing a patronage system and a set of social relations that defy institutionalization of the state.” Moreover, Ms. Abrar’s letter presented a new phenomenon of whistleblowing as a means of fighting corruption in Somalia.

In his annual report to the Security Council, Nicholas Kay, the U.N. Special Representative to Somalia, described Abrar’s resignation as a “body blow” to donors’ confidence and drew stark attention to the need for more robust public financial management and transparency. Although, Ms. Abrar became a very effective whistleblower, her departure was a shock to the whole nation, as well as the Western donors who had pledged $2.5 billion to Somalia’s recovery effort.

The intent to divert Somali assets and the U.N. SEMG report of an allegation of conspiracy:

In July 2014, the UN Somalia and Eretria Monitoring Group produced a damning report that shows communications between U.S. law firm-Shulman Rogers and the president’s office. It recounts recovered funds of $12, 326,971, 63 in cash from overseas frozen assets as well as $37 million in gold and bonds. The report alleges that all the recovered Somalia’s assets were entrusted to the country’s President alone, and not within the proper channel of the Central Bank of Somalia. Ms. Abrar’s major concerns included the violation of the Central Bank’s ability to manage the finances of the country and the fact that hired foreign entities were making decisions on behalf of the Central Bank and the government.

The report indeed indicated that power of attorney was given to Jeremy Schulman of Shulman Rogers (U.S. law firm), which was to gain millions of dollars from these dealings. Furthermore, a letter posted on August 22, 2014 by Allidmaale online shows communication made by the president to Ms. Catherine M. Lomax from the Federal Reserve Bank of New York (FRBNY) authorizing a power of attorney to Mr. Jeremy Schulman and this law firm.

The interference, underhand dealings and the lack of transparency regarding the country’s finances are what Ms. Abrar addresses with the President himself. In her letter Ms. Abrar pleads to the President to reinforce the law:

“The autonomy of the Bank shall be respected at all times, and no person or entity shall seek to influence the members of the decision-making bodies or the staff of the Bank in the performance of their functions or to interfere in the activities of the Bank…Unfortunately, the central bank has not been allowed to function free of interference, and as such cannot operate as a credible institution.”

Absolutism and intimidation tactics by authority is normally inherent in a dictatorial belief system. The behavior displayed by both the hired firm and the other collaborators named in the report are very disturbing, dangerous, and discouraging to many Somalis, who genuinely want to help their country. It is a phenomenon that grown and flourished throughout the chaos of the civil war. Ms. Abrar’s resignation, however, brings attention to the lack of creditable leadership in the country.

There is a quiet dignity to Ms. Abrar’s letter. She knew the battle with corruption was deep and her tolerance was tested, but she kept trying for accountability. She wrote:

“The message that I have received from multiple parties is that I have to be flexible, that I don’t understand the Somali way, that I cannot go against your wishes, and that my own personal security would be at risk as a result… I am the least concerned about the security threat, but I am truly disappointed that I have not received your support and leadership on this matter so that I could objectively perform my duties.”

Both the President and the Foreign Minister denied the allegations made by the Monitoring Group and Ms. Abrar. However, a Reuters’ interview with 12 diplomats involved in Somalia all reported that Abrar’s version of events was credible. As a former Vice-President of Citigroup and American International Group (AIG), and as an entrepreneur in both telecommunications and financial consulting, Ms. Abrar would have been an effective resource person for this nation that is facing such serious economic challenges. Although, Ms. Abrar was aware that the economic problems of the country were immense, the solutions uncertain and that no one approach provides all the answers, she was ready to find remedies and was not afraid to ask hard questions or allow herself to be marginalized.

In her final message to the President and the Somali people, she reiterated her achievements in the short period she served as Governor:

“In the seven weeks since my appointment as Governor, I have already made significant progress. I met with global financial leaders, including the World Bank, IMF, AfDB, Barclays and the US Government, to raise the profile of the remittance crisis facing Somalia and help drive a solution. I worked closely with the World Bank and the IMF to develop a detailed plan to rebuild the Central Bank’s functions on a large scale. The IMF has already started training our staff in Nairobi. I reached out to the money transfer companies who are now looking at the Central Bank for leadership and guidance. The staff at the Central Bank is more motivated now than they have been since before the civil war. I can only imagine what could have been achieved, provided I had your support to perform my duties objectively.”

Your Excellency, while I am disappointed by this lack of support, I am more disappointed for the Somali people who would have benefited the most from these and future contributions.

Ms. Abrar has exposed a well-articulated misappropriation of Somalia funds and her departure has left the country pondering it all while her successors scramble to put a mechanism in place to safeguard such corruption in the future.

Finally, to combat corruption and create a healthy, accountable and transparent democratic government in Somalia, the country’s leaders need to continue Ms. Abrar’s work with the same spirit and manner that she employed. The future leaders of Somalia need to listen, to prod, to insist on reason and fairness, to refuse to keep quiet and conform, to resist stridency and simplistic thinking, and to accept that taking the right action strengthens the foundation of governance and the society as a whole. It is important that corruption loses its legitimacy in public imagination. Somali society must demand transparency of government officials; to set up a registry system and provide the salaries, properties and businesses of members of parliament and government. If these and similar rigorous measures are not taken to curb corruption, the action of a few individuals like Ms. Abrar may not have the desired effect.

There is no shortage of busybodies running or claiming to run for leadership to strengthen national identity and overcome all that was and is wrong in Somalia. Somehow, however, they never seem connected with the real lives of ordinary Somalis struggling to deal with change. I know I am not alone when I say; Ms. Yussur Abrar, your country and people are very proud of you, and appreciate for the bravery and the courage you showed. You have portrayed the quality and the dignity of a true Somali woman, and we hope your bravery, nationalism, and values exemplify the way forward and the changes that Somalia desperately needs.

Farhia Ali Abdi
Email: [email protected]