Inquisitive_
VIP
source
https://muraayad.com/need-know-corrupt-3-revenue-charged-bosaso-port/
What you need to know about the corrupt 3% of revenue charged on the Bosaso port.
“Did you know that in the 2017 Puntland 4 privately owned companies will receive a budget totalling more than the sum for 6 ministries”
Introduction
Corruption is a plague that devastates society and paralyzes the political and economic development of the state. Muraayad has conducted investigation on the causes of poverty and the reason why the state cannot manage its budget. We compared the salary scales of different states in Somalia and found that Puntland employees receive the lowest salary and that most times they don’t receive this small salary. The salary scale for the position of a Director in Puntland ministries is $80, which is extraordinarily low and not anything close to the living wage of Puntland (how can someone feed, educate and provide medical care for a family with this salary).
If the government employees and the soldiers don’t receive their rights, there cannot be security and good administration. There will be a viscous cycle of poverty and lack of confidence in the government.
The current government financial crises is not mainly caused by low government revenues, drought or ban on livestock. The main cause is the mismanagement, corruption, nepotism surrounding what the government already receives as taxes from the public.
The 3% Corruption in Puntland
In recent years in Somalia there have been a many young men armed with laptops and operating without offices who are promising to improve everything using IT technology. Unfortunatly, most of them are not genuine and are relying on nepotism and corruption to get ahead. A good example is the Bosaso port which is at the heart of the Puntland economy, which has a old taxation system and employs many people to do the same work because of mistrust.
In 2015 a technology company, VIVACOM, came to the Puntland government to provide IT services for the Bosaso port. VIVACOM was established between 2012-2013 and has office in Kenya. The company is owned by two gentlemen, one of them, Hussein Salad who hails from Puntland and is a Swedish citizen and a former long time employee of Erickson. The other co-owner is from Somaliland.
Hussein Salad, the Owner and Director of VIVACOM,
VICACOM has the right to promote sell and provide its services to clients. In facts deserves praise for attempting to provide much needed technology solutions that can help the government to mordenize its system. However, what is in question is about the way they have become service providers and more importantly the fact that they are receiving large percentage of Puntland tax for providing very simple IT software. To get the contract, VIVOCOM was helped by lobbyists close to the President and the Minister of Finance.
The VIVACOM-PUNTLAND Contract
The VIVACOM company has approached the government with IT solution that would allow the senior government staff to be informed about the daily tax revenues of the Bosaso port at end of each day. At the end of 2014 and beginning of 2015, VIVACOM made connection with the President of Puntland Abdiweli Ali Mohamed (Gaas), when the President understood their objective he directed them to the Ministry of Finance which was then headed by Shire Haji Farah who is now the Puntland Minister of Planning. Initially, VIVACOM did not succeed with their proposition to Minister Shire. At this point VIVACOM Director, Hussein Salad, approached powerful lobbyist within the circle of the President such as Burhan Mohamud Gurey, Abdirahman Mohamud Haji Hassan and Imam Abdiwahab Mohamud Gurey who are close kinds of the President of Puntland. These lobbyists convinced the President Abdiweli Gaas that there would be personal benefit to him in the form of regular or profit share from the 3%, which then resulted Minister Shire to sign the contract in a haste. Then the VIVACOM Director started buying equipment that included servers and other necessary equipment for the operation.
There was a reshuffle to the Ministry of Finance in June 2015 which brought appointment of Abdullahi Sh. Ahmed as the Minister. The new Minister Abdullahi requested VIVACOM to explain about their contract and service. Muraayad has learned from sources close to the Minister Abdullahi that he transferred their case to an expert in the Ministry who is the Coordinator for the World Bank PFM project so that he can provide his professional opinion.
The Key Terms of the contract and its problems
VIVACOM wanted to invest in a software program and equipment, training ofgovernment officials on how to use them as well as provide any software problems needing troubleshooting. In return for this service VIVACOM would receive 3% of the Bosaso port revenue to paid every month!! This type of agreement has never been seen in Puntland.
Many software providers such as Microsoft and Adobe Creative have recently moved to from perpetual licencing and to subscription licensing. These international companies provide the subscription licencing on fixed monthly or yearly basis. However, VIVACOM by receiving 3% of the port revenue has instead of receiving fixed cost for the service put no limit to the amount they can receive for the service. Murayad learned that the Ministry of Finance expert, Abdulkadir Hashi, has recommended that the VIVACOM agreement should annulled because it is unlawful and would conflict with the World Bank PFM project and suggested that if they want to continue they should only be paid a fixed amount for the service. Afrter this recommendation, Minister of Finance Abdullahi met with VIVACOM Director Hussein Salad and through agreement paper on his face.
The Director of VIVACOM return to Garowe between July and August 2015 in order to complain about the Minister. Once again the powerful lobbyists close to President Gaas called Burhan Mohamud Gurey and Abdirahman Mohamed intervened and have convinced Minister Abdullahi to also benefit and take a share of the 3% fees charged by VIVACOM. Afterward, Minister Abdullahi has summoned Hussei Salad before he could reach his complaint to the President and accepted the agreement despite the objection of the PFM expert.
Contract without completion
The Puntland President Abdiweli has promised to the public before that there would be open completion. This project should have followed these steps:
The PFM project and VIVACOM
The VIVACOM private company and the data entry software coincided with the World Bank PFM project, which is a complete program connecting all the revenue from sea ports, airports and land customs therefore improving revenue services. The PFM project hired expert companies from Kenya and Puntland to do the job. The PFM project will run from 2015-19 and is also central for the other World Bank projects like SCORE, CIP, FMIS as well other project. The VIVACOM agreement which will not improve the revenue of the government (but will only take 3% of the revenue) works in Bosaso only and uses data entered manually into the software to be recorded and shares the data through SMS text to senior officials like the President of Puntland, the Minister of Finance. The program cannot does not capture expenditure and there for cannot generate financial reports.
How is the 3% from Bosaso port Shared?
The average monthly revenue of the port is estimated to be between $2-3 million US Dollar. When you calculare the 3% against this it means VIVACOM will receive around $90,000 per month. However, as Muraayad has learned all this payment does not go to VIVACOM, they only recive 1.5% and the other 1.5% is diverted to President Abdilweli, Minister of Finance Abdullahi and the lobbyists Burhan and Abdirahman.
The money stolen in the name of VIVACOM services is enough to pay for the salaries of 300 soldiers who despite dying to defend the state are not paid what is due to them (they only get paid small amount when they leave the frontline against enemies like Alshabaab and demonstrate in the streets while all forms of corruption is being use). After the benefit from VIVICOM Puntland 2017 budget has started for the first time to give more companies commission. The companies which are mostly technology companies Al-Fatxi, DBB, PIITECH, VIVACOM who are allocated in the budget $370,000 per month. Except from VIVACOM the other three companies are connected to the Ministry of Public Works, two of them are established before President Gaas while DBB is after he come to power. Although they are in the budget it is unknown what services these companies are providing to the government. The Puntland parliament approved the budget in quickly without seeing the agreements and understanding the service.
VIVACOM Vs Ministry of Health
In the 2017 Puntland budget the four companies ar receiving almost $400,000 per month. This is equal to the budget of 6 Puntland Ministries which includes the Ministry of Health. VIVACOM alone has bigger budget than the Ministry of Health in the Puntland budget. Furthermore, the Ministries do not receive the budget amount month while VIVACOM never miss their payment.
Recommendations
As VIVACOM declared they are a private company they are entitled to compete and provide a service that is benefit to the government. The company is not a shareholder of the Puntland government and therefore cannot get percentage of the revenue of the port. It is important that the company take a fixed fee that is proportionate to the service they are providing (either subscription fee or perpetual licencing), which is used by similar companies, instead of the high rate based on port revenue.
Is it appropriate for VIVACOM to take part of the corruption of the revenue in Puntland by knowingly agreeing to share their fee with corrupt senior President and Finance Minister and lobbyist even though VIVACOM is still make large profit after paying officials because its equipment and service only costs $50 per month in reality.
The Government of Puntland should assess the need for VIVACOM services since the implementation of the complete PFM and FMIS project by the World Bank goes beyond what VIVACOM is providing. If there is a necessary need for VIVACOM services that PFM is not providing the Government should review the contract and only pay specific service they require based on fixed rate that is proportionate to the service. It is important to note that the payment to VIVACOM is illegal, pointless and taking much needed revenue for Puntland public services.
The Puntland Parliament should investigate the information presented and published by Muraayad since the the agreement goes against the Puntland constitution and that allows for diversion of government revenue to not just the company but into the pockets of government officials and other private accounts.
The Puntland public should wake up from their sleep and rise up against this high level of corruption and mismanagement with the revenues that they are paying for and which is crippling the state and economy. Puntland does not have independent Auditor General Office that can investigate and take actions against this endemic corruption. Muraayad has found out that the Auditor General Office doesn’t have the security, capacity and financial means carry out their work, therefore they cannot speak against the corruption that they and everyone can see.
Muraayad is encouraging the government, parliament and the public to collectively face the problem of corruption. We should not keep quiet about this real problem. If you have corruption information that the public should be aware of please get in touch with us anonymously on this page (click here to share information).
https://muraayad.com/need-know-corrupt-3-revenue-charged-bosaso-port/
What you need to know about the corrupt 3% of revenue charged on the Bosaso port.
“Did you know that in the 2017 Puntland 4 privately owned companies will receive a budget totalling more than the sum for 6 ministries”
Introduction
Corruption is a plague that devastates society and paralyzes the political and economic development of the state. Muraayad has conducted investigation on the causes of poverty and the reason why the state cannot manage its budget. We compared the salary scales of different states in Somalia and found that Puntland employees receive the lowest salary and that most times they don’t receive this small salary. The salary scale for the position of a Director in Puntland ministries is $80, which is extraordinarily low and not anything close to the living wage of Puntland (how can someone feed, educate and provide medical care for a family with this salary).
If the government employees and the soldiers don’t receive their rights, there cannot be security and good administration. There will be a viscous cycle of poverty and lack of confidence in the government.
The current government financial crises is not mainly caused by low government revenues, drought or ban on livestock. The main cause is the mismanagement, corruption, nepotism surrounding what the government already receives as taxes from the public.
The 3% Corruption in Puntland
In recent years in Somalia there have been a many young men armed with laptops and operating without offices who are promising to improve everything using IT technology. Unfortunatly, most of them are not genuine and are relying on nepotism and corruption to get ahead. A good example is the Bosaso port which is at the heart of the Puntland economy, which has a old taxation system and employs many people to do the same work because of mistrust.
In 2015 a technology company, VIVACOM, came to the Puntland government to provide IT services for the Bosaso port. VIVACOM was established between 2012-2013 and has office in Kenya. The company is owned by two gentlemen, one of them, Hussein Salad who hails from Puntland and is a Swedish citizen and a former long time employee of Erickson. The other co-owner is from Somaliland.
Hussein Salad, the Owner and Director of VIVACOM,
VICACOM has the right to promote sell and provide its services to clients. In facts deserves praise for attempting to provide much needed technology solutions that can help the government to mordenize its system. However, what is in question is about the way they have become service providers and more importantly the fact that they are receiving large percentage of Puntland tax for providing very simple IT software. To get the contract, VIVOCOM was helped by lobbyists close to the President and the Minister of Finance.
The VIVACOM-PUNTLAND Contract
The VIVACOM company has approached the government with IT solution that would allow the senior government staff to be informed about the daily tax revenues of the Bosaso port at end of each day. At the end of 2014 and beginning of 2015, VIVACOM made connection with the President of Puntland Abdiweli Ali Mohamed (Gaas), when the President understood their objective he directed them to the Ministry of Finance which was then headed by Shire Haji Farah who is now the Puntland Minister of Planning. Initially, VIVACOM did not succeed with their proposition to Minister Shire. At this point VIVACOM Director, Hussein Salad, approached powerful lobbyist within the circle of the President such as Burhan Mohamud Gurey, Abdirahman Mohamud Haji Hassan and Imam Abdiwahab Mohamud Gurey who are close kinds of the President of Puntland. These lobbyists convinced the President Abdiweli Gaas that there would be personal benefit to him in the form of regular or profit share from the 3%, which then resulted Minister Shire to sign the contract in a haste. Then the VIVACOM Director started buying equipment that included servers and other necessary equipment for the operation.
There was a reshuffle to the Ministry of Finance in June 2015 which brought appointment of Abdullahi Sh. Ahmed as the Minister. The new Minister Abdullahi requested VIVACOM to explain about their contract and service. Muraayad has learned from sources close to the Minister Abdullahi that he transferred their case to an expert in the Ministry who is the Coordinator for the World Bank PFM project so that he can provide his professional opinion.
The Key Terms of the contract and its problems
VIVACOM wanted to invest in a software program and equipment, training ofgovernment officials on how to use them as well as provide any software problems needing troubleshooting. In return for this service VIVACOM would receive 3% of the Bosaso port revenue to paid every month!! This type of agreement has never been seen in Puntland.
Many software providers such as Microsoft and Adobe Creative have recently moved to from perpetual licencing and to subscription licensing. These international companies provide the subscription licencing on fixed monthly or yearly basis. However, VIVACOM by receiving 3% of the port revenue has instead of receiving fixed cost for the service put no limit to the amount they can receive for the service. Murayad learned that the Ministry of Finance expert, Abdulkadir Hashi, has recommended that the VIVACOM agreement should annulled because it is unlawful and would conflict with the World Bank PFM project and suggested that if they want to continue they should only be paid a fixed amount for the service. Afrter this recommendation, Minister of Finance Abdullahi met with VIVACOM Director Hussein Salad and through agreement paper on his face.
The Director of VIVACOM return to Garowe between July and August 2015 in order to complain about the Minister. Once again the powerful lobbyists close to President Gaas called Burhan Mohamud Gurey and Abdirahman Mohamed intervened and have convinced Minister Abdullahi to also benefit and take a share of the 3% fees charged by VIVACOM. Afterward, Minister Abdullahi has summoned Hussei Salad before he could reach his complaint to the President and accepted the agreement despite the objection of the PFM expert.
Contract without completion
The Puntland President Abdiweli has promised to the public before that there would be open completion. This project should have followed these steps:
- Internal assessment of the need for the service
- Announcement to service providers
- Review of eligible firms for the service
- Assessment of firm’s capacity
- And selection of the suitable firm.
The PFM project and VIVACOM
The VIVACOM private company and the data entry software coincided with the World Bank PFM project, which is a complete program connecting all the revenue from sea ports, airports and land customs therefore improving revenue services. The PFM project hired expert companies from Kenya and Puntland to do the job. The PFM project will run from 2015-19 and is also central for the other World Bank projects like SCORE, CIP, FMIS as well other project. The VIVACOM agreement which will not improve the revenue of the government (but will only take 3% of the revenue) works in Bosaso only and uses data entered manually into the software to be recorded and shares the data through SMS text to senior officials like the President of Puntland, the Minister of Finance. The program cannot does not capture expenditure and there for cannot generate financial reports.
How is the 3% from Bosaso port Shared?
The average monthly revenue of the port is estimated to be between $2-3 million US Dollar. When you calculare the 3% against this it means VIVACOM will receive around $90,000 per month. However, as Muraayad has learned all this payment does not go to VIVACOM, they only recive 1.5% and the other 1.5% is diverted to President Abdilweli, Minister of Finance Abdullahi and the lobbyists Burhan and Abdirahman.
The money stolen in the name of VIVACOM services is enough to pay for the salaries of 300 soldiers who despite dying to defend the state are not paid what is due to them (they only get paid small amount when they leave the frontline against enemies like Alshabaab and demonstrate in the streets while all forms of corruption is being use). After the benefit from VIVICOM Puntland 2017 budget has started for the first time to give more companies commission. The companies which are mostly technology companies Al-Fatxi, DBB, PIITECH, VIVACOM who are allocated in the budget $370,000 per month. Except from VIVACOM the other three companies are connected to the Ministry of Public Works, two of them are established before President Gaas while DBB is after he come to power. Although they are in the budget it is unknown what services these companies are providing to the government. The Puntland parliament approved the budget in quickly without seeing the agreements and understanding the service.
VIVACOM Vs Ministry of Health
In the 2017 Puntland budget the four companies ar receiving almost $400,000 per month. This is equal to the budget of 6 Puntland Ministries which includes the Ministry of Health. VIVACOM alone has bigger budget than the Ministry of Health in the Puntland budget. Furthermore, the Ministries do not receive the budget amount month while VIVACOM never miss their payment.
Recommendations
As VIVACOM declared they are a private company they are entitled to compete and provide a service that is benefit to the government. The company is not a shareholder of the Puntland government and therefore cannot get percentage of the revenue of the port. It is important that the company take a fixed fee that is proportionate to the service they are providing (either subscription fee or perpetual licencing), which is used by similar companies, instead of the high rate based on port revenue.
Is it appropriate for VIVACOM to take part of the corruption of the revenue in Puntland by knowingly agreeing to share their fee with corrupt senior President and Finance Minister and lobbyist even though VIVACOM is still make large profit after paying officials because its equipment and service only costs $50 per month in reality.
The Government of Puntland should assess the need for VIVACOM services since the implementation of the complete PFM and FMIS project by the World Bank goes beyond what VIVACOM is providing. If there is a necessary need for VIVACOM services that PFM is not providing the Government should review the contract and only pay specific service they require based on fixed rate that is proportionate to the service. It is important to note that the payment to VIVACOM is illegal, pointless and taking much needed revenue for Puntland public services.
The Puntland Parliament should investigate the information presented and published by Muraayad since the the agreement goes against the Puntland constitution and that allows for diversion of government revenue to not just the company but into the pockets of government officials and other private accounts.
The Puntland public should wake up from their sleep and rise up against this high level of corruption and mismanagement with the revenues that they are paying for and which is crippling the state and economy. Puntland does not have independent Auditor General Office that can investigate and take actions against this endemic corruption. Muraayad has found out that the Auditor General Office doesn’t have the security, capacity and financial means carry out their work, therefore they cannot speak against the corruption that they and everyone can see.
Muraayad is encouraging the government, parliament and the public to collectively face the problem of corruption. We should not keep quiet about this real problem. If you have corruption information that the public should be aware of please get in touch with us anonymously on this page (click here to share information).
