Recurrent Cost Reform Financing programme launched by the government of Somalia
Programme launched by the Government of Somalia marks important step towards fiscal federalism
On Friday 2nd October, the second phase of the Recurrent Cost Reform Financing (RCRF II) programme was launched by the government of Somalia. The launch was attended by the Ministers of Finance of the Federal Government of Somalia, the Puntland Regional State, the Interim Jubbaland Administration, the Interim South West Administration and the Galmadug Interim Administration, as well as donors. This programme will see the first official transfer of funds from the federal government to the emerging federal states, with the Interim Jubbaland Administration the first to benefit. The RCRF II will support recurrent government costs such as a credible and sustainable payroll and help establish the foundation for efficient budget execution. The UK Department for International Development (DFID) contributes to this programme through our £37m contribution to the World Bank Multi Partner Fund to support the economic recovery of Somalia
The expansion of the RCRF to the Jubbaland State of Somalia owes much to ground-breaking support provided by the Somalia Stability Fund, a multi-donor Fund set up by DFID in 2013. The Stability Fund provided extensive technical support to Jubbaland over the course of 2014, including provision of sound public financial management systems and accounting applications. This enabled the interim administration to set up and staff its Ministry of Finance and establish an international standard system of public financial management from scratch. The presence of these systems provides a basis not just for the administration to control expenditure and to collect and record revenue, but also to demonstrate a high degree of transparency through timely reporting – a factor which has proven critical in enabling the World Bank to roll out RCRF II funding to Jubbaland.