Background

The Project Development Objectives of the Recurrent Cost & Reform Financing Project is to support the government to provide credible and sustainable payroll and to establish the foundation for efficient budget execution and payment systems for the non-security sectors in FGS and eligible interim and emerging states. Key results/achieved from the project include that the FGS paid all twelve months of civil service wages and salaries during calendar year 2017. This was the first time all twelve months of salaries have been paid, and the first time all twelve months of salaries have been executed within the calendar year since RCRF payroll finance began. This underscores the FGS’ commitment to prioritizing timely payment of salaries during 2017, and was partly attributable to the project reform benchmarking approach.

The project reform benchmarks have delivered important reforms by making additional headroom available for financing of the FGS civil service wage bill conditional upon achievement of policy benchmarks. Major successes during 2017 included:

  • Shift from cash-based payment of salaries and allowances to bank account payment for certain categories of Ministry of Finance employees;
  • Bringing revenue collection at Mogadishu International Airport (visas) and Ministry of Industry and Commerce (business licenses) under Ministry of Finance control; and
  • Pioneering inter-governmental fiscal harmonization agreement signed for sin taxes’ and departure tax.

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