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Published On: Sat, Aug 9th, 2014

Landell Mills and Somaliland Business fund

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Somaliland Business Fund.logo

By Abdala Ali Salah

The Somaliland Business Fund (SBF) has been functional for the past two years, under the management of Landell Mills. The program is financed by a Trust Fund managed by the World Bank with contributions from UK Aid (DFID), DANIDA and the World Bank’s Peace and State-Building Fund.

 

The funding provided by the donors was initially $3.6 million then subsequently increased, to bring the total investment intended for Somaliland private sector to $10.7 million.Over the last two years, there have been a number of scandals surrounding Landell

Mills and SBF, after two years it is clear that Landell Mills and the SBF is a very controversial venture with many problems. Problems, that the current manager of the project David Mitchell is willing to share freely.

 

Landell Mills recruited their latest manager for the project 7months ago, with no prior financial or grant management background. On speaking with David Mitchell he pinpoints all the problems with SBF and Landell Mills approach, to internal issues in Somaliland rather than a lack of sound process and protocols. According to Mitchell and by extension Landell Mills who he represents, SBF failures and problems could be attributed to the fact that:

 

“There is a lot of corruption in this country. The government is corrupt, my clients are liars, the consultants are dirty, and I even worry about the employees that work for me”.

 

Even if that was to be true (putting aside the fundamental consideration associated with good practice, mass generalization and offending the very same government who facilitates his project and who he hopes to continue working with for a 3rd round), itis worth considering how Landel Mills fares in this ethical barometer. A closer andsober look at Landell Mills, the organization that is managing the SBF project mayshed light into some of the shortcomings and problems SBF has had;

 

Fact 1: Landell Mills, the organization that is in charge of managing this fund for neither the World Bank, nor the project SBF is legally registered with any government authority in Somaliland. It is not registered with the Ministry of Planning, which is a requirement for all development organizations, whether they are local or international.

 

They are also not registered with the Ministry of Commerce, or with the Attorney General Office. Landell Mills operate in Somaliland, in a vacuum. Ironically, this is from an organization that has a mission “to assist our clients to participate actively in the global economy whilst protecting their fragile environments and vulnerablecommunities in the process”. The best way to protect the fragile environments in this country is by strengthening the regulatory authority, not looking for loopholes to circumvent financial and legal liabilities.

 

Even more ironic and shocking, SBF request and makes a mandatory requirement for each one of the business they give loans, to get at least several different official documentations including: a registration from the minister of commerce, a licensefrom a line ministry, a document from the Attorney General Office, aregistration from the chamber of commerce, ownerships of lands and assets.

 

A poor small business, with little capacity, in Borama or Las Anood has to get all these documentation to be even considered for a grant. However, this consulting agency which certainly received a healthy portion of the project budget for its implementation doesn’t have to play by the rules.

 

Fact 2: Dahabshiil Bank and Remittance refused, rightly so, to open a corporate bank account for the Somaliland Business Fund, because Landell Mills could not provide a corporate registration or valid license. As a result, the entire project funding, all US 12.5 Millions, flow through the personal accounts of the two managers on duty in Hargeisa: Jim Duncan and David Mitchell. Needless to say this is far from best practice for financial management. What type of operational and fiduciary risk does that expose to this World Bank fund? What checks and balances could be put into place to better save guard donors money? It goes without saying, that any recommended practice that DFID has for understanding, managing and monitoring fiduciary risk in provision of aid, especially in a conflict afflicted states is not being followed. The only question is whether DFID is aware of this practice and endorses (or turns a blind eye) and if so why?

 

Fact 3: Because they are not registered with any governmental organization, Somaliland Business Fund does not report to any authority in Somaliland. They choose whatever project they deem worthy and then show the results to the ministers and the World Bank. They can also cancel any project at their discretion, and the management has become so adept at brushing all criticism away, donors have not been present to provide an alternative avenue for complaints. In practice, this essentially means that a farmer in Gabiley, who has been struggling to complete his milestones, can have his project cancelled at any time. Worse, he could not appeal that decision to anyone.

 

All the decisions are taken on the third floor at Mansoor Hotel. This despite the fact that in theory there are four ministers on the advisory board of the project but none have a say on important decisions made by Landell Mills and their consultants. Although the ministers in the advisory board support the additional capital flowing to the private sector, they are disappointed and troubled by the lack of clear mandate to intervene.

 

Other similar Funds in Somaliland such as DAI have better processes of consultation with the government, whereby projects are discussed with representative from government departments, before they are recommended for grant. Clearly, the inexperience and incompetence of SBF in grant management is evident when their processes are compared with other sizeable funds.

 

Despite Landell Mills lacking the basic foundation and set up to manage and process SBF, the project managers eagerness to treat everyone in Somaliland, like a thief and  his accusation of Somaliland government on corruption shows both inexperience and incompetence in managing the project.

 

Sensationalizing a deeper conversation about the largest private sector development project that Somaliland has received in its short existence, into hot topics is one way of keeping the focus away from deeper organizational insecurities and capabilities to ethically manage SBF.

In the meantime, all actors in the private sector are left with many questions and very few answers. How can the World Bank, DFID and DANIDA let one of their

affiliates operate in the country with no checks or balances? Where are the oversight and the supervisory duties of the Minister of Planning?

 

How long can the top brass at Landell Mills continue to veil the mismanagement and unethical behaviour of the funds that was meant for the Somaliland private sector?

As David Mitchell and Jim Duncan openly, loudly and frequently declare their hostile views about the people of Somaliland, about the government of Somaliland and businesses in Somaliland, it is worth asking, why should it to be tolerated? Surely Landell Mills can, and should hire competent consultants to adequately manage SBF, if not, there are many UK private companies that DFID can channel their tax money through, so that it is not wasted…

By Abdala Ali Salah

Hargeisa & Edmonton

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