Somalia replaces central bank chief criticised in U.N. report
* Abdusalam Omer held job for 7 months
* Clean management of finances key to recovery
By Edmund Blair
NAIROBI, Sept 19 (Reuters) - Abdusalam Omer has been replaced as Somalia's central bank governor after seven months in the job, he said on Thursday, once again strongly denying graft allegations made by United Nations monitors.
The allegations in a U.N. report linking him to irregularities regarding millions of dollars withdrawn from the bank have also been formally rejected by the Somali government.
The U.N. Monitoring Group on Somalia and Eritrea said in July that Mogadishu's central bank had become a "slush fund" for political leaders and that Omer had played a central role in irregularities surrounding unaccountable disbursements.
Omer, who has labelled the allegations malicious, said he was informed by President Hassan Sheikh Mohamud on Sept. 13 that changes would be made at the bank. He submitted a letter of resignation the same day, he said.
Somalia has been struggling to rebuild its institutions and battered finances after two decades of conflict and chaos. Better management of public finances is seen by donors as vital to secure a recovery, debt relief and budget support.
Speaking in the Kenyan capital, Nairobi, Omer told Reuters by phone he was given no reason for the decision.
But he said it "is a possibility" that the government decided to remove him as a result of the report, even though an international probe commissioned by Mogadishu had dismissed its findings.
"My thinking is this: that if you play by the rules and you assemble a team, both diaspora and local people, and try to reform a dormant and important institution called the central bank, I guess you have no place in Somalia," Omer said.
He said he would return to Somalia next week to conduct a handover.
A Somali financial source and Somali media said Omer's replacement was Yussur Abrar. One Somali report said Abrar, who has worked in commercial banking abroad, was the country's first woman governor of the central bank.
Officials could not immediately confirm the new appointment.
In Omer's letter of resignation, obtained by Reuters, the former governor listed his achievements, such as producing the bank's first balance sheet for 22 years.
In the letter, he said he was resigning with "regret and disappointment" and had told staff to ensure a smooth handover.
The Mogadishu government had commissioned FTI Consulting and a U.S. law firm to investigate the U.N. monitoring report findings. FTI's chairman for the Europe, Middle East and Africa region is British peer and former minister Mark Malloch-Brown, once a deputy secretary general of the United Nations.
Somalia's recovery is being hampered by an ongoing Islamist insurgency, deep-seated clan loyalties that continue to govern the way politics and business is conducted and vested interests of powerful politicians.
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