* Somalia debts stand at $2.2 billion or more
* Government revenues rely on rickety airport, port
* World Bank, IMF won't lend more till arrears cleared
* Islamist suicide bombing shows fragility of recovery
By Edmund Blair
NAIROBI, April 15 Somalia's finance minister has
his eye on conferences in Washington, London and beyond in the
next six months to shore up international support for a slow
recovery whose fragility was exposed by this weekend's suicide
bombings in Mogadishu.
Mohamud Hassan Suleiman can count on a wave of goodwill on
his travels but needs more than diplomatic backing to steady a
nation emerging from two decades of war and anarchy with debts
of $2.2 billion and state revenues of just $84 million a year.
For the first time in years, Western and other nations have
accredited ambassadors to the new government of President Hassan
Sheikh Mohamud, although most still live outside Somalia. His
government has also won recognition from the International
Monetary Fund, an important step on the road to rehabilitation.
But gains on the ground are shaky, demonstrated in bloody
fashion on Sunday when al Qaeda-affiliated bombers killed at
least 30 people in Mogadishu, a city without a single working
fuel station and whole neighbourhoods of wrecked buildings.
"Somalia is coming out from a dark period," Suleiman told
Reuters in a telephone interview, adding Sunday's attacks in the
capital highlighted the need to support a government that still
relies on African peacekeepers to maintain security.
"They are giving us their attention but we are asking them
to change that to substance," said the 62-year-old minister, a
banker from the diaspora who once worked at Somalia's central
bank, an institution he is now seeking to resuscitate.
"It needs money to train the security forces, to equip them
properly and to pay them properly," he added.
Western states and others have focused on humanitarian aid
till now but efforts are shifting towards bilateral support for
the new government, whose ability to act could have an impact
far beyond the borders of the nation of 10 million people.
A more stable Somalia could help curb piracy, which has
flourished in the political vacuum and according to the World
Bank costs the global economy about $18 billion a year. Western
nations also worry a slide back to chaos will allow al Shabaab
Islamists, ejected from Mogadishu two years ago, to regroup.
But Suleiman said the government needs to show Somalis it
can deliver change, if it is to extend its control beyond
Mogadishu and other urban centres, a difficult task when its
revenues almost all come from a battered port and tiny airport.
"We are doing everything we can, not to disappoint the
people," said Suleiman, who travels to a donor meeting hosted by
the World Bank in Washington on April 20 before attending a
broader London conference to build support for Somalia on May 7.
The Somali government also wants to draw more backing at a
June 1-3 meeting on African development in the Japanese city of
Yokohama, and at a gathering in September in Brussels.
The meetings will help gauge support for debt relief before
starting a formal process that could see Somalia qualify for the
Heavily Indebted Poor Countries initiative, known as HIPC, that
could offer debt forgiveness and restructuring.
To do that, Suleiman and his government must draw up a
sustainable poverty reduction programme and show Somalia has the
backing of 70 to 80 percent of its creditors, experts say.
"It is going to be a long process and we are just starting
that. HIPC is not something we can use immediately," he said.
Suleiman put Somalia's debt at $2.2 billion, although
experts said that was based on a 2010 World Bank figure and
interest accrued since then meant it was probably higher.
About half the debt is owed to the World Bank, IMF and
African Development Bank. Arrears to international financial
institutions (IFIs) must be repaid, whether by Somalia or by
creditors on its behalf, before they can offer new funds.
But IMF recognition was a valuable start, Suleiman said,
adding it "opens doors for us to deal again with the IFIs."
The 2013 budget figures show revenues of about $84 million,
of which about $54 million is forecast to come from domestic
sources and the remainder in external assistance. Spending is
put at $114 million, leaving a $30 million deficit.
"We are hoping to cover this gap by increasing the revenue
or by external assistance," said Suleiman, who spent more than
30 years as an international banker - most recently in Britain -
before he joined Mohamud's government.
His former employer, the central bank, is in no position now
to help out with debt issuance. "We are just undertaking a
comprehensive public finance management reform and the bank is
part of it," he said, adding it was not yet "fully functioning."
But the central bank's freshly painted building is one sign
of a gradual recovery in Mogadishu, where traffic now sometimes
clogs the potholed roads and construction sites have sprouted.
At least one new petrol station has been built but has yet
to open so drivers still rely on vendors selling jerry cans of
fuel on the roadside.
"I believe there is an opportunity," said the minister. "We
hope to use this opportunity."
(Editing by Richard Lough; Editing by Jon Boyle)