EVALUATION DEPARTMENT Report 5 / 2020 ANNEX 5 Evaluation of Norway’s Anti-Corruption Efforts as part of its Development Policy and Assistance Commissioned by The Evaluation Department Carried out by Nordic Consulting Group (NCG) Written by Ch. Vaillant, M. Buch Christensen, M. Pyman, G. Sundet, L. Smed Quality assurance by O. Winckler Andersen This report is the product of the authors, and responsibility for the accuracy of data included in this report rests with the authors alone. The findings, interpretations, and conclusions presented in this report do not necessarily reflect the views of the Evaluation Department. September 2020 ISBN 978-82-8369-044-6 Annex 5: Case study reports 5.1 Country Case Study: Somalia 5.2 Thematic Sector Case Study: The Health Sector 5.3 Thematic Sector Case Study: Climate & Forestry 5.4 Zero-Tolerance Case Study 5.5 Global Case Study: Linking Norway’s Global Advocacy with the Development Agenda I. Country Case Study - Somalia 1 I. Country Case Study: Somalia 2 Contents 1. Introduction ......................................................................................................................... 5 1.1 Purpose ................................................................................................................................... 5 1.2 Methodology ........................................................................................................................... 5 1.3 Limitations............................................................................................................................... 6 1.4 Structure of the Report ........................................................................................................... 6 2. Context ................................................................................................................................ 6 2.1 Overview of the Somalia Context ........................................................................................... 6 2.2 Corruption Issues in Somalia ................................................................................................... 8 2.3 Somalia’s AC Agenda ............................................................................................................. 10 2.4 Norway’s Development Assistance in Somalia ..................................................................... 10 3. Norway’s AC Efforts as Part of its Development Agenda in Somalia ...................................... 14 3.1 The Zero-Tolerance Policy in Somalia: Focus on Partners .................................................... 14 3.2 The Use of Country Systems, Link with ZTP and Spill-Over Effects....................................... 17 3.3 Operationalising AC as a Cross-Cutting Issue ........................................................................ 19 3.4 Support to PFM Reforms and Likely Contribution to AC ...................................................... 20 3.5 AC and Policy Dialogue.......................................................................................................... 23 4. Conclusions and Recommendations .................................................................................... 24 4.1 Conclusions ........................................................................................................................... 24 4.2 Recommendations ................................................................................................................ 25 Annex 1: List of People Consulted ............................................................................................... 29 Annex 2: Bibliography ................................................................................................................ 30 3 List of Abbreviations AC Anti-Corruption ASI Adam Smith International DFID Department for International Development EU European Union FGC Financial Governance Committee FGS Federal Government of Somalia HIPC Heavily Indebted Poor Country GDP Gross Domestic Product IDI INTOSAI Development Initiative IDP Internally displaced people IFF Illicit Financial Flows IMF International Monetary Fund INTOSAI International Organisation of Supreme Audit Institutions JPLG Joint Programme for Local Governance MAF Mutual Accountability Framework MFA Ministry of Foreign Affairs MoU Memorandum of Understanding MPF Multi-Partner Fund (World Bank) MPTF Multi-Partner Trust Fund (UN) NGO Non-governmental organisation NIS Nordic International Support NRC Norwegian Refugee Council Norad Norwegian Agency for Development Cooperation OAG Office of the Auditor General ODA Official Development Assistance OfD Oil for Development OECD DAC Organisation for Economic Co-operation and Development’s Development Assistance Committee PEFA Public Expenditure and Financial Accountability PFM Public Financial Management SDRF Somalia Development and Reconstruction Facility SMP Staff Monitored Programme SFF Special Financing Facility SSF Somalia Stability Fund TI Transparency International UK United Kingdom UN United Nations UNCAC United Nations Convention against Corruption UNDP United Nations Development Programme UNODC United Nations Office on Drugs and Crime USA United States of America ZTP Zero-tolerance policy 4 1. Introduction 1.1 Purpose This country case study evaluates Norway’s Anti-Corruption (AC) efforts in Somalia over the review period (2010-19) across all four AC categories, namely: (1) Upholding the principle of zero tolerance for corruption in Norwegian development assistance; (2) AC as a cross-cutting issue, seeking to avoid corruption resulting from Norwegian development assistance; (3) AC as a distinct component of Norwegian development assistance, both through programmes/projects and through partner dialogue; and (4) Strengthening international norms and standards against corruption, including prevention of Illicit Financial Flows (IFF).1 Norway’s official development assistance (ODA) has increasingly been allocated to fragile states. These face a unique set of circumstances, often characterised by high-level and systemic corruption, links with global terrorism, and – from a development point of view – a limited availability of eligible partners.Some of the factors justifying the choice of Somalia as a country case study was the steady increase in Norwegian ODA allocated to this country over the review period as well as the broad range of sectors and partners characterising Norway’s aid portfolio in this country. 1.2 Methodology The case study assesses AC efforts from a country-level perspective, based on an analysis of the Somalia context. The findings of the case study are drawn from a thorough triangulation of evidence, using different data collection methods and sources. The evaluation team travelled to Kenya/Nairobi and Somalia/Mogadishu in the week commencing 6 December 2019 to meet with a range of stakeholders, including Government Ministries, donors and multilateral agencies, non-governmental organisations (NGOs), and independent experts. Follow-up interviews were conducted by phone after the visit (see full list of people met and bibliography in Annexes 1 and 2). The following programmes and/or partners constitute the main sample for the case study2: • All Norwegian humanitarian assistance received by the Norwegian Refugee Council (NRC) (Flyktninghjelpen) under its Global Partnership Agreement with Norway; • All Norwegian assistance received by the Nordic International Support (NIS) foundation; a Norwegian NGO, which the Norwegian Ministry of Foreign Affairs (MFA) helped set up in 2011- 12, and which has since become an important partner; • The Special Financing Facility (SFF), an innovative bridge facility led and administered by the Norwegian MFA in 2013-14 to support the federal government; • The Somalia Stability Fund (SSF), which has been administered by the Norwegian MFA since its launch in 2012, with the United Kingdom (UK) Department for International Development (DFID) as agreement partner and Adam Smith International (ASI) as implementing partner; • The United Nations (UN) Multi-Partner Trust Fund (MPTF), which is managed by the United Nations Development Programme (UNDP), and which obtained renewed support in 2018; and 1 See Terms of Reference. 2 These programmes and/or partners were selected using the following selection criteria: (i) coverage of partners (ii) coverage of sectors (iii) strength of evidence, including access to key stakeholders and level of documentation received during data collection 5 • The World Bank Multi-Partner Fund (MPF), which Norway has supported since its launch in 2015, and which obtained renewed support in 2018. 1.3 Limitations The case study has some limitations in scope and in methodology. In terms of the scope, the following limitations should be noted: • The case study focuses only on Norway’s support to Somalia as a federal state. The earmarked support to member states, including Somaliland and Puntland, is not covered; and • The case study does not take into account the significant proportion of Norwegian (unallocated) aid money channelled to Somalia through multilateral channels.3 In terms of methodology, the following limitations should be noted: • The evaluation team had limited time in Nairobi, Kenya (where the Norwegian Embassy and other key stakeholders are based) and in Mogadishu, Somalia4; • The evidence on the state of corruption, Public Financial Management (PFM) and other issues over the review period remains partial, with some reports commissioned by donors declared confidential;