The Minister of Petroleum and Mineral Resources, Mr. Dahir Shire Mohamed, has announced that regional states will receive their fair share of revenues generated from oil drilling, in accordance with an agreement on sharing the country’s natural resources. The “Baidoa Agreement,” signed in 2018, outlines the distribution of income, with 60 percent allocated to regional states and 40 percent to the Somali Federal Government. This allocation is based on a previous accord. The Minister stated, “There is a signing bonus that regional states will receive once the agreement is ratified, and this information is currently available.” He also mentioned that the income from natural resources will be distributed at the district and settlement levels, particularly in areas where oil is drilled. This agreement is based on a technical process and political agreements reached by previous leaders. However, the Minister acknowledged that these agreements are subject to review, as different concepts have been suggested by officials, including those from the Ministry of Finance who believe the distribution of revenues should be amended. In terms of efficiency, the Minister strongly defended the finance systems in place in the country, stating that Somalia has made significant progress in terms of accountability and supervision of the economy. He said, “Financially, we are in a better place than in the past. There are audit processes and functioning accountability, which reduces the possibility of corruption and misappropriation of revenues from natural resources.” However, the Minister’s statement also indicates that Galmudug, where the first oil well will be drilled, will receive its share of revenues. On the other hand, the Somali Federal Government has announced that it will take legal action against companies and individuals who have been accused of illegally exploiting the country’s mineral resources. The Minister confirmed that Somalia is rich in mineral resources but acknowledged the existence of illegal exports. The government is currently working on identifying and prosecuting those involved in illegal mineral trade. The Minister expressed concern over companies and individuals who exploit the country’s resources, particularly in areas where local people are involved and minerals are sold without proper oversight. He mentioned that such incidents have been reported in eastern Sanaag and Awdal in Somaliland. The Minister stated that a new law to address illegal mineral trade is almost complete and will be put into effect once the Somali President signs it. This law is expected to strengthen the government’s ability to combat illegal trade in mineral resources
