Page last updated at 12:06 GMT, Wednesday, 8 July 2009 13:06 UK

Somalia appoints accountancy firm

Islamist militants in Mogadishu on 29 June 2009
Radical Islamist insurgents control swathes of Somalia

Somalia's fragile government has hired the world's biggest accountancy firm, PricewaterhouseCoopers, to help ensure international aid is spent correctly.

The embattled administration has been asked by donors to demonstrate that funds will be spent properly, and not embezzled by corrupt officials.

PwC has undertaken similar work checking how donor funds are used across Africa.

More than 200,000 people have fled clashes in Mogadishu since May.

PwC staff will find a Somali capital rocked by fierce battles between radical Islamist insurgents and pro-government forces.

"PricewaterhouseCoopers has been appointed to hold and manage the pledged and allocated funds for institutional capacity building and development [in Somalia]," the firm said in a statement.

This is a big step in reconstructing Somalia and will enhance transparency
Somali government spokesman

It declined to go into detail about the work, citing client confidentiality and security issues.

But it is thought a team of at least 20 staff, based in Nairobi, capital of neighbouring Kenya, will operate in and out of Somalia, helped by local agents on the ground.

They will administer via a central bank account some of the $213m (£132m) pledged by donors in Brussels in April towards boosting security in the failed Horn of Africa state.

PwC will check Somali ministries' spending plans tally with donor expectations, before releasing the cash and ensuring it is spent transparently.

It is understood the firm will receive a commission of between 2-4% on all funds that reach their intended destination.

A spokesman for the Somali transitional federal government said in a statement: "This is a big step in reconstructing Somalia. In addition, this will enhance transparency and accountability."

Somalia has not had a stable central government since Siad Barre was ousted in 1991.

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