MOGADISHU, Somalia – Somalia’s parliament, armed with two chambers, has given a thumbs-up to a $1.3 billion budget, marking a high point over the years. This financial plan is set to boost various economic sectors, including funding for ongoing infrastructure projects.
This approval covers both spending and income as outlined in the Appropriation Act for 2025, ensuring that many governmental departments can pursue their programs seamlessly over the next year.
In a unanimous vote, MPs pushed the budget to $1.3 billion, a jump from last year’s $1.1 billion, according to state media. Somalia primarily leans on external benefactors to bankroll its budget, with 66.7% relying on donor support.
The approved budget divides $731.6 million for regular expenses, while $610 million is earmarked for development. The government is keen on wrapping up ongoing projects, with a smattering of new ones on the horizon.
A closer look reveals that donor contributions form the bedrock of the government’s revenue. The freshly approved budget expects donor contributions to reach $889 million, dwarfing the $429 million projected from domestic sources.
The Appropriation Bill shows a 30% rise in donor support, an increase of $208.4 million compared to the previous $694.6 million. A significant chunk, $847 million, is anticipated from global entities like the World Bank, EU, African Disaster Financing Programme (ADRIFI), and OPEC.
On the bilateral front, the Treasury has penciled in $30 million from Turkey and $12 million from the United Arab Emirates, a pivotal ally for Somalia, which has been grappling with stability woes for three decades.
Somalia has tightened its grip on local revenue collection, anticipating $296 million from taxes and an extra $136 million from miscellaneous sources in 2025. The 5% VAT has also been rolled into action.
The President, Hassan Sheikh Mohamud, will soon ratify the new spending bill. He faces a ticking clock to drive meaningful change amid internal tensions and constitutional challenges.
AXADLETM
