The government approves a $967.7 million budget as Somalia battles the al-Shabaab threat

The government approves a $967.7 million budget as Somalia battles the al-Shabaab threat

MOGADISHU, Somalia – The Somali cabinet on Tuesday approved the first fiscal budget under Prime Minister Hamza Abdi Barre, paving the way for the implementation of various projects proposed by the current administration, which sailed into office in May after a delayed election.

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The ministers, most of whom sit in parliament, approved $967.7 million for the 2022/23 budget, Somalia’s highest fiscal spending to date. The approval comes at a time when the country is grappling with a myriad of challenges including but not limited to the al-Shabaab threat.

Somalia has also struggled in the past to justify some of the spending, and the auditor general has singled out a number of ministries for misappropriation of funds. In 2020, a number of senior officials in the finance and health ministries were jailed for stealing millions meant for Covid-19 relief.

Of the money in the budget, the country expects to collect close to $283.3 million from domestic revenue, an increase of $36.3 million from the 2022 domestic revenue projections of $247 million. The country has no solid methods of revenue collection according to the International Monetary Fund [IMF].

Surprisingly, the country’s domestic revenue projections are almost on a par with the Al-Shabaab terrorists, who are said to have a budget of up to $100 million, with $24 million earmarked for weapons purchases. The government has warned business owners against funding Al-Shabaab either through extortion or voluntarily.

Earlier this week, the State Department also asked people to volunteer information about Al-Shabaab’s financial network, with a reward increased to $10 million. The US is keen to destroy al-Shabaab’s sources of income as a strategy to eliminate the militants who control the countryside.

Dr. Elmi Mohamud Noor, the Finance Minister, thanked the ministers for approving the budget which is, however, subject to verification by the Senate and the House of Commons. The federal government transfers certain amounts to the member states for development and recurrent expenditure.

The federal member states suspended cooperation with the Ministry of Finance and accused the minister of violating some of the previous federal agreements. But the National Consultative Council has since resolved the deadlock, an indication that parliament will approve the budget.

Somalia largely finances its budget through external debt that has accumulated over the years, with the IMF and the World Bank as the largest lenders. Part of the expenditure is also serviced by members of the international community through grants whose use should follow strict guidelines.

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