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.
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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
