Somalia’s budget crosses $1b mark; security, stabilisation likely spenders as Al-Shabaab war moves south

GOOBJOOG NEWS|MOGADISHU: Somalia’s national budget has crossed the $1 billion mark in what the government attributes to robust domestic revenue base and widening expenditure.

The Cabinet approved a $$1,025,687,991 budget presented by the Ministry of Finance for the 2024 financial year. This is up from $977 million in the current financial year.

The Prime Minister’s office said the budget increase was attributable to an 20% increase in domestic revenue. In the 2023 annual budget, domestic revenue was pinned at $283 million.

The 2024 budget is now double that of 2022 which stood at $550. The dramatic increase is also seen as influenced by growing international funding avenues, especially from the IMF and World Bank following Somalia’s completion of the Decision Point in 2021under the Heavily Indebted Poor Countries (HIPC) initiative which saw Somalia access grants from the World Bank’s International Development Agency (IDA).

The World Bank projects that Somalia will reach the Completion Point under the HIPC by December further opening more avenues in the international market.

The 2024 budget will likely see remarkable increase in security and social spending as the country prepares for the second phase of the war against Al-Shabaab which will require heavy spending in the military and related costs. Related to this is stabilisation process which involves establishment of local administrations and provision of services to citizens in newly liberated areas.