Somalia cabinet approves $1.3B 2025 budget

MOGADISHU, Somalia - The government of Somalia has approved a $1.3 billion budget for the 2025 fiscal year, a slight increase from the 2024 estimates, in which gives the Treasury more pressure to collect revenue by changing existing systems in the country.

The cabinet chaired by Prime Minister Hamza Abdi Barre approved the budget moments after the collapse of the National Consultative Council (NCC) meeting in Mogadishu, which brought together leaders from the federal and regional administrations.

By estimates, the total allocation for 2025 was increased to $1, 342,476,311 up from $1,079,315,783. The 24.4% increase of around $263,160,528 showcases the expanding local needs within the government for smooth operations.

The Ministry of Finance has devised mechanisms of increasing local revenues, including the decision to reduce checkpoints which are normally misused by the Al-Shabaab militants. The al-Shabaab controls large swathes of rural central and southern regions.

According to officials, the government is shifting more focus to security, social services, and infrastructure development as Somalia struggles to cure years lost to civil war and now the emergence of terrorist groups in the country.

The increased budget is expected to be funded through enhanced tax collection, improved efficiency in public sector revenue generation, and international aid and grants. The international aid and grants service most of the budget given the country's history of stagnation in development.

However, there are deliberate measures to reduce over-dependency to foreign aid, which has significantly affected economic growth in the country. The self sustainability was one of the key pre-election pledges of President Hassan Sheikh Mohamud.

Security remains a major concern and the government seeks to invest more through budgetary allocation that aims at modernization of the security forces through the purchase of modern equipment. The United Nations Security Council lifted the arms embargo that had lasted for three decades.

The budget will have to get approval from parliament, which authorizes appropriation and revenue collection. The government had pledged to seal corruption loopholes but such promises are yet to be impactful given the opaqueness in government spending.

GAROWE ONLINE