Somalia cabinet approves $1 billion budget

MOGADISHU, Somalia - As a sign of an expanding economy, the cabinet of the Federal Republic of Somalia approved $1 billion for the 2024 financial year, which now needs the nod from both the Lower House and the Upper House before it comes into use effective from early next year.

The country largely funds its budget through external aid and some minimal domestic revenue which Somalia is struggling to collect due to infrastructural challenges. But in recent weeks, the local revenue has shown some signs of spring.

The new budget with a ceiling of $1,025,687,991, will be funded by domestic revenue and international aid which comes in plenty, particularly from the World Bank and the International Monetary Fund [IMF]. Somalia has managed to regulate debt in compliance with international best practices.

The Council stated that domestic revenue has grown over 20%, specifically focusing on enhancing national security and social service development. The government invested much in driving away Al-Shabaab militants who were the major obstacle in the collection of local revenue.

The budget was a slight increase from the 2023 budget ceilings of $973,985,805 which mainly saw the health, education, and security get huge chunks based on need assessment. The country has invested more in security as it seeks to stabilize after years of civil war and Al-Shabaab setbacks.

Prime Minister Hamza Abdi Barre welcomed the approval, maintaining that the country will spend more on development given that service delivery is key to the people of Somalia. A number of sectors still need radical reforms for the government to realize development goals, he said.

Daudi Aweis, the minister for Information, Tourism and Culture said the passing of the budget at the cabinet provides the country with an opportunity to invest in production rather than consumption. National security will be the major gainer in the budgetary estimates, he said.

"The Somali Cabinet has greenlit the 2024 national budget. With a remarkable surge of over 20% in domestic revenue, the government’s budget has now exceeded one billion dollars. The main focus of the budget lies in bolstering national security and advancing social services," he said.

GAROWE ONLINE