Somalia Parliament Approves $1.3B Budget, Donors Cover 66.7%

MOGADISHU, Somalia - The bicameral house of the Somalia parliament has approved $1.3B, the highest figure in as many years, which would help strengthen various sectors of the economy, including funding of infrastructural projects which are on course.

The approval entails expenditure and revenues in the Appropriation Act for the year 2025, which would help many departments run their programmes without any major interruption for the next 12 months.

MPs voted unanimously to pass the budget which stands at $1.3 billion up from this year’s $1.1 billion, state media reports. Somalia largely depends on external actors for financing its budget. Donors Cover 66.7% of the budget. 

In the approved expenditure, the recurrent expenses shall take $731.6 million while $610 million shall go to development. The government aims to complete some of the ongoing projects with a few new ones expected to start soon.

In-depth analysis shows that donor funding remains the bulk of revenue for the government. In the just-passed budget, the government expects to raise $889 million from donors against $429 million from the domestic market.

The Appropriation Bill indicates that the support from donors increased by 30% ($208.4 million) against last year’s $694.6 million. Grants stand at $889 million with a bulk of these- $847 million coming from international organisations such as the World Bank, EU, African Disaster Financing Programme (ADRIFI) and OPEC.

And on bilateral support, Treasury has factored in $30 million from Turkey and $12 million from the UAE. The United Arab Emirates is a critical financial partner of the Horn of Africa nation which has struggled with stability for the last three decades.

Somalia tightened regulations for the collection of local revenue and in 2025, the government expects to raise $296M from taxes and an additional $136M from other sources. The government has also implemented the 5% Value Added Taxes.

The new expenditure bill shall be assented to by President Hassan Sheikh Mohamud, who is running against time to initiate fundamental changes in the country. Hassan Sheikh Mohamud is also battling internal conflicts including the urge to change the constitution.

GAROWE ONLINE