SUMMARY

On December 9, 2023, Somalia’s 2024 annual budget was approved in a joint session of parliament following a brief review and adjustment process of the proposed budget by the Cabinet in late October. The total approved budget amounts to USD 1,079,315,783 billion and comprises of USD 569.66 million in recurrent costs and USD 509.65 million in capital expenditure. A deeper look into the budget reveals both positive and worrisome signs. While the overall budget and domestic revenue have grown impressively over recent years and Somalia is slated to receive support following the completion of its debt relief process, Somalia’s continued dependency on external support highlights its precarious financial situation.

The majority of Somalia’s approved expenditures are allocated to recurrent costs and expenditures on social supports have been cut in this budget. Looking forward, it will be imperative for Somalia to continue to make improvements to its domestic revenue generation through tax reform and strengthening inter-governmental tariff mechanisms. Additionally, while it is positive and impressive for the Somali government to have achieved an approved budget on time, further work is needed to ensure that proper time is allocated for public participation in the process to support efforts of transparency and increase trust in government.

The below analysis provides further details on the 2024 national budget as well as recommendations for the future.