Mogadishu, Somalia — Somalia’s finance minister on Saturday warned that a sharp reduction in international development assistance has begun to weigh heavily on the country’s economic growth, despite what he described as significant progress in domestic reforms.
Finance Minister Biixi Iimaan Cige told CNBC Arabia that the Somali economy expanded by 4 percent in 2024, but growth projections for 2025 have fallen to about 1 percent as donor support continues to decline.
Cige said the government is accelerating fiscal and institutional reforms aimed at strengthening public finance management and boosting domestic revenue, which he called “the backbone of long-term investment.”
According to the minister, the digitisation and automation of tax systems have driven a surge of more than 80 percent in domestic revenue over the past three years, even though the country started from a relatively low base.
He added that Somalia’s national budget grew by 24 percent across 2024 and 2025, but the state still faces a substantial financing gap, particularly in social sectors.
Spending on education funded by domestic revenue rose from 3 percent to 10 percent in three years, a shift he said demonstrates the government’s expanding capacity to fund priority development programmes.
Cige said Mogadishu has moved towards targeted assistance mechanisms, replacing broad, non-specific aid structures in an effort to direct limited resources to areas most in need.
