Somali Cabinet Approves $967.7 million Budget & Defence Pacts

16.11.2022: Mogadishu, Somalia

Yesterday, the Somali Cabinet approved nearly $1 billion budget for the 2023 financial year following a cabinet meeting chaired by Prime Minister, Hamza Abdi Barre.

The $967.7 million budget will be funded through both domestic revenue and external grants. Domestic revenue was at $283.3 million which was up from $247 million for 2022. However, the budget is still mainly supported by external grants which made up $684.4 million of the overall budget, meaning that the Somali government remains in the clutches of international donors which explains why foreign ambassadors and representatives exert such influence in internal affairs.

Domestic revenue makes up only 29.3% of the national budget meaning that the Somali government must increase its taxes and expand revenue beyond Banaadir and Mogadishu to regional states which remains difficult as the Somali Federal system is still in its infancy and remains incomplete. Consequently, Federal State government act as semi-autonomous regions which tend to be somewhat financially independent from Mogadishu. The lack of clarity on the distribution of taxation on a federal level stems from an incomplete constitution which does not definitively outlined roles of governments.

The budget approved by the Cabinet will now be submitted to the Federal Parliament for approval in both Houses.

Two New Defence Deals

In addition to approving the 2023 budget, the Cabinet also approved two new bilateral defence agreements between the Somali Federal Government and the Governments of Sudan and Uganda.

The proposals were put before the Cabinet by the Defence Minister, Abdulkadir Mohamed Nur before approval.

These deals come after President Hassan Sheikh Mahmoud visit Uganda and met with Ugandan strongman, Yoweri Museveni in Kampala in which he discussed increased support for the Somali Armed Forces as the government battles Al-Shabab militants in central Somalia. Similarly, Mahmoud travelled to Khartoum earlier this month where he met with Sudani Defence Minister, Maj Gen Yasin Ibrahim to discusses security in the region and support in the fight against extremism in the Horn of Africa.

This seems like an interesting development as Somalia needs regional support from allies to curb the increasing dangerous threats from Al-Shabab.