Parliament Begins Review of Somalia’s $1.37bn Budget Proposal

Somalia, 16 November 2025 — Somalia’s bicameral Parliament on Saturday began formal deliberations on the proposed 2026 national budget, valued at $1.37 billion, following the completion of its first reading.Deputy Minister of Finance Abdiqafaar Elmi Hange, who presented the proposal, said the spending plan marks a major structural shift, introducing an Activity-Based Budgeting (ABB) system designed to link government expenditures to specific programmes and measurable results.“The budget is based on a new system built on what is known as an activity-based budget, whereas the previous one was based on a general and limited line-item approach.”Hange told lawmakers, saying the reform would strengthen transparency, accountability and performance-monitoring.Hange explained that the 2026 budget relies on a mix of domestic revenue and external assistance. He forecast that external grants would total roughly $828 million next year, including more than $154 million in direct budget support and close to $674 million in project-funded development assistance. He said recurrent expenses amount to just under $700 million, while development spending is expected to reach a similar level, bringing total expenditure to $1.373 billion.Despite welcoming the reform, several MPs expressed unease over the preparation process — particularly the classification of external grants and the extent of parliamentary consultation.MP Muuse Ahmed said many proposals from legislators were overlooked during budget formulation.“Regarding the preparation of the grants that come into the country, I believe that many of the suggestions we provided were not included in the way it was formulated,” he said during Saturday’s session.The budget debate comes as Somalia continues to adjust to a post–debt relief environment and seeks to increase domestic revenue collection while managing heavy reliance on external financing.Despite the concerns, parliamentary committees are now expected to review and refine the proposal before it returns for a second reading. Lawmakers say they intend to approve the 2026 national budget in the coming weeks ahead of the new fiscal year.