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Somalia, October 26, 2026 - For a family in Somalia, the value of a government budget may be measured in very practical terms: whether a child can attend school, whether a pregnant woman can access essential healthcare, or whether a local health facility has the resources to serve its community.
But delivering those services requires public money, and Somalia’s ability to finance its development priorities remains constrained by a narrow domestic revenue base, competing spending demands and declining external assistance.
The World Bank’s Somalia Public Finance Review 2026: The Next Stage of Public Finance estimates that consolidated government expenditure reached approximately 11.3% of gross domestic product in 2025, a level the report describes as low compared with regional and structural peers.
The review identifies a further challenge: how available resources are spent.
“Public spending remains low by international standards and insufficient to meet the Federal Republic of Somalia’s development and service delivery needs, yet its composition limits effectiveness,” the report states in its executive summary.
The finding highlights a two-sided problem for Somalia. Government needs more resources to meet public needs, but it must also ensure that the money it already spends delivers better results.
The report identifies security and recurrent obligations, particularly wages, as major pressures on the budget. These demands leave limited room for public investment, infrastructure, maintenance and services that support long-term development.
Health and education illustrate the scale of the challenge. The review reports that government spending on health was approximately 0.2% of GDP, while education spending averaged around 0.5% of GDP over 2021–2023. These figures use different reporting periods and should not be interpreted as a single-year comparison.
Such low levels of public expenditure place the question of service financing firmly at the centre of Somalia’s fiscal reform debate. They do not, on their own, establish the quality or availability of every school or health facility. However, they indicate how limited the public resources available for these essential sectors remain.
The pressure is compounded by Somalia’s dependence on external assistance. The World Bank estimates that external grants could decline from around 5% of GDP to below 1% by 2030. As this support contracts, the government will face difficult decisions about how to finance essential services while meeting security and other obligations.
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The review argues that strengthening domestic revenue collection is part of the answer. Somalia collected domestic revenue equivalent to 6.3% of GDP in 2025, compared with approximately 15–17% among peer countries, according to the report.
However, increasing revenue is only one part of the challenge. The World Bank also calls for more efficient spending, stronger public financial management, better procurement and clearer responsibilities across different levels of government.
That last issue matters because the institutions that collect or allocate public money may not be the same institutions responsible for delivering services directly. The review identifies incomplete arrangements for sharing resources and assigning responsibilities between the Federal Government, Federal Member States and local governments as an obstacle to effective spending.
For communities, the practical question is whether the money allocated to health and education reaches the institutions expected to provide those services, and whether those institutions can account for how it is used.
Somalia has made progress in rebuilding public financial management systems and expanding some social spending. The task now is to sustain those gains while improving the link between public budgets and service delivery.
The report proposes reforms intended to strengthen revenue collection and expenditure efficiency while creating room, over time, for greater investment in human capital, infrastructure and climate resilience. The success of those measures will depend on implementation, institutional capacity and the government’s ability to balance competing priorities.
For families, the test will ultimately be practical. Can the country build a system that finances essential services more reliably, distributes resources more predictably and demonstrates that public spending is making a difference?
The World Bank review does not suggest that additional revenue alone will solve Somalia’s service-delivery challenges. Its broader message is that stronger revenue mobilisation must go hand in hand with better spending decisions and clearer accountability.
As Somalia plans for a future with less external assistance, the central question is not only how much money the government can raise. It is how effectively that money can be converted into opportunities, protection and essential services for the people who need them.