Somalia’s Finance Minister Bihi Iman Egeh has highlighted a significant 25 percent decrease in foreign aid over 2024 and 2025, urging the nation to accelerate efforts toward economic self-reliance. The minister made these remarks during the 4th Economic Policy Conference in Mogadishu, organized by the Central Bank of Somalia.

Egeh emphasized that the consecutive annual decline in external financial assistance marks a critical turning point, necessitating a shift away from donor dependence. He called for strengthening domestic revenue streams through enhanced tax administration, expanded customs collection, and creating an environment conducive to private sector growth.

Conference Focus and Economic Reforms

The conference convened government officials, economists, financial institutions, academics, and development partners to deliberate on Somalia’s economic future. Discussions centered on financial stability, monetary policy, banking reforms, and improving financial infrastructure.

Somalia has been implementing reforms supported by the International Monetary Fund aimed at modernizing tax systems, boosting public financial management, and expanding financial inclusion. These reforms seek to improve government revenue collection, strengthen institutions, and foster sustainable growth.

Challenges and Opportunities

  • Reduced donor funding amid shifting global priorities
  • Recurring climate shocks impacting agriculture and livelihoods
  • Security challenges affecting economic activity
  • Need to broaden the tax base and encourage business development

The minister stressed that increasing domestic revenues will enable Somalia to finance public services and development projects independently, reducing vulnerability to external funding fluctuations. The International Monetary Fund has also underscored the importance of these reforms for long-term economic stability.

While Somalia has made strides post-debt relief under the Heavily Indebted Poor Countries initiative, the reduced aid environment presents both challenges and an opportunity to build a resilient economy less reliant on foreign assistance.