Somalia’s Finance Minister, Bihi Imaan Cige, told CNBC Arabia in an interview that Somalia has made significant economic progress in recent years, despite new challenges stemming from a decline in development assistance from major donors.
The minister said the country recorded a growth rate of 4% in 2024, but the forecast for 2025 has dropped to around 1%, which he attributed to a lack of external support, which has affected the pace of economic growth.
Bihi Imaan Cige noted that the federal government is working on strengthening financial management, tax and institutional reforms, to increase domestic revenue, which he described as the backbone of long-term investment.
He stressed that the country has made significant progress in digitizing and automating tax systems, which has led to an increase in domestic revenue of more than 80% in the past three years, despite starting from a low revenue base.
The minister also said that the national budget has increased by 24% in 2024 and 2025, but there is still a great need for international financing, as domestic revenue has been increasing slowly each year.
The government, he said, is focusing on expanding social spending, especially on education, health and social protection programs.
He noted that domestic revenue allocated to education has increased from 3% to 10% in three years, indicating the government’s increased capacity to fund development priorities.
The Finance Minister also clarified that Somalia has adopted a targeted support approach, rather than using undifferentiated general aid.
