Issue No 627

The billion dollar budget
 

For the first time, Somalia's federal budget has surpassed USD 1 billion. On Saturday, 9 December, the Federal Parliament passed the 2024 Budget Appropriation Act in a sitting chaired by the Upper House Speaker Abdi Hashi Abdullahi. The bill's eventual passage was straightforward, with near-unanimous approval from MPs, barring three abstentions. An increase of USD 62 million from 2023, the budget dwarfs the country's federal budget of USD 114.3 million of a decade ago. Substantial increases in donor funding and gradual internal revenue development have seen Somalia's budget soar in recent years.  
 
The budget is comprised of two main parts; the first is a fixed budget of USD 569,666,048, and the second is a capital budget of USD 509,655,736 for a total budget of USD 1,079,315,784. Most of this will come from external donors, perhaps as much as 70% from grants and loans, despite the progress Somalia has made in collecting internal taxes.
 
The bill's passage coincides with the expected approval of near-total debt relief for Somalia today, 13 December, following a high-level meeting in Washington DC at the International Monetary Fund (IMF) and World Bank. The write-off slashes Somalia's debt from USD 5.2 billion to around USD 600 million, the result of a decade of reforms and negotiations between Somalia and the Bretton Woods institutions that began during President Hassan Sheikh Mohamud's first term as president. The completion of the Heavily Indebted Poor Countries (HIPC) Initiative is the latest in a string of high-profile foreign policy successes for Villa Somalia. Finance Minister Bihi Iman Egeh further signalled in parliament last week that Somalia will be the "first country granted permission to continue receiving… aid" from these bodies once debt relief is complete.
 
Unsurprisingly, security sector funding accounts for the largest chunk of the national budget. A total of USD 224,279,259 has been allocated for Somalia's entire defence and security services, over 20% of the country's total budget. The Somali National Army has been budgeted over 132 million, the Ministry of National Security 83 million, the Police Command nearly 50 million, and the National Intelligence and Security Agency (NISA) 26 million. Next year is supposed to be crunch time for the Somali National Army (SNA) to eradicate Al-Shabaab from central and southern Somalia. The perennial issues of corruption, and the allocation of funds into vanity projects rather than effective counter-insurgency are likely to continue undermining the SNA budget, however.
 
The content of the federal budget also signals education as another priority of the current government, allocating over USD 60 million for the Ministry of Education. Considering the scale of illiteracy and the patchwork education system currently in Somalia, the budgetary increase, along with the recent announcement that another 3,000 teachers will be hired, are welcome. But not all social investment has been ring-fenced; healthcare in Somalia has taken a major cut from USD 67 million in 2023 to USD 52 million next year.
 
The budget has not come without controversy. As part of the budgetary increase, Somali MPs also voted to hike their own monthly salaries from USD 3,500 to 5,000. Leaving aside whether the increase is justified, two issues have been subsequently raised. First, earlier the same day, the Somali Disaster Commissioner Mohamud Moalim had said there are insufficient funds to fully support those affected by recent and ongoing flooding. While the two cannot be directly equated-- if funding were not allocated for MP salaries does not mean it would be allocated for humanitarian support-- this is certainly a bad look, one which has been seized on by critics of Somalia's parliament. Somali MPs are now paid more than lawmakers in Poland, the Czech Republic, and India, among others, and far higher than the average Somali soldier whose monthly salary is USD 250.
 
Second is the prospect of the National Consultative Council (NCC) proposals’ consideration in parliament. The sweeping electoral changes are yet to be tabled, and are unlikely to be, at least until President Hassan Sheikh Mohamud is back in Mogadishu and able to garner more political support. One perception is that the MP salary increase could help shore up the government's unstable position in pushing the proposals. The increase suggests a wider malaise that has crept into the federal administration in recent months. Promises of constitutionalism and straightforward politics are being replaced by arm-twisting and transactional back room deals.
 
Like with many countries, the passage of Somalia's federal budget has traditionally been a combative affair as lawmakers jostle for funding and influence. The relatively smooth passage of the bill then has come as a bit of a surprise, despite the two controversies mentioned above.
 
There are in fact further concerns about insufficient scrutiny over the passed budget, with the second and third readings of the bill raced through in a single day last week. But the real parliamentary debates may be still to come over the constitutionalism of the NCC proposals. Discussion about Somalia's future electoral configuration should be out in the open, not decided by pay increases and proffered positions. Both houses of Somalia’s parliament must have a genuine say on the future direction of their country, without fear or favour.