Overview of Somalia’s public sector challenges
The Federal Government of Somalia continues to face persistent and multifaceted challenges in its effort to provide essential public services such as security, education, healthcare, food security, and infrastructure. A major obstacle is the government’s limited ability to mobilize sufficient domestic revenue, primarily due to persistent insecurity, weak institutional capacity, and political disagreements. These constraints have severely hindered the government’s ability to fund and deliver services effectively to its citizens.
Despite these hurdles, Somalia has made notable progress in rebuilding trust with international donors, particularly under the Heavily Indebted Poor Countries (HIPC) Initiative. The International Monetary Fund (IMF) and the World Bank have invested heavily in strengthening Somalia’s public financial management systems, providing critical training to staff at the Ministry of Finance to ensure compliance with international financial standards. Following a series of successful pilot projects where Somalia not only managed donor funds through its own systems but also oversaw the full implementation of program activities, donors began to shift their approach. For the first time in decades, international partners entrusted the Somali government with direct management of large-scale, multimillion-dollar development programs. As a result, nearly $2 billion worth of donor-funded projects are currently being channeled through the country’s Single Treasury Account (STA), overseen by the Ministry of Finance.
Key donors to these programs include the World Bank ($1.6 billion), the African Development Bank ($130 million), the Global Partnership for Education ($80 million), and the European Union ($3.3 million). Collectively, these funds support over 34 active projects being implemented across 12 different federal ministries.
The core objective of these programs is to enhance service delivery and drive sustainable development across key sectors such as:
- Institutional capacity building
- Urban resilience and infrastructure
- Energy and technology
- Education and healthcare
- Climate change, drought resilience, and food security
- Economic development, agriculture, and fisheries
In theory, the successful implementation of these programs could significantly transform these sectors and improve the lives of millions of Somali citizens, either directly or indirectly.
Yet, despite their potential, a staggering portion of these funds remains unspent, with many program activities stalled or unimplemented. Why?
This article aims to shed light on this pressing issue examining the systemic obstacles, operational inefficiencies, and institutional challenges that hinder Somalia’s ability to turn donor support into tangible progress for its people. My goal is to unravel the reasons behind the underutilization of donor funds and explore what must change to ensure that Somalia can finally deliver on the promise of these development programs.
Somalia’s reliance on donor aid
Somalia’s 2025 national budget stands at approximately $1.33 billion. Of this, only $430.3 million is expected to be generated through domestic revenue, while a substantial $903 million more than 67% of the total budget is projected to come from international donors. This donor support is divided into $167.9 million in direct budgetary aid and $735.1 million allocated for specific programs.
This stark dependency on external assistance highlights Somalia’s fragile fiscal position and ongoing challenges in building a self-sustaining public sector. Key donors including the World Bank, IMF, European Union, African Development Bank, and Global Partnership for Education continue to play a central role in funding critical government functions and development programs across the country.
To manage these inflows more effectively and enhance transparency, the government has adopted a Single Treasury Account (STA) system, overseen by the Ministry of Finance. The STA is designed to centralize and streamline the management of public funds, ensuring that donor contributions are tracked, reported, and used through formal government systems in alignment with national priorities.
Where the money stalls
Every year, Somalia underutilizes approximately 50% of donor funds allocated for development programs. In 2023 and 2024, a total of $522.7 million remained unspent, $215.7 million in 2023 and $307 million in 2024 resulting in utilization rates of 56% and 47%, respectively. This represents a 9% decline in spending efficiency from 2023 to 2024, this trend signals that the problem is deepening, and without urgent action, the consequences will grow more severe.
Despite the substantial volume of committed aid, a stark paradox persists, absorption and implementation rates remain critically low. While funds are allocated on paper, projects face chronic delays, under-execution, or outright stagnation. This raises serious questions about institutional bottlenecks, operational capacity, and the government’s ability to convert financial support into tangible improvements for Somali citizens.
In my evaluation of 34 projects worth $1.85 billion, each with annual budgets allocated in the national appropriation, I found stark discrepancies in performance:
- 2023: Only 7 projects achieved a spending rate above 70%; 8 projects fell between 40–69%, while 14 projects languished at 0–39%.
- 2024: Performance deteriorated further just 4 projects exceeded 70% execution, 12 projects hovered at 40–69%, and 18 projects remained below 39%.
The seven lowest-spending ministries (with burn rates of 0–46%) exemplify chronic underutilization, directly undermining service delivery in critical sectors. Four ministries, Livestock, Forestry and Range (MoLFR); Communications and Technology (MoCT); Energy and Water Resources (MoEWR); and Education, Culture and Higher Education (MoECHE) consistently underperformed in both years. Three others, Fisheries and Blue Economy (MFBE), Agriculture and Irrigation (MoA), and Planning, Investment and Economic Development (MoPIED) saw drastic declines in 2024.
Collectively, these ministries oversee 17 projects worth over $1 billion, this chronic underutilization of resources by key ministries has stalled progress in critical sectors like agriculture, education, energy, and digital development. These ministries are directly responsible for sectors tied to Somalia’s food security, economic recovery, and long-term development. Their inability to absorb funds has real-world consequences for millions of Somali citizens.
When examining burn rates by donor, a similar pattern emerges. Projects funded by the Global Partnership for Education (GPE) and African Development Bank (AfDB) had the lowest burn rates in 2024, 6% and 17% respectively. Even the World Bank, which funds the largest share of projects, had a utilization rate of just 50%. Only the European Union, with a modest funding envelope, achieved a relatively higher burn rate of 69%, though its overall contribution to the budget was small.
These disparities suggest that donor oversight and implementation support vary significantly. I recommend that technical teams from underperforming donors deepen their involvement in tracking quarterly and annual project plans to ensure targets are met.
The biggest culprits: 23 stalled projects
The biggest culprits: 23 stalled projectsTo further pinpoint where the money is stalled, I identified 23 projects with burn rates below 50% in 2024. These projects account for $1.2 billion in total value, or roughly two-thirds of the total aid portfolio, making their poor performance a major driver of the overall low utilization rate.
To further pinpoint where the money is stalled, I identified 23 projects with burn rates below 50% in 2024. These projects account for $1.2 billion in total value, or roughly two-thirds of the total aid portfolio, making their poor performance a major driver of the overall low utilization rate. These include:
- 5 education projects (3 with severe execution rates of 3%, 5%, and 5%).
- 4 energy/water projects (2 at 2% and 4%).
- 2 projects each in agriculture, finance, livestock, planning, and public works.
Notably, Accelerating Sustainable and Clean Energy Program (WB/MoEWR) spent just 2% of its budget, while Somalia Empowering Women Through Education (WB/MoECHE) utilized only 3%. Several ministries, particularly MOECHE, MoEWR, and MoA are responsible for a large share of these underperforming projects. In some cases, projects had burn rates as low as 2%, 3%, and 5%. These are not just administrative statistics; they represent missed opportunities for improved education, energy access, water infrastructure, and livelihoods for Somali communities.
The answer to Somalia’s declining utilization rates is clear: the largest share of funds is trapped in these underperforming projects managed by 12 key ministries. Without urgent reforms to address procurement delays, capacity gaps, and accountability failures, these ministries will continue to sit on these funds rather than deliver results.
In the next sections, I will dissect the root causes of these bottlenecks and propose actionable solutions.
The root of the problem
Despite the influx of donor funds and the establishment of financial systems like the Single Treasury Account, Somalia’s chronic underutilization of aid is symptomatic of deeper, structural dysfunctions within government institutions. Below, I dissect the four interlinked challenges: a widespread capacity deficit, weak financial management systems, bureaucratic delays, and poor coordination between federal and state institutions. Unless these foundational weaknesses are addressed, progress on development goals will remain elusive.
A. Capacity deficit: Unqualified project leadership
The single greatest obstacle to project execution is the government’s failure to recruit qualified personnel particularly in top project management roles. In recent years, appointments to multimillion-dollar programs have been marred by nepotism and political patronage, with little regard for technical competence
Project management is a multifaceted discipline requiring expertise in planning, stakeholder coordination, budgeting, risk mitigation, and reporting. Managers must lead diverse teams, align stakeholders across federal and state institutions, and ensure timely execution of work plans. When individuals unfamiliar with these responsibilities are placed in charge, the consequences are predictable: delays, inaction, and missed targets.
Moreover, project teams recruited under similar non-transparent processes often lack the technical and managerial skills required to deliver results. In such environments, project staff frequently see their roles as limited to collecting paychecks rather than implementing programs. Without qualified leadership, many of Somalia’s most critical development programs have stalled not because funding is unavailable, but because no one is adequately prepared or equipped to deliver.
This capacity deficit is not a secondary issue it is the root cause of the broader implementation failure. All other bottlenecks, while significant, are ultimately symptoms of this fundamental flaw.
B. Weaknesses in public financial management and budget execution
Closely tied to the capacity gap is the systemic weakness in financial management practices within many of the ministries overseeing donor-funded projects. In ministries with low burn rates, financial operations are marked by a lack of basic controls, irregular budget reviews, and poor cash flow planning. Routine financial reporting is absent in many Project Implementation Units (PIUs), and project managers are often left in the dark regarding budget utilization until the end of the fiscal year by which time it is too late to course correct.
Payment delays are another persistent issue. Due to insufficient documentation and incomplete or delayed cash projections, funds often remain undisbursed, stalling key activities. Payment processing can take weeks, if not months, disrupting implementation schedules and causing bottlenecks throughout the project cycle. Worse still, the finance teams of many underperforming programs do not provide monthly utilization reports to project managers, further compounding the lack of oversight and accountability.
Strong financial management is a prerequisite for effective service delivery. Without it, even the best-designed projects cannot be executed. as long as ministries fail to establish robust financial tracking, cash management, and reporting mechanisms, underutilization of funds will persist.
C. Procurement bottlenecks and institutional gridlock
Procurement inefficiencies represent another critical obstacle to project implementation. The procurement process is heavily bureaucratic, involving complex procedures and extensive documentation. Unfortunately, many of the procurement officers currently working in donor-funded programs lack the technical competence to manage large, high-threshold procurements. As a result, critical procurements are delayed or never acquired at all.
Beyond the procurement teams, other project staff, including technical specialists and financial officers, play crucial roles in drafting Terms of Reference, preparing budgets, and participating in bid evaluations. These responsibilities are frequently neglected or delayed due to a lack of capacity, commitment, or both. This disjointed process significantly disrupts procurement timelines, slows down disbursements, and contributes to the under-execution of project plans.
In some cases, procurement decisions are further complicated by internal conflicts of interest. Disagreements among stakeholders over which vendors should be awarded contracts can lead to deadlocks, undermining the neutrality and efficiency of the selection process.
D. Limited coordination across Federal and State institutions
Finally, poor coordination between Federal Government institutions and the Federal Member States (FMS) presents a major governance challenge. Tensions often arise over the allocation of funds and the selection of project implementation sites, leading to significant delays in program delivery. Federal ministries frequently design and launch programs without adequate consultation with their FMS counterparts, which can result in misaligned priorities and limited local ownership.
Moreover, reporting and feedback channels between the two levels of government are weak or in some cases entirely absent. This lack of communication undermines the ability of projects to respond to local needs, adapt to regional contexts, and effectively monitor performance.
The Impact of this chronic under-spending
Thus far, this analysis has focused on figures, project names, and institutional failures painting a clear picture of Somalia’s systemic inability to utilize donor funds. But behind these statistics lies a deeper tragedy: the real-world consequences for millions of Somalis who remain trapped in cycles of poverty, ignorance, insecurity, and deprivation due to stalled projects. While a full sector-by-sector impact assessment would require extensive research, the evidence already points to severe setbacks in service delivery and development progress.
The persistently low spending rates across critical government programs have had tangible and damaging effects on public service delivery in Somalia. While billions in donor funding remain unspent, communities continue to lack access to essential services.
In education, delays in disbursements for projects such as the Somali Education Human Capital Project and the GPE System Transformation Grant have prevented the achievement of planned school enrollment targets. As a result, schools remain unbuilt, classrooms lack basic resources, and thousands of teachers remain unpaid, undermining efforts to expand access to quality education, particularly for girls.
In the health sector, setbacks in the health projects have left vital health facilities incomplete and communities without access to basic healthcare. The lack of funding for frontline operations has hindered vaccination campaigns, maternal care services, and the country’s ability to respond to disease outbreaks.
The energy and water sectors have also suffered. Projects like Accelerating Sustainable and Clean Energy, Households’ Access to Renewable Energy, and the Groundwater for Resilience Project have made little progress. Consequently, many communities still lack access to clean water, electricity, and renewable energy, services that are not only essential for survival but also for economic development.
Infrastructure development has been stalled by under-implementation of major projects like the Road Infrastructure Program, the Somali Horn of Africa Infrastructure Integration initiative, and the Somalia Urban Resilience Project. This has delayed critical roadworks, bridge construction, and urban development projects undermining connectivity, trade, and broader post-conflict reconstruction efforts.
In agriculture and food security, stalled programs such as the Somalia Crisis Recovery Project and the Somali Food Systems Resilience Project have led to missed opportunities to support rural livelihoods, address climate vulnerabilities, and improve food security across the country.
Every unspent dollar represents a lost opportunity to provide vital services to the Somali people. Chronic under-spending is not merely a technical or financial issue, it constitutes a fundamental development failure, widening the gap between government policy ambitions and the daily reality faced by citizens.
From an economic perspective, the persistent under-utilization of development funds has direct and far-reaching implications for employment, household income, and overall economic activity in Somalia. Every dollar left unspent translates into jobs not created livelihoods not supported, and local demand not stimulated. Development projects, especially those involving infrastructure, education, and basic services are inherently labor-intensive. Even at the subproject level, such as the construction of a single school, multiple employment opportunities are generated: at minimum, 10 laborers and 2 skilled technicians or engineers would be required. These workers depend on such temporary employment for their daily subsistence, often supporting extended families. The cumulative effect of stalled or delayed projects is the systemic denial of income-generating opportunities across the country.
Using a conservative employment multiplier of 5 direct jobs per $1 million investment, the unspent $307 million in 2024 alone represents a minimum of 1,535 direct jobs lost. However, this is only the tip of the iceberg. When factoring in indirect and induced employment effects such as jobs in the supply chain (materials, logistics, services) and increased household consumption, the total number of jobs foregone could be two to three times higher, depending on sector-specific multipliers. This lost employment opportunity contributes not only to rising poverty levels but also to reduced aggregate demand, suppressing domestic consumption and weakening the velocity of money in the economy. In simple terms, money that could have circulated through wages, local purchases, and community investments instead remains idle in government accounts or donor holding funds.
Moreover, under-spending undermines productive capacity by delaying investments in human capital, infrastructure, and public goods which are critical foundations for long-term economic growth. It stifles the multiplier effects that development projects are meant to unleash, curtails economic diversification, and limits Somalia’s ability to reduce unemployment and increase formal labor force participation. The opportunity cost is enormous, not only in jobs lost but in lost GDP contributions, missed tax revenues, and foregone development gains. If unaddressed, this inefficiency will increase poverty and widen inequality, which deepens the very challenges these development programs were designed to alleviate.
From the donor perspective, this issue is especially concerning. At the outset, Somalia demonstrated a strong commitment to managing development programs effectively and delivering services to its people. This gave donors including the World Bank, African Development Bank, Global Partnership for Education, and the European Union confidence in Somalia’s institutions and systems. They responded by providing substantial funding to help the country meet urgent needs and rebuild public trust and legitimacy.
However, once the funds were secured, the government failed to adequately address the operational and systemic issues that have hindered project execution and fund absorption. Many of these projects are now nearing their end dates within the current administration, and several more will expire soon. Donors have already begun issuing warnings about their dissatisfaction with the low utilization rates, raising serious concerns about the government’s ability to manage external assistance. If Somalia fails to utilize these funds effectively, it risks losing future donor support. Such a loss would not only damage the government’s credibility but also jeopardize the country’s ability to secure future funding, potentially leaving future generations with the burden of rebuilding lost trust and restarting stalled development momentum.
The path forward
In this section, I offer a set of practical and achievable recommendations that, if implemented, can help ministries and development projects recover momentum and meet their targets going forward. These suggestions are not extreme, but rather grounded in the current realities and aimed at enabling progress within existing structures.
A. Capacity development
Throughout my career, I have rarely advocated for disciplinary actions or wholesale staff replacement as the first solution. While I strongly believe in merit-based recruitment to ensure the right individuals are placed in the right roles, I advocate more for building capacity than dismantling teams.
Ministries, with the support of donors, should establish online or in-person training programs focused on key areas such as project management. Project managers must be equipped with knowledge of the full project management cycle, their responsibilities in driving progress, and how to hold others accountable. Similar targeted training courses should be developed for staff in finance, procurement, monitoring and evaluation, and other technical areas. To optimize resources, one centrally developed training program can be shared across all ministries and projects.
In addition, underperforming projects should receive immediate support through the addition of two or more technical staff recruited transparently and competitively who can work alongside existing teams. These newly assigned experts should be empowered with decision-making responsibilities to drive implementation forward.
For newly approved projects such as the World Bank’s Somali Integrated Statistics and Economic Planning Capacity Building Project, Barwaaqo Project, Bulsho Project, SPRING Project, and the Somalia Disaster Risk Management DPF with a Catastrophe Deferred Draw Down Option Project, there is a significant opportunity to set a new standard in project implementation. These projects are still in their early stages, giving both government and donor partners a window to proactively establish strong institutional foundations before operational challenges emerge.
One of the most effective ways to ensure these projects succeed is by prioritizing the recruitment of highly competent professionals through transparent and competitive processes. Clear terms of reference, well-defined selection criteria, and the inclusion of donor observers in recruitment panels can help guarantee that qualified individuals with the right technical skills and commitment are brought on board.
I also recommend introducing a staff performance management framework within government institutions. This system would reward high performers through promotions and identify underperforming staff through demotions or reassignment. It should be data-driven, based on annual performance reviews aligned with project goals. Such a mechanism can strengthen accountability without targeting individuals unfairly, allowing performance to be assessed and managed objectively.
B. Strengthening public financial management and budget execution
One consistent issue observed across multiple projects is the limited number of financial management staff. Projects managing tens of millions of dollars often rely on just one or two finance personnel, which is both unrealistic and unsustainable.
Each ministry should adopt a segregation of duties model within finance teams clearly assigning budget monitoring, payment processing, and cash forecasting to different individuals. Ministries need not recruit externally, instead, surplus civil servants who are currently unassigned but still on the payroll can be mobilized to support these roles.
Moreover, monthly budget monitoring reports should be prepared and shared with project managers, Director Generals, and the relevant Ministers or their delegates. This will ensure leadership remains aware of financial trends and can act swiftly to address delays or inefficiencies.
Cash forecasts should be prepared in advance to prevent cash shortages, and payments must be processed promptly with complete, auditable documentation to maintain financial integrity.
C. Establishing efficient and transparent procurement processes
Procurement remains a bottleneck in many projects. Procurement teams are often too small to manage multiple high-value procurements at once. Ministries should expand these teams by assigning trained civil servants to assist with daily administrative tasks, thereby allowing procurement specialists to focus on more technical activities.
Regular training should be provided to all procurement staff to keep up with best practices and evolving policies. Project managers should monitor procurement plans weekly and raise flags when delays occur. In turn, procurement progress should be reported monthly to ministry leadership for better decision-making and accountability.
D. Improving intergovernmental coordination
I strongly recommend establishing a dedicated Aid Coordination Unit within the Office of the Prime Minister. This unit should be tasked with monitoring the performance of all donor-funded programs, identifying those that are lagging, and coordinating responses to resolve bottlenecks.
The Office of the Prime Minister is uniquely positioned to bridge gaps between federal ministries. Many times, challenges in project delivery arise due to lack of coordination at both vertical (federal-state) and horizontal (across federal ministries) levels. A central unit with a mandate to coordinate and intervene will help mitigate these issues significantly.
The federal government must demonstrate political will and urgency in driving these reforms. Donors have placed their trust in Somalia’s institutions, but that trust is at risk. This moment calls for decisive action. Every day lost is another opportunity missed to deliver essential services to Somali citizens.
There is no more time to wait for the system to fix itself. A clear and immediate intervention is necessary to reverse the current trend and place Somalia back on the path to sustainable development.
End
Author’s Note
Models of excellence: Recognizing the best-performing projects
This article examines 34 development projects in Somalia, with an in-depth focus on 23 underperforming projects that account for over $1 billion in stalled funds. These projects highlight critical inefficiencies in fund deployment and underscore the urgent need for remedial action.
However, it is important to acknowledge the successful projects that demonstrate strong performance, efficient resource utilization, and commendable execution. These projects serve as encouraging examples of what is possible when resources are properly managed. The teams behind the following 11 projects (listed in the table below) deserve recognition for their dedication and effectiveness.
Recommendation for further assessment
Recommendation for further assessment
This analysis represents a high-level overview and should be treated as an initial diagnostic. A more detailed, sector-by-sector evaluation is necessary to assess the long-term impact of these underperforming projects. Such an analysis would be vital in understanding how resource mismanagement affects institutional development, economic progress, and societal well-being in Somalia.
About Author
Abdullahi Ciid is an experienced Finance and Grants Manager with over Eight years of expertise in humanitarian and development programs. He has held key roles in public financial management, including serving as a Finance Specialist at the Federal Ministry of Education (2019–2021), where he played a key role in implementing the Global Partnership for Education’s (GPE) ESPIG program. During this period, he contributed to pioneering the use of the country’s Treasury Single Account (TSA) for donor funds, proving its reliability and achieving an 85% utilization rate of the project budget.
Additionally, he supported the World Bank’s Somalia Recurrent Cost & Reform Financing Project (Education Component), significantly improving its historically low burn rate through strategic reforms in project management, finance, and procurement. These reforms driven by the ministry’s leadership and a competitively recruited team of experts led to increased donor confidence, resulting in additional funding for subsequent programs, including the Somalia Education for Human Capital Development Project ($40M), GPE’s GEA Project ($18M), STG Project ($60M), and the World Bank’s Rajo Kaaba program ($52M).
The author now writes this article with deep concern over the deteriorating absorption of donor funds. Having helped build donor trust through effective implementation and accountability, he now warns of the risk of reversing that progress. He urges all stakeholders to undertake urgent reforms to safeguard development outcomes and preserve the confidence of Somalia’s international partners.
For further information or professional inquiries, you may contact the author via email at [email protected] or by phone at +252613197161.