One billion dollars sitting Idle while Somalia faces crisis

By: Mohamed Mukhtar Ibrahim
Sunday August 2, 2026

At a time when Somalia faces shrinking external assistance, mounting fiscal pressures, and growing humanitarian needs, the country can least afford to leave more than one billion dollars in committed development financing sitting idle.

According to the latest portfolio review, Somalia has an active World Bank portfolio worth approximately $3.07 billion. Of this amount, around $1.07 billion—nearly 35 percent of the portfolio—remains undisbursed. While some recently approved projects naturally require time before implementation begins, many others have experienced prolonged delays despite urgent development needs. 

Overall sector performance is highly uneven, with health emerging as the strongest-performing sector while several growth-oriented sectors lag significantly behind. Health has achieved an 80.2% disbursement rate, followed by social protection and labor (78.3%) and development policy financing (73.4%), reflecting relatively strong implementation. Water and resilience (51.4%), agriculture and food systems (48.7%), and public works and infrastructure (37.2%) show moderate progress. In contrast, sectors critical for long-term economic transformation are performing poorly. Education has disbursed only 30.8% of approved funding, energy just 24.2%, fisheries 17.4%, and digital technology only 13.9%. This pattern suggests that while Somalia has made relatively good progress in delivering social services and safety net programs, implementation has been much slower in the infrastructure and productive sectors essential for economic growth, job creation, and private-sector development.

Why Implementation Continues to Fall Short

The portfolio review identifies procurement as the single most significant barrier to implementation. According to the report, procurement has become “the thorniest issue” affecting both World Bank and African Development Bank programs because government officials often have vested interests in contract awards and allegedly seek kickbacks and bribes in exchange for awarding contracts to unqualified companies. These practices not only delay procurement processes but also undermine the quality of project execution. The review further notes that limited leadership capacity within ministries, departments, agencies, and Project Implementation Units (PIUs) constrains effective program management, while the absence of strong coordination by the Office of the Prime Minister allows many implementing agencies to bypass central oversight, weakening the government’s ability to monitor progress and resolve implementation bottlenecks. 

The review also highlights weaknesses in project execution and political coordination. It finds that contracts are frequently awarded to companies that lack the technical qualifications and capacity to deliver the required works, contributing to delays, poor performance, and cost overruns. 

Beyond these administrative shortcomings, political tensions between the Federal Government and the Federal Member States continue to impede implementation. Because many development projects are operationalized at the state level, disagreements over political authority and intergovernmental relations have caused numerous projects to stall or experience significant delays. Taken together, procurement weaknesses, governance failures, limited institutional capacity, inadequate coordination, contractor deficiencies, and federal-state political disputes are not isolated technical problems but mutually reinforcing challenges that have created a systemic implementation crisis across Somalia’s development portfolio. 

The Fiscal Context Has Fundamentally Changed

For much of the past decade, Somalia could rely on steadily expanding donor support to compensate for its limited domestic revenue. That environment no longer exists.

International humanitarian assistance is declining as global crises compete for attention. Conflicts in Ukraine, Gaza, Sudan and elsewhere have stretched donor resources. Development partners increasingly face budget constraints at home while demanding stronger evidence of results abroad.

The recent Iran-Israel conflict further exposed Somalia’s economic vulnerability. Higher global shipping costs disrupted trade, reduced activity at ports such as Mogadishu, and placed additional pressure on customs revenues. At the same time, Somalia’s domestic revenue base remains narrow, limiting the government’s ability to finance development from its own resources.

Against this backdrop, every committed development dollar becomes more valuable. An undisbursed dollar is not simply money waiting in an account. It represents roads that remain unbuilt, schools that remain unfinished, irrigation systems that farmers never receive, electricity projects that continue to stall, and social protection programs that fail to reach vulnerable households.

The Cost of Political Fragmentation

Implementation delays are not solely administrative. They are also political. Many nationally funded projects depend upon cooperation between the Federal Government and Federal Member States. Political disagreements often delay procurement, implementation, supervision, and beneficiary selection.

Development finance should not become another casualty of political competition. Regardless of constitutional disputes or electoral disagreements, all political actors share an interest in ensuring that schools are built, roads are completed, health facilities are equipped, and livelihoods are strengthened. Every month of delay ultimately affects Somali citizens rather than political institutions.

From Resource Mobilization to Resource Utilization

For years, Somalia’s development agenda focused heavily on attracting external financing. Considerable success has been achieved in mobilizing concessional resources from institutions such as the World Bank and African Development Bank.

The challenge has now shifted. 

The central question is no longer whether Somalia can secure development finance. It is whether Somalia can spend that finance effectively and on time. Improving implementation does not necessarily require new funding. It requires stronger procurement systems, better project management, greater accountability, more effective coordination through the Office of the Prime Minister, faster decision-making, and closer cooperation between federal and state institutions. These are governance reforms rather than financial reforms.

A National Development Imperative

Somalia’s development challenges remain immense. Millions require social protection. Infrastructure deficits constrain economic growth. Electricity costs remain among the highest in Africa. Climate shocks continue to threaten livelihoods, while unemployment—particularly among young people—remains exceptionally high.

Against these realities, allowing more than one billion dollars in already committed development financing to remain undisbursed is a luxury Somalia simply cannot afford.

Every delayed project represents delayed growth.

Every postponed investment weakens resilience.

Every implementation bottleneck reduces the country’s ability to withstand future economic shocks.

In today’s fiscal environment, effective implementation is no longer merely good public administration—it is an economic necessity.

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Mohamed Mukhtar Ibrahim can be reached by email at [email protected]