Somalia: Fourth Review Under the Extended Credit Facility Arrangement and Request for Augmentation of Access-Press Release; Staff Report; and Statement by the Executive Director for Somalia

This paper presents Somalia’s Fourth Review under the Extended Credit Facility Arrangement and Request for Augmentation of Access. Somalia has maintained strong program performance despite significant global headwinds, notably the persistent and sharp declines in foreign aid. For the first time, Somalia plans to expand social spending using domestic resources to mitigate the negative social impact of foreign aid cuts. Fiscal performance in 2025 remains strong, supported by resilient domestic revenue collection, disciplined spending, and commendable progress in key reforms. The Cabinet approved 2026 budget aligns with program objectives, envisaging continued domestic revenue mobilization and expenditure restraint while safeguarding priority spending. Key near-term risks emanate from further foreign aid cuts, domestic security and political tensions, climate shocks, lower global growth and heightened global trade uncertainties. The authorities are firmly committed to accelerating domestic revenue mobilization, strengthening public financial management, promoting financial deepening and inclusion, improving governance, and enhancing statistics. Continued donor assistance is essential to support the authorities’ policy efforts. .