Mogadishu, Somalia – Growing concern that the World Bank could review or delay part of its budget support to Somalia is adding pressure on Mogadishu to resolve a widening political crisis.
Somali officials and diplomats told Somalia Today that the weeks leading up to mid-May could prove decisive as a rift deepens between the federal government and some regional states.
The World Bank has not publicly announced any suspension.
But officials and analysts say even a review of disbursements would send a strong signal to a government that still depends on external funding to sustain reforms and keep its federal system functioning.
The risk is now increasingly seen as a threat to fiscal stability, as President Hassan Sheikh Mohamud pushes ahead with contested plans for direct elections.
Budget under scrutiny
Somalia’s 2026 budget framework underscores the financial stakes.
The government projects total revenue and grants of about $1.29 billion this year, with more than $828 million coming from donor support.
Domestic revenue accounts for roughly $470 million.
Budget support alone is projected at more than $154 million, while World Bank-backed reform financing and development operations add another $100 million.
The World Bank remains a central pillar of Somalia’s state-building agenda.
Its funding is tied to public financial management, domestic revenue mobilisation and the gradual strengthening of institutions after decades of conflict.
Any disruption would be painful, though not as severe as in previous years.
Mogadishu has steadily increased domestic revenue and secured bilateral backing from Turkey, Qatar, and Saudi Arabia.
Still, a delay in budget support could affect the government’s ability to pay salaries, protect basic services, and maintain economic reforms.
The risk comes at a sensitive moment for a country still emerging from a debt crisis.
In late 2023, Somalia secured $4.5 billion in debt relief under the Heavily Indebted Poor Countries initiative, a major economic milestone.
But international lenders have warned that the country remains exposed to political instability, climate shocks, and any fall in donor engagement.
Electoral dispute
The immediate trigger for the crisis is political.
Parliament approved constitutional changes in March that critics say could extend Mohamud’s term by a year and delay scheduled elections.
The changes have intensified an already heated dispute over how Somalia should move from its clan-based indirect voting model to universal suffrage.
The president has made one-person, one-vote elections a centrepiece of his agenda.
Somalia last held a direct national election in 1969, shortly before a military coup ushered in decades of dictatorship and civil war.
Since 2004, lawmakers chosen by clan delegates have elected the president, a system long criticised as corrupt and exclusionary.
While international partners broadly support the move towards direct elections, diplomats fear the transition could become destabilising without broad political consensus.
Regional tensions
Those concerns have sharpened as relations between Mogadishu and some federal member states have deteriorated.
Puntland said last year that it would act independently until voters decide on the constitutional changes in a referendum, while Jubaland suspended ties in November after disputes over regional elections.
In March, South West State also cut ties, accusing the federal government of interference.
The standoff culminated last week when federal troops entered Baidoa, prompting the resignation of regional president Abdiaziz Hassan Mohamed.
Diplomats say they do not oppose universal suffrage in principle.
Their concern is that pushing the reforms ahead without agreement could deepen mistrust and strain a federal order already weakened by the Al-Shabaab insurgency.
Echoes of the past
Somalia has already seen how electoral deadlock can spill into public finances.
During the prolonged political crisis of 2021 and 2022, election delays disrupted external support and forced the government to rely on emergency financial buffers.
That episode remains fresh in the minds of Somali policymakers and donors alike.
While Somalia is in a stronger financial position today, donor funding still supports much of the framework holding the federal system together.
If leaders fail to reach a deal on elections and constitutional rules in the coming weeks, the fallout could quickly spread from politics to the treasury.
