Somalia’s 2026 Federal Government Budget Meets the 2026 Election Rituals
Issue 13
It took me some time to fully work through Somalia’s Federal Government (FGS) FY2026 Budget Policy Framework (BPF), released on 15 November 2025. Coming ahead of the 2026 elections, the BPF attempts to balance two demanding objectives: safeguarding macroeconomic stability and accommodating a potential 2026 election ritual, all within exceptionally constrained fiscal space. The FGS BPF paper keeps the deficit small (0.53% of GDP), leans into domestic revenue mobilisation (DRM) and pilots programme-based budgeting across 35 MDAs. But it does all of this while navigating declining grant flows and reduced social transfers just as humanitarian funding shrinks and a drought hardens. That is the predicament confronting Somalia’s fiscal planners in 2026.
The arithmetic problem no one can ignore
The 2026 FGS BPF projects $1.299bn in revenues and grants, with domestic revenue expected to increase by 9.4% and grants down by 8.2%. The deficit is expected to widen modestly to around $75m, still well within East African convergence norms (See tables on revenue/grants). On paper, that looks tight but manageable. However, in practice, Somalia’s 2025 outturns tell a sobering story: by end-September 2025, grants had reached only about 25% of their annual plan and total spending execution was 43%, far below pro-rata expectations (See tables on Jan-Sept 2025 execution). In other words, things have already been tough in 2025 (See also: WB Somalia Economic Update, Jun-30, 2025; WEO Somalia, Oct 2025). Complicating matters, even the once-reliable bilateral budget support to the tune of $30m from Turkey is facing delays; a transfer the BPF prudently halves to $15m for 2026 but still counts as arriving (see BPF – budget support detail). In an election year, betting the payroll on “funds in transit” is a risk you want to hard-wire out of your cash plan!
Election modality uncertainty: cost, timing, legitimacy
In 2026, Somalia faces contested election modalities, political and logistical readiness challenges. Elections that get messy in a fragile context tend to bunch costs and slow donor tranches tied to performance and reforms. The BPF assigns roughly $21m to the National Independent Electoral Commission (NIEC) programmes in 2026. That is not nothing. But if modalities shift or timelines stretch, expect pressure for top-ups to logistics, dispute resolution, ICT, and security – rarely cheap in Somalia, often urgent and politically essential [unless a willing donor is found!], (See BPF – NIEC Programme tables).
The humanitarian cliff meets a shrinking social floor
The FGS BPF cuts social benefits by 42% (to $45m), reflecting project wind-downs and declining donor activities. That choice collides head-on with 2025/26 humanitarian realities: drought emergency, 4.4m people project in IPC3+, an estimated 1.85m children facing acute malnutrition, and appeals funded at historically low shares, forcing agencies to scale down life-saving operations. When external safety nets thin, the political economy of elections tend to demand domestic cushions, not fewer transfers (See FGS BPF – social benefits tables). The cuts to humanitarian aid aren’t just a possibility; they’ve already happened. The 2025 humanitarian plan was heavily reduced and did not get enough funding, so agencies have already had to help fewer people. Somalia’s fiscal planners can’t magically restore lost donor money, but they can create a small emergency fund in the 2026 budget (some sort of domestic shock window) to co-finance targeted cash responses when IPC triggers are breached (they have done some ring-fencing under “other expenses” contingency in the BPF though it is way too small at about $50m).
Finally, the remittance paradox
The FGS BPF counts on continued strength in remittances as Somalia’s macro shock absorber and social lifeline. Yet global policy briefs caution that remittance flows face downside risks: tightening migration regimes in host countries (ICE activities in the US, corridor-specific fees, technological shifts affecting migrant communities etc.). It is wise to keep remittance in the baseline, and wiser still to avoid optimism bias creeping into revenue projections.
Five numbers to keep in mind
1. 64%: Share of revenues still expected from grants in 2025 (FGS BPF)
2. 24.9%: Grants execution by Sep-2025 versus ~ 75% pro-rata expectation (FGS BPF)
3. $20.8m: NIEC programme envelope in the 2026 budget; hardly adequate only if modalities/timelines hold (FGS BPF)
4. -42%: Planned fall in social benefits amid a declared drought emergency (FGS BPF; WFP/OCHA links cited above).
5. $30m: Delayed Turkish 2025 budget support tranche; prudently treated uncertain in 2026 cash planning (Hiiraan Online as cited above).
The bottom line
Somalia’s fiscal team has drafted a defensible macro frame for 2026: a small deficit, a push on DRM, and a cautious grants outlook. But elections do not happen in Excel. They happen in the dusty and messy world of a fragile and conflict-affected context. If the government bakes in a contingency mindset including grant realism, social shock windows (given the impending crisis) and some quick-wins and broader pro-growth actions, then the 2026 budget will deliver a miracle. Should these actions be taken before the Appropriations Law is finalised (final deadline by law is 31st March 2026), then Somalia will be better placed to avoid arrears, protect salaries and keep the lights on in an election year with shrinking external lifelines.
Author’s note
This Blog draws on Somalia’s FY2026 Budget Policy Framework (October 2025), and the most recent updates from the IMF/WB/OCHA/UN/EU cited above. I will publish a follow-up piece soon on the budget dynamics, including a macroeconomic analysis of the decline in external aid to Somalia.