The findings come at a time when Somalia continues to grapple with economic, security, and humanitarian challenges that are affecting livelihoods and limiting the government’s ability to provide essential public services.

Despite progress in economic reforms and debt relief efforts in recent years, the country remains highly vulnerable to external shocks, climate-related disasters, and insecurity.

According to the World Bank’s Somalia Economic Update published in May 2026, the country’s real GDP growth has declined significantly from previous levels.

The report states that Somalia’s economy grew by 4.1 percent in 2024 but slowed to 3 percent in 2025. The World Bank further projects that growth could weaken to 2.8 percent in 2026 if current trends continue.

The slowdown comes as Somalia’s economy remains heavily dependent on livestock exports, trade, remittances from the diaspora, and private sector activity. These sectors are highly sensitive to security conditions, weather patterns, and fluctuations in the global economy.

Meanwhile, a separate report by the African Development Bank highlights a decline in business revenues across the country. According to the report, business income fell by 27 percent during the early months of 2026.

Economists say the drop in business revenues is a strong indication that consumer purchasing power is weakening. Businesses are facing a sluggish market, rising operating costs, and lower demand for goods and services.

Small and medium-sized enterprises, which employ a significant portion of Somalia’s workforce and provide income for many households, are particularly vulnerable to these economic pressures.

The World Bank also reported a sharp decline in private household consumption. Data from the report shows that private consumption growth dropped from 8.8 percent in 2024 to just 3.1 percent in 2025.

The decline suggests that many Somali families are reducing their spending as they struggle with rising living costs, lower incomes, and broader economic uncertainty.

Reduced household spending often has a direct impact on businesses, leading to weaker sales and slower economic activity.

Inflation has also emerged as a growing concern. According to the World Bank, inflation stood at 3.3 percent in 2024 but increased the following year, with projections indicating it could reach 6 percent in 2026.

Rising inflation is expected to place additional strain on households, particularly low-income families. Higher prices for food, transportation, housing, and other essential services can significantly reduce living standards if wages and incomes fail to keep pace with the rising cost of living.

One of the most alarming findings in the World Bank report is the worsening food security situation. The number of Somalis facing food insecurity rose from approximately 4.6 million people in 2025 to 6.5 million in 2026.

The increase means that nearly 1.9 million additional people have fallen into food insecurity within a year.

Humanitarian agencies have repeatedly warned that drought, flooding, conflict, and displacement continue to drive hunger across large parts of the country, particularly in rural communities and areas affected by instability.

The economic downturn and rising inflation are expected to hit the poorest households hardest. Families facing both declining incomes and increasing prices are often forced to cut spending on food, healthcare, education, and other basic needs.

Similarly, businesses dealing with falling sales and rising costs may be forced to reduce their workforce, delay expansion plans, or scale back investments, potentially affecting employment opportunities for Somalia’s large youth population.

Somalia’s economic challenges are being driven by a combination of factors, including persistent security threats, climate change, recurring droughts and floods, limited domestic production, and reliance on external sources of income.

The country’s dependence on livestock and climate-sensitive sectors makes it particularly vulnerable to environmental shocks.

The latest data also places additional pressure on the Somali government, which is seeking to increase domestic revenue, improve public services, attract private investment, and create jobs.

Sustained economic growth will be critical if the country is to reduce poverty and improve living conditions.

Economic experts have long emphasized the need for Somalia to diversify its economy, strengthen domestic production, expand government revenue sources, and invest in critical infrastructure.

Such reforms are viewed as essential for building resilience against future economic shocks.

Despite the challenges highlighted in the reports, analysts note that Somalia still possesses significant economic potential.

Sectors such as livestock, fisheries, agriculture, renewable energy, telecommunications, and trade could drive long-term growth if supported by effective policies, investment, and improved infrastructure.

While the outlook remains difficult in the short term, economists say Somalia’s ability to harness its natural resources, strengthen institutions, and encourage private sector development will play a crucial role in determining whether the country can reverse the current slowdown and achieve more sustainable economic growth in the years ahead.

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The announcement was made by Farhan Jimale, the spokesman of the Office of the Prime Minister, during a mini reshuffle on Saturday night, appointing Bihi Iman Egeh as the new finance minister.

The replacement came after a consultation with President Hassan Sheikh Mohamud, the spokesman added.

The sudden sacking of Minister Nur has left many Somalis in shock, especially as it came a day after he was compelled to retract his official statement suspending Accountant General Mohamed Abdirahman Anas and the Finance Ministry’s Director for Revenue, Feisal Mohamed Hashi.

In his initial letter, Minister Nur accused the two officials of various misconduct, including actions detrimental to national interests, obstruction of the ministry’s administration, deliberate payment delays, unwarranted salary withholding, and hindrance to accessing the Somalia Financial Management Information System (SFMIS), a World Bank and IMF-supported financial reporting system.

‘Stern warning’

However, in an unexpected turn of events, Minister Nur reversed his decision on Friday, stating that the suspensions were lifted but emphasizing that the administrative charges remained, serving as a stern warning for future conduct.

Official sources have revealed that President Mohamud exerted pressure on Minister Nur to rescind the suspensions, as the two officials involved are closely associated with the president.

Both Mohamed Abdirahman Anas and Feisal Mohamed Hashi have longstanding connections to President Mohamud’s political party. Anas, in particular, has been a longtime friend and party member, having come from SIMAD University, which was co-owned by President Mohamud before he joined the Premier Bank, another institution affiliated with the president. Hashi, the Director of Revenue, also hails from SIMAD University and has been an active member of President Mohamud’s political party.

The sacked officials are regarded as highly influential figures in the government’s financial sector, with one insider stating that they hold significant responsibility for releasing funds, including kickbacks for the president and his family.

Don’t touch those connected to the big fish

The abrupt dismissal of these powerful individuals, who are connected to influential figures within the government, has raised concerns about the extent of corruption within Somalia’s political landscape.

Political analyst Ahmed Ali has criticized the sacking, suggesting that Minister Nur should not have dared to dismiss these influential individuals due to their close ties to powerful figures within the government, including President Mohamud.

“For your own survival, you don’t touch those connected to the big fish,” he said.

Meanwhile, MP Ayub Ismail of the Somali Federal Parliament has described the situation as a serious matter that affects the entire government, emphasizing the limited power of both the prime minister and the finance minister to fulfill their constitutional duties.

“Where the head of government does not have any power to fulfill his constitutional duties, one can imagine how limited the power of the minister is. Therefore, this move is not surprising,” MP Ismail, who also comes from the region as minister Nur, said.

In response to his removal from office, Minister Nur expressed his accomplishments during his tenure, highlighting that he ensured timely payment of government employees’ salaries and attempted to maintain a non-political approach to financial reforms.

“I tried to keep politics out of the financial reform program. I have tried to maintain the institutional system of the Ministry of Finance so that it can efficiently fulfill its mandate, so that we can effectively serve our people,” he wrote on his Facebook.

However, the events surrounding his dismissal have further exposed the widespread corruption within the Somali government. Many citizens have begun to point fingers at President Hassan Sheikh Mohamud, accusing him of granting economic benefits to his family members, relatives, and friends while nearly half the country’s population still need humanitarian assistance, including 230,000 at serious risk of starvation.

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Mohamed Abdirahman Dhabancad, the Minister of Finance for Puntland, has accused the federal government in Mogadishu of hijacking the process, leading Puntland to withdraw its participation.

“Puntland, the only region with a functional governance system within the federal government of Somalia, has walked out of the entire debt relief process. We are not part of it,” declared Dhabancad.

The Minister disputed a recent statement made by the Minister of Finance at the federal level, Dr. Elmi Nur, who claimed that Puntland was in agreement with Mogadishu regarding the debt relief process. “We are not satisfied with how the process has been managed. The regulations unilaterally passed by the Mogadishu-based Parliament were not endorsed by Puntland as a federal member state. Therefore, any decision reached concerning the debt relief will not be valid,” stated Dhabancad.

Minister Dhabancad also emphasized that the debt relief process in Somalia cannot proceed unless the country resolves its political differences. Puntland also cited severe corruption within President Hassan Sheikh Mohamud’s cabinet as another reason for distancing themselves from the authorities in Mogadishu.

Although Somalia is already in debt distress, it cannot access full debt relief from the International Monetary Fund (IMF) until it demonstrates commitment to structural reforms that ensure effective utilization of public resources for the benefit of all Somali people and efforts to promote stronger economic growth leading to more job opportunities.

On March 25, 2020, Somalia achieved the HIPC Decision Point, allowing partial settlement of its debt, most of which had accumulated before the civil war in 1991 and remained unpaid for three decades.

In October last year, the IMF announced a staff-level agreement with Somalia, enabling the release of approximately $10 million to the East African nation, subject to approval by the IMF board.

However, numerous critical challenges still persist. The country grapples with rampant corruption in the public sector, lack of transparency, and a deficient governance system, hindering efforts to combat these issues. Furthermore, growing divisions between federal authorities in Mogadishu and federal member states, along with clan-based clashes erupting in various regions, pose risks of plunging the country back into chaos.

Economic and financial experts express concerns about these challenges potentially reversing the hard-earned gains made by the poverty-stricken and heavily indebted nation.

Somalia’s external debt is estimated to exceed $5 billion, with the United States being the largest creditor, owed $1 billion. Countries eligible for the Heavily Indebted Poor Countries (HIPC) Initiative by the IMF and World Bank must commit to economic and financial reforms, poverty reduction, and political stability.

Transparency International, a non-profit organization, ranks Somalia as one of the most corrupt countries globally.

In its 2022 Corruptions Perceptions Index, Transparency International placed Somalia at the bottom, highlighting President Hassan Sheikh Mohamud’s dissolution of two vital anti-corruption bodies through a decree.

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The incident has raised concerns about the protection of women’s rights and exposed a web of corruption and impunity within the Somali federal government institutions.

According to Member of Parliament Abdullahi Hashi Abib, who sent a letter to the World Bank on April 30, 2023, the Minister of Finance, Dr. Elmi Nur, failed to take action to safeguard the rights of female employees in his ministry. The letter details how one survivor, Ayaan Said Tukale, an esteemed gender-based violence expert, was terminated after reporting the sexual assault by a high-ranking official at the ministry.

Ayaan, an energetic advocate hailing from the Awdal region, was dedicated to the Recurrent Cost and Reform Financing (RCRF) project. Funded by the World Bank, the RCRF project is aimed to support the Federal Government of Somalia and eligible Federal Member States to strengthen resource management systems, the inter-governmental fiscal framework, and service delivery systems in health and education.

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MP Abdullahi Hashi Abib alleges that Ayaan was wrongfully terminated without due process, with the support of the finance minister. The parliamentarian states that Abduqadir Sulayman, the director of the RCRF department, subjected Ayaan to eight months of harassment, bullying, intimidation, and mental abuse, culminating in the sexual assault.

In his letter, MP Abib demands the immediate suspension of Abduqadir Sulayman and warns that he will hold the finance minister accountable if action is not taken. The lawmaker highlights the laws of the country and international regulations that prohibit sexual exploitation of women workers, emphasizing the need for justice and protection for survivors.

“I believe this is the only way to deter gender-based violence against working women in Somalia,” he stated.

Moreover, the case sheds light on a cycle of impunity and rampant corruption within the World Bank funded Somalia program. MP Abib exposes the extravagant lifestyle of the RCRF director, which exceeds his official monthly salary. Surprisingly, the office of the Auditor General, the Ministry of Finance, and the World Bank failed to conduct audits of his personal accounts, according to the lawmaker’s account.

The revelations prompt critical questions about the integrity of programs vital for Somalia’s debt relief and the accountability of taxpayer funds. The Minister of Finance and Abduqadir Sulayman have not yet responded to these serious allegations, leaving the public anxiously awaiting their reactions.

The World Bank Group did not respond to our request seeking information regarding any actions taken to address Ms. Ayaan’s case.

The case not only underscores the urgent need for justice for Ayaan and other victims, according to women rights activists we spoke to, but also highlights the imperative to address corruption and ensure accountability within government institutions and externally funded projects.

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