By T. Roble
GOOBJOOG NEWS|MOGADISHU: Somali cabinet Sunday endorsed a $699 million budget for the financial year 2022 up from $671 million in 2021 with most of the funding expected to be met by the international community.
A statement from the cabinet noted the council of ministers okayed the Finance Minister’s proposal to spend $699.1 million next year. The budget details were not immediately disclosed.
The proposal, if voted for by the Lower House will be an increase of $28 million from this year’s expenditure. The 2020 national budget stood at $476 million. The 2021 revenue projection however fell short of the target by over $100 million. Total revenue (domestic and foreign) stood at $648 million with donor revenue being the bulk at $388 million.
In the 2022 budget proposal just adopted by the cabinet, the government projects more pronounced donor support to the tune of $470 million while the domestic market will fund the deficit of $247 million. Project donor support in 2021 stood at $410 million.
According to a 2022 strategy paper by the Ministry of Finance, the tax burden (a measure of the tax burden imposed by the government) projection remains very marginal at 0.95 per cent of GDP as of April 2021. “Projecting that rate of growth forward, it would take nearly 49 years to reach a threshold tax burden of ten per cent of GDP,” the strategy paper says. A ten per cent threshold is considered a minimum floor needed to ensure developmental progress.
According to the 6th Somalia Economic Update by the World Bank released in August, Somalia’s economy contracted by an estimated 0.4 per cent in 2020, as the country grappled with the triple shocks of the COVID-19 pandemic, floods, and locust infestations.
The budget proposals will now head to the Lower House for a vote.