Somaliland 2025 Budget Analysis

Executive overview

Published by ISIR Institute and written by Ahmedi Yusuf, this analysis reviews Somaliland's 2025 national budget and asks one question: how decentralized is it? The budget totals USD 556.3 million (SLSH 3.89 trillion at 7,000 SLSH/USD), an 11.3% rise from USD 499.8 million in 2024 — growth driven mostly by donor-supported projects rather than domestic revenue. KEY HIGHLIGHTS • Central government still dominates: USD 368.0 million, about 66% of the national budget, up only 1.8% on 2024. • Revenue rests on trade: 46% of central revenue (USD 170.6M) comes from international trade, and Berbera Port alone yields over USD 176M — 63% of all customs income. • Customs is nearly flat: forecast customs income of USD 279.9M grows just 2.2%. Borama falls by USD 11.2M, while Zaylac (+USD 6.4M) and Caasha-cado (+USD 7.6M) rise sharply. • Security comes first: USD 139.5M (+5.1%), roughly 38% of central spending — more than governance, education and health combined. • Social sectors are squeezed: education (USD 25.5M) and health (USD 19.2M) both edge down, as do water (−5.7%) and environment (−3.8%). • Infrastructure is the bright spot: economic infrastructure rises 36.9% to USD 18.3M, while governance is cut 15% to USD 69.6M. • Donor money is concentrated: of USD 67.8M in donor-funded projects, 48% goes to one World Bank programme — the Somaliland Electricity Sector Recovery Project (USD 32.7M). • Economy in context: real GDP reached about USD 2.5 billion in 2023, inflation rose to 9.73%, and remittances of over USD 1.2 billion a year remain households' lifeline. WHAT ISIR RECOMMENDS Move to performance-based and medium-term budgeting; correct arithmetic errors in the budget book; broaden domestic revenue beyond customs; give local governments greater fiscal autonomy and needs-based transfers for underfunded regions such as Sool, Sanaag and Togdheer; control wage-bill growth; invest more in infrastructure, health and education; reform procurement; coordinate donor funds transparently; and create an emergency fiscal reserve.