Somalia’s economy is projected to grow 2.3% in 2026, despite challenges from prolonged drought, regional conflicts and fiscal pressures, the IMF says.
MOGADISHU, Somalia (Somali Report) — Somalia’s economy is expected to grow by 2.3% in 2026 despite persistent drought, regional instability and the economic fallout from the conflict in the Middle East, according to an assessment by the International Monetary Fund.
The projection was contained in findings from an IMF staff mission that examined Somalia’s economic performance and policy priorities during a visit from Sept. 21 to Oct. 1. The assessment included meetings between IMF officials and Somali authorities in Nairobi.
The IMF said Somalia’s economy had shown signs of resilience despite a difficult environment, while growth could strengthen further next year if the country maintains economic reforms and addresses key structural challenges.
The assessment comes as Somalia continues to deal with the effects of prolonged drought, which has placed additional pressure on households and livelihoods, while instability in the wider region has created further economic uncertainty.
The IMF said the Somali government should strengthen efforts to increase domestic revenue collection and reduce unnecessary public spending as part of measures to improve the country’s fiscal position.
It also urged authorities to maintain a focus on strengthening security, arguing that improved stability would be important for sustaining economic activity and creating conditions for longer-term investment.
The IMF said the government had made progress in strengthening public financial management, domestic taxation and non-tax revenue collection, areas that could help expand state revenues and support economic growth.
The fund has been working closely with Somali authorities since the country reached the completion point of the Heavily Indebted Poor Countries process and secured major debt relief, a milestone that significantly reduced Somalia’s external debt burden.
IMF officials have continued to meet regularly with representatives of the federal government, providing policy advice and assessing progress on economic reforms.
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The latest mission was led by IMF staff and included Ran Bi, the fund’s deputy director for the Middle East and Central Asia region, who met Somali officials in Nairobi.
The IMF’s assessment highlights the balancing act facing Somalia as the government seeks to expand its revenue base while keeping spending under control and maintaining essential public services.
Increasing domestic revenue has been a central element of Somalia’s economic reform agenda, with authorities seeking to reduce dependence on external financing and strengthen the capacity of state institutions.
The government has also been working to improve tax administration and broaden the collection of revenues outside traditional tax sources.
The IMF said continued implementation of these reforms would be important for strengthening Somalia’s economic resilience and supporting sustainable growth.
The latest growth estimate remains subject to risks, including prolonged drought, insecurity and developments in the wider region.
Somali authorities have sought international support for economic reforms and reconstruction as the country works to rebuild institutions after decades of conflict.
The IMF said it would continue to monitor economic developments in Somalia and engage with the government as it implements its reform programme.
The fund’s latest assessment provides a measure of optimism for Somalia’s economy, while underscoring the need for continued fiscal discipline, stronger domestic revenue mobilisation and improvements in security to sustain growth beyond 2026.
About the Author
Ahmed Omar is a senior journalist for Somali Report, based in Mogadishu. He has two decades of experience reporting on Somalia for international and local media. He covers politics, security, governance, business, trade, economic developments and regional affairs.
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