Somalia: USAID and donor reliance – a case of knowing your worth

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Friday March 7, 2025
By Mohamed Rashid

Volunteers at the Zanzalima Camp for Internally Displaced People unload 50-kilogram sacks of wheat flour that were a part of an aid delivery from USAID on December 17, 2021

For decades, Somalia has been heavily reliant on international aid, particularly from USAID and other donor institutions. While this assistance has been crucial for humanitarian relief, infrastructure development, and institutional rebuilding, it has fostered a dangerous dependency that stifles Somalia’s potential for economic and political self-determination. The influx of foreign aid, though well-intentioned, often comes with conditions that limit Somalia’s ability to shape its policies and development agenda independently. This cycle of dependency discourages investment in local industries and revenue-generating sectors, leaving the country vulnerable to external influence and donor fatigue.

Recent changes in U.S. policy, with President Trump’s freeze on USAID, have led to uncertainty about future funding, with other donors potentially following suit. This shift underscores the urgency for Somalia to transition from donor reliance to self-sufficiency. Sustainable progress cannot be built on perpetual assistance; it must stem from the strength of Somalia’s economy, governance, and workforce. Countries such as Rwanda and Botswana exemplify that sustainable growth is achievable through strategic investment in domestic resources, good governance, and a conducive climate for investment. Somalia must learn from these examples and commit to a long-term vision that prioritizes economic independence.

Somalia’s dependency on aid has become a defining characteristic of its economic and political landscape. While humanitarian assistance has saved millions, it has entrenched a culture of dependency that limits long-term economic growth. Many public institutions and local businesses rely on donor funding, suppressing the development of indigenous revenue-generating mechanisms. Instead of building a strong tax base and fostering entrepreneurship, Somalia remains tethered to external assistance, undermining its sovereignty and making it susceptible to shifting donor priorities.

This aid-dependent model has weakened Somalia’s bargaining power on the global stage. The country often reacts to the agendas set by international donors, many of whom prioritize short-term relief over long-term structural development. Consequently, Somalia’s policy priorities may cater more to donor expectations than to the pressing needs of its citizens, resulting in a fragile system that struggles to sustain progress without continuous foreign intervention.

To realize its full potential, Somalia must break free from this cycle of dependency and take decisive steps toward economic self-sufficiency. This includes harnessing its natural and human resources, addressing internal conflicts to create a stable investment climate, tackling corruption for efficient resource management, and resettling displaced populations to foster social and economic reintegration.

To build a prosperous future, Somalia must prioritize governance reforms, economic diversification, and sustainable development. By doing so, the country can transform from an aid-dependent nation into a resilient economy that determines its own destiny.

Tapping into Somalia’s Own Resources

Contrary to popular belief, Somalia is not a resource-poor country. With one of Africa's longest coastlines, a thriving livestock industry, and vast untapped natural resources—including oil, gas, and minerals—Somalia has the potential to build a self-sustaining economy. However, political will, insecurity, and mismanagement have hindered effective resource harnessing. To escape donor dependency, Somalia must invest in infrastructure, modernize agriculture, and develop a robust energy sector.

The country's 3,300-kilometer coastline holds vast marine resources yet to be fully utilized. Investment in fisheries, cold storage facilities, and export processing zones could transform Somalia into a major seafood exporter, emulating successful models like Iceland's sustainable fishing practices. Similarly, the livestock sector, which contributes over 60% of GDP, can be bolstered by strengthening veterinary healthcare and improving trade logistics, especially with Gulf countries.

Somalia's oil and gas reserves remain largely unexplored due to political instability. Establishing a clear legal framework and fostering transparent negotiations with international energy firms are critical steps toward responsibly developing this sector. Effective management of oil and gas could provide essential revenue to fund infrastructure, education, and public services, reducing reliance on foreign aid.

Agriculture also presents immense potential. The fertile land in the Jubba and Shabelle river basins can support large-scale farming. Investing in modern irrigation systems and drought-resistant crops could enhance food security and reduce dependence on imports. Countries like Ethiopia have demonstrated that investment in agricultural infrastructure can yield substantial economic returns.

Furthermore, Somalia must prioritize the development of its energy sector. With significant renewable energy potential, particularly in solar and wind power, Somalia could decrease its dependence on expensive diesel fuel imports and attract investment in manufacturing industries.

Reducing Internal Conflicts for Stability

Persistent internal conflicts fueled by clan rivalries and political power struggles have long plagued Somalia, deepening its reliance on foreign assistance. These conflicts disrupt governance, displace populations, and deter both domestic and foreign investment, making long-term economic growth nearly impossible. Stability is essential for economic progress; thus, Somalia must prioritize national reconciliation through inclusive governance and conflict resolution mechanisms.

Counterterrorism efforts are crucial for stabilizing the country. Militant groups exploit political divisions, further destabilizing Somalia. A comprehensive strategy should address root causes of radicalization, including economic hardship and lack of education. Investing in job creation and community-led initiatives can help weaken the appeal of extremist groups.

Additionally, strengthening the justice system is vital for reducing internal conflicts. Establishing transparent legal frameworks and promoting accountability can foster trust in the government and deter violence. Resettling displaced populations is also essential to mitigate social tensions and reintegrate communities, reducing vulnerability to exploitation by armed groups.

Enforcing Anti-Corruption Measures

To combat corruption, Somalia must establish robust anti-corruption agencies with the authority to investigate and prosecute corrupt practices. These agencies should operate independently to ensure impartiality. Implementing whistleblower protection laws and public awareness campaigns can further encourage reporting of corrupt activities.

Establishing an independent anti-corruption commission is essential for investigating corruption across all government levels. Strong enforcement mechanisms, including financial audits and international cooperation, will be critical in dismantling entrenched corrupt networks. Promoting a culture of meritocracy in government appointments can help curb nepotism and ensure qualified individuals fill public offices.
Ensuring Transparency in Governance

Transparency is essential in the fight against corruption. Somalia should adopt e-governance systems to streamline administrative processes and reduce opportunities for corrupt practices. Regular audits and public disclosures of government expenditures can enhance accountability.

Learning from successful examples, countries like Singapore and Georgia have effectively tackled corruption through strong legal frameworks and e-governance systems. Singapore’s Corrupt Practices Investigation Bureau and Georgia’s zero-tolerance policy post-Rose Revolution demonstrate that rigorous anti-corruption measures can restore public trust and create conducive environments for economic growth. Somalia can adopt similar strategies tailored to its unique challenges.

Writer: Mohamed Rashid is a political and social commentator.

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