Somalia at risk of falling back into taking expensive debt

Somalia's President Hassan Sheikh Mohamud signs the recently approved Constitution in Mogadishu, Somalia on March 8, 2026.

Photo credit: Reuters

Somalia is facing a real risk of falling back into expensive debt, a headache driven by a simultaneous decline in external grants and aid and a squeeze on domestic revenues. 

This is likely to push Mogadishu towards external borrowing, barely three years after global lenders wrote off $4.5 billion of its debt and allowed it back to the debt market.