MOGADISHU (WDN) — Somalia’s federal government is facing mounting fiscal pressure after President Hassan Sheikh Mohamud disclosed that customs-based domestic revenue has fallen by an estimated 40 percent, underscoring the vulnerability of the country’s finances to disruptions in regional maritime trade.

The president attributed the decline to disruptions around the Strait of Hormuz, a critical global shipping corridor, which have affected trade and increased the cost of imported goods. He warned that Somalia’s heavy dependence on imports from the Middle East has left the country particularly exposed to instability along major maritime trade routes.

The disclosure is significant because customs duties collected at ports and other entry points represent an important source of domestic government revenue. A sharp reduction in customs receipts can directly constrain the government’s ability to finance public services, economic programmes and other recurrent expenditures.

The president did not specify the period covered by the 40 percent estimate or provide detailed figures comparing customs collections before and after the decline. Earlier government data, however, indicated that the volume of goods entering Somalia had also fallen by nearly 40 percent during the maritime disruption, although the two figures measure different things.

A Fiscal Shock Beyond the Ports

The consequences extend beyond government accounts. Somalia is heavily dependent on imported food, fuel, medicines and other essential commodities. Disruptions to shipping routes can therefore affect both the volume and cost of goods entering the country.

President Hassan Sheikh said the maritime crisis had contributed to higher food and fuel prices, inflation, transport costs and insurance premiums. Earlier government assessments also reported significant increases in food and healthcare costs amid the disruption.

For an economy already struggling with limited domestic revenue, drought and humanitarian pressures, the combination of falling customs receipts and rising import costs presents a particularly difficult fiscal challenge.

The government is effectively facing pressure from both directions: less revenue coming into the treasury while the cost of goods and services continues to rise.

Salary Delays Add to the Concern

Against this backdrop, reports have emerged that some members of the National Intelligence and Security Agency (NISA) have not received their salaries on their normal payment date this month.

According to reports, some NISA personnel who did receive their salaries were allegedly paid $200 instead of the reported $280, representing an $80 reduction. There are also reports that members of the Somali Custodial Corps have gone without salaries for more than a year.

However, these claims have not been independently confirmed, and senior officials responsible for NISA and the custodial service have not publicly addressed the reports. It would therefore be premature to directly attribute the alleged salary problems to the 40 percent decline in customs revenue.

Nevertheless, the reports have raised questions about the broader financial pressures facing the federal government. If confirmed, prolonged salary delays affecting security and corrections personnel would carry consequences beyond household finances. Regular and predictable payment of security-sector salaries is closely linked to morale, institutional stability and the government’s ability to maintain essential state functions.

Somalia’s Exposure to Regional Disruption

The deeper problem highlighted by the customs-revenue decline is Somalia’s vulnerability to external economic shocks. The country imports a substantial share of the goods it consumes, leaving government revenue and household purchasing power sensitive to developments far beyond Somalia’s borders.

The disruption of shipping through strategic waterways such as Hormuz and the Bab el-Mandeb can alter shipping routes, increase insurance premiums and transportation costs, delay cargo and ultimately affect both customs collections and consumer prices.

Recent reporting has shown Somali traders and shipping interests exploring alternative routes as insecurity around regional maritime corridors disrupts established supply chains. For Somalia, this means that maritime security is not simply an international geopolitical issue. It has a direct connection to the national budget, the cost of living and the government’s capacity to pay for essential services.

The 40 percent customs-revenue decline should therefore be viewed as more than a temporary fall in government income. It exposes a structural weakness: Somalia remains heavily dependent on trade-based taxation while its domestic revenue base is still relatively narrow.

That vulnerability becomes particularly serious when the government is simultaneously expected to finance security operations, public-sector salaries, social services, infrastructure, economic reforms and development programmes.

President Hassan Sheikh has said his government is continuing efforts to strengthen domestic revenue collection, public financial management and budget transparency despite external economic pressures. He also told the UN General Assembly that Somalia’s economy is expected to record real growth of 3.1 percent this year.

But the customs shock raises a more fundamental question: How resilient is Somalia’s fiscal system when an international shipping crisis thousands of kilometers away can remove such a large portion of customs-based domestic revenue? That question deserves urgent attention.

From Maritime Crisis to National Budget

The lesson from the current disruption is clear. Somalia cannot fully insulate itself from regional instability, but it can reduce the impact by broadening its domestic revenue base, improving customs administration, diversifying the economy and strengthening mechanisms that protect essential government spending during external shocks.

The reported salary difficulties, if independently confirmed, would provide another warning that fiscal pressures can quickly move from government balance sheets into the daily functioning of state institutions.

For a country seeking to strengthen its institutions and reduce dependence on external assistance, the 40 percent customs-revenue decline is therefore more than an economic statistic.

It is a warning about the fragility of the revenue system—and a reminder that Somalia’s economic stability can be profoundly affected by events taking place far beyond its shores.

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