Background
This paper presents to the Council of Ministers (CoM) the fiscal strategy for the financial year (FY) 2021,
outlines the economic and political climate, and recommended resource ceiling within which the FY2021
Budget is to be prepared. The paper adopts a medium-term strategic view, providing an assessment of the
macroeconomic outlook for Somalia over the medium-term (i.e., from 2021 to 2025). It then provides a
summary analysis of the Federal Government of Somalia’s (FGS) fiscal performance over the FY2013 to
FY2019 period, as well as a forward-looking discussion of fiscal risks and assumptions drawing on this
performance assessment. With an understanding of the macroeconomic outlook and historical fiscal
performance, the paper then presents a fiscal forecast for the medium-term, outlining FGS budget
principles, fiscal rules, and outlining the overall indicative resource ceiling for this period. Finally, the
paper concludes by applying the indicative resource ceiling to the FGS’s Ministries, Departments, and
Agencies (MDAs) to derive detailed expenditure ceilings for each entity over the medium-term, as well
as indicate a timetable for FY2021 Budget Preparation.