Competition over major revenue sources, including airports, ports and trade corridors, is creating recurring tensions between national harmonisation and state autonomy in Somalia, according to the World Bank’s Somalia Public Finance Review 2026.
The report says implementation of fiscal agreements often depends on political alignment and bargaining rather than legal obligations alone. Federal member states with stronger own-source revenues frequently have weaker incentives to support arrangements that could reduce their fiscal discretion, while fiscally weaker states generally place greater emphasis on transfers and equalisation.
Aviation Fees in the Revenue Base
Overflight fees and passenger air fees are among the largest components of non-tax revenue identified in the review, alongside harbour fees, passport fees and telecommunications spectrum fees.
Non-tax collections by the Federal Government of Somalia almost doubled in nominal terms between 2021 and 2025. The World Bank attributes the increase to a broader range of fees and stronger performance from existing ones.
The report also says a non-tax revenue portal has streamlined collection, reporting and management by digitising payments and channelling collections by government entities into the Treasury Single Account.
Contested Airport Responsibilities
The review sets out the division of responsibilities agreed by Somalia’s National Consultative Council in December 2022. Under that framework, international airports and airspace control are assigned to the federal government, while local airports are assigned to federal member states. National air policy is also listed as a federal responsibility.
The World Bank says the agreement was codified in the 2026 constitutional amendments but remains politically contentious. Puntland’s president withdrew from the council process, citing concerns about inclusivity, transparency and the perceived concentration of authority at federal level. Puntland also does not recognise the 2026 amendments. The report says significant variation in practice continues across sectors and federal member states.
Aligning Responsibilities and Funding
More broadly, the review finds that envisaged functions generally exceed what any level of government can fund. It says the March 2023 agreement on revenue assignments established broad categories of federal and state revenue authority but did not create a sustainable financing pathway for functions allocated to states and local governments.
The report’s policy options call for an initial revenue-sharing formula, a framework for assigning functions and clearer intergovernmental coordination procedures. It also recommends moving towards rules-based transfers financed by domestic revenues and aligning state and local responsibilities with realistic financing.
