The president of the Somali Development and Reconstruction Bank, Hodan Osman, says the shutdown of the U.S. Agency for International Development (USAID) has severely impacted Somalia’s economy and tax revenue.
Speaking at the Financial Times Africa Summit in London on Tuesday, Osman said the abrupt aid withdrawal by the United States had unexpected ripple effects on Somalia’s fragile economic system and GDP.
“In Somalia, it really impacted our GDP,” she told participants at the summit.
She explained that the aid cuts disrupted key sectors, reducing economic activity and weakening overall public finances.
Osman highlighted how the decline in foreign assistance affected sales tax collection, one of the government’s few reliable revenue sources, causing shortfalls that threatened essential public services and long-term planning.
The United States, under President Donald Trump, shut down USAID earlier in 2025 and drastically slashed foreign aid budgets, ending programmes in health, education, and infrastructure across developing nations.
While Somalia expected some fiscal challenges, Osman said the broader economic hit went beyond projections.
“The aid cuts reverberated in ways we didn’t expect,” she added during her panel remarks.
