Revenue Forecasting Accuracy and Budget Credibility in Somalia's Federal Member States

This study examined budget implementation performance in Somalia's Federal Member States, focusing on the effects of revenue forecast errors on budget execution. Using panel data from four states for 2018-2024 and a random-effects model, the analysis revealed substantial variation across states and over time. Jubbaland and South West consistently achieved stronger execution, while Galmudug and Hirshabelle improved gradually from weaker baselines. The results showed that overestimation of own-source revenues and external grants significantly undermined budget executions. Overall, the study highlighted the need to improve revenue forecasting accuracy, strengthen financial management systems, and build institutional capacity in fragile federal settings.