NEW: Hodan Osman, President of the Somali Development and Reconstruction Bank, Says That the Cuts to USAID Have Had a “Severe Impact” on Her Country’s Economy

Hodan Osman, president of the Somali Development and Reconstruction Bank, recently voiced concerns about the recent cuts to USAID funding. She warned that these reductions have had a severe impact on Somalia’s fragile economy, threatening development and growth.

According to Osman, USAID has been a crucial partner in Somalia’s reconstruction efforts. Its financial support has enabled infrastructure projects, healthcare programs, and education initiatives, all of which are now jeopardized due to the funding cuts announced earlier this year.

Somalia’s economy has long struggled with instability and limited resources. Osman emphasized that foreign aid, particularly from agencies like USAID, plays a pivotal role in stabilizing the country, supporting local businesses, and providing jobs to communities across urban and rural regions.

The Somali Development and Reconstruction Bank, under Osman’s leadership, has actively partnered with USAID to channel aid into economic projects. Osman stressed that the reduction in funding limits their capacity to invest in critical sectors such as agriculture, energy, and transportation.

Osman highlighted the human impact of these cuts, noting that citizens reliant on social programs face greater hardships. Reduced funding affects access to healthcare, education, and clean water, leaving vulnerable populations at increased risk of poverty and disease.

The president of the bank also warned about long-term consequences. “These cuts not only affect immediate relief but also hinder economic recovery and growth,” she explained. Somalia’s fragile institutions are less equipped to withstand shocks without consistent international support.

International development experts have echoed Osman’s concerns, highlighting that reducing aid to developing nations often results in slower progress, increased unemployment, and social unrest. Somalia’s case exemplifies the delicate balance between aid and sustainable development in fragile economies.

Osman also mentioned that these funding cuts could discourage foreign investment. Investors rely on stable support systems, and without USAID backing, Somalia may struggle to attract new business opportunities or expand existing industries in key economic sectors.

The Somali Development and Reconstruction Bank has implemented several programs in partnership with USAID. These initiatives have supported small businesses, provided microloans, and funded entrepreneurship projects, all of which are at risk due to the decreased aid flow.

Osman urged policymakers in donor countries to reconsider the reductions, highlighting that the impact extends beyond Somalia. Regional stability in East Africa is closely tied to Somalia’s economic health, meaning funding cuts could indirectly affect neighboring countries and international security.

In her statement, Osman emphasized collaboration as the key to economic progress. “We cannot achieve meaningful development in isolation,” she said. Continuous funding from agencies like USAID ensures that Somalia can rebuild infrastructure, expand social programs, and strengthen institutional capacity.

The president also highlighted the role of aid in mitigating crises. USAID support has been instrumental in responding to droughts, food insecurity, and public health emergencies. Osman warned that cuts may reduce the country’s ability to handle future disasters effectively.

Osman’s comments have sparked discussion among international organizations. Aid agencies and NGOs have raised concerns about the long-term effects on development goals, warning that reduced funding may set back progress made over the past decade.

The Somali government has expressed support for Osman’s position. Officials note that consistent international funding is essential for achieving strategic development objectives, including job creation, economic diversification, and the reduction of poverty in vulnerable communities.

Experts in international finance point out that Somalia’s economic recovery remains fragile. Without external support, including development aid, progress in education, healthcare, and infrastructure is likely to stall, affecting millions of citizens who depend on public services.

Osman also stressed the multiplier effect of USAID funding. Investments in infrastructure and social programs generate economic activity, support local entrepreneurs, and create jobs. Cuts to aid therefore not only reduce direct support but also harm the broader economic ecosystem.

The Somali Development and Reconstruction Bank has proposed measures to offset the impact, including attracting private investment and fostering regional partnerships. However, Osman cautioned that without adequate foreign aid, these strategies may be insufficient to maintain momentum in economic development.

Osman highlighted that USAID programs have provided training and capacity-building opportunities for Somali professionals. Reduced funding threatens educational programs and workforce development initiatives, which are critical for building long-term economic resilience in Somalia.

International observers note that aid reductions could exacerbate social inequalities. Vulnerable groups, including women and children, are disproportionately affected when social services are cut, potentially reversing gains in healthcare, education, and community development.

Osman called for renewed collaboration between Somali institutions and international partners. She emphasized the importance of multi-sectoral programs that address economic, social, and institutional challenges simultaneously to ensure sustainable growth and stability.

The president of the bank also underscored the importance of long-term planning. Sudden reductions in aid disrupt projects, prevent completion of ongoing programs, and undermine trust in international partnerships, making it harder to attract future support and investment.

Osman’s remarks serve as a reminder of the fragile nature of Somalia’s economy. With limited domestic resources and ongoing security challenges, foreign aid remains a critical component of national development and the wellbeing of millions of Somali citizens.

In conclusion, Hodan Osman’s warning about the severe impact of USAID funding cuts highlights the vital role international aid plays in Somalia’s economic stability. Sustainable development, social programs, and institutional capacity depend heavily on continued support from global partners.

Her message underscores the interconnectedness of international aid, economic growth, and regional stability, emphasizing that reducing support to vulnerable nations has consequences that extend far beyond national borders.