The International Monetary Fund (IMF) may cease its support programme to Somalia in the next three months if scheduled elections face further delays.
An essential military wages funding deal could also be on the chopping board.
The debt relief programme needs to be reviewed by 17 May by a new government, according to IMF’s mission chief for Somalia, Laura Jaramillo Mayor.
The deal will see Somalia’s debt fall to $560m (£400m) from $5.2bn in 2018.
In the first phase of the programme in 2020, the debt was reduced to $3.7bn
It’s expected the debt reduction would allow the country to attract more funding and aid from international partners to develop its private sector.
Elections in Somalia are long overdue – they were initially slated for November 2020, but have since been postponed twice due to disagreements on the mode of conducting the polls.