International aid plays a critical role in shaping the socio-economic landscape of Somalia, a country facing numerous challenges related to conflict and governance. This study assesses the perceived benefits and drawbacks of international aid, evaluates changes in local production and self-sufficiency due to aid, and examines the relationship between aid and governance/state building and development while providing actionable recommendations for improving aid effectiveness. Utilizing a mixed-methods approach, a survey was conducted among 251 participants from NGOs, government institutions, and the business sector. Quantitative analysis using SPSS revealed significant correlations (p < 0.05) between aid and local production, while qualitative interviews provided insights into perceptions. Findings indicate that 68% of respondents view international aid as beneficial, especially in healthcare and education, but 45% reported negative impacts on governance. A notable 30% increase in local production attributed to aid initiatives was observed. The study underscores the necessity for improving aid effectiveness in Somalia through enhanced local stakeholder involvement and comprehensive monitoring frameworks.