Analysts said the warning is a signal that donors are getting impatient with the inability of the Western-backed government to push for reforms. Western security agencies warn that the anarchic nation is increasingly becoming the breeding ground for Islamist militants.

Last week, Somali legislators approved Adiweli Mohamed Ali as the new prime minister. “An election (in an insecure Somalia) is still better than nothing. We have self-appointed people, which makes it difficult to recognise their legitimacy,” said EU’s head of delegation, Roberto Ridolfi.

The international community caved in after President Museveni backed the TFG’s call for extension — arguing that elections would destabilise Somalia and push back the gains made.

Uganda and Burundi are the only African countries that have contributed peace keepers to Somalia.

Convinced that Uganda is an important player for the security in the region, EU accepted a-one-year extension while TFG dropped its quest for a three-year-extension.

It is hoped that the 12 month extension will enable TFG deliver on all the objectives as per the 2008 Djibouti Peace Accord. The Accord permitted TFG to run the country for three years ending August 2011 by which time it should have achieved peace building, development, and cessation of all armed conflicts, enacted a constitution and held elections.

None of these has been achieved. Instead, the former clan fighters have turned into international terrorists backed by Al-Qaeda and carrying out piracy schemes, which constitute local and international threats to security.

In April, EU pegged all future support including stipends for parliamentarians and military training on progress of reforms and delivery of transitional tasks. Last year, the EU announced it planned to spend some €235m between 2010 and 2013. The spending appears guaranteed till 2012 as they watch events unfold.