Somalia's national army is "incapable" of driving out militant group al-Shabab from its strongholds, the US department has said.
The country is still "heavily dependent" on foreign support in almost all major security functions throughout the country, the State Department said in its Country Reports on Terrorism 2019.
The annual report detailing the work of "international terrorist groups" was released on Wednesday.
It says that al-Shabab funds its activities "through illegal charcoal production and exports, taxation of local populations and businesses, and by means of remittances and other money transfers from the Somali diaspora".
The group is also said to control large parts of the country through which it it uses to launch attacks in neighbouring Kenya.