The visit on Thursday by Rajiv Shah, the administrator of USAID, makes him the highest ranking U.S. administration official to visit Mogadishu in years.
The U.S. is embracing the new government in Mogadishu, a formerly war-torn city that has seen about 18 months of relative peace. Last month the U.S. formally recognized Somalia's government for the first time in two decades.
Shah, standing beside Somalia's president, announced $20 million in new funding to support health and education programs. Shah said the U.S. also wants to help Somalia fight corruption.
He said Somalia was mired in conflict, famine and terrorism, but that its story line is now one of resilience, recovery and hope.