* Turkey has been key supporter of current Somali govt
* Aid credited with helping millions during 2011 famine
* War-ravaged Somalia plagued by fighting since 1991
By Drazen Jorgic and Tulay Karadeniz
NAIROBI/ANKARA, Feb 13 (Reuters) - Turkey has stopped direct budgetary support to Somalia, cutting off a major source of funding for a government trying to rebuild the country after more than two decades of chaos.
Turkey is a key ally of the Somali government. Its vast humanitarian aid effort at the height of the 2011 famine has endeared the country to many Somali people, especially as Ankara continues to build hospitals and dispatch aid across Somalia.
Turkey has backed the Somali government with direct cash aid, in contrast to Western governments who have pledged billions but not in the form of direct budget support.
A Turkish foreign ministry official told Reuters direct budget support payments stopped at the end of 2013.
It is not clear how much cash Turkey donated to Somalia in 2013, when the government budget totalled $110 million.
Somalia's former central bank chief, Abdusalam Omer, said during his seven-month tenure the support amounted to $4.5 million per month, which he said was paid in cash to the central bank.
A Somali government official confirmed the support stopped at the end of 2013 but said his government "hopes the payments will be re-started".
When asked whether there were plans to restart payments in 2014 or whether talks were taking place over resuming direct budget support, the Turkish official told Reuters in Ankara: "We have no such plans at this stage. It is not on our agenda."
An official from TKA (Turkish Cooperation and Coordination Agency) said its projects in Somalia were unaffected and would continue.
Turkey's support for the current government has angered Islamist al Shabaab rebels, who in July raided Turkey's embassy compound in Mogadishu, killing three people and wounding nine others.
CENTRAL BANK SCANDAL
The government of President Hassan Sheikh Mohamud, which was firmly backed by the West when it came to power in September 2012 amid a wave of optimism, has since become a source of frustration for many Somalis angry with the slow pace of change, insecurity and graft allegations.
The government has lost much goodwill from Western donors angry over a scandal sparked by the resignation of central bank governor Yussur Abrar, who said she quit after only seven weeks in the job due to pressure on her to sign shady deals.
Somali officials denied the corruption claims.
The Turkish official said Turkey's budget support cut was not related to recent developments, saying the support agreement was only in place for 2013 and had expired.
Horn of Africa analyst Rashid Abdi said the loss of Turkey's budget aid will "definitely be a disappointment for the current government but I have no doubt they will find another (Middle Eastern) partner who will be happy to plug the shortfall."
Western diplomats say they will not be stepping up to fill the budget hole and some shudder at how little oversight Turkey had over its aid.
Former governor Omer recalled how once a month he would visit Turkey's Mogadishu embassy to collect $4.5 million in boxes full of cash. "It was always in $100 bills," he told Reuters in Nairobi.
Turkey's ambassador to Somalia declined to comment on his government's method of delivering budget support.
Analyst Abdi said other countries may be much more secretive over how much financial support they give to Mohamud, an Islamist president with many allies in the Middle East.
"Turkey for all its faults was pretty transparent in its budgetary support for Somalia compared to other Muslim countries."
(Writing by Drazen Jorgic; editing by Andrew Roche)
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