e Business Directory

You are here: Home > Somalia

Somalia Economical Facts

 

Economical overview

The chaos that has been going on in Somalia since the late 1980s makes it difficult to get an overview of the economic conditions in the country. Statistical data on gross domestic product (GDP), imports and exports are often old or completely missing. The statistics that still exist have major shortcomings. The basis for the economy is nomadic livestock management and, in the alternative, agriculture. There are also some small industries.

Mogadishu is still Somalia's commercial center. In the Bakara market in the capital, most things are sold, not only food and clothing, but also computers and mobile phones of the latest cut. In the past, large quantities of weapons were also sold here, but the arms trade has been relocated to other, less open places after the authorities' strike.

  • Countryaah.com: Major imports by Somalia, covering a full list of top products imported by the country and trade value for each product category.

An informal economy has been built up in Mogadishu and in other parts of the country, with various small businesses. There is also a successful telecom industry. In 2014, Somalis were able to choose from some 20 providers of mobile telephony and the Internet and the tariffs were among the lowest in Africa. Nowadays, many money transactions take place within the country via mobile phones.

There has also been talk of a "construction boom" in Somalia, which is funded, like so much else, by money that Somalis abroad send home to their relatives. These remittances are estimated to amount to $ 1.2-1.6 billion per year, and about 40 percent of households are almost entirely dependent on this money.

  • Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including SOM which represents the country of Somalia.

Economical Facts of Somalia

As there were no functioning banks, money was sent through informal networks based on personal trust, hawala. Following the terrorist attacks against the United States in 2001, the United Nations, at American request, allowed all accounts on one of these networks, al-Barakaat, to be blocked, even though no evidence was provided.

In 2013, the British Barclays Bank ceased to transfer money to Somalia, citing concerns that some of the money could end up in the hands of terrorists. Two years later, a US major bank also stopped transferring money to Somalia, due to new rules designed to prevent money laundering.

Somalia is highly dependent on aid. According to the World Bank, in the beginning of the 2010s, the country received around one billion dollars a year in support (including both humanitarian and development assistance). The most important donors include the United States, the EU, Turkey and the United Kingdom. Much of the assistance comes through various UN agencies.

Just over half of the state budget is financed through aid, $ 87 million in 2014, while the rest, about $ 82 million, mainly comes from taxes on foreign trade. Large sums are still believed to disappear into corruption. According to the organization Transparency International's index, Somalia has for several years been considered the most corrupt country by the states that were included in the survey.

For several years, al-Shabaab earned many millions of dollars, despite a UN embargo, shipping charcoal to the United Arab Emirates and Saudi Arabia - and sugar to Kenya - via the ports of Kismayo and Merca. In 2012, the Islamist group lost control of Kismayo. However, al-Shabaab has continued to receive large revenues from smuggling traffic and on the taxes the group imposes from businessmen and private individuals. al-Shabaab also receives financial support from Somalis abroad and supporters in the Arab world.

Local clan leaders and other armed groups also levy taxes in the areas they control. A large part of the money is paid to militias, but in their places, local authorities have tried to get schools, health centers and other community services started. Often it is the trade in the mildly narcotic plant khat that generates the largest income.

Much of what the state usually stands for in a country is lacking in Somalia, everything from a functioning currency to laws on how a contract should look. Many transactions are now done in dollars. The value of the Somali shilling can vary between different cities and it is also available in several variants.

Foreign debt amounts to a few billion dollars. However, despite the International Monetary Fund (IMF) resuming contact with Somalia in 2013, no new loans or debt write-offs will become relevant until the country has repaid some of its previous debt. No debt payments have been made since 1990.

The trade deficit is large, as imports are much larger than exports. Most important is the export of cattle, hides and skins to countries around the Persian Gulf. Bananas are also exported.

FACTS - FINANCE

GDP per person

US $ 315 (2018)

Total GDP

US $ 4,721 million (2018)

GDP growth

-1.5 percent (1990)

Agriculture's share of GDP

62.7 percent (1990)

Manufacturing industry's share of GDP

4.4 percent (1990)

External debt

US $ 2 958 million (2017)

Currency

Somali shilling

Main export goods

livestock, livestock products, bananas

Largest trading partner

Saudi Arabia, United Arab Emirates, Yemen, Djibouti, Kenya

2011

December

Ethiopian forces occupy Beledweyne

During the last days of 2011, Ethiopian troops conquer the strategically located city of Beledweyne in the middle of the country from al-Shabaab. According to Ethiopia, the intervention is being carried out on behalf of the Somali government.

Kenyan troops are included in the AU force

In December, the Kenya Parliament approves that Kenyan soldiers should be included in the AU force. President Sharif Sheikh Ahmed, who initially criticized the Kenyan intervention, is later said to have given his approval.

November

Islamists stop Western aid organizations

al-Shabaab storms and closes the offices of several Western aid organizations in the cities of Baidoa and Beledweyne. Sixteen organizations are banned, including the UN Children's Fund Unicef.

Ethiopian troops form new front against al-Shabaab

In the middle of the month, hundreds of Ethiopian soldiers are reported to have crossed the border with tanks as well as heavy artillery, opening a new front against al-Shabaab.

October

Kenyan troops enter Somalia

In the middle of the month, Kenyan troops enter Somalia to fight back against the Islamist group. Shortly thereafter, at least five people were killed in a suicide attack in Mogadishu. The deed is being carried out near the building where interim government representatives hold talks with Kenyan ministers.

At least 70 dead in new bombing

At the beginning of the month, at least 70 people were killed and 100 were injured in a bomb attack outside the government buildings in Mogadishu. A spokesman for al-Shabaab says the group is behind the deed.

September

Roadmap for the next election is adopted

At a September conference, several Somali leaders sign a "road map" for how to create a new government to take over after the incumbent transition minister. You get twelve months to reform and write a new constitution. Among the signatories are President Sheikh Sharif Ahmed, Prime Minister Abdiweli Mohamed Ali, representatives of Puntland, the Galmudug region and Ahlu Sunna Waljamaca.

Islamists kidnap Westerners in Kenya

A British man is killed on the Kenyan tourist island of Lamu. His wife is kidnapped and taken to Somalia. Three weeks later, a French woman is also kidnapped from the city of Lamu and taken to Kismayo, which is controlled by al-Shabaab (the woman later dies in captivity). Later, two Spanish relief workers are also removed from the Dadaab refugee camp in Kenya.

August

Islamist group resigns from Mogadishu

August 6th

On August 6, al-Shabaab leaves Mogadishu.

June

Adiweli Mohamed Ali becomes new prime minister

On June 28, Parliament approves Adiweli Mohamed Ali, former professor of economics in the United States, as new prime minister.

Terrorist suspected al-Qaeda leader killed

The terrorist network al-Qaeda's leader in East Africa, Fazul Abdullah Muhammad, is killed at a roadblock outside Mogadishu. He was suspected of planning in the terrorist attacks against US embassies in Kenya and Tanzania in 1998 and an attack on an Israeli-owned hotel in Kenya in 2002.

Timetable for new elections

The President and President agree that both the Government and Parliament's term will run in August 2012. According to the agreement, which also gets international approval, the election of President and President shall be held no later than August 20 of that year. To agree to the deal, the President has pushed for Prime Minister Abdullahi Mohamed to step down. This triggers street protests in Mogadishu.

May

Drought causes famine

The severe drought in the country leads to acute famine.

March

The government's mandate is extended for one year

The Transitional Parliament extends the government's mandate for one year. The decision refers to the difficult security situation in the country.

Islamists are being pushed back from Mogadishu

al-Shabaab is forced to retreat in the Mogadishu area, but the group still controls most of southern and central Somalia.

February

al-Shabaab and al-Qaeda merge

February 10

al-Shabaab announces that the group will formally join the al-Qaeda terrorist network. This is announced via a 15-minute video in Arabic in which al-Shabaab leader Ahmed Abdi Godane appears alongside al-Qaeda leader Ayman al-Zawahiri.

Controversy between the President and Parliament

February 3

The transitional Parliament votes to extend its mandate for another three years. President Sharif Sheikh Ahmed refuses to sign the decision, which he said was made without consulting him.

 

Copyright 2020 e Tenant-Landlord Law Directory All Rights Reserved