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.
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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.
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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.
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.
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