Somaliland’s economy is mostly based on primary production and agriculture, with cattle serving as the country’s largest export, which it sells to neighboring Djibouti and Ethiopia, as well as Gulf states such as the United Arab Emirates, Saudi Arabia, and Oman. As of 2019, Somaliland’s gross domestic product (GDP) was at US$2 billion, with the majority of that coming from remittances from Somalis working overseas. The COVID-19 epidemic has hampered Somaliland’s trade flows, as demand in the agriculture industry, a major source of tax revenue, has fallen. The country’s GDP per capita is under US$950, making it one of the world’s lowest.
Somaliland is located in the Gulf of Aden, near the entrance to the Bab al-Mandeb, a significant shipping path that carries nearly one-third of the world’s cargo. Its strategic location has aided the government in securing new trade and development agreements. DP World stated in late 2016 that it would invest roughly US$450 million in managing and upgrading the Port of Berbera, as well as developing a corridor connecting the port to the Ethiopian border. The CDC Group of the UK government joined the initiative in 2021, doubling the financing.
What is Somalia’s economic situation?
Somalia’s informal economy is heavily dependent on livestock, remittance/money transfer enterprises, and telecommunications, despite the lack of efficient state governance. Somalia’s government is unable to collect domestic revenue, and the country’s external debt which is primarily in arrears was estimated to be at 77 percent of GDP in 2017. Agriculture is the most important industry, with livestock accounting for over 40% of GDP and more than 50% of export revenues. A major section of the population is made up of nomads and semi-pastoralists who rely on cattle for their livelihood…
Who in Somalia is the wealthiest?
Abdirashid Duale (Somali: Cabdirashiid Siciid Ducale, Arabic: ) is a multi-millionaire Somali businessman and the CEO of Dahabshiil, an international money transfer company.
What is the HDI for Somalia?
Somalia’s Human Development Somalia’s HDI is 0.285 out of 1.0, indicating how poorly the country performs in terms of health, income, education, and overall development.
Is Somaliland impoverished?
HARGEISA, HARGEISA, HARGEISA, HARGEISA, HARGEISA, Somaliland has developed a democratic governance structure and embarked on an ambitious development agenda, including the establishment of a National Development Plan, since declaring independence in 1991. (NDP 2012-16).
1. Gross Domestic Product and Unemployment
Somaliland’s GDP for 2012 is projected to have been $1.4 billion (current US$ prices), with GDP per capita expected to be $347, according to an initial GDP analysis – which will be revised as data improves and more data becomes available.
This would place Malawi, the Democratic Republic of the Congo, and Burundi as the world’s poorest countries.
The cattle industry accounts for over 30% of GDP, with wholesale and retail trade (including the informal sector) accounting for 20%, crops accounting for 8%, and real estate accounting for 6%.
Somaliland had a $496 million trade imbalance in 2012, which was covered by a combination of remittances and foreign aid.
Somaliland has low investment levels, ranking around 180th in the world in terms of gross fixed capital formation as a percentage of GDP.
Furthermore, Somaliland has an extremely low employment-to-population ratio, with males employed at 28 percent and females employed at 17 percent (15-24 year olds in Borama, Hargeisa and Burao).
2. Poverty and Happiness
According to preliminary estimates, Somaliland’s urban poverty rate is 29 percent, equal to Ethiopia’s (26 percent), but rural poverty, at 38 percent, is higher. Despite the fact that urban households are better off, inequality remains significant, close to levels documented in Kenya’s 2005 household census.
In metropolitan regions, access to health care is comparable to that of other nations in the region, but in rural areas, most deliveries are performed at home without the assistance of a qualified attendant.
In Somaliland, mothers are more likely to die while giving birth, and newborns are more likely to die before their first birthday than in Ethiopia or Djibouti.
In Somaliland, only approximately half of children aged 6 to 13 attend primary education, compared to 87 percent in Ethiopia.
Because Somaliland’s present school attendance is substantially lower than that of the rest of the area, Somaliland’s comparative literacy rates may suffer in the future.
3. Fiscal Policy
Somaliland’s tax income as a percentage of GDP (about 7% in 2012) is less than half that of Sub-Saharan Africa.
Low domestic revenue has only been able to support key government activities and maintain peace and stability in the past.
Human development has suffered as a result of a lack of investment in social services.
The Somaliland authorities have made recent, impressive progress in strengthening budgeting and planning, as well as increasing revenue, with the Budget Policy Committee now allocating 10-13 percent of the expanding budget to investment initiatives.
The Somaliland Development Fund (SDF) was established in order for the government to have more control over external resources.
However, in order to maintain income generation and develop a more competitive economy, critical sectors must be reformed.
Access to finance, which is the number one limitation on private sector activity in Somaliland, is severely hampered by the lack of a traditional financial system.
It is critical to revise decentralization policies, restructure the civil service, and implement the Public Financial Management (PFM) Reform Strategy 2013-2017 in order to improve public service delivery. The private sector’s clout must not impede the government from capturing revenue by implementing a tax strategy that focuses on consistent and moderate taxing of large firms, in order to bring Somaliland’s tax-to-GDP ratio closer to regional averages.
GDP is based on a population estimate of 4 million people; if a population estimate of 3.5 million people is used instead, total GDP and per capita estimates are around 5% lower.
Findings from the Somaliland Household Survey 2013, which included a representative urban sample as well as a fairly representative sample of settled rural households.
Is there a difference between Somalia and Somaliland?
Somaliland is an independent province in northern Somalia that broke away from Somalia in 1991 and declared independence. Somaliland is self-governing, with an independent government, democratic elections, and a separate history that no foreign force recognizes.
What do Somalis make a living doing?
Somalia is a long, narrow country that encircles Africa’s Horn. It boasts the longest coastline of any African country, bordering the Red Sea as well as the Indian Ocean. With the exception of few rough mountains in the extreme north, the inland lands are mostly plateaus. The northern part of the country is desert, whereas the southern part receives more rainfall. Many Somalis are herders, fisherman, and farmers who live nomadic or semi-nomadic lifestyles. The capital and largest city is Mogadishu.
Is Somalia oil-rich?
On the sidelines of the Africa Oil Week in Dubai, Mohamed Arabey Hashi Abdi said, “We are encouraged by the interest so far.” In the last few days, he noted, interest has also been indicated in Dubai. He predicted that oil production might begin in the country for the first time in two years.
In May 2020, the Somalia Petroleum Authority announced the country’s first-ever offshore round, offering seven blocks in the Indian Ocean and Gulf of Aden. The round was originally set to close for bids on March 12, 2021, however it was extended. According to Abdi, the deadline will most likely be next year.
He noted that negotiations with interested parties are presently taking place to determine the conditions of the production sharing agreement.
According to Abdi, the seven blocks in the licensing phase are expected to hold more over 30 billion barrels of oil. Oil was discovered in Somalia in 1950, but due to the civil conflict, firms such as Exxon Mobil had to suspend operations. A new government has given stability to the country since 2009, according to Abdi.
He claims that Somalia possesses more than 200 offshore blocks that could potentially hold crude oil. Somalia is also looking into ways to entice investors to invest in downstream businesses, such as refineries, because the country currently imports all of its gasoline from the Middle East, primarily the United Arab Emirates and Oman, according to Abdi. In 2020, Somalia passed a petroleum law that provided the foundation for onshore and offshore exploration and hydrocarbon production.