flag Somalia Somalia: Economic Outline

Economic Indicators

Somalia grapples with recurring shocks amidst widespread fragility, conflict, and violence. Climate-related crises like droughts, floods, and locust infestations, coupled with fluctuating international commodity prices and heightened insecurity, have disrupted the country's growth path and hindered progress away from fragility. Over the period of 2019 to 2023, growth has been modest, averaging only 2% annually, with an average negative real GDP per capita growth of 0.8%. In 2023, favorable rains bolstered agricultural output, alleviated food insecurity, and bolstered private consumption. Real GDP is estimated to have expanded by 3.1% in 2023, matching population growth, up from 2.4% in 2022. Real GDP growth is anticipated to accelerate from 3.7% in 2024 to 4% in 2026 (World Bank data).

On December 13, 2023, Somalia reached a significant milestone by attaining the Historic HIPC Completion Point. Subsequent to this achievement, Somalia obtained complete and irreversible debt relief amounting to USD 4.5 billion for the nation. Consequently, the external debt was projected to be less than 6% of GDP in 2023, a notable decrease from 64% in 2018 (World Bank). In 2023, the federal government achieved a modest surplus, yet faces ongoing fiscal challenges due to limited domestic resource mobilization. Although domestic revenue mobilization improved to 2.8% of GDP from 2.5% in 2022, it still falls short of the country's development needs. Public spending is primarily allocated to personnel costs, with minimal investment in human capital and infrastructure, primarily reliant on grants. The approved 2024 budget targets a modest overall fiscal deficit of 0.3 percent of GDP. Inflation pressures abated in 2023, buoyed by improved agricultural performance and declining commodity prices. However, overall inflation remained relatively stable at 6.1% compared to 6.8% in 2022. Favorable rainfall enhanced agricultural production, leading to lower local staple food prices, with food inflation averaging 0.7% in 2023, down from 13.9% in 2022. The anticipated recovery in agricultural production and exports, alongside continued moderation in global commodity prices, is expected to sustain low inflation in 2024 (World Bank). As per the IMF, significant reforms are underway to enhance domestic revenue mobilization. These reforms include modernizing customs operations, implementing a new income tax law, and boosting revenue collection from major enterprises, notably in the telecom sector. Efforts persist in fortifying public financial management, which involves streamlining business procedures and enhancing debt management capabilities. Additionally, initiatives are in progress to integrate all employees into the payroll system, with plans to enforce the Pay and Grade policy. Key challenges include infrastructure constraints, weak state institutions and capacity, weak public financial management systems, continued insecurity linked to incursions by Al-Shabaab and ISIS insurgents, limited resilience to environmental extremes.

The economic growth is too weak to significantly reduce the widespread poverty: as per the World Bank, projections derived from GDP per capita growth indicate a rise in poverty from 71% in 2017 to 73% in 2023, using the 2017 poverty threshold. As per the 2022 Integrated Household Budget Survey, poverty rates are most pronounced among the nomadic community. However, owing to Somalia's significant urbanization, the majority of the impoverished reside in urban regions. Unemployment rate is high, estimated at 19.2% in 2023 by the World Bank, and labor force participation rates are notably low, especially with significant gender disparities. Merely one-third of men and a mere 12% of women are engaged in the labor market. Poverty levels remain high and pervasive, exacerbated by recurring shocks that heighten the risk of more individuals slipping into poverty. The country’s GDP per capita (PPP) was estimated at only USD 1,711 in 2022 by the World Bank.


Monetary Indicators 20192020
Somali Shilling (SOS) - Average Annual Exchange Rate For 1 GBP n/a33,026.94

Source: World Bank - Latest available data.


Main Sectors of Industry

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 26.3 17.7 56.0

Source: World Bank - Latest available data.


The Active Population in Figures

Labour Force 3,817,3253,953,1414,065,294

Source: International Labour Organization, ILOSTAT database

Total activity rate 49.16%49.28%49.42%
Men activity rate 76.15%76.21%76.28%
Women activity rate 22.66%22.85%23.06%

Source: International Labour Organization, ILOSTAT database


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

World Rank:
Regional Rank:

Source: Index of Economic Freedom, Heritage Foundation


Country Risk

See the country risk analysis provided by Coface.


Indicator of Political Freedom


The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Not Free
Political Freedom:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

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Sources of General Economic Information

Main Online Newspapers and Portals
Allafrica, Somalia News
Somalia Newspapers online
Borama News
Puntland Post
BBC profile
Useful Resources
Ministry of Finance
Ministry of Trade and Industry
Ministry of Agriculture and Irrigation
Ministry of Oil and Mines
Central Bank

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Latest Update: May 2024