flag Somalia Somalia: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Somalia’s formal economy remains fragile and the informal sector, essentially made up of livestock farming, live animals trade (over 50% of its exports, ITC) as well as remittances from abroad (a fifth of the country’s GDP), plays a crucial role in the economy. After rebounding from the triple shock of floods, a locust invasion and the COVID-19 pandemic, Somalia’s economy was hit again by a prolonged drought, slowing global growth and slowing remittances in 2022. From 2.9% in 2021, GDP growth slowed down to 1.7% in 2022, and it is expected to slightly increase to 2.8% in 2023 and 3.7% in 2024 (IMF).

In 2022, as Somalia’s economy was still recovering from the effects of flooding, desert locusts invasions, the outbreak of the Covid-19 pandemic, the regional ban on imported livestock imposed by the Gulf countries and decreasing remittances from the diaspora, it was further hit by a drought and the spillovers from the war in Ukraine. Despite this challenging context, presidential elections were held in May 2022, and the authorities pursued the implementation of the IMF-led reform program and made progress toward the Heavily Indebted Poor Countries (HIPC) Completion Point. The authorities reached debt relief agreements with most Paris Club members and the Kuwait Fund for Arab Economic Development (KFAED) and continued to seek agreements with other bilateral creditors (IMF). Somalia became eligible for interim debt relief under the HIPC initiative in March 2020, process which will significantly reduce Somalia's total debt and provide access to new resources to restart growth and reduce poverty. Somalia is in debt distress, both for external and overall public debt, but its debt is assessed as sustainable in a forward-looking sense. Indeed, estimated at 42.5% GDP in 2022, public debt will drop to 7.3% GDP in 2023 and 9.7% GDP in 2024, assuming the full delivery of debt relief under the HIPC Initiative, Multilateral Debt Relief Initiative (MDRI), and ‘beyond-HIPC’ assistance at the Completion Point in 2023 (IMF). As revenues and budget grants recovered, the fiscal deficit narrowed from -1.1% GDP in 2022 to a balanced position in 2022 (IMF). A higher deficit is expected for 2023 (-0.5% GDP) and 2024 (-2.1%) driven mainly by the timing of budget grant disbursements (IMF). Due to high food and fuel prices, inflation increased from 4.6% in 2021 to 6.8% in 2022 (IMF). It is expected to reduce to 4.2% in 2023 and 3.8% in 2024 as commodity prices recede (IMF). The authorities remain committed to the reform agenda agreed with the IMF and to make progress toward the HIPC Completion Point, as reflected in the Supplementary Budget for 2023. In March 2020, the IMF approved three-year arrangements under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) to support the implementation of the authorities’ Ninth National Development Plan (NDP9). This plan's main objective is inclusive growth and poverty reduction. The IMF judged the implementation of the program satisfactory, but the economic reality of the country is dire both in terms of politics and security and the country is extremely dependent on international aid. 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 (more than half of the population lives in poverty according to the World Bank), unemployment among young people is high (total unemployment was 19.9% of the workforce in 2021 according to the World Bank, modeled ILO estimate) and the social needs are important. The Covid-19 pandemic has likely increased poverty, as real per capita income decreased by 4.4% (AfDB). Due to the prolonged drought, 1.4 million persons are at risk to be displaced.


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
BBC profile
Useful Resources
Ministry of Finance
Ministry of Fisheries
Ministry of Trade and Industry
Ministry of Agriculture and Irrigation
Ministry of Oil and Mines
Central Bank

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Latest Update: December 2023

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