The Economic Activity of Somalia

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The current civil disturbances and armed clan rivalries in Somalia, coupled by the absence of a generally recognized government interfere with the country’s economic development. Long years of political divisions that started in 1991, have driven away what could have been the country’s economic fortunes from many worthwhile revenue-generating activities. Before 1991, its economy has agriculture as its most important sector, accounting for 65% of gross domestic product (GDP), with livestock contributing 40% of GDP and more than 50% of export earnings. Its principal exports, led by livestock, included fish, charcoal, hides, and bananas to its main export partners such as United Arab Emirates, Yemen, Oman, China, Nigeria and Kuwait. A severe drought hit the country in 1992 and the devastations of the civil war, appear to have impaired agricultural and livestock production in the country.

The industrial sector, that which is based on the processing of agricultural products, is seriously affected. Most petroleum refining operations have stopped, leaving only some light industries like sugar refining, textiles and wireless communication standing, but wobbly, on their feet. The fishing industry is also adversely affected by the absence of authoritative national government that leads to the lack of fishing concessions and illegal fishing. The tourism sector is almost non-operational as many tourists, aware of the imbroglio in the country, have avoided it as their travel destination. To repair the damages wrought by the prolonged civil war, the country will need a stable central government that can capitalize on its overall economic potential to the hilt.

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