Somalia: Economy

Somalia lacks natural resources and faces major development challenges. Recent economic reverses have left its people increasingly dependent on remittances from abroad. Its economy is pastoral and agricultural, with livestock--principally camels, cattle, sheep, and goats--representing the main form of wealth. Livestock exports in recent years have been severely reduced by periodic bans, ostensibly for concerns of animal health, by Arabian Peninsula states. Saudi Arabia lifted its ban on Somali livestock in 2009. Drought has also impaired agricultural and livestock production. Because rainfall is scanty and irregular, farming generally is limited to certain coastal districts, areas near Hargeisa, and the Juba and Shabelle River valleys. The agricultural sector of the economy consists mainly of banana plantations located in the south, which use modern irrigation systems and up-to-date farm machinery.

A small fishing industry exists in the north where tuna, shark, and other warm-water fish are caught, although fishing production is seriously affected by poaching. Aromatic woods--frankincense and myrrh--from a small and diminishing forest also contribute to the country’s exports. Minerals, including uranium and likely deposits of petroleum and natural gas, are found throughout the country, but have not been exploited commercially. Petroleum exploration efforts have ceased due to insecurity and instability. Illegal production in the south of charcoal for export has led to widespread deforestation. With the help of foreign aid, small industries such as textiles, handicrafts, meat processing, and printing are being established.

The absence of central government authority, as well as profiteering from counterfeiting, has rapidly debased Somalia’s currency. The self-declared “Republic of Somaliland” issues its own currency, the Somaliland shilling, which is not accepted outside of the self-declared republic.

There are no railways in Somalia; internal transportation is limited to truck and bus. The national road system nominally comprises 22,100 kilometers (13,702 mi.) of roads that include about 2,600 kilometers (1,612 mi.) of all-weather roads; however, most roads have received little maintenance for years and have seriously deteriorated.

Air transportation is provided by small air charter firms. A number of airlines operate from Hargeisa. Some private airlines, including Daallo Airlines, serve several domestic locations as well as Djibouti and the United Arab Emirates. The UN and other nongovernmental organizations (NGOs) operate air service for their missions.

The European Community and the World Bank jointly financed construction of a deepwater port at Mogadishu. The Soviet Union improved Somalia’s deepwater port at Berbera in 1969. Facilities at Berbera were further improved by a U.S. military construction program completed in 1985, but they have since become dilapidated. During the 1990s the United States renovated a deepwater port at Kismayo that serves the fertile Juba River basin and is vital to Somalia’s banana export industry. Smaller ports are located at Merca, Brava, and Bossaso. Absence of security and lack of maintenance and improvement are major issues at most Somali ports.

Cellular phone service is readily available throughout the country, but landline communication systems have been destroyed or dismantled. Somalia is linked to the outside world via ship-to-shore communications (INMARSAT) as well as links to overseas satellite operators by private telecommunications operators (including cellular telephone systems) in major towns. Radio broadcasting stations operate at Mogadishu, Hargeisa, and Galkacyo, with programs in Somali and some other languages. There are two television broadcast stations in Mogadishu and one in Hargeisa.

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