Executive Summary

Somalia’s economic landscape is characterized by a complex interplay of challenges and opportunities. Over seven chapters, this report provides a comprehensive analysis of the country’s economic activity, labour force, investment profile, monetary and fiscal policies, food security, foreign trade, and external debt. The report delves into the intricacies of Somalia’s economy, highlighting key trends and impacts, obstacles, and policy recommendations.

This report stands out for its use of a comprehensive time series dataset spanning 2004-2023 across most chapters, combined with a multi-method approach that utilizes both descriptive analytics and applied econometrics to derive insightful results.

Between 2004 and 2023, Somalia’s economy faced significant challenges due to several global events. Key incidents include:

• The Global Energy Crisis (2004-2008), which caused oil prices to soar and heavily impacted Somalia’s oil-import-dependent economy.
• The Global Financial Crisis (2008), a worldwide economic downturn that reduced investments and worsened economic conditions in Somalia.
• The Yemen War (2015), which escalated regional tensions and adversely affected Somalia’s trade and investment.
• The COVID-19 Pandemic (2019-2022), characterized by prolonged lockdowns and remote work, leading to reduced economic activity, increased poverty, and higher unemployment rates globally.
• The Russian-Ukrainian War (2022), which triggered a global economic shock, particularly in energy and food markets. The resulting surge in oil, gas, and wheat prices increased costs for economies worldwide, including Somalia.