You will lose half your brain cells if you try to process the numbers the government or IMF put out and people parrot at face value.
Not only is export/import massively under-reported, but look at the ratio: we’re somehow expected to believe Somalia imports 9–10 billion worth of goods with an “official” GDP of 12 billion. That’s 75%. thats mathematically incompatible , it simply does not add up.
There’s a reason for this. Somalia’s imports/exports are not well documented. At all.
A huge share of the economy is invisible to the formal data system
• massive informal cross-border trade
• huge off-book port transactions
• entire sectors uncounted (livestock, construction, telecom, fisheries, quarrying, transport, energy)
• and most importantly, Somali-owned companies based abroad importing goods to themselves
Somali conglomerates operate from the UAE, Kenya, Ethiopia, Oman, Turkey, etc.
When they import goods into Somalia, the system counts it as foreign imports, not Somali capital.
So what happens?
Imports (M) get inflated. GDP gets deflated. Somalia looks poorer than it actually is.
This is the problem with the formula:
GDP = HFCE + G + I + (X − M)
They subtract imports even though many of those “imports” are literally Somali-owned capital and inventory moving through foreign-registered companies.
So Somalia ends up penalized by its own diaspora’s transnational business structure.
And you can tell this is happening because, contrary to what
@Maintainnnin keeps repeating, Somalia’s trade is not “well documented.” There is no comprehensive trade data.
The World Bank openly states:
“Comprehensive trade statistics are difficult to acquire.”
Translation: They don’t have real import/export data. They have fragments.
What they actually rely on is mirror trade statistics: they ask other countries what they exported to Somalia and then treat that as Somalia’s import data.
This alone guarantees huge distortion because:
• partner countries misreport
• they report differently
• some report nothing
• some classify Somali-owned firms as their own “domestic” importers
• and most of this comes through Kenya, Djibouti, and UAE , all with incomplete records
So the final dataset is not Somali data at all. It’s a patchwork of partner country errors that gets dumped into Somalia’s GDP formula.
On top of that, I don’t buy
@Maintainnnin ’s “Somalia is unproductive” argument.
Imports don’t mean collapse. They reflect wealth and demand.
Even in the 1980s, Somalia’s domestic production was growing and they were running surpluses, yet imports were rising fast and economists at the time found it “paradoxical.”
Turned out it was driven by urban demand and increased purchasing power.
Same thing today, but worse because they don’t have accurate domestic production data to compare it with.
And
@Midas is correct: if you look at what Somalis import, it reflects rising wealth, not production collapse.
I don’t have the time to debate this endlessly, so I’ll just paste what I wrote earlier:
Imports are not just money leaving the country, they reflect economic growth. Much of what is imported gets converted into capital, hard physical assets for fueling business expansion, services, and urbanization:
Now let’s come back to Somalia’s imports, because you narrowly focus on ‘food imports’ (which are heavily influenced by climate shocks) but miss the fact that manufactured goods make up a large bulk of all imports
. In 2018, over a quarter of imports were machinery and transport equipment, 18% were chemical products, and the rest were other manufactured goods such as textiles, electronics, luxury cars and construction materials. These aren’t subsistence items , they reflect business expansion, capital accumulation, and rising urban consumption.
If Somalia were truly operating at the bare minimum subsistence level, its import profile would be dominated by food staples. Instead, the fact that such a large share of imports is tied to machinery, industrial inputs, and consumer goods shows that there’s significant purchasing power and capital investment happening.
In other words, food import doesn’t erase the evidence of consumer wealth and urban-driven economic activity. Somalia’s economy is more complex than the ‘poor country with sugar imports’ framing allows.
The consumer boom shows that they have rising purchasing power as well, it also translates to bigger GDP. It shows large parts of the money stays and circulates in the economy.
You are right. It started in the 1980s when they shoehorned remittances as the main explanatory factor even though the total volume available was too small compared to the actual monetary flow being observed. They simply couldn’t explain it any other way. The figure they had at the time was 30 million.
It’s strange because if you look at other countries with large diasporas , like China, India, the Philippines, or Nigeria , they all receive significant remittances, yet those are never treated as the defining feature of their economies. The Chinese diaspora alone sends around $49 billion annually, and no one reduces China’s economic story to that.
As shown in that text you shared with China, a lot of imports are capital goods and industrial materials (like coated flat-rolled iron, synthetic fibers, and machinery), not just consumer items. That indicates productive reinvestment and business expansion, not simple dependency.
Then the other one will be the household consumption figures its like 16 times higher than government expenditure and its the figures they themselves give. So there is no way they can claim Somalis are aid dependent.
There is a also a lot of internal contradiction with the gov publication.
It makes no sense to claim remittances finances imports. Remittances mostly go to household consumption , food, rent, education , not bulk import financing. Businesses pay for imports using foreign exchange earned through trade, investment, hawala networks, or reinvested diaspora capital.
Also Aids and Grants makes no sense either. They do not enter private trade channels, they usually go through government budgets or NGOs, not importers or retailers.
They don't seem to realize that Somalia's macroeconomic structure is trade and investment-led not remittances dependent.
To simplify everything I wrote above:
In a normal economy:
- imports correlate with production capacity
- import growth follows rising incomes
- poor, low-income economies import very little (because they can’t afford to)
But Somalia imports:
- cars
- construction materials
- fuel
- industrial equipment
- electronics
- food
- machinery
- pharmaceuticals
- telecom infrastructure
This is not the import profile of a $12-billion economy.
It’s the profile of a much larger, much wealthier, heavily urbanized, capital-intensive economy.
