Somalia National Transformation Plan (NTP) 2025-2029

[Thegoodshepherd]

I don't think Somalia's GDP growth is ever going to exceed 6% for any long periods of time. These ambitious GDP growth figures are maybe possible if we have a lot of FDI, and if we remain very open to the global economy.

Somalia could easily double its GDP per capita in the next 15 years if we complete and implement the 2012 constitution, spend money only on first 9 grades of schooling (leave all other education as private), remove all internal trade barriers (i.e regional customs checkpoints), bring in drought resistant GMO seeds, build 10,000 ton steel silos & dryers, establish a minimum price for grain production, build large abattoirs at each of the 5 ports to export frozen meat, invite Chinese experts to help establish an industrial scale fishing fleet, invest heavily in solar for daytime cheap electricity (no storage too expensive), only rehabilitate the old road network (it is already too big for Somalia to maintain easily) all new roads can be gravel or privately funded tarmac.

You do those things and GDP per capita could reach $1,600 or more by 2040. This is where countries like Cameroon, Benin and Senegal are today. It is where India was in 2016.

The main drag on GDP per capita will be population growth, but that is ok as we need more people for security reasons (i.e Ethiopia).

 

[Nes]

I don't think Somalia's GDP growth is ever going to exceed 6% for any long periods of time. These ambitious GDP growth figures are maybe possible if we have a lot of FDI, and if we remain very open to the global economy.

Somalia could easily double its GDP per capita in the next 15 years if we complete and implement the 2012 constitution, spend money only on first 9 grades of schooling (leave all other education as private), remove all internal trade barriers (i.e regional customs checkpoints), bring in drought resistant GMO seeds, build 10,000 ton steel silos & dryers, establish a minimum price for grain production, build large abattoirs at each of the 5 ports to export frozen meat, invite Chinese experts to help establish an industrial scale fishing fleet, invest heavily in solar for daytime cheap electricity (no storage too expensive), only rehabilitate the old road network (it is already too big for Somalia to maintain easily) all new roads can be gravel or privately funded tarmac.

You do those things and GDP per capita could reach $1,600 or more by 2040. This is where countries like Cameroon, Benin and Senegal are today. It is where India was in 2016.

The main drag on GDP per capita will be population growth, but that is ok as we need more people for security reasons (i.e Ethiopia).

How does oil production affect this if there are economically viable amounts. We can at least have hopes of being similar to Guyana or Azerbaijan at the lowest benchmark.

 

[Midas]

I don't think Somalia's GDP growth is ever going to exceed 6% for any long periods of time. These ambitious GDP growth figures are maybe possible if we have a lot of FDI, and if we remain very open to the global economy.

Somalia could easily double its GDP per capita in the next 15 years if we complete and implement the 2012 constitution, spend money only on first 9 grades of schooling (leave all other education as private), remove all internal trade barriers (i.e regional customs checkpoints), bring in drought resistant GMO seeds, build 10,000 ton steel silos & dryers, establish a minimum price for grain production, build large abattoirs at each of the 5 ports to export frozen meat, invite Chinese experts to help establish an industrial scale fishing fleet, invest heavily in solar for daytime cheap electricity (no storage too expensive), only rehabilitate the old road network (it is already too big for Somalia to maintain easily) all new roads can be gravel or privately funded tarmac.

You do those things and GDP per capita could reach $1,600 or more by 2040. This is where countries like Cameroon, Benin and Senegal are today. It is where India was in 2016.

The main drag on GDP per capita will be population growth, but that is ok as we need more people for security reasons (i.e Ethiopia).

Im sorry but 6% gdp is only difficult when your an Upper middle income country. Also, the reality is that somalia's gdp per capita has already surpassed $ 2,000. Haven't you been reading all the stuff thats been posted?

Just think about for a second how much somalia's economy has transformed in the last 10 years. Yet the gdp has only gone up by $200 ? It very clear that just from stuff like this that you have massive discrepancies in the size of the somali economy.

Plus the biggest piece of evidence is somalia having the same amount of monthly mobile transactions as Kenya which is supposedly has an economy 10 times are size

Sxb somalia most likely has a larger economy and a higher gdp per capita than benin,Senegal and Cameroon

 

[Thegoodshepherd]

How does oil production affect this if there are economically viable amounts. We can at least have hopes of being similar to Guyana or Azerbaijan at the lowest benchmark.

We should plan and act as if there is no oil. If we find oil/gas, we can fast forward a lot of things.

Im sorry but 6% gdp is only difficult when your an Upper middle income country. Also, the reality is that somalia's gdp per capita has already surpassed $ 2,000. Haven't you been reading all the stuff thats been posted?

Just think about for a second how much somalia's economy has transformed in the last 10 years. Yet the gdp has only gone up by $200 ? It very clear that just from stuff like this that you have massive discrepancies in the size of the somali economy.

Plus the biggest piece of evidence is somalia having the same amount of monthly mobile transactions as Kenya which is supposedly has an economy 10 times are size

Sxb somalia most likely has a larger economy and a higher gdp per capita than benin,Senegal and Cameroon

6% growth rate is very high for a country that does not expect any FDI, has no judiciary, no tradition of business law, weak government and very low literacy rates. It is the maximum plausible for Somalia in the next 20 years. We are at 4% GDP growth now and I find that miraculous.

Somalia's GDP per capita in USF is ~$800, and in GDP per capita PPP terms it is ~$2000. PPP is not really a good measure for Somalia as it is very import dependent and has a dollarized economy. PPP figures for Somalia can be ignored.

Transactions per month is just money moving in a circle. The US has roughly $1.6 quadrillion in transactions each year. Meaningless metric.

 

[Midas]

We should plan and act as if there is no oil. If we find oil/gas, we can fast forward a lot of things.



6% growth rate is very high for a country that does not expect any FDI, has no judiciary, no tradition of business law, weak government and very low literacy rates. It is the maximum plausible for Somalia in the next 20 years. We are at 4% GDP growth now and I find that miraculous.

Somalia's GDP per capita in USF is ~$800, and in GDP per capita PPP terms it is ~$2000. PPP is not really a good measure for Somalia as it is very import dependent and has a dollarized economy. PPP figures for Somalia can be ignored.

Transactions per month is just money moving in a circle. The US has roughly $1.6 quadrillion in transactions each year. Meaningless metric.

Im not talking ppp im talking nominal.

Transactions per month is just money moving in a circle. The US has roughly $1.6 quadrillion in transactions each year. Meaningless metric.

The transactions that article is talking about are of a completely different type. Countries in africa use mobile money transactions for all their payments Nobody in the u.s does that.

If you wanted to compare it to something you would compare it to credit card transactions whidh are essentially what mobile money si the equivalent of for africa.

And when you look at that you don't see some outrageous numbers. You see 4 trillion dollars which is a totally reasonable number in $27 trillion dollar economy.

But the accueacy of the mobile money transactions wasnt even my main point. Which was that if you compare the mobile money transactions of kenay vs somalia. They are basically equivalent which would be illogical if somalia's gdp was onky $13 billion dollars with a per capita of $800

 

[Idilinaa]

It's not only mobile money; we also rely on direct income statements from Somalis in Somalia about their daily and monthly earnings across sectors, and how much they pay for costs in both rural and urban areas. They earn between $200–$600 per month at the lower end and $1,200–$7,000 or more per month at the higher end.

We discuss some of this in this thread:

Ethiopia raising minimum civil servant salary from $35 to $44 per month

They really do operate much like multi-national corporation. This one operates factories in Mogadishu, sources agricultural products from Somalia but is headquartered in Dubai. Dubai is treated as a gateway into global markets. https://somseedagri.com/ But look how many locations they exist...

www.somalispot.com

We also have surveys on mobile money users and micro-entrepreneurs, separated by educational bracket, age, gender, and income differentials. These studies show that they earn on average $4,000–$5,000 per capita, and I plan to share more on that later.

Currently, 64% of Somalis are urbanized:

• About 50% of urbanites rely on wage labor (earning salaries from factories, offices, shops, construction, transport, or service jobs, rather than agriculture or running businesses).
• The other half rely on small businesses.

In rural areas, which make up 24% of the population:

• 26% rely on agriculture and fishing for income
• 16% rely on small businesses

If people actually earned only $600–$800 a year on average, they would not be able to afford anything in Somalia. Businesses and private services would struggle to operate because they need customers with spending power. Households wouldn’t be able to buy food, pay rent, purchase homes, pay for education, cover transport costs, or even pay for electricity and utilities , heck electricity alone costs $15–$20 per month. It would be physically and structurally impossible for consumer activity to function under such low earnings.


I have to say @Midas. One thing my research has taught me is that people will often ignore on the ground realities in favor of numbers seen online or in reports. Many take figures at face value without investigating the source, context, or applicability. Often, outdated numbers get recycled, sometimes from years or even decades ago.

For example, the claim that ''$300 million of fish is stolen annually'' continues to circulate, but this number comes from a UN study in 2009. Since 2012, Somalia has implemented registration and licensing, banned foreign trawlers, ratified its exclusive economic maritime zone, and strengthened the coastal guard. These efforts have significantly reduced illegal fishing. While new figures are rarely cited, the rapid growth of fisheries, increased investment, rising fish consumption, and export growth clearly reflect a changed reality.

They will even ignore the contradictions you just pointed out between Kenya and Somalia, when something doesn’t add up, they still go along with it anyway

It’s true that ''perception becomes someone’s reality''. Even as Somalia quietly makes significant progress, overturning decades of outdated perceptions will take time. The displaced population further complicates the picture, particularly following the 2021–2023 climate disaster. Humanitarian organizations often focus on displaced groups and generalize their economic conditions to the broader population. Fortunately, two studies have separated IDPs from rural and urban populations, showing that extreme poverty and service disparities is mostly concentrated among displaced communities rather than being directly tied to Somalia’s economic structure or overall wealth.

 

[Midas]

If people actually earned only $600–$800 a year on average, they would not be able to afford anything in Somalia. Businesses and private services would struggle to operate because they need customers with spending power. Households wouldn’t be able to buy food, pay rent, purchase homes, pay for education, cover transport costs, or even pay for electricity and utilities , heck electricity alone costs $15–$20 per month. It would be physically and structurally impossible for consumer activity to function under such low earnings.

Damn I didnt even think about this aspect. Your right though. A school i used to go to in bossaso when I was there for dhaqancelis was charging $30 dollars a month per student which is $360 dollars a year and the school was mainly non-diaspora and you could tell most of these families weren't well off and people were paying prices like this 10 years ago.

 

[Hilmaam]

I don't think Somalia's GDP growth is ever going to exceed 6% for any long periods of time. These ambitious GDP growth figures are maybe possible if we have a lot of FDI, and if we remain very open to the global economy.

Somalia could easily double its GDP per capita in the next 15 years if we complete and implement the 2012 constitution, spend money only on first 9 grades of schooling (leave all other education as private), remove all internal trade barriers (i.e regional customs checkpoints), bring in drought resistant GMO seeds, build 10,000 ton steel silos & dryers, establish a minimum price for grain production, build large abattoirs at each of the 5 ports to export frozen meat, invite Chinese experts to help establish an industrial scale fishing fleet, invest heavily in solar for daytime cheap electricity (no storage too expensive), only rehabilitate the old road network (it is already too big for Somalia to maintain easily) all new roads can be gravel or privately funded tarmac.

You do those things and GDP per capita could reach $1,600 or more by 2040. This is where countries like Cameroon, Benin and Senegal are today. It is where India was in 2016.

The main drag on GDP per capita will be population growth, but that is ok as we need more people for security reasons (i.e Ethiopia).

Will be interesting to see what 2025 comes out at. 2024 was 4% gdp growth. 2025 will be year 1 of drastically reduced aid hundreds of millions slashed by Trump admin wouldn’t be suprised if next 3-4 years growth slows.

Yes, we need Security and strong institutions which leads to property rights being respected and people knowing investments safe. Good ROI in Somalia just need more business confidence, risk to high for a lot of folks on sideline today

 

[Idilinaa]

Damn I didnt even think about this aspect. Your right though. A school i used to go to in bossaso when I was there for dhaqancelis was charging $30 dollars a month per student which is $360 dollars a year and the school was mainly non-diaspora and you could tell most of these families weren't well off and people were paying prices like this 10 years ago.

All the schools would shut down if people didn’t have the ability to pay for them. Yet schools, universities, and educational institutions have been expanding and proliferating. How can private services grow in the absence of spending power and demand? You can’t just say it’s because of remittances.

Look at other countries when deflation (falling prices) and weak consumer spending impact businesses , demand matters.

In the World Bank survey I shared, only 8% of households nationwide (urban and rural combined) relied on remittances as their main income in 2017–2018. In many areas, the number was as low as 3%, and the highest recorded was 13%. Basically 92% of households relied primarily on small businesses, wage labor, fishing, or agriculture for their livelihoods.

If services and consumption totaled $20.4 billion in 2018, then remittances represented only 6%, as the World Bank’s mobile money chart shows about $1.6–$2.0 billion (with P2P included). When you compare this to the rest of GDP ($56.8 billion, or 64% of the economy), it becomes clear that remittances only represented about 2% of the total economy.

Other testimonials also show that families pay for education from the income they earn domestically, not primarily from remittances.

Even if you tried to argue that remittances explain it, the numbers wouldn’t add up. If the average amount sent is $420 per month, you’re already implying Somalis earn well above $600–$800 per year. And how could just 1 million diaspora members possibly support 15–20 million people in Somalia through remittances alone to pay for a diverse range of private services? Structurally, it makes no sense no matter how you try to rationalize it

 

[Thegoodshepherd]

@Midas @Idilinaa I was in Somalia & Kenya earlier in the summer. You are living in lala land if you think Somalia even approaches Kenya in nominal GDP per capita let alone ppp terms.

Kenyans are 3x richer than Somalis in nominal terms and 4x richer in ppp terms. You would usually expect the gap in ppp terms to be smaller, but since Somalia has a dollarized economy and is massive net importer its GDPpc ppp is lower than expected.

Somalia is an incredibly poor country. The poorest in East Africa barring Burundi and South Sudan. Nothing I saw while I was there changed my mind. I did not see anything that contradicts this assessment.

 

[Midas]

@Midas @Idilinaa I was in Somalia & Kenya earlier in the summer. You are living in lala land if you think Somalia even approaches Kenya in nominal GDP per capita let alone ppp terms.

Kenyans are 3x richer than Somalis in nominal terms and 4x richer in ppp terms. You would usually expect the gap in ppp terms to be smaller, but since Somalia has a dollarized economy and is massive net importer its GDPpc ppp is lower than expected.

Somalia is an incredibly poor country. The poorest in East Africa barring Burundi and South Sudan. Nothing I saw while I was there changed my mind. I did not see anything that contradicts this assessment.

Where exactly did you go in kenya ? I doubt you left Nairobi or explored any of the poorer areas in the city. Alsp Was anything in Nairobi way more expansive than when you were in somlaia ?

If you've been to somalia you know how expansive everything is just do the calculations. $800 gdp per capita. Means $60 dollars a month. Could somebody actually live off $60 dollars a month in any city in somalia ?

 

[Idilinaa]

@Midas @Idilinaa I was in Somalia & Kenya earlier in the summer. You are living in lala land if you think Somalia even approaches Kenya in nominal GDP per capita let alone ppp terms. Kenyans are 3x richer than Somalis in nominal terms and 4x richer in ppp terms. You would usually expect the gap in ppp terms to be smaller,

You were in Kenya? Which part of Kenya? Because 90% of Nairobi actually live like this:



1% of people control all the wealth and with sizeable amount being foreign multinationals who invest then send billions back abroad.



This short documentary explains on the ground impact of this inequality:


So even the GDP per capita or ppp that you are trying to cite doesn't accurately reflect the true income of most Kenyans.

So don't even kid yourself you are far removed from the on ground realities of how most people in Kenyans live just like you are far removed from the realites how Somalis actually live in Somalia. So you are the one who lives in la la land , i went to Kenya kulaha.

Why do you think Kenyans in Kenya percieve Somalis as having more wealth than them?

It's because they see this difference in living conditions see this caption:

 

[reer]

@Midas @Idilinaa I was in Somalia & Kenya earlier in the summer. You are living in lala land if you think Somalia even approaches Kenya in nominal GDP per capita let alone ppp terms.

Kenyans are 3x richer than Somalis in nominal terms and 4x richer in ppp terms. You would usually expect the gap in ppp terms to be smaller, but since Somalia has a dollarized economy and is massive net importer its GDPpc ppp is lower than expected.

Somalia is an incredibly poor country. The poorest in East Africa barring Burundi and South Sudan. Nothing I saw while I was there changed my mind. I did not see anything that contradicts this assessment.

the dollarization of the somali economy + qaaraan culture makes it seem richer than it is. a teacher making 200-250 dollars is more than a teacher in egypt or syria. but somalia lacks infrastructure industry etc.

 

[Idilinaa]

but since Somalia has a dollarized economy and is massive net importer its GDPpc ppp is lower than expected.

Somalia is an incredibly poor country. The poorest in East Africa barring Burundi and South Sudan. Nothing I saw while I was there changed my mind. I did not see anything that contradicts this assessment.

Use your common sense a little. How are Somalis paying for imports to begin with? You need capital, it doesn't matter if it comes in dollar or another currency. So you are only contradicting yourself. You simply cannot have high consumer spending that exceeds over 100% of the supposed claimed GDP without having money.

Poor African country's actually export more than they import, because they cannot pay for goods coming from abroad, so what their import is tiny.

Another thing worth mentioning is how i also pointed out in another thread that trade stats like exports/imports is distorted by Somali businesses engaging in transnational practices:

I covered it in that thread i linked: There is actually a lot of industrial development/production going on, and Somalis are incredibly super active in logistics , import/exports and multinational trade.

Ethiopia raising minimum civil servant salary from $35 to $44 per month

@Shimbiris @novanova @Barkhadle1520 @Neptune @Zak12

Had to quickly come back and share this with you all. I found another major Somali business conglomerate that really puts things into perspective.

Their headquarters is in Mogadishu, they have multiple branch offices across various towns, and even an international office in the UAE.

Shakir Group

Building Excellence since 1982

shakirgroup.com

View attachment 372532


What’s fascinating is how some of these conglomerates start as trading companies focused on import/export and logistics, then diversify into multiple sectors and reinvest in local manufacturing. For example, this group manufactures furniture and mattresses in Somalia.

View attachment 372530
View attachment 372533



I guess I was right , they use the UAE to bypass trade restrictions and credibility issues that Somalia faces, and from there they move products directly.


It really looks like Somalia’s main export markets are East African countries and the UAE/Turkey, with the UAE acting as the main funnel. Goods produced in Somalia livestock, agriculture, fish, manufactured items often go first to Dubai. From there, they’re re-exported globally under UAE paperwork. On paper, this makes Somalia’s exports look smaller, because they show up in UAE trade statistics instead of Somalia’s.

The same distortion happens with imports. Many Somali businesses set up headquarters or hubs abroad, run factories there, and then export products back into Somalia. It shows up as “imports,” but most of the profits flow back to Somali owners.

Take tuna as an example. OMAAR Tuna (which recently set up a tuna plant in Somalia), Jazeera Tuna, and likely Qandala Tuna all source fish locally, package it abroad, and sell it back into Somalia’s market while also exporting internationally. So in trade stats it looks like Somalia is “importing canned tuna,” but in reality Somalis are selling their own tuna back to themselves while also selling it to other markets. The value chain and profits still go back to Somalia. They employ local Somali fishermen, processers

And this distortion in exports is bigger than just tuna. A lot of Somali goods are funneled through Dubai, Nairobi, or Turkey before reaching global markets. That’s why they don’t show up neatly as “Somalia’s exports,” even though the business activity and profits connect back home. Now with local factories like SomTuna, Habo, and Bareeda operational inside Somalia, more of the processing is happening locally. But since much of their output still gets re-exported through hubs like Dubai, the same trade distortion continues it doesn’t always show up cleanly as “Somali exports,” even though the value and profits are Somali.

It makes a lot of sense, actually. I remember @Shimbiris saying how he grew up eating Somali canned and processed food in the UAE. At the time it sounded interesting, but now it really clicks.

It also makes sense how local fishermen can earn $1,500–$3,000 a month. Their catch moves through a value chain: first sold to local processors, then to manufacturers/packagers, then to distributors, then to retailers, and finally to consumers. The same thing happens with banana farmers, who can earn around $18,000 a year (as that study showed). The key is that the longer and stronger the value chain, the bigger the income opportunities it creates. And since much of that chain is controlled by Somali businesses, the profits largely stay within Somali hands and cycle back into the economy.





The same goes for Frankincense. Many Somali-owned businesses distill it into various products abroad to bypass accreditation, certification, and lab setup bottlenecks. They then package, brand, and sell it to different markets. For example:


View attachment 372535
View attachment 372536

They sell it even at the BBS mall in Eastleigh:

https://bbsmallnairobi.com/store/dhulkii-lubaanta/

Another company I found on LinkedIn appears to be part of multiple businesses owned by descendants of the Majerteen royal family, who collectively inherited and manage the frankincense trees.
View attachment 372537

It actually surprised me how many Somali owned companies are distilling abroad in the UK/West or UAE while being registered both there and in Somalia. This is ironic considering the misleading narratives online about exploitation. While that may have been true over a decade ago, today Frankincense harvesters are likely earning a decent income from a value chain they effectively control. Meanwhile, the Somali owned companies probably generate profits in the millions, and diaspora entrepreneurs have even built sustainability mechanisms to manage operations.


As far as I know, Botanika is the only company that has successfully bypassed barriers to central distilling locally. However, this setup distorts Somalia’s trade/export statistics because the value and profit return is much higher than what official figures suggest.

I suspect a similar dynamic exists with gold. Somali trading companies headquartered abroad often purchase gold and then resell it to Somali businesses or retailers, who in turn sell to wealthy customers or distribute it globally. In effect, Somalis act as their own middlemen in their own trade.

For example, this one company has offices in both the UAE and Somaliland located in Hargeisa’s Burj Omar Business District and the Gold Souq, where Somali shops operate. According to their website, they manage billions in assets owned by 50,000 Somali investors, who receive monthly returns. They fund gold mining and processing operations in Somaliland and maintain a transparent supply chain that complies with Islamic finance rules and certifications:
View attachment 372538

In one of Somaliland industrial survey on various factories in the country, they actually point this out that some of these companies cater to foreign markets but their exports are indirect.
View attachment 372542




Let me show you an example

It's not just UAE, thats just the import hub that use to re-export it globally, some of these business men set up factories abroad and start packaging Tuna they import from Somalia that fishermen sell to local processors who then sell it Somali export companies before it reaches Somali manufacturers/processors abroad.

View attachment 372543
View attachment 372545

I remember a few years ago Somalis thought Thailand Manufacturers were stealing Somali fish and branding it to later resell it, but looking back now it was actually local Somali business men doing this lmaao

Waa kee waddanka "qaatay" magacii warshadda kalluunka ee Laasqoray? - BBC News Somali

Howshii warshadda Kalluunka Laasqoray ayaa in muddo ahba hakad ku jirtay

www.bbc.com

These same local business men contribute to local income generation and job creation for Somali fisheries unironically.

They really do operate much like multi-national corporation.

This one operates factories in Mogadishu, sources agricultural products from Somalia but is headquartered in Dubai. Dubai is treated as a gateway into global markets.

Som Seed Agri – Specialists in Sesame

somseedagri.com

View attachment 372553


But look how many locations they exist in:
View attachment 372552

 

[Midas]

the dollarization of the somali economy + qaaraan culture makes it seem richer than it is. a teacher making 200-250 dollars is more than a teacher in egypt or syria. but somalia lacks infrastructure industry etc.

But ask yourself why would that be the case ? Somalia isnt some country generating billions od dollars from selling its natural resources. Nor are we a country with several tens of millions of people who do agriculture and have the wealth concentrated in the capital .

So where does the money to pay a teacher $200 dollars as a monthly salary come from ?

 

[Idilinaa]

Why do you think Kenyans in Kenya percieve Somalis as having more wealth than them?

It's because they see this difference in living conditions see this caption:

You will find the same type of modern high-rise apartment blocks he is showing in the video , being built all over major cities like Mogadishu , Hargeisa, etc and as that World Bank survey showed most Somalis live in improved housing across all towns in villas or apartments:

Mogadishu


Hargeisa:


When you examine this, you will notice how Kenyans often make a fuss over things that are common or ordinary in Somalia, largely because they lack proper housing and are not very entrepreneurial. No one in Somalia will make a big deal about you living in an apartment or a villa, or starting and running a business. Why? Because poverty is relative. You won’t be perceived as wealthy or exceptional for having or doing something that is common or ordinary. But it actually highlights that the wealth gap and inequality between people is much smaller in Somalia.

 

[Hilmaam]

 

[Thegoodshepherd]

Use your common sense a little. How are Somalis paying for imports to begin with? You need capital, it doesn't matter if it comes in dollar or another currency. So you are only contradicting yourself. You simply cannot have high consumer spending that exceeds over 100% of the supposed claimed GDP without having money.

Poor African country's actually export more than they import, because they cannot pay for goods coming from abroad, so what their import is tiny.

Another thing worth mentioning is how i also pointed out in another thread that trade stats like exports/imports is distorted by Somali businesses engaging in transnational practices:

I covered it in that thread i linked: There is actually a lot of industrial development/production going on, and Somalis are incredibly super active in logistics , import/exports and multinational trade.

Ethiopia raising minimum civil servant salary from $35 to $44 per month

Somalis are paying for their import bill with remittances and foreign aid.
https://www.somalispot.com/threads/...-2020-was-foreign-aid-and-remittances.118210/

Somalia is not a normal country, not even close.
It is a country that is incredibly dependent on outside support for its people to survive.

 

[Idilinaa]

Somalis are paying for their import bill with remittances and foreign aid.
https://www.somalispot.com/threads/...-2020-was-foreign-aid-and-remittances.118210/

Somalia is not a normal country, not even close.
It is a country that is incredibly dependent on outside support for its people to survive.

Remittances are about $2 billion per year, and foreign aid is around $1.3 billion, most of which flows through the government. Together, they don’t come close to explaining the overall consumption figures.

In 2023, household consumption from their own figures was $15 billion, compared to just $931 million in government consumption , that’s about 16 times larger.

I agree with you on that Somalia is a pretty unique country because it's a private sector driven and trade driven economy and that's where the wealth and foreign capital comes from and that is what supports people.

We discussed it in this thread:

Very weird discrepancy in the somali economy

@Idilinaa @Barkhadle1520 I think you guys might be intrested in this . I was looking at this report info from the official govt statsics twitter. If you look at the the government expenditure vs the household final expenditure the gap is honestly insane. Its $980 million for the govt and $15...

www.somalispot.com

Good observation, that ratio shows you two things. First, the economy is way bigger than what the official stats say, with a massive informal economy. And second, GDP growth here is clearly private-sector driven rather than state-driven. Even the $15 billion figure, as big as it looks, is still under-reported , it’s probably 2–times higher in reality.

It also shows Somalia isn’t actually foreign aid dependent. Most donor money or aid flows through the government budget or international orgs, but most of the real economic activity comes from households’ own income, business/trade, and investments from the diaspora.

So the economy is largely self-sustaining, independent of government spending or foreign aid.

I clocked another weird discrepancy when I was following debates about Trump’s tariffs like when he pointed out that a country like Lesotho exports way more to the US than it imports, and framed it as unfair. But really, that’s just because they’re a poor country. Then I thought back to how people always cite Somalia’s import numbers for different goods as proof of “dependency.”

But a poor country with weak purchasing power can’t import that much. The problem is they don’t have accurate domestic production data to compare it against, so they assume there’s an outsized import dependency. In reality, those import numbers are more of an indirect admission of how much domestic production is happening and how much wealth actually exists in the economy. At the end of the day, a country can only import what it can pay for.

 

[Idilinaa]

Remittances are about $2 billion per year, and foreign aid is around $1.3 billion, most of which flows through the government. Together, they don’t come close to explaining the overall consumption figures.

In 2023, household consumption from their own figures was $15 billion, compared to just $931 million in government consumption , that’s about 16 times larger.
View attachment 372755


I agree with you on that Somalia is a pretty unique country because it's a private sector driven and trade driven economy and that's where the wealth and foreign capital comes from and that is what supports people.

We discussed it in this thread:

Very weird discrepancy in the somali economy

@Idilinaa @Barkhadle1520 I think you guys might be intrested in this . I was looking at this report info from the official govt statsics twitter. If you look at the the government expenditure vs the household final expenditure the gap is honestly insane. Its $980 million for the govt and $15...

www.somalispot.com

Also @Thegoodshepherd another thing to point out aside from the fact that foreign currency comes into the country through trade , import/export and cross border logistics by transnational Somali businesses and Somali businesses who repatriate profit from abroad.

It's also important to point out that most of the Diaspora capital does not actually come from remittances at all, most of the money is direct investment into various sectors.

There is an important survey that managed to separate this in 2019:

(nearly 60% were active investors) commited funds generally in the range of 5,000 to 50.000 with some to the level of 100.000 .
''Investments were distributed across sectors with the highest to agriculture, real estate and education and wells/boreholes for water supply, motivations the report cited financial return, social good and potential to return in the future."

I also talk about it more here:

Diaspora investments are actually much higher than the outdated $1.3–2 billion figure that’s been recycled for over a decade. Most of the capital coming from the diaspora is direct investment, not just remittances. In that 2019 survey, they made the distinction but the actual investor numbers (people contributing $5,000–50,000 each, and some putting in $100,000 or more) never really get properly added up.

Most money diaspora send go to finance economic development and is distributed to various sectors schools, business, hospitals, factories, services and humanitarian activities

The diaspora has lifted millions of Somalis out of poverty, providing jobs, housing, electricity, water, sanitation, and access to finance. Their impact can’t be overstated.

The idea that Somalia is massively supported by handouts from its diaspora is outdated. People keep repeating figures from 2012 or earlier numbers tied to the aftermath of the 2007–2009 invasion and occupation. That period saw the economy collapse, sanctions imposed, bank freezes, and fund seizures.

During those years, many Somalis were forced to rely on the diaspora more than they normally would. This changed after the return of the diaspora, foreign direct investment (FDI), and the resumption of domestic production following the establishment of a new transitional federal government in 2012.


According to a UN/World Bank study, in 2017/18 remittances accounted for only 6% of mobile money transaction value.

Mobile money represents over 90% of all transfers in Somalia, valued at about $2.7 billion per month , roughly 36% of GDP. That means remittances are around 2% of the economy

That's because from 2012 their importance fell dramatically:

''However experts acknowledged that the role of MTO in the economy has been declining since 2012 due to the return of many Somali Diasporas , and increase in the production of the domestic economy as result of new investments from both foreign investors and Somalis.''

You can see this in another 2020 survey . Remittances played a very small role for most peoples incomes. It's only like a small portion like 3-14% of their income in most places so by and large when its received its treated as a supplemental income.

Households mostly relied on wage labor or small businesses.

Overall only 8% of rural and urban population counted on remittances as their main source of income.
26% of rural households rely on agriculture and fishing and 16% rely on small businesses.

The diaspora for years now have functioned more like FDI(investors) in actuality and not a lifeline keeping people afloat.

Thanks to their return and investments, about 92% of Somalis support themselves through wage labor, business, agriculture, or fishing. The majority of the population is economically active and self-sustaining.