Somalia National Transformation Plan (NTP) 2025-2029

[Midas]

they are often overshadowed by political theatrics

Speaking of politics its actually because of the geopolitical situation around the world and the long term trends that im hopeful for somalia.
Ita pretty clear that at least for the next 5 years and possibly even 10 years. We will be one of the few islands of stability and destinations for investment in the region. You've got the ethiopia situation which seems like it'll explode soon and then the iran-israel conflict which will likely start up again. Plus theres Russia who i doubt will just quietly wind down after the Ukraine war ends.

These combined with a few other long term trends feels like it'll increase the value of somalia's natural resources as well as the strategic importance of our location

 

[Idilinaa]

Speaking of politics its actually because of the geopolitical situation around the world and the long term trends that im hopeful for somalia.
Ita pretty clear that at least for the next 5 years and possibly even 10 years. We will be one of the few islands of stability and destinations for investment in the region. You've got the ethiopia situation which seems like it'll explode soon and then the iran-israel conflict which will likely start up again. Plus theres Russia who i doubt will just quietly wind down after the Ukraine war ends.

These combined with a few other long term trends feels like it'll increase the value of somalia's natural resources as well as the strategic importance of our location

Somalia will become an Island of stability and experience sustained rapid economic growth, the regions will all come under economic cooperation agreements and create a security pact. Kinda like Post-War Europe where they made compromises.

Thats what i predict based on what i observe from the trajectory of how things are currently going.

There is far more trade and cross border-trade and economic inter-linkiages between regions now then what it was like few decades back. All the major companies, banks and businesses etc operate branches and hold investment in to various parts of the country. Same with private individuals that would secondary or third businesses in various cities/regions

Economic interdependence raises the opportunity cost of conflict, pushes communities to communicate, and builds stable networks of alliances where regions have stronger incentives to protect each other rather than fight.

 

[Idilinaa]

View attachment 373480


Somalia will become an Island of stability and experience sustained rapid economic growth, the regions will all come under economic cooperation agreements and create a security pact. Kinda like Post-War Europe where they made compromises.

Thats what i predict based on what i observe from the trajectory of how things are currently going.

There is far more trade and cross border-trade and economic inter-linkiages between regions now then what it was like few decades back. All the major companies, banks and businesses etc operate branches and hold investment in to various parts of the country. Same with private individuals that would secondary or third businesses in various cities/regions

Economic interdependence raises the opportunity cost of conflict, pushes communities to communicate, and builds stable networks of alliances where regions have stronger incentives to protect each other rather than fight.

They also point this out in one of the studies relating Somalia's cross border trade that i have shown :

As it says "‘Finally, it promotes solidarity among border communities, thereby contributing to regional stability"

 

[Guure⁸]

I really like reading your take on things, really optimistic guy

Fr she has a source for everything masha allah

 

[Idilinaa]

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

From the NTP i suspect they use the world bank survey numbers without realizing the full implication of this employment distribution.

This actually shows you that most of Somalia's economy now is service, market/trade and finance driven. That's how most people make their money.

 

[Idilinaa]

From the NTP i suspect they use the world bank survey numbers without realizing the full implication of this employment distribution.

This actually shows you that most of Somalia's economy now is service, market/trade and finance driven. That's how most people make their money.

@Midas @Barkhadle1520 @Thegoodshepherd

The full implication of this is that it shows increasing urbanization and diversification away from purely rural/agropastoral livelihoods. A majority of Somalis now work in trade, transport, logistics, telecom, retail, finance, education, health, hospitality and other services.

It also shows you fewer people producing more output means agriculture is becoming more efficient, mechanized, or linked to processing/value chains. So it reflects commercialization of agriculture and livestock.

The other thing this employment distribution shows is that industrial base is emerging. Almost 1 in 5 people work in industry, small factories, construction, utilities, and processing. This signals the early stages of industrialization, often a key step in economic development.

Many developing countries start with agriculture heavy employment and slowly move to industry, then services. Somalia seems to be skipping directly to a service dominated structure, which is common for economies with strong trade networks, transnational capital inflows, and vibrant private sectors.


It also provides evidence of a monetized, market-based economy. Services and industry rely on cash transactions, financing, and infrastructure. So it matches what i pointed out before in the Ethiopian Exposed thread about the growth in private financial institutions, digitization, and business cooperatives :

One of the clearest signs of this capital accumulation is the rapid expansion of Somalia’s financial sector. You can actually see how many services and institutions have sprung up just to handle the sheer volume of capital flows, transactions, and investments coming from both diaspora and exports. This isn’t just about banks existing , it’s about the constant movement of money, reinvestment, and the multiplier effect it creates for private businesses and wages. The IMF even pointed this out recently in their piece on how financial conglomerates are shaping Somalia’s tax system:

Navigating the impact of financial conglomerates on Somalia's tax system

blog-pfm.imf.org

Compare that with Ethiopia: the state keeps a tight grip on banking, private banks aren’t allowed in, and most capital gets locked into mega projects or debt repayment rather than flowing into the private sector. As a result, there’s very little financial intermediation farmers, small businesses, even doctors don’t get the kind of access to capital that Somalis do. That’s why Ethiopia has low wages and weak domestic purchasing power, while Somalia’s private sector and service economy are far more dynamic despite all its challenges

I actually explained it somewhat in the Kenyan President thread i made:

I’ve come to understand now that for other Africans, like Kenyans, the lack of access to capital due to weak financial systems makes it hard for them to grasp how Somalis are able to build houses, run malls, finance hospitals, or move huge sums across borders. Since in their economies those financial channels barely exist, they can’t imagine it happening through legitimate means

Despite this, Kenyans online still recycle this myth, even though there’s no evidence linking Somali capital to illicit or criminal activity. Most Somali investment stems from legitimate family or community-run businesses that reinvest across sectors and borders.

The key driver behind this? The financial system , particularly Hawala networks and cooperative financing.

Also ties into what i showed and explained here:

It’s also much easier now than before to set up a business without start up capital. In the past, people relied mostly on the hawala system and money-lending schemes, but today there are micro-financing options, development funds, and even commercial bank loans.

Here are a few examples you can check out:

• https://raasmfi.com/so/
• https://kimsmfi.com/
• https://amalbankso.so/micro-finance/
• https://maalmicrofinance.com/
• https://himilomfi.com/
• https://asalmicrofinance.com/
• https://gargaara.com/

I read that there is like 13 microfinance institutions , and they have pretty much boosted business developments. Finance everything from agri-businesses, renewable energy, fishing, Small and Medium Enterprises (SMEs), Asset financing (like purchase of a car) . Some of them even finance factories.

Even Dahabshiil has its own microfinance arm with branches across Somalia:

About us - Empowering People

microdahabmfi.com

And to give you an idea of the recognition Somali MFIs are getting ,one of them even won an international award:

Somalia-focused Kaah International Microfinance Services wins $100,000 EFICA 2017 | Salaam Gateway - Global Islamic Economy Gateway

Kaah International Microfinance Services (KIMS) has been named the 2017 recipient of the Ethical Finance Innovation Challenge and Awards (EFICA), which is co-organised by Thomson Reuters and Abu Dhabi Islamic Bank.

salaamgateway.com

On top of that, already established businesses in Somalia often invest in new ventures. The business climate is surprisingly open , people don’t really care what qabiil you’re from if your idea is solid.

Whats particularly interesting is that these MFI came together and formed an association. It reminds me of the cooperative approach that exist in other sectors where dozens of company's, herders, farmers, fishermen and factories come together to grow and scale and improve.

This is what i hope will be replicated in our political process in the near future where regions come together to form a union/coalition in mutual uplift/prosperity and the increase in local and grassroots politics to boost inclusiveness. This is how things acted back in our history.

Btw, Salaam Bank gives out annual free micro-financing to businesses https://www.garoweonline.com/en/new...-bank-continues-to-help-small-businesses-grow

All the banks have micro-financing options and various sharia complaint loans to businesses , asset or home purchases.

There are 13 licensed commercial banks by the Central Bank operating in Somalia with each having multiple branches. Most of these commercial banks are what you would call community banks
https://en.wikipedia.org/wiki/Community_bank


In this study they showed that countries that local small banks help economies grow. Basically, countries where small, private, locally owned banks have a bigger market share and run more efficiently tend to have stronger economic performance.
https://link.springer.com/article/10.1023/B:FINA.0000020659.33510.b7

They also found that state owned banks had unfavorable effects on economic performance.

Big advantage to Somalia that the banking system is dominated by community & domestic commercial banks is that profits and lending get recycled back into the local economy, instead of being sent abroad (like with foreign banks) or eaten up by inefficient state run systems. And on top of it they have extremely robust digital banking and fintech infrastructure in place which increase financial inclusion. Being they follow Islamic principles, that they are essentially non are predatory lenders and they are extremely ethical and responsible meaning no interest based debt traps, and financing is tied to real economic activity (asset-based).

So if any of you are planning on starting a business in Somalia or to purchase assets , don't hesitate to reach out to them or apply.

 

[Midas]

@Idilinaa it looks like they've officially confirmed that electricity acess is at 69.1% and their goal is to reach 80%

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">“According to the National Transformation Plan, Somalia is committed to expanding access to sustainable energy by increasing electricity coverage from 69.1% to 80%. This will be achieved through strategic investments in a diversified energy mix, thereby broadening the electricity… <a href="https://t.co/Lyx2HmZ7PK">pic.twitter.com/Lyx2HmZ7PK</a></p>&mdash; Hormuud Telecom (@Hormuud) <a href="">September 18, 2025</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

 

[Barkhadle1520]

From the NTP i suspect they use the world bank survey numbers without realizing the full implication of this employment distribution.

View attachment 373564

I love this graph excellent graph, Agriculture being 26% makes sense cause around 20% is still nomadic and the 6% are the few people cultivating stuff in koonfur and places like gabiley, very low number tbh, wish it was higher

Industrial sector employing 18% is surprising

 

[Barkhadle1520]

@Midas @Barkhadle1520 @Thegoodshepherd

The full implication of this is that it shows increasing urbanization and diversification away from purely rural/agropastoral livelihoods. A majority of Somalis now work in trade, transport, logistics, telecom, retail, finance, education, health, hospitality and other services.

It also shows you fewer people producing more output means agriculture is becoming more efficient, mechanized, or linked to processing/value chains. So it reflects commercialization of agriculture and livestock.

The other thing this employment distribution shows is that industrial base is emerging. Almost 1 in 5 people work in industry, small factories, construction, utilities, and processing. This signals the early stages of industrialization, often a key step in economic development.

Many developing countries start with agriculture heavy employment and slowly move to industry, then services. Somalia seems to be skipping directly to a service dominated structure, which is common for economies with strong trade networks, transnational capital inflows, and vibrant private sectors.


It also provides evidence of a monetized, market-based economy. Services and industry rely on cash transactions, financing, and infrastructure. So it matches what i pointed out before in the Ethiopian Exposed thread about the growth in private financial institutions, digitization, and business cooperatives :







Also ties into what i showed and explained here:

Pretty sure most start ups are cooperative businesses, like multiple people coming together to invest in an idea

 

[Barkhadle1520]

@Idilinaa it looks like they've officially confirmed that electricity acess is at 69.1% and their goal is to reach 80%

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">“According to the National Transformation Plan, Somalia is committed to expanding access to sustainable energy by increasing electricity coverage from 69.1% to 80%. This will be achieved through strategic investments in a diversified energy mix, thereby broadening the electricity… <a href="https://t.co/Lyx2HmZ7PK">pic.twitter.com/Lyx2HmZ7PK</a></p>&mdash; Hormuud Telecom (@Hormuud) <a href="">September 18, 2025</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

So is it the highest in East Africa ?

 

[Midas]

So is it the highest in East Africa ?

I would assume so. Id have to look into Kenya to be 100% sure. It wouldnt surprise me though because only 30% of Kenyans live in urban areas. As soon as you leave Nairobi you see the massive difference between Nairobi and other Kenyan cities. I cant imagine the difference when you leave urban areas

 

[Barkhadle1520]

I would assume so. Id have to look into Kenya to be 100% sure. It wouldnt surprise me though because only 30% of Kenyans live in urban areas. As soon as you leave Nairobi you see the massive difference between Nairobi and other Kenyan cities. I cant imagine the difference when you leave urban areas

Nah Kenya is higher actually with nearly 80%, they're leagues ahead, their consumption by kwh is also higher

 

[Midas]

Nah Kenya is higher actually with nearly 80%, they're leagues ahead, their consumption by kwh is also higher

Yeah your right it looks like they've already reached 80%

 

[Idilinaa]

@Idilinaa it looks like they've officially confirmed that electricity acess is at 69.1% and their goal is to reach 80%

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">“According to the National Transformation Plan, Somalia is committed to expanding access to sustainable energy by increasing electricity coverage from 69.1% to 80%. This will be achieved through strategic investments in a diversified energy mix, thereby broadening the electricity… <a href="https://t.co/Lyx2HmZ7PK">pic.twitter.com/Lyx2HmZ7PK</a></p>&mdash; Hormuud Telecom (@Hormuud) <a href="">September 18, 2025</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

I think they mistyped it in the tweet. It’s actually 61.9%, according to 2022 data quoted in the NTP and Household Budget Survey released by the government. They reported electricity access at around 80% in urban areas and about 40% in rural areas. With the urban population at roughly 64% and the rural population at 24%, I suspect the discrepancies pulling the overall figure down come from IDP populations(2-3%) and semi-nomadic(12%)

For context, electricity access was only 15% nationally (and 33% urban) in 2012, and much of the grid then was low-voltage. Today, many areas have upgraded to high-voltage grids with significantly reduced losses.

The government doesn’t really highlight or emphasize this progress which is understandable, because they played very little role in it. The real drivers were local private companies that built numerous microgrids and metro-grids, funded through pooled community capital and diaspora investment.

This is also why they tend to underestimate how quickly the remaining gap can be closed , likely within 1–3 years and why they keep reusing outdated figures, often from older World Bank surveys mixed with 2012–2015 power system data. Given the pace of expansion, the real figure is probably already higher by 2025.

If you look at how the Kenyan government publicly celebrates its electricity achievements, it’s striking that Somalia’s progress has actually been greater delivering far more reliable energy supply, expanded through innovation and technological leapfrogging. Kenya’s gains were heavily bankrolled by IMF loans and public debt, while Somalia achieved its gains through market-driven mechanisms and they had rebuild the power system from scratch after the collapse.

It’s unfortunate that the remarkable strides Somalis have made across nearly every metric are undervalued simply because some weren’t state-driven, and thus often overlooked in policy narratives.

Perhaps with stronger cooperation between the public and private sectors she mentioned in the video and better data collection, the narrative will start to reflect this success.

 

[Idilinaa]

Yeah your right it looks like they've already reached 80%
View attachment 373676

This is what their own government published in July.

But the reality is that their electricity system is highly unreliable , they experience frequent losses and blackouts:

https://nation.africa/kenya/business/kenya-power-faces-fines-for-unreliable-electricity--3941918

Kenya: A renewable energy hub with frequent blackouts – DW – 01/02/2024

Kenya boasts around 87% renewable energy generation, yet its citizens are left fumbling in the dark. Experts say frequent nationwide power outages in recent months show weaknesses in the system that need attention.

www.dw.com

That said, I wouldn’t single Kenya out for this, because frequent outages, high system losses, and even nationwide blackouts are common across much of Africa , including Uganda, South Africa, and Ethiopia.

 

[Idilinaa]

I love this graph excellent graph, Agriculture being 26% makes sense cause around 20% is still nomadic and the 6% are the few people cultivating stuff in koonfur and places like gabiley, very low number tbh, wish it was higher

Industrial sector employing 18% is surprising

Only about 12% of the population are semi-nomadic (according to HBS 2022). Most of what is categorized as agriculture actually includes livestock farmers, fishermen, and crop farmers.

These sectors have become largely commercialized rather than subsistence based , so livestock, farming, and fishing are no longer primarily for household consumption. Most people now engage in these activities to sell their products and generate income or profit. But it's mostly concentrated in rural areas(in villages) that engage in that type livelihood.

 

[Midas]

The government doesn’t really highlight or emphasize this progress which is understandable, because they played very little role in it. The real drivers were local private companies that built numerous microgrids and metro-grids, funded through pooled community capital and diaspora investment.

I also think up until the last 2-3 years they had absolutely no awareness of any of this progress either. Its only when they've begun to collect information and researchers publishing stuff that they realized they had something they could work with.

It also definitely feels like companies co-operating with the government is a trend in the last 2 -3 years and really companies like hormuud seem to have started to advertise what they've done for the community for publicity and awareness reasons

 

[Idilinaa]

Also @Midas speaking of livestock commercialization, not sure if you saw me shared this a few weeks ago in a different thread.

From an IGAD/ICPALD study, even in 2013 like a year into Somalia's 2nd economic recovery they found a discrepancy between their own direct production estimates and SBS/IMF GDP figures when they directly measured the livestock economy.

As they said:
''The Production based approach places the contribution of the Livestock to the Somalia economy at 8.152 billion in 2013. This figure is above the IMF estimate of Agriculture GDP of 5.7 billion USD where livestock contributes 2.28 billion."

They even explain that the figures given by the Somali government and the IMF are due to lack of accurate statistical data and differences in methodological approach. So basically livestocks GDP value was underestimated by 103%

Now this isn't the most interesting part about it. The most interesting part is that they found that people would use livestock as a financial vehicle and convert them into financial assets. Use it as ''credit" meaning people could liquidate herds to access funds, or treat them as collateral/financial reserves. It compares this to the opportunity cost of formal credit finance, showing that livestock filled the role of self-financing or self-insurance for business activity.

So essentially, livestock acted like capital , a store of wealth that people could convert into liquid financial resources to start or expand businesses, buy goods, or invest in other sectors.

Now why am i mentioning this? because it directly supports my earlier point that Somalis converted livestock wealth into capital for business and trade, which then accelerated urbanization and diversification of the economy.

 

[Barkhadle1520]

It also definitely feels like companies co-operating with the government is a trend in the last 2 -3 years and really companies like hormuud seem to have started to advertise what they've done for the community for publicity and awareness reasons

Early 2024 they signed a bill on Public private partnerships, havent read it but looks like they realized the full potential of the private sector

 

[Midas]

Also @Midas speaking of livestock commercialization, not sure if you saw me shared this a few weeks ago in a different thread.

From an IGAD/ICPALD study, even in 2013 like a year into Somalia's 2nd economic recovery they found a discrepancy between their own direct production estimates and SBS/IMF GDP figures when they directly measured the livestock economy.

As they said:
''The Production based approach places the contribution of the Livestock to the Somalia economy at 8.152 billion in 2013. This figure is above the IMF estimate of Agriculture GDP of 5.7 billion USD where livestock contributes 2.28 billion."

View attachment 373683

They even explain that the figures given by the Somali government and the IMF are due to lack of accurate statistical data and differences in methodological approach. So basically livestocks GDP value was underestimated by 103%
View attachment 373684

Now this isn't the most interesting part about it. The most interesting part is that they found that people would use livestock as a financial vehicle and convert them into financial assets. Use it as ''credit" meaning people could liquidate herds to access funds, or treat them as collateral/financial reserves. It compares this to the opportunity cost of formal credit finance, showing that livestock filled the role of self-financing or self-insurance for business activity.

So essentially, livestock acted like capital , a store of wealth that people could convert into liquid financial resources to start or expand businesses, buy goods, or invest in other sectors.

View attachment 373685

Now why am i mentioning this? because it directly supports my earlier point that Somalis converted livestock wealth into capital for business and trade, which then accelerated urbanization and diversification of the economy.

Fascinating i wonder if the livestock as credit is a new innovation or if it was just a standard cultural practice.

Also, it seems like the actual implication of them underestimating the livestock contribution to gdp by 4x is that the economy is several times larger. Do they consider that in the paper ?