Somali's GDP per Capita is false

[Barkhadle1520]

At first I thought even 5k sounded ridculous because I was thinking of vietnam and indonesia which are Also around there. But then j realizes that 5k would only gives us a gdp of 90 billion which is way smaller than Vietnam or Thailand's gdp which is in the several hundred billions range. If we take kenya as the comparison which has a similar total gdp and then add in the fact that Kenya's wealth is very much concentrated whereas somalia's is much more equally istributed then you realize a 5k gdp per capita isnt unrealistic at all.

By the way I forgot to say but 90b$ is the 2018 data and Kenya was also around 90B$ at that time, if you add yearly GDP growth % which is between 3-4% every year until 2025, you get around 101B$ GDP with 5800$ GDP per capita.

Can't wait until this becomes official, economy nerds will have a hard time understanding how it's possible lol

 

[Midas]

By the way I forgot to say but 90b$ is the 2018 data and Kenya was also around 90B$ at that time, if you add yearly GDP growth % which is between 3-4% every year until 2025, you get around 101B$ GDP with 5800$ GDP per capita.

Can't wait until this becomes official, economy nerds will have a hard time understanding how it's possible lol

I think a lot of it comes from rhe fact that somali's undeveloped public sector means that a lot of public sector goods (like roads and education) are way behind what would be normal for our gdp per capita level. The lack of foreign investment also means that the tech transfers and development of certain more high-tevh industries never happened.

 

[Midas]

I think a lot of it comes from rhe fact that somali's undeveloped public sector means that a lot of public sector goods (like roads and education) are way behind what would be normal for our gdp per capita level. The lack of foreign investment also means that the tech transfers and development of certain more high-tevh industries never happened.

While the avg quality of education in somalia is probably higher due to children being educated in their native language. 30-40 of children are still not enrolled in schools. There also don't seemed to be standardized somali textbooks at all

We have about 21 thousand km's in total road compared to kenyas 180 thousand Km's

This is where the oil money would change everything. Since these kinds of public goods require billions in investment. The oil money would allows us to not take billions in debt that countries in africa did to invest in education and public infrastructure.

 

[bobby_hill-Punt]

Either the geel

This is making me miss Hargeysa I miss climbing five billion hills to explore

Abayo are you short ?

 

[zeilaprime]

There are two choices: 1) the stats that have been gathered by Somalis working for the UN, NGOs, the Somali government, African Union are reliable and factual or 2) there is a conspiracy against the failed state and Somalia is actually much richer than the stats show. Ill take option one.

 

[Idilinaa]

There are two choices: 1) the stats that have been gathered by Somalis working for the UN, NGOs, the Somali government, African Union are reliable and factual or 2) there is a conspiracy against the failed state and Somalia is actually much richer than the stats show. Ill take option one.

I don’t think there’s any deliberate conspiracy by the UN or World Bank.

Even the government and researchers openly acknowledge that they struggle to track the informal sector , which makes up about 80–90% of all economic activity or mobile money usage, which is how over 90% of the population conducts transactions, pays for services, and essentially manages their finances.


What they should do, as I’ve mentioned before, is rebase the economy , like many other countries have , and begin integrating data from mobile money platforms and the informal sector into their official estimates.

 

[Idilinaa]

While the avg quality of education in somalia is probably higher due to children being educated in their native language. 30-40 of children are still not enrolled in schools. There also don't seemed to be standardized somali textbooks at all

We have about 21 thousand km's in total road compared to kenyas 180 thousand Km's

This is where the oil money would change everything. Since these kinds of public goods require billions in investment. The oil money would allows us to not take billions in debt that countries in africa did to invest in education and public infrastructure.

I think a lot of it comes from rhe fact that somali's undeveloped public sector means that a lot of public sector goods (like roads and education) are way behind what would be normal for our gdp per capita level. The lack of foreign investment also means that the tech transfers and development of certain more high-tevh industries never happened.

They’ve been building a lot of new roads and highways over the past few years, so that trend is definitely continuing.

At this point, I think many have started to recognize the billions circulating within the economy, and there’s a clear push to accelerate development through Public-Private Partnership (PPP) models.

To me, it’s pretty obvious that the private sector will play a key role in strengthening the public sector. That’s where the real long-term sustainability lies.

 

[Idilinaa]

At first I thought even 5k sounded ridculous because I was thinking of vietnam and indonesia which are Also around there. But then j realizes that 5k would only gives us a gdp of 90 billion which is way smaller than Vietnam or Thailand's gdp which is in the several hundred billions range. If we take kenya as the comparison which has a similar total gdp and then add in the fact that Kenya's wealth is very much concentrated whereas somalia's is much more equally istributed then you realize a 5k gdp per capita isnt unrealistic at all.

Vietnam and Thailand have populations of around 71 to 100 million, and Kenya’s is about 55 million. If you go by GDP per capita, you’d assume Kenya is at around $1K, Vietnam at $5K, and Thailand at $7K.


But these are highly unequal societies. A large share of their GDP is concentrated in the hands of a small elite, meaning the average person earns far less than what the headline per capita figure suggests. A small group tends to monopolize most of that $100–500 billion GDP.


For Somalia, however, the situation is quite different. That same $100 billion or $5–6K (PPP) per capita is arguably more meaningful because wealth and ownership are more evenly distributed. Money circulates and is reinvested locally, rather than being hoarded or extracted by a small class.


Also, the way we’re estimating Somalia’s economic activity , by looking at actual earnings, prices, salaries, living costs, mobile money data, transaction volumes, etc. , gives a much more accurate and grounded picture. It reflects the real economy, not just abstract macro indicators.

 

[iley]

Same in Hargeisa, take a look at the Hargeisa suburbs, exact same style of cheap middle class homes can be observed all over the landscape
View attachment 363162

Average residential neighborhood in Hargeisa

View attachment 363163

Another beautiful exemple of Hargeisa

They have these residential estates near xamar too with darusalam. I visited again last year and they expanded quite a bit

 

[Idilinaa]

Vietnam and Thailand have populations of around 71 to 100 million, and Kenya’s is about 55 million. If you go by GDP per capita, you’d assume Kenya is at around $1K, Vietnam at $5K, and Thailand at $7K.


But these are highly unequal societies. A large share of their GDP is concentrated in the hands of a small elite, meaning the average person earns far less than what the headline per capita figure suggests. A small group tends to monopolize most of that $100–500 billion GDP.


For Somalia, however, the situation is quite different. That same $100 billion or $5–6K (PPP) per capita is arguably more meaningful because wealth and ownership are more evenly distributed. Money circulates and is reinvested locally, rather than being hoarded or extracted by a small class.


Also, the way we’re estimating Somalia’s economic activity , by looking at actual earnings, prices, salaries, living costs, mobile money data, transaction volumes, etc. , gives a much more accurate and grounded picture. It reflects the real economy, not just abstract macro indicators.

Go to the part where she talks about a better metric at @11:34

She shows a chart that help explain how the poorest countries are often the most unequal.

 

[balanbalis]

Abayo are you short ?

No Hargeisa is hilly

 

[Karim]

I agree with the notion that Somalia's GDP per capita is higher than 766 dollars but I wouldn't say it's 5k or even remotely close to that number.

Only a capable adult person can earn 300 dollars or more per month in Somalia, that leaves his dependents like his wife, kids and even sometimes his parents with minimal to no income. Maybe he recieves 100 or 150 dollars from his family members abroad, that would mean 450 dollars per month, and that money supports close to 7 or 8 people or more. Housing is cheap in Somalia, you can rent a villa that consists of 4 or 5 rooms with less than 100 dollars, the rest of the money will be spent on groceries, kids education and other basic necessities.

The question is how many adults earn that money if the population of adults (Male or Female) is less than 9 milllion or 8 million, I'd say half of them could potentially earn that. That leaves 3 or 4 million adults capable of earning 300 dollars per month, the remaining 14 million are jobless dependents that rely on the working 4 million.

Let's calculate it;

4,000,000 x450; 1.8 billion dollars per month, x 12 months; 21.6 billion per year. That would be the GDP, divided by 18 million, which is estimated population of Somalia in 2025: 1,200 dollars.

I'd say a GDP per capita of 1,200 dollars would be the closest to the truth.

 

[Idilinaa]

I agree with the notion that Somalia's GDP per capita is higher than 766 dollars but I wouldn't say it's 5k or even remotely close to that number.

Only a capable adult person can earn 300 dollars or more per month in Somalia, that leaves his dependents like his wife, kids and even sometimes his parents with minimal to no income. Maybe he recieves 100 or 150 dollars from his family members abroad, that would mean 450 dollars per month, and that money supports close to 7 or 8 people or more. Housing is cheap in Somalia, you can rent a villa that consists of 4 or 5 rooms with less than 100 dollars, the rest of the money will be spent on groceries, kids education and other basic necessities.

The question is how many adults earn that money if the population of adults (Male or Female) is less than 9 milllion or 8 million, I'd say half of them could potentially earn that. That leaves 3 or 4 million adults capable of earning 300 dollars per month, the remaining 14 million are jobless dependents that rely on the working 4 million.

Let's calculate it;

4,000,000 x450; 1.8 billion dollars per month, x 12 months; 21.6 billion per year. That would be the GDP, divided by 18 million, which is estimated population of Somalia in 2025: 1,200 dollars.

I'd say a GDP per capita of 1,200 dollars would be the closest to the truth.

That was a solid breakdown, but your conclusion is based on some assumptions that don’t really match the reality on the ground , even based on the numbers already shared.


First off, @Barkhadle1520 clearly showed that the basic cost of living for a family in Hargeisa is at least $316/month, and that goes up to $466–$516/month when you include other expenses , and that’s not even counting rent. If we take the middle point ($500/month), and look at that from an individual’s perspective , not one person supporting an entire household , you’re already at $6,000/year per person in terms of purchasing power. So even if nominal GDP is lower, the real (PPP) GDP per capita has to be much higher than $1,200.

Second, you’re assuming only 4 million people are earning, and the other 14 million are completely dependent. That just doesn’t reflect how the Somali economy works. People hustle , women run businesses, youth work in trade, mobile money, transport, construction, fishing, farming, and so on. Families often pool income from multiple sources, including remittances, which alone bring in over $2 billion a year and are spread widely across the country.


Also, like Barkhadle mentioned , you can’t have booming restaurants, $18 milk cans, and $11 pasta boxes in a country where people only live on $64/month. The daily consumer activity we all see shows people are spending way more than that, and across all classes , not just a wealthy few.

Finally, GDP per capita isn’t just about survival costs. It includes all the value people produce and spend , including savings, reinvestments, and business transactions. That’s why it makes more sense to estimate GDP using real market behavior, not a rough guess based on one breadwinner supporting everyone.


Basically to TDLR this, A $5K–$6K GDP per capita (PPP) fits the actual lifestyle and spending habits people see every day in Somalia better than a flat $1,200 estimate.

 

[Idilinaa]

The rapid rise the Middle class in Somalia is undeniable, this Arab guy who lives in Mogadishu even noticed it.


3:52 "Now, it may surprise some of you, but there is legitimate quite big and growing middle-class here [in Somalia], there are people who have extra-money that they want to spend on their week-ends and do fun things with their family.."

4:08 He gives an example saying that on Eid 2024 he went to Daruslam garden and there were many attraction and things to do/buy, and he saw thousands of people spending money to enter the park and buy many things there, he claims in that single day millions have been spent, a population which lives on 64$ a month could never afford that.

Throughout the video he says that Somalis are queing up in new shops paying extra for new modern premium quality services and trades, so there's a real purchasing power. This can seen by the thriving shops and businesses all over Somalia.

To add to this point about Somalia’s growing middle class and rising purchasing power, we can also look at what's happening in Eastleigh, Nairobi. A Dutch expat recently visited a Somali-owned mall there and directly compared it to other major malls in the city.

Read the full thread here:

A dutch guy goes to the Somali owned shopping mall in Eastleigh and compares it to other malls in Nairobi:

I came across this video that someone linked me and i looked through his account. I found it to be revealing. Basically this guy from the Netherlands is an expat in Kenya and he goes to different malls and markets and reviews them and uses them evaluate economic growth and middle class in any...

www.somalispot.com

The comments under that thread are just as telling, people explain how Somalis in Nairobi tend to have more disposable income and stronger purchasing power than many of their Kenyan counterparts. That’s why Somali-owned malls are full of customers and active shops, while other malls in the city sometimes sit half-empty or vacant.

Here’s the key point:
If people are only surviving on bare minimum wages, they’re not going to malls. They’re not dining out or shopping for non-essentials. They’re certainly not paying premium rents to operate businesses in those spaces either. Malls don’t thrive where people are just scraping by , they thrive where people have money left over after essentials, and that’s clearly the case here.


This same pattern is visible across Somalia , from Mogadishu to Hargeisa. People are spending money on leisure, consumer goods, and services. Businesses are growing, modern shops are opening, and people are willing to pay for quality. That simply doesn’t happen in an economy where the average person supposedly earns just 64-$100/month. The math and the street-level reality don’t add up.


What we’re seeing instead , in both Somalia and Somali communities in other Somali regions is evidence of real purchasing power, rising middle class wealth, and economic circulation, much of which is missed by traditional GDP stats that don’t fully capture informal economies or mobile money usage.

 

[Karim]

@Idilinaa let's break down and simplify your argument.

First off, @Barkhadle1520 clearly showed that the basic cost of living for a family in Hargeisa is at least $316/month, and that goes up to $466–$516/month when you include other expenses

I'm not sure an example of a middle class family in Hargeisa can be taken into consideration as we're talking about the entire country, where millions live under the tyrant rule of AS and millions are IDPs barely surviving on aid programs provided by UN agencies and other NGOs.

Not to mention the millions who live a nomadic lifestyle.

If we take the middle point ($500/month), and look at that from an individual’s perspective , not one person supporting an entire household , you’re already at $6,000/year per person in terms of purchasing power.

Where exactly did you come upa with that 6k per year per person value if I may ask?!
You calculated 466-516 dollars of expenses per "family" in "Hargeisa" or 500 dollars if we take the middle point. That's 500 dollars per family not per person, the 6k would be the purchasing power of the family not per individual. And that's also in Hargeisa, which is a stable city with a working economy compared to huge swaths of the country.

Second, you’re assuming only 4 million people are earning, and the other 14 million are completely dependent. That just doesn’t reflect how the Somali economy works. People hustle , women run businesses, youth work in trade, mobile money, transport, construction, fishing, farming, and so on

I'm actually generous with that 4 million figure and you'd be fully pleased if you were raised in Somalia. Most people don't actually work at all, every family has one or two individuals max that hustle and make money, the rest are mouths to feed waiting for someone. Not to mention my calculation was 450 per working person of those 4Million, which is fairly decent in my own honest assessment. For example; a mid tier employee that works for Golis or Hormuud telecommunication companies makes about 200-350 dollars per month, I know this because 5 of my cousins work for Golis, and they have bachelors degree from local university as well, imagine what would a person with no degrees can make in the market, they barely make 200 dollars per month.

Families often pool income from multiple sources, including remittances, which alone bring in over $2 billion a year and are spread widely across the country.

I actually added the remittances in my calculations as well, 150 dollars per person of the working 4 million, which equates to 600 million dollars per month, and 7.2 billion dollars per year. Not 2 billion, Somali remittance sent by diaspora (including diasporas in other African countries, Asia, Europe, Australia and North America) is higher than what's estimated and I'm 100% sure of that.

Also, like Barkhadle mentioned , you can’t have booming restaurants, $18 milk cans, and $11 pasta boxes in a country where people only live on $64/month. The daily consumer activity we all see shows people are spending way more than that, and across all classes , not just a wealthy few.

That's another generalisation, the standard of living is drastically lower in South Central Somalia, the average family cannot afford those expensive pastas or milk cans. Instead they use their livestock for their milk and grow rice and wheat from their land, their economic output is significantly lower and their income is depleted by constant invasions, terrorism and mass displacements.

If we're making estimations and honest analysis we shouldn't be solely focusing on the upper end of the society.

GDP per capita isn’t just about survival costs. It includes all the value people produce and spend , including savings, reinvestments, and business transactions. That’s why it makes more sense to estimate GDP using real market behavior, not a rough guess based on one breadwinner supporting everyone.

If we take your figure of 5k GDP per capita in Somalia, shouldn't the gross domestic product of the country be 90 billion or more?! Do you actually think Somalia has a 90 billion GDP?! Higher than 43 out of 54 African Nations?! That figure would put Somalia in the top 10. ... That's insane tbh.

Please let's not get carried away with enthusiasm and patriotic exaggeration if we're being fairly logical and analytical.

 

[Barkhadle1520]

While the avg quality of education in somalia is probably higher due to children being educated in their native language. 30-40 of children are still not enrolled in schools. There also don't seemed to be standardized somali textbooks at all

We have about 21 thousand km's in total road compared to kenyas 180 thousand Km's

This is where the oil money would change everything. Since these kinds of public goods require billions in investment. The oil money would allows us to not take billions in debt that countries in africa did to invest in education and public infrastructure.

Forget about the Oil we're not seeing it in our lifetime.

 

[Barkhadle1520]

They have these residential estates near xamar too with darusalam. I visited again last year and they expanded quite a bit

Darusalam is too expensive

 

[Karim]

@Idilinaa let's break down and simplify your argument.


I'm not sure an example of a middle class family in Hargeisa can be taken into consideration as we're talking about the entire country, where millions live under the tyrant rule of AS and millions are IDPs barely surviving on aid programs provided by UN agencies and other NGOs.

Not to mention the millions who live a nomadic lifestyle.


Where exactly did you come upa with that 6k per year per person value if I may ask?!
You calculated 466-516 dollars of expenses per "family" in "Hargeisa" or 500 dollars if we take the middle point. That's 500 dollars per family not per person, the 6k would be the purchasing power of the family not per individual. And that's also in Hargeisa, which is a stable city with a working economy compared to huge swaths of the country.


I'm actually generous with that 4 million figure and you'd be fully pleased if you were raised in Somalia. Most people don't actually work at all, every family has one or two individuals max that hustle and make money, the rest are mouths to feed waiting for someone. Not to mention my calculation was 450 per working person of those 4Million, which is fairly decent in my own honest assessment. For example; a mid tier employee that works for Golis or Hormuud telecommunication companies makes about 200-350 dollars per month, I know this because 5 of my cousins work for Golis, and they have bachelors degree from local university as well, imagine what would a person with no degrees can make in the market, they barely make 200 dollars per month.

I actually added the remittances in my calculations as well, 150 dollars per person of the working 4 million, which equates to 600 million dollars per month, and 7.2 billion dollars per year. Not 2 billion, Somali remittance sent by diaspora (including diasporas in other African countries, Asia, Europe, Australia and North America) is higher than what's estimated and I'm 100% sure of that.


That's another generalisation, the standard of living is drastically lower in South Central Somalia, the average family cannot afford those expensive pastas or milk cans. Instead they use their livestock for their milk and grow rice and wheat from their land, their economic output is significantly lower and their income is depleted by constant invasions, terrorism and mass displacements.

If we're making estimations and honest analysis we shouldn't be solely focusing on the upper end of the society.


If we take your figure of 5k GDP per capita in Somalia, shouldn't the gross domestic product of the country be 90 billion or more?! Do you actually think Somalia has a 90 billion GDP?! Higher than 43 out of 54 African Nations?! That figure would put Somalia in the top 10. ... That's insane tbh.

Please let's not get carried away with enthusiasm and patriotic exaggeration if we're being fairly logical and analytical.

@Idilinaa
The 4 million figure would actually make more sense to you if you search the number of adults in Somalia compared to kids.

Approximately 53% of Somalia's population is under 18 years old, according to UNICEF. This translates to about 9 million people. The World Population Dashboard indicates that 47% of the population is aged 0-14, while 51% are aged 15-64, with 3% aged 65 and older.

So, if 9 million people are underage or kids, how many of the remaining 9 million people work at all?! That's why I calculated that 4 million would be the working population of the country. Please do some research on this point.

 

[Hotchick12]

i think remittances gave a launching pad for comfortable life for some people like my uncle who stole my mums property that she built, all he does is just drive bajaaj but his house is all paid for

 

[Barkhadle1520]

@Idilinaa let's break down and simplify your argument.


I'm not sure an example of a middle class family in Hargeisa can be taken into consideration as we're talking about the entire country, where millions live under the tyrant rule of AS and millions are IDPs barely surviving on aid programs provided by UN agencies and other NGOs.

Not to mention the millions who live a nomadic lifestyle.


Where exactly did you come upa with that 6k per year per person value if I may ask?!
You calculated 466-516 dollars of expenses per "family" in "Hargeisa" or 500 dollars if we take the middle point. That's 500 dollars per family not per person, the 6k would be the purchasing power of the family not per individual. And that's also in Hargeisa, which is a stable city with a working economy compared to huge swaths of the country.


I'm actually generous with that 4 million figure and you'd be fully pleased if you were raised in Somalia. Most people don't actually work at all, every family has one or two individuals max that hustle and make money, the rest are mouths to feed waiting for someone. Not to mention my calculation was 450 per working person of those 4Million, which is fairly decent in my own honest assessment. For example; a mid tier employee that works for Golis or Hormuud telecommunication companies makes about 200-350 dollars per month, I know this because 5 of my cousins work for Golis, and they have bachelors degree from local university as well, imagine what would a person with no degrees can make in the market, they barely make 200 dollars per month.

I actually added the remittances in my calculations as well, 150 dollars per person of the working 4 million, which equates to 600 million dollars per month, and 7.2 billion dollars per year. Not 2 billion, Somali remittance sent by diaspora (including diasporas in other African countries, Asia, Europe, Australia and North America) is higher than what's estimated and I'm 100% sure of that.


That's another generalisation, the standard of living is drastically lower in South Central Somalia, the average family cannot afford those expensive pastas or milk cans. Instead they use their livestock for their milk and grow rice and wheat from their land, their economic output is significantly lower and their income is depleted by constant invasions, terrorism and mass displacements.

If we're making estimations and honest analysis we shouldn't be solely focusing on the upper end of the society.


If we take your figure of 5k GDP per capita in Somalia, shouldn't the gross domestic product of the country be 90 billion or more?! Do you actually think Somalia has a 90 billion GDP?! Higher than 43 out of 54 African Nations?! That figure would put Somalia in the top 10. ... That's insane tbh.

Please let's not get carried away with enthusiasm and patriotic exaggeration if we're being fairly logical and analytical.

IDPs are actively getting rehabilitated and only 18% are IDPs, I think we can safely say at least 60% of Somalis live that lifestyle, I don't know the number is higher than that.