Somali's GDP per Capita is false

[Idilinaa]

Taxing personal income for a corrupt government that doesn't even represent its own citizens is evil. It's just going to agitate people even more.

It's going to cripple them because imagine if a single person earns 500 dollars a month and the government taxes that, they have to cover soo many different expenses with that level of income, electricity, water, food, (maybe rent), education, transport etc

 

[Barkhadle1520]

There aren’t actual monopolies in Somaliland what likely happened in that poultry case is tied to licensing and registration requirements, which tend to be stricter compared to Mogadishu. The cost of acquiring licenses is what drives many to operate informally. That’s probably what your colleague was referring to.

Business licensing, however, brings significant income to the government.

This is why I believe struggling businesses should receive targeted tax exemptions, capped taxation, and even government grants for license acquisition to help encourage formalization and stimulate growth.

Also, let’s be clear: Somaliland has a growing poultry sector. Over the last 2–3 years, they’ve worked to develop a proper value chain including storage, processing, and local production. In fact, poultry farms now outnumber traditional livestock farms in some areas.
View attachment 364050

There are a number of well-known poultry operations: Mandeeq Poultry, Someggs Poultry, Tooyo Poultry, Mahuraan Poultry, Lootah Hargeisa Chicken, and others.

Even small youth-run poultry businesses are starting and thriving.
View attachment 364051

As for the broader economy Hargeisa actually has the second-highest number of registered businesses in Somalia (31,000), just after Mogadishu (50,000). So it’s incorrect to claim it’s anti-business. Benadir administration also issues licenses and taxes businesses. Both cities operate on a similar model in that regard.

Hargaisa is pretty much similar to Mogadishu's transformation, If you look at the recent renovations of Hargeisa’s central business district it has modern buildings, palm tree boulevards, renovated roads, you’d see it’s thriving.

View attachment 364043
View attachment 364044
View attachment 364045

You can watch the whole video to see how it's shaped out.


Same road in Hargeisa only a few months apart

How it looks now:
View attachment 364047
View attachment 364046

How it used to look:
View attachment 364048
View attachment 364049

Same with Garowe, which has undergone a transformation through local revenue funded infrastructure and public works.

There are no real monopolies or oligarchies in Somalia what we have is a network of competing enterprises, community-run businesses, and cooperatives. Trying to interpret Somalia’s economic ecosystem through a Western shareholder-capitalist lens completely misses how things actually function here.

In fact, Puntland and Somaliland receive far less international aid compared to FGS, and they fund most of their governance through domestic revenue.

Puntland, in particular, has the most diversified tax base in the country: mobile money tax, property tax, business tax, transportation levies they’ve built an internally sustainable model.

View attachment 364053

Meanwhile, FGS is still largely reliant on customs duties and donor aid, with a narrow tax base and poor returns.

The Kacaan government actually had a broad tax system. It supplemented trade taxes with revenue from state-owned enterprises, business profits, tolls and even export levies. That’s what allowed it to fund public services and infrastructure.

This brings me to income tax. I’ve seen how income taxes cripple livelihoods in Somali regions like the NFD and the Ogaden before the regime change. People already pay out-of-pocket for everything healthcare, education, security, even roads. Now you want the government to tax their salaries too, and still not provide anything in return?


I’m not saying income tax should be permanently off the table, but for now, it’s neither practical nor justifiable. We need to build trust and capacity first. Once wage levels rise and the state can actually offer services, then income taxation will be less burdensome and more acceptable.

Also, given the high informality of the economy, enforcing income tax would be costly and inefficient right now. It’s better to tax where money already moves visibly: trade, large enterprises, mobile transfers, and real property.

It pisses me off how bad Hargeisa's urban planning is

 

[Idilinaa]

It pisses me off how bad Hargeisa's urban planning is

Feel you, the private sector outpaces the public sector so there lack of capacity for centralized urban planning and local councils don't have the strong capacity to regulate of urban development.

Basically, businesses and construction projects move fast, while municipal governments often lack the technical expertise, legal tools, or funding to keep pace. Which means there are few enforceable zoning laws, no architectural guidelines, and poor coordination in how infrastructure should be built how and where.

So what you had since 1991 post- recovery was unregulated private development at the expense of public infrastructure.

Strengthening the public sector and local councils, the municipalities and boosting private-public partnership is what will fix this dilemma and we can reverse it.

The good news is that they launched master plans in 2022 to fix it and recently established a local government and urban development ministry

We are correcting the haphazard expansion of Hargeisa city with the Master Plan, says Mayor Mooge​

We are correcting the haphazard expansion of Hargeisa city with the Master Plan, says Mayor Mooge

By M.A. Egge The Mayor of Hargeisa Cllr. Abdikarim Ahmed Mooge said that the local government requested to make a comprehensive master plan for the city, Hargeisa, hence thanked the national planni…

horntribune.com

The Mayor of Hargeisa Cllr. Abdikarim Ahmed Mooge said that the local government requested to make a comprehensive master plan for the city, Hargeisa, hence thanked the national planning committee and the ministry of public works for heeding their call.

Pointing out that the spread of the city has widened haphazardly, the mayor noted that the new 20-year Master Plan for the city will be at par with renowned cities, and hence would correct the anomalies.

The mayor gave the sentiments at an event presenting the Collection of Data for the new Urban City Master Plan that was launched by the VP H.E. Abdirahman Abdillahi on Wednesday in the city.

He said that the city expanded without a plan, which caused it to be ragged.

He notes that since they took office, they have been working hard to straighten the city plan and get a modern design process and correct the anomalies

We have seen the newly elected president express this as a priority (time stamped when he talks about it)

 

[Idilinaa]

Feel you, the private sector outpaces the public sector so there lack of capacity for centralized urban planning and local councils down have strong capacity to regulate of urban development.

Basically, businesses and construction projects move fast, while municipal governments often lack the technical expertise, legal tools, or funding to keep pace. Which means there are few enforceable zoning laws, no architectural guidelines, and poor coordination in how infrastructure should be built how and where.

So what you had since 1991 post- recovery was unregulated private development at the expense of public infrastructure.

Strengthening the public sector and local councils, the municipalities and boosting private-public partnership is what will fix this dilemma and we can reverse it.

The good news is that they launched master plans in 2022 to fix it and recently established a local government and urban development ministry

We are correcting the haphazard expansion of Hargeisa city with the Master Plan, says Mayor Mooge​

We are correcting the haphazard expansion of Hargeisa city with the Master Plan, says Mayor Mooge

By M.A. Egge The Mayor of Hargeisa Cllr. Abdikarim Ahmed Mooge said that the local government requested to make a comprehensive master plan for the city, Hargeisa, hence thanked the national planni…

horntribune.com

We have seen the newly elected president express this as a priority (time stamped when he talks about it)

One of Hargeisa’s key advantages is its strong social cohesion and high rate of tax compliance people generally trust each other and support development. If the government matches that with transparency and visible public service delivery, it could build real institutional trust. That would turn Hargeisa’s organic growth into something more coordinated and planned, especially with the rollout of new master plans.

 

[Barkhadle1520]

Feel you, the private sector outpaces the public sector so there lack of capacity for centralized urban planning and local councils don't have the strong capacity to regulate of urban development.

Basically, businesses and construction projects move fast, while municipal governments often lack the technical expertise, legal tools, or funding to keep pace. Which means there are few enforceable zoning laws, no architectural guidelines, and poor coordination in how infrastructure should be built how and where.

So what you had since 1991 post- recovery was unregulated private development at the expense of public infrastructure.

Strengthening the public sector and local councils, the municipalities and boosting private-public partnership is what will fix this dilemma and we can reverse it.

The good news is that they launched master plans in 2022 to fix it and recently established a local government and urban development ministry

We are correcting the haphazard expansion of Hargeisa city with the Master Plan, says Mayor Mooge​

We are correcting the haphazard expansion of Hargeisa city with the Master Plan, says Mayor Mooge

By M.A. Egge The Mayor of Hargeisa Cllr. Abdikarim Ahmed Mooge said that the local government requested to make a comprehensive master plan for the city, Hargeisa, hence thanked the national planni…

horntribune.com

We have seen the newly elected president express this as a priority (time stamped when he talks about it)

SL gov is always seriousand on time about development so this is a good sign

 

[Idilinaa]

SL gov is always seriousand on time about development so this is a good sign

They are doing something similar in JigJiga

On top of that, the Mayor of Jigjiga is rolling out an ambitious plan to transform the city into a smart city. Over 3 billion is being invested, and the entire project is being handled by local contractors. He specifically emphasized that the engineers, managers, and construction workers will be Somali , a deliberate move to build local capacity.


The plan includes centralized urban planning: underground cabling, connected neighborhoods, green spaces, and dedicated bicycle paths. It’s a modern, integrative vision driven by local expertise ,not outsourced gimmicks.

This highlights how Somalis in the region, when granted autonomy and peace, have made Jigjiga into a model of self-sustained, locally-driven development , despite decades of marginalization.

They have launched an urban development corparation in Mogadishu

About – New Mogadishu Development Corporation

nmdcs.com

But Mogadishu's plan is questionable how they going to fund, execute and coordinate it?

At least JijJiga has already collected the revenue for it and Hargeisa’s high tax compliance gives it a better foundation if paired with real reforms and planning. Then there is also the questions about institutional capacity.

 

[Barkhadle1520]

They are doing something similar in JigJiga



They have launched an urban development corparation in Mogadishu

About – New Mogadishu Development Corporation

nmdcs.com

But Mogadishu's plan is questionable how they going to fund, execute and coordinate it?

At least JijJiga has already collected the revenue for it and Hargeisa’s high tax compliance gives it a better foundation if paired with real reforms and planning. Then there is also the questions about institutional capacity.

Lol I read the paper they say by 2029 they need to "secure" 200M fund to build a better port, these kinds of things in xamar are always only hadal like that marina beach resort

 

[Barkhadle1520]

@Idilinaa @Aseer @Midas

Found some new interesting studies below

Suprisingly enough, this one is using SNBS data, had to check twice

The samples mesured 7000 households, 50,4% were rural/nomadic while 49,6% were urban

Average household income in 2022 according to this is 350 USD/month which would make 4200 GDP per capita this was a large sample with majority rural

Now this other study mesured 400 people but only in Mogadishu

The average monthly income for this was $603.35 which is 7240 GDP per capita

To be honest it makes sense that rural people earn two times less than people working in big cities, but if we do an average between the two it makes 5720 GDP capita

There's also this other study on mobile money which was made in may of this year by somali researchers at the University of Mogadishu

The research surveyed 440 Somalis from diverse backgrounds, all of whom regularly use mobile money in their daily lives

Here is the income table, and the gdp per capita is 5400$

As for cost of living, I found nothing interesting except people on Reddit who live there giving the same cost of living as the guy in the video i shared begining of the thread

 

[Idilinaa]

@Idilinaa @Aseer @Midas

Found some new interesting studies below

Suprisingly enough, this one is using SNBS data, had to check twice

View attachment 364080

The samples mesured 7000 households, 50,4% were rural/nomadic while 49,6% were urban

View attachment 364082

Average household income in 2022 according to this is 350 USD/month which would make 4200 GDP per capita this was a large sample with majority rural

View attachment 364085

Now this other study mesured 400 people but only in Mogadishu

View attachment 364086

The average monthly income for this was $603.35 which is 7240 GDP per capita

View attachment 364087


To be honest it makes sense that rural people earn two times less than people working in big cities, but if we do an average between the two it makes 5720 GDP capita

There's also this other study on mobile money which was made in may of this year by somali researchers at the University of Mogadishu

The research surveyed 440 Somalis from diverse backgrounds, all of whom regularly use mobile money in their daily lives

Here is the income table, and the gdp per capita is 5400$

As for cost of living, I found nothing interesting except people on Reddit who live there giving the same cost of living as the guy in the video i shared begining of the thread

View attachment 364094

One thing to keep in mind. Self-reported income can often be unreported or inconsistent, especially in informal economies. I think a better approach would be to measure actual household expenditures like food, rent, school fees, and remittances which can give a more accurate picture of living standards and economic capacity. People tend to remember better what the spend on essentials.

If you look at other development research i've noticed how consumption expenditure is often used as a ''proxy for income'' especially for rural or informal economies.

I hope they do something like that in the near future. They also need to account for income variability, many don't have fixed salaries and incomes can even fluctuate month to month.

 

[Idilinaa]

Lol I read the paper they say by 2029 they need to "secure" 200M fund to build a better port, these kinds of things in xamar are always only hadal like that marina beach resort

From what i remember dahabshil was meant to finance it but then i heard they backed out found new investors.

Then they scrapped it for something called Xeebta-Luulka. Very confusing because i am not sure if its the same project or a different one.

 

[Medeea]

While I think you bring up intresting points with the business model of sl/garowe. The idea of a govt getting out of the way and letting business do whatever it wants is extremly naive.

The goal of a businessman at the end of the day is to make money. The goal of the state is to develop the nation. What do you think happens when you allow the intrestes of a business to come before that of a nation ? Its already a bit problematic how powerful the telecom companies in Somalia are.


Theres also the simple fact that every sucessful industrialization of a country was state led. The billions of dollars required to build infrastructure and invest to buikd an industrial base can only come from government direction.


Tdlr : business are motivated by profit. Unless kept on a leash capital will overpower the long term interests of a state .

I’m talking mid-term. The HAG model is very similar to Deng’s model.

I still believe SOEs are necessary. But only in a few strategically important areas like banking, electricity grids, airport/port management, military manufacturing, etc.

But when it comes to large scale nonmilitary manufacturing, it should be 100% private.

There aren’t actual monopolies in Somaliland what likely happened in that poultry case is tied to licensing and registration requirements, which tend to be stricter compared to Mogadishu. The cost of acquiring licenses is what drives many to operate informally. That’s probably what your colleague was referring to.

Business licensing, however, brings significant income to the government.

This is why I believe struggling businesses should receive targeted tax exemptions, capped taxation, and even government grants for license acquisition to help encourage formalization and stimulate growth.

Also, let’s be clear: Somaliland has a growing poultry sector. Over the last 2–3 years, they’ve worked to develop a proper value chain including storage, processing, and local production. In fact, poultry farms now outnumber traditional livestock farms in some areas.
View attachment 364050

There are a number of well-known poultry operations: Mandeeq Poultry, Someggs Poultry, Tooyo Poultry, Mahuraan Poultry, Lootah Hargeisa Chicken, and others.

Even small youth-run poultry businesses are starting and thriving.
View attachment 364051

As for the broader economy Hargeisa actually has the second-highest number of registered businesses in Somalia (31,000), just after Mogadishu (50,000). So it’s incorrect to claim it’s anti-business. Benadir administration also issues licenses and taxes businesses. Both cities operate on a similar model in that regard.

Hargaisa is pretty much similar to Mogadishu's transformation, If you look at the recent renovations of Hargeisa’s central business district it has modern buildings, palm tree boulevards, renovated roads, you’d see it’s thriving.

View attachment 364043
View attachment 364044
View attachment 364045

You can watch the whole video to see how it's shaped out.


Same road in Hargeisa only a few months apart

How it looks now:
View attachment 364047
View attachment 364046

How it used to look:
View attachment 364048
View attachment 364049

Same with Garowe, which has undergone a transformation through local revenue funded infrastructure and public works.

There are no real monopolies or oligarchies in Somalia what we have is a network of competing enterprises, community-run businesses, and cooperatives. Trying to interpret Somalia’s economic ecosystem through a Western shareholder-capitalist lens completely misses how things actually function here.

In fact, Puntland and Somaliland receive far less international aid compared to FGS, and they fund most of their governance through domestic revenue.

Here’s data on aid distribution, SL is literally at the top. PL is third. but if you look at aid per capita, it’s absolutely ridiculous. They’ve been getting 3x- 5x times more per person than other regions.

And this isn’t just for a year or two. it’s been like this for almost two decades. Literally, the complete opposite of what you’re claiming.

Puntland, in particular, has the most diversified tax base in the country: mobile money tax, property tax, business tax, transportation levies they’ve built an internally sustainable model.

View attachment 364053

Meanwhile, FGS is still largely reliant on customs duties and donor aid, with a narrow tax base and poor returns.

The Kacaan government actually had a broad tax system. It supplemented trade taxes with revenue from state-owned enterprises, business profits, tolls and even export levies. That’s what allowed it to fund public services and infrastructure.

Outside of two state owned enterprises (which were run by Italian firms), the rest were literally bleeding money like crazy thanks to Kacaan’s rampant corruption and extream Darod nepotism. Starting in ’82, Kacaan fell into the IMF debt trap and kept taking more loans to finance the previous ones and keep the lights on. What public infrastructure(that was using funded by Iraq) were they financing? I’m guessing you’re talking about a different Kacaan and a different Somalia.

This brings me to income tax. I’ve seen how income taxes cripple livelihoods in Somali regions like the NFD and the Ogaden before the regime change. People already pay out-of-pocket for everything healthcare, education, security, even roads. Now you want the government to tax their salaries too, and still not provide anything in return?

View attachment 364078

One of Hargeisa’s key advantages is its strong social cohesion and high rate of tax compliance people generally trust each other and support development. If the government matches that with transparency and visible public service delivery, it could build real institutional trust. That would turn Hargeisa’s organic growth into something more coordinated and planned, especially with the rollout of new master plans.

It’s funny how you’re happy that hargsya and garowe are taxing on average, an even poorer citizens, but when the FGS tries to do the same in Xamar, all of a sudden it’s the end of the world… Give me a break dude.

From what i remember dahabshil was meant to finance it but then i heard they backed out found new investors.

Then they scrapped it for something called Xeebta-Luulka. Very confusing because i am not sure if its the same project or a different one.

They were dragging their feet just so they could be replaced by the HAG group. It’s very large project so they’re still pooling their resources

 

[Midas]

@Idilinaa @Aseer @Midas

Found some new interesting studies below

Suprisingly enough, this one is using SNBS data, had to check twice

View attachment 364080

The samples mesured 7000 households, 50,4% were rural/nomadic while 49,6% were urban

View attachment 364082

Average household income in 2022 according to this is 350 USD/month which would make 4200 GDP per capita this was a large sample with majority rural

View attachment 364085

Now this other study mesured 400 people but only in Mogadishu

View attachment 364086

The average monthly income for this was $603.35 which is 7240 GDP per capita

View attachment 364087


To be honest it makes sense that rural people earn two times less than people working in big cities, but if we do an average between the two it makes 5720 GDP capita

There's also this other study on mobile money which was made in may of this year by somali researchers at the University of Mogadishu

The research surveyed 440 Somalis from diverse backgrounds, all of whom regularly use mobile money in their daily lives

Here is the income table, and the gdp per capita is 5400$

As for cost of living, I found nothing interesting except people on Reddit who live there giving the same cost of living as the guy in the video i shared begining of the thread

View attachment 364094

Very intresting although you have to keep in mind gdp per capita is divided by individual not household. So we'd have to know how big the household their measuring is.

 

[Idilinaa]

I’m talking mid-term. The HAG model is very similar to Deng’s model.

I still believe SOEs are necessary. But only in a few strategically important areas like banking, electricity grids, airport/port management, military manufacturing, etc.

But when it comes to large scale nonmilitary manufacturing, it should be 100% private.

Here’s data on aid distribution, SL is literally at the top. PL is third. but if you look at aid per capita, it’s absolutely ridiculous. They’ve been getting 3x- 5x times more per person than other regions.

And this isn’t just for a year or two. it’s been like this for almost two decades. Literally, the complete opposite of what you’re claiming.

View attachment 364067

That chart doesn’t show aid per capita, it simply shows total allocations by sector. If anything, it reflects poorly on the FGS, since the bulk of funding goes into governance and security, not actual service delivery. It suggests the FGS is largely externally propped up, with limited presence beyond core political and security functions.

As for Puntland, most of what it receives passes through the FGS, in the form of limited domestic grants and it receives virtually no direct foreign grants. Unlike the FGS, Puntland’s budget is overwhelmingly made up of internally generated revenue, especially from taxes, port duties, and fees.

You can see it clearly in the latest budget analysis. Puntland is by far the best-performing Federal Member State:

https://hespi.org/wp-content/uploads/2024/07/Somalia_Budget_Policy_Brief_2024.pdf

5. Federal Member States Financial Operations

During the first quarter of 2024, the total fiscal receipts of the State of Puntland amounted to US$26.7 million, the highest among the Federal Member States. This is followed by Jubbaland, with a total revenue of US$10.1 million. Galmudug recorded a total fiscal receipt of US$4.7 million, while Southwest and HirShabelle recorded total revenues of US$3.3 million and US$2.7 million, respectively.

On the expenditure side, the Puntland State of Somalia spent US$24.3 million, the highest expenditure among the Federal Member States, with a financing surplus of US$2.4 million. The spending of Jubaland State amounted to US$11.5 million, with a financing gap of US$1.4 million, followed by Galmudug, with a total expenditure of US$5.2 million and a fiscal gap of US$0.5 million. Southwest and HirShabelle spent US$3.4 million and US$3 million, with a financing gap of US$0.1 million and US$0.9 million, respectively.

In the first quarter of 2024, Puntland not only collected more revenue than any other FMS, but also recorded the largest financing surplus. On top of that, it had the highest expenditure, showing it’s not just collecting revenue but also effectively allocating and spending it on public services. That’s real fiscal capacity and institutional performance , not dependency.

Outside of two state owned enterprises (which were run by Italian firms), the rest were literally bleeding money like crazy thanks to Kacaan’s rampant corruption and extream Darod nepotism. Starting in ’82, Kacaan fell into the IMF debt trap and kept taking more loans to finance the previous ones and keep the lights on. What public infrastructure(that was using funded by Iraq) were they financing? I’m guessing you’re talking about a different Kacaan and a different Somalia.


It’s funny how you’re happy that hargsya and garowe are taxing on average, an even poorer citizens, but when the FGS tries to do the same in Xamar, all of a sudden it’s the end of the world… Give me a break dude.


They were dragging their feet just so they could be replaced by the HAG group. It’s very large project so they’re still pooling their resources

The enterprises under the Kacaan government were nationalized and operated by Somali institutions not Italians. In fact, one of the most successful SOEs was the Jowhar Sugar Enterprise, managed by Ali Khalif Galaydh, which at one point contributed 10% of the national budget. That’s a significant and homegrown revenue-generating enterprise.

Let’s also not forget that the 1960s civilian government resembled today’s FGS a narrow tax base, poor tax compliance, and a weak ability to mobilize resources due to lack of public trust.

The Kacaan government, for all its faults, excelled at domestic resource mobilization. Tax collection was robust, the state ran budget surpluses for several years, and much of the revenue was directed toward public services and infrastructure. They even implemented policies like civil service wage compression and ordered private companies to reduce pay scales effectively generating additional state revenue while flattening income disparities

The need for aid and IMF loans only emerged after 1978, primarily due to mounting budgetary pressures. Before that, the government had enough surplus revenue to reallocate funds from its development plan to respond to the 1974–75 drought, implementing large-scale relief, resettlement, and recovery programs. However, by the late 1970s, the situation had drastically changed. Mass refugee inflows from Ethiopia, at the back drop of the Ogaden War and ongoing defense spending against Ethiopian-backed insurgencies, created an unsustainable financial burden. This exceeded the government's revenue capacity, pushing Somalia into its first serious budget deficit and forcing it to seek external loans to bridge the gap.

So no it had nothing to do with Darod nepotism or a broken revenue system. In fact, the government had a functioning and disciplined tax collection system, and much of the revenue was used to fund public services, humanitarian relief, and national defense. If anything, the examples I’ve mentioned show that effective domestic resource mobilization and responsible public spending were possible and should be the benchmark for today’s institutions, not dismissed as failures.

As for Hargeisa and Garowe taxing poorer citizens the key difference is that those local governments are actually providing services in return. Meanwhile, in Xamar, taxation often feels extractive because it isn’t paired with tangible governance improvements. That’s the trust deficit the FGS has yet to overcome.