Somalia Economy

by


Somaliais located in Eastern Africa, bordering the Indian Ocean and the Gulf of Aden. With a total area of 637,657 sq km, Sudan has a flat terrain, with some hills towards the north. The nation is highly prone to dust storms and droughts in summer and floods during the rainy season. As a result the Somalian economy, which is largely agrarian, is extremely vulnerable. Besides, Somalia has a lack of natural resources, and most of its mineral reservoir is unexploited. Consequently, Somalia’s economy is one of the poorest and least developed in the world. 

Somalia Economy: Overview

Somalia’s economic development has been mixed. Somalia continues to be in a delicate state due to several civil war outbreaks and floods, which have left thousands of people homeless.

 

As a result of inadequate government support and administration, Somalia’s private sector has grown considerably, particularly in the spheres of trade, commerce and infrastructure. Private participants have also extended their contribution to the primary sectors, particularly in livestock and fisheries. The United Nations, in a 2007 report, stated that Somalia’s service industry is thriving. Despite these favorable changes, Somalia has a meager GDP per capita of $600.

 

Other key indicators of Somalia economy:

 

Economic Indicator
Value

GDP Per Capita (Purchasing Power Parity)

$5.733 billion

GDP (Official Exchange Rate)

$2.731 billion

GDP - per capita

$600

Labor Force

3.447 million

 

Somalia Economy Outlook

The absence of a central government authority has been detrimental to Somalia’s economy, particularly to its currency, which has been debased considerably. The Somali Shilling exchange rate reached a historic low of 30,000 per US dollar in 2002. Absence of adequate government intervention was also responsible for the fake currency racket, which escalated in 2007, pushing up Somalia’s inflation rate significantly.

 

Despite facing extreme poverty, Somalia fares better than several African nations in terms of economic potential and infrastructure, according to the World Bank. What the nation needs is a stable and able government that is able to capitalize on its economic potential.