Somalia

The eight sectoral scenarios as well as their relationship to the Current Path and the Combined scenario are explained in the Technical page. Chart 10 summarises the approach.

Chart 11 presents the mortality distribution in the Current Path for 2023 and 2043.

The Demographics and Health scenario envisions ambitious improvements in child and maternal mortality rates, enhanced access to modern contraception, and decreased mortality from communicable diseases (e.g., AIDS, diarrhoea, malaria, respiratory infections) and non-communicable diseases (e.g., diabetes), alongside advancements in safe water access and sanitation. This scenario assumes a swift demographic transition, supported by increased investments in health and water, sanitation, and hygiene (WaSH) infrastructure.

Visit the themes on Demographics and Health/WaSH for more details on the scenario structure and interventions.

Somalia’s health outcomes remain among the weakest globally, with high maternal and child mortality and widespread malnutrition. Access to basic care is limited for large segments of the population, and health service provision is overwhelmingly dependent on external assistance, with donor financing accounting for around 95% of total health expenditure. This heavy reliance on external funding leaves the system highly exposed to external shocks and geopolitical factors, and recent reductions in international support have placed growing pressure on the continuity and quality of essential health and nutrition services. A 2025 survey by the Somali NGO Consortium highlights the scale of disruption caused by the suspension of US aid to Somalia. More than 60% of NGOs operating in the country reported receiving stop-work orders. The suspension has led to widespread interruptions across critical sectors, including health, nutrition, WASH, food security, education and protection, alongside staff layoffs and unpaid leave.

Additionally, the health workforce is critically overstretched, with a severe shortage of trained professionals and pronounced urban–rural imbalances driven by insecurity, internal migration and outward emigration. Health facilities are unevenly distributed and often poorly equipped, with many facilities non-operational or failing to meet basic infection prevention standards. These weaknesses are compounded by persistent shortages of medicines and supplies, alongside procurement and transport challenges that are further exacerbated by insecurity.

Within this context, the mortality profile in 2023 was dominated by communicable diseases, reflecting the high prevalence of preventable and treatable conditions in a setting characterised by weak health system capacity and limited access to safely managed water and sanitation. Conflict, displacement and overcrowded living conditions further amplify transmission risks and disrupt access to preventive and curative care. Routine immunisation coverage in Somalia was low for many years, remaining below 50% for extended periods. More recent estimates, however, indicate significant progress, with around 70% of children fully vaccinated by 2024.

Looking ahead, communicable diseases are projected to remain the leading cause of mortality through to 2043, even as deaths from non-communicable diseases (NCDs) increase markedly. In 2023, the leading causes of death were “other communicable diseases” including respiratory infections, cardiovascular diseases, diarrhoeal diseases and cancers. By 2043, other communicable diseases will remain the leading cause, while cardiovascular diseases and cancers rise to second and third place, respectively, overtaking respiratory infections and diarrhoeal diseases, which fall to fourth and fifth.

These shifts reflect an intensifying dual burden of disease, in which persistent infectious mortality coexists with a growing challenge of chronic conditions, placing increasing strain on an already fragile health system. Managing this transition will require sustained efforts to reduce preventable infectious disease deaths while simultaneously strengthening the system’s capacity to detect and treat NCDs.

In the near term, reducing infectious disease mortality remains critical. Priority interventions include expanding access to basic and preventive services, strengthening routine immunisation and maternal and child health programs, improving infection prevention and control standards in health facilities, and reinforcing community-based health delivery in displacement-affected and hard-to-reach areas. Sustained investment in WaSH services, nutrition support and early disease detection will also be key to reducing preventable deaths in a context of recurrent shocks and population displacement. Without progress on these fronts, gains in health outcomes are likely to remain fragile.

At the same time, the rising burden of NCDs will require targeted health system strengthening. Priorities include improving access to early diagnosis and basic screening, progressively integrating NCD prevention and treatment into primary health care, and strengthening disease surveillance and health information systems to support planning and resource allocation. Complementary public health efforts, including addressing malnutrition, reducing tobacco use and promoting physical activity, will also be important in moderating the long-term growth of NCDs.

Chart 12 presents the infant mortality rate in the Current Path and in the Demographics and Health scenario, from 2020 to 2043.

The infant mortality rate is the probability of a child born in a specific year dying before reaching the age of one. It measures the child-born survival rate and reflects the social, economic and environmental conditions in which children live, including their health care. It is measured as the number of infant deaths per 1 000 live births and is an important marker of a country's overall health system quality.

Somalia continues to face extremely high levels of maternal and newborn mortality. UNICEF 2019 estimates indicate that around four in every 100 children die within the first month of life, and nearly eight in 100 do not survive to their first birthday. Approximately one in 20 women of reproductive age dies each year from complications related to pregnancy or childbirth.

Limited access to, and utilisation of, maternal and newborn health services contribute significantly to these outcomes. The 2020 Somalia Demographic and Health Survey shows that only about one-third of births take place with the assistance of skilled health personnel, and a similar share of women receive antenatal care from a trained provider during their most recent pregnancy. Postnatal care coverage is particularly weak, with nearly nine in ten mothers not receiving a check-up within the first two days after childbirth. Service availability is also uneven: a 2016 national assessment found that Basic Emergency Obstetric and Neonatal Care services were available in fewer than half of urban health facilities and only one-fifth of rural facilities. Essential Newborn Care was offered in less than a third of urban facilities and just over one in ten rural facilities.

In 2023, Somalia’s infant mortality rate stood at 62 deaths per 1 000 live births, more than double the Sustainable Development Goal target of fewer than 25 deaths per 1 000 live births by 2030. On the Current Path, the rate is projected to decline to 31 deaths per 1 000 live births in 2043, indicating substantial improvement but still falling short of the global benchmark. Under the Demographics and Health scenario, however, infant mortality could fall further to 26 deaths per 1 000 live births, bringing the country close to achieving the SDG target.

Chart 13 presents the demographic dividend in the Current Path and in the Demographics and Health scenario, from 2020 to 2043.

The demographic dividend, which refers to economic growth resulting from changes in a country's population structure, is influenced by factors such as declining fertility rates and improvements in health and education. With fewer dependants (children under 15 and adults over 65) to support, families and governments can allocate more resources to savings, education, infrastructure and economic development, driving accelerated growth.

The demographic dividend is attained when the ratio of working-age persons (15–64 years of age) to dependants is at least 1.7:1. However, attaining the demographic dividend does not automatically translate into economic growth. Realising the potential demographic dividend depends on simultaneous policy-driven improvements in employment, governance and basic service provision.

In Somalia’s case, persistently high fertility and rapid population growth mean that this transition will unfold slowly under the Current Path. In 2023, the ratio of working-age individuals to dependants stood at approximately 1.03, indicating that for every 1 dependent person (children under 15 or elderly over 65), there were approximately 1.02 people of working age (15–64). This implies that the economic burden of supporting non-workers was relatively low, which is a key requirement for economic acceleration. Although fertility is projected to decline over time, the reduction will be slow. As a result, the dependency burden will ease only marginally, with the demographic dividend ratio rising to 1.19 working-age persons per dependant by 2043 under the Current Path, and slightly higher to 1.22 under the Demographics and Health scenario.

Even under the Demographics and Health scenario, which reduces infant mortality, expands access to family planning and strengthens overall health outcomes, improvements in the age structure remain incremental. Demographic shifts operate over decades, and the large youth cohorts already born will continue to move through the dependency cycle before substantially altering the overall ratio.

Somalia is projected to reach a ratio of 1.7 working-age persons per dependant only towards the end of the 2060s, more than a decade later than the projected average of 2052 for low-income Africa. This delayed window has significant implications. For the next several decades, demographic momentum will continue to exert pressure on public services, education systems and labour markets, even as gradual gains in human capital materialise.

The policy implication is clear. Somalia cannot rely solely on demographic change to unlock growth and must balance immediate priorities with sustained long-term investments. Accelerating fertility decline through expanded access to family planning and greater investment in girls’ education is essential to reducing dependency pressures. At the same time, the country must manage immediate strains on employment, service delivery and human capital while advancing longer-term structural transformation, including stronger institutions, economic diversification and broader inclusion.

Chart 14 presents crop production and demand in the Current Path from 1990 to 2043.

The Agriculture scenario envisions an agricultural revolution that ensures food security through ambitious yet feasible increases in yields per hectare, driven by improved management, seed, fertiliser technology and expanded irrigation. Efforts to reduce food loss and waste are emphasised, with increased calorie consumption as an indicator of self-sufficiency and prioritising it over food exports. Additionally, enhanced forest protection demonstrates a commitment to sustainable land-use practices.

Visit the theme on Agriculture for our conceptualisation and details on the scenario structure and interventions.

A thriving agriculture sector is crucial to long-term peace and development in Somalia. Crop and livestock production together account for more than 70% of GDP and employ more than 80% of the labour force. Within this, livestock is the dominant subsector, contributing roughly 45% of GDP and underpinning around 80% of foreign currency earnings. An estimated 70% of Somalis depend directly or indirectly on livestock-related activities along the value chain, whether through herding, trading, processing or transport.

Despite its potential, the crop sector underperforms relative to its pre-conflict levels and its current potential. The country has an estimated 8.9 million hectares of arable land, significant groundwater reserves and three major river systems, the Shabelle, Jubba and Dawa, which together stretch roughly 2 500 kilometres. Agro-pastoral systems dominate much of rural life, particularly in the fertile river valleys of the south. Agricultural production is concentrated in southern Somalia, where soils are relatively fertile and river-based irrigation is available.

Maize is one of the country’s most important staple crops. It is primarily cultivated in Lower Shabelle and serves as a key source of household nutrition and livestock feed. However, domestic maize production remains far below national requirements. Yields are relatively low due to limited irrigation infrastructure, erratic rainfall, poor access to improved seeds and fertilisers, and high post-harvest losses. Annual output is estimated at 75 000 to 80 000 metric tons, while demand exceeds 1.2 million tons.

Fodder production remains underdeveloped but a vital part of Somalia’s livestock economy, which is the country’s largest contributor to GDP. However, a feed deficit of around 34%, driven by recurring droughts, overgrazing and rangeland degradation, continues to constrain productivity and raise livestock mortality during dry periods. Expanding the cultivation of drought-tolerant fodder crops, particularly in irrigated areas of Lower Juba and Lower Shebelle, offers significant scope to strengthen resilience and improve output.

Environmental degradation represents a significant constraint on Somalia’s development trajectory. The causes of degradation are estimated at 38% of the land area affected by biological decline, and a further 34% by water-driven soil erosion, meaning that more than 70% of already degraded land is under significant ecological stress. Only about 14% of the overall land remains unaffected by degradation. These patterns reflect the country’s heavy reliance on natural resources and its growing vulnerability to degradation driven by overgrazing, deforestation and unsustainable land use. Somalia has taken constructive steps in response, including its commitment under SDG 15 to achieve land degradation neutrality, alongside reforestation and soil conservation initiatives. Stronger land-use planning, improved environmental data systems, consistent monitoring and better coordination across sectors and levels of government are essential. Without strengthened land governance and sustained resource management, ecological decline will continue to erode food security, slow poverty reduction, and heighten risks to long-term stability.

Climate change is compounding Somalia’s structural vulnerabilities and intensifying pressure on its food systems. Longer and more frequent dry spells are reducing water availability, degrading rangelands and causing repeated livestock and crop losses. Between 2021 and 2023, the country experienced its worst drought in nearly four decades, following successive failed rainy seasons. The shock affected more than half the population, depleted key water sources, destroyed pasture, caused large-scale livestock losses and triggered widespread displacement. Recent initiatives, such as the Ugbaad climate-resilient agriculture program, signal a shift towards more adaptive water management, drought-resistant inputs and ecosystem restoration. While these interventions are important, their impact will depend on scale, coordination and sustained implementation.

These climate shocks interact with conflict, economic fragility and environmental degradation to disrupt production and weaken resilience. As a result, food insecurity remains chronic. In 2023, around 1.9 million people in Somalia were facing severe levels of food insecurity, classified as crisis or worse under the Integrated Food Security Phase (IPC) classification, the highest number recorded since the Global Report on Food Crises began in 2016. Acute malnutrition also remained alarmingly high, with an estimated 1.8 million children under five affected.

Against this backdrop, crop demand will rise steeply under the Current Path from 4.63 million metric tons in 2023 to 24.35 million metric tons by 2043, mainly due to rapid population growth. Production will increase, but at a far slower rate, from 1.26 to 2.94 million metric tons in the same period. Accordingly, the crop production deficit will widen from roughly 3.37 million metric tons to 21.41 million metric tons. This trajectory depicts severe food insecurity and tends to have negative implications for macroeconomic stability.

Chart 15 presents the import dependence in the Current Path and the Agriculture scenario, from 2020 to 2043.

The widening crop production deficit shown in Chart 14 translates directly into persistent reliance on imported food, as depicted in Chart 15. Under the Current Path, import dependence will remain high, with the agricultural trade deficit increasing from almost 8% of demand in 2023 to 11.4% by 2043. The Agriculture scenario will modestly improve the outlook, with higher domestic crop production slightly reducing import dependence. By 2043, the agriculture trade deficit will decline to around 10.4% of demand.

In Somalia’s context, this dependence has macroeconomic consequences. Food imports must be financed in foreign currency, placing pressure on limited reserves and exposing the economy to global price volatility and supply disruptions. In a system already vulnerable to climate shocks and political fragility, high import dependence amplifies inflationary risk and household food insecurity.

Livestock exports partially offset this exposure by generating foreign exchange. Somalia has one of the largest livestock populations in Africa with substantial herds of goats, sheep, camels and cattle, reflecting the country’s long-standing pastoral traditions. Sheep and goats account for the bulk of livestock exports, mostly to Gulf and Middle Eastern markets. In addition to live animal trade, products such as hides, skins and dairy contribute to domestic and regional value chains, further reinforcing the sector’s economic importance. However, the sector is itself climate-sensitive and vulnerable to trade restrictions. It cannot fully compensate for structural food deficits.

Beyond land-based systems, Somalia’s blue economy represents a significant but underutilised additional avenue for strengthening external balances. The country has the longest coastline in mainland Africa and substantial marine resources, yet the fisheries sector contributes only around 2% of GDP despite recent nominal growth. Artisanal fishers produce approximately 6 000 tonnes annually, while illegal, unreported and unregulated foreign vessels are estimated to capture around 13 000 tonnes per year, more than double the artisanal catch. Total national marine potential is estimated at roughly 200 000 tonnes, indicating substantial untapped capacity. At the same time, governance reforms have strengthened oversight of the sector, including improvements in licensing systems and enforcement against illegal fishing. Further building the blue economy will require investment in coastal infrastructure, cold chains, enforcement capacity, value addition and stronger integration into maritime trade networks.

Given continued demographic growth and persistent climate vulnerability, Somalia’s structural exposure is unlikely to diminish in the near term. Without sustained productivity gains that unlock underutilised agricultural potential and diversification beyond rain-fed systems into irrigation, livestock value addition and fisheries development, the country will remain dependent on food imports over the next two decades.

Chart 16 depicts the progress through the educational system in the Current Path, for 2023 and 2043.

The Education scenario represents reasonable but ambitious improvements in intake, transition, and graduation rates from primary to tertiary levels as well as better-quality education at the primary and secondary levels. It also models substantive progress towards gender parity at all levels, additional vocational training at the secondary school level, and increases in the share of science and engineering graduates.

Visit the theme on Education for our conceptualisation and details on the scenario structure and interventions.

Since the establishment of the Federal Government of Somalia in 2012, rebuilding the education system has been a central pillar of state reconstruction. The Ministry of Education, Culture and Higher Education (MoECHE) has progressively reasserted national oversight, positioning education as essential to economic recovery, social cohesion and long-term stability.

Institutionally, notable progress has been made. One of the most significant milestones was the passage of the Education Act in April 2021, following a four-year consultation process. The Act now serves as the primary legal framework regulating and guiding the operation of a unified national education system. In 2021, Somalia adopted a 4+4+4 education structure, replacing earlier parallel systems such as the 6+3+3 model. The reform standardises general education into four years of lower-primary, four years of upper-primary, and four years of secondary schooling, aligning the system nationally and supporting curriculum harmonisation. Oversight bodies for higher education and technical and vocational education and training (TVET), including the National Commission for Higher Education, have also been established.

However, institutional reform has not translated into broad-based access. In 2020, more than 85% of school-age children were out of school, placing Somalia among the countries with the highest exclusion rates globally. Poverty remains the strongest predictor of exclusion, with children from the poorest households far less likely to attend school than those from wealthier families. Rural and nomadic communities face structural barriers, while internally displaced children, children with disabilities and girls remain disproportionately marginalised.

Gender inequality is particularly pronounced at the adolescent level. Child marriage remains widespread, with roughly 40-45% of girls marrying before the age of 18. Poverty often drives the practice, as low-income households treat early marriage as a coping strategy. Pregnancy, domestic responsibilities and marital obligations significantly reduce school participation. Among girls aged 15–17, only 16% of those who are married are enrolled in school, compared to 40% of those who have never married. Weak legal enforcement, limited awareness of the harms of early marriage and inadequate gender-responsive school infrastructure further entrench exclusion. Restricted educational access then reinforces limited economic opportunities for women, sustaining a cycle in which early marriage remains a rationalised alternative.

Quality deficits further weaken the system. A large proportion of teachers lack formal qualifications, and shortages of trained personnel, learning materials and effective supervision undermine classroom outcomes.

Early childhood education is minimal and largely provided privately, with limited regulatory oversight and weak data coverage. This early childhood landscape is dominated by Traditional Qur’anic schools (TQS) and Integrated Qur’anic schools (IQS), which operate under different models. TQS offer low-cost Islamic instruction to pre-primary-aged children, particularly in rural areas. They fall under the Ministry of Religious Affairs, with limited oversight from the Ministry of Education, Culture, Higher Education and Research (MOECHE). These schools are not part of the formal education system and do not provide structured early childhood education.

In contrast, IQS follow a broader curriculum and extend into the primary cycle. Typically managed by associations, they offer a three-year pre-primary program starting at age five. Learners who complete IQS can transition to lower-primary education. While the curriculum remains strongly oriented towards religious instruction, it also prepares children for formal schooling. Governance of the subsector is fragmented. Weak coordination between the Ministry of Justice and the Ministry of Religious Affairs, which oversee Qur’anic schools, and the Ministry of Education, which is responsible for early childhood education, constrains effective management and oversight.

The TVET subsector remains underdeveloped and highly informal. Although the number of centres has expanded, provision is geographically uneven, public-sector capacity is limited and enrolment levels remain modest relative to population needs. Instructor shortages and inconsistent data reporting constrain effective planning, and gender parity varies significantly across states.

Governance and financing constraints continue to limit progress. Lines of responsibility between federal and state institutions are not always clear, coordination mechanisms remain weak and administrative capacity is uneven. Despite decentralisation ambitions, the federal government still executes the majority of public education spending, reflecting concerns about subnational readiness. This raises legitimate questions about the depth and functionality of decentralisation in practice. Implementation of the Education Sector Strategic Plan (2022–2026) has also been slowed by delayed planning cycles, funding shortfalls, donor–government misalignment and fragmented partner coordination. Heavy reliance on external financing underscores the sector’s structural vulnerability.

Data systems are improving but remain fragile. The Education Management Information System (EMIS) has expanded coverage, yet weak school-level reporting, limited technical capacity and insufficient quality assurance reduce the reliability of sector data and constrain evidence-based policymaking.

Recent initiatives signal renewed political commitment. The 2023 National Education Conference created space for broader stakeholder engagement, and the recruitment of 3 000 new teachers marked a concrete step toward strengthening system capacity. Yet the scale of exclusion, persistent governance weaknesses and financing constraints mean that reform remains fragile.

Somalia has rebuilt key elements of its educational institutional architecture. The deeper challenge now lies in translating policy frameworks into equitable access, improved quality and sustainable delivery at scale. Until that gap is closed, education will remain both one of Somalia’s greatest vulnerabilities and one of its most strategic opportunities. Performance projections reinforce this concern.

SDG 4.1 commits states to ensuring that all girls and boys complete free, equitable and quality primary and secondary education. In the Current Path, primary completion in Somalia will rise from 21.6% in 2023 to 56.1% in 2043. This is a significant improvement, signalling system consolidation and improved retention. However, even by 2043, nearly half of primary-age children would still not complete primary school. This falls well short of universal completion and indicates persistent structural exclusion. At the secondary level, the gap is more pronounced. Lower-secondary completion will increase to 39.0% in the Current Path, while upper-secondary completion will reach only 12.0%. Although lower-secondary enrolment expands substantially, attrition between enrolment and completion remains high, particularly at the upper-secondary level.

SDG 4.3 calls for equal access to affordable and high-quality technical, vocational and tertiary education. Tertiary education in Somalia will expand, but from a very low base. In the Current Path, gross enrolment will rise from 9.5% to 16.2%, and completion will reach 11.5% by 2043. The constraint lies earlier in the pipeline. With upper-secondary completion projected at just 12.0%, the number of students eligible to enter tertiary education will remain structurally capped.

Somalia appears to be on a path of gradual system consolidation rather than universal provision. Achieving the SDG targets would require accelerated gains in completion rates, targeted equity interventions and sustained investment in system quality. Otherwise, demographic growth will continue to outpace institutional capacity.

Chart 17 presents the mean years of education in the Current Path and in the Education scenario, from 2020 to 2043, for the 15 to 24-year age group.

The average years of education in the adult population aged 15 to 24 is a good first indicator of how the stock of knowledge in society is changing. In 2023, Somalia ranked 52nd out of 54 African countries. This low starting point reflects the legacy of conflict, prolonged state collapse and heavy reliance on fragmented, largely private provision.

As shown in Chart 16, progression through the education funnel will remain constrained at each stage, particularly at the lower- and upper-secondary level. These bottlenecks are reflected in the mean years indicator. On the Current Path, mean years of schooling for young people will rise modestly, from 4.6 years in 2023 to 5.5 years by 2043.

Under the Education scenario, mean years of education will increase much more rapidly, reaching 8.3 years by 2043. This improvement from the Current Path reflects stronger progression and retention across the pipeline. Improvements in primary intake and survival feed into higher-secondary transition and graduation rates, while improvements in quality, expanded vocational pathways and stronger tertiary enrolment deepen the overall years of schooling accumulated by each cohort.

This acceleration reflects system-wide reforms across the education pipeline. The Education scenario strengthens the system at every level to better align education with development needs. At the primary level, reforms improve intake, retention and learning quality. At the secondary level, higher transition and graduation rates reduce dropout and expand participation, alongside a larger vocational track to diversify pathways and better match labour market demand. At the tertiary level, enrolment and completion increase, together with a greater share of science and engineering graduates to strengthen the advanced skills supply. Gender parity embedded across all levels further amplifies these gains. In a context where early marriage and poverty constrain girls’ progression, sustained improvements in female educational attainment can alter labour market participation and intergenerational opportunity structures.

Education reform alone will not guarantee economic transformation. The returns to expanded and improved schooling will depend on labour-market absorption, private-sector growth and political stability. However, without sustained improvements in both attainment and quality, Somalia risks stabilising at low average levels of schooling that constrain long-term growth, productivity and state-building prospects.

Chart 18 presents the value-added by sector as share of GDP in the Current Path, for 2023 and 2043.

Drawing on the 2024 Somalia Economic Update and the Somalia Economic Outlook (2nd Edition), Somalia remains in the early phases of economic transformation. Progress in shifting labour and capital from low-productivity, subsistence and informal activities into higher-productivity sectors has been slow and uneven. A large proportion of the population continues to depend directly or indirectly on agriculture, livestock, petty trade and informal services, underscoring the narrow productive base and limited sectoral diversification. Structural transformation is further constrained by low female labour force participation, with participation rates significantly lower for women than men.

Agriculture continues to play a central role in employment and exports, particularly through livestock. Recent sectoral performance has been mixed. Livestock production and exports have shown relative resilience, while several staple crops have struggled to recover fully from the 2020–2023 drought, widely regarded as the most severe in four decades. The drought significantly reduced pasture, water availability and crop yields, and caused major livestock losses. Although pastoral systems can adjust through mobility, both crop and livestock production remain highly exposed to climatic shocks, animal disease and external market disruptions. The country’s long coastline offers considerable fisheries potential, yet much of this capacity remains underutilised due to weak regulation, limited cold-chain infrastructure and illegal fishing.

Despite the importance of agriculture, domestic value addition is minimal. Most livestock and agricultural products are exported in unprocessed form, reflecting weak agro-processing capacity. The modest industrial base that existed before state collapse has largely eroded, and manufacturing contributes only a very small share to overall output. Small-scale food processing, grain milling, textiles and leather production exist but operate at limited scale, outdated technology and weak infrastructure support. Construction has expanded in major cities, driven partly by diaspora investment and urban growth, yet this has not translated into broader industrial development. Persistent infrastructure deficits compound these limitations. Inadequate electricity supply, weak transport networks, limited port capacity and underdeveloped logistics systems increase production costs and restrict market access. Energy shortages in particular limit industrial expansion and agro-processing. Although policy frameworks for industrial development have been revived in recent years, implementation capacity remains uneven.

At the same time, services and trade have become increasingly prominent in the economic landscape. Telecommunications, financial services and money transfer operations have expanded despite continued institutional fragility. Remittances and diaspora investment play an outsized role in sustaining consumption and financing business activity, including a substantial share of start-up capital for small and medium enterprises. Expansion in formal services and urban construction has been particularly visible in major centres including Mogadishu, Garowe, Baidoa and Kismayo. Building activity has increased, supported by diaspora capital, and improved, though still uneven, local security conditions. Trade and transport systems also remain a critical backbone of domestic distribution and cross-border exchange. However, much of this activity remains informal and lightly regulated. Operating outside the formal tax base, it constrains productivity growth, weakens revenue mobilisation and limits deeper state–private sector linkages.

These structural features are reflected in Somalia’s macroeconomic performance. Economic growth has been modest in recent years, and rapid population growth has limited per capita income gains. Household consumption accounts for the largest share of output and is heavily supported by remittances, aid and imports, signalling that domestic production remains too weak to drive sustained income expansion. The economy, therefore, combines private-sector adaptability with continued dependence on climate-sensitive sectors and on external financing.

Overall, Somalia’s growth pattern combines private sector adaptability with structural fragility. Continued dependence on livestock and primary commodity exports, high informality, weak industrial capacity and reliance on remittances and aid limit the pace of productivity transformation. Sustained progress will depend on diversifying export value chains, strengthening energy and transport systems, expanding manufacturing and agro-processing, raising labour force participation, and deepening institutional and fiscal capacity.

On the Current Path, Somalia’s economic structure will shift gradually between 2023 and 2043. Agriculture’s share of GDP will decline markedly from 46% to 27%. Over the same period, the services sector will expand to the dominant contributor to economic activity, from 42% to 52%. Manufacturing will also grow, albeit from a low base, increasing its share from 5% to 11%. The energy sector will expand modestly from 3% to 5%, while ICT will remain relatively stable at around 4% of GDP. The materials sector will show little change over the forecast horizon, maintaining a steady share of roughly 2%.

Chart 19 presents the contribution of the manufacturing sector to GDP in the Current Path and in the Manufacturing scenario, from 2020 to 2043. The data are in US$ and as a % of GDP.

In the Manufacturing scenario, reasonable but ambitious growth in manufacturing is envisaged through increased investment in the sector, research and development (R&D) and improved government regulation of businesses. This aims to enhance total labour.

Visit the theme on Manufacturing for our conceptualisation and details on the scenario structure and interventions.

By 2043, manufacturing value added will increase from approximately US$2.5 billion under the Current Path to US$2.7 billion under the Manufacturing scenario, an improvement of around US$200 million. While this reflects measurable industrial deepening in absolute terms, manufacturing’s share of GDP will remain at 11% in 2043. The limited impact highlights persistent structural constraints in Somalia. Industrial expansion remains closely tied to improvements in energy reliability, transport infrastructure, access to finance, skills development and institutional coherence. Without broader system-wide reforms in these enabling conditions, manufacturing growth does not generate strong backward and forward linkages or significant spillovers into higher-productivity employment.

Even under positive reforms, Somalia’s projected transition is constrained by structural factors that limit industrial take-off. The dominance of services signals progress, but also highlights the need for deliberate strategies to strengthen manufacturing capacity if the country aims for productivity gains and employment-intensive growth. Even with coordinated reforms across sectors, manufacturing will expand only modestly and remain a relatively small share of GDP, while services will account for more than half of total output by 2043. While services can drive growth, especially in ICT, trade and finance, they do not automatically replicate the broad-based productivity gains associated with manufacturing-led development. For employment, this pattern has mixed implications. A growing services sector can generate jobs, but many service activities in low-income contexts remain informal and low-productivity. Without a stronger manufacturing base, the economy may struggle to absorb a rapidly growing labour force into higher-productivity employment. 

Chart 20 depicts exports and imports as a percentage of GDP, from 2000 to 2043, in the Current Path.

The AfCFTA scenario represents the impact of fully implementing the African Continental Free Trade Agreement by 2034. The scenario increases exports across manufacturing, agriculture, services, ICT, materials and energy. It also includes improved multifactor productivity growth from trade and reduced tariffs for all sectors.

Visit the theme on AfCFTA for our conceptualisation and details on the scenario structure and interventions.

Somalia’s strategic location along major maritime routes linking the Middle East, Asia and East Africa provides a natural advantage for trade. Historically, this position has supported strong commercial ties with Gulf economies across the Red Sea corridor. However, geographic advantage has not yet translated into broad-based export diversification or industrial development. The economy therefore remains structurally reliant on imports to meet domestic demand, increasing exposure to global supply disruptions, currency fluctuations and commodity price cycles.

Ongoing geopolitical tensions, elevated global interest rates and shifting trade policies continue to place pressure on developing and emerging market economies. For Somalia, whose economy is externally exposed, these global dynamics amplify existing structural vulnerabilities and reinforce the importance of resilient trade partnerships and diversified export markets.

Against this backdrop, Somalia has sought to deepen regional and continental economic integration. The country joined the East African Community (EAC) in 2023 and ratified the AfCFTA in 2025, initiating the alignment of trade policies and institutions with the continental framework. Somalia has begun implementing a range of reforms designed to lower trade barriers and strengthen trade-related infrastructure. Key measures include the creation of the National Trade Facilitation Committee and the National Monitoring Committee on Non-Tariff Barriers, alongside the rollout of the SOMCAS electronic customs platform. Preparations for accession to the World Trade Organization, together with bilateral initiatives such as the Somalia–Kenya memorandum of understanding to strengthen cross-border investment in East Africa, further reflect growing regional trade cooperation.

In 2023, total exports of goods and services reached approximately US$2 billion. Live animals accounted for roughly 62% of exports, followed by seafood, precious metals, natural resins and limited agricultural products such as sesame. Despite modest diversification over time, the export base remains narrow and dominated by low-value primary commodities that are highly sensitive to climatic shocks, price volatility and external market restrictions.

Somalia’s export destinations are highly concentrated. The United Arab Emirates, Oman and Saudi Arabia together account for more than 80% of total exports, reinforcing Somalia’s heavy reliance on Gulf markets. While these relationships reflect long-standing commercial and cultural ties, such concentration leaves the economy vulnerable to regulatory changes, market restrictions and economic fluctuations in a small number of partner countries.

Somalia is highly import-dependent. Total imports reached approximately US$7.4 billion in 2023 and are concentrated in food, fuel, manufactured goods and capital equipment, reflecting limited domestic production capacity and the underdevelopment of local manufacturing and agro-processing industries. Top import destinations include China, India, Turkey, Brazil and Kenya.

Chart 21 presents the trade balance in the Current Path and in the AfCFTA scenario, from 2020 to 2043, as a percentage of GDP.

In 2023, Somalia had a trade deficit of 51.1% of GDP. This will decline to a deficit of 19.4% of GDP by 2043 on the Current Path. Under the AfCFTA scenario, the trade deficit will be slightly above the Current Path at 20% of GDP in 2043.

The limited impact of the AfCFTA scenario reflects Somalia’s current trade structure. The country’s export markets are heavily concentrated in the Gulf states, accounting for 80% of total exports. As a result, reductions in intra-African trade barriers do not immediately translate into large increases in Somalia’s exports to African markets.

Structural constraints further limit the short-term gains from continental trade integration. As previously mentioned, Somalia’s manufacturing sector remains small and underdeveloped, constraining the country’s ability to expand exports of higher-value manufactured goods. Instead, exports are dominated by low-value primary commodities, particularly live animals, limiting opportunities for value addition and diversification. At the same time, Somalia remains highly dependent on imports, particularly food, fuel and manufactured goods, reinforcing persistent trade imbalances.

The AfCFTA agreement could offer important long-term benefits. By reducing tariff and non-tariff barriers across the continent, the agreement provides a framework for expanding market access, attracting investment and supporting the gradual development of new export sectors. Deeper integration into African markets could help Somalia diversify its trade partnerships beyond the Gulf, reduce vulnerability to external market shocks and encourage the development of domestic manufacturing and agro-processing industries over time. Realising these gains, however, will depend on complementary domestic reforms aimed at strengthening productive capacity, improving trade facilitation and supporting export diversification.

Chart 22 presents the Current Path of access to electricity for urban, rural and the total population from 2000 to 2043.

The Large Infrastructure and Leapfrogging scenario involves ambitious investments in road and renewable energy infrastructure, improved electricity access and accelerated broadband connectivity. It emphasises adopting modern technologies to enhance government efficiency. It incorporates significant investments in major infrastructure projects, such as rail, ports, and airports (other infrastructure), while highlighting the positive impacts of renewables and ICT.

Visit the themes on Large Infrastructure and Leapfrogging for our conceptualisation and details on the scenario structure and interventions.

Somalia’s infrastructure sector reflects decades of state collapse, conflict and underinvestment. Damage and neglect have left the country with severely limited transport, energy and public service systems. Despite recent institutional rebuilding, infrastructure gaps continue to constrain economic diversification, trade competitiveness and social development. Closing these deficits will demand sustained, large-scale capital investment.

In 2025, Somalia ranked 26th on the Africa Infrastructure Development Index (AIDI) produced by the African Development Bank. The index comprises transport, electricity, ICT and water supply and sanitation (WSS) components. Somalia placed last in the electricity composite index, 50th in transport and 43rd for ICT. Its best ranking was for WSS at 26th out of 54 African countries.

However, fiscal constraints restrict the government’s ability to finance such projects. Public expenditure remains overwhelmingly recurrent. Recurrent spending accounted for approximately 98% of total expenditure in 2023, with similarly high shares recorded in preceding years. This imbalance reflects weak domestic revenue mobilisation relative to overall expenditure needs, leaving minimal fiscal space for capital investment. As a result, major infrastructure development depends largely on external grants, concessional loans and development partner support, alongside growing private sector participation in select sectors such as ports, telecommunications and urban electricity provision.

Somalia’s road network extends over 21 000 kilometres, but only a small proportion, around 14%, is paved and many sections are in poor condition. Limited maintenance, climate shocks and insecurity have further weakened connectivity, particularly in rural areas. Only around one-third of Somalia’s rural population is estimated to have access to an all-season road, reflecting severe connectivity gaps outside major urban corridors. Poor road quality raises transport costs, reduces access to markets and services, and fragments domestic economic integration. With support from development partners, through initiatives such as the Road Infrastructure Programme and the Horn of Africa Infrastructure Integration Project, strategic road corridors are being rehabilitated to improve transport connectivity and strengthen regional trade links.

Ports in Mogadishu, Bossaso and Kismayo remain central to trade flows, given the country’s strong dependence on imports and livestock exports. In addition, smaller ports such as Hobyo and Garacad have attracted increasing interest for expansion and commercial development. These facilities are strategically significant given Somalia’s long coastline and the country’s heavy reliance on maritime trade. Investments in port management and facilities have aimed to enhance efficiency and revenue generation.

Somalia’s main airports include Aden Adde International Airport in Mogadishu, as well as Hargeisa, Bosasso, Garowe and Kismayo. Mogadishu functions as the primary international gateway, while regional airports support domestic and cross-border connectivity within the Horn of Africa. In January 2023, Somalia regained full control of its airspace after more than three decades of external administration, marking a significant step in restoring aviation sovereignty and strengthening regulatory oversight through the Somali Civil Aviation Authority in coordination with ICAO. International connectivity has expanded in recent years. Diaspora travel, business activity, humanitarian operations and religious travel have driven passenger growth. Despite this progress, infrastructure gaps persist, including the need for upgrades to terminals, runways and cargo handling facilities. The sector presents opportunities for public-private investment, particularly in airport modernisation and air cargo development.

Energy infrastructure remains one of the most binding constraints on development. Expanding access to reliable, affordable electricity is widely recognised as essential for industrial growth, agro-processing, and improved service delivery. Somalia’s electricity supply is largely provided by private operators relying on diesel-powered mini-grids, resulting in some of the highest electricity tariffs in Africa and limited, uneven access outside urban centres. The absence of a national grid and the dependence on imported fuels increase vulnerability to global price fluctuations, while investment in renewable energy, particularly solar, is gradually expanding but remains fragmented and undercapitalised.

In 2023, just over half of the population (53%) had access to electricity, with stark disparities between urban and rural areas. While approximately 78% of the urban population had access to electricity, only 31% of rural residents were connected. These gaps are projected to persist. On the Current Path, overall electricity access will reach 75% by 2043, with universal coverage in urban areas, while rural access will rise only modestly to around 42%.

To guide long-term development, the Federal Government adopted the Somali National Infrastructure Strategy (2019-2063), which sets out priorities across transport, energy, water, ICT and social infrastructure. The strategy aligns infrastructure development with broader economic transformation goals and the SDGs.

Overall, Somalia’s infrastructure landscape is characterised by incremental recovery rather than rapid transformation. Strategic projects in roads, ports and energy are underway, and policy frameworks have strengthened. However, persistent deficits in connectivity, power supply, water access and public investment capacity continue to limit productivity growth and structural transformation. Sustained improvements will depend on strengthened institutions, expanded domestic revenue mobilisation, improved project execution capacity and continued support from regional and international partners.

Chart 23 presents the number of people using cookstoves in the Current Path versus the Large Infrastructure and Leapfrogging scenario, from 2020 to 2043.

Somalia has one of the lowest levels of access to clean cooking globally. Although urban households are gradually shifting to modern fuels such as LPG, most people still rely on charcoal and firewood. This dependence carries high costs. Household air pollution remains a serious health risk, especially for women and young children. At the same time, demand for biomass fuels accelerates deforestation and land degradation in a country already highly vulnerable to climate shocks.

Improved cookstoves have expanded across Africa over the past two decades, but not fast enough to keep pace with population growth. They are often promoted as a bridge to cleaner fuels such as LPG or bioLPG. In practice, results have been mixed. Health and emissions gains are frequently undermined by stove stacking and inconsistent use. In remote rural areas, where modern fuels are not realistically accessible and sustainable biomass is available, improved cookstoves can still offer incremental benefits. Local production can support small enterprises and reduce exposure to volatile import prices. Even so, they do not represent a structural shift in the cooking energy system. Uptake is typically based on one-off purchases rather than reliable energy service models, limiting scale and long-term impact.

Under the Current Path, households using traditional cookstoves will increase from 1.6 million in 2023 to 2.1 million by 2043. In the Large Infrastructure and Leapfrogging scenario, the number of households using traditional cookstoves will be about 200 000 lower than the Current Path forecast for 2043, indicating a modest acceleration in the shift away from biomass. This shift is reflected in modern fuel uptake. By 2043, 1.7 million people will use modern fuels under the Current Path, compared to 1.9 million in the Large Infrastructure and Leapfrogging scenario. The gains are tangible but limited.

Clean cooking should therefore be treated as a central development and public health priority. Affordability constraints, weak fuel supply chains and limited perceived advantages over traditional practices drive low adoption. Awareness campaigns alone will not be sufficient. Targeted subsidies, financing mechanisms and stronger distribution systems are essential to reduce upfront costs and ensure a reliable supply. Policy measures could include LPG affordability support, decentralised solar and biogas where viable, strengthened distribution networks, incentives for local manufacturing, and the integration of clean cooking targets into broader rural development and energy strategies. Urban trends show that progress is possible when affordability and supply reliability align, but nationwide transformation will require sustained coordination among government, private-sector actors and development partners.

Chart 24 presents the percentage of the population and number of people with access to mobile and fixed broadband in the Current Path and in the Large Infrastructure and Leapfrogging scenario, from 2020 to 2043. The user can toggle between mobile and fixed broadband.

Digital technologies are widely recognised as critical tools for responding to Somalia’s structural development pressures, including protracted conflict, climate shocks, food insecurity and displacement. Despite underdeveloped formal sectors and institutions, Somalia has developed one of the most dynamic mobile money ecosystems globally. Mobile money services are used by more than 70% of adults and have largely replaced cash for everyday transactions. Roughly 155 million mobile money transactions are processed each month, valued at approximately US$2.7 billion. These platforms facilitate domestic payments and remittances, support informal commerce and expand access to financial services in areas where traditional banking infrastructure is limited.

Digital inclusion is therefore embedded within national policy priorities. The foundation was laid through the National Communications Law (2017) and the National ICT Policy and Strategy (2019–2024). Following stakeholder validation in late 2023, the ICT Digital Inclusion Policy builds on this, establishing a targeted framework and a five-year implementation roadmap focused on digital exclusion of marginalised groups.

Somalia’s digital ecosystem is more dynamic than often assumed. Since 2014, fibre deployment and international submarine cable connectivity have strengthened core infrastructure. In 2024, leading operators began rolling out commercial 5G services in major urban centres, building on earlier 4G expansion.

Network performance in urban areas has improved steadily, with download speeds in some cases comparable to regional averages. However, these gains are unevenly distributed. Outside major cities, infrastructure deficits remain significant. Network reliability varies, electricity supply is inconsistent, and service costs remain high relative to household incomes. Digital exclusion is concentrated among rural communities, internally displaced populations, women, youth, older persons, people with disabilities and those with limited formal education. Beyond connectivity, limited digital literacy and a shortage of locally relevant content restrict meaningful participation in the digital economy.

The telecommunications sector is largely private-sector driven and operates under a technology-neutral licensing regime. Competition has lowered headline prices and expanded services, but market incentives alone have not delivered connectivity to underserved and commercially unattractive areas. While Somalia benefits from international submarine cable connections, it lacks a strong national fibre backbone, relying heavily on microwave networks that limit resilience and performance.

Affordability comparisons within the East African Community and Djibouti show that, although service prices may appear relatively low in absolute terms, they are costly relative to national income levels. On the regulatory front, Somalia performs relatively well, particularly in formal mandates and competitive frameworks, placing it broadly in line with regional reform trends.

The 2025 entry of Starlink adds a new layer of complexity. Satellite connectivity has the potential to improve access in hard-to-reach locations, yet high equipment and subscription costs place it beyond the reach of most households. In urban markets, where terrestrial services are already available, the competitive advantage is limited. Moreover, public debate surrounding the licensing process underscores the importance of transparency and regulatory accountability in managing new market entrants. The broader question is whether emerging technologies will complement existing networks to close rural gaps or primarily serve higher-income users in already connected areas.

Taken together, Somalia’s digital landscape in 2026 reflects both progress and persistent structural constraints. Urban connectivity has improved and competition is active, yet affordability pressures, rural infrastructure deficits and skills gaps continue to limit inclusive participation. The central policy question is no longer whether digital transformation is advancing, but whether technological upgrades, new entrants and regulatory reforms can be aligned to reduce, rather than entrench, existing inequalities.

On the Current Path, Somalia’s mobile broadband subscriptions per 100 people will increase from 3 to 97 between 2023 and 2043. The Large Infrastructure and Leapfrogging scenario will accelerate adoption and increase mobile broadband subscriptions to 110 per 100 people by 2043.

In terms of fixed broadband, Somalia ranked 17th out of 22 low-income African countries in 2023, with 1.1 subscriptions per 100 people. The Current Path forecast indicates steady growth, reaching 19.7 subscriptions per 100 people by 2043, overtaking the group average of 15.8. A modest additional increase is observed in the Large Infrastructure and Leapfrogging scenario, which will reach 21.4 subscriptions per 100 people by 2043.

Chart 25 presents the trends in FDI, aid and remittances in the Current Path and in the Financial Flows scenario as a percentage of GDP, from 1990 to 2043.

The Financial Flows scenario represents a reasonable but ambitious increase in inward flows of worker remittances, aid to poor countries and the stock of foreign direct investment (FDI) and additional portfolio investment inflows. We reduce outward financial flows to emulate a reduction in illicit financial outflows.

Visit the theme on Financial Flows for our conceptualisation and details on the scenario structure and interventions.

Foreign aid has shaped Somalia’s development trajectory since the mid-twentieth century. Rather than tapering off, reliance on aid intensified across subsequent decades. Aid flows increased from the 1970s through to the end of the 1980s, and very large volumes of official assistance followed after 1991, amounting to billions of dollars over the years that followed. The composition of that support also changed in ways that matter for long-term outcomes. After the collapse of the central government in 1991, assistance became overwhelmingly crisis-oriented, with humanitarian allocations frequently matching or exceeding development funding.

Despite the scale and longevity of aid, development outcomes remain weak. Efforts to improve aid coordination in the post-civil war era have aimed to align assistance with global principles and frameworks, such as country ownership and accountability. For example, the Somali Compact signalled an attempt to consolidate external support around a shared state building and peacebuilding framework. Successive national development plans shift focus toward development priorities and domestic planning and architecture. However, the aid ecosystem remains fragmented and politicised, with institutional instability, weak accountability and federal–state tensions continuing to undermine coherence and trust.

The wider context keeps pushing aid back towards emergency response. Recurrent drought, insecurity and weak resilience have entrenched humanitarian need and driven large-scale displacement, placing intense strain on infrastructure and services, particularly in Mogadishu. These pressures also constrain domestic revenue mobilisation, reinforcing dependence on external resources. This dependence carries its own risk: donor concentration and sudden policy shifts can destabilise the system. The suspension of USAID assistance in January 2025 had a significant impact, linked to immediate job losses and interruptions to health and education services, alongside setbacks for private sector development. In Somalia, funding reductions created pipeline breaks that sharply curtailed emergency food assistance by more than 80%. With an estimated 4.4 million people facing high levels of food insecurity, coverage fell from 2.2 million recipients before the US cuts to 1.1 million by April 2025, and dropped further to around 350 000 as supply interruptions linked to financing gaps took hold. As other donors also reduce commitments, the resulting financing gap threatens recovery gains.

Somalia’s investment environment shows gradual improvement, reflected in rising foreign direct investment (FDI) and a growing set of institutional and legal reforms aimed at attracting investors. FDI inflows have increased steadily from US$11.84 million in 1990 to US$626.2 million in 2023. Investment originates largely from Turkey, the United Arab Emirates, Kenya and Ethiopia, and is concentrated in telecommunications, agro-processing, construction and port development. Infrastructure constraints remain a major drag on competitiveness. Weak road networks, unstable electricity supply and ageing port infrastructure raise operating costs and restrict growth. The World Bank notes that weak economic integration and low-complexity investment continue to limit productivity gains in Somalia’s private sector. The country remains only loosely connected to global value chains, with limited foreign value added in exports and weak upstream and downstream linkages, a pattern reinforced by the economy’s geographic and economic fragmentation. Although FDI appears sizeable relative to GDP and stocks have risen in recent years, per capita levels remain low and efficiency-seeking investment is minimal. Instead, inflows are largely driven by diaspora and transnational Somali conglomerates, and are often channelled into lower-productivity activities, in some cases contributing to market distortions.

Policy measures have been introduced to strengthen investor confidence and improve the investment climate. Somalia established the Somalia Investment Promotion Office (SOMINVEST) under the Ministry of Planning to promote and facilitate investment. The Investment and Investors Protection Law, enacted in 2023, provides guarantees that include full foreign ownership, the right to repatriate capital and protections for investor rights. In addition, the government is developing Special Economic Zones and offering tax incentives to encourage investment in priority sectors such as agriculture, energy and fisheries, with the stated aim of supporting diversification and long-term growth. Related reforms include the PPP Law and the roll-out of digital systems for customs and tax administration. Business registration processes have also improved, contributing to greater transparency and efficiency, but contract enforcement, tax compliance and cross-border trade remain challenges.

Despite the reform momentum, the operating environment remains highly uncertain, inter-regional tensions continue and insecurity persists in ways that discourage long-term commitments. Incomplete federal arrangements add an additional layer of unpredictability for investors assessing regulatory consistency across territories. These challenges sit alongside broader macro-institutional fragility, including a heavy reliance on external assistance and a narrow domestic tax base, which limits the state’s ability to finance infrastructure and deliver predictable public services at scale. Additionally, Somalia was ranked second-worst in Transparency International’s 2024 Corruption Perceptions Index, and firms routinely report informal payments, unclear tax rules and bureaucratic obstacles that delay market entry and complicate expansion. These issues weaken predictability, increase transaction costs and reduce the effectiveness of recent reforms intended to improve the investment climate.

Domestic investment is showing early signs of increased momentum, linked to renewed entrepreneurship, especially among the Somali diaspora. Local capital is reported to be moving into real estate, telecommunications and small-scale manufacturing. The private sector is the main driver of the economy, contributing around 75% of GDP and 87% of wage employment. Somalia also has a large base of micro, small and medium-sized enterprises (MSMEs), estimated at more than 174 000.

Somalia’s financial sector remains underdeveloped. The country has a growing network of licensed banks and money-transfer firms, and mobile money has become the default transaction channel for many people who are excluded from conventional banking. However, finance is still a binding constraint and formal financial inclusion remains low. Only around 15% of the population holds a bank account, and fewer than 5% use formal credit. Microfinance providers and mobile money operators help to narrow the gap. Still, progress is slowed by fragmented regulation, elevated credit risk and collateral requirements that most households and small businesses cannot meet.

Remittances from the Somali diaspora are another critical lifeline. With Somalis making up one of the world’s largest populations living abroad (by share) as of 2021, remittance inflows have become a routine survival strategy for an estimated 40-60% of households. However, the outlook for both aid and remittances is uncertain. As Somalia moves into a post-context of the Heavily Indebted Poor Countries Initiative (HIPC), external financing is expected to shift towards concessional borrowing, with tighter links to fiscal performance and debt sustainability. That could become restrictive if domestic revenue mobilisation does not improve substantially. Remittances may also shrink over the near to medium term as older diaspora cohorts retire and as younger generations, who may feel less connected to extended family networks, become less likely to send money back to relatives. However, the outlook for both aid and remittances is uncertain.

Chart 26 presents government revenue in the Current Path and in the Financial Flows scenario, from 2020 to 2043. The data is in US$ 2017 and % of GDP. 

Wagner's law, or the law of increasing state activity, states that public expenditure increases as national income rises. In the Financial Flows scenario, it is reasonable to expect government revenues to increase as a percentage of GDP relative to the Current Path.

Government revenue in Somalia remains limited but has improved gradually in recent years, supported by reforms aimed at strengthening fiscal management and broadening the tax base. Domestic revenue is still driven primarily by export revenue and taxes. The roll-out of digital systems for customs and tax administration, alongside related reforms such as the PPP Law and improvements in business registration processes, has enhanced transparency and administrative efficiency. These measures have contributed to modest gains in revenue mobilisation and expanded fiscal space.

However, structural weaknesses continue to constrain revenue performance. The tax base remains narrow, income and corporate taxation are limited, and compliance challenges persist. Contract enforcement, tax compliance and cross-border trade procedures remain problematic, undermining predictability for businesses and reducing the effectiveness of reforms. At the same time, the broader operating environment remains uncertain. Inter-regional tensions, insecurity and incomplete federal arrangements create regulatory inconsistencies across territories, discouraging long-term investment and complicating enforcement.

These governance constraints are compounded by macro-institutional fragility. Somalia continues to rely heavily on external assistance, and its limited domestic revenue base restricts the state’s ability to finance infrastructure and deliver consistent public services.

On the Current Path, government revenue is projected to increase from US$3.6 billion in 2023 to US$14.1 billion by 2043. Under the Financial Flows scenario, revenues will rise further to US$15.6 billion over the same period.

As a share of the economy, government revenue stood at 35.2% of GDP in 2023 and is projected to decline slightly to 34.8% by 2043 on the Current Path. Under the Financial Flows scenario, improved financial inflows and strengthened fiscal capacity would raise government revenue to 37.3% of GDP by 2043.

Chart 27 presents the Current Path of government effectiveness comparing the country to the average for the African income group, from 2002 to 2043.

Somalia’s governance trajectory has been shaped by rupture and negotiated reassembly. After independence in 1960, the country briefly sustained competitive electoral politics. The 1969 military coup under Siad Barre centralised authority and progressively personalised rule. When the regime collapsed in 1991, the central state apparatus disintegrated, leaving a fragmented political landscape in which authority persisted through clan structures, customary law and armed actors rather than formal institutions.

From 2000 onwards, national reconstruction relied on explicit clan-mediated power sharing. The 4.5 formula structured parliamentary representation among major clans and minority groups and enabled executive formation through negotiated inclusion. Under this formula, each of the four main clans receives an equal number of seats. In contrast, minority groups collectively receive half the number of representatives allocated to any one of the major clans. The 2012 Provisional Constitution then re-established a federal framework, but the settlement remains incomplete and politically contested. In practice, clan identity continues to shape representation and senior appointments despite limited formal recognition in the constitutional text.

Territorial fragmentation remains a defining fault line in Somalia’s governance trajectory. Somaliland declared independence in 1991 following the collapse of the Siad Barre regime and has since operated as a de facto separate political entity with its own institutions, elections and security structures. Despite this sustained internal consolidation, it has not secured broad international recognition, and the Federal Government of Somalia continues to assert sovereignty over the territory. Tensions escalated in 2024 when Ethiopia signed a memorandum of understanding with Somaliland on potential port access, a move widely interpreted as opening the door to recognition. Somalia strongly rejected the agreement as a violation of its territorial integrity and intensified diplomatic efforts to rally regional and international support. Somalia also concluded a defence and cooperation framework with Türkiye, which subsequently mediated between Somalia and Ethiopia. This engagement culminated in the Ankara Declaration, reflecting an attempt to defuse escalating tensions. The episode underscored how Somalia’s unresolved territorial question is embedded in wider Red Sea and Horn of Africa geopolitical competition.

The dispute intensified further in December 2025, when Israel announced recognition of Somaliland, triggering condemnation by Somalia and strong pushback from regional actors. States that have historically opposed Somaliland’s secession, including Djibouti, Egypt, Sudan, South Sudan, Türkiye and Saudi Arabia, reiterated their support for Somalia’s territorial integrity. Other governments adopted a more cautious posture, refraining from immediate public alignment while monitoring the evolving diplomatic landscape. For the African Union, unilateral assertions of sovereignty are inherently problematic. The Peace and Security Council firmly rejected the move, stating that no external actor has the right to alter the territorial integrity of a member state. Yet this forceful stance effectively stalled the debate without advancing a negotiated solution. Somaliland’s bid for recognition reflects deeper tensions in African post-colonial statehood. It brings unresolved questions about sovereignty, legitimacy and borders into focus, with significant legal, political and geopolitical consequences for the region.

Against this backdrop of fragmented authority and negotiated state-building, it is important to assess not only political arrangements but also the state’s implementation and delivery, as measured by the government effectiveness index. In the modelling, the index captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation and the credibility of the government's commitment to such policies.

In 2023, Somalia scored 0.5 out of 5 on the World Bank Governement Effectiveness index, reflecting institutional fragility and weak service delivery. The model projects a gradual improvement to 1.2 by 2043, on the Current Path. While this represents measurable progress, it remains low by regional and global standards. By 2043, the projected average for sub-Saharan Africa will be around 2.2, while low-income African countries will average closer to 1.9.

Chart 28 presents the security, capacity and inclusion index for the Current Path versus the Governance scenario, in 2023 and 2043.

This scenario assumes better governance: stability, capacity and inclusion. It measures a state’s progress by averaging these three indices. To this end, it includes an index (0 to 1) for each dimension, with higher scores indicating better outcomes.

Visit the theme on Governance for a full conceptualisation and details on the scenario structure and interventions.

In 2023, Somalia recorded a score of 0.35 on the IFs governance index, which measures performance across security, state capacity and inclusion. On the Current Path, the score is projected to increase modestly to 0.41 by 2043. Under the Governance scenario, institutional reforms and improvements in state effectiveness will raise the score further to 0.49 by 2043.

Persistent security challenges continue to constrain development progress. Somalia’s federal government does not exercise full territorial control, and al-Shabaab continues to influence or administer parts of the countryside, limiting state authority and undermining rule-of-law institutions. External security assistance has therefore been central to state reconstruction. The African Union Transition Mission in Somalia (ATMIS), deployed in April 2022, was mandated to strengthen Somali security forces and support a gradual transfer of responsibility from international troops to national institutions. In practice, the transition has proved complex. Shortfalls in force integration, logistics and command capacity, combined with political sensitivities surrounding troop drawdowns, have slowed progress. The launch of the African Union Support and Stabilization Mission in Somalia (AUSSOM) in January 2025, under the oversight of the AU Peace and Security Council, reflects a shared recognition among Somali authorities and external partners that the security handover remains unfinished. Building a unified, professional and nationally accountable security architecture remains central to durable stability.

Political instability, centred on disputes over the 2026 electoral process, federal–regional tensions and constitutional disagreements, is distracting attention and resources from counter-terrorism operations. The federal government’s push to reform the electoral system, contested by powerful federal member states such as Puntland and Jubaland, has heightened the risk of legitimacy crises and public unrest, further undermining unified security efforts.

The security crisis is closely intertwined with climatic and humanitarian pressures. Recurrent drought, layered onto conflict and displacement, has contributed to one of the world’s most acute food insecurity crises, leaving millions at risk of severe hunger and acute malnutrition. These overlapping shocks not only deepen immediate vulnerability but also weaken livelihoods, strain social cohesion and undermine the economic foundations needed for recovery.

The escalation of conflict in the Middle East adds a further layer of risk to Somalia’s fragile security environment. Rising tensions across the Red Sea and Gulf of Aden are increasing geopolitical competition along one of the world’s most strategic maritime corridors. Somalia’s long coastline and limited maritime enforcement capacity make it particularly exposed to illicit trafficking, arms flows and external proxy activity linked to these wider conflicts. At the same time, intensifying crises in the Middle East risk diverting international political attention, security assistance and humanitarian funding away from the Horn of Africa. For Somalia, where the transition from international peacekeeping to nationally led security arrangements remains incomplete, such shifts could slow stabilisation efforts and prolong reliance on external security support.

Taken together, Somalia faces a dangerous convergence of insurgent resurgence, political fragmentation and humanitarian distress. Without stronger political consensus, improved coordination among security actors and sustained investment in civilian protection and resilience, the risk of further instability and prolonged conflict remains high.

In 2023, Somalia scored 0.41 out of 1 on the security index in our modelling, well below both its regional and income-group peers. East Africa and low-income Africa scored 0.67 and 0.63, respectively. Under the Current Path, Somalia’s score will improve only marginally to 0.46 by 2043. By contrast, integrated reforms under the Governance scenario would raise the score to 0.57 by 2043.

State capacity has improved in targeted areas, but remains uneven and geographically constrained. The most tangible gains have been in public financial management. Reforms to revenue administration, budgeting and debt oversight enabled Somalia to reach the Heavily Indebted Poor Countries (HIPC) Initiative completion point in December 2023, unlocking approximately US$4.5 billion in debt relief. This milestone strengthened macroeconomic credibility and expanded fiscal space.

However, stronger fiscal management does not automatically translate into effective governance. Federal revenue collection remains concentrated in Mogadishu, and administrative reach across much of the country is limited by insecurity and fragmented authority. Institutional performance also varies significantly across federal member states. Puntland, which has consistently supported a federal rather than secessionist model, exercises relatively stronger territorial control, collects customs revenues and has managed more regular leadership transitions than most southern states. This uneven subnational capacity underscores that Somalia’s governance challenge is not a total breakdown, but uneven progress within a federal system that remains politically fragile.

Service delivery, including water, electricity, health care and education, remains uneven and heavily reliant on private provision and external donor support. Without deeper institutional consolidation and agreement on resource sharing between the federal government and federal member states, increased fiscal space may not generate broad-based improvements in legitimacy or public services. Persistent corruption, reflected in Somalia’s position as the second-worst-performing country in Transparency International’s 2024 Corruption Perceptions Index, further undermines public trust and distorts resource allocation.

Somalia records its lowest performance on the capacity component of the composite governance index in our modelling. With a score of 0.12 in 2023, rising only to 0.21 under the Current Path by 2043, this reflects the fragility of the country’s core state institutions. After decades of state collapse, many foundational systems are still being rebuilt. Institutions formally exist, but their operational depth remains limited, and many core functions continue to depend heavily on external funding and technical assistance. Fiscal constraints, together with unresolved divisions of authority between the federal government and federal member states, further complicate coordination and slow policy implementation. Even under the Governance scenario, the projected increase to 0.25 by 2043 points to gradual strengthening rather than transformation. In practice, Somalia’s central governance challenge lies not only in designing reforms, but in building institutions capable of implementing them consistently and at scale.

Political inclusion in Somalia continues to be mediated largely through negotiated collective identities rather than exercised primarily through individual citizenship in practice. The 4.5 power-sharing formula privileges major clan groupings, while minority communities continue to experience structural marginalisation and unequal access to political representation and protection.

Electoral governance remains contested amid federal–member state tensions and ongoing debates over electoral reform. Although federal member state constitutions assign responsibility for state and local elections to subnational authorities, practice has varied, with the federal government playing a more direct role in some contexts. In 2023, the National Consultative Council, without Puntland’s participation, agreed to align federal and member-state election timelines and established a national electoral commission, transferring election management authority to Mogadishu. Supporters argue this promotes coherence, while critics view it as centralisation that risks undermining federal autonomy. The approach to the 2026 electoral cycle has intensified these tensions, with resistance from some federal member states, delays and constitutional contestation affecting perceptions of electoral credibility and inclusiveness.

Civic space remains constrained by insecurity and political contestation. Somalia is rated “Not Free” in Freedom House’s Freedom in the World 2025 assessment, reflecting weak protections for political rights and civil liberties. Journalists and civil society actors face periodic intimidation, and minority groups encounter barriers to justice, particularly where formal legal institutions are weak. Gender inclusion also remains uneven. Although quota commitments have improved women’s parliamentary representation relative to earlier periods, participation remains below agreed targets. High rates of early and child marriage further constrain girls’ educational attainment and long-term civic and economic participation.

Somalia’s inclusion score is projected to increase modestly from 0.52 in 2023 to 0.55 by 2043 on the Current Path. The relatively higher inclusion score reflects Somalia’s negotiated and competitive political order. However, inclusion in formal representation does not necessarily translate into equal access, institutional depth or effective service delivery. The positive interventions in the Governance scenario will improve inclusivity to 0.66 in 2043.