Somalia Economy

1. Somalia
 SWOT for PESTEL
 Natural resources
 Import and Export
 Classical and Modern theory
Presented by
Manu Xaviour
Saithu Mohammed

2. Independe
nce
July 1, 1960
Capital City Mogadishu
2°2′N 45°21′E
Largest City Mogadishu
2°2′N 45°21′E
Total area 637,657 sq km
Population 10,616,380 (2015 est.)
Official
Language
Somali and Arabic
National
Anthem
Qolobaa Calankeed
Religion Islam
Borders Ethiopia, Djibouti and Kenya

3. Currency Somali shilling (SOS)
Life expectancy 52.4 Years (2012)
Climate principally desert; northeast monsoon
(December to February), moderate
temperatures in north and hot in
south; southwest monsoon (May to
October), torrid in the north and hot
in the south, irregular rainfall, hot and
humid periods (tangambili) between
monsoons
Terrain mostly flat to undulating plateau
rising to hills in north
Natural resources uranium and largely unexploited
reserves of iron ore, tin, gypsum,
bauxite, copper, salt, natural gas,
likely oil reserves
Agricultural land 70.3%

4. Birth rate 40 births/1,000
population (2016 est.)
Death rate 13.3 deaths/1,000
population (2016 est.)
Sex ratio 1.01 male(s)/female
(2016 est.)
Government type federal parliamentary
republic

5. S.W.O.T FOR P.E.S.T.L.E OF SOMALIA
1) P-POLITICS
• Politics of Somalia takes place in framework of Federal
Parliamentary Representative Democratic Republic.
• Constitution of Somalia lays down that President is the Head
of the State & Prime Minister is the head of Government.
• Prime Minister is appointed by President with parliaments
approval.
• Somalia has a bicameral legislature, consisting of Senate
(Upper House) and National assembly of Somalia (Lower
House).

6. Strengths
• President is the hed of the state, Prime Minister is elected by
President with the approval of parliament.
• Government institutions perform essential functions.
• Due to Bicameral legislature, better controlling and governing
of the state is possible.
• Two houses which makes the Federal Parliament Of Somalia
are The Senate and National Assembly of Somalia which helps
proper decision making and scrutinizing the decisions made
and make it far more better for the development of the country.

7. Weakness
• Somalia Civil War:
– Absence of national government for two decades.
– Severe lack of capacity in every part of the country.
– Interclan and Interfractional fight have flared with little
warning, kidnapping and murder and other threats to occur
unpredictably in many regions.
– It lead to more than 350,000 death resulting from starvation
and disease.

8. Opportunities
• New constitution and New parliament representing diverse
parties and factions.
• Somalia’s political structure subsequently showed sign of
stabilization

9. Threats
• Somalia Government is facing fresh pressure from regional
governments and local politicians to quickly roll out a state
of security and reconciliation.
• Reconciliation reforms or face a regime change in the wake
of the recent attack on Westgate Shopping Mall in Nairobi
by Al-Shabab.
• Regional governments are concerned about country’s
capital Mogadisha’ lackadaisical approach to the fight
against Al-Qaeda linked militants.

10. 2)ECONOMY
• Somalia is classified as UN as a least developed country.
STRENGTHS
i. Livestock
ii. Agriculture & Fisheries

11. Weakness
• Risk of overall policy reversal and more specifically
monetary and related policy.
• Unpredictability of local economic environment.
• High Inflation rate.
• Poor Infrastructure.
• Adverse weather condition.

12. Opportunities
– Business boom expected as local and foreign investors as
an investment destination
– Oil find in Somalia and increased local investment would
result in increase of job opportunities.
– Dispute between clans in Somali land could be fuelled by
discovery of Oil.
– High poverty like to increase vulnerability of host
community.
– High inflation rate
– International restrictions on Money transfer
Threats

13. 3)SOCIAL
• Somali people share a common language somali and most
are muslims of the sunni sect.
STRENGTHS
i. Increased public awareness on their own rights
ii. Increased public awareness of government.
WEAKNESS
• High poverty
• Civil war
• Illiteracy
• Malnutrition
• High Death Rate

14. Opportunities
– There is a positive change of mentality of youth towards
the somali conflict and interest to come out of it,
– Conflict dynamics in south likely to change.
– Somali Diaspora community likely to influence social
norms
– Illiteracy
– Political Instability
– Low income
– Poverty
– Limited Political contribution of people.
Threats

15. 4)TECHNOLOGY
It appears that scientific progress has come to standstill.
STRENGTHS
i. Telecommunication
ii. Internet
iii. Radio
iv. Print
v. Television and Postal services are largely concenterated in private sector
WEAKNESS
• Poltical instability.
• Long time civil conflicts
• Poverty
• Lack Of education
• Economic Underdevelopment

16. Opportunities
– Somalia has the lowest international call rate in the world
– Growth in telecommunication
– Advent of undersea fiber optic cable and its network
promotes ICT.
– Natural disaster
– Limited Resources
– Instability of economy
– Illiteracy
Threats

17. 5)LEGAL
Xeer is the traditional legal system of Somalia, and one of
the three systems from which formal somali law draws its
inspiration, the others being civil law and islamic law.
STRENGTHS
i. Legal system converted into Shari’äh with possibility for appeals.
ii. Easy access to seek right with law as small localties have courts,
WEAKNESS
• No National Legal system.
• No Definite explanation of laws.
• Delay in attending to legal matters.
• Ineffictive legal system

18. Opportunities
– NRC will need to strategize operating within various legal
frameworks (e.g., Sharia Law) in Somalia.
– NRC will continue to operate with weak legal state
institutions also.
– Corruption in government institution and individuals
– Government regulation of INGOs. And formalization of
IDP policy affect aid agencies
– Access of Internatinal staff shrink due to legal issues
questioning their status and necessity
Threats

19. 6)ENVIRONMENT
Somalia has five main world ecosystem types;Coastal
Aquatic,Desert & Semi-Desert, Grass & Shrub, Crop and
settlement & interrupted woods.
STRENGTHS
i. Abundant fisheries resources.
ii. Composition of five main ecosystem
iii. High Livestock export
iv. Suitable climatic condition for agriculture in some regions.
WEAKNESS
• Unpredictable climatic changes
• Natural disasters like flood and draught
• Most of land are uncultivatable and deserted.
• Increased land degradation as result of deforestation.

20. Opportunities
– Abundant availability of unexploited oil.
– NRC has an opportunity to adopt & create new initiative on
environmental protection.
– Deforestation for Charcoal for export.
– Poaching of Wildlife resulting in emigration of animals to
neighboring countries.
– Lack of renewable resources result in heavy dependence of
charcoal mainly for cooking
Threats

21. Natural Resources
Natural resources of Somalia include;
• Oil reserves
Somalia one billion barrels of oil reserves in the Yemeni region but
not yet exploited
• Natural gas
Proved reserves of natural gas are estimated to 5.563 billion cu
meters in the country
• Other resources include
• Phosphate
• Bauxite
• Copper
• Tin
• Salt
• Uranium
• Iron ore

22. INTERESTING FACTS
• Somalia is one of thee poorest countries in the world.
• Over 73%live on less the $2 per day.
• About 1 in every 8 children in Somalia is acutely malnourished.
• Over One million people in the country are in desperate need of
emergency food assistance.
• Only 19.9% enrollment to schools which is 285,574 children,
placing somalia among lowest enrollment rates in world.
• No National Legal system. Sharia and secular courts are in some
localities.
• Over 5 million people died in Civil War since 1990.
• Since beginning of civil war no tourist visited Somalia until 2010.
• More than 350,000 civilians died due to starvation and diseases.

23. Comparative Advantage
• Somalia has a comparative advantage of Livestock mainly
Sheep and Goats.
• As Somalia exports livestock & Fisheries to a large extent as
the country is abundant with the same and it imports
Vegetables and Raw sugar in high quantity which is scarcely
available in the country, Somalia carries out Hecksher-Ohlin
Theory.
Hecksher-Ohlin Theory

24. EXPORT AND IMPORT
Export
• Export in Somalia decreased to 533.12 USD million in 2015
from 635.95 USD million in 2014.
• Export of Somalia average 272.44 USD million from 1998-
2015.
• High time 640.89 USD million and record low of 45.62
USD 2001.

25. EXPORT commodity
composition(2015)
Commodity Composition (%)
Bovine 8.8
Sheep & Goats 68
Other Animals 7.1
Non-Fillet Frozen 2.1
Molluscs 2.1
Other oily seeds 5.5
Insect Resins tanned 2.0
Oil seed, grain, & fruits 5.1
Raw hides, skins & leather 7.6

26. EXPORT Destination
Total Export in 2015 = $548 million
Country Amount (USD Million)
Saudi Arabia 314
Oman 138
China 23.5
India 15.6
Yemen 8.67
Ethiopia 1.3
Bahrain 4.86
Pakistan 6.61
South Korea 6.36
Jordan 2.94

27. IMPORT commodity
composition(2015)
Commodity Composition (%)
Synthetic Filament Yarn 1.3
Woven Fabric 4.2
Rubber 1.3
Telephone 0.69
Armed Vehicles 1.1
Bovine Sheep & Goats 5.1
Milk 1.7
Potato & Tomato 7
Other Vegetables 21
Rice 4.6
Palmoil 8.3

28. IMPORT Destination
Total Export in 2015 = $2.12 billion
Country Amount (USD Million)
India 418
China 300
Oman 183
Malaysia 66.7
Saudi Arabia 49.6
Turkey 70.6
Yemen 37.7
Thailand 17.4
South Korea 5.51
Ethiopia 672

29. IMPORT Trend Analyis

30. Export Trend Analysis

31. Somalia
Trade
Last Previous Highest Lowest Unit
Balance of
Trade
-1473.48 -1935.43 -104.18 -2175.87 USD
Million
[+]
Exports 533.12 635.95 640.89 45.68 USD
Million
[+]
Imports 2006.60 2571.38 2816.75 163.42 USD
Million
[+]
Terrorism
Index
7.55 7.60 7.60 3.14 [+]