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Somalia ECONOMY
Salient Features: Formerly socialist-oriented economy
undergoing market-oriented structural adjustment until 1991.
Stabilization and macroeconomic adjustment programs implemented
during 1980s under auspices of international credit and aid
agencies. Privatization of wholesale trade and financial sectors
largely complete by 1991; economic growth sporadic and uneven
across sectors. Most economic activity disrupted by breakdown of
Somali state in 1991.
Agriculture, Livestock, Forestry, and Fisheries: Crop
and livestock production, forestry, and fisheries, accounted for
bulk of gross domestic product (GDP) in 1991; livestock
predominant agricultural export, also important source of animal
products (mostly milk) for internal markets and subsistence. Crop
cultivation dominated by rural subsistence sector, which
generated sufficient surpluses to sustain domestic informal
markets and barter economy until 1990. Main crops: sorghum, corn;
incipient production of mild narcotic qat suppressed by central
government during mid-1980s. Small plantation sector dedicated
primarily to export of bananas and sugarcane. Domestic grain
supply supplemented by international food aid. Small forestry
sector dominated by production for export of frankincense and
myrrh. Fisheries production showed modest growth during 1980s but
remained minor economic activity. Agricultural activity severely
curtailed as result of drought and breakdown of Somali state in
1991.
Mining: Mining contribution to GDP negligible (.3
percent of GDP in 1988) despite substantial deposits of gypsumanhydrite , quartz and piezoquartz, uranium, and iron ore.
Meerschaum sepiolite mined; gold deposits suspected but not
confirmed.
Manufacturing: Small manufacturing sector, based
primarily on processing of agricultural products, consisted of
few large state enterprises, hundreds of medium-sized private
firms, and thousands of small-scale informal operations. Largescale enterprises dedicated mainly to processing of sugar, milk,
and hides and skins. Overall manufacturing output declined during
1980s as result of failure of inefficient state enterprises under
market conditions. Manufacturing activity further curtailed by
civil war and collapse of Somali state. By 1990 manufacturing
ceased to play significant role in economy (about 5 percent of
GDP).
Energy: Domestic wood, charcoal, and imported petroleum
provided basic sources of energy; significant hydroelectric
potential of Jubba River remained unexploited; four small-scale
wind turbine generators operated in Mogadishu. Prior to civil
war, eighty state-owned oil-fired and diesel power plants
provided electricity to cities and towns. Refining capacity
limited to one refinery. Foreign oil supplies erratic throughout
1980s. United Nations Development Programme hydrocarbon study in
1991 indicated good potential for oil and gas deposits in
northern Somalia.
Foreign Trade: Exports consisted of agricultural raw
materials and food products. Livestock and bananas principal
exports, followed by hides and skins, fish and fish products, and
myrrh. Trade balance remained negative throughout 1980s and early
1990s. Principal imports in descending order: food,
transportation equipment, nonelectrical machinery, cement and
building materials, and iron and steel. Italy and Arab states
main destinations of exports; Italy main country of origin for
imported Somali goods in 1990; other minor suppliers included
Norway, Bahrain, and Britain.
Currency: Somali shilling. During 1980s currency
alternated between fixed and floating rates; as of March 31,
1992, US$1 equaled 3,800 shillings.
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