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Somalia Export of Livestock
As the macroeconomic data made clear, Somalia was primarily
an exporter of livestock to the Arab states. The macroeconomic
data did not make clear the proportions in which the foreign
exchange earnings from livestock exports went to the government,
based on the official exchange rate of those recorded sales, and
to the traders and herders themselves, based on the difference
between the official and informal exchange rates plus all
revenues from unofficially recorded sales. A system known as
franco valuta (see Glossary)
enabled livestock middlemen
to hoard a considerable foreign exchange surplus. In the
livestock export sector, traders had to give the government only
40 percent of their foreign exchange earnings; the traders could
import anything they wished with the remaining foreign exchange.
Thus, imports were substantial amid data of collapse. One needed
only to be connected to a trading family to enjoy massive
increases in consumption during the 1980s. In the livestock
export system, franco valuta was officially discontinued
as a result of the IMF structural adjustment program, but in
practice franco valuta continued to be observed.
In the 1970s, northern trading families used their profits to
buy real estate, much of it in Mogadishu. In the 1980s, they
helped subsidize the rebels fighting the government of Siad
Barre.
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