Manufacturing achieved some success in the early 1970s, and
was primarily based on processing of agricultural product. In
1986 the government planned to bring its sugar- and milkprocessing plants up to full production, to add a new cement
factory in Berbera, and to contract with an Italian firm to
operate its urea factory, which was producing at less than 30
percent of capacity. In 1989 a hides- and skins-processing plant
in Mogadishu was completed with Italian government financing.
Despite this activity, manufacturing did not respond to IMF
incentives as well as agriculture had. In 1988 there was a
decline of 4.9 percent in production. The decline followed a 5
percent increase in 1987. The government blamed the decline on
shortages of inputs and spare parts and on poor management. By
1990 manufacturing had all but ceased to play a significant role
in the economy, contributing only about 5 percent of GDP.