The Federal Republic of Somalia is faced with the challenge of rebuilding state institutions in the midst of recurrent and protracted conflict. Since the collapse of the Siad Barre government in 1991, Somalia has experienced cycles of conflict that fragmented the country, destroyed legitimate institutions and created widespread vulnerability. Gross domestic product (GDP) per capita and human development outcomes are now among the lowest in the world.
Following a fragile, but positive, transition mid-2012, Somalia has a full federal government in Mogadishu committed to inclusiveness, reconciliation and peace, based on a provisional constitution. Many observers hail the transition as a genuine break with the past, and the best opportunity for stability the fragmented country has had in the last two decades. The New Deal for Somalia Conference held in Brussels in September 2013, is a key milestone for the country and for a more sustainable and committed international re-engagement with Somalia.
The state’s collapse undermined basic service delivery, with a severe impact on human development outcomes. Out of 170 countries, Somalia is among the five least developed as measured by the 2012 Human Development Index. The pre-eminence of customary clan-based systems inhibit social cohesion and pervasive traditional practices such as polygamy, early and forced marriage, exclusion of women from education and employment opportunities, result in some of the worst gender equality indicators in the world.
With more than 70% of the population under the age of 30, Somalia is a young country with enormous development needs. Among the more urgent is food security which, together with displacement of a large share of the population, has led to a continuing humanitarian crisis that has spilled over into the wider region.
Somalia’s economy has been shaped and sustained by conflict. The 2012 Human Development Report estimates per capita GDP at $284 - against a sub-Saharan Africa average of $1,300 per capita. Poverty incidence is 73% (61% in urban centers and 80% in rural areas).
Livestock is the mainstay of the economy: 60% of the population derives a livelihood from pastoralism-based livestock production. The export of livestock and meat generates 80% of foreign currency. Most Somalis live in rural areas where traditional coping mechanisms, clan affiliations and pastoral mobility have been undermined by conflict. Only 7% of the rural population enjoys access to improved water sources, compared to 66% of people living in urban areas.
Somalia is heavily dependent on aid and remittances. In the absence of a formal commercial banking sector, remittance companies have enabled the diaspora to remit around $1.3 billion annually to families in Somalia. In recent years, Somalia has received approximately $1 billion in official development assistance (ODA) annually (including both humanitarian and development assistance); in 2012. ODA per capita was $98. While a majority of aid has been directed toward humanitarian assistance in the past, an increasing proportion of ODA is being directed toward longer-term development in Somalia under the New Deal.
Domestic revenue sources lack diversity, which makes the government highly vulnerable to shocks; 76% of domestic revenue in 2014 was derived from taxes on international trade. Domestic revenue only accounts for half of the government budget. In October 2014, budget support from development partners totaled $87 million, compared with $82 million in domestic revenue.
The unregulated state of the economy has allowed the private sector to grow although this is marred by elite capture of revenue sources, often by cartels linked to militias. Somalia has, for instance, received between $304-317 in illicit gains from piracy since the first known hijacking in 2005, although it is not known how much has remained in country.
After decades of stagnation, the public education sector was revived in 2014 with the enrolment of nearly 90,000 children in formal primary education. This is a first step toward addressing the nation’s extremely low national enrolment rate of around 42%, of whom only a third are girls. Secondary school participation is even lower for both boys and girls, with net attendance ratios of 12% and 8% respectively. Barriers to education include limited or unavailable primary and secondary school facilities, prohibitive school fees, and conflicting household and livelihood demands. Girls, in particular, are less likely to attend school due to domestic responsibilities. Nearly 75% of females between 15-24 years are illiterate, one of the world’s highest levels of gender disparity.
Access to health services is poor even by Sub-Saharan standards. Life expectancy at birth is 51 years and infant mortality rates are estimated to be 108 deaths per 1,000 live births i.e. one in every 10 children dies in the first year (UNICEF).
In 2009, there were an estimated 625 health posts and 225 maternal and child health centers in Somalia. Assuming a population of nine million, this amounts to just one health post per 15,200 people. What existing services exist, are provided by the private sector, including pharmacies and drug stores, which may account for high service fees.
The last 20 years have seen numerous failed attempts to establish peace and national reconciliation in Somalia. The August 2012 election of President Hassan Sheikh and the formation of the government have revived hopes in the country’s ability to move from fragility towards sustainable stability and improved governance. The President and his government have embraced the New Deal through the development of an inclusive Somali Compact, which sets out the critical priorities for stability and sustainable economic development in the country.
Promising events in the political sphere have converged with a period of important — albeit fragile — military gains in southern Somalia. The new federal government has growing support from donors who are increasing assistance for further peacebuilding and statebuilding activities under the compact in the coming year. In 2014, the government developed Vision 2016, establishing a roadmap for achieving a national political settlement. It is comprised of three interwoven strands for reviewing and adopting a revised Federal Constitution, federalism and preparing for national elections in 2016. Despite some progress, Somalia is likely to face continued instability as new stresses emerge in the coming years.
Last Updated: Mar 09, 2015