ABOUT SOMALIA

Somalia is situated in the Horn of Africa, bordered by Djibouti, Ethiopia and Kenya. The rivers Jubba and Wadi Shebelle traverse the country from the west and flow from Ethiopia to the Indian Ocean. Those areas are fertile, with a lot of pastureland. In total 2% of the land is arable and 14% forested. The climate is predominantly arid with rainfall increasing towards the south-east of the country. There are a number of ports, and 5,900 km of asphalted roads. The main airport is Mogadishu, which is also the capital. The time zone is 3 hours ahead of GMT.

The mostly Islamic population of about 7.7m is 85% Somali, and 15% predominantly Bantu. The official language is Somali, but English and Italian are spoken by some people. Present day Somalia was formed by combining the former British and Italian Somali Protectorates. In 1960 Somalia became independent as the Somali Democratic Republic (SDR), but civil wars have since held back the country's development. The initially Marxist SDR has now become a liberal and democratic regime, but it does not fully control the country - in particular, northern provinces forming the previous British Somaliland wish for independence. A long-running conference in Kenya aiming at establishing national unity has so far failed to reconcile conflicting interests.

The SDR's Constitution dates from 20 February, 1995. In transition. Somalia has an executive president, and the People’s Assembly - a unicameral legislative body elected for five-year term by direct popular vote. International Relationships include membership of the UN, NAM, Arab League, OAU, ACP, and ICO.

Somalia is predominantly a pastoral country and about 80% of the population depend on livestock rearing. GDP was estimated at US$1.6bn, or $200 per capita, in 1995. The currency is the Somali shilling (SOS) divided into 100 centesimi. US dollars and Euros are generally used in international transactions. The Central Bank of Somalia is based in Mogadishu.

The Somali International Financial Centre (SIFC), an agency created by the transitional government, offers a tax-free offshore international banking regime. There are also laws providing for offshore insurance and gaming (e-commerce) regimes. The SIFC is committed to strict confidentiality and world class regulatory standards; there is a modern money-laundering law. The SIFC does not deal directly with the public; contacts take place through an entity duly licensed to provide registered agency services within the territory of the Democratic Republic of Somalia. There is currently only one such licensed entity, Star Trust Company Limited.

Short Information about Somalia

Africa

The Republic of Somalia is bounded in the north by the Gulf of Aden; in the east and south by the Indian Ocean, and in the west by Kenya, Ethiopia, and Djibouti. Somalia occupies the east horn of Africa.

Area (sq. km.): 637,760

Capital: Mogadishu

Climate: Hot and dry

Time: 3 hours + GMT

Languages: Somali and Arabic is official language but English is used as business language

Membership: OIC, AEC, CAEU, Arab League

ECONOMY:

Somalia has a market economy. It lacks natural resources and faces major development challenges, and recent economic reverses have left its people increasingly dependent on remittances from abroad.
Its economy is pastoral and agricultural, with livestock — principally camels, cattle, sheep, and goats — representing the main form of wealth.
Livestock exports in recent years have been severely reduced by periodic bans, ostensibly for concerns of animal health, by Arabian Peninsula states.
Drought has also impaired agricultural and livestock production. Because rainfall is scanty and irregular, farming generally is limited to certain coastal districts, areas near Hargeisa, and the Jubba and Shebelle River valleys.
The modern sector of the agricultural economy consists mainly of banana plantations located in the south, which have used modern irrigation systems and up-to-date farm machinery.

Current GDP per capita of Somalia grew 37% in the Sixties, dropped to just 6% in the Seventies and recovered to 37% growth in the Eighties.

A small fishing is alwayes industry has begun in the north where tuna, shark, and other warm-water fish are caught, although fishing production is seriously affected by poaching and the lack of ability to grant concessions because of the absence of a generally recognized government. Aromatic woods — frankincense and myrrh — from a small and diminishing forest area also contribute to the country's exports. Minerals, including uranium and likely deposits of petroleum and natural gas, are found throughout the country, but have not been exploited commercially. Petroleum exploration efforts, at one time under way, have ceased due to insecurity and instability. Illegal production in the south of charcoal for export has led to widespread deforestation. With the help of foreign aid, small industries such as textiles, handicrafts, meat processing, and printing are being established.

The absence of central government authority, as well as profiteering from counterfeiting, has rapidly debased Somalia's currency. By the spring of 2002, the Somali shilling emitted by the TNG had fallen to over 30,000 shillings to the U.S. dollar.

There are no railways in Somalia; internal transportation is by truck and bus. The national road system nominally comprises 22,100 kilometers (13,702 mi.) of roads that include about 2,600 kilometers (1,612 mi.) of all-weather roads, although most roads have received little maintenance for years and have seriously deteriorated.

Air transportation is provided by small air charter firms and craft used by drug smugglers. A number of airlines operate from Hargeisa. Some private airlines, including Air Somalia and Daallo Airlines, serve several domestic locations as well as Djibouti and the United Arab Emirates. The UN and other NGOs operate air service for their missions.

The European Community and the World Bank jointly financed construction of a deepwater port at Mogadishu (currently closed). The Soviet Union improved Somalia's deepwater port at Berbera in 1969. Facilities at Berbera were further improved by a U.S. military construction program completed in 1985, but they have become dilapidated. During the 1990s the United States renovated a deepwater port at Kismayo that serves the fertile Juba River basin and is vital to Somalia's banana export industry. Smaller ports are located at Merca, Brava, and Bossaso. Absence of security and lack of maintenance and improvement are major issues at most Somali ports.

Radiotelephone service is available to both to regional and international locations. The public telecommunications system has been destroyed or dismantled, however it has been rebuilt privately and is superior to what existed before. Somalia is linked to the outside world via ship-to-shore communications (INMARSAT) as well as links to overseas satellite operators by private telecommunications operators (including cellular telephone systems) in major towns. Radio broadcasting stations operate at Mogadishu, Hargeisa, and Galkayo, with programs in Somali and some other languages. There are two television broadcast stations in Mogadishu and one in Hargeisa.

Remittance services has become a large industry in Somalia. Successful people from the world-wide diaspora who fled because of the war contribute to the economy around $2 billion annually. In the absence of a formal banking sector, money exchange services have sprouted throughout the country, handling between $500 million and $1 billion in remittances annually. Wireless communications has also become a giant economic force in Somalia. Because of the war, nobody really knows the size of the economy or how much it is growing.

Agriculture: Sorghum, maize, rice, beans, sesame seeds, bananas, sugarcane, livestock, fisheries

Minerals: Manganese, copper, lead, zinc, gold, iron ore, coal, kyanite, tin, silver, tungsten, titanium, chromium, nickel

Industry: Sugar, textiles, pasta, flour, cement, pharmaceutical, fertilizer

Main Items of Exports: Petroleum products, livestock, poultry, bananas, hides and skins, fish, meat

Main Partners: UK, Germany, USA, Italy, Ethiopia, Iran, India, Thailand, Hong Kong, Kenya, Saudi Arabia, UAE, Yemen, Bahrain

Main Items of Imports: Petroleum and petroleum products, foodstuff, machinery, transport equipment, construction materials, industrial raw materials, chemicals, medicines, textiles and textiles products, beverages, tobacco

Main Partners: UK, Germany, USA, Italy, Ethiopia, Iran, India, Thailand, Hong Kong, Kenya, Djibouti, Brazil

Main OIC Partners: Iran, Djibouti, UAE, Bahrain, Saudi Arabia, Yemen

INVESTMENT CODE:

The current political situation in Somalia is not conducive to foreign investment. Since the beginning of the civil war, all of the major industries and infrastructure have suffered. As there is no central government, there is no investment policy, taxation regime, and no government body geared toward the promotion of investment. There are no performance requirements or incentives.

Important Contacts:

 

Ministry of Foreign Affairs

                   Mogadishu, SOMALIA

                   Tel:                   (2521) 21721

Ministry of Commerce and Industry

                   P.O. Box: 928, Mogadishu, SOMALIA

                   Tel:                   (2521) 21453

 

Ministry of Finance and Economy

                   Mogadishu, SOMALIA

                   Tel:     (2521) 33090

 

Chamber: Somalia Chamber of Commerce, Industry & Agriculture

Address:      P. O. Box: 27, Mogadishu, SOMALIA

                   Tel:     (2521) 80726, 50550

GDP: purchasing power parity — $4.361 billion (2004 est.)

GDP — per capita: purchasing power parity — $500 (2004 est.)

GDP — composition by sector:

• agriculture: 65%
• industry: 10%
• services: 25% (2000 est.)

Population below poverty line: NA

Household income or consumption by percentage share:

• lowest 10%: NA
• highest 10%: NA

Inflation rate (consumer prices): note — businesses print their own money, so inflation rates cannot be sensibly determined (2003 est.)

Labor force: 3.7 million (very few are skilled laborers)(1993 est.)

Labor force - by occupation:

• agriculture (mostly pastoral nomadism) 71%
• industry and services 29%

Unemployment rate: NA

Budget:

• revenues: $NA
• expenditures: $NA, including capital expenditures of $NA

Industries: a few light industries, including sugar refining, textiles, petroleum refining (mostly shut down), wireless communication

Industrial production growth rate: NA

Electricity - production: 245.1 GWh (2001)

Electricity - production by source:

• fossil fuel: 100%
• hydro: 0%
• nuclear: 0%
• other: 0%

Electricity - consumption: 227.9 GWh (2001)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products:

• bananas, sorghum, maize, rice, sugar cane, mangoes, coconuts, sesame seeds, beans
• cattle, sheep, goats
• fish

Exports: $79 million f.o.b. (2002 est.)

Exports - commodities: livestock, bananas, hides, fish, charcoal, scrap metal

Exports - partners:

• UAE 37.2%
• Yemen 22.3%
• Oman 10.1%
• China 6%
• Kuwait 4.4%
• Nigeria 4%

Imports: $344 million f.o.b. (2002 est.)

Imports - commodities: manufactures, petroleum products, foodstuffs, construction materials, khat

Imports - partners:

• Djibouti 33.9%
• Kenya 15.5%
• Brazil 6.6%
• UAE 5.1%
• Thailand 4.2%

Debt - external: $2.6 billion (2000 est.)

Economic aid - recipient: $60 million (1999 est.)

Currency: Somali shilling (SOS)

Exchange rates: Somali shillings (So. Sh.) per US$1:

• 2,620 (January 1999)
• 7,500 (November 1997 est.)
• 7,000 (January 1996 est.)
• 5,000 (1 January 1995)
• 2,616 (1 July 1993)
• 4,200 (December 1992)

Fiscal year: NA