2025 Budget Strategy

[geeljre49]

Somalia has never done a rebase, which is absurd as there are so many new industries that didn’t exist in the past before 1991, which is the base year for many of these economic world bodies. The economies of Ghana and Nigeria significantly grew in size after their rebase. There is a huge informal economy in Somalia that is rarely factored in because it benefits the corrupt Somali elite to portray Somalia as destitute as possible to attract more aid. An extra $25 billion or $35 billion added to the Somali GDP could directly impact its inclusion in the LDC camp because it would no longer be eligible if its nominal per capita exceeded $2000 after a rebase. This would snatch away the narrative from the elite and the NGOs, whose entire bread and butter is predicated on the perception of a pathetic and destitute Somalia.

A $2 billion export figure is only low if you ignore that our next door neighbour with a population of 100+ million only exports $10 billion worth of goods. The fact that Somalia will reach a third of that figure by 2027 is impressive considering it lost entire decades in development, while Ethiopia absorbed over $50 billion in FDI during that same time-period. From a regional perspective, we can also look at Uganda’s and Kenya’s exports, which are between the $5 and $7 billion, yet their populations are triple, if not quadruple that of Somalia.

Somalia still has a very dysfunctional government, tons of infrastructure bottlenecks, and none of the FDI other countries enjoyed for decades, yet it has the same export volume as a similar sized country like Rwanda, with a strong government, and decades of peace. This only tells me with the right government and investment maintained for a decade or two, Somalia would leapfrog the region and enjoy the same developmental status / economic rankings as the North African countries if not beyond.

The formal GDP is said to be $12 billion as of 2024. How higher would you estimate the GDP is if you include informal?

 

[Three Moons]

The formal GDP is said to be $12 billion as of 2024. How higher would you estimate the GDP is if you include informal?

You first need an accurate population census, and a proper listing of all businesses across the country, from major corporations to small vendors. The FGS hasn’t really done this. The digital transactions through mobile money however do provide a clue at the size of the economy. If Somalia could have a $32 billion mobile money market in 2018, comparable to the mobile money markets of Kenya ($38 billion) and Ghana ($36 billion) in 2018, which are two of the most technological advanced countries in Africa and both with formal economies in the $150-200 billion range, then its clear that there is a lot more wealth in circulation in Somalia than what official stats show.

Today Kenya’s mobile money figure stands at $109 billion and Ghana’s stands at $121 billion, but no similar update has been done for Somalia’s 2023/4 figures, but it should be substantial.

 

[Hilmaam]

Somalia has never done a rebase, which is absurd as there are so many new industries that didn’t exist in the past before 1991, which is the base year for many of these economic world bodies. The economies of Ghana and Nigeria significantly grew in size after their rebase. There is a huge informal economy in Somalia that is rarely factored in because it benefits the corrupt Somali elite to portray Somalia as destitute as possible to attract more aid. An extra $25 billion or $35 billion added to the Somali GDP could directly impact its inclusion in the LDC camp because it would no longer be eligible if its nominal per capita exceeded $2000 after a rebase. This would snatch away the narrative from the elite and the NGOs, whose entire bread and butter is predicated on the perception of a pathetic and destitute Somalia.

A $2 billion export figure is only low if you ignore that our next door neighbour with a population of 100+ million only exports $10 billion worth of goods. The fact that Somalia will reach a third of that figure by 2027 is impressive considering it lost entire decades in development, while Ethiopia absorbed over $50 billion in FDI during that same time-period. From a regional perspective, we can also look at Uganda’s and Kenya’s exports, which are between the $5 and $7 billion, yet their populations are triple, if not quadruple that of Somalia.

Somalia still has a very dysfunctional government, tons of infrastructure bottlenecks, and none of the FDI other countries enjoyed for decades, yet it has the same export volume as a similar sized country like Rwanda, with a strong government, and decades of peace. This only tells me with the right government and investment maintained for a decade or two, Somalia would leapfrog the region and enjoy the same developmental status / economic rankings as the North African countries if not beyond.

yes some new industries exist today that didnt exist before 1991. But you can also say opposite of many factories that now sit shutered, farming and irrigation thats yet to recover, and bridges and infrastructure in dissaray. Big chunk of our export is livestock which hit $1 bilion dollar mark last year. But is also catch 22 since livestock is decimating land and exacerbating clan conflict. There needs to be pivot to farming which is tied heavily to south that is occupied by al shabab which makes it tough for someone to invest millions in irrigation and equipment knowing you will be taxed by multiple forms of govt and also because of insecurity

the gdp data is not the most accurate since institutions are lacking but its best we have. plus there are estimates out there for our populations as well as water points and herd sizes so i dont see why this is being considered hidden economy worth billions in dollars. I will need to see some data for this hidden informal economy.

Yes, ethiopia is very poor subsaharan country completely agree. Thousands die from hunger and preventable diseases every year which is why I would like to see capital investment in other than things than port all the time

 

[Hilmaam]

Every time we buy imports it’s money and jobs leaving Somalia. We don’t even need to be huge exporter but imports need to limited somehow and industry created to help meet internal demand
Clothes fruits veggies meats and other foods should be made in house. I even hear we get very low quality chickens and flours from abroad that cause health issues

 

[TheLand]

I dont remitance and FDI and ODA go into GDP calculation but it defintly impact the economic activity of the country. 2023 like 6.5 billion dollars entered country as aid. Crazy to think when GDP is only 11.5 billion. This is a very poor country that is being proped up by otusiders

The 2 billion dollars in exports is also very low

Remittances are 20% of gdp for Somalia and like 2% for Rwanda. Their economy is much more diversified. Remittances will decrease greatly in the near future as older generations die and hooyo matalo doesn’t send a penny. Not good.

 

[Hilmaam]

Remittances are 20% of gdp for Somalia and like 2% for Rwanda. Their economy is much more diversified. Remittances will decrease greatly in the near future as older generations die and hooyo matalo doesn’t send a penny. Not good.

Eventually need to put very high tariffs on all imports. will be painful but otherwise no industry will develop back home . Right now our population growth probably canceling out whatever little gdp growth there is . Means stagnant gdp per capita