A $300 billion Economy for Somalia in 10 years?

[Gaandheri]

Come on now don’t be delusional like some people in the politics section but this won’t happen or Somalia will never have peace till reconciliation happens.

 

[hinters]

Will we finally be free?
View attachment 301483

Allah needs to send a rumbling to those fuckers

 

[Internet Nomad]

Allah needs to send a rumbling to those fuckers

Inshallah

 

[Three Moons]

Come on now don’t be delusional like some people in the politics section but this won’t happen or Somalia will never have peace till reconciliation happens.

 

[Dashiki Bucaale]

Meds

 

[Bazed]

Come on now don’t be delusional like some people in the politics section but this won’t happen or Somalia will never have peace till reconciliation happens.

That's true. We can't get anywhere without first ensuring somali territorial sovereignty from the north edge to the southern tip. But with the way things are going for successionist I think they're living on borrowed time. Internal enemies on the other had will take a long time to get rid of.

 

[Emir of Zayla]

I'm grateful Somalia is not insanely resource rich like Congo, we'd never find peace.

It is resource rich tho, thankfully not at Congo levels. That’s an insane curse

 

[Bazed]

The main issues stopping us is simply ourselves. We must gain self sufficiency first before moving into developing industry.

 

[Internet Nomad]

The main issues stopping us is simply ourselves. We must gain self sufficiency first before moving into developing industry.

Somalia was able to raise 5 million in three days for the Turkish earthquake but how much do you they would raise to help the dowlad buy equipment for farming

 

[johnsepei5]

Somalia was able to raise 5 million in three days for the Turkish earthquake but how much do you they would raise to help the dowlad buy equipment for farming

they don't trust the dowlad which is understandable
they need a heavy pr

 

[Three Moons]

Source

The IMF’s projections for 2028 puts the GDP at $43 billion, and that’s a very conservative estimate. High double digit growth through peace, FDI, sound fiscal policies, and a construction / productivity boom would completely smash these projections.

As @Bazed said we are the only ones standing in our own way. We have 50 years of economic miracles and case-studies from around the world to use for an economic roadmap to guarantee success.

 

[repo]

Oh Allah help our people and their delusion for they have neither water or food.

 

[Three Moons]

Presentism is probably one of the biggest flaws of Somali individuals when it comes discussing the future. They cannot see the forest for the trees. They see only the grass but not the field. While our neighbours are neck deep in their own genocides or corruption scandals, they still have discussions about their future potential.

The Somali economy sunk to less than 1 billion in 1991, and in 4 years time (2028) it will have crossed the $43 billion mark, a 43x increase in probably the worst period in Somali history. Yet me suggesting we can 10x our economy in a better economic climate is somehow science-fiction and delusional?

WTF?

 

[Nin123]

Presentism is probably one of the biggest flaws of Somali individuals when it comes discussing the future. They cannot see the forest for the trees. They see only the grass but not the field. While our neighbours are neck deep in their own genocides or corruption scandals, they still have discussions about their future potential.

The Somali economy sunk to less than 1 billion in 1991, in 4 years time it will cross the $43 billion, a 43x increase in probably the worst period in Somali history. Yet me suggesting we can 10x our economy in a better economic climate is somehow science-fiction and delusional.

This is ppp gdp not the real gdp of Somalia big difference

 

[Three Moons]

This is ppp gdp not the real gdp of Somalia big difference

Which doesn’t even factor in the informal economy of Somalia, with a rebase those figures would double, if not triple. See the rebases of Nigeria and Ghana for example and how their economies were totally underestimated for years.

 

[Nin123]

Which doesn’t even factor in the informal economy, with a rebase those figures would double, if not triple. See the rebases of Nigeria and Ghana.

The informal economy of Somalia is probably 2x the size of Somali gdp

 

[Three Moons]

The informal economy of Somalia is probably 2x the size of Somali gdp

I think it’s grossly underestimated, and you know why? In 2018, the mobile money economy of Somalia ($32.4 billion a year) was almost the same as those of Kenya ($38 billion) and Ghana ($36 billion), two of the most technological advanced countries in Africa and both with formal economies in the $150-200 billion range.

Today Kenya’s figure stands at $109 billion and Ghana’s stands at $121 billion, so it will be interesting to see what Somalia’s figures are today when its updated because its safe to assume its still one of the leaders of the continent, and a $60 to $70 billion mobile money market after five years of growth wouldn’t be farfetched at all.

 

[The alchemist]

The informal economy has scaling problems if it doesn't directly interact to expand the formal economy in a structural sense. The health of the "economy" is terrible if the informal economic complex dominates.

This does not mean the informality of economic interaction is a negative drive. It is a shadow coping mechanism for broader formal systemic operational failures. The goal is to enrich the informal while setting up institutions to verify its interactive significance, thus establishing and creating better connective networks across economic principalities.

One can say that the informal economy is also a scaling down of new flexible economic principles for people to maintain market integrity amidst systemic insecurities, as well, so it helps bring economic influence to the average person, lowering the barriers for participatory entry for the average household. The scaling capacity might be infrastructure-wise hampered, but people can enter expediently on informal synergistic grounds.

The future hinges on providing a healthy bridge between a formal set-up for the informal participants to cross back and forth, inducing productivity and value and providing flexible informal leeway without destroying the financial maneuverability of the informal economic actors. Further providing legislative standard health measures to safeguard good economic participation by people in the informal economy as it usually is held to a lower standard.

However, true growth needs formalizing frameworks. As mentioned, the hidden/"unofficial" economy is for interconnected small-scale micro and minor enterprises oriented. A country-wide scaling capacity for millions of people, with tremendous economic growth can only take place under partly disciplined strategic circumstances.

I have a personal theory. We can observe the economic reality, the true skeletal interconnected economic profile of the broader Somali peninsula going into adjacent economic shadows of neighboring countries, even are tremendously complex from a free-flow market nature perspective. My theory says, that the more complicated a low-scaling informal system is, as it is closer to the ground-based lifeline, the greater the immediate rate of growth it can receive if partly formalized, but also the capacity for the scale of growth is high-reaching.

This was a half-assed text from a political infrastructure perspective going into economic speculatory theory from over a year ago as a response to a guy who talked about Somalia (I had written a better rough draft of this theory, but it is lost, so bear with the context):

For example, the Somali peninsula is an advanced problem. People think the poorest place in the world is simple, quite to the contrary -- there is a reason it is the most corrupt too-- its economic and political dynamics with its rapidly shifting state-models, makes it paradoxically extremely high capacity potentiality but because of its protracted tendency with the various elite sections, traditional forces, logistical economy and state actors, it is highly pushed toward a decentralized fragmentized, undermining any long-term central state formation to gain prime authority, with sector integrity and coherency.

So in a way, the complex negative problems are correlated with diagonal squared space capacity and poentiality. In a contradictory formulation, that theoretical span looks at the complex mess as the deep roots. This a new theory I created. Now this is a political point, so it is by itself a digression.

Taking another look at it from a pragmatic point of view, one can extrapolate a lesson, with political economy analogy and organizational focus gained through setting things in a better way, one can channel extreme reach. Another analogy to give you an indication of this, think of a malnourished guy that only reaches 170cm but has potential to grow 198cm if the nutritional intake was different. This is not at all good analogy, and the second point is just an extension of the discussion but I just wanted to bring that to light because technically we I can say it is related in some respects.

There is some new scholarship that has been produced in the Somali Peninsula, published months ago. It is another subject that proadly goes into the broadeer topic at hand:

 

[Three Moons]

@The alchemist what would those ‘bridges’ look like to you to close the gap between the informal and formal? I believe the establishment of official conglomerates in each sector to organise everything from the street vendors, to the SMEs, to the major companies through the spirit of a ‘Global Somali Brand’ would go a long way to incorporate the informal economy, and allow for opportunities to modernise it and scale it.

Instead of multiple minor companies exporting livestock and agricultural products for pennies on the dollar, we could have one major Green conglomerate with enough weight to negotiate a break into the markets of Europe, America while dominating the Middle-Eastern markets, similar to the role played by the National Farmers Federation of Australia. Picture a dozen mid-sized companies like the prewar Somalita, Somfruit and others banding together for better overseas prices, while successfully defending their domestic market through legislation.

The same could be done for the Fisheries sector, the Aviation sector, and is already being implemented in the Telecommunication sector. It would therefore have to become a country with robust institutions.

One of the major assets for any future Somali government seeking to get a grasp of the ‘real size’ of the economy is the fact that most Somalis participating in it use traceable transactions via the mobile money system, including during transnational trade activities with Somalis in neighbouring countries, so its not an exact mystery today compared to the 1990s, when cash was king. See my above estimations for what I think the size of the mobile money market should be today.

I will watch the video when I have more time

 

[The alchemist]

@The alchemist what would those ‘bridges’ look like to you to close the gap between the informal and formal? I believe the establishment of official conglomerates in each sector to organise everything from the street vendors, to the SMEs, to the major companies through the spirit of a ‘Global Somali Brand’ would go a long way to incorporate the informal economy, and allow for opportunities to modernise it and scale it.

Instead of multiple minor companies exporting livestock and agricultural products for pennies on the dollar, we could have one major Green conglomerate with enough weight to negotiate a break into the markets of Europe, America while dominating the Middle-Eastern markets, similar to the role played by the National Farmers Federation of Australia. Picture a dozen mid-sized companies like the prewar Somalita, Somfruit and others banding together for better overseas prices, while successfully defending their domestic market through legislation.

The same could be done for the Fisheries sector, the Aviation sector, and is already being implemented in the Telecommunication sector. It would therefore have to become a country with robust institutions.

One of the major assets for any future Somali government seeking to get a grasp of the ‘real size’ of the economy is the fact that most Somalis participating in it use traceable transactions via the mobile money system, including during transnational trade activities with Somalis in neighbouring countries, so its not an exact mystery today compared to the 1990s, when cash was king. See my above estimations for what I think the size of the mobile money market should be today.

I will watch the video when I have more time

A rough response since I am short on time:

You first have to grow the formal economy and then provide legislative regulations through established institutions that allow there to exist a parallel economy for a few years. This will occur within a limited room as the formal establishment will grow in size rapidly relatively - the informal economy will, by default, re-arrange its existence relative to that formal, domineering existence, benefit by participating in forming a heterogeneous new growing quasi-formal third economic section, meaning the informal economy will shift toward established infrastructures because of the benefit it would give. So again, one of those bridges is reliable and consistent infrastructural economic channels that are regulated by the institutional bodies. This should have been stated first; the informal economy will also face an imposition of standard-bearing measures that allow it to interact with the formal while as well, again having some room for economic potentiality in new healthier ways. It would not be a good policy to kill the informal economy creating barriers for the average person in creating a small economic unit.

Oftentimes times you see a radical conditioning by state bodies that makes the transition effectively creating an economic participatory hindrance to the economy by a massive section of the population just to reach a formalized sector status, killing growth and people's ability to realize basic human needs or aspire to gain economic mobility. This comes from a lack of knowledge about the profile of the economy and how to grow it and the nature of its growth is complex and multi-faceted. Using a car analogy, it is by trying to start a car and automatically trying to drive beginning with the 5th gear.

What this bridge effectively does, is provide the informal economic participators the potential to structure their businesses and or economic participation on healthier, fairer, and consistent ground that lets them benefit positively by interacting with the formalized sector by giving them the infrastructure for growth and rule-based benefits that encourage that interaction. The scaling issue normally is a fundamental problem in the informal economy. You might wonder, how big corporations exist in the Somali states. Well, those are monopolistic in nature. More so than economic participants, they act as drivers, abiding by different conditions in the rare moment they scale.

You might wonder why I talk about scaling so much. It is for two reasons. I believe you cannot have economic growth without scaling, and without scaling, complex economic structuralization is not possible, limiting a heterogenic outlook from a profile perspective. An informal economy as it is today is like trying to win a race on 1st gear only. There is a fundamental cap to potential. The landscape is unguided and too diffusive so efficiency is so low. So much of the actual potential is lost through every trade cycle.

So the key aspect of the informal economy is the human comex-system tendency and what it can potentialize if put on several types of tracks. The goal is to manage several things at once having in mind that the transition will be natural as possible. An ideal sense is that a business can start a business on better conditions in the informal (since the informal is behaviorally different at this point); they can source a lot of benefit from the broader macroeconomic parallelization, and if the business grows and wishes to expand, they automatically can utilize the formalized regulation that protects and provide growth outlook potential with the broader economic stochasticity where a person can exchange a good condition with a benefit incentive trade-off gaining a formal status being able to take advantage of the stable, coherent landscape.