Somalia National Transformation Plan (NTP) 2025-2029

[Idilinaa]

He’s not even arguing about industry , he is saying they lack ways to store food. I've actually shown that in many parts of the country they have set up storage and processing facilities, so it's an outdated reality.

But let’s actually take what @Thegoodshepherd said about “milk going to waste” and look at the incomes of people before and after introducing cooling/storage equipment. It completely kills the “$695 per capita” nonsense he keeps clinging to.

Take Sahra a rural mother from an area near Mogadishu, she sells camel and cow milk to support her family. Previously losing much of it to spoilage, her income rose from $7 to $20 a day after receiving training and basic cooling equipment from a Somali association, allowing her to sell fresher milk and better support her children.

Mind you this is from 2017:
Key points :
- The lowest wages that can be found in Somalia average at 7$ a day or 215$ a month or 2600$ a year, very far from the official number of 695$ a year.
- Even with 7$ a day this single mother could feed her 8 children and send them to school.
- Some micro-businesses like these can easily make 20$ a day or 620$ a month or 7450$ a year, indicating a stronger consumerism.

Milking the Benefits for Small-Scale Women Milk Retailers in Somalia - SATG | Somali Agriculture Technical Group

Sahra Mohamed lives in Daynile district three miles from Mogadishu, the capital of Somalia, which is located in the Horn of Africa. The country is ravaged by a 25-year civil war. Government institutions/agencies hardly function.

satg.org

View attachment 373719

View attachment 373720


Another similar example. Milk sellers were able to triple their gains from $500-$700 per month to $3200 per month just by being given cool equipment and joining a business cooperative.

Milk Cooperative — SomReP

Ceelsame milk cooperative is one of the cooperatives established and supported by World Vision under DFAT Project. Ceelsame consists of 30 members who are mainly women and it is operational in Ceel-same village under Odweyne District.

www.somrep.org

View attachment 373721


And again, these are rural underprivileged women, not an “urban elite.” Even without cooling/storage they were already making far more than the official GDP per capita claims.


It also extends to Fishing as well, which i am sure people are completely unaware of how much the fishing industry has grown in recent decade from 2013-2018 it grew by 300% : Millions are employed directly or indirectly through it because fishermen sell it to stores, shops, restaurants , processors, exporter etc





From the above the report from 2019 it showed the average fisherman earned 470 dollars a month in 2018 and now they on average earn 15k$ to 20k$ a year from catches made on their small fishing boats
See this:
View attachment 373722


We have collected many such examples across sectors etc. That i will organize into post InshaAllah. This is what i was talking about before they don't look at direct income statements or base it from a consumer price index to measure real income per capita.

There is no way these examples can earn 1000-6000 USD a month with weak or poor consumer market economy as people like to claim.

Also @Midas @Barkhadle1520 another thing i want to point out is how significant the wage growth displayed above has been.

For comparison take what this economist points out about China for example, she points to how China has a deficit in demand because of low wage growth, scaring effects of pandemic(Export dependency hit them hard because other countries could bounce back by relying on internal mechanisms) and the real estate crash.

She also says almost a billion people in China make less than 300$ a month and that only 48% of Chinese is employed in the service sector compared to 80% in advanced economies. 22% of Chinese are employed in agriculture and 28%-32% industrial.



This China example proves that being “industrial” doesn’t automatically mean higher wages or broad wealth. Almost a billion Chinese still earn under $300/month despite all their factories. This is what @Dagdag /Hilmaam positing in the Ethiopian Garment Factory thread. That factories will lift Ethiopians out of poverty.

Ethiopian Garment Factory

But i disagreed and is still proven right. Where wages are high in China isn’t in the factory belts but in the service and finance heavy coastal provinces (Hong Kong, Macao, Shanghai, Shenzhen). These places are globally integrated through trade, finance, and services and that’s what drives incomes up.

Those places actually earn on par with Japan and Korea or on part with even richer nations like Singapore. Particularly Honk Kong and Macao (50K and 76K per capita)

List of top Chinese cities by GDP per capita - Wikipedia

en.wikipedia.org

List of Chinese provincial-level divisions by GDP per capita - Wikipedia

en.wikipedia.org

This actually shows the real key to wealth and wage growth is it’s domestic market expansion and the service sector that drive higher incomes. Domestic demand matters just as much , if not more than exports and industrial output.


Somalia’s trajectory is much closer to this service-driven path than the traditional agricultural/industrial one. I’ve already shown how wage growth in Somali sectors (teaching, medicine, fisheries, retail, agriculture, telecom, transport etc.) far surpasses the “$695 GDP per capita” narrative. These gains have come from value chain expansion, financialization, and stronger market inclusion.

@Idilinaa I think you guys might like this video. T The guys talks about rhe challenges india faces and that part of what led him to understand india's situation was that the dominance of IT in the service sector was based on foreign companies using india's labor and not actual Indian growth since there was no domestic market for these It services.

Very interesting, it helps me understand a few things.


It’s almost the opposite trajectory of Somalia. We’re already at around 56% service sector employment, but unlike India, the push here comes from domestic demand rather than foreign demand. Our fintech and telecom sectors unlike India’s IT sector are built around serving Somalis directly, reaching and benefiting the general population.

This is why the general Indian population remain poor and don't reap the benefit from the IT industry and why it's IT industry isn't advanced or very innovative.

Since this is based on 2022, i really wonder that the distribution looks like in 2025.

 

[Idilinaa]

Importing most of your food makes you low income ? Do you know how many middle income countries have to import all their food ? Jordan is an example that came to mind but theres tons of others really, thats the dumbest argument i heard tbh

Even high income ones as well. Norway(75%) , Singapore(90%) and Japan(62%) imports most of their food. They are all rich countries but they are also economies that are 80%+ service sector led.

It's like painting those countries i mentioned as import dependent and therefore they are lower income. It make zero sense.

So importing food says more about economic structure (urbanization, service-sector dominance, land/water scarcity) than about poverty.

For instance other Africa countries are still overwhelmingly agrarian, with 60–80% of people in subsistence farming. Households eat what they grow ---> very little integration with markets.
Imports are low, not because they’re “self-sufficient,” but because they lack income and demand to buy imports. When they do import, it’s usually emergency staples (wheat, maize) supported by aid.

Somalia on the contrary are urbanized and service led. Food is accessed through markets, not backyard subsistence plots. Imports aren’t a sign of weakness , they reflect spending power and consumer demand.

Even rural households often sell livestock, crops or fish to generate cash, then buy cereals/oil/sugar in the market ---> that’s commercialized, not subsistence.

And unlike Ethiopia, Nigeria, or South Africa, Somalia’s private sector manages to keep markets stocked without heavy state intervention.

So Somalia looks much closer to middle income economies (urban, trade- and service-driven, food importers) than to the typical “low-income agrarian” African profile.

 

[Midas]

Also @Midas @Barkhadle1520 another thing i want to point out is how significant the wage growth displayed above has been.

For comparison take what this economist points out about China for example, she points to how China has a deficit in demand because of low wage growth, scaring effects of pandemic(Export dependency hit them hard because other countries could bounce back by relying on internal mechanisms) and the real estate crash.

She also says almost a billion people in China make less than 300$ a month and that only 48% of Chinese is employed in the service sector compared to 80% in advanced economies. 22% of Chinese are employed in agriculture and 28%-32% industrial.



This China example proves that being “industrial” doesn’t automatically mean higher wages or broad wealth. Almost a billion Chinese still earn under $300/month despite all their factories. This is what @Dagdag /Hilmaam positing in the Ethiopian Garment Factory thread. That factories will lift Ethiopians out of poverty.

Ethiopian Garment Factory

But i disagreed and is still proven right. Where wages are high in China isn’t in the factory belts but in the service and finance heavy coastal provinces (Hong Kong, Macao, Shanghai, Shenzhen). These places are globally integrated through trade, finance, and services and that’s what drives incomes up.

Those places actually earn on par with Japan and Korea or on part with even richer nations like Singapore. Particularly Honk Kong and Macao (50K and 76K per capita)

List of top Chinese cities by GDP per capita - Wikipedia

en.wikipedia.org

List of Chinese provincial-level divisions by GDP per capita - Wikipedia

en.wikipedia.org

This actually shows the real key to wealth and wage growth is it’s domestic market expansion and the service sector that drive higher incomes. Domestic demand matters just as much , if not more than exports and industrial output.


Somalia’s trajectory is much closer to this service-driven path than the traditional agricultural/industrial one. I’ve already shown how wage growth in Somali sectors (teaching, medicine, fisheries, retail, agriculture, telecom, transport etc.) far surpasses the “$695 GDP per capita” narrative. These gains have come from value chain expansion, financialization, and stronger market inclusion.





Very interesting, it helps me understand a few things.


It’s almost the opposite trajectory of Somalia. We’re already at around 56% service sector employment, but unlike India, the push here comes from domestic demand rather than foreign demand. Our fintech and telecom sectors unlike India’s IT sector are built around serving Somalis directly, reaching and benefiting the general population.

This is why the general Indian population remain poor and don't reap the benefit from the IT industry and why it's IT industry isn't advanced or very innovative.


View attachment 373731
Since this is based on 2022, i really wonder that the distribution looks like in 2025.

But the reason china was able to reach where it is today was entirely because of the economic surplus generated by becoming the factory of the world and the first foreign factories in china arrived in coastal places it was only after the coastal provinces generated a huge amount of wealth from manufacturering that labor became expensive their that they shifted factories deeper inside china . This also provided china with a huge amount of cheap manufactured goods that they didnt have to import.

I don't know if somali can maybe do the services path. But india for sure cannot because at the end of the day the service sector employs a small amount of high skilled workers. Wheras factories provide huge amount of jobs for low skilled people and distributs wealth throughout the entire pouplation. $300 dollars a month is $3600 a year that is almost at the upper limit of lowe middle income status which peaks at about $4000

 

[Midas]

I suspect if we had more accurate statistics we would see that livestock exports combined with whatever other goods these somali companies who headquarter themselves in other ciuntires are selling overseas provides a lot of capital that they bring back to somalia and invest. This outward foreign direct investment functions as the equivalent of exports for somalia.

 

[Idilinaa]

You noticed the same thing , many of the financial institutions based in Somalia have opened branches across various African countries.

And you’re right: could you imagine all these foreign exchange companies, money transfer operators, and Sharia-compliant commercial banks suddenly being flooded with capital from future oil and other revenue streams in Somalia?

Even the fuel distribution networks would be transformed.
That same paper mentioned how Somalis already dominate the fuel sector across East Africa. Once Somalia starts producing oil and gas, they could export it through Somali-controlled supply chains.
That means Somalis wouldn’t just profit from selling the oil itself but also from every step of the chain that brings it to market, keeping the value circulating within the network.

This really shows how financial institutions are the backbone powering these businesses and an influx of oil revenue would supercharge the entire system within just a few years.

Speaking of livestock, I came across this really interesting study on the export and local value chains Somalis run in the livestock trade. It tracks how animals move from southern Somalia → NFD → Nairobi, where Somalis process them for export abroad.

Each trader in that chain is clearing $30,000 a week in profits.

a

Safe to say… they’re making big bank.

What’s even more telling is what happens afterwards. Once they’ve accumulated capital, they don’t just sit on it. They reinvest into other sectors and services , real estate, transport, hotels, hardware trade, etc.

The study also notes how Somali financial networks (hawalas like Dahabshiil, Amal, Tawakal) are running in Garissa to grease the wheels of all this.

So basically, the entire value chain between Kenya and Somalia is Somali-controlled.

It also highlights something I’ve been saying for a while: Somalis have been shifting livestock from just “pastoral grazing” into breeding, feed/fodder, and commercial ranch farming in multiple places. The author (a Kenyan) mostly focused on the Kenya side, but you can clearly see how much of it connects back into Somalia and spills over. I only wish someone did this same kind of deep dive on the Somali side.

Now, the paper doesn’t tally up the total earnings across the whole network, but you can easily tell it’s billions. And here’s the kicker: a lot of Somalia’s trade/export is actually counted as Kenya’s. These exporters go straight into southern Somalia, cut out brokers, and source directly through ties/shared networks. That reduces costs, boosts profits but also makes the flows practically invisible in official trade stats.

This is where the informality kills the numbers: so many animals bypass formal markets (like Garissa) and go straight to Nairobi/coastal Kenya for slaughter and export. Meaning Somalia’s contribution is massively undercounted in both Somali and Kenyan official figures.

It also shows how transnational the setup is. Somali cattle end up slaughtered in Nairobi, packaged/frozen, and airlifted abroad. Somalia is clearly plugged into a global export chain but the value often lands in Kenya’s books, not Somalia’s.

This is exactly why Somalia’s GDP/trade stats look “low.” The economic activity is real, the money is flowing, but it’s invisible in formal reporting because it’s happening in these parallel, informal, transnational networks.

Honestly, I’d love to see a similar study done on fish, frankincense, branded foodstuffs, manufactured goods, etc., centered on Somalia rather than Kenya. That would really expose the scale of what’s being missed.

 

[Idilinaa]

But the reason china was able to reach where it is today was entirely because of the economic surplus generated by becoming the factory of the world and the first foreign factories in china arrived in coastal places it was only after the coastal provinces generated a huge amount of wealth from manufacturering that labor became expensive their that they shifted factories deeper inside china . This also provided china with a huge amount of cheap manufactured goods that they didnt have to import.

I don't know if somali can maybe do the services path. But india for sure cannot because at the end of the day the service sector employs a small amount of high skilled workers. Wheras factories provide huge amount of jobs for low skilled people and distributs wealth throughout the entire pouplation. $300 dollars a month is $3600 a year that is almost at the upper limit of lowe middle income status which peaks at about $4000

Most of that surplus wealth in China wasn’t going into the hands of the average factory worker anyway it was captured by corporations and the state. Early on, Chinese factory workers were paid peanuts because production was geared toward exports, not domestic markets.

It’s only when China started pivoting into finance and services, especially in those coastal special zones, that wages really began to rise. That’s where the actual jump in incomes came from.
.
Also, the idea that the service sector “only employs a small number of high-skilled workers” is just wrong. Services cover everything from retail, logistics, hospitality, education, telecoms, health, banking, transport so it’s a mix of high and low skill. India’s service sector looks skewed because it’s built around foreign demand (outsourcing/IT), not domestic consumption. Somalia’s is the opposite: its fintech, telecoms, transport, and retail are built around serving Somalis themselves, which makes demand broad-based.

Globally, it’s actually the service sector that employs the majority, not manufacturing. Even in advanced economies, 70–80% of people work in services.

Somalia’s path is likely to mirror that. Manufacturing will emerge, but more in high-value niches electrical gear, boat/shipbuilding, processing, irrigation/agro equipment, renewable tech, ICT/AI hardware, gadgets to support its fintech/solar/ICT backbone and defense industry. That’ll probably sit around 15–20% of the economy. Agriculture will shrink to maybe 10% of jobs as it becomes more mechanized/commercialized. Services will keep dominating because that’s where both demand and money are.

 

[Midas]

Most of that surplus wealth in China wasn’t going into the hands of the average factory worker anyway it was captured by corporations and the state. Early on, Chinese factory workers were paid peanuts because production was geared toward exports, not domestic markets.

It’s only when China started pivoting into finance and services, especially in those coastal special zones, that wages really began to rise. That’s where the actual jump in incomes came from.
.
Also, the idea that the service sector “only employs a small number of high-skilled workers” is just wrong. Services cover everything from retail, logistics, hospitality, education, telecoms, health, banking, transport so it’s a mix of high and low skill. India’s service sector looks skewed because it’s built around foreign demand (outsourcing/IT), not domestic consumption. Somalia’s is the opposite: its fintech, telecoms, transport, and retail are built around serving Somalis themselves, which makes demand broad-based.

Globally, it’s actually the service sector that employs the majority, not manufacturing. Even in advanced economies, 70–80% of people work in services.

Somalia’s path is likely to mirror that. Manufacturing will emerge, but more in high-value niches electrical gear, boat/shipbuilding, processing, irrigation/agro equipment, renewable tech, ICT/AI hardware, gadgets to support its fintech/solar/ICT backbone and defense industry. That’ll probably sit around 15–20% of the economy. Agriculture will shrink to maybe 10% of jobs as it becomes more mechanized/commercialized. Services will keep dominating because that’s where both demand and money are.

Maybe its not necessarily accurate to say the mamaufacturing sector employs more today. But what props up the service sector is the wealth that's generated from manufacturing and trade. I think the examples you give of these somali buisnessman running these transnational business networks where they sell all sorts of livestock and other sorts of physical goods are what form the backbone of the economy

 

[Midas]

Speak of cattle i wonder how big the operations of these traders have become since I doubt its only in kenya. Plus the beef market is worth $500 billion dollars today and is still growing fast. Thats orders of magnitude larger than the demand for camel or goats/sheeps.

 

[Idilinaa]

Maybe its not necessarily accurate to say the mamaufacturing sector employs more today. But what props up the service sector is the wealth that's generated from manufacturing and trade. I think the examples you give of these somali buisnessman running these transnational business networks where they sell all sorts of livestock and other sorts of physical goods are what form the backbone of the economy

You’re actually right in a way. China gained export surplus/wealth from manufacturing, which they reinvested kinda like how Somali transnational conglomerates reinvest profits into other sectors.

But the mass manufacturing/factory model was only possible for China because of their vast population (hundreds of millions of workers to draw from) and huge resource base for inputs. They leveraged that scale into global dominance.

Look at Apple’s deal: they paid the Chinese government $55 billion in a year, and the cumulative benefits reached $500 billion. On top of that, Foxconn and related firms trained more than 2 million Chinese engineers talent that later powered other industries like EVs, defense, and renewables.

Somalia can’t replicate that exact model. It doesn’t have the same labor pool or resource depth. But what Somalia can do is carve out a smaller, higher-value niche: light industries linked to domestic demand (packaging, food processing, construction materials, renewables, ICT hardware, boat/shipbuilding, etc.), and later move into higher-value chains that support its service driven economy (like fintech infrastructure, solar equipment, AI/ICT hardware).

In other words, factories won’t be the mass employer in Somalia like they were in China but they’ll still be important as a support sector for a services/finance driven growth model

@Idilinaa I think you guys might like this video. T The guys talks about rhe challenges india faces and that part of what led him to understand india's situation was that the dominance of IT in the service sector was based on foreign companies using india's labor and not actual Indian growth since there was no domestic market for these It services.

Also i noticed another thing from watching this that shows how much domestic demand there is in Somalia (Also in China as well seeing as China is experiencing brain gain). Because he says that educated and highly skilled Indians, who are educated by their own country don't find a market or compensation for their skills/expertise , this is why India experiencing massive brain drain.

It reminds me of the Brain Drain Ethiopia is going through on a large scale. Although a lot of it goes to other African countries or elsewhere some of that Brain Drain migration enters into Somalia.

Like this doctor with a particular expertise in pathology who move to Somaliland away from Ethiopia because

Eenyu Isheen 20: Hakimni Itoophiyaa Somaaliilaand tajaajilaa turtee deebite maal himti? - BBC News Afaan Oromoo

Dr. Maahileet Guush Gabrawald jedhamti. Digiriishee jalqabaa ogummaa wal'aansaa fayyaa (medicine)n bara 2014tti Yunivarsiitii Maqalee irraa eebbifamte. Haala muxannoo Somaalilaandiitti oggummaasheetiin hojjataa turte akkasiin BBCtti himte.

www.bbc.com

She says this about Ethiopias medical system.

Meanwhile in Somalia the health services are expanding and the pay is increasing because it is pulled forward by domestic demand. It kinda relates to what that Chinese professor observed in India's IT industry in the sense that in India their systems and computers were outdated and not advancing as fast because of the lack of domestic demand.

It comes back to what i said to @Dagdag /Hilmaam

There is a reason why Somalis have higher purchasing power because it's a market driven, urbanized, service heavy economy with huge diaspora capital inflows, whereas Ethiopia’s economy is still state heavy, rural, and subsistence based, with wages kept deliberately low for export competitiveness. It's as if they operated more like a feudal society in a way.

They also need to open more technical schools. Galbeed has led with this, and Somalia is shifting its educational system to be more market demand specific, boosting youth employment. Here even Somalia has the added advantage that there’s already a strong domestic market ready to absorb these skills. Because a lot of the skills from technical and vocational training can be immediately applied in the local economy because there’s an existing demand for them.


In Ethiopia, a big part of the challenge is that even if they train people, the domestic economy is weaker in absorbing them into good paying jobs , much of the manufacturing is export oriented, agriculture is still subsistence based not strongly linked to market systems that would create steady supply chains and income, local consumption is also limited.

 

[SomaliSON1977]

Somalis are paying for their import bill with remittances and foreign aid.
https://www.somalispot.com/threads/...-2020-was-foreign-aid-and-remittances.118210/

Somalia is not a normal country, not even close.
It is a country that is incredibly dependent on outside support for its people to survive.

100 Percent Agree, People forget we were importing and exporting WITHOUT A GOVERNMENT

From the 90s and 2000s, People sent money to each other, borrowed from each other, and sent each other money

Middle men in Dubai, Malaysia, China, India, Pakistan, ect

 

[Idilinaa]

100 Percent Agree, People forget we were importing and exporting WITHOUT A GOVERNMENT

The gov’t taxes and regulates a lot of the trade, but it’s the private sector that drives Somalia’s import/export. That’s exactly why it kept going even without a strong state.

From the 90s and 2000s, People sent money to each other, borrowed from each other, and sent each other money

I already addressed what @Thegoodshepherd said. Most foreign currency in Somalia comes from trade and direct investment by Somali conglomerates or the diaspora, not remittances or aid.

Remittances are only a fraction, and aid which is also tiny fraction doesn’t even go directly to households or private actors, so it can’t explain the scale of consumption:

Remittances are about $2 billion per year, and foreign aid is around $1.3 billion, most of which flows through the government. Together, they don’t come close to explaining the overall consumption figures.

In 2023, household consumption from their own figures was $15 billion, compared to just $931 million in government consumption , that’s about 16 times larger.

]


I agree with you on that Somalia is a pretty unique country because it's a private sector driven and trade driven economy and that's where the wealth and foreign capital comes from and that is what supports people.

We discussed it in this thread:

Very weird discrepancy in the somali economy

@Idilinaa @Barkhadle1520 I think you guys might be intrested in this . I was looking at this report info from the official govt statsics twitter. If you look at the the government expenditure vs the household final expenditure the gap is honestly insane. Its $980 million for the govt and $15...

www.somalispot.com

Here as well:

The report also highlights several things that confirm what i said about the transnational practices of Somali businesses. , how most foreign currency and liquidity comes from trade and import/export and direct diaspora investment that then resycles throughout the economy through the financial systems.

It says "but FDI in the country has been driven primarily by diaspora and Somali transnational conglomerate investments.."

Somali finance companies literally run xawalas with branches and agents worldwide. They act like global forex and money transfer bureaus, creating a steady supply of foreign currency that lets Somalis pay for imports and keep trade flowing.

Middle men in Dubai, Malaysia, China, India, Pakistan, ect

There is no middle men, Somalia's transnational conglomerates practice ''vertical integration''. So they essentially cut them out.

 

[Idilinaa]

People are starting to realize how illogical the statistics for the size of our economy are.

View attachment 373795View attachment 373796

He is also soo right here, I looked up other countries for comparison. @Barkhadle1520

If 56% of people are employed in the service sector and 18% in the industrial sector(construction, light manufacturing, energy, utilities etc.) and 64% are Urbanized surviving on mostly wage labour and businesses, there’s no way livestock is making up 80% of GDP.

Take Norway as an equivalent example , it exports oil, fish, and other commodities, but the majority of it's GDP actually comes from services like 63.5%. In Japan services have a share of 77% of GDP. Exports are important, but they don’t overshadow the entire domestic economy. Somalia’s numbers are just being framed in a way that ignores urban services, industry, and crop/fish agriculture.

In Norway fewer people work in agriculture or resource extraction but those sectors generate a lot of GDP because productivity per worker is very high (one oil rig worker generates way more value than one shopkeeper). Still, services employ the majority and make up the bulk of GDP.

But in Somalia's case it makes no sense at all , livestock has lower productivity per worker while services like telecom, finance, logistics, trade, health, or even retail generate more value per head. So it makes even less sense to claim it’s 80% of GDP when most Somalis are employed in services and industry.

That said , the livestock value chain is still far more complex and valuable than official GDP stats capture. It spills into cross-border trade, exports, logistics, food processing, and even finance (through credits/MFI's/Banking/hawala). So it is systemically important and way undercounted in GDP.

 

[Midas]

I wonder how large these transnational networks will grow after a few decades. Espciaally since a decent share of the oil revenues will undoubtedly make their way into the hands of these buisnessman. I cant imagine how quickly they'll be able to scale with that new money source if they've been able to do all this with nothing

 

[Idilinaa]

I wonder how large these transnational networks will grow after a few decades. Espciaally since a decent share of the oil revenues will undoubtedly make their way into the hands of these buisnessman. I cant imagine how quickly they'll be able to scale with that new money source if they've been able to do all this with nothing

Its actually amazing how much these transnational conglomerates have scaled when you look at their background story and the tough times they had to endure. Some of them started as small simple businesses like a small shop:

And they have noble aspirations:

Their stories are very inspirational to read. They had to endure a lot due to the political situation in the region and picked themselves up , to build again a new and have to become creative to navigate it all. The term "Resilient" is a complete under statement when it comes describing Somalis.

So if they can grow and scale under these types of circumstances. With the oil money and more government support that can directly fund them and create a better environment they will explode even more.

I mentioned this before but i noticed a lot of them start off in the general trading /import/export/distribution business or shipping/logistics and then sink the capital they gained from it into investing in manufacturing, infrastracture and diversify into other sectors providing diverse services.

 

[Idilinaa]

@Midas @Zak12 @Thegoodshepherd @Dagdag @Barkhadle1520

Saw someone share this under Hornaristocrats post.

'

This economist actually noticed what we’re pointing out now but all the way back in 1988. He called BS on the official stats because they simply didn’t line up with what he saw on the ground. It shows you how much of this is really a game of perception shaped by numbers rather than lived reality.

The remittances angle is also misleading. Most of it isn’t “remittances” in the traditional sense but direct investments/FDI something only Shuraako’s 2019 study properly distinguished. The economist himself described it as “monetary flow,” which is basically Somali capital from abroad financing investment.

His own study backs this: Somali public sector workers said they relied on multiple income streams from trade, services, and small businesses , to cover expenses. So outside money wasn’t “keeping them alive” but supplementing entrepreneurial activity.

Families were, and still are, multi-occupational.

4

He also showed how unreliable Somalia’s “production numbers” were. Like I’ve said before, a relatively small number of Somali producers were creating surpluses big enough to sustain non-agricultural populations unlike most African countries where farming was mostly subsistence-based. Why? Because Somali farmers were tied into market mechanisms that monetized output, pushing them toward surplus production.

He also noted the paradox with food imports: even though Somalia had a cereal surplus, imports were rising. His argument was that urban purchasing power and demand were increasing, not that domestic production was collapsing. He even points out that urban Somalis had a higher per capita meat consumption than all African countries at the time.

And then the key part: he highlights how most trade and currency flow was happening outside official control to quote him: "the majority of exports and imports are transacted outside the purview of customs authorities and at essentially free-market exchange rates and much of the internal trade escapes official control" , and how Somalia was just flush with foreign exchange, financing a higher standard of living than official data suggested.

Remarks the same observation i make about Somalia today:

He even gave figures: in 1984, the shilling was 17 to the dollar. The urban poverty line was 6,990 Sh/month ($1,208 in today’s inflation adjusted terms), food poverty was 4,990 Sh ($863), and extreme poverty was 4,000 Sh ($692). These figures were based on their own consumer price index and direct household expenditure surveys, not IMF guesswork.

Essentially he argues in the paper how conventional economic statistics are unreliable indicators of welfare or performance because the Somali economy doesn't operate in conventional ways.
The irony, he notes, is that the IMF was trying to impose a free market system on Somalia when one already existed in all but name.

There’s still so much that gets misrepresented about Somalia’s economy (like the “monopoly/oligarchy” myth), but I’ll save that for another time. What’s clear is that even back then, outsiders who looked closely could see through the false stats , so we’re not the first to call this all into question.

 

[Idilinaa]

He even gave figures: in 1984, the shilling was 17 to the dollar. The urban poverty line was 6,990 Sh/month ($1,208 in today’s inflation adjusted terms), food poverty was 4,990 Sh ($863), and extreme poverty was 4,000 Sh ($692). These figures were based on their own consumer price index and direct household expenditure surveys, not IMF guesswork.

The current Somali government has yet to do this which is base minimum income on a consumer price index, because this is how you survey a household budget. They did essentially what Barkhadle did in the "Somali GDP is False " thread. Instead they rely on indirect inferences and guesswork .


Now this exchange figure for 1984/1985 might have changed when trade/export fluctuated in later years but the average incomes increased each year which augmented it.

Their impression is that because of more equal distribution that poverty in many other areas were less severe than in Mogadishu because other areas had stronger communal links:

 

[Midas]

@Midas @Zak12 @Thegoodshepherd @Dagdag @Barkhadle1520

Saw someone share this under Hornaristocrats post.
View attachment 375262'

This economist actually noticed what we’re pointing out now but all the way back in 1988. He called BS on the official stats because they simply didn’t line up with what he saw on the ground. It shows you how much of this is really a game of perception shaped by numbers rather than lived reality.

View attachment 375261


The remittances angle is also misleading. Most of it isn’t “remittances” in the traditional sense but direct investments/FDI something only Shuraako’s 2019 study properly distinguished. The economist himself described it as “monetary flow,” which is basically Somali capital from abroad financing investment.
View attachment 375267

His own study backs this: Somali public sector workers said they relied on multiple income streams from trade, services, and small businesses , to cover expenses. So outside money wasn’t “keeping them alive” but supplementing entrepreneurial activity.
View attachment 375268

Families were, and still are, multi-occupational.
View attachment 3752654

He also showed how unreliable Somalia’s “production numbers” were. Like I’ve said before, a relatively small number of Somali producers were creating surpluses big enough to sustain non-agricultural populations unlike most African countries where farming was mostly subsistence-based. Why? Because Somali farmers were tied into market mechanisms that monetized output, pushing them toward surplus production.
View attachment 375269
View attachment 375270



He also noted the paradox with food imports: even though Somalia had a cereal surplus, imports were rising. His argument was that urban purchasing power and demand were increasing, not that domestic production was collapsing. He even points out that urban Somalis had a higher per capita meat consumption than all African countries at the time.

And then the key part: he highlights how most trade and currency flow was happening outside official control to quote him: "the majority of exports and imports are transacted outside the purview of customs authorities and at essentially free-market exchange rates and much of the internal trade escapes official control" , and how Somalia was just flush with foreign exchange, financing a higher standard of living than official data suggested.

Remarks the same observation i make about Somalia today:
View attachment 375271

He even gave figures: in 1984, the shilling was 17 to the dollar. The urban poverty line was 6,990 Sh/month ($1,208 in today’s inflation adjusted terms), food poverty was 4,990 Sh ($863), and extreme poverty was 4,000 Sh ($692). These figures were based on their own consumer price index and direct household expenditure surveys, not IMF guesswork.

Essentially he argues in the paper how conventional economic statistics are unreliable indicators of welfare or performance because the Somali economy doesn't operate in conventional ways.
The irony, he notes, is that the IMF was trying to impose a free market system on Somalia when one already existed in all but name.

There’s still so much that gets misrepresented about Somalia’s economy (like the “monopoly/oligarchy” myth), but I’ll save that for another time. What’s clear is that even back then, outsiders who looked closely could see through the false stats , so we’re not the first to call this all into question.

This is incredible. I knew there was something weird about the pre civil war period since you had all these contested narratives about somalia's economic situation.

I always knew that somalia orginally having been a country where 90% of the pouplation was pastoralist was a key aspect of understanding the uniqueness of our society. I think I've said this before but we are the only society of seafaring pastoralists. pastoralists also have a fundamentally different relationship to the economy throughout history then farmers.

 

[Idilinaa]

This is incredible. I knew there was something weird about the pre civil war period since you had all these contested narratives about somalia's economic situation.

I always knew that somalia orginally having been a country where 90% of the pouplation was pastoralist was a key aspect of understanding the uniqueness of our society. I think I've said this before but we are the only society of seafaring pastoralists. pastoralists also have a fundamentally different relationship to the economy throughout history then farmers.

Pastoralism is definitely part of it, but I’d argue the real foundation is that Somalis are a "trade-based" society. Our economy and culture have always revolved around exchange i.e goods, currency, and people moving fluidly while most other societies were built around fixed, dependency based structures.

We are essentially one of the few societies that shift seamlessly between multiple livelihoods, income streams, and occupations. That’s why even the “90%” or “60% pastoralist” figures of the past were also misleading. I noticed this clearly when I researched cross-border trade with Kenya.

The same people involved in livestock were also engaged in other diversified, urban-related business activities:

This passage paints the picture:

The most misleading assumption is that livestock is a fixed livelihood, subsistence based, or mutually exclusive. In reality, most of it is monetized and integrated into urban market mechanisms.

Somali business portfolios have always been diversified and fluid, with livestock serving as a key cultural and economic anchor while profits are reinvested into new industries.

If Somali society is not rigidly pastoral or subsistence based, but instead trade oriented, fluid, and multi-occupational, then it becomes clear how distorted economic statistics and outside perceptions often are.

These figures overlook the fact that many so-called ‘pastoralists’ were at the same time entrepreneurs, traders, and financiers, continuously channeling their wealth into broader market networks.

 

[Idilinaa]

@Midas @Zak12 @Thegoodshepherd @Dagdag @Barkhadle1520

Saw someone share this under Hornaristocrats post.
View attachment 375262'

This economist actually noticed what we’re pointing out now but all the way back in 1988. He called BS on the official stats because they simply didn’t line up with what he saw on the ground. It shows you how much of this is really a game of perception shaped by numbers rather than lived reality.

View attachment 375261


The remittances angle is also misleading. Most of it isn’t “remittances” in the traditional sense but direct investments/FDI something only Shuraako’s 2019 study properly distinguished. The economist himself described it as “monetary flow,” which is basically Somali capital from abroad financing investment.
View attachment 375267

His own study backs this: Somali public sector workers said they relied on multiple income streams from trade, services, and small businesses , to cover expenses. So outside money wasn’t “keeping them alive” but supplementing entrepreneurial activity.
View attachment 375268

Families were, and still are, multi-occupational.
View attachment 3752654

He also showed how unreliable Somalia’s “production numbers” were. Like I’ve said before, a relatively small number of Somali producers were creating surpluses big enough to sustain non-agricultural populations unlike most African countries where farming was mostly subsistence-based. Why? Because Somali farmers were tied into market mechanisms that monetized output, pushing them toward surplus production.
View attachment 375269
View attachment 375270



He also noted the paradox with food imports: even though Somalia had a cereal surplus, imports were rising. His argument was that urban purchasing power and demand were increasing, not that domestic production was collapsing. He even points out that urban Somalis had a higher per capita meat consumption than all African countries at the time.

And then the key part: he highlights how most trade and currency flow was happening outside official control to quote him: "the majority of exports and imports are transacted outside the purview of customs authorities and at essentially free-market exchange rates and much of the internal trade escapes official control" , and how Somalia was just flush with foreign exchange, financing a higher standard of living than official data suggested.

Remarks the same observation i make about Somalia today:
View attachment 375271

He even gave figures: in 1984, the shilling was 17 to the dollar. The urban poverty line was 6,990 Sh/month ($1,208 in today’s inflation adjusted terms), food poverty was 4,990 Sh ($863), and extreme poverty was 4,000 Sh ($692). These figures were based on their own consumer price index and direct household expenditure surveys, not IMF guesswork.

Essentially he argues in the paper how conventional economic statistics are unreliable indicators of welfare or performance because the Somali economy doesn't operate in conventional ways.
The irony, he notes, is that the IMF was trying to impose a free market system on Somalia when one already existed in all but name.

There’s still so much that gets misrepresented about Somalia’s economy (like the “monopoly/oligarchy” myth), but I’ll save that for another time. What’s clear is that even back then, outsiders who looked closely could see through the false stats , so we’re not the first to call this all into question.

I have come to find out that i actually had read this study some time ago and put it into folder lmaao

But he really does point out that how bad this usage of incorrect statistics on Somalia is because they often lead to recommendations and prescriptions that are misaligned.

View attachment 375275
View attachment 375276
View attachment 375273


The current Somali government has yet to do this which is base minimum income on a consumer price index, because this is how you survey a household budget. They did essentially what Barkhadle did in the "Somali GDP is False " thread. Instead they rely on indirect inferences and guesswork .


Now this exchange figure for 1984/1985 might have changed when trade/export fluctuated in later years but the average incomes increased each year which augmented it.
View attachment 375274

Their impression is that because of more equal distribution that poverty in many other areas were less severe than in Mogadishu because other areas had stronger communal links:

View attachment 375272

Btw @Thegoodshepherd @Barkhadle1520 @Midas @Zak12 @novanova and @Shimbiris

Its actually hilarious to read this because i feel extremely vindicated , he is verbatim saying the same thing as i have been saying.

Exactly what i said in my response to @Thegoodshepherd .

It’s wild to me how they ignore what’s right in front of their eyes because they’ve got this fixed image in their head.

If Somalis were really as poor as they claim, people wouldn’t even be able to survive there. Look at the prices of food, rent, electricity, school fees, water, transport , fuel none of that works on $2 a day.

We would see exactly what you see in other African countries with real crippling poverty: streets lined with beggars, mass desperation driven crime like theft/pick pocketing and burglary, and widespread homelessness. Instead, in Somalia, 99% in the North and 80% in the South live in improved housing in towns. The main crisis is displacement due to conflict/climate, not homelessness from poverty.

And honestly, how do they think the whole system runs? Telecom, electricity, water, landlords, shops all of that is private. Those businesses need paying customers to stay afloat. You think Somalis are paying their landlord $1 a month or topping up phones with $2 a month? The whole idea just collapses when you actually think about it.

I remember others in this thread that contested it was @Maintainnnin and @Karim

Somali's GDP per Capita is false

Does anyone really believe this ? According to these stats the average Somali is poorer than Liberians, Sierra Leoneans, Gambians, Chadians and lives with just 64$ a day which literally any Somali knows is just impossible, let me give a few examples : This video below showcases the average...

www.somalispot.com

So even back in the 1980s Somalia was actually a middle income country in reality and was by all means quite well off than most African countries, although the issues with inflation and currency devaluation was a real thing , it didn't make them poor because it was augmented by the rise in incomes and domestic production and private sector investment that was support by an influx of external funds.


He directly explains what i said to @Thegoodshepherd and @SomaliSON1977 that most foreign currency that is used to pay for imports comes from foreign investments by the diaspora and from trade, and the foreign exchange company/money transfers he calls them ''Somali money merchants".

With this is i am pretty confident with how i will advance my case forward.

 

[Idilinaa]

I've been coming to the conclusion for a while that due to somalia's unqiue situation and historical trajectory it's economy,society and culture need to be understood on its own terms.

This is what i believe. It's going to be fun to capture and describe this.

I must say this is actually baffling that this paper was 37 years ago and they didn't even take his concluding advice at all. Because they continue to this very day apply the same flawed statistical metrics

There is no economy in the world more misunderstood and misrepresented than the Somali economy.