Economy of Somalia
Economy of Somalia Last updated on Sunday 25th April 2010
The 1990s saw the disastrous collapse of the Somali economy. There had been virtually no attempt to diversify income-generating activities in the country, relying only on the livestock of the north and some agricultural products in the south.
With the existing crisis in the country, attempts at diversification are in urgent need of government assistance and foreign aid. Before civil war broke out, the gross national product was estimated at only $290 per capita.
The IMF was called in at the start of the 1980s and granted a series of credit measures in return for a more market-oriented economy. Steps were initially taken by the government to liberalize the economy, and OPEC and other Arab countries, led by Saudi Arabia, donated funds.
Over the first five years, the Somali government did not fully accept the tighter demands imposed by the IMF and by 1984, with the Saudi ban on Somali meat imports and the drought, the country was in dire straits. The trade Somalia
In the late 1990's, the people of Somalia are no longer on the verge of starvation, but the country's economic prospect remains insecure. Somalia lacks the necessary characteristics of a modern economy; the small industrial sector closed down in the early 1990s due to civil war and many businesses remained closed. Most of the population lives without the required modern infrastructure of electricity, hospitals or schools.
Clans and local militia organizations control local economies, engaging in trade and black market transactions. About 70 percent of Somalis are still pastoral nomads, raising camels, cattle, sheep, and goats. About 20 percent of Somalia’s workforce is agricultural. Banana is the main export crop; Sugar, sorghum, mangoes, sesame and corn are grown for the domestic market. One result of the political turmoil of the 1990s was a substantial drop in agricultural output between 1991 and 1993, leading to a widespread famine. The remaining 10 percent of the population engages in trading, fishing or handicrafts production. Mogadishu, Somalia's leading port city, is the country’s commercial center. The city’s main industries are leather tanning, shoe manufacturing and food processing.