The Economy of Somaliland largely relies on primary production and
agriculture
Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people t ...
, where
livestock
Livestock are the domesticated animals raised in an agricultural setting to provide labor and produce diversified products for consumption such as meat, eggs, milk, fur, leather, and wool. The term is sometimes used to refer solely to animal ...
is the main export of the country, which it ships to neighbouring
Djibouti
Djibouti, ar, جيبوتي ', french: link=no, Djibouti, so, Jabuuti officially the Republic of Djibouti, is a country in the Horn of Africa, bordered by Somalia to the south, Ethiopia to the southwest, Eritrea in the north, and the Red ...
and
Ethiopia
Ethiopia, , om, Itiyoophiyaa, so, Itoobiya, ti, ኢትዮጵያ, Ítiyop'iya, aa, Itiyoppiya officially the Federal Democratic Republic of Ethiopia, is a landlocked country in the Horn of Africa. It shares borders with Eritrea to the ...
, as well as to Gulf states, such as
UAE
The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia (The Middle East). It is located at th ...
,
Saudi Arabia
Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the A ...
and
Oman
Oman ( ; ar, عُمَان ' ), officially the Sultanate of Oman ( ar, سلْطنةُ عُمان ), is an Arabian country located in southwestern Asia. It is situated on the southeastern coast of the Arabian Peninsula, and spans the mouth of ...
.
Somaliland has a gross domestic product (GDP) of about US$7.2 billion as of 2022,
[https://www.govsomaliland.org/] most of which it receives in remittances from Somalis working abroad. The COVID-19 pandemic has restricted Somaliland's trade flows with decreased demand in the agriculture sector, a significant source of tax revenue. The country's
GDP per capita is approximately US$1530 which is one of the lowest in the world.
[https://www.govsomaliland.org/]
Somaliland is located along the
Gulf of Aden, near the entrance to the
Bab al-Mandeb, a major sea-lane through which almost one-third of the world's shipping passes. Its location has helped the government attract new trade and development deals. In late 2016, the
DP World announced that it would invest nearly US$450 million to manage and upgrade the
Port of Berbera
The Port of Berbera ( so, Dekedda Berbera, ar, ميناء بربرة), also known as Berbera Port, is the official seaport of Berbera, the commercial capital of Somaliland. It is classified as a major class port.
Overview
Berbera Port histori ...
and develop a corridor running from the Port to the Ethiopian border. In 2021 the project was joined by the UK government's
CDC Group
British International Investment, (formerly CDC Group plc, Commonwealth Development Corporation, and Colonial Development Corporation) is the development finance institution of the UK government. The Foreign, Commonwealth and Development Office ...
which has doubled the funding.
Overview
![Somaliland Beverage Industries Factory](https://upload.wikimedia.org/wikipedia/commons/c/c2/Somaliland_Beverage_Industries_Factory.jpg)
The
Somaliland shilling
The Somaliland shilling ( so, Shillin Somaliland, ar, شلن صوماليلاندي; abbreviation: SLS; symbol: /-, sometimes prefixed Sl.Sh.) is the official currency of the Republic of Somaliland.
Overview
The shilling has been the curren ...
, which cannot easily be exchanged outside Somaliland on account of the nation's lack of recognition, is regulated by the
Bank of Somaliland
The Bank of Somaliland ( so, Baanka Somaliland, ) is the central bank of Somaliland.[central bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central b ...](_blank)
, which was established constitutionally in 1994.
Since Somaliland is unrecognised, international donors have found it difficult to provide aid. As a result, the government relies mainly upon tax receipts and
remittances from the large
Somali diaspora
The Somali diaspora or Qurbajoogta refers to Somalis who were born in Greater Somalia and reside in areas of the world that they were not born in. The civil war in Somalia greatly increased the size of the Somali diaspora, as many Somalis moved fr ...
, which contribute immensely to Somaliland's economy.
[Daniel Harris with Marta Foresti 2011]
Somaliland's progress on governance: A case of blending the old and the new
London: Overseas Development Institute
ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...
Remittances come to Somaliland through
money transfer companies, the largest of which is
Dahabshiil
Dahabshiil ( so, Dahabshiil, ar, دهب شيل) is an international funds transfer company, and is the largest money-transfer business in Africa. It's headquartered in Burao, Somaliland. Formed in the early 1970s, the firm operates from over 24 ...
, one of the few Somali money transfer companies that conform to modern money-transfer regulations. The
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
estimates that remittances worth approximately US$1 billion reach Somalia annually from
émigrés working in the
Gulf
A gulf is a large inlet from the ocean into the landmass, typically with a narrower opening than a bay, but that is not observable in all geographic areas so named. The term gulf was traditionally used for large highly-indented navigable bodies ...
states, Europe and the United States. Analysts say that Dahabshiil may handle around two-thirds of that figure and as much as half of it reaches Somaliland alone.
Since the late 1990s, service provisions have significantly improved through limited government provisions and contributions from
non-governmental organisations
A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in ...
, religious groups, the international community (especially the diaspora), and the growing private sector. Local and municipal governments have been developing key public service provisions such as water in Hargeisa and education, electricity, and security in Berbera.
[ In 2009, the ]Banque pour le Commerce et l'Industrie – Mer Rouge Banque pour le Commerce et l'Industrie – Mer Rouge (BCIMR) is a bank in Djibouti. It has a market share of around 45%, and is the largest bank in the Horn of Africa. BCIMR is a subsidiary of the French bank BRED Banque populaire, which owns a 5 ...
(BCIMR), based in Djibouti
Djibouti, ar, جيبوتي ', french: link=no, Djibouti, so, Jabuuti officially the Republic of Djibouti, is a country in the Horn of Africa, bordered by Somalia to the south, Ethiopia to the southwest, Eritrea in the north, and the Red ...
, opened a branch in Hargeisa
Hargeisa (; so, Hargeysa, ar, هرجيسا) is the capital and largest city of the Republic of Somaliland. It is located in the Maroodi Jeex region of the Horn of Africa. It succeeded Burco as the capital of the British Somaliland Protector ...
and became the first bank in the country since the 1990 collapse of the Commercial and Savings Bank of Somalia
The Central Bank of Somalia (CBS) ( so, Bankiga Dhexe ee Soomaaliya, ar, البنك المركزي الصومالي) is the monetary authority of Somalia. Somalia has struggled to reestablish a functioning state since the collapse of an autho ...
. In 2014, Dahabshil Bank International became the region's first commercial bank. In 2017 Premier Bank from Mogadishu opened a branch in Hargeisa.
Various telecommunication
Telecommunication is the transmission of information by various types of technologies over wire, radio, optical, or other electromagnetic systems. It has its origin in the desire of humans for communication over a distance greater than that fe ...
s firms also have branches in Somaliland. Among these companies is Telesom
Telesom is a private telecommunication company established in 2002 by local entrepreneurs in Hargeisa, Somaliland. It is the leading provider of ICT services in the country and offers a wide range of products including voice and mobile broadband ...
, one of the largest operators in Somaliland. Founded in 2002 with the objective of supplying the local market with telecommunications services such as GSM
The Global System for Mobile Communications (GSM) is a standard developed by the European Telecommunications Standards Institute (ETSI) to describe the protocols for second-generation ( 2G) digital cellular networks used by mobile devices such ...
, fixed line
A landline (land line, land-line, main line, home phone, fixed-line, and wireline) is a telephone connection that uses metal wires or optical fiber telephone line for transmission, as distinguished from a mobile cellular network, which uses ...
, and Internet access, it has an extensive network that covers all of Somaliland's major cities and more than 40 districts in both Somalia and Somaliland. Telesom also offers among the cheapest international calling rates at US$0.2 less than its nearest competitor. Other telecommunication firms serving the region include Somtel
Somtel ( so, Somtel, ar, سومتيل) is a telecommunications company headquartered in Hargeisa, Somaliland.
Regions
Somtel provides services in all over Somaliland.
Background
One of Somaliland's leading telecommunications firms, it provid ...
, Telcom and NationLink.
Livestock is the backbone of Somaliland's economy. Sheep, camels, and cattle are shipped from the Berbera port and sent to Gulf Arab countries, such as Saudi Arabia. The country is home to some of the largest livestock markets, known in Somali as ''seylad'', in the Horn of Africa, with as many as 10,000 heads of sheep and goats sold daily in the markets of Burao
Burao, also spelt Bur'o or Bur'ao (; so, Burco, , ar, برعو) is the capital of the Togdheer region and the second largest city in Somaliland. Burao was also the third largest city of Somalia. Burao was the site of the declaration of an in ...
and Yirowe
Yirowe, also spelt Yerrowa, Yerowa, Yeroweh or Yerowah ( so, Yiroowe, ) is a town in the Burao District, located in the Togdheer region of Somaliland. The town is located 20 km east of Burao, the provincial capital of the Togdheer region.
O ...
, many of whom shipped to Gulf states via the port
A port is a maritime facility comprising one or more wharves or loading areas, where ships load and discharge cargo and passengers. Although usually situated on a sea coast or estuary, ports can also be found far inland, such as H ...
of Berbera
Berbera (; so, Barbara, ar, بربرة) is the capital of the Sahil region of Somaliland and is the main sea port of the country. Berbera is a coastal city and was the former capital of the British Somaliland protectorate before Hargeisa. It ...
. The market handles livestock from all over the Horn of Africa.
Agriculture
Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people t ...
is generally considered to be a potentially successful industry, especially in the production of cereals and horticulture
Horticulture is the branch of agriculture that deals with the art, science, technology, and business of plant cultivation. It includes the cultivation of fruits, vegetables, nuts, seeds, herbs, sprouts, mushrooms, algae, flowers, seaweeds and no ...
. Mining also has potential, though simple quarry
A quarry is a type of open-pit mine in which dimension stone, rock, construction aggregate, riprap, sand, gravel, or slate is excavated from the ground. The operation of quarries is regulated in some jurisdictions to reduce their envir ...
ing represents the extent of current operations, despite the presence of diverse quantities of mineral deposits.
File:Somalia (Somaliland)(023).jpg, The Dahabshiil
Dahabshiil ( so, Dahabshiil, ar, دهب شيل) is an international funds transfer company, and is the largest money-transfer business in Africa. It's headquartered in Burao, Somaliland. Formed in the early 1970s, the firm operates from over 24 ...
in Hargeisa
Hargeisa (; so, Hargeysa, ar, هرجيسا) is the capital and largest city of the Republic of Somaliland. It is located in the Maroodi Jeex region of the Horn of Africa. It succeeded Burco as the capital of the British Somaliland Protector ...
.
File:Burcoshopmall.jpeg, A shopping mall in downtown Burao
Burao, also spelt Bur'o or Bur'ao (; so, Burco, , ar, برعو) is the capital of the Togdheer region and the second largest city in Somaliland. Burao was also the third largest city of Somalia. Burao was the site of the declaration of an in ...
.
Tourism
The rock art and caves at Laas Geel
Laas Geel ( so, Laas Geel), also spelled Laas Gaal, are cave formations on the rural outskirts of Hargeisa, Somaliland, situated in the Maroodi Jeex region of the country. They contain some of the earliest known cave paintings of domesticated Afr ...
, situated on the outskirts of Hargeisa
Hargeisa (; so, Hargeysa, ar, هرجيسا) is the capital and largest city of the Republic of Somaliland. It is located in the Maroodi Jeex region of the Horn of Africa. It succeeded Burco as the capital of the British Somaliland Protector ...
, are a popular local tourist attraction. Totaling ten caves, they were discovered by a French archaeological team in 2002 and are believed to date back around 5,000 years. The government and locals keep the cave paintings safe and only a restricted number of tourists are allowed entry. Other notable sights include the Freedom Arch in Hargeisa and the War Memorial
A war memorial is a building, monument, statue, or other edifice to celebrate a war or victory, or (predominating in modern times) to commemorate those who died or were injured in a war.
Symbolism
Historical usage
It has ...
in the city centre. Natural attractions are very common around the region. The Naasa Hablood are twin hills located on the outskirts of Hargeisa that Somalis in the region consider to be a majestic natural landmark.
The Ministry of Commerce, Industries and Tourism has also encouraged travellers to visit historic towns and cities in Somaliland. The historic town of Sheikh is located near Berbera and is home to old British colonial buildings that have remained untouched for over forty years. Berbera
Berbera (; so, Barbara, ar, بربرة) is the capital of the Sahil region of Somaliland and is the main sea port of the country. Berbera is a coastal city and was the former capital of the British Somaliland protectorate before Hargeisa. It ...
also houses historic and impressive Ottoman architectural buildings. Another equally famous historic city is Zeila
Zeila ( so, Saylac, ar, زيلع, Zayla), also known as Zaila or Zayla, is a historical port town in the western Awdal region of Somaliland.
In the Middle Ages, the Jewish traveller Benjamin of Tudela identified Zeila (or Hawilah) with the Bibl ...
. Zeila was once part of the Ottoman Empire
The Ottoman Empire, * ; is an archaic version. The definite article forms and were synonymous * and el, Оθωμανική Αυτοκρατορία, Othōmanikē Avtokratoria, label=none * info page on book at Martin Luther University) ...
, a dependency of Yemen
Yemen (; ar, ٱلْيَمَن, al-Yaman), officially the Republic of Yemen,, ) is a country in Western Asia. It is situated on the southern end of the Arabian Peninsula, and borders Saudi Arabia to the Saudi Arabia–Yemen border, north and ...
and Egypt
Egypt ( ar, مصر , ), officially the Arab Republic of Egypt, is a transcontinental country spanning the northeast corner of Africa and southwest corner of Asia via a land bridge formed by the Sinai Peninsula. It is bordered by the Medit ...
and a major trade city during the 19th century. The city has been visited for its old colonial landmarks, offshore mangrove
A mangrove is a shrub or tree that grows in coastal saline or brackish water. The term is also used for tropical coastal vegetation consisting of such species. Mangroves are taxonomically diverse, as a result of convergent evolution in severa ...
s and coral reefs, towering cliffs, and beach. The nomad
A nomad is a member of a community without fixed habitation who regularly moves to and from the same areas. Such groups include hunter-gatherers, pastoral nomads (owning livestock), tinkers and trader nomads. In the twentieth century, the po ...
ic culture of Somaliland has also attracted tourists. Most nomads live in the countryside.
Transport
Bus services operate in Hargeisa
Hargeisa (; so, Hargeysa, ar, هرجيسا) is the capital and largest city of the Republic of Somaliland. It is located in the Maroodi Jeex region of the Horn of Africa. It succeeded Burco as the capital of the British Somaliland Protector ...
, Burao
Burao, also spelt Bur'o or Bur'ao (; so, Burco, , ar, برعو) is the capital of the Togdheer region and the second largest city in Somaliland. Burao was also the third largest city of Somalia. Burao was the site of the declaration of an in ...
, Gabiley
Gabiley ( so, Gabiley, ar, غابيلي), also known as Gebiley, is a city in the Maroodi Jeex region of Somaliland.
Gabiley is located 58 km west of Hargeisa, the capital of Somaliland. It is in the center of the Gabiley district, bounded ...
, Berbera
Berbera (; so, Barbara, ar, بربرة) is the capital of the Sahil region of Somaliland and is the main sea port of the country. Berbera is a coastal city and was the former capital of the British Somaliland protectorate before Hargeisa. It ...
and Borama. There are also road transportation services between the major towns and adjacent villages, which are operated by different types of vehicles. Among these are taxi
A taxi, also known as a taxicab or simply a cab, is a type of vehicle for hire with a driver, used by a single passenger or small group of passengers, often for a non-shared ride. A taxicab conveys passengers between locations of their choic ...
s, four-wheel drive
Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer cas ...
s, minibus
A minibus, microbus, minicoach, or commuter (in Zimbabwe) is a passenger-carrying motor vehicle that is designed to carry more people than a multi-purpose vehicle or minivan, but fewer people than a full-size bus. In the United Kingdom, ...
es and light goods vehicle
A light commercial vehicle (LCV) in the European Union, Australia and New Zealand is a commercial carrier vehicle with a gross vehicle weight of no more than 3.5 metric tons (tonnes). The LCV designation is also occasionally used in both Cana ...
s (LGV).
The most prominent airlines serving Somaliland is Daallo Airlines
Daallo Airlines is a Somali-owned airline based at Dubai Airport Free Zone in Al Garhoud, Dubai, United Arab Emirates. With its main hub at the Djibouti–Ambouli International Airport, the airline operates scheduled services in the Horn of Af ...
, a Somali-owned private carrier with regular international flights that emerged after Somali Airlines
Somali Airlines was the flag carrier of Somalia. Established in 1964, it offered flights to both domestic and international destinations. It operated Boeing 720Bs, Boeing 707-300s and Airbus A310-300s on a network to the Middle East and Europe ...
ceased operations. African Express Airways and Ethiopian Airlines
Ethiopian Airlines (commonly referred to as Ethiopian; am, የኢትዮጵያ አየር መንገድ, translit=Ye-Ītyōṗṗyā āyer menged), formerly ''Ethiopian Air Lines'' (EAL), is the flag carrier of Ethiopia, and is wholly owned by ...
also fly from airports in Somaliland to Djibouti City
Djibouti (also called Djibouti City and in many early English texts and on many early maps, Jibuti; so, Magaalada Jabuuti, french: link=no, Ville de Djibouti, ar, مدينة جيبوتي, aa, Gabuutî Magaala) is the eponymous capital of Dji ...
, Addis Ababa
Addis Ababa (; am, አዲስ አበባ, , new flower ; also known as , lit. "natural spring" in Oromo), is the capital and largest city of Ethiopia. It is also served as major administrative center of the Oromia Region. In the 2007 census, t ...
, Dubai
Dubai (, ; ar, دبي, translit=Dubayy, , ) is the most populous city in the United Arab Emirates (UAE) and the capital of the Emirate of Dubai, the most populated of the 7 emirates of the United Arab Emirates.The Government and Politics of ...
and Jeddah, and offer flights for the Hajj and Umrah
The ʿUmrah ( ar, عُمْرَة, lit=to visit a populated place) is an Islamic pilgrimage to Mecca (the holiest city for Muslims, located in the Hejazi region of Saudi Arabia) that can be undertaken at any time of the year, in contrast to t ...
pilgrimages via the Egal International Airport
Egal International Airport (), ( so, Madaarka Caalamiga a ee Cigaal ar, مطار هرجيسا إيغال الدولية) is an airport in Hargeisa, the capital of Somaliland, named after Somaliland's second president Muhammad Haji Ibrahim Ega ...
in Hargeisa. Other major airports in the country include the Berbera Airport.
Ports
In June 2016, the Somaliland government signed an agreement with DP World to manage the strategic port of Berbera
Berbera (; so, Barbara, ar, بربرة) is the capital of the Sahil region of Somaliland and is the main sea port of the country. Berbera is a coastal city and was the former capital of the British Somaliland protectorate before Hargeisa. It ...
with the aim of enhancing productive capacity and acting as an alternative port for landlocked Ethiopia. In 2021 the project was joined by the UK government's CDC Group
British International Investment, (formerly CDC Group plc, Commonwealth Development Corporation, and Colonial Development Corporation) is the development finance institution of the UK government. The Foreign, Commonwealth and Development Office ...
which has doubled the funding, making Berbera a $1 billion investment.
File:Berbera_Port2.jpg, The Port of Berbera
The Port of Berbera ( so, Dekedda Berbera, ar, ميناء بربرة), also known as Berbera Port, is the official seaport of Berbera, the commercial capital of Somaliland. It is classified as a major class port.
Overview
Berbera Port histori ...
.
File:New DP World Berbera Container Terminal Port.jpg, New DP World Berbera Container Terminal Port
A port is a maritime facility comprising one or more wharves or loading areas, where ships load and discharge cargo and passengers. Although usually situated on a sea coast or estuary, ports can also be found far inland, such as H ...
.
Oil explorations
In August 2012, the Somaliland government awarded Genel Energy
Genel Energy plc is an oil company with a registered office in Jersey and field office in Turkey. The company is listed at the London Stock Exchange. It has its exploration and production operations in Northern Iraq with plans to expand its activit ...
license to explore oil within its territory. Results of a surface seep study completed early in 2015 confirmed the outstanding potential offered in SL-10B and SL-13 block and Oodweyne block with estimated oil reserves of 1 billion barrel each. Genel Energy is set to drill exploration well for SL-10B and SL-13 block in Buur-Dhaab 20 kilometers northwest of Aynabo
Aynaba, also spelt Ainabo, Ainaba or Aynabo ( so, Caynaba, ) is a major town in western Sool region of Somaliland as well as the administrative seat of the Aynaba District. Aynaba is known for its watering wells and for its good and abundant fresh ...
by the end of 2018.
File:Oil and Gas exploration activities in Somaliland.jpg, Oil and Gas exploration activities in Odwayne, Togdheer region.
File:Somaliland oil explorations.jpg, Somaliland oil blocks.
See also
* Agriculture in Somaliland
*Ministry of Finance (Somaliland)
The Ministry of Finance Development of the Republic of Somaliland ( so, Wasaaradda Horumarinta Maaliyadda Somaliland) ( ar, وزارة المالية) is the Somaliland government ministry which is concerned with the economy of Somaliland. In ...
* Ministry of Investment Promotion (Somaliland)
References
{{Africa topic, Economy of