Economy of Somalia
The economy of Somalia like those of the neighbouring countries of Ethiopia and Kenya is a dual economy in which traditional production and the way of life are practised along modern production, with gradual graduation from traditional economic way of life to modern economy.
Somalia's economy, one of the poorest in the world, is an agricultural one based primarily on livestock and, to a lesser extent, on farming. Livestock accounts for about 40% of GDP and more than 50% of export earnings, mainly from Saudi Arabia; bananas are the main cash crop and account for nearly 50% of export earnings. Other crops produced for domestic consumption are cotton, maize, and sorghum. There are plans to develop the fishing industry. Northern Somalia is the world's largest source of incense and myrrh. There has been little exploitation of mineral resources, which include petroleum, uranium, and natural gas.
Despite the lack of effective national governance, Somalia has maintained a healthy informal economy, largely based on livestock, remittance/money transfer companies, and telecommunications. Most of the industrial production based around food processing collapsed as factories were looted during fighting, but there is a service sector (around 25% of GDP) based around the intermediation of remittances from and telecommunications with the Somali diaspora which is the main contributor to Somali economic development and reconstruction, providing resources for family support, humanitarian and development assistance and investment.
Nomads and semi-pastoralists, who are dependent upon livestock for their livelihood, make up a large portion of the population. Livestock, hides, fish, charcoal, and bananas are Somalia's principal exports, while sugar, sorghum, corn, qat, and machined goods are the principal imports.
Somalia's service sector also has grown. Telecommunication firms provide wireless services in most major cities and offer the lowest international call rates on the continent. In the absence of a formal banking sector, money transfer/remittance services have sprouted throughout the country, handling up to $1.6 billion in remittances annually. Hotels continue to operate and are supported with private-security militias.
Despite 17 years of crisis in Somalia, the economy there is stronger than that of many countries in Africa in terms of gross domestic product and imports and exports.
Area: 738,000 sq km