Livestock exports and money sent home by Somalis abroad have propped up the Horn of Africa nation’s economy despite a war over the New Year that gave way to an Iraq-style insurgency, the World Bank said on Wednesday.
Somalia’s entrepreneurs have learned to thrive despite a lack of government, feuding warlords and an Islamist-led guerrilla war targeting security forces and their Ethiopian allies, who overthrew a sharia courts group in January.
”The conflict did not have a negative impact on remittance inflows, which stay around $800-million to $1-billion annually,” said Chris Lovelace, World Bank country manager for Somalia.
Funds transfers by Somalis abroad made up nearly 70% of the economy, he told Reuters in an interview in the Eritrean capital Asmara.
Somalia has been mired in chaos since warlords toppled dictator Mohamed Siad Barre in 1991. It has also been beset by droughts and flooding triggering regular humanitarian disasters.
But Lovelace said neither imports or exports — mostly livestock — appeared to have been affected by the conflict that ousted the Islamists, or the insurgency characterised by assassinations and roadside bombings that has followed it.
Exports, mostly to the Middle East, climbed 20% to $298,9-million in 2006 compared with the previous year, he said, while imports also rose to $792,8-million from $626,3-million.
Due to insecurity inside Somalia, those estimates are based on reporting by other nations to the International Monetary Fund on where their exports go and their imports come from.
”Livestock is the single most important aspect of the economy, which shows both its resilience and frailty,” he said. ”What they lack is regulated animal health systems and a system to more efficiently organise the management of livestock. That insures the health of the animals which increases the value.”
Along with cattle, goats and sheep, another important Somali export is charcoal. Others are hides, fish and scrap metal.
In a country that has seen 13 failed attempts to set up central rule since 1991, more foreign investment is urgently needed. And Lovelace said the economy had potential upsides.
”Fisheries are potentially exploitable as well as the minerals and hydrocarbons,” he said.
Analysts say Somalia remains at best a speculative bet for Western oil majors as no commercial reserves have yet been discovered and the nation’s coastline is rife with piracy.
Somalia’s Parliament is debating a proposed hydrocarbon law — widely seen as the brainchild of Prime Minister Ali Mohamed Gedi — that nullifies any exploration deals struck after 1990. – Reuters