Facts To Know About Economy Of Somalia Before Doing Business

If you are new in Somalia and planning to start a new business, it is better to be aware of the relevant business information about the country and also gather all the factual details pertaining to the economy, its key industrial sectors, its currency, GDO, government type and trade figures. It is also crucial to understand the economic structure and be aware of the intricacies of the tightly-knit ethno- economic networks of Somalia in order to start a new business. One should also gather relevant details about the financial standing that Somalia enjoyed in the past. Reading through the financial forecasts of Somalia would also be helpful for you to take a business decision.

Here are some of the interesting facts that you should know about Somalia.

- The economy prevailed in Somalia till 1991 was socialist in nature.

- Agriculture is the chief sector in Somalia. It accounts for 40% of the nation's GDP. However, 65% of the export revenue is also generated by the agricultural production in Somalia. Agricultural exports largely include banana. Other exports include metals, scarps, fish, hides, skin and charcoal.

- Imports from Somalia include sorghum, corn, sugar and machinery.

- Chief trading partners of Somalia includes countries like United Arab Emirates (UAE), Saudi Arabia and Yemen. Somalia largely exports to these countries. However, Somalia depends on Kenya, Brazil, Djibouti and India for its supplies.

- Somalia has entered into free trade agreements with several countries, including China, Kenya and Indonesia. These agreements are proving to be beneficial to Somalia to a certain extent.

- Somalia has also acquired the membership of the Council of Arab Economic Unity and is now into partnerships with several Middle Eastern and African nations. Being members with such countries is allowing Somalia to gain from certain liberal policies on trade with other member state of the Council

- Industrial sector in Somalia has a bleak position, accounting for a meager 10% of the country's GDP

- Stiff competition between different tribes in Somalia as well as increasing debts have curtailed the economic growth of Somalia

- The official currency of Somalia is the Somali shilling and it has been officially recognized as the country's currency since 1991. Lack of central government authority as well as fake currency racket rapidly debased the country's currency value. In 2002, value of Somali shilling had dropped drastically at over 30,000 shillings to the U.S. dollar.

- Several small-scale industrial units in Somalia came up in sectors such as textile, livestock, handicrafts, printing and meat processing. The small industrial sector is based on agricultural processing, including sugar refinery, oilseed, leather tanning and meat canning

- Large-scale businesses in Somalia largely exists in the petroleum refinery and telecommunications sector

- Despite facing economic reverses and several adversities, the services sector of Somalia has managed to survive and grow. The telecom companies running their operations in the country are charging the lowest rate for international calls and providing excellent services.

- Absence of proper banking network has led to the emergence of several small and big money exchange companies in Somalia. Services of private remittance companies is used for conversion of money.