Economy in Somaliland

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Economy-overview: The main national source of government revenue, trade in camels, sheep and goats to Saudi Arabia and the Gulf states, has been hard hit by a second import ban caused by fears of the spread of Rift Valley Fever. Somaliland is not recognised internationally as a separate state, and this hampers anything other than minimal aid flows from major donors. Conversely lack of recognition has created a culture of self-reliance among the Somali people, supported by relatives and friends in the diaspora. The population has made enormous efforts to re-establish basic health and education services.

The majority of the Somali people are pastoral nomads. Camels (the traditional currency of prestige and wealth), sheep, goats and some cattle are raised in large numbers across the plains and rangelands of Somaliland and provide both daily subsistence and the economic backbone of the country.

An estimated 60 per cent of the population depends either directly or indirectly on livestock and livestock products for their livelihood. Agriculture provides subsistence for nearly 20 per cent of the country's population and is practised mostly in the east of the country and towards the northwest where sufficient rainfall allows. Crops grown include sorghum, maize, fruit and vegetables. Somaliland is also a producer of frankincense.

The informal economy and trade is strong and the results can be seen in the variety of goods available within the major urban areas. There is a flourishing trade in the mild stimulant qat. However, unemployment is high and there are few formal job opportunities for young people.

The government's ability to promote economic development is constrained by its meager budget. The 2004 budget was $25 million, of which nearly two-thirds went to security-related expenses.


Principal exports: Livestock (sheep, goats, camels, cattle) ...

GDP per capita: $200

External debt:  nil

Remittances: $200-500 million per annum


Pastoralism/agro-pastoralism: 59%

Agriculture: 17%

Urban: 24%


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