Somalia Economic Update, October 2015

Abstract

Somalis face a daunting development
 challenge to overcome the legacy of two decades of sustained
 conflict and fragility, but substantial progress is now
 being made. Since 1991 and the collapse of the Siad Barre
 regime, Somalia has experienced cycles of conflict and
 fragility that fragmented the country, undermined legitimate
 institutions, and created widespread vulnerability. The new
 government that emerged following the Transitional Federal
 Government and the Roadmap to End the Transition in 2012
 inherited a dysfunctional economy facing high levels of
 poverty and inequality, a youth bulge, high unemployment,
 and large infrastructure gaps. Against a backdrop of
 political progress marked by the emergence of new Federal
 Member States (FMSs) within the new constitutional framework
 and continued insecurity, the Federal Government of Somalia
 (FGS) has embarked on a process of structural, legislative,
 and institutional reform. The economy is starting to
 respond: Somalis are returning from abroad to invest, shops
 are opening, and the property market is booming. This is the
 first economic update for Somalia since the 2005 World Bank
 country economic memorandum for Somalia. The long conflict
 made monitoring of economic and social data nearly
 impossible since the late 1980s. With the relative stability
 of the past few years, new data have become available. The
 update is divided into two parts. Part one presents
 information on the social, economic, and governance status
 of Somalia. Part two focuses on intergovernmental fiscal relations.