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Somaliland Economy#

Growth rate: 3.5%#

Taking 2012 as a starting point, the country’s budget had been on the rise indicating a healthy, overall growth despite the severe drought in 2015 and the livestock export ban later in 2017.

GDP (Gross Domestic Product)#

2,573 million US dollars (2017 EST.)

GDP - per capita#

675 US Dollars.


In Somaliland farming contributes between 8% and 15% of the GDP, as livestock production and exports are the backbone of the economy and the biggest hard currency earner for the country. Due to the importance of livestock, the Somaliland Government treats it as a different sector and has a separate ministry dedicated to livestock.

It is estimated that about 10% of the land is suitable for agriculture. Despite being erratic and often scanty there are nevertheless two main rainy seasons. These are GU or spring (April to June) and Deyr or autumn (September to October), in between these two rainy seasons there is also Karan (late July through September) most occur in the western regions.

The farming in Somaliland is predominantly subsistence in nature. The principal grain crop grown under rain fed conditions is sorghum, followed by maize; and both crops are grown primarily for household consumption by smallscale farmers. Fruit and vegetable crops, which are relatively small, are grown mainly for commercial purposes and the principal commercial crops are tomatoes, lettuce, onions, watermelon, peppers, cabbages, oranges, lemons, and papaya.

Rain-fed farming accounts for 90% of the total area cultivated, while the area under irrigation constitutes only 10%, supporting about 4,000 farm families. The sector is dominated by smallholder

farmers who own farms ranging from 2 to 30 hectares in the area. The average farm size is approximately 4 hectares. During the dry season, irrigated farms make good profits, because the supply in the vegetable and fruit markets is low in this period. The shortfalls are usually filled by imports from neighboring countries such as Ethiopia and Somalia. In recent years, the cultivation of watermelon has emerged as an important source of income for the farmers. Presently, watermelon is the only fruit crop that is exported successfully to Djibouti.


Livestock is currently the leading economic sector in all of Somaliland. Livestock production accounts for 60-65% of the gross domestic product (GDP).

Based on 1998 FAO estimates of livestock numbers and past growth rates, Somaliland has about 1.69 million camels, 0.40 million head of cattle, 8.4 million goats and 8.75 million sheep in 2011. The Sool, Sanaag and Togdheer regions account for about 75% of all livestock. Somaliland’s major livestock exports are sheep and goats, accounting for 91% of all animal exports. In 2010 a total of 2.352 million shoats were exported through the Berbera port (including from Ethiopian sources). Of this total, 1.612 million (69%) were exported between September and November for the Hajj festivities.

Assuming an average export price of US$70, the estimated total value would be over US$160 million. With government taxes at around US$3.60 per head, this means tax revenue of around US$8.5 million or 10% of the Somaliland government’s total revenue.

Somaliland, and to a certain extent the other exporters from the Horn of Africa, depends on only a few countries for exports. For example, out of the 2.585 million head of sheep and goat exported through the Port of Berbera in 2010, about 78% went to Saudi Arabia, 20% to Yemen and the rest to Egypt and Oman. With increased investment, smart regulation, infrastructure development, sector coordination, and improved branding, Somaliland has ample opportunities to capitalize on the growth of the livestock sector in the Middle East and other regions of the world, while supporting the growing local demand.

Livestock Population#

There were above 20 million heads of livestock in Somaliland in the year 2013. Of course, since then, there happened a severe drought that has culled stocks, especially, cattle, camels and sheep down to a less level. Much head found salvage along the Golis. Mountains which retains much of its foliage throughout the year. Livestock populations in the West of Somaliland did not also suffer as much in the 2015 protracted drought which ran offer to early 2016. Other livestock had also been trucked to remote areas in Somalia where it found succor.

Poultry Farms#

There are 12 successful poultry farms in the country which are small scale farms that hold between 300- 60,000 heads of chickens and are mostly layers (egg-layers) based in the peri-urban farms.

The poultry industry is new and poultry production is an emerging source of food that if encouraged and invested well can be viable. The core challenges of poultry industry include feed (feed cost is very high in Somaliland due to limited agricultural by-products), limited experience of farmers for poultry rearing and absence of local agencies for the production of low-cost vaccines to control endemic diseases of poultry. Poultry is a good source of income for households, nutrition for children and is manageable by the females if well trained.

Mostly, the poultry breeds kept in Somaliland are European breeds (hybrid) which prove difficult to adapt the local weather and the existing endemic diseases, the local breeds are characterized by low production and productivity.

Dairy Farms#

There are increasing peri-urban dairy farms in suburbs of cities which are a form of livestock investment to turn livestock products into a commercialized sector that is capable to maximize returns from animal products. There are nine (9) peri-urban dairy farms registered by the Ministry of Livestock since 2011, these farms were invested by traders in the urban centers which are a success story when it comes to investments. These Peri-urban farms include dairy and fattening farms, there have been also 15 (15 milk cooperatives and associations) milk cooperatives and meat cooperatives who are aimed to bring

the stakeholders together in a coherent way that provides the voice. The increasing farms do require capacity –building, enabling environment, including credit system, technical support and strengthen their governing structure. There is a small industry that processes milk (although its process powder milk imported from abroad as bottled Yoghurt). These farms and industries are not only investment but are also demonstration form that is eye-opening for the other traders. There is, therefore, an important space for the government to institutionalize them and create continual awareness programs to encourage more investment.

Contribution to Food Security#

Livestock plays a very crucial role in the food security of the people that inhabit the Somali ecosystems. Meat and milk are the two animal food sources which people of Somaliland depend on; it is obvious that milk and meat are very important staples in the Somaliland diet, a major source of proteins, minerals as well as vitamins for the rural population to whom vegetables are often inaccessible. Rural households meet their demand for carbohydrates through the sale of their livestock in local markets investing the earnings to purchase rice, maize, sorghum, tea, sugar and pasta amongst other products.

Selling livestock to buy grain could be lucrative as long as the “caloric terms of trade” are good for livestock owners. This relates pastoral production to pastoral consumption of cereals (both expressed in energy values) through the price of the respective products and their energy value on the market. However, to profit from this exchange of protein for carbohydrates, pastoralists rely on three things: trader willingness to buy animals or milk when cash is needed for food, trader willingness to sell low-cost cereals or grains when pastoralists need them at places that are safely accessible, and the ability to sell animals without jeopardizing the national herd size, structure, and composition. This concept of “caloric terms of trade” helps the understanding of what goes on in pastoral societies, and it evolves around the relative caloric value between grain and livestock or milk.


Coastal Characteristics#

The western coast has wide sandy beaches, while the eastern coast has relatively narrow sandy beaches broken at intervals by rocky outcrops and cliffs. The continental shelf on the eastern coast is between 5 to 10kms wide when measured at the 200m depth line. The shelf becomes wider-reaching around 30-50kms near Zeila town area at the border with Djibouti.

Fish Resources#

The average annual value of the potential fish catch is estimated at US$32 million, assuming a freight on Board (FOB) price of US$2 per kilogram based on current practices and sales in Gulf markets as reported in a variety of United Nations and World Bank reports (JNA, Productive Sectors Report, Sept, 2007). As per recent estimates, the yearly sustainable catch available to Somaliland fishermen could be around 40,000 metric tons (Shuraako. org).

Current Fish Production#

Somaliland is endowed with a rich coastline along the Gulf of Aden and Indian Ocean. These waters are home to an extensive list of fish species, including various species of tuna, albacore, lobster, swordfish, shark, and many others. Even though no comprehensive data is available, estimates from fragmented assessments point to the existence of large untapped resources in a pristine environment (IUCN 1997/99 and Cesvi 2011).

The estimated catch by local Somaliland fishermen is around 15,000 – 20,000 metric tons annually. However, it must be noted that fishing boats from neighboring countries like Yemen do still come and fish illegally in Somaliland water. These actions are being taken seriously. The actual number of boats and the

quantity of fish they catch annually is difficult to determine; however, it is estimated that illegal fish reaches 4800mt – 6000mt yearly. Yemenis are known to utilize wooden or plastic boats of small sizes (8-11m in length) with carrying capacities between 3mt and 7mt. They tend to be afraid of being arrested and stay far away from Somaliland fishing water in the daytime.

Gap in Somaliland Fisheries sector to be exploited annually

Major Fish Species By Region

Somaliland’s potential for expansion can be illustrated by reviewing the status of fishing sectors of nearby countries. Yemen, which shares the same sea with Somaliland has been producing 230,000, 180,000 and 174,800 metric tons in the years 2006, 2007 and 2008 respectively (World bank 2009). In the Hadramout region of Yemen which is directly opposite to the Somaliland coast, the average production of fish for the years 2003-2005 was 85,511mt. It’s therefore fair to assume that similar production is feasible in Somaliland waters provided.

Fishing Communities/Cooperatives#

There are major settlements of fishing communities along the coast of Somaliland. Starting from the west, they are Loyado, Tokoshi, Zeila, lughaya, Elsheik, Bulahar, Geri, Berbera, Elgerdi, Karin, Shal’o, Heiss, Mait, Laskorey, Elayo.

Extractives and Energy#

Somaliland Ministry of Energy and Minerals

With the kind of the yet-to-be-tapped abundance of gemstones, hydrocarbons and minerals resources that the Republic of Somaliland is endowed with, the time has come for the country to invite international investors to partner with it to explore potential and optimize production. The resources need to be extracted to alleviate the country from its economic recess which initiative is already taking momentum at some quarters. The efforts, however, are somewhat hampered by the absence of intrepid international partners to spearhead the country’s diplomatic recognition without which no meaningful, multilateral agreements can be reached.

Certainly, investors who take the first step of acquiring minerals exploration licenses to look for a commercial deposit of the mineral of their choice or a mining license to exploit a proven resource will be richly rewarded for their efforts. However, a more detailed, geologicalgeochemical exploration is needed to assess the commercial mining potential of these occurrences, discoveries, and potential minable deposits. We strongly urge international mining companies to invest in Somaliland’s mineral sector. The government of Somaliland will welcome such investors with conducive and competitive mining terms.


Currently, the principal sources of energy in Somaliland are of two main origins: Imported petroleum and local biomass resources. Petroleum is imported in the form of refined diesel, petrol, and aviation gas, all of which are used for transportation and electric power generation.

Other imported petroleum products including kerosene and natural gas which are used for cooking by certain segments of the urban community. Kerosene, in addition to cooking, is also used for illumination by a large number of consumers.

Somaliland power producers now use imported diesel fuel as the only source of energy to generate electricity. It is estimated that collectively, companies burn more than 90-100,000 liters of diesel fuel every day in Somaliland. Independent Power Producers (IPPs)4 also struggle with heavy operational and maintenance costs of diesel generators. The electricity tariff rate in Somaliland is probably the highest in Africa at approximately $1.00- 1.40 /kWh5. As global consumption, fuel costs and unstable imported fuel supply problems continue to rise, electricity costs will also rise.

This level of cost is already restricting business development in Somaliland, and as it increases, at a certain point it will be too expensive for the majority of business and ordinary consumers in Somaliland. For power producers, it is becoming difficult to stay profitable and be sustainable. As a result, the Government is prioritizing energy investment from private and public sources and is confident that major investment opportunities exist to upgrade, diversify and modernize this important sector.

It has been estimated that the capital investment required by Somaliland’s energy sector is US$15.17 million for 2012-2016, of which $5 million is expected to come from the private sector (National Development Plan 2012-2016). Key priority challenges that investors, policy-makers, and donors need to address in the sector include:

  • The need to invest in the outdated power plants and limited power distribution network; T
  • The need to diversify away from the dependence on imported fuel for power generation – which has resulted in higher electricity costs in Somaliland.
  • The development of necessary skills and technical resources to utilize alternative energy sources for power production.
  • The development, review, passage, enforcement, and wide dissemination of key pieces of energy legislation.
  • The need to promote energy saving culture and invest in energy efficient technology.

Since the declaration of independence in 1991, Somaliland’s electricity system was rebuilt and is now operated almost entirely by independent power producers each supplying areas in its neighborhood. Some of these are “dedicated” IPPs who sell electricity as a central part of their business model, but many others need electricity generation for their own business activities and sell excess electricity to nearby customers to supplement their own income and recoup costs. Both kinds of IPPs have fully vertically-integrated systems; they have built and maintained infrastructure to generate, transmit and distribute electricity in the areas in which they operate.

In Somaliland, each area’s electricity infrastructure has been developed by the IPP working in that area. Until now, grids have not been connected, and the systems have not been unbundled, due to the high fixed cost of building new infrastructure. In each of those areas, almost all power distribution is via diesel generators for which fuel is expensive and of variable quality.

While over 20 IPPs operate in Somaliland, there has been significant consolidation of IPPs in recent years with many IPPs coming together to form one large company in order to deal with duplication and inefficiencies. This is a trend that is emerging in Hargeisa, Somaliland’s capital, as well as other cities. Larger players have used this opportunity to pursue outside funding which is considerably more difficult for smaller players.

There is a clear need for investment in the energy sector, to reduce costs and prices, and to keep up with Somaliland’s rapid economic expansion.


When it comes to hydrocarbons, Somaliland is one of the few high potentials yet underexplored areas around the globe. The existence of oil and gas in Somaliland was known since the beginning of the last century, through oil seepages in several parts of the country confirming the working petroleum system. It is only the finding of the big structures and the discovery of commercial accumulations that have so far eluded the limited and intermitted exploration and the small number drilling over that length of time.

The petroleum system of Somaliland consists of high-quality source rocks of various ages, reservoir units of both classticand carbonates as well as excellent sealing rocks. The trapping mechanism is dominated by extensional tectonic structures of rotated fault blocks and related ductile deformations The geology of Somaliland is very similar to that of Yemen as the two sides of the Gulf of Aden were only separated during Miocene (around 30 million years).

Reconstruction of the Arabian Plate to the position before the opening of the Gulf of Aden shows that the southern Yemen productive basins extend to Somaliland. The stratigraphy of the two countries compares very well and Somaliland has numerous basins with the potentiality of containing commercial hydrocarbons.

Extension of Yemen Basin to Somaliland

The petroleum exploration interest of the country started in 1912 when an oil seep at DhagahShabel, 38 km south-east of Berbera, was reported. In 1959 Standard Vacuum (Mobil and Esso) drilled three wells (Dhagah Shabel-1, -2, and -3) near the Dhagah Shabel oil seep, without the aid of subsurface control.

Two of the wells recovered a small amount of free oil (33.6 API) from the Wanderer limestone (Upper Jurassic) and Nubian sandstone (Upper Cretaceous). This is believed to be sourced by the high-quality Upper Jurassic Dhaghani shale. Interest in oil exploration recommenced in the late 1970s and, in 1980, GECO conducted an extensive offshore speculative seismic survey in the Gulf of Aden for the Somali government. In the same year Quintana Oil Company and Hunt Oil Company conducted a detail exploration programme which included an aeromagnetic survey and a seismic programme over onshore blocks 32 and 35.

From 1986 to 1990 Conoco Oil Company carried over 4000km of 2D seismic survey in area within their old blocks which covered almost 98,700km2, in Nugal basin of Sool and Togdheer regions of Somaliland. Based on the data acquired, processed and interpreted Conoco sanctioned the drilling of two wells; Nugaal-1 &Kelis

In March 2009, TGS-NOPEC Geophysical Company (TGS) completed processing and interpretation of speculative survey in Somaliland, acquired in partnership with the Somaliland Ministry of Water and Mineral Resources (currently named as The Ministry of Energy and Minerals). The programs included 5,300km of marine 2D seismic and approximately 34,000km of highresolution aeromagnetic data covering onshore areas.

Multi-Client 2d Seismic Project#

The Ministry of Energy and Minerals formulated and facilitated a multi-client 2D seismic project in which it

presented to all the international oil companies which have production-sharing agreements with the government. This was an effort by the ministry to enable the IOC’s to fulfill their exploration obligation on a slimmer budget than having to get into separate contracts with seismic contractors.

BGP Inc. (a Chinese national seismic contractor and the leading company in onshore seismic) won the international tender held by the Ministry. The first project of the multi-client arrangement was concluded in January 2018, acquiring of 3,500km of 2D.

The second project of the multi-client has been concluded six months later, July 2018, acquiring nearly 800km of 2D seismic for RAK Gas on block SL9. The recent oil and gas activities and indeed the other major international investment in Somaliland is a fair reflection of the peace and stability this country had for a long time. In addition, it is at the most priority of the recently elected government to increase production. It is particularly giving a great deal of attention on hydrocarbons and minerals.

This is not surprising since all most all the regional countries have now made discoveries of oil and gas and since the focus of the oil and gas sector is currently on Eastern Africa The above-mentioned priority is not only a government-driven campaign but rather a national ambition embraced by the whole community.

The success of recent exploration projects was made possible by the support and effort of the public particularly the local communities.With regard to safety and security, it is a point of noteworthy that during the two major seismic projects, covering 5 regions there have not been any major security incidents and on the safety side, there has been a great achievement of 2 million man-hours without LTI.

The current scheme of Somaliland oil and gas blocks consists of 24 blocks of both onshore and offshore. Only a quarter of that is presently held by IOC’s that have exploration and production sharing agreement with the government. The block system is one degree one block and therefore are huge in size (each about 12,000km2). Many of these blocks have a great deal of potentiality and open for investors. Somaliland is elongated east-west along the Gulf of Aden and hence all the blocks are not far from the coast furthest being about 300km away.


Based on the geological and geochemical surveys and studies that were conducted to date, the mineralized zones of Somaliland are highly prospective to host a wide range of minerals. Studies that were conducted to date have recorded the occurrences of precious metals, base metals, heavy minerals, non-metallic minerals, and gemstones in many areas across the regions of the Republic of Somaliland.

The occurrence of precious metals, including platinum, silver, and gold, have been recorded in several regions of Somaliland, and a gold prospect area was discovered in the region of eastern Sanaag, fueling increased artisanal activity in the area since last year . Recorded occurrences and prospects for base metals in the country include Zinc, lead, copper, iron, titanium, manganese, beryllium, columbitetantalite, chromium, molybdenum, tin, nickel, vanadium, ilmenite and bismuth.55 Furthermore, mineral sands deposits along with the coastal areas of Somaliland, east and west of Berbera, have the potential to contain commercially important titaniferous heavy minerals that can be easily mined. Heavy minerals accumulation in these sands includes ilmenite, magnetite, rutile, monazite and zircon. A recent study of these heavy mineral sands has concluded that the development prospects of these mineral sands are encouraging.

Somaliland is also endowed with significant deposits of non-metallic industrial minerals such as gypsum, mica, feldspar, kaolin, and sapiolite. Decorative stones such as jade, which are currently mined, and quartz crystals are additionally available. For instance, there is a world-class, ready to be mined gypsum deposit of 96-99% purity estimated at 180 million tons above ground and nearly twice this quantity below the surface in an area near the Port of Berbera. Gypsum is mainly used for construction and also as an additive in the manufacture of cement.

If an investor is found to mine and set up a processing plant there, it could easily be shipped on a massive scale for export to other countries. The availability of dimension stones such as granite, limestone, marble, travertine, quartz-based stones are also widely available in Somaliland.


As an extension of the Mozambique belt which hosts many types of gemstones in Kenya, Tanzania, and Madagascar, Somaliland’s mineralized zones contain a variety of gemstones that thus far have only been mined in a small scale through artisanal activity. Gemstones occurrences found in Somaliland include emerald, ruby, sapphire, aquamarine, garnet, opal, amethyst, and topaz to name a few.

Somaliland Gemstones


Somaliland is blessed with abundant deposit of salt that has a potential for investment and export. Salt is currently mass-produced by evaporation of seawater or brine from brine wells and salt lakes. Mining of rock salt is also a major source; however, Somaliland is still far to reach its full potential of salt production. China is the world’s main supplier of salt.

In 2010, world production was estimated at 270 million tons, the top five producers (in million tons) being China (60.0), United States (45.0), India (20.0) Germany (16.5), and Canada (14.0).


In the abstract to a scientific study paper he wrote on the International Journal of Oil, Gas and Coal Technology, Dr. Mohamed Y Ali, asserted :

Geological field mapping along with available geological and drilling data suggest that Somaliland has favorable stratigraphy and structure for coal deposits. Lignitic to sub-bituminous coal deposits with ages from Jurassic to Oligocene-Miocene occur in various locations across the country including Hed-Hed valley south of Onkhor, Guveneh hills north of Las Dureh and Daban Basin southeast of Berbera. However, the coal occurrence at Hed-Hed has both the greatest thickness and highest quality.

Map of Somaliland and surrounding regions showing plate boundaries and rift zone-transform faults of the Gulf of Aden

area in the years between 2006 and 2007, the following had been mapped:

  • In the area of Gal Hamud ((45°09.885′ E; 10°09.713′ N)), eight kilometres north of Bihendula, coal stringers showing branches and trunks are deposited in the Lower Jurassic sandstones and conglomeratic beds of the Adigrat Formation which underlie the Bihen Limestone.

  • Hed-Hed (46°14.484′ E; 10°33.802′ N) is located about 25 kilometres south of the coastal village of Onkhor. Coal deposits occur approximately 4 kilometres upstream in the Hed-Hed gorge from its junction with the Hodmo ravine. Hed-Hed has the greatest thickness and highest quality of coal so far exposed in the country but not ash free where Gal Hamud has the highest quality with low ash content and high calorific values.

Simplified geological map of Somaliland showing locations of coal deposits

Tourism sites#

The Republic of Somaliland has always been mapped as an area rich in both natural and prehistoric attractions whose promise mesmerizes tourists and archeologists alike.

Sacadadiin Island

Daallo Mountains

Lasgel Cave Paintings

Even the best of tourist and travel agencies promoting the rich heritage of the country hardly make an indent on the untold of, untapped, unspoiled, pristine locations that local communities accept as features blended into the local lore, local terrain without realizing the added value they hold at the national and international fora as cradles of civilization or as tourist attractions which can, potentially, account for much of the country’s foreign currency earnings.

Somaliland tourist attractions at both the micro and macro-level contexts are much more than have been covered by tourism agencies. Presently, the Gulf of Aden port of Berbera is one of the destinations most frequented by tourists. The city does not only over one of the most pristine beaches in the region but, also, buildings and sites that date back to times long past such as the Ottoman-Turk footprints in the area, Zeila, and its archipelago of islands, is another seaside town which attests to the Ottoman Empire’s incursion into the area. Zeila is often referred to as the entry point of Islam into Africa.

The scenic high vintage point views which Sheikh mountains, Daallo, Surud, Al Madow and the rest of that part of the Golis Range mountains in the Sanaag region offer visitors are attractions that had held the attention and imagination of tourists and tourism boards for a long time. The possibility of developing the sites to a scale at par with Alps sites has often been discussed but not implemented to date. At some points above the awesome escarpments, for instance, one finds himself looking down at majestic clouds slowly moving, blending and separating hundreds of meters down.


At present, telecommunication in Somaliland has entered the fifth generation. It is one of the most thriving, best developed industries in Somaliland. The government is in the process of effecting interconnectivity among the two mobile gsm providers: Telesom and Somtel. Both companies also provide mobile banking and internet access, as well as prepaid call plans, monthly subscription plans, international roaming, SMS, WAP (over both GSM and GPRS), residential fixed-line services. Both companies are about to introduce 5G services on top of the enviably, highly sophisticated platforms they are already running successfully.

Telesom was founded in 2001, Somtel in 2008 though becoming fully operational in 2010. Somcable largely concentrates on the provision of fiber optic Internet services and was founded in 2016.

Somaliland Telecommunication