Industrial and Manufacturing

Industrial Secor

Somalia has maintained a healthy informal economy, largely based on livestock, remittance/money transfer companies, and telecommunications. Agriculture is the most important sector with livestock normally accounting for about 40% of GDP and more than 50% of export earnings. Nomads and semi-pastoralists, who are dependent upon livestock for their livelihood, make up a large portion of the population.

Livestock, hides, fish, charcoal, and bananas are Somalia’s principal exports, while sugar, sorghum, corn, qat, and machined goods are the principal imports. Somalia’s small industrial sector, based on the processing of agricultural products, has largely been looted and the machinery sold as scrap metal. Somalia’s service sector has grown.

Telecommunication firms provide wireless services in most major cities and offer the lowest international call rates on the continent. In the absence of a formal banking sector, money transfer/remittance services have sprouted throughout the country, handling up to $1.6 billion in remittances annually. Mogadishu’s main market offers a variety of goods from food to the newest electronic gadgets. Hotels continue to operate and are supported with private-security militias.

Mogadishu has witnessed the development of the city’s first gas stations, supermarkets, and flights between Europe (Istanbul-Mogadishu) since the collapse of central authority in 1991. This economic growth has yet to expand outside of Mogadishu.

Manufacturing Sector

The modest Manufacturing based on the processing of agricultural products, accounts for 10% of Somalia’s GDP. Prior to the outbreak of the civil war in 1991, the roughly 53 state-owned small, medium and large manufacturing firms were foundering, with the ensuing conflict destroying many of the remaining industries. However, primarily as a result of substantial local investment by theSomali diaspora, many of these small-scale plants have re-opened and newer ones have been created.

The latter include fish-canning and meat-processing plants in the north, as well as about 25 factories in the Mogadishu area, which manufacture pasta, mineral water, confections,plastic bags, fabric, hides and skins, detergent and soap, aluminum, foam mattresses andpillows, fishing boats, carry out packaging, and stone processing.

According to the UNDP, investments in light manufacturing have expanded in Bosaso, Hargeisaand Mogadishu, in particular, indicating growing business confidence in the economy.^[8] To this end, in 2004, an $8.3 million Coca-Cola bottling plant opened in Mogadishu, with investors hailing from various constituencies in Somalia.^[13] The robust private sector has also attracted foreign investment from the likes of General Motors and Dole Fruit.