Skip to main content

Growth Potential in Somalia

Growth Potential in Somalia

The following statistics show the growth potential of Somalia, based on its abundant natural resources and position relative to global trade routes. Of course, to optimize its geographic advantages and resources this divided nation on the horn of East Africa would have to at least stabilize and possibly re-unite. 

Somalia has some prime real estate in terms of accessing global trade. Let’s have a look at this fun little map of global trade:


The ochre and brick-to-brown palette indicates travel time to major cities (in hours and days).
The light blue is shipping lane density based on the thickness of the lines in the ocean.
Now a zoom to Somalia:

As you can see the sea trade that passes Somalia is substantial.  Nearly 8% of global trade pass through the Gulf of Aden (the space between Somalia and Yemen). 

  • In slightly easier-to-imagine terms that’s 20,000 ships and 30% of Europe’s oil imports.  
  • Most of the news around the Gulf of Aden in the past years has been about the piracy. 
  •  It is important to note that piracy is in decline and is now at a 6 year low.

This means if Somalia could tap that trade through locally owned businesses then it could have a growth boom like Singapore, as pictured at the center of the spider web below.

Source: Singapore Bureau of Statistics

Singapore serves as a trade hub with 25% of global trade passing by. They have developed an oil processing infrastructure, buying unprocessed oil (cheaper than processed stuff), and selling the processed oil to passing vessels. They don’t have their own domestic oil resources they just import.

You may be asking: why stop to refuel? When the boats are fully fueled they are heavier. Heavier sitting lower in the water sitting lower in the water more water has to be displaced for the boat to move more oil has to be used for the vessel to move more expensive. Ergo, more frequent refueling stops are less expensive.

So if Somalia could have its own oil processing infrastructure then they could sell to vessels going to and from Africa, Asia, Europe and the Middle East. When a country has a large proportion of global trade passing nearby, a wide variety of products pass your shores. The variety available provides opportunities, as many of the products can be combined to create more valuable products. For example, different countries are more efficient at producing different types of fruits and vegetables. So, Somalia could import a variety of those agricultural products and export overpriced fruit smoothies.

Warning: classes in international econ are incredibly difficult.

Granted Somalia gets a 8% of trade passing by to Singapore’s 25%, but with the Economic growth of the sub-Saharan nations on the east coast of Africa the volume of trade passing Somalia could increase.  As you can see on the map:

A large portion of the trade that these economies engage it will be with Europe and Asia and a lot of that trade will pass by Somalia. The top trading partner for 2007 to 2010 for every sub-Saharan African country on Africa’s east coast including was the European Union. With the exception of Tanzania who’s largest trading partner was Switzerland. 

  •  There have been some major shake ups in the oil markets of east Africa, the breakup of Sudan has left the South seeking new paths of export. This along with the discovery of oil in Uganda has lead to plans to construct new oil pipelines connecting Uganda and South Sudan to Kenya.
  • This means that a major market for oil has been delivered to Somalia’s door step.

Estimated to exceed a quarter of global reserves So more than 200,000 tons,235261

Even though the price of uranium  got as high as $120/pound ever since the fucashima disaster it seems fluxulate between 30-50 $ a pound.

So: 200,000tons converted to pounds
200,000 X 2000 = 400,000,000 pounds
Then into US$

$16 trillion in deposits
Sources: or /images/motw/africa/somalia_nat_res_2002.jpg 

Now If you look at that map you will see that Uranium deposits are in the south. It is around Mogadishu just north and to the Northeast.

Unfortunately these areas have had severe problems with stability. Hopefully this wont go the same direction as the Kivu  regions in the DRC, especially because Uranium is especially dangerous to extract, both for the people mining it and for the environment.

Fishing could generate 1.2 billion annually. 1 But it is important to note that fishing needs regulation to maximize the good which it provides to a country. Large stocks of fish do not guaranty wealthy fishers and without proper regulation fishing to extinction is a very real danger. Naturally, a large port which could export the fish for consumption by the wealthy along with factories for processing the fish would be key components.

Fisheries as Public Resources
The problem with fish is that they are a public resource to which everyone has access. If Somalis were to gain access to exporting fish then anyone with a boat would immediately start fishing as large of a quantity of fish as possible due to the high prices which foreign consumers would be willing to pay. So immediately the supply of fish would jump upwards and as a result the price would decrease. And the price could get very very low before the typical Somali fisher would stop fishing. This is because the prices of goods in poorer countries are lower and Somalia is exceptionally poor. Foreigners would happily buy up the exported fish and freeze it to be sold later and in the meantime overfishing would destroy the domestic stocks of fish.

For the solution this problem let’s look at Iceland. It may seem counter intuitive to turn to Iceland for economic advice given its spectacular failure in 2008, but the fact remains that it was one of poorest nations in Europe in 1900 and now it is one of the richest. The change in Iceland came in the mid-1970s when after two years of poor fishing the government took radical action and implemented a tradable quota system. What this meant was they set a overall cap on the total amount which the fishermen could extract from the seas annually and gave out permits to fishers based on their historic catch. The fishers could then sell the permits to one another. The successful fishers would gradually accumulate more and more permits. This decreased the proportion of population of Iceland which was employed in fishing while maintaining a sustainable level of production which allows for profits.


Finally, I could not locate stats for the accumulated wealth of the Somali Diaspora, but it could be a boon to Somalia if they were to start re-emigrating, in terms of their movable or liquidated physical capital, access to connections useful to FDI and their human capital.

I am aware that that this essay ignores major political issues and I apologize for that. Africa’s history is full of colonial and corporate and exploitation of such overwhelming economic potential.  Subverting the advances of rapacious international concerns will be an enormous challenge, but there is potential!

Mohamed Hassan



  1. Some good read here. Only wonder if we can witness all this potential


Post a Comment

Popular posts from this blog

The 8 commandments for Diaspora on returning home

1.Stop the Arrogance
However smart and confidence you may feel, note that someone else is taking this as arrogance. Sometimes it’s best to let others shines so do not make the mistake of thinking that you know everything about everything just because you had access to Google for the last 10 years. Some youths here carry 4 or 5 degrees and did this in a warzone. Just because you had a western education and speak with a good English/American accent does not make you the messiah Somalis have been waiting for.
2.Learn Af-Somali
This is crucial for your survival (in oral sense). People will look at you and judge you. Make sure your Af-Somali game is stepped up and ready to converse at any given time. You should already know that we are an oral nation so having some type of ammo (Not guns) is important. Kids as young as 8 would test you and so would Caasi (Bus) drivers. You must be able to reply as fast as possible without any hiccup.
3.ATM/Cash Machine? Forget all that Rubbish, Welcome to the…

Somali Youth - Challenges and Actions

Somali youth are at present face huge task in trying to restore order back to their beloved country.This is not one with a simple duty but with many challenges and also countless rewards if successful. With over 75% of the population, Somalia has seen its youth participate in both positive aspects of the country and also negative. Youth have witnessed themselves being sidelined in decision-making forums while at the same time at the frontline in combat defending leaders who clearly have shown to have no regards for their wellbeing and future.
History tells us the Youth of Somalia have been the driving force in establishing the state from colonial rule. 13 young activists formed the celebrated Somali Youth League (SYL) in which they had protested, lobbied for the rights of the nation. All over the country, SYL members are seen as iconic and were the drive for the nation as they had been pivotal to see Somalia with self-rule away from British and Italian ruling. It was a move…

Your contribution will be much appreciated...

I cannot comprehend my reasons of not seeking any effort on updating my prize possession (for me anyways) of Moga Tribune for over a year. So much had happened with other commitments arising (and more commitments) and allowing for this blog to quietly hit the endless storage centre of Google archive. Until, that is, of having a rather intriguing discussion recently.
As I set myself out for lunch with the family at the beautiful resort of Lido Beach one afternoon, I had, from the corner of my eyes, caught two youths halfway through a discussion with a heavy usage of finger pointing. Now, three thoughts had raced upon my mind when the finger pointing had refused to back down.
I either have:
A: Family member(s). B: Social Media friend(s).
C: Unwanted trouble. (You can always expect the un-expected).
I sat down cautiously with the family while staring optimistically through my Ray Bans in order to figure out this far-away conversation while over-lining option C out of the listed expectations (t…