This archive report was first published on 11 September 2019.
On September 11, 2019, the World Bank reported that Somalia's economy experienced a modest growth of 2.8 percent in 2018, primarily due to the agriculture sector's recovery.
Improved weather conditions led to a significant increase in annual harvests, with maize and sorghum yields growing by 39 percent, resulting in stabilized food prices.
According to the 4th edition of the World Bank's Somalia Economic Update, the country has made steady progress in its economic recovery.
Notably, the decline in inflation from 6.1 percent in 2017 to 3.2 percent in 2018 was attributed to stable food prices.
The World Bank also forecast a GDP growth of 2.9 percent in 2019 and projected a medium-term expansion of 3.2-3.5 percent, assuming the current momentum of reform continues.
The Somali government has been implementing fiscal and economic reforms to increase domestic revenue, stimulate economic growth, and finance basic public services.
Key sectors such as money transfer services, transport, and telecommunications have recorded healthy growth, while the rollout of a national curriculum and provision of educational opportunities in local languages have improved education outcomes.
Additionally, affordable mobile connectivity has been made available throughout the country, offering opportunities for teacher quality and better learning outcomes for students.
Changes in tax policies and improved tax administration have led to a 29 percent growth in revenues, as the central government diversified from its heavy reliance on customs duties.
Furthermore, financial sector reforms have resulted in a 56 percent growth in credit to the private sector, giving the private sector confidence to increase deposits and banks' confidence in lending.
