Somalia's Macroeconomic Statistics

Despite the conflict of the past, Somalia's economy is very resilient, even expanding (although the distribution of that growth is unequal). During the civil war, the institutions that were responsible for the management of monetary policy were destroyed, but even now, they are slowly being reconstructed.

The Ministry of Finance is responsible now for the creation and implementation of monetary policy. It isn't collecting that much revenue (only about 2% of the GDP), but has the potential to collect over ten percent. The Ministries in Somaliland and Puntland are setting annual budgets, and soon the budgets will include South Central Somalia as well.

Revenue collections in Somalia are down partly because taxes are trade-specific rather than of an ad valorem nature (imposed on transactions such as exports). Most public spending in Somalia is on general administration (operating expenses, salaries), which makes up 78% of the budget. Minimal spending is done on health services, education and roads, because so much of the budget goes toward keeping the country secure.

The budget deficit is only being paid down by loans from businesspeople in Somalia, and at first glance, they appear to be of a non-inflationary nature. However, the same businesspeople are printing the country's currency, as the Central Bank is no longer responsible for the printing of legal tender.

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