2016 Index of Economic Freedom

Somalia

overall scoreN/A
world rank
Rule of Law

Property RightsN/A

Freedom From Corruption8.0

Limited Government

Government SpendingN/A

Fiscal FreedomN/A

Regulatory Efficiency

Business FreedomN/A

Labor FreedomN/A

Monetary FreedomN/A

Open Markets

Trade FreedomN/A

Investment FreedomN/A

Financial FreedomN/A

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Quick Facts
  • Population:
    • 10.5 million
  • GDP (PPP):
    • 3.7% growth
    • $600 per capita
  • Unemployment:
  • Inflation (CPI):
  • FDI Inflow:
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Mired in political instability and famine, Somalia remains a failed state. Institutions and policies necessary for meaningful economic progress are largely absent, and much of the population lives in severe poverty. Agriculture is the most important sector, with livestock normally accounting for about 40 percent of total domestic output and more than half of Somalia’s limited export earnings.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: Not Graded
  • Economic Freedom Status: Not Graded
  • Global Ranking: Not Ranked
  • Regional Ranking: Not Ranked in Sub-Saharan Africa
  • Notable Successes: N/A
  • Concerns: N/A
  • Overall Score Change Since 2012: N/A

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Background

Since the collapse of longtime dictator Siad Barre’s regime in 1991, various peacekeeping forces have protected a succession of weak and short-lived governments. The current AMISOM multinational force was inaugurated in 2007. A provisional constitution was passed in August 2012, and Hassan Sheikh Mohamud was elected president in September. Pirate hijackings have nearly ceased, and the Islamist terrorist group al-Shabaab has been pushed from major strongholds, though it remains a potent threat. In September 2014, al-Shabaab leader Ahmed Abdi Godane was killed in a U.S. airstrike; he was replaced by Ahmad Umar. GDP and living standards are among the world’s lowest, and the population depends on foreign aid and remittances. Economic growth is slowly expanding beyond Mogadishu, which has been recovering since al-Shabaab retreated to rural areas beginning in 2011.

Rule of LawView Methodology

Property Rights N/A Create a Graph using this measurement

Freedom From Corruption 8.0 Create a Graph using this measurement

Corruption is rampant in Somalia, tied with North Korea for last place among the 175 countries surveyed in Transparency International’s 2014 Corruption Perceptions Index. In 2013, the U.N. reported that 80 percent of withdrawals by government officials from the Somali central bank were for private purposes. The provisional constitution outlines a judicial framework, but none of its institutions have been established.

Limited GovernmentView Methodology

There is no effective national government that can provide basic services. Other than the collection of very limited duties and taxes, little formal fiscal policy is in place. A new income tax law has been submitted to parliament for approval, but the lack of productive economic activity severely constrains the government’s ability to generate revenues.

Regulatory EfficiencyView Methodology

An outmoded regulatory environment and inadequate infrastructure deter the formation and operation of businesses. The labor market is dominated by informal hiring practices. In 2015, the IMF held the first Article IV consultation with Somalia in 25 years. Despite almost nonexistent national governance, the informal agricultural, construction, and telecommunications sectors have registered positive growth without subsidies.

Open MarketsView Methodology

Much of the population remains outside of the formal trade and banking sectors, and private investment remains extremely limited. Somali diaspora remittances continue to be an important source of foreign exchange and economic support for the majority of Somalis. These financial inflows assist households in confronting poverty and financing basic needs.

Country's Score Over Time

Bar Graph of Somalia Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Somalia to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Mauritius74.7-1.7
2Botswana71.11.3
3Cabo Verde66.50.1
4Rwanda63.1-1.7
5Ghana630.0
6Seychelles62.24.7
7South Africa61.9-0.7
8Namibia61.92.3
9Madagascar61.1-0.6
10Côte d'Ivoire 601.5
11Swaziland59.7-0.2
12Benin59.30.5
13Uganda59.3-0.4
14Burkina Faso59.10.5
15Gabon590.7
16Zambia58.80.1
17Tanzania58.51.0
18Senegal58.10.3
19Kenya57.51.9
20Nigeria57.51.9
21The Gambia57.1-0.4
22São Tomé and Príncipe 56.73.4
23Mali56.50.1
24Djibouti56-1.5
25Mauritania54.81.5
26Niger54.3-0.3
27Cameroon54.22.3
28Burundi53.90.2
29Togo53.60.6
30Guinea53.31.2
31Mozambique 53.2-1.6
32Comoros52.40.3
33Sierra Leone52.30.6
34Liberia52.2-0.5
35Guinea-Bissau51.8-0.2
36Malawi51.8-3.0
37Ethiopia51.50.0
38Lesotho50.61.0
39Angola48.91.0
40Democratic Republic of Congo46.41.4
41Chad46.30.4
42Central African Republic45.2-0.7
43Equatorial Guinea43.73.3
44Republic of Congo 42.80.1
45Eritrea42.73.8
46Zimbabwe38.20.6
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