– Somalia‘s economy is expected to grow 2.7 percent in 2022, down from 2.9 percent in 2021, amid a global environment characterized by multiple shocks, high volatility and uncertainty, the Bank projected Tuesday. World.
The latest Somalia Economic Update report from the World Bank says a recovery in demand is expected in 2023, when most of the shocks currently dragging down the recovery are expected to dissipate.
“A rebound in consumption and investment, combined with faster growth in Somalia’s trading partners, supports a Gross Domestic Product (GDP) growth forecast of 3.6 percent in 2023 and 3.7 percent in 2024,” the report says.
According to the World Bank, the economy recovered with a GDP growth rate of 2.9% in 2021, compared to a contraction of 0.3% in 2020.
The World Bank said this is despite significant shocks and factors muting the economic recovery, including delayed elections, drought, supply chain bottlenecks from COVID-19 lockdowns and the increase in insecurity.
World Bank Country Manager for Somalia Kristina Svensson said that given the recurring weather shocks facing Somalia, the medium-term growth outlook remains highly uncertain and the case for investments in social protection is stronger.
Somalia is currently experiencing a severe drought that has not been seen for at least 40 years. After four consecutive seasons of poor rains, 90 percent of the country is experiencing severely dry conditions that include crop failures, widespread water shortages, and declining livestock production.
According to the United Nations, the drought has exacerbated the humanitarian crisis and is bringing the country to the brink of famine with large displacements of people leaving their homes in search of food, water and pasture for their livestock. Higher commodity prices are disproportionately affecting the poor and exacerbating inequality.
The report also notes that as Somalia emerges from fragility, it needs to gradually shift from humanitarian aid to development approaches. ■