Somalia's Commerce and Industry Minister Jamaal Mohamed Hassan has called for increased domestic manufacturing to reduce the country's heavy reliance on imports. The nation imports goods worth nearly $9 billion annually, with a significant portion of these imports consisting of food, fuel, medicines, and construction materials. Minister Hassan emphasized the need for a more supportive business environment to encourage local production. He expressed his support for entrepreneurs who invest in and create jobs within the country.
The International Monetary Fund projects Somalia's goods imports at $8.2 billion in 2026, with exports estimated at only $1.3 billion, resulting in a substantial trade deficit of $7.7 billion. Food imports alone accounted for about $2.5 billion in 2024, representing one-third of the country's merchandise imports. Minister Hassan urged Somali businesses to invest more in manufacturing, citing the country's workforce and economic potential to produce a larger share of the goods it consumes.
Minister Hassan also encouraged consumers to buy locally made products, arguing that stronger domestic demand could support job creation, reduce reliance on imports, and stimulate economic growth. However, Somalia's manufacturing sector faces significant challenges, including expensive electricity, limited access to financing, and weak infrastructure. The World Bank has identified high energy costs as a major constraint on business competitiveness and industrial expansion.
Electricity generation in Somalia remains heavily dependent on imported diesel, leaving businesses exposed to fluctuations in global fuel prices. A 2025 survey reported that 71% of Somali households have access to electricity, but only 21% receive more than eight hours of power a day. Minister Hassan acknowledged these challenges and stated that the government intends to work with businesses to ease these constraints.
To address these issues, the Commerce Ministry plans to establish industrial and special economic zones aimed at attracting investment and expanding domestic production. The ministry is also drafting legislation covering commerce, competition, and consumer protection, as well as developing regulations for e-commerce. Minister Hassan called on banks and investment firms to direct more financing toward manufacturing, agriculture, and fisheries.
Somalia's narrow export base has contributed to the persistent trade imbalance, with livestock traditionally being one of the country's main merchandise exports. Recurrent droughts and floods have constrained agricultural production, increasing demand for imported food. The push to expand domestic production comes as Somalia seeks new sources of private investment while economic growth remains under pressure.
The World Bank estimated that Somalia's economy grew about 3% in 2025, slowing from roughly 4% in 2023 and 2024 amid declining foreign aid, drought, and higher living costs. These developments coincide with President Hassan Sheikh Mohamud's announcement of confirmed deposits of uranium, lithium, and cobalt, which could become an important area of economic development.
Key points
- Somalia imports goods worth nearly $9 billion annually.
- The country's manufacturing sector faces significant challenges, including expensive electricity and limited access to financing.
- The government plans to establish industrial and special economic zones to attract investment and expand domestic production.
