Somalia economy grew 2.9% in 2021 despite drought, Covid-19 -World Bank

30th November 2022 By: Reuters

Somalia's economy grew 2.9% in 2021, up from a contraction of 0.3% the previous year, despite significant shocks including delayed elections, drought, Covid-19 and increased insecurity, the World Bank said on Tuesday.

It said according to the latest Somalia Economic Update report, a forecast of GDP growth of 3.6 percent in 2023 and 3.7 percent in 2024 could be achieved.

This would be attained if, next year, demand recovers, most of the shocks currently dragging the recovery dissipate, and consumption and investment tick up, combined with faster growth of Somalia's trading partners.

Following four seasons of failed rains, Somalia is experiencing its worst drought in four decades, affecting some 7.8-million people, aid groups say.

The humanitarian crisis is driving the country to the brink of famine, with large displacements of people as they leave their homes in search of food, water, and pasture for their livestock, the World Bank said in a statement.

The situation is exacerbated by the war in Ukraine, which has pushed up global food and oil prices, which are disproportionably affecting the poor and widening inequality.

"Given the recurrent climatic shocks facing Somalia, the medium-term growth outlook remains highly uncertain, and the case for investments in social protection stronger," said Kristina Svensson, the World Bank's Somalia country manager.

An assault by al Qaeda-allied militiamen on a heavily-guarded hotel in the capital over the weekend underscored the ongoing ability of al Shabaab group to stage deadly attacks, despite a series of battlefield victories by government forces and their allies.