Somalia has achieved notable macroeconomic progress in recent years, but poverty remains a significant challenge, according to a new World Bank report titled "Somalia Poverty and Equity Assessment." The report indicates that over half of the population still lives below the national poverty line.
“Notably, Somalia achieved the historic Heavily Indebted Poor Countries (HIPC) initiative completion point in December 2023, reducing external debt to just 6 percent of GDP,” said Qimiao Fan, World Bank Country Director for Somalia. “Looking ahead, Somalia needs to sustain its macroeconomic progress, promote stability, and implement inclusive policies that create jobs and benefit the poor.”
Despite signs of recovery, the report highlights that growth has not been sufficient to raise GDP per capita between 2017 and 2022. Factors such as limited economic opportunities, scarcity of better-paying jobs, and frequent climatic shocks have contributed to persistent poverty.
“Climatic shocks like droughts disproportionately impact poorer regions and households, increasing poverty in rural and nomadic communities. These households lack the economic means to manage and recover from such events,” said Kristina Svensson, World Bank Country Manager for Somalia. "The World Bank remains committed to supporting Somalia in building resilience to these shocks and helping vulnerable communities adapt, ensuring a more sustainable and inclusive path toward poverty reduction."
The report also notes that certain groups face alarmingly high poverty rates. Among these are the nomadic population (78 percent) and internally displaced persons. The nomadic population suffers from both monetary and non-monetary poverty and faces significant inequality based on herd size, commercialization levels, and geographic location.
“Sustained economic growth and stability are priorities for Somalia to facilitate a conducive environment for poverty reduction,” said Aphichoke Kotikula, World Bank Senior Poverty Economist for Somalia. "The country will need to accelerate job creation and enhance the resilience of rural and nomadic communities."
Given Somalia's limited fiscal space, the report recommends leveraging urbanization to improve service delivery in education. Concentrating services in urban areas can make them more accessible and affordable for the poor. Strengthening resilience against climate change for rural and nomadic livelihoods is also advised.
The "Somalia Poverty and Equity Assessment Report" builds on data from the Somalia Integrated Household Budget Survey. It provides an in-depth analysis of poverty trends, economic vulnerabilities, and social inequalities within the country.