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Somalia is still emerging from the effects of a long civil war, political-social conflicts and extended drought. Despite this, the economy, mainly based on traditional primary productive sectors, is growing. Through the National Development Plan, the New Partnership Agreement and the Economic Recovery Plan, the Federal Government of Somalia (FGS) has set out an ambitious agenda of reforms needed to support the economy.
Somalia has diverse livelihood systems: pastoralists, agro-pastoralists, fishing and coastal communities. Agriculture provides 60% of the country's GDP, 80% of its employment and 90% of its exports. The livestock and crop sectors remain the main sources of current economic activity and employment.
Live animal export and cereals are critical to consolidate and improve the quality of the high number of existing jobs in some regions. Meat production and hide and skin also have some potential to create jobs along the chain if investments are made for small-medium industries in urban areas with big demand. There is a high potential to increase cereal productivity with Good Agricultural Practices (GAP), better inputs and post-harvest management. Horticulture (mainly fruit and vegetables) has the biggest potential to create new jobs especially to supply urban areas. Banana production potential remains large, as Somalia used to be the largest banana exporter in East Africa before the start of the civil war.
With the longest coastline in Africa (3,330 km) and a large Economic Exclusive Zone (EEZ) the fishing industry has a high potential for growth and job creation in Somalia. However, fishery remains artisanal, virtually unmanaged, and subject to commercial exploitation by foreign and mostly illegal fleets.
The lifting of state constraints on private enterprise led to improved economic performance and to the provision by the private sector of many services previously provided inefficiently by the public sector (telecommunications, air transport, money transfer, and, though inadequately so, urban water, electricity, and social services). Contributing to the improved economic performance is the large emigration of skilled Somalis. The booming informal trade with neighbouring countries provided a new source of income.
The support of the Productive and Private Sectors development in Somalia is critical. The EU has historically been one of the main donors in the livestock sector, actively supporting agriculture and recently engaged in fisheries. The main EU interventions combine institutional capacity building for main line ministries (policies, regulations, information, competences) with farmers/pastoralists direct support.
Private sector engagement is key to support and boost value chain development and job creation. Local private investments are an opportunity in the short term, but strategies need to be adapted. The EU strategy to address inclusive economic growth and job creation will combine direct support to selected value chains with policy and regulatory frameworks for business environment and private sector development. Since the establishment of the Public Private Dialogue and the involvement of the private sector in the National Development Plan the EU has maintained constant dialogue with the Chambers of Commerce at regional and national level both through informal meetings and the participation into the private sector fora organised in the framework of the work of IFC/WB supporting private sector development. As a result a stronger emphasis on partnerships with the private sector has been given in ongoing projects as well as in the design of new programmes, especially related to economic development and job creation. The EU contribution to the IFC Trust Fund for Private Sector Development, will be specifically targeted to strengthen the capacity and representativeness of the private sector organisations and increase their participation in policy dialogue and development strategies.
Amongst most relevant results achieved in 2017 thanks to EU support in these sectors:
Project: Enhancing Somali Livestock Trade (ESOLT)
Amount in EUR: 3 000 000
Implementing partner: African Union
Project: Reviving Spate Irrigation In Somaliland
Amount in EUR: 2 000 000
Main objectives: Increase the resilience of livelihoods to threats and crises
Implementing partner: FAO
Project: Somaseeds - Improving the genetic quality of seeds in Somalia
Amount in EUR: 2 500 000
Implementing partner: FAO
Project: Income, livelihood and nutrition through a fishery-based economy
Amount in EUR: 2 999 427
Main objectives: To strengthen livelihoods, improve food security and nutrition to Somaliland and Puntland populations through small-scale fisheries production, processing and trade
Implementing partner: somali Fair fishing
Project: No Piracy: Alternatives for Youth Living in Coastal Communities of Puntland, Galmudug and Mogadishu
Amount in EUR: 5 300 000
Implementing partner: FAO
Project: Technical Assistance for Institutional Capacity Building on Agriculture Value Chain and Public-Private Partnership Development in South-Central Somalia
Amount in EUR: 1 922 283.55
Implementing partner: Adam Smith International