Somalia’s economy grew by 4.1 percent in 2024, according to newly released government data. While the figure reflects continued progress in rebuilding a fragile economy, it represents a slowdown from earlier forecasts and raises new concerns about the country’s ability to sustain momentum.
The Ministry of Planning and Economic Development cited external shocks, rising global fuel costs, and prolonged drought conditions as major contributing factors. Although the Somali government made progress on institutional reforms and international debt relief, several internal and external pressures limited expansion.
Experts warn that the slowdown could have broader implications for the Horn of Africa, where economic ties are deepening amid growing regional cooperation and infrastructure development.
Economic expansion, but with limitations
Somalia’s modest 4.1 percent GDP growth comes in the wake of significant debt forgiveness from international lenders and increased regional engagement, including trade corridors and port agreements. Despite this, analysts say the country remains hampered by widespread insecurity, infrastructure gaps, and limited private investment.
“Somalia is trying to move forward economically, but the pace is uneven,” said Safiya Abshir, an economist based in Hargeisa. “The government is pushing reforms, but until there is consistent peace and wider investor confidence, growth will remain fragile.”
The World Bank and IMF had previously projected slightly higher figures for 2024, anticipating stronger recovery following global stabilization post-pandemic. However, inflation, displacement due to conflict and climate, and a volatile security environment have kept Somalia’s growth below regional averages.
Regional impact: stability and integration at risk
Somalia is at the heart of East Africa’s strategic crossroads. Its growth trajectory affects not only its own population, but also its neighbors who are increasingly tied through trade, transport, and cross-border security arrangements.
In Ethiopia, rising demand for port access has brought renewed focus on Somalia’s coastline. Meanwhile, Somaliland’s commercial port at Berbera continues to attract international attention as a viable trade alternative. Djibouti remains another critical hub whose fortunes are linked to the region’s economic health.
If Somalia’s growth remains sluggish, it may impact future joint ventures, transport projects, and economic zones being considered across the Horn. Likewise, declining investor confidence in Mogadishu could shift investment toward more stable partners in the region.
“Regional integration cannot move at full speed if one of the major players is struggling,” said a regional trade consultant who spoke on condition of anonymity. “Somalia’s economy is still recovering, but its progress is essential for the Horn’s shared goals.”
Rising together or falling apart
The Horn of Africa is moving toward a future of shared infrastructure, trade corridors, and security agreements. But the vision of regional integration requires all key partners to maintain stable economic trajectories.
Somalia’s 4.1 percent growth may be an achievement given its starting point. Yet, it also signals that without stronger internal stability, the path to lasting economic transformation will remain narrow.
For the Horn of Africa, the stakes are clear. If Somalia succeeds, it lifts the entire region. If it stalls, it could slow or derail ambitious plans for deeper cooperation.
As regional leaders chart a path forward, Somalia’s next steps will be closely watched — not just in Mogadishu, but in Addis Ababa, Djibouti, Asmara, and Hargeisa.