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Somalia’s economy has been seriously dislocated by years of fighting and political strife, as well as a severe long-term drought
which has affected the whole of East Africa. Somalia now ranks among the poorest countries in the world. Subsistence agriculture
and livestock rearing occupy most of the working population, although development is hampered by primitive techniques, poor
soil and climatic conditions, and a chronic labour shortage. Bananas are the main cash crop and provide nearly half the country’s
export earnings; cotton, maize, sorghum and other crops are produced for domestic consumption. Animal products, particularly
hides and skins, are another key source of revenue, mainly from Saudi Arabia. Fishing has dwindled to the level of individual
small boats, but there are provisional plans to restore this to full commercial capacity. Oil and gas deposits have been located
but their exploitation has been in abeyance due to the lack of an effective central government. There is little industry other
than small-scale operations to meet domestic needs, mainly food-processing and oil refining.
Most economic assets remain in the unstable hands of clan-based militias, with frequent competition for control of particular
industries.
Over half the population relies on remittances from abroad as well as large injections of foreign aid, especially from the
various United Nations relief organisations. These were disrupted by the closure in 2002 – at the behest of the US government,
which claimed links to terrorism – of the al-Barakat finance company which processed a large number of overseas payments;
the company also had major interests in other parts of the economy, especially banking and telecommunications. Somalia is
burdened by a huge foreign debt and its traditional trade relationships have largely been suspended due to payment problems.
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Overview 
