Country Private Sector Diagnostic

Creating Markets in Somalia

June 26, 2024

Download: Executive Summary | Full Report

Unlocking private sector-led growth at a critical juncture of Somalia's development

Somalia has made significant political, economic, and development strides since the collapse of its government in 1991. While this progress has opened a path for the country’s reconstruction and transition from fragility, conflict, and violence (FCV), generating more inclusive dividends for the population is essential to ensure that these achievements take root. To date, Somalia continues to suffer from scarce economic opportunities and extreme levels of vulnerability and fragility, and the government’s fiscal space and institutional capacity to deliver public goods and services are limited. In this context, marshaling the private sector to support the country’s development is critical.

The Somalia Country Private Sector Diagnostic (CPSD) presents a policy agenda to guide toward this objective. Specifically, the joint WB-IFC report sheds light on private sector opportunities, on policy and regulatory constraints, and on enabling sector bottlenecks that hamper the growth of the Somali private sector. It proposes a series of mutually reinforcing recommendations to incentivize short-term dividends and enable the country’s private sector-led economic transformation in the medium to long term, namely by:

  1. deepening reforms to establish legitimate, effective, and equitable formal institutions and regulatory frameworks for private sector-led growth;
  2. promoting private participation and improving public stewardship of key enabling sectors to facilitate an economic transformation in the medium to long term; and
  3. improving growth and productivity of selected value chains for short- to medium-term dividends.