Opinion: Somalia’s Economy Didn’t Collapse — The Data Tells a Different Story | Dawan Africa

 “Economic criticism demands evidence; turning growth into contraction does not change Somalia’s record, it only distorts it.” Abdirahman Ali

Somalia’s economy grew by an estimated 3 percent last year. According to former Prime Minister Hassan Ali Khaire, it contracted by 3 percent. Both figures come from the same World Bank report. Only one of them is accurate.

That is not the only place Mr. Khaire’s op-ed departs from the record. He portrays Somalia as an economy in collapse: growth contracting, businesses closing, bank credit disappearing, imports falling, development financing going unused and fiscal governance deteriorating.

The official record tells a very different story. This is a matter of record, not opinion.

The most fundamental distortion concerns economic growth. Khaire claims the World Bank’s May 2026 Somalia Economic Update shows real GDP “contracting by 3%” in 2025. It does not. The World Bank estimates that Somalia’s real GDP grew by approximately 3% in 2025, following growth of around 4% in 2023 and 2024. Positive 3% growth means the economy expanded; it does not mean the economy contracted by 3%. The World Bank further projects growth of approximately 2.8% in 2026 and 3.1% in 2027, while the IMF projects 3% growth in 2025 and 3.3% in 2026. Turning positive growth into negative growth is a fundamental distortion of basic economic data, not a matter of interpretation.

The same problem arises in Khaire’s treatment of banking. He claims that credit available to Somali businesses “collapsed from 30% in 2022 to just 14 % in 2025.” The actual banking data shows precisely the opposite. 

Credit to the private sector increased from US$293.4 million in 2022 to US$472.6 million in 2024 and US$540 million in 2025 and 84 % increase between 2022 and 2025. That $472.6 million grew to $540 million in 2025, representing approximately 14% growth in a single year. The very 14% figure presented as evidence of collapse is evidence that private-sector credit was still expanding.

This followed exceptionally rapid credit expansion in the preceding period, including approximately 48 % growth between 2023 and 2024. As the credit base expands, the percentage growth rate naturally moderates. That does not turn growth into contraction. Banking assets likewise increased from approximately US$1.2 billion in 2022 to US$2.3 billion in 2025, while customer deposits rose from roughly US$0.9 billion to US$1.6 billion. The World Bank itself reports that financial intermediation is gradually expanding.

No independent source, not the World Bank, the IMF, nor the Central Bank of Somalia, has substantiated Khaire’s characterization of a credit collapse; the underlying data shows private-sector credit continued to expand throughout the period in question.

Khaire’s broader business-collapse narrative runs into another inconvenient fact: IMF data shows that Somalia’s import volumes increased substantially year after year, with 2025 recording the highest import volumes, followed by 2024. A narrative of collapsing businesses, disappearing liquidity and sharply weakening demand cannot simply ignore trade data moving strongly in the opposite direction. If Somalia were experiencing the economic collapse described in the op-ed, record import volumes would require explanation. None is offered.

The claims about checkpoints between Afgooye and Mogadishu are similarly detached from their history. The checkpoint problem emerged from unresolved fiscal federalism, with different levels of government including the Federal Government, Banadir Regional Administration and Southwest State operating separate collection points. That system existed while Khaire himself was Prime Minister. Under the current administration, the Federal Government removed its checkpoint to reduce the burden. The constitutional reforms completed in 2026 also address the underlying problem by clarifying revenue assignments between the Federal Government and Federal Member States. Khaire now condemns a system that existed while he governed while ignoring the steps subsequently taken to dismantle it and resolve its institutional causes.i

His description of the per-container charge at Mogadishu Port is equally misleading. The charge is administered through a transportation committee under the Chamber of Commerce, not as a Federal Government tax, and is intended to finance road infrastructure alongside donor-supported projects. Again, this arrangement existed while Khaire was Prime Minister. At the recent Chamber of Commerce leadership handover, outgoing chairman Mr. Gabeyre reported that the arrangement had financed approximately 36 kilometers of roads and US$23 million in payments to construction companies, with US$9.1 million remaining owed to the Chamber by construction companies. Portraying the arrangement simply as a scheme to “extract rents” conceals both its purpose and its history.

Khaire then links this charge to inflation of 6 % and declining food imports. The numbers again tell another story. The World Bank reports consumer price inflation of approximately 3.7% in 2025, compared with 3.3% in 2024. The approximately 6% figure is a projection for 2026, associated with the Middle East conflict, disruption around the Strait of Hormuz and resulting global energy, food and supply-chain pressures. Presenting a future projection driven by international geopolitical shocks as an existing inflation rate is another distortion. His claim that food imports fell by 2.5% must also be reconciled with IMF data showing overall import volumes reaching record levels in 2025.

Perhaps the most striking deception concerns development financing. Khaire claims more than half a billion dollars committed by development partners was left unused because of “mismanagement and graft.” Yet during the World Bank fiscal year July 2025–June 2026, Somalia achieved record-level disbursement of more than half a billion dollars in a single fiscal year, the highest in its history, while ranking among the strongest performers in Eastern Africa and among fragile states. Government execution data also shows 2024 and 2025 recording stronger execution rates than the years of Khaire’s premiership.

Calling record disbursement evidence of failure turns actual performance on its head. And there is a glaring hypocrisy in being lectured about financial accountability by a former Prime Minister who never presented annual financial statements to Parliament during his tenure.

Khaire claims the number of internally displaced Somalis has grown to 3.4 million, and 6.5 million face food insecurity. This is the one claim that is substantially accurate. UN and humanitarian agencies confirm: 3.5 million IDPs were recorded in Somalia; 3.8 million IDPs were recorded at the end of 2022; and approximately 6.5 million people face acute food insecurity in crisis phase or worse. President Hassan Sheikh Mohamud returned to office the same year, May 2022 amid a devastating drought and a humanitarian emergency.

The president responded by appointing a Special Envoy for Drought and Humanitarian Affairs, strengthening coordination with international partners and establishing the Somalia Disaster Management Agency (SoDMA) as an independent institution responsible for disaster preparedness, response and recovery. These measures strengthened national coordination and helped mobilize assistance during one of Somalia’s most severe drought emergencies. Human suffering deserves serious policy debate, not chronology selectively rearranged to serve an electoral argument.