Somalia - Memorandum on the economy

Report No. 32fWSO FILE COPY Memorandum on the Economy of Somalia F'U.E, C9)iy March 16, 1981 Country Programs Department Eastern Africa Regional Office FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients aniy in the performance of their official duties. Its contents may not otherwise be disclosed without Wodid Bank authorization.  CURRENCY EQUIVALEN'TS Currency Unit = Somali Shilling (So. Sh.) = 100 cents U.S. $0.159 = So.Sh. 1.00 U.S. $1.00 = So.Sh. 6.295 ABBREVIATIONS ADC - Agricultural Development Corporation ECA - UN Economic Commission for Africa ENC - The National Agency for Trade FYDP - Five-Year Development Plan, 1974-78 MNP - Ministry of National Planning RDC - Rural Development Corporation SDB - Somali Development Bank TYDP - Three-Year Development Plan UNFPA - United Nations Fund for Population Activities UNHCR - UN High Commission for Refugees GOVERNMENT OF SOMALIA FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY MEMORANDUM ON THE ECONOMY OF SOMALIA TABLE OF CONTENTS Page No. Country Data Map Summary and Conclusions ............................................ i-iv I. Introduction .... ............... 1 II. Country Objectives and Development Planning 3 III. Social and Economic Performance and Main Issues 6 A. Social and Economic Performance . . 7 B. Government Financial Operations ........ .......... 16 C. Balance of Payments and External Debt ........... . 20 IV. Need for a New Policy Framework ................... ... 24 Statistical Appendix (Including List of Tables) .. .............. 35 Annex I Performance of the Public Enterprises and Main Issues. 82 This report is based mainly on the findings of an economic mission which visited Somalia during June 1980. The mission consisted of Mr. Willem Maane, Senior Economist (Mission Chief), Mr. Rajendra Sharma, Country Economist, and Ms. Adriana de Leva, Research Assistant. This report also benefited from the contribution of Messrs. Jim Miller, YP (mission on public enterprises, February 1980) and Mohey Ragab, EPD (mission on external debt, July 1980). The report was discussed with Somali authorities in February, 1981, by a mission consisting of Messrs. Sven Burmester and Rajendra Sharma. | This document has a restricted distribution and may be used by recipients only in the performance of | their official duties. Its contenst may not otherwise be disclosed without World Bank authorization.   COUNTRY DATA AREA POPULATION 637,700 sq. kl. 4.2 iin (id-1980 estimate) Rate of Growth: 2.3% POPULATION CHARACTERISTICS (1974-77) HEALTH (1974-77) Crude Birth Rate (per 1,000) 48 Population per physician 23,600 Crude Death Rote (per 1,000) 20 Population per hospital bhd 600 LIFE EXPECTANCY AT BIRTH 43 ACCESS TO RAFE HATER (1974-77) EDICATION (1977-78) I of population - total 33 Adult literacy rate (X) 60 urban 58 Primary school enrolment (X) 44 rural 20 NUTRITION (1974-77) LABOR FORCE (1974-77) Calorie intake au % of roqairemmots 88 Total 1.64 mli. Per apita protein intake (grams/day) 70 Agriculture 820 Industry 7% GRE PER CAPITA (1978 estimate): US11851/ GROSS NATIONAL PRODUCT IN 1978 ANNUAL RATE OF GROWTH (%, constant prices) US $ MIs. % 1972 - 1978 GDp at Moket prices_/ 1,191 100.0 2.5 Correct A-count Salamc- - 65 - 5.5 Efports of Goods NFE 152 12.8 Imports of Goods NFS 322 27.0 MONEY, CREDITS AND PRICES Dec. Dec. Dec. D-c. Jsne I976 1977 1978 1979 1980 (Million So. Sh.) Bonk Clamis on Gove-nent (sot) 124.4 -97.8 311.1 1,231.3 1,364.9 Bask Claims on Private Sector and Public Ecterprise- 986.4 1,2850.7 1,404.7 1,725.7 1,740.2 Money Supply 994.9 1,325.2 1,720.0 2,335.3 2,469.8 (Percentage or Rodeo NRubers) Geseral Price Index (1977-100) 91.1 100.0 110.0 136.2 204.3 Anoal Percentage Changes in: General Price Inden 14.7 9.8 10.0 23.8 Bask Claims on Private Sect-r and Public Enterprises -5.3 29.8 9.7 22.8 Mosey Supply 20.5 33.2 30.4 35.1 CENTRAL GOVERNMENT FINANCE ERt. 1976 1977 1978 1979 MERCHANDI8E EXPORTS (Million RS.Rh.) Average 1976-78 1 9 7 9 U0$ Mls. US$ Mln. 7, Total Revenue 671 843 1394 1506 Cacrest Expenditure 649 770 1353 1603 Livesto-k 60.9 69.1 75.3 71.0 Current Surplus or Deficit (-) 22 73 41 -97 Bananas 15.2 17.2 11.6 11.0 Developeset Ependiture 165 211 197 265 Meat and Meat Products 3.0 3.4 1.2 1.1 REtra Budgetary Expenditure -- 279 541 802 Bides and Skins 3.8 4.3 9.0 8.5 Fish and Fish Products 1.3 1.7 0.4 0.4 BALANCE OF PAYMENTs-2/ Proisionl Others 3.7 4.3 8.5 8.0 1975 1976 1977 19781 19793/ 7,'tal 88.1 100.0 106.0 100.0 (Million us$) Merchandise Exports (f.o.b.) 88.6 81.0 71.3 109.4 105.9 Merchandise Imports (c.i.f.) -162.2 -176.0 -205.9 -275.1 -394.1 Trade 8alance -73 .6 -95. -134.6 -65 .7 -280 .2 _TFRNAL DEBT U0$ Mls. Services, Net -28.6 -15.1 -6.0 -4.6 -11.6 Trensfers, Set 102.1 40.8 108.1 105.8 94.1 Public Debt (Dec. 31. 1979)41. 906.1 Current Account Balance - -69.3 -32.5 -64.5 -205.7 (of which Disbushed) (545.7) Long-Term Capital 52.1 70.9 71.8 70.0 87.5 DEBT SERVICE RATIO 2 Sheet-Teem Capital end Errors and Omissions -22.2 14.8 -11.0 -6.0 33.7 'ublic Debt 1979 (estimate) 8.0 Reserves end Related Items -29.9 -16.4 -28.3 -8.3 04.5 ISA LENDING5 (Nov. 3D. 1980) US$ HIm.. International Reserves (end year) 68.4 84.9 120.0 126.3 43.8 0 DA LN d Di.b3r19d 70.7 Petroleum Imports 19.1 18.5 38.7 Undisbursed 75.8 Outstanding inc. Undishurned 146.5 RATE OF EXCHANGE U0$1.00 = So.Sh. 6.295 (Since 1973) -- Not available January 1981 1/ Based en tentative estimates of National Accounts recently prepared by the Bank (see page 8-9) 2/ Converted at official e-change rate to make it comparable with other data. 3/ Data are officially recorded figures only. There are large unrerorded flows of trade, transfers and capital. 4/ Excludes undisburaed c-mmitments from Erat European countries, totalling $154 millicn, which are net expected to be disbursed any further.   IBRD 15413 , 48t ~~~~~~~~~~~~~~~~~~~~~~DECEMBEER 1980 ,PPEOPL`ES DEMOCRATIC REPUBLIC OF YEMEN DJIBOUTI -12- - */ Ed1130UTS G/o/f of Aden ~~~~~~~~~~~~~~~~~~~~~Bereda 1- v u~~~oyada Condo 1 ALU A e ~~~~~~~~~Adodo Bos Co nd - Lo K - SAND A I IE IA~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I SOMALJA LJGHA 1-7 KOREH w ^0RM / / BERBERAi\ ucu REGIONS ANI) DISTRICTSHA A - - Tvil V 9 a t r o o *-\ / t Gr8! $ / I~~~~~ra Otncer Beilt SALKhiJTALEHIBA - T0WW0~ ACII r ELASANODTI : 'OM C ,~s G80HOTLEH XLos Anod /yo RECO RATIOND AISS DJR$ TS : - : - I T EIGALKAYDSJARIBAN etT um'SLm " DC fiOAOS ' NWEMOANRTH FAED r.OAM- . - INER"T00RL . . .+ -OLO -GAEitANAO - U ! / i / \ OBBIO / T AM TGON sm,"ut