Somalia - Economic development prospects

RESTRICTED 17w~ Report No. AE- 10 This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may- not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION ECONOMIC DEVELOPMENT PROSP,ECTS IN SOMALIA January 15, 1971 Eastern Africa Department  EQUIVALENTS Currency The basic monetary unit is the Somali shilling, which is on a par with the shillings used in. Kenya, Tanzania and Uganda. Sh. I = 100 cents Sh. I= U.S.$0.14 U.S.$l Sh. 7.143 Weight All weights are expressed in kilograms and metric tons. Length and Area All lengths are expressed in kilometres and areas in square kilometres or hectares.  ECONOMIC DEVELOPMENT PROSPECTS IN SOMALIA BASIC DATA Page No. Para. No. MAP SUMMARY AND CONCLUSIONS 1. INTRODUCTION The Country and Its Resources ................. I I The People, the State and Political Developments . ....................... 2 6 Economic and Political Objectives ..... .......... 3 1 3 I. RECENT ECONOMIC PERFORMANCE The Economic Setting ........ .............. 4 1 5 Population, Employment and Wages .... .......... 5 1 9 Banking, Money and Credit ...... ............. 8 28 Foreign Trade and Balance of Payments .... ....... 10 36 Public Finance and Development Planning ............................ 12 43 Development IPlaining . ..................... 1 5 5 1 External Assist:ance and Public Debt ..............16 56 111. RECENT DEVELOP'MENT AND PROSPECTS OF THE MAIN SECT'ORS Agricuiture, Fishing, Forestry ................. 17 59 Fishing ........... .... 25 91 Forestry .............................. 26 96 M ining ............... .............. . 27 97 Manufacturing, Constrtuction and Power ... ........ 28 101 Transport and Communicationls ................ 31 110 Tourisrm . ............................. 32 11 6 Education and Training ..................... . 32 117 Social Services . . . . . . . . . . . . . . . . . . . . . . . . . . 34 124 IV. PROSPECTS FOR DEVELOPMENT The Potential for Accelerated Growth ............ . 35 1 29 Development E'riorities .................... . 36 134 Prospects for the Period 1970-75 . . . . . . . . . . . . . . .39 144 Creditworthiness ........................ . 43 i 58 APPENDIX 1. Present Prospects for the Banana Industry APPENDIX 2. Some Notes on Pre-Investment Studies STATISTICAL, APPENI)IX THE MISSION TJhis report is baise(d un the f inidiligs (J 1a inissiofn whictVi Visited Son)ldli(i iuririg May-Jrlnce. 19 7() The Mission conisisted of d1ohn /lurrows arJd Sha wk i Farag.   SOMALIA BASIC l)ATA Area: 637,000 square kilometers (246,000 square miles) 1 970 Estimiiate - I.S ilillioni Rate of growtl - approximately 2 1/2 perccnt Population denisity - 4.4 per square kilometer Political Status: Intdepenidenit Republic since July 19600; associate nicmnber of the European 1economlic Comnmunity ; applicaint for menibership of thle East African Economic Communlity. Gross Domnestic Prodtuct and National lincoiiie: Fhlere are no national aCCOUnts available for Somalia. Livestock and subsistence crop pr-oduction contribute the largest proportion of national income. Moilcy aad Credit: Sl. Million Rate of Growthi 1963 1965 1969) 1963-69 Totli money supply 197.9 191.5 273.4 5 1/2%Y, Domestic credit: to Governmenit 34.3 38.5 64.2 11 %0 to 1'rivate Sector 90.9 177.9 233.9 17 V, Priccs: No comprehlenlsive price indices are available for Somalia. The cost of livinlg index tor NMogadishu. however, rosc ten percenit for the period 1966-1970. Public Sector Operations: Sli. Million 1963 1965 1969 Iotal Governimncit Rcvenues 150.5 177.4 272.3 rotaLl (G1overniiient 'xpcmlditurcs 201.o 218.6 289.1 Budget deficit 51.2 41.2 16.8 lbui(dget dcf'icit asI ' o(' Governnciint FxpenlitLures 25.4%/, 18.8',,, 5.8%/  - 2 - Elxtcrtial Ptiblic Debt - (Incomplete Staicnienit): Debt outstainidinig December 31, 1968 US$79.4 million Debt Service Payments (1909) US$ 2.0 millioni Debt Service Ratio (approximiatcly) 6 percent Balance of Paymnents: Sh. Million 1963 1965 1969 Merchandise Exports 199 240 242 Merchandise Imports 315 410 367 Net Services - 40 -44 0 Net Transfers 105 II] 84 Balance on Currenit Account - 51 -103 -41 Mar. 1963 1965 1969 1970 Foreign) Assets (net) 94.8 5.8 51.5 76-6 Conicenitration of Exports: Percenitage of' Exports 1963 1969 Bananas 45 28 Live Animals and Hides and Skins 46 65 IMF Position: US$ Million Quota 15.0 SDR's 2.5 Drawings (as of June 1970) 1.9 External Assistance, 1960-1 969: US$ Million Grantis 239.7 Loan s 147.9 387.6 Major lDonors: Multilateral: US$ Million UN 24.3 IDA 8.5 EEC 27.3 Bilateral: Italy 112.4 U.S.A. 70.9 U.S.S.R. 53.1 Federal Republic of Germany 29.2  Or .n.,JoJ' ~~~~~~~~~~~~~48 5,2 'PEOPLE'S REPUBLIC OF /j 1SOUTHERN YEMEN F. T A. 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