Introduction

Background

Somalia has been on a trajectory toward political stabilization and reconstruction. In 2012, a Provisional
Constitution was adopted, establishing the Federal Government of Somalia (FGS). Following this political transition
and the subsequent establishment of Federal Member States (FMSs), periodic elections since 2012 have been
conducted through representatives and described as relatively peaceful and transitions although faced with
challenges, smooth. The last elections faced some delays but later held in 2022 establishing the current
administration. The sustained political, economic, and institutional reforms have enabled the rebuilding of core
state functions, though the country’s fiscal position remains largely supported by official development assistance,
remittances, and foreign direct investment. The country still faces persistent insecurity, conflict, and unresolved
political tensions, as demonstrated by the delay of the elections from 2020 to 2022. A new President was officially
inaugurated on June 9, 2022.

Somalia’s economic growth trajectory has seen a moderate acceleration in recent years, supported by rebounds
in agriculture, private consumption, and exports, despite significant challenges. Real GDP growth rose to 4.2% in
2023 and is expected to reach 4.4% in 2024, driven by favorable rains that improved agricultural output and a
reduction in inflation due to easing global commodity prices. However, poverty remains widespread, with
projections showing that 72% of the population will still be living below the poverty line by 2024. Domestic
revenue is also very low, comprising just 2.8% of GDP in 2023, which limits Somalia’s ability to independently fund
necessary social and economic investments. Although the government closed the 2023 budget with a small
surplus, fiscal constraints remain, with heavy reliance on external grants, which accounted for 55% of total
revenues.

Agriculture and livestock continue to be pivotal for Somalia’s economic stability and growth potential. Agricultural
production, which employs over 70% of Somalia’s population, benefitted from good rainfall in the Gu and Deyr
seasons of 2023, resulting in higher crop yields and livestock health. However, flooding during the Deyr season
impacted riverine areas of Somalia, highlighting the sector’s vulnerability to climate variability. Somalia’s 2023
deyr season brought extreme rainfall and severe flooding, driven by El Niño, resulting in total damages and losses
of $57 million, severely impacting agriculture and livestock sectors. The floods destroyed irrigation infrastructure,
crops, pastures, and livestock, affecting approximately 68,000 households, particularly in 16 districts of the
southern and central regions, including Jubaland, Southwest, Hirshabelle, and Galmudug states, with Beletweyne
in Hirshabelle, and Dolow and Baardheere in Jubaland among the most severely impacted districts. Crop
production losses, particularly of staple crops like maize and sorghum, amounted to 12,800 metric tons, while milk
production losses exceeded one million liters. These disruptions significantly diminished household incomes and
heightened food insecurity, with an additional 304,980 people facing food stress or crisis levels. Recovery needs
for the agriculture and livestock sectors were estimated at $60 million, as per the post disaster needs assessment
(PDNA). Immediate interventions prioritized distribution of agricultural inputs and rehabilitation of irrigation
systems to support future planting seasons