ReportNo. 6542-SO Somalia
Public Disclosure Authorized RecentEconomic Developments and Medium-TermProspects
February10, 1987 Country ProgramsII Easternand SouthernAfrica Region FOR OFFICIALUSE ONLY
Public Disclosure Authorized U Public Disclosure Authorized Public Disclosure Authorized
Dmiuf. eW_ ]
MUMaA_M-ay btured tecipients a"un. ks contemay n otherwise CURRENCY EQUIVALENT
Currency Unit = Somali Shilling (So. Sh.) = 100 cents
ABBREVIATIONS
ADC - Agricultural Development Corporation AMF - Arab Monetary Fund ASAP - Agricultural Sector Adjustment Program CPE - Centrally Planned Economics CPI - (Mogadishu)Consumer Price Index CSD - Central Statistical Department DAC - Development Assistance Committee DOD - Debt Outstanding and Disbursed ECA - UN Economic Commission for Africa ENC - The National Commercial Agency HASA - Hides and Skins Agency MNP - Ministry of National Planning MOF - Ministry of Finance OECD - Organization for Economic Corporation and Development OPEC - Organization for Petroleum Exporting Countries NBB - National Banana Board ONAT - Farm Machinery and Agricultural Services Corporation PIP - Public Investment Program TYDP - Three-Year Development Plan (1979-1981) UNHCR - United Nations High Commission for Refugees
GOVERNMENT OF SOMALIA
FISCAL YEAR
January 1 - December 31 FOR OMCIL US ONLY
This reportis based largelyon the findingsof an economic missionwhich visitedSomalia during June-July 1986. The missioncomprised Messrs. SwadeshBose (MissionChief), Jack van Holst Pellekaan (agriculture),George Beier (publicinvestments), Ashok Khanna (industry), AlbertoAgbonyitor (micro-economics), Thorveld Moe (externaldebt, consultant), and Ms. Seema Hafeez (publicfinance, consultant). Swadesh Bose is the principalauthor of this report.
The draft reportwas discussedwith the Somaliauthorities by Messrs Bose and Beier in January 1987. ------__------
Thisdocument has a restricteddistribution and may be used by recipientsonly in the performance of their officialduties. Its contentsmay not otherwisebe disclosedwithout World Bank authorization. SOLIAt RECENTECONOMIC DEVKLOPMHNTS AND MEDIW-TERM PROSPECTS
Table of Contents Pate No.
COURY DATA (i-iii)
EECUTIE S ARY (iv-ix)
CHAPTERI Introduction 1 Scope of Report 1 Background 2 An Overview 4
CHAPTERII RecentEconomic Developments 6
ProductionGrowth 6 DomesticInvestment and its Distributionby Sector 9 Macro-EconomicImbalances 10 Balanceof Payments 13 ExternalDebt 16 Fiscal and MonetaryDevelopments 21 Key Performanceand IncentiveIndicators 26
CHAPTERIII Progressof PolicyReform and RemainingIssues 30
A. Liberalizationand Incentivesto Promote 31 Production
B. ExchangeRate Regime 36
Background 36 Evolutionof ExchangeRates 37 Operationof the Free ForeignExchange Market 39 Effectsof the ExchangeRate System 40
C. FiscalPolicy and PublicExpenditure Program 41
PublicSector Resource Mobilization 42 CommodiryAid Utilizationfor the Budget 44 PublicExpenditures 46 PublicSector Salaries 50
D. Summarvand Recommendations 50
CHAPTERIV Medium-TermProspects 54
Constraints 54 GrowthProspects 55 Balanceof PaymentsProspects 57 Debt Relief 61 GovernmentBudget Prospects 67
STATISTICALAMN=E 71 SOMALIACOUNTRY DATA
Economic Indicators
ONPPer Capita n US3281(19865)1 Annual Rate of Growth of GDP at Constant Factor Cost (t) GrossDomestic Product in 19865 (FiscalYears) US$ Min X 1980-83 1984 1985 CDP at MarketPrIces 1516.0 136.0 4.6 3.6 8.3 Investment 232.1 15.3 ResourceBalance -275.5 18.2 Export of Goodsand NFS 14096 9.8 Importof Goodsand NFS 416.1 27.4 OutputIn FY 1985 ValueAdded (FactorCost)
Agriculture 829.1 67.6 Industry 127.2 8.8 Services 482.7 38.6 1439.9 lW-. CENTRALGOVERNMENT FINANCE
1980 1981 1982 1988 1984 1986 ti l l l1t o n So. Sh) TotalRevenue 1421 2268 2769 4263 8979 5220 CurrontExpenditure 1892 2295 2906 4716 8140 9918 CurrentSurplus or Deficit(-) -861 -32 -146 -463 -4161 -4898 Investment Expenditures la8 1426 2481 1920 3182 7949 Overall Deficit -1711 1467 2689 2_83 7343 12638
l/Exchangerate used for conversioninto US dolarsis 1US$ = 63.6 So. Sh. This exchangerate is derivedby assigning50 percentweight to the officialexchange rate and 50 percentweight to the averageof the commercialand free market rates. BALANCEOF PAYMENTS 1960 1901 1932 t 1914 1901
MerchandisoExports (f.o.b) 134 114 157 101 62 9J MerchandiseImports (c.l.f.) -461 -422 -434 -41U -496 -362 Trade Balance -W1-ai 7 -J49 -5M N1 Non-factor service -6 9 23 24 -3 - Interest Paymwnt. -2 -10 -14 -21 -44 -43 Private transfers, not 57 64 go 51 72 29 CurrentAccount Balance -271 !i5 -2Wf -2WC -ST -2W1 OfficialLoans, Not 143 16S 157 140 174 179 OtherCapita 37 79 123 1in 46 69 (Incl.rrors A omissions 21 3 -36 -39 -46 -36 OverallBalance -27 -13 -44 -86 -139 so
RATEOF EXCHANGE
W1101l Rate
From1973 to June39, 1901- US81.0* So. Sh.6.295 July1, 1981-Juno3J, 1982- A dualexchange rate with: USS1.11a 6.295(for essential lmports) USJ1.49a 12.59(all other foreign transoctleas) July-l, 1902-Oct.22, 1983 -- USJ1.00a So. Sh. 15.227
Oct.23, 198W-Sept.14, 1914- USSn.OOa So. Sh. 17.55 Sept.15, 1094-Doc. 31, 1984 - USS1.40 So. Sh 26.00 Jan. 1, 1986-Feb. 28, 1905- USS1.00a So. $h. 36.09
OfficialRate Free MarketRate 1985 March 37.0 91.4 June 40.6 97.8 Sept. 40.6 100.7 Dec. 42.5 114.7 1986 Jan. 64.5 114.8 March 82.5 138.6 June 74.5 152.3 sept. 86.6 134.0 Dec. 90.5 132.0 - iii.
MONEY.CREDIT AND PRICES
Doe. Doc. Doe. Doc. D1c. Doe 1960 19 1902 19118 1964 165 (MillionSo. Sh) Bank Claim,on Government(net) 1,982 2,260 2,199 1,805 4,378 6,252 Bank Claim on PrivatoSector 426 675 1624 2298 8727 4024 Bank Claimson PublicEnter. 1651 1722 1890 1168 1511 2671 Mon.ySupply (MI) 2,768 8,619 $,911 4,167 6,676 9,117 (IndexNumbers) ConsumerPrice Index (1977=199)218.7 818.4 848.2 624.0 1996.6 1867.9 AnnualPercontage Change ConsumerPrice Index 69.0 44.6 22.6 36.4 92.1 37.9 Bank Clalm on PrivateSector -4.7 85.0 102.4 41.2 62.5 6.9 BankClaim on PublicEnter. 21.8 11.9 -24.6 -19.6 29.9 87.1 MoneySupply (MI). 19.2 80.9 0.1 8.8 22.2 79.5
MECHANDISEEXPORTS
Av*rcog 199-62 1968 1984 1986 USSIMIn _ USS Min _ US SMln X USS Min X Livestock 1M1.$ 79.8 72.0 71.5 83.1 5$.4 66.9 71.4 Bananso 9.4 7.3 15.9 14.9 14.1 22.7 1 J. 14.1 Met &MtA Products 9.6 9.4 9.2 9.1 - - - - Hides and Skins 6.2 4.0 1.5 1.5 8.9 6.8 4.8 4.6 FishA Flh Products 1.8 1.9 2.8 2.8 0.4 0.6 0.2 0.2 Others 10.2 6.9 9.7 9.7 19.5 17.0 9.0 9.7 TOTAL 1HEl. 19.-.7 199 . 62. 9i51 liU.
EXTERNALDEBT US$ Min. Public Dobt (Doc.31,1989) 1542.7 DEBTSERVICE RATIO (1965) X Accrualbasis 104.0 Cash basis 48.9 IDA LENDING(DEC. 31. 1986) Outstanding and Disbursed 215.23 Undisbur.ed 47.94 Outstaning Inc. Undisbursed 268.17 - jv_
EXECUTIVESUMMARY
INTRODUCTION
1. Somaliais among the least developedcountries of the world. Endowedwith ratherlimited known naturalresources and a fragile environmentfor agriculture,it faces formidableconstraints to economic developmentin the face of a 3 percentannual growth of population. Livestockproduction accounts for nearly40 percentof GDP and 80 percent of exports,but cannotincrease rapidly since the capacityof the rangeland has nearlybeen reached. A rapid growthof crop productionwhich accounts for about 12 percentof GDP will requireinvestments in irrigation rehabilitationand development,as well as in other infrastructure, researchand extension. Developmentof the tiny industrialsector is constrained,among other things,by a scarcityof skills. Somalia's economicdevelopment is a challengingtask requiringsound policies. On the contrary,pervasive Government controls led to grosslyinefficient resourceuse and hinderedgrowth in the 1970s;and for a numberof years Somaliahas been sufferingfrom seriousdomestic and externalfinancial imbalances,rapid inflationand debt servicecrisis. Since the first ConsultativeGroup meeting in 1983,the Governmentwith the supportof the donor communityembarked on a programof policyreform to achievethe twin objectivesof financialstabilization, and economicadjustment and growth throughfostering greater market orientation.
Recent EconomicPerformance
2. Real GDP growthin 1984 and 1985 was between3 and 6 percentper year originatingmainly from livestockand crops. The reformprogram involvingtrade liberalization,exchange rate reform,and dismantlingof agricul-uralprices and marketingcontrols, with favorableweather, led to the recoveryof productionand exports. For two consecutiveyears, productionof crops particularlyfoodgrains has increasedremarkably. Maize productionincreased from 235,000tons in 1983 to over 380,000tons in 1985 (Table2.2). Export earningsincreased from $62 million in 1984 to $93 millionin 1985 as the searchfor new marketsfor livestockbegan to yield results. Real economicgrowth was accompaniedby a modest declinein importsfrom $406 millionin 1984 to $362 million in 1985 as increased domesticproduction led to reducedfood imports. Domesticinflation declinedfrom 92 percentin 1984 to about 37 percentin 1985 and 1986. Therewas a marginalreduction in the currentaccount deficit on the balanceof paymentsdue considerablyto about $150 milliondebt relief obtainedin 1985. Still new paymen-tsarrears were accumulatedin 1985 which added up to total arrearsof $173 million. There was modest improvementof the budget deficitas domesticrevenue made some recovery.
Implementationof PolicyReforms
3. After the relapsein 1984, implementationof policyreform improvedin 1985 and has continuedthrough 1986. Pricingand marketingof most agriculturalgoods have been liberalized,major price controlshave been dismantled. Most of the controlson exportand importtrade have been liberalized.A gradualbut large devaluationof the officialexchange rate (So. Sh. 90.5 - $1 in December1986, comparedwith So. Sh. 26-$1 in December1984) and the introductionof a free foreignexchange market for 50 percentof all *xport earningsare yieldingan exportrate of about Sh. 115 - $1 in late 1986 (See Table 3.1) and providingincentives to agriculturalproduction for exportsand import-substitution.In the implementationof exchangerate reform,however, a de facto transient multipleexchange rate systememerged with distortiveeffects on resource allocation. In additionto the exportrate, various importsface differentrates: the officialrate, the free market rate (aboutSo. Sh. 135 to the dollarin late 1986),the auctionrate (aboutSo. Sh 110 - $1), and the commercialrate (of So Sh 83.60 - $1, but discontinuedsince September 1986).
4. However,there are still some importantareas in agricultural pricingand marketingwhich remainto be liberalizedin order to provide incentivesfor exportexpansion through the participationof private operations. One such area is trade in hides and skins, and frankincense and myrrh where existingpublic sector control is hinderingpotential export expansion(para. 3.6). Studiesin this area have been commissioned. Anotherarea is governmentcontrol on petroleumimporting, pricing and distributionwhich is hinderingefficient resource allocation for adjustmentand growth (para.3.9). The subsidizationof tractorservices by ONAT (the Governmenttractor hire agency)constitutes a barrierto entry of privateoperators for agriculturalinvestment (para. 3.8). This issue Is also being studiedunder the ASAP credit.
5. In the industrialsector, there is still price controlon some publicenterprises (para. 3.13).
6. The unsatisfactoryperformance of industrialpublic enterprises resultsin a continueddrain on the budgetor the economy. Improvementof efficiencyof resourceuse in publicenterprises which constitutethe bulk of the industrialsector is essentialfor futureeconomic and industrial production. Despitethe Government'scommitment since 1984 to public enterprisereform through a combinationof phasingout clearlyunviable enterprises,privatizing (or formingjoint ventures),restructuring and rehabilitatingothers in the publicsector, substantive progress has yet to be made. (para.3.16)
7. Nominal interestrates were increasedbut are still below the rate of inflation. The creationof the Ministryof revenuesin responseto deteriorationof tax efforthas contributedto a recoveryof revenues particularlyin 1986. However,the basic factorsinhibiting revenue growth remainunchanged. (1) Importsare valued for importduty purposesat the officialexchange rate insteadof the free market exchangerate. (2) Tax avoidanceand evasioncontinue to undermineefforts at improvedrevenue collection. (3) There is very littlerecovery of the costs of public investmentand services. - vi -
8. FiscalPolicy and PublicExperiditure Program. The currentbudget deficitstill remainslarge as a resultof slow growth in domesticrevenues and a continuedexpansion in expenditures.The continuinglarge public dissavingsare thwartingcorrection of the domesticfinancial imbalance and weaknessesin the expenditureprogram are underminingthe productivityof public investment. Improvementof publicsector resourcemobilization and of public expenditureprogram remain two major issuesfor Somalia.
9. In the absenceof adequatepublic sectorresource mobilization, local counterpartfunds generated from cash and commodityaid were in 1985 (accordingto donor estimates)equivalent to the domesticrevenues on the Governmentbudget in 1985 and these fundswould increasein the coming years (para.3.46). In general,budgetary expenditure records and accountingremain less than comprehensive.Certain items of current expendituredo not appearin the budget. And one third of the budgetis a contingencyitem in the Ministryof Financebudget for which no disaggregation is available (para. 3.49 - 3.50). In addition, it is unclearif there are any explicitsubsidies (and to whom) includedin the budgetaryexpenditures called " transfersand recurrentexpenditures".
10. Under-Fundingof RecurrentExpenditure. The development expenditures(i.e., PIP expenditures)of the Governmentremain large relativeto the recurrentbudget. The futurerecurrent cost implications of new developmentprojects (PIP) are not worked throughduring the preparationof the public investmentprogram. The budgetformulation processdoes not attemptto quantifyand mobilizeresources for recurrent cost needs of completeddevelopment projects. To provideadequately for operatingand maintenancecosts, the 1986 recurrentbudget for the productivesectors would have to be increasedseveral times. (para.3.44, Table 3.5). Generalservices including defense consumed 88 percentof the recurrentbudget in 1985 while the combinedshares of economicand social servicesdropped to 12 percentfrom about 34 percentin 1976-80. But despitethe Government'sdeclared intent to the contrarythis sharewas furtherreduced in the 1986 budget. This share is extremelylow compared to Sub-SaharanAfrica (37 percent)as a whole (Table3.6). The gross underfundingof recurrentcosts led to deteriorationof physical facilities,and servicesprovided; e.g., roads and irrigationfacilities deterioratedbadly requiringcostly rehabilitation, and elementaryschool enrollmentratio fell from 30 percentin 1980 to 19 percentin 1984.
11. Civil ServiceReform. Somaliahas an oversizedand ill-paidcivil servicewith adverseimpact on moraleand motivation. Withouta well- compensatedand well-functioningcivil service public policy and expendituremanagement would not improveadequately. There is need to - vii - recast salariesand restorethe purchasingpower of earlieryears, and make overallcompensation more visible. The additionalexpenditure can hardly be met without a substantialincrease in domesticrevenue and a reduction in the numberof employees. Donor supporttowards an increasedsalary bill must be only temporaryand consistentwith the stabilizationobjectives. The Governmentacknowledges the problem,but no substantiveprogress has been made in this regard.
OverallPolicy Performance
12. This mixed overallpolicy performance in 1985 and 1986 is, however,an improvementover 1984 when the implementationof the IMF stabilizationprogram was suspendedin the wake of sharp declinein exports and tax revenues.
13. Despitethese gains in policy reform,real GDP growth,recovery of exports,and declinein imports,the externalcurrent account deficit and the domesticsavings investment gap remainlarge, about 22 percentof GDP in 1985. Recent developmentsdo not indicatethat the unsustainablylarge macro-economicimbalances of the economyare being steadilycorrected. Aggregateconsumption exceeds GDP, so savingsare nil or negative. Export earningscover only about a quarterof the value of imports.
14. Externaldebt servicingis in a crisisstate with the accumulation of over 170 million in arrearsat the end of 1985. No reschedulingthrough the Paris Club has been arrangedfor 1986. Multilateraldebt servicing alone would absorbabout 50 percentof exportearnings (Table 4.5) while the total debt service,excluding about $70 million frozenarrears accrued to Bulgaria,China and the USSR is over 100 percentof expectedexport receiptsin the medium term.
15. It is to be emphasizedthat the economyhas respondedto policy reformin positiveways throughagricultural growth, lower inflation, reductionof imports,and some recoveryof exports. However,the effects of these positivedevelopments on the macro-economicimbalances of the economyis yet negligiblemainly because the imbalancesin themselveshave been enormousand deeplyentrenched.
Need for SustainingAdlustment Policies
16. If the economyis to adjust,then the correctionof these fundamentalimbalances together with growthpromotion must be centralto adjustmentprograms in the mediumand long-term.
17. Progresstowards adjustment of these imbalanceswould require among other thingsa sustainedimplementation of the remainingaspects of the policy reformprogram and new measuresto promoteefficient use of resourcesin the economy. These include:
(a) unificationof the exchangerate and its maintenanceat a realisticlevel; - viii -
(b) eliminationof currentbudget deficitsthrough increases in revenue,and restructuringof recurrentexpenditure in favor of economicand socialservices;
(c) improvingproductivity of public investmentthrough use of profitabilitycriteria in selectingprojects with a focus on the growthgenerating sectors;
(d) removalof remainingcontrols on prices, marketing, exportsand imports,especially of petroleum,hides and skins, and frankincense;
(o) improvedfood aid managementto sustainIncentives for domesticcrop production;
(f) furtherimprovement of incentivesand opportunitiesto encourageprivate savings and investment,interest rate adjustmentto improvecredit allocation and introduction of privatebank(s) to improveservices to the private sector;
(g) civil servicereform with a reductionof numbersand a recastingof salaries;and
(h) publicenterprise reform to phase out unviableenterprises and to improveresource use efficiency.
18. Exchangerate policy and publicexpenditure management are criticalelements in improvingresource use efficiencyand correctingthe externalimbalance. Thoughexchange rate reformshave impos,eddiscipline on the privatesector, the largershare of imports channeledthrough the publicsector through grants and loans is not subjectto the same market disciplineinduced by adjustmentsin the exchangerate.
19. The PIP imports which constitutethe largestsingle import item are not, for example,subject to effectivemarket discipline through exchangerate reform. Even after the expectedunification of exchange rates the largershare of total importsfor the publicsector will be influencednot by the exchangerate per se, but by the inflowof grantsand loans.
20. Hence to enforceefficiency in the use of importedgoods, and inducea reductionin the externalimbalance would requirethats (a) institutionsfor aid coordinationand aelectionof projectsbe strengthenedand used to enhancethe productivityof the publicinvestment program. (b) use of importedgoods is channeledincreasingly through the privatesector. - ix -
Medium Term Prospectsand Aid Requirements
21. With sustainedpolicy reformand favorableweather complementedby aid flows,GDP growthof about4.1 percenta year is feasiblein the medium term. Sustained export recoveryis also feasiblewith exchangerate adjustments,relaxation of restrictionson remainingexports and continued search for marketsfor livestockoutside Saudi Arabia.
22. With GDP growthabove population growth, and assumingthat socio- politicalconstraints would not permitany compressionof real per capita consumption,there would be slow (a) increasein the savingsratio from -7 percent in 1985 to +1 percentin 1991, (b) increasein the investmentto GDP ratio from nearly 15 percentin 1985 to 17 percentin 1991, (c) reductionin the ratioof trade deficitto GDP from 21 percentin 1985 to 15 percentin 1991,and (d) overallinternal and externaladjustment in the medium term as the consumptionratio declines,export ratio rises,and the importratio falls. (Table4.2)
23. The economywould however,still dependon importsurpluses to supportconsumption and investmentwith overallfinancing requirements includingdebt serviceobligation between $400 millionand $450 millionper year over the medium term. (Table4.4) Even with growth,debt servicing will be unmanageable(Table 4.5) withoutextra-ordinary measures. Multilateraldebt servicealone would requireabout 50 percentof expected exportearnings in the medium tem. Total debt serviceobligations would averageabout $150 millionper year during 1986-91.
24. Two scenariosof debt reliefwere simulated. Each case is based on assumptionthat (a) all multilateraldebt servicemust be paid and, (b) 95 percentof all other debt is rescheduled.The analysisshows that to providepositive capital inflow required to supportgrowth and to improve the debt service profile to a manageable debt service burden in the medium and long term would requirea combinationof (i) multi-yearor regular annualrescheduling of all bilateralobligations on soft (closeto IDA) terms,and (ii) quick disbursinggrants, including cash grants.
25. Two points deserveemphasis. First,even with policy reformand prospectivegrowth, adjustment of the externaldeficit will be slow, and the economy will in the foreseeablefuture, lack the capacityto meet externaldebt obligations.Second, rescheduling on soft terms need be predicatedon sustainedimplementation of policy reform.
26. During 1987 and 1988 Somaliawill requireaverage annual aid disbursementsof nearly$400 million,about $250 millionin grantsand $150 million in (mostlyconcessionary) loans (Table4.7); roughlyone-half of these tnflowswill be requiredfor quick disbursingcommodity aid and balanceof paymentssupport in the form of food, petroleum,other commoditiesand cash. Disbursementsfrom the aid pipelinewould amountto about $300 million a year, and hence additional disbursements of nearly $100 million from new aid commitmentwill be necessary. In addition,about $70 million in debt reliefper year will be required. As the existingaid pipelinegets exhausted,larger new aid commitmentsare requiredfor 1989 and beyond. Throughthe ConsultativeGroup process it shouldbe possible to coordinatedonor supportto mobilizeresources to financethe prospective gap, providedthe Somaliauthorities sustain and strengthenthe policy and institutional reforms required for adjustment and growth. CHAPTERI
INTRODUCTION
Scope of the R&Port
1.1 This economicmemorandum focuses on the adjustmentsthat will be requiredover che next few years if Somaliais to achieverealistic goals of stabilizationand economicdevelopment with a viable externalpayments position. Based mainly on the findingsof an economicmission which visitedSomalia in June-July1986, the presentreport is clearlyless comprehensivethan the previouseconomic report.l It coversthe recent developmentsmainly since 1984, and review the progressof implementation of the reformorogram with an assessmentof exchangerate reform,and liberalizationpolicies so far implemented.The centraltheme of the report is recentmacro-economic adjustment for growthin light of the Government'sreform program, the recommendationsof the previousBank economicreport and the 1985 ConsultativeGroup (CG) understanding,and policymeasures needed to sustaingrowth over the mediumterm, e.g. improvementof financialmanagement and public investmentprogram, effectiveincentives and betterallocation of resources,and liberalization to extendthe market discipline.
1.2 ChapterII providesa reviewof recenteconomic and financial developmentswith attentionto progresstowards correcting large macro- economicimbalances in the externalcurrent account and the government budget,and towardscorrecting distortions in the policy framework, especiallyin prices,exchange rates, and interestrates.
ChapterIII especiallydeals with policy implementationunder the reformprogram, discusses achievements and shortcomingsin three broad areas -- pricingand marketingliberalization, exchange rate regime,and fiscalpolicy and publicsector resource mobilization, and outlinesthe unfinishedagenda of actionswhich need to be Implementedfor sustainingthe processof adjustmentwith growth over the medium term.
ChapterIV discussesthe economy'sprospects of growth assuming that the recommendedmeasures will be largelyimplemented and indicatesthe requirementsof externalaid and debt reliefto supportthis process. The financialimplications of medium-term growthof GDP are analyzedalong with a projectionof the balance of payments. Since Somalia'shuge debt serviceburden makes the futureprospects very bleak withoutdebt relief,alternative scenariosof debt reliefare also presentedalong with aid requirements,to indicateoverall financing requirements. Finally,the chapteralso providesa normativeprojection of the governmentbudget in order to indicatehow fiscalmanagement shouldand can evolvein order to achievefinancial stabilization and to supportadjustment with growthin the medium term.
L/ World Bank (ReportNo. 5584-SO),Somalia: TowardsEconomic Recovery and Growth (August1985). -2-
BackRround
1.3 Somaliais a large but sparselypopulated country of about 5.5 millionpeople (excludingrefugees). 2 With an estimatedper capita income of about $260 it is among the poorestcountries in the world, and is classifiedby the UnitedNations as a least developedcountry. The average life expectancyat birth is only 46 years. Somalia'scrude death rate of 20 per thousandand infantmortality rate of 150 per thousandlive births are among the highestin Sub-SaharanAfrica. Modernhealth care is entirelyconfined to urban areas. The populationper physicianis 16,000, or about the same for low-incomecountries.
1.4 The countryis poor in naturalresources, with no known minerals or fossilfuels. Its low and variablerainfall and largelyrugged terrain present a harsh and fragileenvironment for agriculture.About 13 percent of the land is consideredarable. Due to the limitedphysical and social infrastructure,and with water being the limitingconstraint, hardly 10 percent (or 1 millionhectares) of the potentiallyarable land is actually cultivated,mostly under rainfedconditions. About 50 percentof the populationare nomadicpastoralists who dependon livestockfor their livelihood;roughly 25 percentare settledfarmers, and the remaining25 percentare engagedin variousnon-agricultural occupations and live mostly in urban areas. Somaliasuffers from seriousinstitutional weaknesses in both publicand privatesectors. There is a criticalshortage of skilled labor and of personnelwith technicaland managerialexpertise, along with an apparentexcess supply of schoolleavers at almostevery level of education,reflecting an imbalancebetween the output of the education systemand the needs of the economy.
1.5 Followinga major borderconflict with Ethiopiain 1977/78, Somaliahas been experiencinga seriouseconomic and financialcrisis in the face of relativelystagnating production. The immediateconsequences of the conflictwere sharp increasesin governmentexpenditures, mainly for defense,and in bank financingof large budgetdeficits leading to high rates of inflation. The balanceof paymentscounterpart of these budgetary developmentswas a surge in importsthrough 1980, and a sharp declinein foreignreserves, accompanied by reducedcapital flows (as the aid from the USSR ceasedand beforeother donorsstepped up their aid). Beginningin 1981, the Governmentdecided to introducepolicy and institutionalreforms towardsimproving incentives, liberalizing the economicsystem from extensivegovernment controls and moving to correctpolicy-induced distortionsthat had led both to economicstagnation and grossly insufficientresource use in the 1970'sand to externaland domestic financialcrises since the late 1970s. The reformmeasures mainly comprisingexchange rate adjustments,fiscal and monetaryrestraint, interestrate increases,increases in agriculturalproducer prices and de facto eliminationof the governmentmonopoly of grain purchases,generated some recoveryin the economyand led to increasedexternal aid.
1.6 In 1983, the Governmentprepared a medium-termrecovery program comprisinga public investmentprogram (PIP) for 1984-86and a programof
2/ The officialfigure used by the UNHCR for refugeesin camps is 700,000. - 3 - phasedpolicy reformfor achievingfinancial stabilization and rationalizingthe pricingand incentivestructure for outputgrowth. The programcalled for: improvementin macro-economicmanagement through fiscal,monetary and exchangerate policies;improvement in financial disciplineand public investmentprogramming; liberalization of agriculturalpricing and marketing;and an incentiveframework for encouragingthe privatesector. At the first ConsultativeGroup meetingin October1983, donorswelcomed the reformprogram and pledgedsupport for the PIP and the associatedpolicies. However,because of the ban on Somali cattleexports to its principalmarket, the impactof the 1983 drought,and the slackeningof stabilizationefforts by the Governmentand its decision not to implementadditional policy measures including devaluation and financialrestraint, a severe financialcrisis reemerged in 1984 with a recordinflation, and mountingexternal debt servicearrears.
1.7 Faced with a rapidlydeteriorating situation, the Government adoptedan adjustmentprogram for 1985 under an IMF Stand-byArrangement designedto reducedomestic and externalimbalances, and to stimulate economicgrowth. At a specialConsultative Group (CG)meeting in January 1985, donorscommended this programand pledgedquick-disbursing assistance to financeSomalia's balance of paymentsgap for 1985.
1.8 ARainstthis background,the previousWorld Bank Economicreport on Somalia3 presentedto the secondConsultative Group meetingheld in November1985 noted that the main issuesfacing the economywere inadequate domesticresource mobilization, negative savings, stagnating exports, very high importdependence, low productivityof publicinvestment, and poor financialdiscipline and public expendituremanagement. As noted in ChapterIII of the presentreport, it stresseedthe need for strongpolicy measuresto raise domesticrevenue and savings,to enforcepublic expenditurecontrol and restrainmonetary expansion for achievingfinancial stabilization,to liberalizeprice, trade and exchangecontrols for improvingincentives and resourceallocation, and for encouragingthe privatesector to boost productionand exports,and to raise the qualityof the public investmentprogram for sustainingeconomic recovery and growth. Keepingin view Somalia'slong-term development, the reportreviewed the main constraintsto developmentsin agricultureand industry,eLnd discussed measuresaimed at augmentingproduction and promotingthe privatesector. It also drew upon other sectorstudies to emphasizethe need for population policy and improvedenergy demand management for the long-termdevelopment of Somalia.
1.9 The constraintsto Somalia'slong-term development in the face of a 3 percentannual growth of populationnoted in the previousreport remain unchangedand will not be elaboratedin the presentreport. The livestock subsector--accountingfor nearly 40 percentof domesticproduction--is and will continueto be the major contributorto GDP and exportsin Somaliafor quite pome time. However,it is widelyconsidered that the capacityof the rangelandsto sustainadditional numbers of animalsis at or near its limit. There is, thus, a seriousstructural constraint to a rapid growth of GDP, and, to a lesserextent, of exports. Crop productionwhich
3/ World Bank (ReportNo. 5584-SO),Somalia: TowardsEconomic Recovery and Growth (August1985). - 4 - accountsfor about 12 percentof GDP, can be increasinglymore important for both importsubstitution and exportexpansion. This is, however, contingent,among other things,upon irrigationrehabilitation, new irrigationdevelopment and improvedwater management,as well as increased productivityof rainfedagriculture through better culturalpractices, improvedinputs, research and extension. In additionto Somalia'svery small market and poor resourcesendowment, a seriousscarcity of managerial and technicalskills remains a major supply-sideconstraint to industrial development. Publicenterprises account for nearly 80 percentof the outputof the small manufacturingsector which contributes6-7 percentof GDP. Originallyenvisaged to processlocal agricultural,livestock and fisheriesproducts for consumer-orientedimport substitution and exports these enterpriseshave becomeheavily dependent on importedmaterials and operateat a low level of capacityhindering output growth. Much of the sectorsuffers from inherentincompetitiveness and from an ineffective protectivesystem.
An Overview
1.10 As a resultof the liberalizationof agriculturalprices and marketing,exchange rate reform,search for and accessto new export markets,and a favorableweather, real productionincreased in 1984 and 1985, and exportsrecovered from the depressed1984 level. Real GDP growth was accompaniedby declinein imports,especially of food imports. Thus, trade deficitand inflationwere reducedin 1985 and 1986.
1.11 Policyperformance also improved,following the lapse of reforms in 1984. A new adjustmentprogram was adoptedin 1985 and continued through 1986. Exchangerate reformswere implemented,leading to a transientma'ltiple exchange rate system;agricultural prices and marketing controlswere dismantled,the pricesof exportand importgoods were partiallyliberalized (the petroleummarket is still controlled);and interestrates were increased,though they are still below the rate of inflation.
1.12 While these developmentsin economicand policyperformance are positiveand in the right directiontowards improving incentives and resourceallocation to boost exportsand domesticsavings, the impacton the fundamentalinternal and externalimbalances of the economyso far is negligible. Consumptionexceeds real production,so savingsremain negative. Governmenttax revenuesare grosslybelow government expenditures.Exports, despite the recovery,cover only about a quarterof imports;the balanceof paymentsdeficit, though reduced,remains close to $300 million (22 percentof GDP in 1985). There is a debt servicecrisis with nearly $200 millionarrears at the end of 1985, and a debt service ratio of well over 100 percentof exportsper annum in the medium term.
1.13 Sustainedpolicy reformwith respectto the removalof the remainingcontrols, interest rate changes,public enterprise reform, exchangerate unificationand decontrolof remainingexport and import goods are requiredfor the recoveryto continue. Even with sustained policy reformand a feasibleGDP growthof 4.1 percenta year, the basic macroeconomicimbalances relating to savingsand investment,consumption and production,and the balanceof paymentswould improveonly marginally in the medium term (1986-91). Even with a constant(i.e., allowing for no increasein) real per capitaconsumption, the economywould still require large externalaid inflowto supportinvestment and consumption.
1.14 While the ratio of the trade deficitto GDP would be reducedin the medium term with continuedpolicy reform,the balanceof payments deficitand externaldebt servicingcrisis would persist. Given that multilateraldebt servicewhich is on averagewell over 50 percent of exportearnings a year up to 1991 and is not eligiblefor rescheduling,the economywould have no capacityto supportan orderlydebt servicefinancing even if all bilateraldebt were rescheduledon very soft terms. Becauseof the large non-reschedulabledebt serviceobligations, Somalia faces a seriouscash problemover the medium term. An orderlyexternal financing scenariowith growthwould requirea combinationof (a) sustainedpolicy reform,(b) large inflowof soft aid includingcash grants,and (a) reschedulingof eligibledebt serviceon soft terms. -4- CHAPTERII
RECENT ECONOMICDEVELOPMENTS
ProductionGrowth
2.1 The performanceof the Somalieconomy improved with increasesin aggregateproduction in real terms in 1984 and 1985. Somaliadoes not have any officialnational accounts. Availabledata on gross domesticproduct suffer from seriousweaknesses. Though specificfigures on the growth of GDP from differentsourcesl are not consistent,the overallevidence suggestsa real annualGDP growthof about 3 to 6 percentin 1984 and 1985.
2.2 Data concerningSomalia's national accounts collected largely throughad hoc limitedsurveys, still remainvery weak. This is true especiallyfor the large livestocksector for which the official statisticalbase is no better than guesstimates,giving rise to implausibly wide year-to-yearfluctuations in livestockproduction and also in GDP.2 The livestockproduction data used by the CentralStatistics Department for GDP estimatesare unreliable. The Ministryof Livestocksuggests an averageannual real growthof between2.5 and 3 percent. Discountingthese very wide fluctuationsin livestockproduction, estimated growth of GDP in recentyears is shown in Table 2.1. However,specific GDP figuresand growthrates of real GDP must be viewedwith cautionsince they may be subjectto wide marginsof error.
1/ The IMP, Somalia:Recent Economic Developments, September 1986, and the tentativeestimates by the CentralStatistics Department (CSD), Ministry of NationalPlanning, show the followingannual rates of growthof real GDP: 1982 1983 1984 1985 1980-84 1981-85 IMF 11.2 2.4 2.3 10.2 6.2 6.2 CSD 7.1 -16.0 13.5 18.0 2.5 5.0
2/ The CSD's figuresshow a 41 percentdecline in livestockproduction in 1983, 40 percentincrease in 1984 and another21 percentincrease in 1985. These wide fluctuationsare due to an implausibleassumption that the animalherds sufferedthe largestdeath loss in 1983, even larger than the death loss incurredin worst droughtyears of 1973 and 1974. Tablo 2.1
SOMALIA- AnnualGrowth Rates of GOP kg Sector (At conotint1977 prices)
SectorShar*a AM"fif cx of WP) 1989 1981 12 1968 1984 1966 - N
Aricultur Sector 6.4 16.8 10.6 2.6 66 7.8 8.7 57.6
Crop Production 8.0 8.6 1.9 -19.2 $.e 88.2 7.4 12.0 Livestock 9.6 22.5 18.4 4.8 6.1 2.8 9.7 89.2 IndustrySector 0.4 1.6 1.5 -14.7 -10.9 7.2 -3.1 8.8 ServicesSector 9.6 -9.9 7.9 8.1 8.9 4.4 2.7 88.6 GovornrentSe rvIc-a1 -Uf 17! 171 -17C -471 -47T7 OthorServices -8.8 1.8 109. 7.9 4.2 5.6 5.9 26.4 GDP-FactorCost 8.8 4.4 6.5 2.4 8.6 6.8 650 100.0
Source: Annex Table 2.2.
2.3 The sharesof the major sectorsin GDP are approximately39 percentfor livestock,12 percentfor crops,6 percentfor forestryand fisheries,9 percentfor industryand about 34 percentfor services. Agriculture(including livestock, crops, forestryand fishery)was the major sourceof growth in 1984 with most contributioncoming from livestock and crops. Followingthe droughtof 1983, the growthof livestock productionin 1984 has been higher than and in 1985 close to the long-term annual averagenoted later.
2.4 Somalia'scrop productionhas increasedremarkably for two consecutiveyears -- 1984 and 1985. Furtherincreases in productionare expectedin 1986. Improvedincentives -- the liberalizationof agriculturalprices and marketing-- and favorableweather conditions accountfor the increasedproduction of crops,particularly foodgrains. No notableimprovement occurred in the irrigationsystem, and better seed varietiesand other improvedinputs were not availablein significantly largerquantities. However,the land area under crop productionincreased from 700,000hectares in 1980 to over 900,000in 1984 and 1985. Thoughthe productionstatistics (Table 2.2) are subjectto errors,the reported increasein maize produetionfrom 235,000tons in 1983 to 382,000tons in 1985 is almostspectacular. These productionincreases led to an accumulationof maize stock and declinein food importsin 1985. - 8 -
2.5 The productionand acreageof sorghum,the major rainfedcrop, did not show any strongtrend increasesince 1980, althoughyear-to-year fluctuationshave been considerable.But the increasesin the production of maize -- an irrigatedand rainfedcrop -- is a major phenomenonin the 1980's. The area plantedto maize which variedbetween 100,000ha to 150,000ha up until 1980, is reportedto have increasedto 350,000ha in 1984 and 1985. While the reporteddata indicateconsiderable yield increazesin 1985,maize yieldshave remainedaround 0.75 tons per hectare witho'atany trend increaseduring 1980-84, reflecting rapid expansionof ma'ze in rainfedareas.
Table 2.2
Somalia: Outputof Maior Crops (MetricTons 000)
1980 1982 1983 1984 1985
Banana 60 79 99 62 59 Maize 110 150 235 270 382 Pulses 9 59 21 32 39 Rice 17 20 3 4 6 Sesame 38 57 60 46 100 Sorghum 140 235 120 221 226 Sugar (Cane) 420 483 450 342 416
Source: Annex Table 7.1.
2.6 The productionof pulses and oilseeds(mainly sesame) also increasedvery significantlyin 1984 and 1985 (Table2.2). In regardto bananas,the most importantexport crop grown on irrigatedland, there has been a notablerecovery in the area planted(including new plantings), reflectingimproved price Incentivesand better availabilityof inputsfuel and tractorservices. Althoughoutput (and yields)shows modest increases since 1982, they remainsignificantly below the levelsobtained during the early 1970s. There was some apparentdecline in productionin the past two years, althoughtrade data do not corroboratethis decline. The production of sugarcane -- an important import-substitutioncrop grown on irrigated land -- declinedin 1984 due to a shortageof water at the Juba Sugar Estate3 due to a combinationof the low riverwater level in the dry season and a shortageof fuel for irrigationpumps. Althoughthe scarcityof fuel has continued,good rains and improvedcultivation led to a substantial insreasein the area under cultivationresulting in a recoveryof cane productionin 1985 (Table2.2). Other agriculturalsector activitiessuch as forestryincreased only slightly(about 2 percent)in 1984 and 1985, while productionof fish was unstablewith a declinein 1985.
3I With the closureof the JowharSugar Factoryfor repairsin 1983, Juba is the only sugarcane/sugarproduction center in Somalia. - 9 -
2.7 Manufacturingproduction, which declinedor stagnatedin 1983 and 1984,showed considerablereal growth in 1985,due to improvedavailability of inputs. The growth of manufacturingoutput growth was strongly influencedby food processing,particularly sugar productionat Juba which is the single largestmanufacturing subsector.
DomesticInvestment and its Distributionby Sector
2.8 Gross domesticinvestment in recentyears has been maintainedat around 15 percentof GDP, while gross domesticsavings remained negative (Table2.3). However,the levelof fixed investmentincreased to about 14 percent of GDP in 1984 and 1985,up from around9 percent in the early 1980s. The changesin stock ( the differencebetween total and fixed investment)in Somaliaare more volatileand mainly reflectdrought-induced changesin livestockraised entirely in the privatesector.
Table 2.3
Somalia: DomesticSavints and Investment,1980-85 (Percentof GDP)
1980 1981 1982 1983 1984 1985
Investment 4.8 16.3 15.1 14.2 15.6 15.3 Of which: Fixed Investment 9.4 6.8 8.4 11.0 13.9 14.0
DomesticSavings -12.2 6.3 -2.8 -0.7 4.1 -5.5
MemorandumItemst Volume Indicesin:
Per cap resource 100.0 101.3 105.2 103.5 99.2 97.1 Per cap GDP 100.0 103.7 106.5 105.6 101.2 105.8 Per cap privatecon 100.0 96.1 100.9 103.2 99.2 96.5
Source:Annex Tables2.3 and 5.1.
2.9 Around 80 percentof the estimateddomestic fixed investmenthas been undertakenby the publicsector; the largestshare (overone-third) of this investmenthas been in the agriculturalsector, the secondlargest share (about30 percent)has gone to economicinfrastructure (energy, water, transportand communications),a decliningshare (around12 percent) to manufacturing,and an increasingshare (from6 percentin 1980-81to 14 percentin 1984-85)on educationand health (Table2.4). The general thrustof public investmentstrategy has in the 1980schanged in favorof increasingconcentration on rehabilitationand developmentof infrastructureand supportservices to encouragethe privatesector as the - 10 - main sourceof productiongrowth, rather than large investmentsto establishand expandpublic enterprisesas in the 1970s. The sectoral distributionof privatefixed investmentaccounting for around20 percent of total domesticfixed investmentis not known. But it is undertakenin livestockand crop production,small-scalAmanufacturing, retail trade, a major part of road transportand almostthe whole of residentisl constructionin which the privatesector dominates. The progressin liberalizationand changesin public investmentstrategy have so far not resultedin any significantincrease in the share of privatefixed investmentover the period 1981-85for reasonswhich will be discussedin ChapterIII. However,the share of privatefixed investmentin total gross fixed investmenthas increasedfrom about 15 percent4 in 1976 and 1977 to over 20 percentin 1985. Moreover,including changes in stock raisesthe share of privatesector in totalgross domesticinvestment.
Table 2.4
Somalia: Share of PublicSector Investment by Sector,1980-85 (Percent)
1980 1981 1982 1983 1984 1985
Agriculture 33 38 46 39 36 40
Manufacturing and Mining 26 11 8 16 12 10
Energy,Water, Transportand Communications 24 36 22 28 34 28
Educationand Health 6 6 9 11 14 14
Others 11 9 15 6 4 8
Total 100 100 100 100 100 100
Source: Ministryof Planning,National Development Strategy and Programme, Mogadishu,September, 1985.
Macro-economicImbalances
2.10 Recent developmentsdo not indicatethat the unsustainablylarge macro-economicimbalances of the economyare being steadilycorrected. It shouldbe statedat the outset,however, that becauseof the serious weaknessesof the Somalidata, possibleerrors are involvedespecially in estimatedratios of macro-economicmagnitudes to GDP. Data presentedin Table 2.5 providean overviewof the externalcurrent account balance and the domesticinvestment-savings balance for recentyears as percentof GDP (the saving-investmentbalance is also disaggregatedinto privateand
4/ See, Somalia,Ministry of NationalPlanning, Development Strategy and Public InvestmentPro ramme,1984-86, Mogadishu, September 1983. - 11 - public sectors). An externalcurrent account deficit and a domestic investmentsavings gap are normal featuresof a poor economyin the process of developingwith externalassistance. In the case of Somalia,these gaps are enormous.requiring large externalfinancing. The currentaccount deficiton the balanceof paymentsremains a large proportionof GDP rising to 22 percent in 1985. The apparentlylow ratio for 1984 (and also 1983) is an aberration because the magnitude of the deficit was grossly understatedin local currencyby the highlyovervalued official exchange ra_e which was adjustedin 1985. The gap betweendomestic investment and domesticsavings remains large, rising to over 21 percentof GDP in 1985. (If the officialexchange rate, ratherthan the trade weightedaverage of the multipleexchange rates, is used for conversion,the ratiosof the currentaccount deficitto GDP and the resourcegap to GDP for 1985 become 12.2 percentand 11.3 percentrespectively. But even this soes not indicatea declinein the externalimbalance relative to GDP.) This gap is financedby foreignsavingslaid flows reflectediin net imports(excess of importsover exportsof goods and non-factorservices). Domesticsavings have, in most years, remainednegative in both privateand public sectors, and externalassistance financed part of domesticconsumption as well as 100 percentof all investment.However, the much largerpublic dissavings constitutethe major factorbehind the persistentlylarge doniesticand externalfinancial imbalances, which we shall discusslater on. The extremelylarge investmentsavings imbalance indicates the gross inadequacy of domesticresource mobilization which combinedwith still inadequate externalsector policies resulted in continuinglarge currentaccount deficiton the balanceof payments.
2.11 It is to be emphasizedthat the economyhas respondedto the changedpolicy environmentand favorableclimate in positiveways through agriculturalgrowth, lower inflation,reduction of importsand recoveryof exports. However,the effectof these positivedevelopments on the macro- economicimbalances of the economyis still negligiblemainly becausethe imbalancesin themselveshave been enormousand deeplyentrenched to start with. The followingtwo sectionsof this chapterwill elaborateon the externalpayments situation and the domesticfinancial situation. The final sectionprovides an overviewof how incentiveshave evolvedand to what extent importantdistortions are being correctedin recentyears. - 12 -
Table 2.5
Somaliat Macroeconomic Balances.1980-85 (Percentof GDP)
1980 198j 1982 1983 1984 1985
ForeignSavints
CurrentA/C Balance -14.2 -8.1 -16.3 -13.6 -10.7 -21e7 Net imports (ResourceBalance) -17.0 -9.9 -17.9 -14.9 -11.6 -20.8
PrivateSector
Gross Dom Inv -2.7 10.9 8.9 5.6 4.8 4.1 Fix Inv 1 1.9 1.4 2.2 2.4 3.1 2.8 Chg in Stk 2 -4.5 9.5 6.7 3.2 1.8 1.3 Dom Savings -9.1 6.5 -2.2 0.6 10.5 -0.6 Inv - Sav 6.4 4.3 11.1 5.0 -5.7 4.8
PublicSector
(coss Dom Inv 7.5 5.4 6.2 8.6 10.8 11.2 Fix Inv 7.5 5.4 6.2 8.6 10.8 11.2 Chg n Stk 3 ------Dom Savings -3.1 -0.2 -0.6 -1.4 -6.4 -4.9 CurrentRev 11.5 11.9 11.2 12.4 6.1 5.4 CurrentExp 14.6 12.1 11.8 13.7 12.5 10.3 Inv - Sav 10.6 5.6 6.8 10.6 17.2 16.0
Public & Private
Inv - Sav 17.0 9.9 17.9 14.9 11.6 20.8
Memo Item
Share of Gross Dom. Inv. financedby foreignsavings (2) 100 94 100 100 96 100
1/ Split betweenpublic and privateinvestment is taken from government document,"Performance of the SomaliEconomy, 1983", and staff estimates. 2/ Change in stock data primarilyrefer to livestock. Due to weak data base, may includesome publicsector stock changes. 3/ IncludedIn privatechange in stocks.
Source:Annex Tables2.3, 3.1 and 5.1 _ 13 -
Balanceof Payments
2.12 The balanceof paymentsituation remained precarious during 1985 despitesome improvements over 1984. Exports increaeedto US$93 million, and importsfell to US$362million, leading to an improvementin the trade balanceof US$75million compared with 1984. Privatetransfers fell on the other hand, becauseof the changingemployment opportunities in the neighboringoil exportingcountries, and the deficiton the currentaccount was reducedonly by US$21 million. Not capital inflows(including official transfers)were moderatelyhigher than in 1984,and the overallbalance of paymentsdeficit was reducedby some US$50 million from 1984 to 1985. This deficitwas financedlargely by accumulationof paymentarrears in 1984. In 1985, it was financedpartly by debt relief (see Table 2.6). - 14 -
Tablo2.6 SOMALI1- Balanceof Payents Summaryv1901-1986 (inmillions of US dollars)
1991 1962 1998 1964 1985
Exports, f.o.b. 114 17 101 62 98 Imports, C.I.f. -422 -484 -450 -498 -862 Trade Balance -S8 -847 -849 -844 -269 Non-factor services (not) 9 28 24 -S -8 Resource Balance -299 -324 -325 -847 -275
Interest Poyments -10 -14 -21 -44 -48 Private Transfors (workers' remittance) 64 so 51 72 20 Current Aeo.unt Sol. -245 -268 -295 -S19 -298 Offieial Transfors (net) 159 167 148 174 179 Public Loans (net) 79 128 1N 46 69 (disbursements) (98) (181) (16) (106) (114) (rpayments) (-14) (-8) (-7) (-U) (-46) Other Capitol (inel *rrors and omi s ione) (not) a -a6 -89 -40 -88 Overall Balance -18 -44 -88 -189 -88 Financing 14 44 so 189 88 Central BDnk B8 64 47 18 26 of which: Net credit from IMF 30 34 44 -8 82 Com"rcialBank -20 -20 89 29 -82 Arrears - - - 71 -58 DebtRoelo - _ - 26 160
MemoItems; aros reservesas X of total Imports 10 8 4 1 2 Currentaccount deficit/GOP (U) -8.1 -12.6 -18.6 -9.8 -12.7 Debt srvice ratio (asX of exportsof goodsand services) accrualbasl 20 21 28 166 104 cash basis n.e. n.a. n.n. 19 48
Source: AnnexTable 8.1 - 15 -
2.13 Exportsincreased by 50 percentfrom 1984 to 1985,from US$62 millionto US$93 million. This was eatirelydue to a doublingof livestock exports,from US$33 million to US$66 million. The recoverywas due to the good performanceof exportsof sheep and goats (Table2.7). Part of the increasewas the resultof a concertedeffort to open up now exportmarkets in Egypt and North Yemen especiallyfor cattle,following the ban on import of Somali cattlein its traditionalexport market. The devaluationof the Somali Shillingin 1985 along with the introductionof a free market for sellingpart of foreignexchange earnings from exportsis having a positive effect on livestockexports. Stillcattle exportsof 32,000head in 1985 were far below the peak levelof 157,p0uin 1982.
Table 2.7
Somalia: LivestockExports (ThousandHead)
1980 1981 1982 1983 1984 1985
Camels 16 12 12 6 5 6 Cattle 89 103 157 38 7 32 Goats 734 680 719 557 351 749 Sheep 747 658 730 569 350 709
Total LivestockUnits* 238 231 285 150 82 197
*Convertedat camel-l.2LU; cattle-0.8LU; goat-0.1LU; sheep=0.1LU)
Source: Somalia,Ministry of Livestock.
Therewere, however,only minor improvementsin other exportsin 1985. Bananaexports remained at the 1984 level. Exportsof incense,and hides and skins recoveredonly slightlyin 1985. Comparedto the numberof animalsslaughtered, the collectionrate of hides and skins remainslow as price and marketingremain controlled.
2.14 Total importsin currentdollars declined by 10 percentin 1984, and by another10 percentin 1985 to $362 million. The reductionin overallimports was entirelydue to a substantialdecline in foreign exchangeimports while the total level of importsunder commodityaid and public investmentprogram (PIP) in 1985 was not lower than in the previous year. - 16 -
Table 2.8
Somalia: Total Imiorts(Current USS millions)
1984 1985
ForeignExchange Imports 156 111 CommodityAid 110 97 (of which oil) (20) (37) PIP Imports 140 154 Total Imports 406 362
Sources IMF, SomaliaRecent EconomicDevelopments, April 1986; and Bank staff estimatesfor 1985.
The declinein foreignexchange imports in 1985 was not the resultof an absolutedecline in foreignexchange availability (export earnings, private remittancesplus cash grants),which actuallyincreased somewhat. It largelyreflected, the impactof price and exchangerate adjustmenton privatesector imports, and some substitutionof foreignexchange imports by commodityaid as the latter'scomposition improved.
2.15 Despitethe declinein total foreignexchange imports as well as total imports,real GDP increasedin 1985 becauseproduction originated mainly from the agriculturalsector which dependsmuch less on importsthan other sectors.
2.16 The lower importsand the recovoryof exports in 1985 contributed to a modest declinein the trade deficit,though it still remained4 times the value of exports. With the declinein privatetransfers in 1985, the overallfinancing requirement, the currentaccount deficit plus loan repaymentobligation, exceeded $400 millionin 1984 and $380 million in 1985. Aid disbursementsin forms of projectaid, commodityaid and cash grantsamounted to $280 million in 1984 to over $290 million in 1985 (about $60 per capita). While in 1984, financingof the remaininggap was done largelythrough accumulation of arrears,in 1985 this was achievedmainly througha debt reliefof $150 millionand a net creditof $32 million from the IMF. Thus the economydepended on large externalgrants and loans and debt reliefto meet the externalfinancial obligations. Yet, Somalia accumulatednew paymentsarrears by the end of 1985.
ExternalDebt
2.17 Somalia'sexternal debt (outstandingand disbursed)has increased to reach US$1.54billion as of December31, 1985 from US$1.35billion at the end of 1984. Around 33 percentof this total outstandingdebt is owed to multilateralagencies including the InternationalMonetary Fund and the Arab MonetaryFund (see Table 2.9; detailsare shown in Annex Table 4.1). About one-thirdof this multilateraldebt originatesfrom OPEC - 17 - institutions.The remaining64 percentof total externaldebt is owed to differentbilaterals. OECD countriesincluding suppliers credits (SACE, Italy)have the largestshare (34 percent). OPEC countriesincluding bilateralagencies (Kuwait Fund and Saudi Fund) have 16 percent,and CPE countrieshave another16 percent. A large part of CPE debt is de facto frozen.
Table 2.9
SOMALIA: ExternalPublic Debt Outstanding,end 1985
US $ Z of Million Grand Total
OfficialCreditors:
Multilateral 324 20.9 IDA 164 10.6 OPEC 113 7.3 Other 47 3.0
Bilateral 814 52.7 OECD 318 20.6 OPEC 253 16.4 CPE 243 15.7
Total (excl.IMF/AMF) 1,138 73.6
IMF 142 9.2
AMF 50 3.2
PrivateCreditors: Supplierscredits 213 14.0
Grand Total 1,543 100.0
Source: Appendix,Table 4.1; Ministryof Finance,Debt Unit.
2.18 Actual debt servicepayments (excludingIMF) increasedfrom US$3.8 million in 1984 to US$26.0million in 1985. Actual debt servicepayments includingpayments to IMF increasedfrom nearlyUS$12 millionin 1984 to about US$50million in 1985,of which US$27 millionrepresented repayment of principal. Thus, the largerportion of debt servicepayments are due to the IMF. Yet, actualpayments have remaineda smallproportion of debt serviceobligations (Table 2.10). - 18 -
Table 2.10
Somalia:Debt ServiceOblization, and Actual Payment.In 1984 and 1985 (MillionUS$)
1984 1985 Obligations Payments Obligations Payments
Multilateral(excl. IMF) 18 2.2 15 6.1 Bilateral(OPEC) 28 0.9 23 19.2 Bilateral(OECD) 44 0.7 43 0.7 CPEs 12 0.0 13 0.0 IMF 8 8.0 26 24.0
Total 112 11.6 120 50.0
Source: Ministryof Finance,Debt Unit, and staff estimates.
2.19 Shortagesof foreignexchange in the officialmarket continuedto be a constrainton the Government'sdebt servicecapacity in 1985,but a largecash grant from SaudiArabia enabledthe Governmentto discharge outstandingarrears and currentdebt servicewith two bilateralagencies-- the Saudi Fund and the Kuwait Fund. Debt servicepayments to other agencieswere partlyfinanced through purchase of foreignexchange in the free foreignexchange market (aroundUS$3 million)or settledin local currency(around US$2 million).5
2.20 Somalia'sdebt servicearrears increased rapidly from US$31 million at the end of 1981 to US$224million as of December31, 1984. Around US$98 millionof these.arrears were settledin 1985,but another US$46million in new arrearswere incurredin the same period. Table 2.11 shows the changein arrearsby donorgroups.
5/ The CentralGovernment budget shows a debt servicefor 1985 of So.Sh. 1.4 billion,equivalent to aboutUS$26.4 million at an averageexchange rate of 53 Sh/US$1. _ 19 -
Table 2.11
Change in Arrears,end 84 to and 85 (MillionUS$)
Settled New Arrears Arrears
Multilateral (Excl. IMFIAMF) 12.6 10.3
Bilateral (OPEC) 75.9 16.1
OPEC 11.3 2.5 OECD 70.4 0.0 CPE 4.2 13.6
IMFIjAMP 0.0 19.4
Total 98.5 46.4
Sources Ministryof Finance,Debt Unit
2.21 Seventymillion US dollarsin arrearsto OECD countrieswere settledas part of the 1985 Paris Club agreement. Arrearswere also settledwith certainagencies during 1985 (the AfricanDevelopment Bank, the AfricanDevelopment Fund, the IslamicDevelopment Bank, the Kuwait Fund and the Saudi Fund),but now arrearswere built up with other agencies (Arab Fund, OPEC Fund, Arab MonetaryFund, and the IMF). Around US$16 millionof new arrearswere built with CPE countriesand OPEC bilaterals. This debt includesfrozen debt to CPE countries.
2.22 Dturing1985, throughthe Paris Club reschedulingsand bilateral arrangementswith other officialcreditors, Somalia received debt reliefon currentdebt serviceand arrearstotalling US$150 million. Bilateral reschedulingsarranged at the 1985 Paris Club meetingwere finalizedin 1985 with only two creditors-,Franceand the U.S. Similararrangements arisingfrom the 1985 Paris Club reschedulingwere finalizedwith Italy and the U.K. in 1986. Long negotiationson interestrates rosultedin this delay in formalagreement. The delay with Italy was due to (successful) effortsat convertingsome of the rescheduledloans into grants. The Paris Club arrangementsgave Somalia10 years maturityand 4 years grace for the majorityof debt rescheduled.The interestrates set in bilateral agreementswith individualcreditors varied between 2 and 12 percent,with a weightedaverage rate of 4.5 percentper year.
2.23 The positionof arrearsby donor as of December31, 1985 is shown in Table 2.12 (for details,see Appendix,Table 4.3). Total outstanding - 20 - arrearsas of December31, 1985 was estimatedat US$173.8million. Close to three quartersof this is, however,arrears on 'frozen'debt. This includesUS$85.6 million owed to CPE countries(mostly to Bulgariaand the USSR)which are unilaterally'frosen', with no servicingor formal reschedulingbeing arranged. Similarly,US$40 million in arrearsowed to Abu Dhabi (out of US$44.3million in arrearsto OPEC bilaterals)appears to be virtuallyfrozen with no reschedulingarrangements.
Table 2.12 Arrears (MillionUS$) end-1984 end-1985
Multilateral 20.2 18.4 OPEC 19.6 17.6 Others 0.6 0.8
Bilateral 189.7 129.9 OECD 60.5 0.0 OPEC 53.0 44.3 CPE 76.2 85.6
IMF/AMF 4.5 25.5
Total 214.4 173.8
Source: Appendix,Table 4.3, Ministryof Finance,Debt Unit.
2.24 The Governmentcould not achieveits objective(as set out in the 1985 adjustmentprogram supported with IMF stand-by)of virtually eliminatingby the end of 1985 all externalpayments arrears either by cash paymentsor throughrescheduling arrangements.
2.25 In fact, despitesome reductionof outstandingarrears during 1985, Somalia'scurrent debt serviceproblem remains extremely difficult. Even excludingthe outstandingarrears at the end of 1985,current debt serviceobligations during 1986 and 1987 exceedUS$150 million per year, or are largerthan the sum of annualexport earnings and remittancesof Somali nationalsworking abroad. The currentburden of annualdebt service obligationis thus way beyond Somalia'scapacity to bear. The currentdebt serviceobligations (excluding arrears) to multilateralsalone amountto over US$40 million in 1986 and $80 millionin 1987 (of which the larger portionis owed to IMF).
2.26 The Governmentrequested a furtherParis Club reschedulingin early 1986,but followingthe Paris Club's standardprocedure, creditors indicatedtheir unwillingnessto considerSomalia's request until a Fund- supportedprogram was in place, coveringat least the periodthrough the end of 1986. Somaliahas also approachedvarious other creditorsfor debt - 21 - relief,but no new debt reschedulinghas been arranged. Meanwhile,debt serviceobligations to variouscreditors have not been paid. Therefore, Somalia'sarrears at the end of 1986 have increasedby over $80 million (contraryto the objectiveof reductionof arrearsstipulated in the 1986 stand-byarrangement with the Fund).
Fiscal and MonetaryDevelopments
2.27 Notwithstandingless than comprehensivecoverage and accountingof the governmentbudget, data in Table 2.13 below indicatethat the fiscal situationimproved moderately in 1985 over 1984, althoughthe current accountdeficit remained very large. The progressis continuingin 1986. Total revenuein nominalterms, afterhaving decreasedby 8 percentiti 1984, grew by 31 percent in 1985. But this rate of increasewas still substantiallylower than the rate of inflation. The increasein total recurrentexpenditure in 1985 (22 percent)was much smallerthan in 1984 (73 percent).
2.28 However,domestic revenues remain grossly inadequate to finance recurrentgovernment expenditures. Despite wide marginsof error in estimates,available data indicatethat domesticrevenue as a proportionof GDP in 1984 and 1985 was a recordlow (5-6 percent)compared to 13-15 percentin earlieryears. There are severalfactors contributing to this problem. The primaryreason has been the valuationof importsfor duties and taxes (fromwhich comes half of Somalia'sdomestic revenue) has been carriedout at an artificiallylow price of foreignexchange which is roughlyhalf of the legal free market rate. Extensivetax evasionand weak tax administrationsare also importantfactors. - 22 -
Table2.18 SOMALIA:.Summary of CentralIGovernment Financ*. 1981-86 (inMill. of So"aitShillings) 1981 1982 1988 1984 Prolim 1986*
DomesticRevenue 1 2262.6 2759.8 4252.6 8978.7 5220.0 9401.0 of whichTax Revenue 2967.8 2477.9 U848.6 2979.9 4582.4 8418.0 RecurrontExpenditure 1 2295.9 2906.0 4716.0 8140.0 9918.0 15898.0 CurrontBalance -32.4 -145.4 -468.5 -4161.8 -4698.9 -6998.0 DovelopmentExpenditure 1424.8 2400.6 1920.0 3181.5 7940.0 12296.0 of which: DovelopmeontBudget 286.8 847.6 498.1 661.5 1872.0 2609.9 OverallBalance -1457.2 -2606.0 -2888.5 -7842.8 -12688.0 -18289.0 Financing 1457.2 2606.0 2388.5 7842.8 12688.0 18269.0 Foreign 1116.2 2780.0 2678.5 4720.8 11698.0 18850.0 Loans 081.2 1724.1 1572.5 2797.8 4978.0 99911.0 Grants 485.0 1066.0 1106.9 1989.0 620.0 9849.9 Domeatic 841.0 -174.0 -295.0 256.0 1046.0 -81.0 BankingSystem 847.9 -150.0 295.0 2678.0 875.60 -61.0 Other -4.0 -24.0 0.0 -8.0 170.0 090
I/ Includestransfer. to andfrom local governoente. Source: Annex Tablo 6.1. - estimate. as of December1986. - 23 -
2.29 As a consequenceof an inadequatedomostic resource mobilization in the public sector,the budget deficitin the last few years has continuedto be large. This deficitwas financedmostly from foreign grants in the form of shillingsgenerated by commodityaid. Current deficitincreased from So.Sh.4.1 billionin 1984 to So.Sh.4.7 billionin 1985. In 1984 budgetarysupport in the form of externalgrants was So.Sh. 2 billionand by 1985 it had jumpedto So.Sh.6.6 billionor about 7 percentof GDP. Despitethis high level of externalbudgetary support, the Government'snet borrowingfrom the bankingsystem was So.Sh.2.6 billion in 1984 and So.Sh.875 million in 1985. (The Governmenthad to recourseto bank borrowingin 1985 becauseit paid off So.Sh. 1400 millionin arrears it had accumulatedin 1984). No net borrowingfrom the bankingsystem has been made in 1986 primarilybecause of a 41 percentincrease in external grants.
2.30 Externalloans and grantscontinue to finance fully the developmentexpenditures undertaken through the PublicInvestment Program (PIP)which remainoutside the budget. (The PIP expenditureshave been includedin the Table 2.13 to get a better overallestimate of the total governmentspending.) The local counterpartrequirements of the developmentexpenditures are includedin the budgetas 'developmentbudget' and are also financedexternally by counterpartfunds generatedthrough the commodityaid program. Table 2.13 indicatesthat developmentexpenditures have been large,and increased66 percentin 1984 and further150 percent in 1985. In 1986 total developmentexpenditures have increased55 percent to So.Sh. 12.3 billionor about 48 percentof total (recurrentand development)expenditures and 80 percentof recurrentexpenditures.
2.31 At the same time, recurrentexpenditures on social and economic serviceshave been grosslyinsufficient. Recurrent budget expenditures have primarilygone towardsmeeting rising expenditures on generalpublic services(i.e. Defense, Interior) and maintainingan overly large civil serviceas will be discussedin ChapterIII.
2.32 Recentmonetary developments largely reflect the modest budgetary improvementin 1985 over 1984. The rate of expansionof domesticcredit sloweddown to about 18 percentin 1985 from over 82 percentin 1984. This was entirelydue to a sharp reductionin creditto the CentralGovernment (see Table 2.14), as CentralBank financingof the budgetwas reducedfrom So.Sh.2.6 billionin 1984 to about So.Sh.0.9 billionin 1985. Creditto public entitieswas somewhathigher in 1985 than in 1984,whereas creditto the privatesector was drasticallylower -- with only 8 percentincrease in 1985 comparedto 62 percent increasein 1984.
2.33 Broad money (M2), i.e., currencyplus demanddeposits and time deposits,increased sharply in 1985 despitethe reductionin the rate of expansionof domesticcredit. Domesticcredit expansion only accountedfor about one-thirdof the budgetaryexpansion. The large increasein monetary - 24 - liabilitiesreflects in particularthe increasein foreigncurrency depositsby the privatesector and their revaluationgiven the rapid depreciationof the shilling,and the build-upof counterpart funds from the comodity aid program. Data availablefor early months of 1986 indicatethat monetaryexpansion may have sloweddown to some extent.
2.34 With moderationin the expansionof domesticcredit, inflation (as measuredby MogadishuConsumer Price Index)slowod down to 38 percent in 1985 from 92 percentin 1984. But furtherprogress does not seem to have been made in 1986. During 1986, domesticinflation was about 37 percent. However,the share of the privatesector in domesticcredit declined from 39 percent in 1984 to 35 percentin 1985, and was even lower in 1986 (See Table 2.14). - 25 -
Table2.14 SOMALIA: fngo and Crodit , 198W (mlill.of So.5h.,OngdO Prio)
Items 19 19e IOU198 1984 19eC .e. 2 For.lin Asnets, Net1 145 72 -441 -28JW -4465 -591U8 -8259
Domestic Credit 8gm 4546 5024 5261 9616 11347 1ism Claims on Govt., Not 1902 22W0 2100 1S65 4J78 5252 6196 Claimson Public Entities 1651 1722 1300 1163 1511 2071 8257 Claimson Private Sector 426 575 1624 2293 8727 4024 4227 Money Supply (MI) 2788 3619 8911 4167 6078 0117 11887 Mon y Quasi-Money (M2) 8081 4866 4995 5849 6678 11938 16111 Other Itume, Not 1 648 251 -612 -248 -1797 -6428 -10888 MemoItems Ratio of M2 to GOP 27.4 22.9 20.8 16.6 10.8 12.8 11.6 X Increase of M2 20.2 29.1 14.4 7.1 24.9 78.2 86.8 X IncroeseIn DOM Credit 81.12 17.2 10.5 4.7 82.8 18.0 20.6 U IncreoseIn Mo4gdishuCPI 59.0 44.6 22.6 86.4 92.1 87.9 87.0
J/Includes valuationadjustomnt. Data for 1966 ore as of September1986. M2 Includesmoney supply (currencyand demanddeposits) and tim deposits. Source: Annex Tables6.1 and 9.2. - 26 -
Key Performanceand IncentiveIndicators
2.35 Table 2.15 attemptsto providean overviewof some incentive indicators,in order to show to what extentdistortions in the policy frameworkare being correctedover time. The real effectivoexchange rate (REER)- the nominaleffective exchange rate adjustedfor the differential in domesticinflation and partnercountries' inflation - applicableto exporters(Table 2.15), has declinedmoderately but unsteadilysince 1980, except for 1984,the year of setbackof policy reform. The indexof REER depreciatedsubstantially and rapidlyto reachabout 60 in mid-1986. A depreciationof the REER raisesthe domesticprices of exportablesrelative to non-tradables,provides incentives to producers/exporters,and also improvesthe competitivenessof exportablesabroad, and helps to rectify the balanceof paymentsdeficit. Thus, exceptfor 1984,Somalia has been correctingthe earlierexchange rate distortionsand improvingexport incentivessince 1981, and speciallyduring 1985 and 1986. Somalianeeds to sustaina depreciationof the real effectiveexchange rate to expandand diversifyexports and to encourageimport substitution towards reducing the large externalimbalance. However, because of multipleexchange rates, the real effectiveexchange rate relevantfor importshas still not moved adequatelyin the right directionto providestrong incentives to import savings,domestic production of importsubstitutes and thus to correct distortionsin the policyframework which we shall discussin the ne-', chapter. - 27 -
tabIl2 1S Soeall Keo£conoeic V;riabloe.910W-a
IncentiveIndicators ttt^ }b"1 192 t3t 19U4 1995 19|6 1. RealEffective Exchongs Rate 1 a. Index 1908* 1 108 121 96 16 170 98 e1 b. AnnualChange 21 -21 1J so -45 -84 2. RealInterest Rates p.m. a. 8-monthdeposit rate -86 -27 12 -21 -44 -17 -17 b. long-termlonding rate -t8 -28 -9 -10 -42 -15 -15 8. Ratiosof DomesticAgricultural Priceoto InternationalPric" a. Maize 98 142 112 112 168 18s 118 b. Bananas 28 so 87 0S 76 SO 5. Cotton 22 29 19 26 42 44 - ExternalTrade Indicators 4. VolumoIndex of MalorExports a. Livestock 18 97 120 08 84 88 - b. Bananas 1i 97 148 176 1S5 128 - S. CommodityTerms of Trade a. Index 1980100 1C8 go 98 120 118 99 - b. Annual Change -4 2 22 -7 -12 -
Notes: 1. Roal Effective ExchangeRate (REER)calculatlons are basedon the relativechanges In Mogadishu CPI and theweighted consumer price Indexes In the partner countrieo, applied to the nominal exchansgrate. Sincemultiple exchange rates existed In Somali, the nominaleffective exchangerate applicable to exportersis usedfor the calculations. Index of REERa Indexof a x Pd
where* u unitsof SOR perSomali Shilling applicable to exporters. Pd a MogadishuCPI Pf aWWtghted CPIof partnorcountries. A decroeseIn the lndex mano depreciation of RER. 2. Real Interest Rates(RIR) arecalculated from nominal Interest rates(NIR) adjusted by the changein the GOP deflator (ODPD),using the formula: RIR (1+ NIR -1) x 100 (r+WD) S. For relative agricultural price, dometic prices refer to farm levelproducer prices. International prices for maiz and cotton referto c.t.f. Import parity prices at Nogadishu, and for bannas to f.o.b. prices (taken from World Bank, CommoditiosDivision). 4. VolumeIndex of exports of livestockis baed on livestock units exported. S. Termsof trade Index Is ealculated as the ratio of export price Index by the importprice Index.In computilngthe export price lndex,livestock Is given Ofpercent weight and bananas 20 percentweight In exports, since prices of other exports are not known.In Importprice Index petroleum has 20 percentwoight, and the rest9S percent.Actual prlcetrends are from Somalis trade data. Price moveonts for bananas,petroleum and other Imports are basedon World BankCommoditioe Dlvision. - 28 -
2.36 Duringthe same period,the ratio of domesticagricultural prices to internationalprices of three major crops -- maize, bananasand cotton (at the officialexchange rate) has increasedsince 1980 indicating improvementof incentivesthrough liberalization of pricingand marketing and/or increasesin producerprices (Table2.15). Producers'prices of bananasat the farm level have been graduallyraised from 22 percentto 75 percentof internationalf.o.b. prices between 1980 and 1985. Considering the relativequality of Somalibananas the level of producerprice seems to be a good indicatorof productionand export incentives.Producer prices of cottonhave been raisedfrom 22 percentin 1980 to 44 percent in 1985; but the ratio is still too low to provideadequate production incentives, while importscontinue to meet domesticdemand. Producers'price of maize has gone much above the c.i.f.Mogadishu import price in 1984 and 1985 indicatingthat maize is not competitiveas import-substituteat the officialexchange rate. Stocksof localmaize are pilingup while consumers are attractedby the price and availabilityof importedwheat - a problem which shouldbe tackledthrough appropriate pricing and managementof food aid imports. On the other hand, at the averageexchange rate applicableto exports(So. Sh. 115-$1)in 1986, Somalimaize cannotenter exportmarkets.
2.37 Unlikethe improvementin productionand exportincentives, Somaliahas not made significantprogress towards making real interest rates positive. Both the short-termdeposit rate and the long-termlending rate remainnegative, although it may be noted that exceptfor 1984,there has been some movementin the right direction. The main problemhas been the failureto reducethe rate of inflationsufficiently, so that moderate nominalinterest rate adjustmentscould ensurepositive real interest. Negativereal interestrates createdisincentives to the supplyof savings for creditcreation and encouragecapital flight out of the countryor conversioninto real assets (goodsor real estate)that appreciatewith inflation. On the other hand, demandfor creditoutstrips supply when it is availableat negativereal interestrates. Allocationof creditbecomes arbitrary,based on criteriaother than efficiency,and resultsin inefficientullocatio3 of resources.
2.38 The externaltrade indicatorspartly or largelyreflect the effect of externalfactors, rather than domesticpolicies. It is worth noting that Somaliahas suffereda significantadverse movement (a fall of nearly 20 percent)in its commodityterms of trade in 1984 and 1985, althoughit did not sufferany terms of trade loss during 1980-1983(Table 2.15). The volume of exportsof livestock(Somalia's main export)suffered a seirious declinesince 1983 due to a ban by the principalimporting country initiallyon all Somalilive animals,and later only on cattle. Some recoverywas made in 1985 from the depressedlevel of 1984. Bananaexports kept increasing,although the last two years saw some slackening. Somalia has no mentionableexports of manufactures.
2.39 In summary,the past two years witnessedsome growth in real GDP-- the effectof improvedincentives and good weather. Therewas modest improvementin the balanceof paymentsas livestockexports began to recoverand import-substitutionin foodgrainsmade some progress. The Government'sprogram of policy reformsuiported by generousexternal aid - 29 - flows made this possible.The improvementin the externalcurrent account is due considerablyto the large debt reliefas well as the slightlylarger foroignaid obtainedin 1985. Still,new paymentsarrears were accumulated in 1985. There was modest improvementin the budgetarysituation as domesticrevenue made some recovery. Here again,the improvemertIs due considerablyto the large amountsof counterpartfunds mada availableto the budget throughthe commodityaid program. Thus, the modest improvementsin the balanceof paymentsand the budgetare much too dependenton large externalaid which has not yet been matchedby adequate domesticstructural adjustment effort. Importsare still about four times exportsdespite some recoveryin exports. Domesticconsumption is still largerthan gross domesticproduct. Publicsavings continue to be negative with domesticrevenue covering only 50 percentof the recurrentbudget. Thus Somalia'sbalance of paymentsand budgetarycrisis still remains serious,requiring very high levelsof externalfinancing which would not be sustainableunless furtherpolicy adjustmentsare made to boost export earnings and domesticresource mobilization. - 30 - CHAPTERIII
PROGRESSOF POLICYREFORM AND REMAININGISSUES
3.1 Since the first ConsultativeGroup meeting in 1983, the Government of Somaliahas adoptedan agendafor policyreform. Reinforcedby the Government's1985 adjustmentprogram under an IMF stand-by,the reform program aimed at stabilizationand outputgrowth with a sustaiinablebalance of payments,and includedmeasures for improvementof macro-economic managementthrough fiscaland monetarypolicies, liberalization of price, trade and exchangerate regimes,unification of the exchangerate, incentivesfor the privatesector, reform of publicenterprises, reduction in public employmentand improvementof the qualityof public investment program (PIP).
3.2 The previousWorld Bank economicreport congratulated the Governmentfor the bold reformsalready undertaken for improvingresource allocationand fosteringa market-orientedeconomy, but noted that the fundamentalproblems facing the economy-- the huge resource(savings- investmentand externaltrade) gap emanatingfrom a level of consumption exceedingdomestic production, high importdependence contrasting with stagnatingexports and low productivityof investmentsarising from deficienciesin public expendituremanagement and resourceallocation -- cannotbe resolvedin a year or two. The unfinishedagenda of the reform program-- adjustmentmeasures for macro-economicand demandmanagement and policy reformsto augmentdomestic production need to be pursuedby the Governmentover a protractedperiod duringwhich it will requiregenerous externalaid flows for resumptionof economicgrowth with a sustainable balanceof payments.
3.3 The reportrecommended -
progressto full liberalizationof trade and prices; unificationand maintenanceof the exchangerate at a market- determinedlevel to encourageexports and efficientimport- substitution,attract remittances, restrain demand for imports,and help improveuse of foreignexchange resources;
improvedincentives and legal frameworkto encouragethe privatesector reform of publicenterprises to improve efficiencyof resourceuse, and to reducethe burdenon the budgetor the economy;
strong fiscalefforts to raise domesticrevenue and improve cost recovery;
improvedfinancial discipline and expenditurecontrol through more transparentbudgeting and enforcementof budgetary ceiling;
restrainton monetaryexpansion; - 31 -
improvementof the qualityof PIP throughuse of economicand financialrates of return in projectselection; making PIP the sole authorityfor projectcomuitments and expenditure; expansionof the 'developmentbudget' into a full capital budget includingboth domesticallyand externallyfinanced expenditures;explicit consideration of recurringcosts arisingfrom developmentprojects and how thesewill be financed;preparation of a medium-termfinancing plan for public (investmentand recurrent)expenditure and anticipated resourceavailability from domesticand externalsources; confiningthe size of PIP consistentwith resource availabilityand the need for recurrentcost outlays;
3.4 The previouschapter has shown in broad terms that Somalia's performancein implementationof adjustmentpolicies in recentyears has been one of modest but unsteadyprogress in stabilizingthe economyand narrowingthe externaldeficit towards a sustainablelevel, and slow and uneven progresstowards correcting distortions and improvingincentives and resourceallocation for promotingoutput growth. The followingparagraphs attempta somewhatmore extendedreview of Somalia'spolicy performance and weaknessesin three major areas: (a) liberalization,incentives, and promotionof production;(b) exchangerate regime;and (c) fiscalpolicy and public expendituremanagement. Since these issuesconcern the main prerequisitesfor macro-adjustmentand improvementof resourcemobilization and allocation,this assessmentwill help in identifyingimportant policy measuresfor sustaininggrowth over the mediumterm.
A. Liberalizationand Incentivesto PromoteProduction
3.5 Agriculturalpricing, marketing and exports. The Governmenthas liberalizedpricing and domesticmarketing of most agriculturalcrops, particularlycereals, and reducedthe role of publicagricultural marketing agenciessuch as the AgriculturalDevelopment Corporation (ADC). It has eliminatedvirtually all quantitativerestrictions and controlson exports and importssince early 1985. Barringa very few essentialcommodities, it has dismantledall price controls. It has introducedauction systems for sales of some commoditiesimported under commodityaid programs,and thus modifiedearlier underpricing of concessionalimports by the National Agency for Trade (ENC). It has substantiallydevalued the official exchangerate and has introduceda free floatingexchange rate market in which exporterscan trade 50 percentof their exportearnings. The exporterin late 1986 got an averageof about So.Sh. 112 for every dollar of exportearnings. The devaluationof the shillingand the liberalization of agriculturalpricing and marketinghave increasinglybrought agriculturalprices in line with world pricesand are providingstrong incentivesfor traditionalexports and import-substitutionin crops (especiallygrains), and constitutethe Government'smajor policy achievementin the recentpast. Moreover,in order to augmentproduction, the Governmenthas transferredland of formerstate farms to settlementsof private farmers.
3.6 However,there are still some importantareas of activityin pricingand marketingof agriculturaloutputs and inputswhich remainto be liberalizedfrom public controlor monopolyin order to provideincentives - 32 - for export expansionthrough the participationof privateoperators. One such area is trade in hides and skins,and frankincenseand myrrh which can potentiallymake a significantcontribution towards increasing earnings from Somalia'svery narrowexport base. But at presentthe exportof hides and skins requivesprior approval. The Goverment's Hides and Skins Agency (HASA)monopolizes the collection,wholesaling and exportingof hides and skins. This has preventedsome privatecompanies from exportinghides and skins and finishetdleather. Also the impositionof unacceptablylow purchaseprices of hides and skins has resultedin large quantities disappearinginto unofficialmarkets leaving insufficient supplies for the state-ownedand privatetanneries. The result is a directloss of foreign exchangeto Somalia. Similarly,exports of frankincenseand myrrh are monopolizedby government-sponsoredcooperatives to the detrimentof export expansion. Under the AgriculturalSector Adjustment Program (ASAP) from IDA, the Governmenthas agreedto a study of domesticand exportmarketing of hides and skins and to reach agreementwith IDA on the implementationof the study'srecommendations.
3.7 Marketingand exportof binanasis anotherimportant activity which remainsto be liberalized.While the joint venturecompany (Somalfruit)responded to improvedincentives and providedbetter inputs and servicesto expandarea under bananas,its exportmonopoly is reducing the potentialof expandedprivate sector participation to augment -roductionand exports.
3.8 The Government'sagricultural input supplyagencies have continued to heavilysubsidize prices. In particular,ONAT (the tractorhire service agency)is providingtractor services at much below full costs,thus hamperingadjustment and constitutinga barrierto entry of private operatorsin tractorhire services. Also land rightsand tenureremain to be well-definedto improveconditions for privateinvestment in agriculture.
3.9 Importregime. With respectto importation,only alcohol, tobacco,petroleum, medicines, explosives, precious metals and mineralsare subjectto prior approval. There is governmentcontrol on petroleum importing,pricing and distribution(through Somalpetrol) which is hinderingnecessary adjustments in the economy. The Governmenthas recentlyraised the retailprices of some petroleumproducts to about importparity levels,and has allowedthe privatesector to importdiesel oil. However,the Governmenthas not decontrolledprices, for allocation to be determinedby the market;the price increasesmade by the Government to reach importparity have not been large or applieduniformly to all users to eliminatethe fuel shortagethat is hamperingthe productive sectorsof the economy. The distributionsystem is still a public monopoly,and only a few privateentities have actuallybeen able to import dieseloil. No privateimport of gasoleneor keroseneis allowedbecause the Governmenthas not decontrolledpetroleum prices and has not liberalizedmarketing and distribution.
I - 33 -
3.10 While all other productsare supposedto be freelyimportable, the Ministryof Commercestill has controlover importapplications. In approvingapplications, the Ministryclaims that it takes interestsof domesticproducers into account. Importsare permittedonly if domestic supply is inadequate to meet demand; thus, producers of urea, soap, soft drinks,processed foods etc. are contactedby the Ministryto ascertain what local productionis likelyto be, and to decidehow much could be imported. The protectiveeffect of this practiceis difficultto evaluate, and it is likelythat it plays a major role in keepingout some competing imports.
3.11 Importduties comprising of customsand fiscalduties range from 4Z to 700%. Luxurygoods like toiletries,and alcohol,are chargedthe highestduties. Capitalgoods and some recurrentinputs are exempt,but this dependson administrativediscretion. Goods that an averageurban consumerneeds are chargedduties of 30-50%,though some items (soft drinks,soaps, garments) are in higher bracketsto protectdomestic production. The protectiveeffect of tariffsis, however,diluted by the low rate of exchangeused for tariffpurposes, evasion of importduties and smuggling. In some products,the incidenceof smugglingis so high (cigarettes,garments, pots and pans) that neitherrestrictions (noted above)nor tariffshave much protectiveimpact.
3.12 The net protectiveimpact of importduties (and supplemental charges),together with other Governmentpolicies can be measuredby the effectiverate of protection(ERP). 1 Recentstudies 2 indicatethat there is a wide dispersionof ERP's resultingfrom the patchworkcombination of protectivetariffs, sporadic access to subsidizedforeign exchange, undervaluationof importedinputs, partial exemption from tariffson importsand price controlson output. Such a diverserange of protection, among and within subsectors,provides wide rangesof differential incentivesfor differentactivities and firms resultingin a substantial misallocationof resources. Incentivesshould be equal among activities
1/ The ratio focuseson the protectionan enterprisereceives for its value-added(revenue from sales of tradeableoutputs minus costs of tradeableinputs). In other words, it takes into accountnot only the effectsof policyon revenuefrom sales,but also the effectsof policy on inputsto production. ERP is the ratio of value-addedin market prices to value-addedin economic(world) prices. A positiveERP indicatesthat the firm is receivinga net positiveprotection from the combinationof policiesinfluencing the costs of materialinputs and of sales revenue. Likewise,a negativevalue indicatesthat the firm is receivinga net disincentive.An infiniteERP means that the value- added at economic(world) prices is negative. In other words, the foreignexchange cost of manufacturinga productdomestically exceeds the foreignexchange cost of importingthe finishedproduct: the countryis givingup more foreignexchange to manufacturea productthan it would to importit as a finishedgood.
2/ QuantitativeAnalysis of Incentivesand Disincentivesfor Expansionof IndustrialOutput and Employmentin Somalia,Harvard Institute for InternationalDevelopment, July 1985. Also World Bank, Somalia- IndustrySector Report (forthcoming) - 34 - and for individualfirms to ensurethat investmentsare attractedinto lines of productionthat earn or save the maximumamount of fore'ign exchange.
3.13 There is a strongcase for a thoroughreform of the importregime in Somalia. The presentstructure of importtariffs is largelygeared to generatingrevenue. It is very complicated,allows for arbitraryuse of discretionarypowers and is irrationalfrom the viewpointof allocating resourcesefficiently. The regimeneeds to be simplifiedand made more transparent to minimize or eliminate the use of discretionary powers. Protection shouldbe more uniformamong activities(except for luxuriesand undesirableitems) and fairlylow to ensurethat resourcesare allocatedt.o the most efficientuses and there is no differentialin incentives.These changescan probablybe made with littleloss in revenueto the exchequer and also littledislocation because the industrialsector, especially the privatesector, is very small. There is an opportunityto lay the foundationfor the futuredevelopment of an efficientprivate industrial sector.
3.14 Price control. Most price controlshave been dismantled,except for some items producedor handledby public enterprises.These enterprisesare, however,a large part of the economy,especially of the industrialsector. At least some public industrialenterprises have to sell their productionat Government-setprices. In some cases, for instancecigarettes and pasta,they are below C.I.F.levels. The Cigarette and Match Factoryis the only enterpriselegally entitled to importand producecigarettes and matchesin Somalia,although ease of smuggling reducethe value of this monopolyposition. The low ex-factoryprice of cigaretteshas clearlycontributed to discouragingthe companyfrom expandingoutput by buyingadditional inputs at the free market rate. As a result,capacity utilization is very low and 701 of domesticdemand is suppliedby smuggledimports even thoughthere is apparentlyconsumer preferencefor the domesticproduct. The state Wheat-Flourand Pasta factoryenjoys a privilegedposition in the distributionof wheat, imported under food aid arrangements,at a price based on the officialexchange rate. This is an obviousincentive to the factory. However,this advantageis outweighedby controlledlow sales price. As a result,the pasta factoryis discouragedfrom expandingoutput and privatepasta makers are reticentto enter the market. Other industrialenterprises, according to the Ministryof Industryand Commerce,are supposedto set outputprices to cover costs and providea suitablereturn on investment.
3.15 Differentialincentives are enjoyedby firms dependingon access to the officialor parallelmarkets, resulting in an inefficientallocation of resourcesand an adverseeffect on businessactivity, production and exports. The remainingprice controlsshould be liftedfrom pub'lic enterprisesto allow competitionin productionand determinationof prices by the market forces. There will undoubtedlybe a net gain in efficiency and foreignexchange. For example,Somalia has an opportunityto develop the leatherindustry for exportbased on a comparativeadvantage. - 35 -
Credit,and PrivateSector Promotion
3.16 Since 1981,as part of a strategyto promotoprivate sector activitySomalia has made a deliberateeffort to curtailcredit to public enterprisesand make it availableto the privateseator. Between1980 and 1984, the privatesector increased its share of total creditoutstanding from 11 to 391, whereasparastatals decreased their share from 401 to 161 (Table2.14). This is a welcomedevelopment after many years duringwhich the Governmentcrowded out the privatesector from accessto credit. Even now the Governmentstill retainsa total of 612 of creditsoutstanding, considerablyhigher than the 30% in rneighboringKenya. Also tho Governmant0sshare again increasedto 35 percent in 1985. This share has to docreasefurther to facilitatelong-term sustained development of the privatesector. Furthermore, allocation of creditto the privatosector is not based on instrinsic creditworthiness of the borrower or the project and banking services are generally slow and poor. A beginning is reportedly being made to approve credit to new enterpriseson the basis of technical assessment of proposals. In any case, in the presenteconomic environment, most (an increasingproportion) of the privatesector credit is used for trade rather than agricultureor industry. This is partlya direct consequence of liberal import and foreign exchange policieswithout an accompanying appropriate interest rate policy and a government monopoly in banking services. Interest rates,like the foreignexchange rate shouldbe detemneind by competitive market forces. The Government should move towards positive real interest rates and grant charters to encourage competition in commercial banking services. Breaking the Government's bankingmonopoly and changinginterest rate policy would help the private sectorget accessto creditand improvedservices, result in a better allocation of resources, and go a long way in promoting private sector activityin agricultureand industry.
3.17 PublicEnterprise Reform. The unsatisfactoryperformanee of public enterprises engagedin agro-industrialor manufacturingproduction continueto resultin a drain on the publicfinances or the economy. Most of the enterprisesoperate at very low capacities,and due to operating losses,are unable to pay taxes to the Governmentor meet their own financialneeds, and rely heavilyon increasedbank borrowing. Improvement of operating efficiency in public enterpriseswhich constitutethe major part of the industry sector and were built with large externalfinancing, is essential for Somalia's future economic and industrialgrowth. Although the Government has, since 1984, been committed to the reform of public enterprisec,the progresshas been very slow. Specifically,the Government agreedto assignindividual public enterprises into three categories;those which are unviableand to be phasedout of operation; those which will be divestedor formedinto joint ventures;and those to be retainedin the public sector with neoded rehabilitation and restructuring within an improved legal framework with greater enterprise autonomy. But actual reform measures, even feasibility studies to determine viability of individual enterprises, are yet to be undertaken. - 36 -
B. ExchangeRate Regime
Background
3.18 Somalia undertooka major reformof the exchangerate system at the start of 1985. As part of a major adjustmentprogram adopted in 1985 under a new IMF Stand-byAgreement, in the formulationof which Bank staff had also been closelyinvolved, the officialexchange rate was devaluedby 38.5 percentto So.Sh.36 to the dollaron January1, 1985, and a free foreignexchange market was set up to handlemost privatetransactions. This was accompaniedby the liftingof most quantitativecontrols on exportsand importsand a virtualdismantling of the pervasiveapparatus of price controls.
3.19 The officialmarket was fed by aid, other governmentreceipts and a portionof (35 percentin 1985 and 50 percentin 1986) privateexport earnings. It handledall debt transactions,military imports, petroleum importsand diplomaticexpenditures. The privatemarket was suppliedby the retainedportion of exportearnings, and privateremittances, and handledall privateimports, capital transfers, and some pubiic enterprise imports. There was also a small third market for foreignexchange administeredby the Commercialand SavingsBank, used mainly for tourist receipts,overseas travel and educationexpenditures and importsbrought in under aid-financedCommodity Import Programs (CIPs), the main sourceof intermediateinputs to Somalia'sproductive sectors. It was anticipated that the exchangerates would be unified (at a market-determinedrate) by end-19859following a progressivemonthly devaluation of the officialrate and a gradualtransfer of items from the officialto the free market. The CommercialBank rate, set initiallyat So.Sh.84 to the dollar (when the free market rate was So.Sh.89), was supposedto changein line with the free market rate until the unificationof all rates was achieved.
3.20 In any event,only some elementsof this policypackage were implementedin 1985. Monetaryand fiscaltargets could not be met and inflationwas higher than expected. The Stand-bywas suspendedas Somalia also fell into arrearswith the IMF. The devaluationof the official exchangerate was sloweddown, retardingthe unificationof the foreign exchangemarket as the free market rate depreciated.The CommercialBank rate was not adjusted,and was still at So.Sh.84 per dollar in late 1986. No transactionswere transferredfrom the officialto the free market.
3.21 The Stand-byAgreement was renewedin early 1986 under a revised timetable. The surrenderrequirement of privateexport receiptsat the officialexchange rate was raisedfrom 35 percentto 50 percentwith the remainderto be sold at the free market rate. The officialrate was devaluedfrom So.Sh.42.5 to the dollarin December1985 to So.Sh.54.5 in January 1986, and was envisagedto depreciateby So.Sh.4 per month so as to reach paritywith the free market rate by end-1986. The commercialbank rate was to be adjustedevery 10 days in line with the free market rate.
3.22 By mid-1986,slippages again took place. The rate of inflation continuedto exceedprojections, and the officialrate (at So.Sh.91 * $1) - 37 - by Octoberwas still only about 68 percentof the free market rate. The commercialbank rate remainedunchanged. The interestrate remained negativein real terms (the commercialbank overdraftrate was 15-20 percentwhile priceswere risingat nearly40 percentper annum).
3.23 Under World Bank initiative,bost of the AgriculturalSector AdjustmentProgram (ASAP)credit of $70 million3 is being channelled throughan exchangeauction, which acts as a 'wholesale'market for foreign exchangeusable for essentialimports only. The CommercialBank rate has been eliminated,while the free market continuesto function,rather like a 'retail' foreign exchange market. Bids for the auction can be a minimum of $5,000and a maximumof $200,000. Both public and private enterprises (exceptfor Somalpetrol)as well as individualscan participatein the auction,which can financeall importsexcept for militaryequipment and luxurygoods. The first auctionon was on September1, 1986, followedby others after 15-dayintervals. At each of the first four auctions,$2.3 m. was offered. Since the amountwas quite large,and the permissibleimport items were restricted,4 the auctionrate was considerablylower than the free market rate. A broadeningof the auctionmarket with additional supplyof funds from Somalia'sown resourcesas well as enlargementof the list of importableswill give a more realistic price of foreignexchange and conceivablyprovide the basis for unifying the exchange rate.
Evolutionof ExchangeRates
3.24 Table 3.1 shows the evolutionof the variousexchange rates in Somalia. The parallelmarket rate at end-1984is also shown for comparison;this market almostdisappeared when the free marketwas introduced,since the latterfulfilled all its functionsmore conveniently and legally.5
3.25 The free market value of the shillingdeclined fairly steadily 6 throughJune 1986. However,for the whole of 1985, the depreciationof 29 percentwas close to the rate of inflation. In 1986, the rate of depreciation(about 66 percentat an annualizedrate) was considerably higherthan the rate of inflation(37 percentp.a.).
I/Made up of $30 m. from IDA, $32.6m. from the SpecialFacility for Sub- SaharanAfrica, and $7.4 m. from UK grant.
4/ For the first three auctions,construction materials for urban housing were also on the negativelist.
5/ Accordingto Somaliauthorities, a tiny parallelmarket still existsfor illegal(contraband) transactions, but its rates are practicallythe same as the free market rate (or 1-2 shillingslower).
61 A regressionline fittedto 50 observationsof 10-dayaverage rates from January1, 1985 to end-Hay,1986, 'explains'86 percentof the variation in the rate. The mean value of the rate is 110.4,with a standard deviationof 20.0. - 38 -
Table 8.1 SOMALIA- ExchanpeRat.. Deamler 1984 - October 1988 (o. hSb.per UtS. dollarat end-period)
OfficialRates Fre MarketRates Ratio of Official Parallel Free to Contral Commrcial Free Market Auction Market Official Bank Bank Rate Market* Rate Rates
1904Dec. 26.9 - - - 890-100 8.1-8.8 1965 Jan. 88.0 68.6 - - - 2.6 1085 March 87.0 84.0 91.4 - - 2.5 1985 June 40.6 84.0 97.8 - - 2.4 1985 Sept. 40.6 84.0 199.7 - - 2.6 1985 Dec. 42.5 84.0 114.7 - - 2.7
1986 Jan. 64.5 84.8 114.8 - - 2.1 16O6 Feb. 58.5 84.8 122.9 - - 2.1 1066 March 82.5 84.8 188.8 - - 2.2 1966April 66.5 84.8 149.0 - - 2.2 1906 May 70.5 84.8 162.9 - - 2.2 1086 June 74.5 84.8 152.8 - - 2.0 1066 July 76.5 84.8 157.0 - - 2.0 1066 Aug. 82.5 84.8 186.9 - - 1.7 1998 Sept. 86.6 64.8 134.0 195 - 1.6 1906 Oct. 90.6 64.3 184.0 96 - 1.t sAverageof the clearing rates of two auctions per month. Source: Co>mercialbanks.
3.26 The free market rate differsby So.Sh.2-3 from buyer to buyer, dependingon the amount involved(larger buyers get better rates). The daily fluctuationcan be quite substantial:in 10 days of early June, 1986, for instance,they rangedfrom 0.5 percentto 4.2 percent (it is possible,however, that instabilityhad increasedsince 1985). Nevertheless,the month-by-monthstability of the rate during 1985 was remarkable,in view of the fact that the free marketwas so new, relatively thin (about$2.6 m. per month in early 1985, about $4.8 m. per month in late 1985 and the same in early 1986) and subjectto seasonalflu^tuation in the supply of foreign currency (livestock exports are affected by the 'pilgrimageseason') and its demand (whichalso varies,depending on need to importfood privatelyas food aid disbursementsfluctuate).
3.27 The main transactors,some 100 large livestockexporters and an unknownnumber of overseasremitters on the supply si6e, and some 30 large IL 39 - private traderson the demandside, thus showed an impressiveability (a) to smoothenout cyclesin supply and demand,and (b) to match the decline in the domesticpurchasing power of the shilling. Th thinnessof the market (as measuredby the small member of traderson supplyand demand side) did not appearto hamperthe flow of informationor the formationof expectationsof tho main actors. However, the fasterrate of depreciation in 1986 seemed to reflectthe entry of other influences,to which reference is made below.
Operationof the Free ForeignExchange Market
3.28 The free market is fed by the retainedportion of privateexport receiptsand remittancesfrom abroad: these are channelledthrough two separateaccounts (export account and externalaccount). Exportaccounts can only be used (by the exporteror'anyone else) for payments for legitimateimports of goods and services,by transferringthe money to an importaccount. Externalaccounts are suppliedand used on a Ono questions asked*basis with foreignexchange from overseasresidents or Somali traders. These holdingscan be used either for Importsof commoditiesor for transferof capitaloverseas.
3.29 The externalaccount market provides for three differenttypes of transactionsbesides transferring remittances to Somalia. First,since exportershave to surrenderhalf their foreignexchange at the official rate, they have an incentiveto underinvoice their exportsand bring the money via externalaccounts, so evadingthe penalty. Second,since capital can be transferredabroad freely by anyoneholding an externalaccount (it requiresUS$1,000 to open such an account)who buys exchangefrom another externalaccount holder, this submarkethas taken over the capitalflight functionof the parallelmarket. Third,since real interestrates continue to be negativein Somalia,the externalaccount can be profitablyused to remit capitaloverseas, not only for long-termcapital flight, but also for speculationagainst the Somalishilling.
3.30 The depreciationof the shillinghas been led by the external accountsubmarket, where the value of the shillingis slightlylower than in the export/importaccount market. 7 It is reasonableto believe (as indeedthe Somali authoritiesdo) that the recentpressures on the value of the shillinghave been fuelled,not so much by a changein the underlying fundamentals(inflation, export performance, etc. which are marginally better in 1986),as by capitalflight and/or profitable speculation. It is likelythat a self-reinforcingspeculative run on the shillinghas built up since aroundFebruary, 1986, for reasonswhich are not apparent. It is this run which the auctionmarket has successfullythwarted.
3.31 In 1985, the importsof commoditiesfinanced by the free market cme to $42.9 million. Of this, food, beveragesand tobaccoaccounted for 40 percent,construction materials for 33 percent,transport equipment
7/ Ir January-May1986, of the total of $21.7 m. worth of transactionsin the free market, $11.9m. or 55 percentwas sold from the external accounts,$2.6 m. or 12 percentfrom exportaccounts and $7.1 m. or 33 percentfrom importaccounts (the last two only being usablefor imports). - 40 -
(largelypassenger cars) for 12 percent,and industrialinputs (raw materials,machinery and spares)accounted for only 17 percent. Thus, the liberalizationof importsand foreignexchange led predominantlyto the meeting of affluentconsumer and urban constructiondemands rather than to increasingthe use of installetdindustrial capacity. In part, industrial enterprisespreferred to wait for much cheaper(at the CommercialBank rate) allocationsof inputsunder CIPs. However,this still left a lot of unutilisedcapacity: the reluctance;toresort to the free market appears to signifythe inabilityto competeft those prices.
Effectsof the ExchanteRate System
3.32 The complexsystem of exchangerates in 1985-86has had a mixture of beneficialand harmfulqffects. The beneficialeffects have been that the overallmove (howeverhalting) towards a market-determinedrate has helped exporters8 (exceptfor hides and skins producers,whose prices are controlledby HASA), reducedadministrative control over a sectionof the importmarket and virtuallyeliminated the parallelmarket.
3.33 The harmfuleffects have arisen from the half-heartedand complicatedway in which the liberalizationhas taken place.The fact that some inputsare availableat highlysubsidized exchange rates while others have to be bought at the market rate createscompetitive distortions between firmswith differentialaccess to CIPs. Many firms use both markets,and so base their internalallocative decisions on distorted signals. The 50 percentsurrender requirement imposed on exportershas inducedunderinvoicing 9 of exports. As a result,the governmentloses revenueand localproducers face a reductionof protectivetariffs as noted earlier. The externalaccount system, in combinationwith domestic inflationand negativereal interestrates on depositshas permitted capitalflight (thoughwhether it has led to more flightthan with a parallelmarket is unknown)and speculationagainst the shilling. The consequentfall in the value of the shilling,exceeding its 'true'level, has probablyhad undesirableallocative effects on the economy.
3.34 The fall in the free marketvalue of the shillinghas been influencedlargely by domesticcredit expansion to financebudget deficit with consequenthigh inflation.A successfulmove towardsunification of the exchangerate and its maintenanceat a market-determinedbut reasonably stable level calls for more fundamentalchanges to effectrigorous fiscal and monetaryrestraint and dampeninflation, in which the government largelyfailed in the recentpast.
3.35 Finally,the liberalizedsystem has not yet achievedan activation of idle capacityand greaterdynamism in the Somaliaindustrial sector.
8/ Who duringOctober 1986, got on averageabout So.Sh. 112 to a dollar; (1/2 90 + 1/2 134).
9/ A calculationby the IMF from partnercountry trade date shows that, in 1984, Somaliexports were valuedat $62 millionby Somaliaand $123 millionby importers. The differenceof $61 millionas large as declaredexports, was presumablytransferred abroad for capitalflight or remittancevia the parallelmarket. - 41 -
This is not however, the fault of the free market. It results partly from the inherentuncompetitiveness of much of the industrialsector and partly from the ineffectiveprotective system mentioned earlier. In the end, the exchangerate systemby itselfwill not solve the problemswhich afflict Somalimanufacturings a completerestructuring and upgradingof a much smallerindustrial sector will be necessary,as indicatedin the earlier section.
C. FiscalPolicy and PublicExpenditure Program
3.36 Despitethe Government'seffort to raisedomestic revenues during the last two years,the currentbudget deficitremains large. Public sectorresource mobilization and publicexpenditure program are two major issuesfor Somalia. The continuinglarge public dissavings are thwarting correctionof the domesticfinancial Imbalance and the weaknessesin the expenditureprogram are underminingthe potentialproductivity of public investment.
3.37 The seriousimbalance in Somalia'scurrent budget since 1984 has been a resultof slow growthin domesticrevenues and a continuedexpansion in governmentexpenditures'. Rapid inflationin the economyhas raisedthe cost of governmentprograms and servicesthereby raising budgetary expenditures.Domestic revenues, on the other hand, have laggedbehind expenditures.The resulthas been an increasingbudget deficitand a fiscalcrisis. OverallCPI increased166 percentfrom 1983 to 1985. As Table 3.2 below indicatestotal expendituresfrom 1983 to 1985 rose in nominalterms by 170 percentand recurrentexpenditures by 110 percent,but the increasein domesticrevenues was only 22 percent. In 1986 revenues increasedconsiderably but so did expenditures.The governmentbank borrowingrose sharply(9 times) in 1984 over 1983 to financethe budget gap. Althoughrecourse to bank financingwas much reducedin 1985 and has been zero in 1986 due to increasinglylarger availability of CIP counterpartfundts, adequate fiscal discipline was not achieved. - 42 -
Table 3.2
SOMALIA- NominalIndices of Revenueand Expenditures
1983 1984 1985 1986
DomesticRevenue 100 94 122 221 of which: Tax Revenue 100 86 133 243
Total Espenditures 100 170 270 387 of which RecurrentExp. 100 173 210 326
CurrentAccount Deficit 100 897 1013 1293
OverallDeficit 100 307 532 767
Financing 100 307 532 767 of which: BudgetaryGrants 100 179 598 845 Bank Financing 100 872 296 -21
Mmorandum Item
CPI 100 192 266 364
Source: Table 2.13 and data providedby Somaliauthorities.
The differencein the speed of adjustmentof domesticrevenues and expendituresin the face of rapid inflationhas been the greatestbudgetary destabilizingfactor in the last coupleof years. Bank financingof budget deficit,despite large budgetary grants is underminingthe stabilization program.
3.38 PublicSector Resource Mobilization. Notwithstanding the Government'srecent effort to raise tax and non-taxrevenue, domestic revenuesgrew less rapidlythan currentprice GDP, ..ndicatinga low elasticityof tax,revenues(0.65).
3.39 There are many factorscontributing to the lagginggrowth of revenues. The primaryreason has been the Government'simport tax policy. About 50 percentof domesticrevenue is derivedfrom taxes on merchandise - 43 -
imports;however, imports are valued for importduty purposesat the officialexchange rate insteadof the legal free market exchangerate. The rise in the price of a dollar in the free market increasedthe value importsbut not the importtax base. Consequentlyin 1985 the importtaxes were abouthalf of what they couldhave been.10
3.40 Rapid inflationin the last few years has eroded revenuesfrom domesticindirect taxes becausetax rateswere leviedon a unit base. Excise dutieson industrialoutput were finallychanged to an ad valorem basis in June 1985. A 5 percentsales tax was introducedat the wholesale level and on the final outputof public enterprises.Revenues from excise taxes doubledin 1985 over 1984; however,the increasecould not be large due to the low level and sluggishgrowth of industrialproduction.
3.41 Taxes on wage and non-wageincome have laggedbehind inflationdue to tax avoidance. Whereasthe ConsumerPrice Index increasedfour-fold between 1981 and 1985 incometax revenuesonly doubled. In the public sector,wage incomesdid not keep pace with inflationand the contributions to incometax revenueshave been declining. Privatesector salary and businessincomes increased with inflationand a largerproportion of incomesreached the highestmarginal income tax bracketswhich in turn has createdincentives for tax evasionand avoidance. The incometax structure has becomeout of date and is clearlya sourceof stagnationin incometax revenues.
3.42 Another factorcontributing to slow growthin both tax and non-tax revenueshas been the practiceof discretionarytax enforcement.Despite the Government'sefforts to tightentax enforcement,the time of payment and amountof certaintaxes -- most notablypublic enterprisetaxes -- remainsnegotiable. Apart from the fact that due to operatinglosses public enterprisesare often unableto pay taxes,they have successfully postponedlarge amountsof tax paymentsin the last few years throughsuch negotiations.In 1985 cumulativetax arrearsestimates available for 15 public enterprisestotalled So.Sh. 409 millionor 8 percentof domestic revenues. The postponementof tax liabilitywithout a high-enoughpenalty has contributedto a much slowergrowth in domesticrevenues since 1984.
3.43 Tax avoidanceand evasioncontinue to undermineefforts at improvedtax revenuecollection. The incentiveto avoid taxes remains strong in the face of an inadequatefiscal penal code. The problemof tax avoidancehas manifesteditself in the form of importand export underinvoicing;non-payment of exciseduties, delays, underreporting and evasionof incometax and accumulationof tax arrears. Accordingto one source in Mogadishu,some portionof the tax liabilityis avoidedin 50 percentof the cases. There has been insufficientmanpower and resources
10/A somewhatless criticalproblem has been the exemptionfrom importduty of all centralgovernment (including PIP) imports,international institutions,charitable organizations and key privatesector imports which togetherreduce the dutiableimport tax base to 30 percentof the c.i.f. imports. Despitethe fact that abolishingthis policywould constitutean accountingentry for the centralgovernment budget, it will serve to reflectmore accuratelythe revenuesfrom importsand the true cost to the economyof centralgovernment programs. - 44 - devotedto accurat asseszm*ntand collectionof taxes. Althoughthe newly set up Ministryof Revenuemade an impressivebeginning, there is an urgent need to redirectgreater resources towards improving tax assessmentand collection.
3.44 There is very littlerecovery of the costs of public investment and services. Pricescharged on publicservices do not cover costs of deliveryand a reasonablereturn on investment.In additionto fiscal arguments,there are good resourceallocation arguments for charging reasonableprices for agriculturaland transportationservices. There are no water chargesfor irrigation.Water is scarce and any use in periodsof low flow restrictsother uses. Also, excessivewater use complicatesthe drainageand salinizationcontrol problems (in the Shobelliarea). In the presentsituation, water savingcrops and practicesare not rewardednor are excessivewater use penalized. Water chargesshould become important both for cost recoveryand for supportof water managementsystems, especiallyas major irrigationrehabilitation projsets are completed.
3.45 Land tax is extremelylow (Sh. 5 per hectareof unirrigatedand Sh. 10 per hectareof irrigatedland). In law, land is state-ownedbut much of it is leasedin an arbitraryway includingfree leases. This urgentlyneeds reformfor domesticresource mobilization, equity and efficiencyreasons. Pricesfor tractorservices and chargesfor land developmentaro much below costs. Fuel is also underpriced.There is a strongcase for greatercost recoveryin most cases for augmentingrevenues and for better allocationof resources.While wider applicationof cost recoverymeasures would requirefurther analysis, and developw'ntof systemsand institutions,the problemis too importantto delay the beginningon a moderatescale.
3.46 CommodityAid Utilizationfor the Budget. In the absenceof adequatepublic sector resource mobilization effort, local counterpart funds generatedthrough cash and commodityaid are becomingincreasingly more importantin Somalia'sbudget. These fundswere in 1985 (accordingto donorsestimates) equivalent to the total domesticrevenues on the central governmentbudget. Donor estimatesshow disbursementof lo4alcounterpart fund generatingnon-project aid in 1985 of US$137million (see Table 3.3), generatinga total of aroundSo.Sh. 5.4 billionin local counterpartfunds. About 80 percentof this non-projectaid was given as grants. Cash aid was about $41 million,mostly from OPEC countries. The shareof commodityaid sold in the privatemarket varied among donors,but was around 15 percent on the average. - 45 -
Table 3.3
SOMALIAs Non-ProiectAid 1985 (US$Million)
Cash Aid 41.0
CommodityAid 52.2 Of which: Petroleum 37.2 Other 5.0
Food Aid 44.0 Of which: PL 480 20.0
Total 137.2
Source: World Bank staff estimates.
3.47 In the Government's1985 budget, 'currenttransfers from abroad' are shown as having been So.Sh.3,445 million,without any breakdown. The differencebetween donor estimates(So.Sh. 5.4 billion)and the Government'sbudget estimate (So.Sh. 3.4 billion)is primarilydue to differentestimates of Saudi aid.11The Government'srecording system of commodityaid has improvedespecially for food aid. However,the records reveala poor collectioneffort, particularly for food aid distributed throughADC.
3.48 There are severalmajbr weaknessesin counterpartfund budgeting, especiallyfor non-foodcommodity aid. The budget is a mixtureof cash and accrualrecording. This makes comparisonsbetween donor and government estimatesdifficult. When publicagencies (e.g. petroleum purchased by Somal Petrol)do not pay for their purchasesof commodityaid goods,no receiptsare shown in the budgetalthough these shouldbe recordedas creditextended to these agencies. Also, contraryto standardpractice, the Ministryof Financekeeps some counterpartfunds accountsin the CommercialBank, enablingthe Governmentto use these accountsas temporary lines of credit. Again,quite unrealistically,the 1986 budget includedan estimatefor "currenttransfers from abroad"of only So.Sh.689 million which is only 20 percentof the 1985 actual. Even though local counterpa-.t funds would increasein the comingyears, a large part of these funds are, accordingto donor agreements,to be used for developmentprojects. There
1l/Saudicash aid (includingUS$20 millionfor debt repayment)and petroleumaid shouldhave generatedaround So.Sh. 2 billion (at the officialexchange rate). Apparently,the Governmentused the cash for debt repaymentwithout entering it on the receiptside. - 46 - is a real possibilityof a large build-upof surplusbalances of counterpartfunds. The Governmentneeds to strengthenaccounting and budg-ttingof these funds. The level of development(PIP) expenditure, financedby these funds shouldbe consistentwith financialstabilization objectives. PublicExpenditurtes
3.49 FinancialDiscipline. Budgetaryexpenditure records and accountingin Somaliaremain less than comprehensive.The development expendituresof the Governmentundertaken through the PublicInvestment Program (PIP) are financedentirely by foreigngrants and loans and do not form part of budgetaryexpenditures. Thus the Ministryof Financedoes not exerciseeffective control over total publicexpenditures. Also, certain sensitiveitems of currentexpenditure (e.g. defense salary expenditures) do not appearin the budget. Publicsecoor wage bill, as it appearsin the budget, is net of defensesalaty expenditures. Estimates of total governmentexpenditures on salariesas shown in the Government's1985 CG document12 indicatesthat militarysalary bill may be twice as large as the publishedcivil servicebill. Thus, currentbudgetary accounting proceduresunderstates the wage bill by about 66 percent. It is not clear under which accountdefense salary expenditures are budgetedfor.
3.50 Expenditureswhich do appearin the budgetare less than fully 'visible'. One third of the budget is a contingencyitem in the Ministry of Financebudget for which no disaggregationhas been availablefrom the Government. Despitethe Government'sresolves to the contrary,this item has remainedlarge. In 1985, the expenditurestitled 'otherworks' under the Ministryof Financeincreased by 100 percentto So.Sh.2.3 million comparedto So.Sh. 1.2 billionin 1984. In addition,it remainsunclear if there are any explicitsubsidies (and to whom) includedin the budgetary expenditures'Transfers, Recurrent Contributions'. The Government's documentprepared for the 1985 CG meetingmade a specificreference to eliminatingsubsidies to public enterprisesthrough improved cost recovery. However,not much informationon implicitor explicitbudgetary subsidies has been available.
3.51 Over-Emphasison DevelowmentExpenditures. The development expendituresof the Government(i.e. the foreignexchange component of the PIP plus the local currencydevelopment budget financed by counterpart funds)remain large relativeto the recurrentbudget. Development expendituresas a proportionof total expendituresincreased from 28 percentin 1984 to 45 percentin 1985, and about 48 percentin 1986. The proportionof recurrentexpenditure to the total is much higher,and that of developmentexpenditure much lower in countriessuch as Malawi and Kenya, and also in Sub-SaharanAfrica as a whole. Clearly,the allocation of public expendituresin Somaliais in favor of undertakingadditional investmentat the expenseof operationand maintenanceof existing infrastructureand facilities.
L2/Ministryof NationalPlanning, National Development Strategy and Programme,Mogadishu, September 1985. - 47 -
Table 3.4
SOMALIA- Recurrentand DevelopmentExponditures
(As percentof total governmentexpenditures)
Average for Sub-Saharan Africa 1984 1985 1986 1981-85
RecurrentExpenditures 70.7 55.5 52.1 75 DevelopmentExpenditures 27.7 44.5 47.9 25
Source: Based on data providedby Ministryof Financeand RecentEconomic Developments,IMF, September1986; and GovernmentFinance Statistics IMF, variousissues.
3.52 Underfundingof RecurrentExpenditures. The future recurrentcost Implicationsof new developmentprojects have not been worked through during the preparationof the publicInvestment program (PIP). Nor are considerationsgiven to the ways and means of financingthese additional recurrentexpenditures. It shouldbe prettyobvious, however, that the investmentmade in the PIP shall increasemanifold the budgetary expendituresrequired for recurrentcosts in the next few years. Rough calculationsof operatingand maintenancecosts for facilitiescreated by past investmentin socialand economicsectors, (such as public education and health facilities,transportation and irrigationinfrastructure, etc.) are shown in Table 3.6. In the absenceof informationon the recurrent costs requirementsof completedprojects in Somalia,'r' coefficientsbased on experiencein other Sub-Saharancountries are appliedsector by sector to the estimatedpublic capital expendflure undertaken in these sectors from 1980 through1985. These rough aggregativeestimates may involve substantialerrors. It is importantfor the Governmentministries and departmentsto make more disaggregitedestimates of recurrentcost needs for specificsectors and sub-sectors.However, these rough calculations indicatethat less than 15 percentof requiredrecurrent costs are currentlybeing providedfor. The budget formulationprocess does not attemptto quantifyand mobilizeresources for recurrentcost needs of completeddevelopment projects. In order to provideadequately for operatingand maintenancecosts, resources budgeted in 1986 for the productivesectors would need to be increasedseveral times. If the exchangerate is unified (say, at So.Sh. 120 - 1US$) in 1987 the Somali shillingrequirements for maintenanceof existingcapital stock in the public sector,social and economicfacilities, will furtherincrease substantially.These calculationsdo not take accountof the pressureon the budget from developmentprojects completed as a resultof the 1987-89 PIP, which are expectedto come on line around 1990. - 48 -
Table *.5
SOUAUIA- ReurrentCoat Reovi reent of EbletinaPublic *ector Investment in soIIlia
EstiomtedTotal CapitalStock 'r' EstimatedRecurrent Recurront Required (USI Mi.l) Coeff. CostRequiremonts Budget Incroase for 1986 Provision In X Mn USS MnSo.Sh for 1908 Mn. So.Sh. (d)/(t) (a) (b) (c) (d) (t) TotalProductive Sectors 1097.6 .... 86.6 6294.4 1076.7 486.1 EconomicSectors 926.5 - 57.9 4216.6 898.6 957.8 Livestock 95.9 0.14 18.4 977.4 76.O 1203.2 Agriculture 252.9 9.10 25.2 1884.6 886. 4652.7 Forestry 20.7 0904 0.8 0.O - Fishorles 54.8 0909 4.4 819.2 87.2 757.9 Mining 24.0 9.91 0.2 17.5 69.8 -71.8 Monufacturing/Industry 184.8 9.91 1.8 98.1 18.2 643.4 Energy 69.0 90.1 0.5 87.0 49.7 -25.6 Transportation 162.1 09.4 6.5 472.0 66.2 692.1 Tourlem 0.3 0.95 090 1.1 5.4 -79.8 Trade& Commerce 28.7 09.1 O.8 19.4 10.2 90.6 WOterResources 194.4 O.56 5.2 3800.9 - - Poet & Telecom - 0.91 - - 86.6 - JubaValley - 0904 - - 4.7 - SoclalSectora 171.8 - 20.5 2077.9 677.1 2 .9 Education 77.1 0.17 18.1 954.2 88.32 162.7 Heath 29.7 0.84 10.1 786.1 170.5 881.2 Manpower 6.0 0.17 1.4 99.0 17.2 475.6 Planning & Statistics 9.6 0.17 1.6 1186. 13.9 764.7 Infomation 10.8 0905 096 87.6 112.8 -8.6 Rural Devolopment 8C86 0905 1.8 188.2 - -
Notes: (a) Estimated total capital stock 19U6refers to total accusulated public investment undertakon during 1980 to 19865s it appero In the governmentdocument National DevelopmentStratoav and Progra (mMoadihu,Septe r 1965). It Is assumedthat, on average,the recurront cost niois of this invemntimct fully 19068 (b) A 'r' coefficientio the ratio of annual recurrent expenditures required aftercompletion of the project for proper utilization of thecapacity or thefacility through the budget to the total lnvestmetcost of theoproject. The 'r' coefficients have beentaken from (1)Peter Hol ler, 'The Underfinancing of Recurrent DevelopmentCosts' In Flnance andDevelom nt, Vol. 18, March1979; and (11) Club du Sahel, R curront Cost o evo ont Progrms in the Countriesof the Sahel:Analysis and Recommendation, Report of a working group on recurrent cost, August 196. The 'r'coefficient refersto tho wageand non-wagocosts arising annually out of the normal operations of the facilityor project. (c) (a) x (b); oxchang rate usd is So.Sh. 72. a US21,Bank staff estimate of the average official exchangerates prevealing during January-October,1968. - 49 -
3.53 The allocationof expenditureswithin the recurrentbudget has been grosslyin favorof less productiveactivities and at the expenseof *griculture,transport, education and health. In 1985 generalpublic servicesincluding defense consumed 88 percentof recurrentbudget, while the combinedshares of socialand economicservices dropped to 12 percent from about 34 percentin 1976-80. Despitethe Government'sdeclared intent to the contrary,the share of social and economicservices was further reducedin the 1986 budget. The share is ridiculouslylow comparedto Sub- SaharanAfrica as a whole.
Table 3.6
SectoralRecurrent Expenditures (As percentof total RecurrentExpenditures)
Averagefor Sub-Saharan 1984 1985 1986 Africa budget 1981-85
GeneralPublic Services (IncludingDefense) 82.9 87.6 88.8 63
Socialand Economic Services 17.1 12.4 11.2 37
Sources Basedon data providedby Ministryof Finance,Somalia; and GovernmentFinance Statistics, IMP, various issues.
Past underfundingof socialand economicsectors has resultedin an erosion of the qualityand quantityof servicesprovided. In many places,major roads have deterioratedto such a largeextent due to lack of timely maintenancethat a completeand costlyoverhaul and rehabilitationhas becomenecessary. This is also largelytrue of the irrigationsystem along the Shebelliriver. In the educationsector also, non-wageexpenditures per pupil have declinedsteadily by 4 percentannually between 1980 and 1984. With hardly any textbooksand teachingmaterials, students, teachers and parentsdo not find classroomsparticularly useful. Official statisticsshow that therewas practicallyno increasein enrollmentduring the same period. The elementaryschool enrollment ratio fell from 30 percentin 1980 to 19 percentin 1984. It is imperativethat the Governmentundertake serious restructuring of its total expendituresin favor of the recurrentcosts, and divertgreater resources to recurrent cost requirementsof the economicand socialservices, including those for human resourcedevelopment. - 50 -
3.54 PublicSector Salaries. The low level of budgetaryrevenues are unable to supportincreasing expenditures on an overlylarge civil service. The total civil servicewage bill (excludingdefense) doubled from So.Sh. 383 millionin 1980 to So.Sh.684 in 1984. Salaries(including defense) consumeone-third of total recurrentbu4get. In 1985 centralgovernment expenditureon salaries(including defense) was So.Sh. 2.2 billion. Althoughthe Government discontinuedthe policyof guaranteedemployment of all schoolleavers in 1983, the civil serviceranks had become considerably swollenby then, resultingin a large increasein the wage bill noted above. Estimatedcivil serviceemployees (excluding defense personnel and publicenterprise employees) are estimatedto be around 45,100in 1985. (Includingpublic enterpriseemployees, the size of the public sector employeesis around93,000.) Civil servicesalaries are very low. Apart from a 10 percentcost of livingincrease in 1980, salarieshave not been revisedin recentyears. Civil servicesalaries in 1985 were 15 percentof their 1977 level in real terms. Althoughthere has been virtuallyno increasein salaries,there have been increasedallowances. Whereassome allowanceshave been acrossthe board othershave been grantedby individualministries. Allowancesin recentyears have added considerably to the wage bill. In 1984 allowanceswere So.Sh. 137.4 millionor 22 percentof the non-defensewage bill.
3.55 Low levelsof salariesare a primarydeterminant of the low morale and motivationof the civil service. This has been a major factorbehind Somalia'sweak economicmanagement and fairlyineffective transfer of know- how througha massivetechnical assistance program. Effortsfor public sectorresource mobilization will fall shortwithout a well-compensatedand well-functioningcivil service. There is need to raise publicsector salariesto restorethe purchasingpower of earlieryears. More importantly,overall compensation structure as it existstoday shouldbe rationalizedand made more 'visible'.Allowances and benefitshave to be tied to job level. However,increases in total publicsector wage bill are unsustainablethrough the presentbudget resources. Salaryexpenditures can be restructuredto providea higherlevel of compensationfor a reduced of publicsector employees only if domesticbudgetary revenue is increased rapidlyand substantially.However, hardly any progresshas been made towardsreforming the civil servicethrough recasting of salariesand reductionof numbers.13
Summaryand Recommendations
3.56 In sum, despiteconsiderable progress in policy reform,the agenda of actiodsproposed in the Government'srecovery and adjustmentprogram have not yet been fully implemented.
13/TheSomali authorities informed the Bank staff that they reducedthe numberof civil servantsby 3,000 each year in 1985 and 1986; and that in January1987, salaryincreases ranging from 26 to 40 percentwere given to low-paidstaff. - 51 -
3.57 The pricingand marketingof most agriculturalproducts have been liberalized.However, the pricingand marketingof some products(e.g. hides and skins) remainunder governmentcontrol. Most of the controls on importand exporttrade have been removed,but petroleumpricing and import still remainunder governmentcontrol.
3.58 A major exchangerate reformwas initiated,though this resulted in practiceto a multipleexchange rate systemwhich providedincentives for traditionalexports (althoughpossibly not for diversificationinto new exports)but introducedsignificant distortions in resourceallocstion and adverselyaffected government revenues by creatingconfusion in computation of values of imports for tax purposes. Still greaterincentives through exchangorate policywould be desirablein future to encourageexpansion and diversificationof exports,domestic production of import-substitutes and to attract private remittances.
3.59 Despite some efforts to increase revenue, the deficiton the currentbudget continues to be large. Fiscal and monetary objectives have not yet been achieved. For example,no significantprogress has been made in reducinginflation after 1985. The Ministryof Revenue,was createdto strengthentax administrationand collection. But seriousweaknesses still remainin revenuecollection. Hardly a beginninghas been made in cost recovery. Public dissavingsstill remainhigh. Interestrates were increasedsomewhat in recentyears, but real interestrates are still very negative.
3.60 In regardto improvementof publicinvestment and public sector managementto raise productivityof publicresources for economicgrowth, policy implementationhas not made much progress. Profitabilitycriteria are yet to be widely used in the selectionof public investmentprojects. Recurrentcost needs are yet to be seriouslyestimated and providedfor. Publicenterprise reform is yet to be undertaken.
3.61 Thus, while the developmentsin economicand policyperformance are positiveand in the right direction,the impacton the fundamental internaland externalimbalances of the economyso far is negligible. Aggregateconsumption about exceedsGDP; so, gross domesticsavings are about nil. Governmentrevenues are grosslybelow governmentrecurrent expenditures;recurrent costs of publicinvestments continue to be seriouslyunderfinanced. Exports, despite some recovery,cover only about a quarterof imports;the balanceof paymentsdeficit, though slightly reduced,remains large. There is a continuingdebt servicecrisis with about $173 million arrearsat the end of 1985, and a debt serviceratio of around 100 percentper annum in the mediumterm.
3.62 The chronicadverse external imbalance requires special attention becauseof the sharp dichotomybetween the privateand public sectoruse of importedgoods. Thoughexchange rate reformshave imposeddiscipline on the privatesector, public sectorimports are not subjectto the same market disciplineinduced by adjustmentsin the exchangerate. - 52 -
3.63 The policy issue for export promotioninvolves more than exchange rate adjustmentand export liberalization. Rinderpestoutbreak in the East Africa Region has-been cited as the reason for banning Somali cattle imports in its principalmarket. Even if there are other reasons for the ban, the quality problem must be addresseddirectly by (a) investmentfor improvingquality productionthrough veterinary services,disease control, feeding, etc.; and (b) incentiveschemes for producersto improvequality.
3.64 Finally, the issue of public expenditurereform, revenue mobilization,and civil servicesalary must be consideredin the context of the macro economy. Salary increasesin real terms are better achieved in a stable price environment. Any salary increasesleading to expenditure increasesare likely to deepen existing internal and external imbalances, unless associatedwith reductionsin the rate of inflationand substantial revenue increases.
3.65 Continuationof the economicgrowth with slow but steady progress towards adjustmentof the external and internal imbalanceswould require a sustainedimplementation of the remainingaspects of the policy reform program and new measures to promote efflcientuse of resources,encourage export expansionand import-substitution,and improve incentivesand opportunitiesfor greater private sector investmentin the economy. These include:
(a) unificationof the exchange rate and its maintenanceat a realisticlevel to improve resource allocationand provide strong incentivesto exports, import-substitution,and remittances;
(b) improvementin tax administrationand public sector domestic resourcemobilization, and control of governmentexpenditure to eliminatecurrent budget deficits for financial stabilization;
(c) increasedprovision for recurrentexpenditure for economicand social services along with restrainton general services to make effectiveuse of existing facilities;
(d) use of profitabilitycriteria in selectingprojects for inclusionin the PIP with a focus on the growth generating sectors,to improve productivityof public investment;
(e) removalof remainingcontrols on the prices and marketingof importedgoods, especiallypetroleum and related products,to improve allocationof resources;
(f) liberalizationof exportsof hides and skins, and frankincense and myrrh to improveopportunities for private sector participationin productionand export growth;
(g) simplificationof import tariffs to make protectionmore uniform among products (exceptfor luxuriesand undesirable items) for ensuring resource allocationto efficientusers;
(h) control and monitoringof food aid to sustain incentivesfor domestic crop production; - 53 -
(i) furtherimprovement of incentivesand opportunitiesto encourageprivate sector savingsand investment, interest rate adjustmantto real positive levels to improvecredit allocationand introductionof privatebank(s) to help improve servicesto the privatesector;
(j) civil servicereform with a reductionof numbersand a recasting of salaries;and
(k) public enterprisereform to phase out unviableenterprises and restructureothers for improvingresource use efficiency. CHAPTERIV
MEDIUM-TERMPROSPECTS
4.1 The medium-termprospects for growthand developmentwith adjustment in the basic imbalances of the economy would depend on the sustainedimplementation of existingpolicy reformand initiationof new policymeasures to promoteefficient resource use in the economy, noted in the previouschapter.
Constraints
4.2 Economicgrowth in 1984 and 1985 was led by livestockand crops which would continueto be dominantin the medium term. But the basic constraintto the growthof livestockproduction over the medium and long term has alreadybeen noted in ChapterI. As shown by the recent agriculturalsector report, 1 averagegrowth in the productionof livestock is expectedto be about 2 percentper annum in the long run becauseof range land capacity. In the medium term, a slightlyhigher livestock growthof 2.5 to 3 percentis consideredfeasible with effectiverangeland development,since ruminantswhich constitutethe largeststock, and have growthrates between2 and 3 percentcan obtainpart of their feed from browsing(see Table 4.1).
Table 4.1
Somalia: EstimatedLivestock Population (Millionsof Heads)
Year Cattle Camels Sheep Goats TLU a/
1975 3.7 5.3 8.7 14.0 11.6 1980 4.5 5.8 10.3 16.8 13.3 1984 4.2 6.1 11.2 18.0 13.6 1985 4.4 6.2 11.8 18.3 14.0
AverageAnnual Growth Rate (X) 1.4 0.8 3.3 3.9 2.5 a/ Tropicallivestock unit - 250 Kg. TLU Conversionfactorss sheep and goats 0.1, Camels1.2, Cattle 0.8.
Source: Somalia, Ministryof Livestock,Forestry and Range.
1/ Somalia:Agricultural Sector Survey, World Bank,April 1986, (draft). - 55 -
4.3 For crops the recentincrease in productionwas due partlyto cultivatedarea, mostly rainfed,which increasedby 53 percent in 1980-85, and partly to increasedyield (38 percent).2 A feasibleaverage growth rate of 5.4 percentfor agriculturalcrops in the long run is suggestedby the recent agriculturalsector study. 3 It is predicatedon irrigation rehabilitation,development of new irrigationfacilities, and improved water managementinvolving substantial investments. In the case of some crops (e.g. rice, cotton,sugarcane, vegetables), such an expansionwould lead to the use of more and more marginalland requiringincreased investmentin water controltechniques. Over the mediumterm, an annual growth rate of 5.4 percentcould be achievedprovided incentives are maintained,and input availabilitiesare increasinglyimproved.
4.4 The Governmentneeds to pursue a medium term strategywhich will supportlong term developmentgiven the structuralconstraints, limitations of naturalresources and scarcityof skillsand addressthe debt crisis and large financialimbalances over the mediumterm to attaina sustainable balanceof payments. The structureof the economydictates that over the medium term the strategyshould aim at realizingthe productiongrowth potentialsof livestockand crops,through appropriate policies and investmentallocation noted earlier,and at relaxinglong term constraints throughhuman resourceand institutionaldevelopment as well as development of unused naturalresources (e.g., water and power).
Growth Prospects
4.5 The unpredictablenature of externalshocks such as the importban on Somali cattle,the changesin the price of oil, the influenceof weather conditionson agriculturalgrowth, and the poor qualityof Somalidata are major sourcesof uncertaintyin the analysisof futureeconomic prospects. Subjectto these qualifications,and on assumptionof sustainedpolicy reform for improvingresource use efficiencya RevisedMinimum Standard Model (RMSM)framework 4 is used in analyzingmedium-term (1986-91) prospectsfor growth,the correspondingbalance of paymentsscenario, the debt serviceand aid requirement.
4.6 Relativeto past performance(1980-85) a real GDP growthof 4.1 percentper year is feasiblein the medium term with sustainedpolicy reform. Agriculturewould continueto be the leadingsector with about 4.2 percentgrowth, with crops being the major potentialsource of growthof about 5.4 percentand livestockoutput growth of 2.5 to 3 percent. In manufacturingproduction, an annualgrowth of 3 to 4 percentis feasible
2/ Ibid.
3/ Ibid.
4/ The RMSM used here includes(a) the impositionof a floor of constant real per capitaconsumption for socialand politicalstability, (b) the use of policychange includingexchange rate liberalizationto influence relativepricas, domestic food production,and food and oil imports,and (c) separatingprivate from public investment. -56 - with the increasedavailability of raw materials(e.g. sugarcane) from agriculturaloutput, the decontrolof petroleummarketing, and improved incentivesfor the privat, sector. Table 4.2
Somalia: Scenarioof Growthand Distributionof GDP (Constant1985 Prices)
GrowthRates (% Per Year) OutputShare of GDP (% of Total) Actual(a) Scenario Actual(a) Scenario 1985 1986-91 1985 1986-91
GDP at FactorCo0t 6.3 4.1 100 100 Agriculture 7.3 4.2 58 56 Livestock 2.3 3.0 39 32 Crops (*) 19.7 5.4 19 24
Industry 7.2 3.5 9 11 Manufacturing 16.0 3.3 6 6 Other (+) -7.3 3.7 3 5 Services 4.4 4.0 33 33
PopulationGrowth 2.9 3.0 2.9 3
Shareof GDP (X)
1985 1986 1986-91 1991 (Actual) Scenario
Consumption 105.5 104.6 101.7 98.9 Investment 15.3 14.6 15.5 16.7 Imports 27.6 26.0 24.4 23.0 Exports 7.0 7.3 8.0 8.5 Savings -5.5 -4.6 -1.7 1.14 ResourceBalance -20.8 -18.7 -16.4 -14.5 CurrentAccount Balance -21.7 -22.6 -21.0 -19.6 Savings-InvestmentBalance -20.8 -18.6 -16.4 -14.5
(*) Includesforestry and fishing. (+) Wzing, quarrying,electricity and construction.
Sources: Staff estimatesfrom data obtainedfrom Somaliauthorities.
4.7 Given the small size (6 percentof GDP in 1985)of the mAnufacturingsectort its contributionto GDP will be negligible. Medium - 57-
term growthwill have to be generatedmostly from agriculturespecifically livestock,crops and fisheriesthrough a combinationof (a) selective investment(PIP) in the agriculturalsector in rangelanddevelopment, improvementof foddersupply on stock routesto ports, expansionof veterinaryservices, water control,irrigation rehabilitation and managementof food aid to supportcrop output,especially grains and (b) directinggovernment recurrent expenditure allocations to emphasizethe deliveryof social and economicservices to the growthareas. The delivery of socialand economicservices through recurrent cost allocationwould supportthe developmentof human resourcesand promotethe maintenanceand effectiveuse of existinginvestment, in socialand economicinfrastructure as new investmerAtis selectiveand focussedon the growthactivities. Medium-termgrowth would, therefore,be consistentwith longerterm developmentobjectives.
4.8 The adjustmentissues are complex,involving growth promotion with improvementin the balanceof payments,and raisingthe savingsratio while maintaininga level of real per capitaprivate consumption in order not to provokesocial and politicalunrest. Even with 4.1 percentannual growth of GDP and a floor of constantreal per capitalconsumption, average consumptionto GDP ratio would remainat about 102 percentduring 1986-91 which is an improvementover the first half of the 1980s. Consequently, averagesavings would improveslightly, but would still remainnegative zver the medium term. Overallimprovements in the imbalancesbetween consumptionand production,and betweensavings and investmentwould be marginaleven with a 4.1 percentannual real GDP growth.
4.9 The dependenceon importsurpluses to supportinvestment and consumptionwould, therefore,continue during 1986-91. To envisagea more rapid adjustmentand improvementin the basic imbalancesconsistent with growthwould be unrealistic.For a lower growthrate, say 3.5 percent,the imbalanceswould be more severe,with the economymore dependenton imports as the savingsratio remainsnegative, and the ratio of trade deficitto GDP becomesmore chronic.
Balanceof PaymentsProspects
4.10 There is scope for the continuedrecovery of exportsof livestock, and moderateexport growthof bananas,hides and skins,and myrrh. From the base level of 32,000heads of cattleexported in 1985, and given averageannual exports of 105,000heads in 1980-83(157,000 peak in 1982), an averageannual growth of cattleexports of over 20 percentis feasible, but exportperformance remains constrained by the ban in the principal market. The overallexport scenario (Table 4.3) shows continuingrecovery with the major increasescoming from livestockas liberalizationand search for new marketscontinue. 5
4.11 Since exportsand remittancescannot be expectedto grow faster than projected,Somalia's adjustment will have to be throughsignificant adjustmentof importdependence. Importrestraint and importsubstitution
5/ A 4 to 5 percentworld price increasefor livestockandf banana, and a 3 to 5 percentincrease for other exportsare assumedin the export scenario(Table 4.3). - 58 - throughappropriate adjustment policies are built into the import projectionswhich are 'normative'but appropriatefor medium term growth (Table4.3). The compositionof importsis expectedto changewith import substitutionof foodgrains.However, continued substitution of local staplesfor importswill dependon managementof maize surplusesand pricingpolicies designed to switchexpenditures to locally-grownstaples. Overallimports would increasein the mediumterm in responseto growth requirements,even with policyreforms. The importprojections include requiredfood importsfor the population,and importsof petroleum,and other items incluCingintermediate and capitalgoods to supportthe growth of GDP in the medium term throughrehabilitation and expansionof existing capacitiesas well as creationof some new capacities. The leadingsource of expectedincreases in importsis investmentgoods importsdue mainly to the Government'splanned Public Investment Program (PIP) includingthe beginningof the multi-purposeBardhere dam project. It is appropriateto view the PIP importsas complementaryrather than directlyproductive investment.The PIP is expectedto be focussedon the agriculturalsector to supportinfrastructural, institutional and human resourcedevelopment which have relativelylong gestationperiods and therebysupport growth and developmentover the medium and long term.
Table 4.3
Somalia: Trade Balance (US$millions current)
Actual ------Scenario------1985 1986 1987 1988 1989 1990 1991
Exports(f.o.b.) 93 108 120 133 148 170 188 Livestock 66 74 82 98 108 119 130 Banana 12 16 18 20 22 25 30 Other 14 16 18 20 23 26 28
Imports(f.o.b.) -362 -377 -403 -429 -439 -450 -480 Food -66 -56 -54 -52 -49 -46 -43 Oil -63 -46 -52 -58 -59 -60 -65 Intermediate Goods -38 -44 -47 -50 -52 -55 -59 Investment Goods (*) -164 -199 -210 -223 -235 -238 -246 Others -31 -32 -40 -46 -44 -51 -67
Trade Balance -269 -269 -283 -296 -291 -280 -292
(*) Machineryand transportationequipment.
4.12 Even with continuinggrowth and exportrecovery, the trade deficit would increaseslightly to about $280 milliona year in the medium term (Table4.3) which is about 17 percentof GDP. Relativeto GDP however, there is a slow improvementin the externalbalance as the importratio decreasesfrom about 28 percentin 1985 to about 23 percentin 1991 while the exportratio rises from 7 percentto 8.5 percentin the same period, causingthe trade deficitratio to fall. -59 -
4.13 The medium term externalfinancial situation Is characterizedby a chronicdeficit on the currentaccount (Table4.4) and largo debt services requiringmore aid and debt rescheduling.Exports by 1991would cover only about 40 percentof imports. The currentaccount deficit (excluding grants)would persistin the sediumterm at over $300 milliona year (21 percentof GDP), leadingto an overallimbalance including debt service commitmentsbetween $450 millionand $400 milliona year in the medium term (Table4.4). -60-
hble 4.4
w~ ~~ ~~~~~Pa xea Bo g
*~~~
1. Ormt Amounthnipts 12 145 163 183 215 23R 331 1. ;; dw Iat ports (fob) 108 121) 13 148 170 8 277 lb. PkivlwTmfras 20 25 30 35 45 50 54
2. Cwraito Aut nwMts 467 461 481 487 498 526 645 2a hwudwas Imports* (fob) 377 403. 429 439 450 480 590 2b Ntb'aUr Suvicm (1s1) 14 5 0 0 5 6 5 3 2 FhctorSevim (nat) 13 0 0 0 -4 -1 4 3d htuzt onldDebt 63 53 52 48 47- 39 46
* 3. Oxwwt Am t 1efidt 339 316 318 304 283 286 314
_,4. tal Ry,y ts an GU DJt 95 134 140 93 84 78 82 4a lRmntof Prlnpu 86 63 63 58 69 76 77 4b bzdme fromtW/M9 52 58 35 15 2 5 4c Pldim ofArrars 0 19 19 0 0 0 0
5. Pw4pina .enes(b) 5 5 5 5 5 17 17
6. Total Financing Requirements (3#45) 439 455 463 402 372 381 413
7. TOWalCapftnI n1ow frcmQd Ca_tract 302 306 311 144 90 65 37 7a 1 r a fram orazs (a) 185 187 190 66 35 17 0 msuu. sferoe Iaz (a) 117 119 121 78 55 48 37
R. Overall Gap(inc. rants) 137 144 152 2.5A 2R2 116 376
9. Owerdl Gap (ei:. Grants) 322 336 342 324 317 131 376
(a) (rant and loans generated fran pipeline. (b) Basedon D# estfrtes * See Table 4.3 for disaregation of nerchanise lniports. - 61 -
4.14 Wedium-termfinancing would dependcritically on disbursements from pipelineaid, and inflowsfrom new aid commitments.Total inflowof grantsand loans in 1985 was $290 millionwith an undisbursedpipeline 6 which would give an estimatedaid flow of about $300 milliona year in 1986-88. If for each year 1989-91,aid flow is maintainedat the 1988 level in real terms (Table4.4), it would requirenew commitmentsof $550 to $600 milliona year and a quick disbursementpattern, particularly for cash grants and commodityimport programs to financethe gap.7
Debt Relief
4.15 A major elementin Somalia'seconomic prospects is an unbearably large externaldebt serviceobligation. Total debt serviceis $158 million in 1986 and would remainon the averageat $150 milliona year (Table4.5) in the medium term amountingto over 100 percentof exportearnings. The "non-reschedulable"debt service,comprising multilateral debt serviceand debt servicedue to the 1985 debt relief,rises from $51 million in 1986 to $100 million in 1988, and remainsat about $60 milliona year up to 1991. The multilateraldebt servicealone would averageabout $60 milliona year requiring50 percentof exportearnings in 1986 risingto over 60 percent in 1988. Somalia'smedium term prospectsare bleak unlessthe debt service problemcan be grappledwith and resolved. However,since as high as 213 of debt serviceor around$100 millionper year is owed to non- reschedulablecreditors, Somalia's debt problemis complicatedand requires specialtreatment. Becauseof the large non-reschedulableservice obligation,Somalia faces a seriouscash problemover the medium term, which cannotbe resolvedwith reschedulingonly. No matterhow generous the terms on which the bilateraldebt serviceobligations falling due in one year (e.g.,1987) are rescheduled,it will not ensure an affordable level of total debt serviceobligation either for that year or the followingyears, because it will neitherreduce the large non-reschedulable obligationsfor any year, nor the bilateralobligations for the later years.
4.16 Additionalfinancial aid and debt reschedulingwould be required to achievean orderlyfinancing of importsand debt service. To ensurea sustainablebalance of paymentsincluding debt service,it is necessaryto arrangemulti-year rescheduling or regularyearly rescheduling of all bilateralobligations at very soft terms - long maturitiesand low interest rates,so that all bilateralobligations are almostentirely deferred for a decadeor so and cash assistanceor new aid flows (otherthan projectand commodityaid) are providedto enableSomalia to make orderlypayments to non-reschedulablecreditors. A viable financingplan consistentwith growthobjectives should (i) lead to net capitalinflows, (ii) lead to a manageabledebt serviceburden, (iii) supportthe implementationof policy reformand economicrecovery, and (iv) containreasonable levels of new soft aid. Unlessdebt servicepayment is considerablyreduced through debt relief,consumption will fall below acceptablelevels.
6/ Estimatedat US$1200million.
7/ Based on reschedulingon soft terms (Table4.7). -62-
Table 4.5
Somalia: Debt Service (US S Million)
1986 1987 1988 1989 1990 1991 1995
Total Debt Service(a) 158 168 173 141 131 117 128 Principal 95 115 121 93. 84 78 82 Interest *63 53 52 48 47 39 46
MultilateralDebt (b) 41 82 88 59 54 56 65 Principal 18 63 71 47 41 39 46 Interest 23 19 17 12 13 17 19
Other Debt (c) 117 86 8S 82 77 62 64 Principal 77 52 50 46 42 40 36 Interest 40 34 35 36 35 22 28
Ion-reached.Debt 51 95 100 72 54 56 65 Multilateral(d) 16 17 19 19 33 49-. 55 Bilateralfunds (e) 10 13 12 13 - - IkF/AMF 25 65 69 4.0 21 7 10
Ratio of MerchandiseExports
Debt Service(s) 1.5 1.4 1.3 0.9 0.8 0.6 0.5 lon-rescheduable 0.7 0.8 0.8 0.$ 0.4 0.4 0.3 Multilateral(b) 0.38 0.68 0.66 0.4' 0.32 0.28 0.25
Source: Ministryof Finance,External Debt Unit. (a) excludesdebt serviceand frozenarrears owed to China,Bulgaria and the USSR.
(b) includesthe IMF and the AHF.
(c) OECD debt and other bilateralagencies.
(d) excludes IMF and AHF.
(e) Kuwait Fund and Saudi Fund. - 63 -
4.17 In line with the above objectives,two debt reliefscenarios were considered. For both scenarios,we assumethat multilateraldebt service and debt serviceon past debt relief (Table4.5) will not be rescheduled. ScenarioI (Table4.6) adoptsa multi-yearrescheduling for 95 percentof the remainingdebt servicedue during1986-90 at 9.8 percentinterest, 6 years grace,and 12 year maturityterms which are similarto terms obtained by Sudan at the Paris Club. The remaining5 percentis paid in four equal annualinstallments.
4.18 The debt serviceprofile is shown in Table 4.6. Debt relief amountsto about $100 million in 1986,declining to about $42 million in 1990. The resultingdebt serviceadded to the nonreschedulabledebt servicewould result in a new debt serviceratio of 90 percentin 1987 and 1988,declining to 52 percentin 1990 and, risingagain to about 80 percent per annumduring 1991-95as debt reschedulingis stopped. Additionalaid requiredto close the net gap would be nearly $100 milliona year during 1987 and 1988 which would add up to overallaid flow of between $400 and $450 milliona year in the medium term. Therewould be need for loan and grant commitmentof over $600 milliona year, includingcash grantsfor meetingthe financingrequirements of growthand recovery. Under this scenario,debt servicewould stillbe unmanageable.
4.19 In scenarioII (Table4.7) the focus is on reducingthe debt serviceburden in a multi-yearrescheduling, on softerterms and longer maturity. It is assumedthat 95 percentof all reschedurabledebt service for 1986-90is rescheduledat 2.6 percentinterest, with 9 years grace period,and a maturityof 19 years.8
8/ These are close to the averageterms of recentconcessionary loans to Madagascarwhich has had a similardebt managementproblem. -64 -
Tblu 4.6 SWAM: Firanuuci b h1i4 Scmwto I
1966 1967 19' 1989 1990 l491 1992 1993 1994 1995
1. Fiiwbqzg Ihul(irui(a) 43 455 463 402 372 3R1 394 404 40 413
2.Imnd (kw= 30 3MA 311 144 90 65 62 48 35 37 Cxnts(b) 185 187 190 66 35 17 11 6 0 0 tin (c) 117 119 121 78 55 48 51 42 35 37
3. ap(d) 137 149 152 258 282 316 332 356 371 376
4. Net PIblhduU (e) -35 -50 -31 -12 -160 -183 -201 -219 -236 Gsed Ub9&W (f) 102 73 73 69 77 0 0 0 0 0 Rescheduled debt Servic (g) 7 14 23 28 35 42 43 79 94 107 TrA Nw Debt Sevic8 () 58 109 123 100 89 160 183 201 219 236
5. Gap ln'dx 137 149 152 258 282 .316 332 356 371 376 Dbt Pla1M (i) 100 59 50 41 42- -42 -64 -79 -94 -107 Addit al Aid RPuired 37 90 1M 217 240 35R 396 435 465 483 * i W(j) 37 60 67 146 161 240 266 291 312 325 Comb(k) 37 35 35 35 35 35 35 35 35 35- Other 0 25 32 111 -12 205 231 256 277 290 imm 0 30 35 71 79 118 13n 144 153 158 6. 1Mmonku ite N;wCam ,t-Pa*dxs (1) 150 250 150 600 300 600 600 480 48 55n Qits (a) 100 170 10 4M 200 400 40X 32t 320 370 IAMB 50 80 50 200 100 2)0 2D0. 160 160 180
DebtServce RPato 0.54 0.91 0.92 0.67 0.52 0.85 0. 0.88 0.87 n.85
Now.eon Table 4.6 (a) Is the sum of current account deficit, capital repayment on old debt plus increase in teaervei, shown in Taible 4.4 Line 6. (b)(c) Comprise expected disbursement from pipeline. (d) Li 1 Ilisne 2. (e) (f) les (h), (f) See Table 4.5 (total debt service less non-reschedulable debt service). (g) Mlti-war reschedultir of debt seiice in (f) frem 1986-90bls on term obtained for Sudan whichare 9.8 per-nt ntent, 6 yeas grare period, and12 years marity. (h) Tied otber deft .mrvtce nntr"u4iAtlmf. (i) (Table 4.5, line 1, less Table 4.6 (h). (j) asedon abc z j or new aw required. (k) Basedan past prrfonam. (1) Asswea disburswent pttetn reprmsntirWan avere for project aiTinon project loans (257, 207, 1R%,15i, 122, 5%,5%) such that cced utas can mcatethe fw of aid requirei. (m) About2/3 of nte ca,dmnt in !¢ant aid, 'm tte ret Is lkns, - 65 -
Table 4.7 Sa1U.a:l fr.r:itn wrn LZbt ReIef Seenrlo II (USDolUar MIllIf)
1986 lq87 19M8 1989 1990 1991 1992 1993 1994 1995
1. PItnnigRaquirumits(a) 439 455 463 402 372 381 394 404 406 413
7. Um andOrmts 302 306 311 144 90 65 62 48 35 37 Grats(b) 185 187 190 *66 35 17 11 6 0 0 Icen(c) 117 119 121 78 55 48 51 42 35 37 3. Gap (d) 137 149 152 258 282 316 332 356 371 376
4. Not Peehedu1rIM 50 -26 -33 -10 -66 -129 -139 -149 -159 -169 GMuUudhduling (f) 102 73 73 64 77 0 0 0 0 0 Rescheduled Debt Service (g) 1 4 6 7 9 11 20 27 34 40 T NowDbt Service (h) 52 99 106 79 63 129 139 149 159 16l
S. GAPpII g(+) 137 149 152 258 282 316 332 356 371 376 Deb Pt tf() 106 69 68 62 68 -11 *-20 -27 -34 -0 Ad&tiul Ald PquLred 31 80 85 196 214 327 352 383 405 416 &atea(O) 31 50 55 131 143 219 236 257. 271 23o Msh (k) 31 35 35 35 35 35 35 35 35 35 Ot r 0 15 2n 96 IO 184 201 222 237 245 toaf 0 30 30 65 7 10M 116 126 133 136
6. *w Comdirmts Requdred 120 200 100 600 350 500 5CO 46n 350 500
Grants (1) 80 130 65 4n0 230 340 340 270 230 u4n
tioai (m) 40 70 35 200 120 160 160 130 120 16n
DebtService Ratio 0.48 0.82 0.79 0.54 0.37 0.69 n.67 0.65 n.63 0.61
N%teson Table 4.7
(a), (b), (c), (d), (e), (f) See notes for Table 4.6
(g) .izti-,ear reschedullrg of 95 percent of debc service d*uefrcm 19R86-con soft terms: 2.6 percent interest, 9 years of grce, am 19 vears maturity.
(h), (1), (j), (k), (t), (tm) see notes on Table 4.6 - 66 -
4.20 The resultingadditional financing requirements and the debt serviceprofile are shown in Table 4.7. Comparedto the first scenario, the debt serviceprofilo is improved;but still the debt serviceratio remainsabout 80 percenta year in 1987 and 1988, decliningto 37 percent in 1990, since nearly 50 percentof the debt servicewhich is mainly multilateralis not eligiblefor rescheduling.Also, additionalaid flows and commitmentsrequired to financethe gap are slightlylower than in scenarioI. But even under scanerioII, additionalaid of $80-85million (including$35 millioncash) per year would be requiredin 1987 and 1988. In both debt reliefscenarios, the amountof debt reliefturns negative after 1990 as the total new debt servicefrom the reschedulingexceeds the originaldebt service(without rescheduling) causing a sharp increasein new aid requirements.9 This means that in order to achievean orderly debt servicescenario after 1991 and also reducethe level of aid required, there will be need for more debt reliefduring that period.
4.21 Given the share of debt servicewhich is not subjectto rescheduling,a viablesolution to Somalia'sfinancing gap and debt service problemwould requirea three-prongedapproach including (a) rescheduling on soft terms; (b) additionalflow of quick disbursingaid includingcash grantsover and above the currentlevel of aid flows;and (c) sustained policy reformto achievegrowth and a gradualeven if slow correctionof the seriousinternal and externalimbalances facing the economy. Exchange rate adjustmentshave contributedto a declinein privatesector imports. One basic adjustmentproblem, however, is that the largershare of imports (over 70 percent in 1985) is channelledthrough the public sectorthrough grantsand loans,and therefore,not subjectto the same market discipline on the privatesector due to exchangerate reforms. Thus, enforcementof efficiencyin the use of importedgoods would require(i) improvedaid coordinationand selectionof qualityprojects to maximizeproductivity from the PIP which is the singlelargest user of imports,and (ii) increasedchanelling of importsand investmentsthrough the privatesector.
4.22 Somalia'sexternal imbalance is so large that only sustained adjustmentefforts will not be sufficientin themselves,but need to be complementedby large inflowsof foreignaid and considerabledebt relief every year, if economicgrowth is to be maintainedover the medium-term. During 1987-88Somalia will requireaverage annual aid disbursementsof nearly$400 million,about $250 millionin grants and $150 millionin (mostlyconcessionary) loans (Table4.7); roughlyone-half of these inflows will be requiredfor quick disbursingcommodity aid and balanceof payments supportin the form of food,petroleum, other commoditiesand cash. Disbursementsfrom the aid pipelinewould amountto about $300 milliona year, and hence additionaldisbursements of nearly$100 millionfrom new aid commitmentwill be necessary. In addition,about $70 million in debt reliefper year will be required. As the existingaid pipelinegets exhausted,larger new aid commitmentsare requiredfor 1989 and beyond. Throughthe ConsultativeGroup processit shouldbe possibleto co-ordinate
9/ This debt servicepattern is similarto the Madagascarcase. - 67 - donor supportto mobilizeresources to financethe prospectivegap, providedthe Somaliauthorities sustain and strengthenthe policy and institutionalreforms required for adjustmentand growth,as noted in ChapterIII.
Govnenmnt Budiet Prospects
4.23 The budgetaryoutlook for the next few years is likelyto be grim, althoughstabilixation and domesticresource mobilization objectives requiresquick eliminationof the Government'scurrent budget deficit. Given the low levelsof revenue,it is unlikelythat the currentbudget deficitcan be eliminatedin the next one or two years. To achievea currentsurplus in the mediumterm, a much strongerrevenue effort than in the past will have to be made to raise domesticrevenues from the existing low level of 5-6 percentof GDP to a higher ratio prevailingin earlier years, and improvefinancial discipline and expenditurecontrol, while restructuringexpenditures towards greater financing of economicand social services,and civil servicesalaries with a correspondingreduction on generalservices.
4.24 It is importantfor the Governmentto preparea medium-term financialplan givingestimates of likelydomestic revenues and the proposedexpenditures the revenueswill be requiredto finance. Such a projectioncan help onvisagethe potentialof financingbadly needed recurringcosts, assess the prospectsof governmentsavings to financepart of the PIP, and to identifyareas of futurepolicy changes.
4.25 One such budgetaryprojection is attemptedhere on the assumption of sustainedrevenue effort and expenditurerestraint as suggestedabove. The revenueprojection is based on the projectionsof GDP and external trade noted *arlier,and do not assumeany changein the rates of taxation. On the expenditureside, interestpayments are projectedon a cash basis, reflectingthe interestportion of the non-rescheduabledebt serviceshown in Table 4.5. However,difficulties have been faced in projectingthe exchangerate and the rates of domesticinflation. The date of unification of the exchangerate and the level at which it will be unifiedis one of crucialimportance since an increasein domesticrevenues (which comes largelyfrom importtax revenues)is dependenton the valuationof merchandiseimports at an appropriateexchange rate. The uncertaintyis compoundedwhen projectingdomestic inflation in Somalia,given past erratictrends in annualinflation. Notwithstandingthese uncertainties, Table 4.8 gives a summaryof budgetaryoperations for 1987-91.
4.26 Domesticrevenues are expectedto increasefrom 6.2 percentof GDP in 1986 to 9.1 percentin 1991. Most of the increasein revenuesin 1987 is due to the revision in import tax revenues following revision of import valuationpolicy and exchangerate unification.10 Expendituresare expectedto increaseless rapidlythan before and are restructuredto providefor higher salariesfor civil servantsand increasedallocations
10/Exchangerate is assumedto be unifiedin 1987 at So.Sh. 120-US$1. Domesticinflation is expectedto be 25 percentin 1987, 20 percentin 1988 and 15 percentthoreafter. - 68 - for operational and maintenance costs of economic and social services The currentdeficit (net of externalgrants) is expectedto be 0.9 percentof GDP in 1987 and then slowly improveto a positionof a nominalsurplus by 1990 (0.1 percentof GDP). Table 4.8
Somalia: Medium-TermBud2etary Prolections, 1987-91 (MillionSo.Sh.)
1986 1987 1988 1989 1990 1991 Budget ------Projected------
CurrentRevenue 8600.0 13550.0 19099.0 24040.0 29229.0 35758.0 o/ws tax revenue 7540.0 11828.0 16674.0 20894.0 25147.0 30461.0 CurrentExpenditure 10371.3 15298.5 19745.0 24491.6 28802.0 33696.6 olwt Interest (Cashbasis) 1296.3 1651.0 1893.0 2126.0 2386.0 2671.0 oviw Nonwagecosts of Sco.& Soc. sectors 522.3 4381.0 6308.0 8463.7 10428.8 11992.5 o/w: Civil Service wages & salaries 760.2 1376.0 2075.0 3013.0 3465.0 3984.0
CurrentDeficit -1771.3 -1748.5 -646.0 -451.6 427.0 2061.4 (excl.grants)
MemorandumItems
Comodity Aid 1 2125.8 3600.0 4200.0 4800.0 5100.0 5400.0 ReschedulableInt. 21 3852.3 5309.0 5987.0 6154.0 6674.0 5729.0
As % of GDP
CurrentRevenue 6.2 7.0 8.0 8.6 8.9 9.1 CurrentExpenditure 7.5 7.9 8.2 8.8 8.7 8.5 CurrentDeficit -1.3 -0.9 -0.3 -0.2 0.1 0.5 (excl.grants)
I/ Assumesthat only 40 percentof total commodityaid is availablefor general budgetarysupport.
2/ This amountis in additionto the interestexpenditure included in current expnditures abovo and representsthe differencebetween interest on non- reschedulabledebt and on total debt as shown in Table 4.5. For the budget to meet entireinterest expenditures would requireadditional assistance in the form of debt reliefand/or counterpart funds from commodityaid. Sourcet Bank staff estimates. - 69 -
4.27 In ordtr to have a currentaccount surplus (net of grants)by 1990,the GOS will need to revisethe basis of importsvaluation for import duty effectiveimmediately. Valuation at the singleunified rate of So.Sh. 120 - US$1 is expectedto resultin, at least,a doublingof the importduty revenuesimmediately upon revisionin the importvaluation policy.
4.28 Somalia'straditional dependence on importduties for the bulk of its revenuewill rise in 1987 from about 48 percentof total revenueto about 52 percentupon unificationof the exchangerate. However,this dependenceis expectedto be reducedas collectionsfrom domesticdirect and indirecttaxes rise. By 1991, importtaxes are expectedto contribute about A9 percentof domesticrevenuxes. Export taxes are expectedto grow moderatelyas new exportmarkets are establishedand improvedrevenue collectionreduces underinvoicing of exports. It is expectedthat as economicrecovery continues, contribution to domesticrevenues from domesticexcise taxes (notablyexcises on sugar and cigarettesand matches) shall grow at a fasterrate than before. With impositionof the recent sales tax, the share of total domesticindirect taxes shall grow from 15 percent in 1987 to 19 percent.in 1991. The growthin all tax collections is inextricablylinked to improvedtax collection. It is expectedthat with the completionof the recentlyundertaken income tax survey,more people shall be brought into the income tax net -- notably small business entrepreneurs,and tax structurewould be revisedto bring the incometax rates more in line with the currentincome levels.
4.29 Non-taxrevenues, which are derivedprimarily from public enterprises,are expectedto rise from 12 percentin 1985 to 13.5 percent in 1991 as some publicenterprises become viable in the wake of the anticipatedpublic enterprise reform. However,the contributionto the budget revenuesis expectedto be gradualas rehabilitationof major public enterprisesis expectedto take two to three years.
4.30 On the expenditureside, costs of providingservices are expected to go up becauseof inflation.Recurrent costs are expectedto go up from 7.5 percentof GDP in 1986 to 8.5 percentin 1991. As budgetary expendituresare restructuredin favor of economicand socialservices and civil servicesalaries, it is expectedthat 40 percentof the estimated requiredrecurrent cost needs in the productiveservices would be provided for in 1987; 50 percentin 1988; 60 percentin 1989 and 65 percent thereafter. This will raise the share of recurrentbudgetary expenditure in the economicand socialservices in line with the averagein Sub-Saharan Africa. At the same time, the share for generalservices will be correspondinglyreduced to make resourcesavailable for more productive uses. Expenditureson 'transfers'(which may includesubsidies) are expectedto be graduallyreduced likewise. Civil servicesalaries are expectedto go up 400 percentbetween 1986 to 1991,with restrainton defenserelated expenditures. -70 -
4.31 Providedthe recommendedmeasures are adopted,the currentbudget can be expectedto show a nominalsurplus (0.1 percentof GDP) by 1990 and make a marginalcontribution to the public investmentprogram, which will till then continueto be entirelyfinanced by externalaid. Also, the local currencycounterpart generated by the commodityaid programwill be more than adequateto financethe currentbudget deficit without any need for domesticbank borrowing,so that the Governmentwill be well advisedto immobilize any surplus counterpart funds in a central bank account (as suggestedearlier). In this regardthe main issuesfor the budgetwill be (a) to captureall counterpartfunds and hold them in the CentralBank, (b) to determinehow much of these funds can be used withoutdestroying the fiscal effortand the stabilizationobjective noted earlieron, and (c) to controland limit the use of these funds only for such budgeted expenditures.Beyond 1990, as the currentbudget generatesa surplus, largerproportion of counterpartfunds may be used to raisethe presentlow localcurrency component (12 percent)of public investmentexpenditure. - 71 -
SOMALIA:STATISTICAL ANNMU
Part I - SocialDemographic Data
1.1 SocialIndicator Data Sheet 1.2 Select DemographicIndicators 1.3 Age and Sex Distribution
Part II - National Accounts Data
2 1 Gross DomesticProduct by Sector (CurrentFactor Cost) 2.2 Gross DomesticProduct by Sector (ConstancPrices) 2.3 Expenditureon Gross DomesticProduct (CurrentPrices) 2.4 Expenditureon Gross DomesticProduct (ConstantPrices)
Part III - Trade and Balanceof PaymentsData
3.1 Balanceof Payments 3.2 Value of Exportsby Major Commodities(Somali Shillings) 3.3 Expo:tsby Commodity(U.S. Dollars) 3.4 Numberand Value of LivestockExports 3.5 Value of Importsby Major Commodities 3.6 Directionof ExternalTrade
Part IV - External Debt
4.1 ExternalDebt Outstanding 4.2 Debt ServicePayments 4.3 ExternalDebt Arrears 4.4 AverageTerms of New Commitments 4.5 Debt ServiceObligations 1986-90
Part V - PublicFinance
5.1 FinancialOperations of the CentralGoverm'awnt 5.2 CentralGovernment Revenue 5.3 FunctionalClassification of the CentralGovernment 5.4 CentralGovernment Wage Bill 5.5 FunctionalClassification of DevelopmentExpenditure
Part VI - Monetary Accounts
6.1 MonetarySurvey 6.2 SummaryAccounts of the CentralBank 6.3 SummaryAccounts of the NationalCommercial Bank 6.4 SummaryAccounts of the SomaliDevelopment Bank 6.5 Loans and Advances by Economic Activity 6.6 Somali Development Bank - Loans by Sector 6.7 Interest Rate Structure 6.8 History of Exchange Rates - 72 -
Part VII - AgriculturalSector
7.1 Productionof AgriculturalCrops 7.2 Banana- Area, Yields and Exports 7.3 Productionsof Sugar Cane and Sugar 7.4 ProducerPrices of Major Crops 7.5 ProducerPrices Paid by ADC and Grain Purchases
Part VIII - IndustrialSector
8.1 SelectedData on Public and PrivateManufacturing Industries 8.2 IndustrialOutput of SelectedProducts 8.3 ManufacturingEnterprises Performance Indicators
Part IX - Prices
9.1 MogadishuConsumer Price Index 9.2 Rates of Inflation 9.3 QuarterlyMovements in the CPI 9.4 RetailPrices of Petroleum
Part X - Education
10.1 PrlmarySchool Enrollment by grade and Sex 10.2 SecondarySchool Enrollment by Grade and Sex 73 Table 1. 1
1986 SOCIAL INDICATORDATA SHEET SOMALIA Reforence Grouos (uQE) Most Recont Low-income utio-inccm _ _ 1965se 1973 Estimate S-S Africa S-S Africs
LABOR FORCE Total Laooe Force (thou) t092.1 1477.1 1987.4 Femal (%) 30.1 29.5 28.4 35.7 37.5 Agriculture (%) 61.1 78.2 7i5.5 a 78.9 59.4 Industry (%) 6.3 7.4 8.4 a 7.6 14.8 Parttcipation rate IX) Total 37.5 38.5 38.0 38.9 36.2 Male 53.0 54.8 53.9 50.4 45.8 Female 22.3 22.5 21.8 27.5 26.7 Age aepencency ratio 1.0 1.0 0.9 1.0 1.0
HOUSING Average size of housenold: rotal Urboan Rural Y 3...a Percentage of dwellings with electricity: Total .. .. Urban Rural
EUCATION Enrollmenv ratest Primary: Total 10.0 11.0 21.0 60.1 98.B Mali 16.0 17.0 28.0 69.6 '07.8 Female 4.0 5.0 15.0 51.3 90.7 Secondary: Total 2.0 5.0 14.0 12.5 21.0 Male 4.0 8.0 19.0 18.5 28.5 Female 1.0 2.0 10.0 9.0 16.9 Pupil-Teacher ratio: Primary 25.7 38.8 23.6 _ 45.1 42.5 Secondary 16.5 22.4 19.9 c 23.0 27.7 Pupils reaching grade 6 (%) 59.6 808 INCOME. CONSUMPTION. AND POVERTY Enorgy consumption per cap. (kg of oil equivalent) 14.9 24.7 82.6 54.6 530.7 Percentageof private incomo receivedby: m1ig1st 10% of hWoisetl5s Highest 20% Lowest 20% Lowest 40% Est. absolute poverty incomo level (USS per capit&): Uroan 150.0 d 6896 Rural 110.0 d 338.1 Est. pop. below absolute poverty incomolevol (%) Urban 40, 00 Rural . 70. Passengercars/thou poo. 1.7 2. 36.0 Newspapercirculation (per tmousanaPpoultion) 1.7 1.0 3.6 7.4 EPO uly '986
'wUI'fae'st .V VWyyg twW 2.62ang I55, !373 :egwun lord Ott WIL6&na -Ross "Oenteh'"tUmt 30two.ft 12 ana.085. a. :36. IL I .l" - 74 - Table 1.1
1986 SOCIAL INDICATORDATA SHEET SOMALIA Reference Groups (MRE) Most Recent Low-mncome Mctl ncom@ 195 1973 Estimate S-S Africa S-S Afelca AREA Total land area (thou sctkm) 637.7 637.7 637.7 Agricultural (% of total) 46.8 46.9 46.9
GNP PER CAPtTA (USS) .. .. 260.0 29.9 1025.3 POPULATIONAND VITAL STATISTtCS Total population (thou) 29t2.0 3840.0 5234.0 uroan pou. (% of total) 20.1 25.1 33.3 20.4 33.1 Population growtn rate(%): Total 3.5 2.8 2.9 2.5 Urban 6.4 5.4 6.2 4.8 Life exoect. at otrtn (yrs) 37.9 4t.1 45.7 48.2 $1.0 Population projectiOns: Pop, in 2000 (mill) 8.5 stationary poe. (Mill) 30.4 Population Cotnsity per sQ km of agricultural lar 9.6 12.8 17.5 55.9 45.6 POP, age structure (%): 0-14 yrs 49.1 47.0 44.9 46.7 46.2 15-64 yrs 49.0 51.0 52.3 50.4 51.0 6a and above 1.9 2.0 2.1 2.9 2.3 Crudlebirth rate (par thou) 50.0 50.0 49.3 46.3 46.3 Crudte coatn rate (per thou) 25.7 22.9 19.6 18.3 15.6 Total fertility rate 6.7 6.7 6.8 6.4 6.4 tnfant mort. rate (per thou) 166.0 155.0 152.6 121.5 103.2 Child d.eatnrate (per tnou) 37.0 35.1 32.4 25.7 17.6 Family planning: Acceotors, annual (thou) Us-rs (X of marriec women) 1.0 4.5 7.1 FO00 HEALTH AND NUTRITION Index of food production per Capita (1974-76 a 100) 107.6 106.5 65.t 89.5 89.3 Por capita supply of: Calories (% of retouirmnts) 91.5 09.7 59.3 90.0 94.2 Proteins (grams per day) 76.5 72.0 63.5 52.6 50.6 PoP, por opysician (thou) 33.9 19.9 17.5 a 39.2 11.3 Poo. per nurse (thou) 4.3 2.9 a 3.3 2.6 Pop. per nosPIta Ieo (thou) 0.7 0.7 *- 1.7 1.4 Access to Safe water (% of population): Total 15.0 33.0 a 25.2 65.8 Urban 17.0 $5.0 a 61.6 70.5 Rural .. 14.0 21.6 a 17.1 35.0
Population Growth Infant Mortolity Primary School Enrollment 52 ~~~~~~~200 e....~~...... ~120.
0- - -' :: I g? t0 '560 sOMItOA 1s80
0~~~~~~~~~~~~~~~~~~~~~~~
0 SOMAL IA______Q nesrrtr CtOSP f.lftS?ftfGrQ UP - 75 - Definitionsof SocialIndicators
The definitionof a particularsocial indicatofmay Infant (age 0-IJ mortalit rate - Number of infants vary amongcountries or withinone country over per thousandlive births who die beforereaching one time.For instance.different countries define -urban yearof ap. in a givenyear. area" or safe watcr" in diffeint waya Childtage 1-4)mortality rate - Number of deaths of children.ag 1-4. per thousandchildren in the AREA(thousand square kilometers) sameage group in a givenyear. For most developing Total- Totalsurface area comprisingIand area and countriesthse data are derivedfrom models using inlandwatets. informationon infant mortalityrates. .4gricltwral(percentage of toral)- Estimateof agri- Fmily planing - acceptors,(thousands) - Annual culturalarea used for CropS,pastures, market nd numberof acceptofsof birth-controlmeasur re- kitchengardens or to lie falow, as percentap of ceivedunder the auspicesof a nationalfamily plan- total. ningprom. Familvplanning - usrs (percentageof marriedwom- GNP PER CAPITA (USS) - GNP per capita esti- en) - Prenatage of marriedwomen of child-bearing mates at current market prices cakulated by the age who are practang, or whose husbands are conversionmethod used for the WorldBank Atlas. prctising, any form of contraception.Women of 1986. child-bearingage ar generallywomen aged 15-49. althoughfor somecountries contraceptive usage is POPULATnONAND VITALSTATISTICS measuredfor another age group. Totalpopulation - midyear (millions) Urban popsdation(peretage of total) - Different FOOD, HEALTH ANDNUITION countries followdifferent definitions of urban popu- lInx offoodproductionper capita(1974- 76 -100) lation.Such differences may affect comparability of - Indexof per capita annualproduction of all food data amongcm;atries. commodities.Production.excludes animal feed and Populationgrowth rate (percent) - total and urbn - seed for agiculture. Food commoditiesinclude pri- Annualgrowth rates of total and of urbanpopula- marycommoditie (for example.sugarcane instead tions. of sugar)which are edibleand whichcontain nu- Lifeexpectancy at birnt(ws) - Numberof yeas a trients(for exampletea and coffeeare excluded). newborninfant wouldlive if prevailingpatterns of Commoditiesinclude nuts, fruits, pulses,creals, mortalityfor all peopleat the timeof its birth were vegctables,oil -xds, sugarane and sugar beets to staythe samethroughout its life. livestock,and livestockproducts. Aregate produc- Population projections tion of each country is based on national average Populaionin 200 - The projectionof population producerprice weights. giventotal populationby age and sex, fertilityand Percapita supply of caloriws(percentage of require. the demographicparameters of mortalityrates. and mets) - Computedftom energ equivalentof net migrationin thebas year1980, until the population foodsupplies available in countryper capita per day. reachesa stationaryfate. Availablesupplies comprise domestic production, Stationry populion . The projectedpopultion imports less exports,and changs in stock. Net levelwhen zero populationgrowth is achieved:i.e., suppliesexclude animal feed, seeds for use in agti- the birthrate isconstant and equal to the deathrate. culture quantitiesusd in foodprocssing, and lossw the age structureis stable,and the growthrate is es in distribution.Requirements were estimated for zero. 1977 by the Food and Agricuture Organization Populationdenuitv. agricd;ural lnd - Populationper (FAO) based on physiologicalneeds for normal squarekilometer (100 hectars) of agriculturalarea. activityand healthconsidering body weights,envi- Populationage structure(percent) - Children0-14 ronmentaltemperature. age and sex distributionof years.working age 15-64years, and peopleof 65 population. yearsand overas percentagesof population. Percapita supply of protei ({gramsper day) - Protein Crudebirth rate - Annuallive births per thousand contentof percapita net supplyof foodper day.N.,~ population. supplyof foodis defined as above.Requirements for Crude death rate - Annual deaths per thousand all countriesestablished by UnitedStates Depart- population'. ment of Agricultureprovide for minimumallow- Thiall rtdijwrate - The avcragenumber of children ancesof 60 gramsof total protein per day and 20 that would be born alive to a woman during her gramsof animal and pulseprotein. These standards hleutnmeif Juring her childbearingyears she were to are lowerthan those of 75 gramsof total protein and hearchildrn at eachaye in accordancewit',l presail- 23 grams of animal protein as an average for the ,n .igespcctiic fertility rates. world.as proposed by FA.O -76 -
Populationper phksician - Population divided by group of individualswho share living quarters and number of practising physicians qualified from a main meals. A boarder or lodgermay or may not be medical school at universitylevel. included in the househoid for statistical purposes. Populationper nursingperson - Population divided Nrcentageof dwellingswith electricity - total. urban. by number of practising graduatenurses. assistant andrural -Conventionaldwellings with electricityin nurses. practical nursesand nursing auxiliaries. living quarters as percentageof all dwellings. Poputatonper hospitalbed - Populationdivided by number of hospital beds availablein public and pri- EDUCATION vat, general and speciazed hospitals, and reha- EnrollmentRates bilitation centers. Hospitals are establishments PrimarySchool Enrollment - total, male andfemale permanently staffed by at least one physician. Es- - Gross enrollmentof all ages at primary levelas a tablishmentsprincipally providing custodial cae are percentage of primary school-age children. While not included. many countries consider primary school age to be Accessto safe water (percentage ofpopulation) - total. 6-11years, others have wider age groups. Differ- urban.and rural - People(total urban,and rwal) with ences in country practicesin the ages and duration reasonableaccss to safewater supply(includes treat- of school are reflectedin the ratios given.For some ed surface waters or untreated but uncontaminated countrieswith universaleducation, gross enrollment water such as that from sprngs sanitay wells and may exceed 100percent sincesome pupils are youn- protectedborcholes). In an urbanarea a public foun- ger or older than the country's standard primary- tam or standpost located not more than 200 meters school age. froma house may be consideredwithin reasonable SecondarySchooI Enrollment - total. male and accessof that house. In rural areas reasonableaccess female - Computedin a simiilarmanner, but includes wouldimply that membersof the householddo not pupils enrolled in vocational, or teacher training have to spend a disproportionatepart of the day secondary schools, for pupils usually of 12 to 17 fetchingwater. Absent and incotmpiteresponses, and years of age. largevaiations between countries, may affect the Pupil-teacherratio -prinary, andsecondary- Total validity of the overall results of the country and students enrolled in school divided by the total regionalcomparisons. In additi certain defiitions number of teachers. and clsifications such as urban and rural, son Pfercentagepupils reaching grade six - The percen- able accessto safe water in rural areas safewater tage of a cohort of 1,000 pupils starting primary sources (when they are not subject to laboratory school that persist into grade six. control) vary considerablyfrom country to country and thus affectcomparability of the data. INCOME, CONSUMPTION,AND POVERTY LABORFORCE Energyconsumption per capita(kilograms ofoil equi- Total laborforce (millions) - Economicallyactive valent)- Annual consumption of commercial pri- persons,including armed forces and unemployed but mary energy (coal and lignite, petroleum, natural excl g h s ad s s Dgas,and hydro, nuclear and geothermalelectricity). variousexcloudincountries housewives are are notndt comparable.ankidacrngtpeetlerosofhu- studentse.Dfntosn Privateincome distribution - Income(both in cash Femak (percent) - Femalelabor fore as a percen- and kmd) acumg to percentilegroups of house- tage of total labor force. holds ranked by total householdincome. Agriculture (percent)- Labor force in farming, Passengercars (perthousandpopulation) - Includes forestry,hunting and fishingas a percentageof total motor cars seating fewer than eight persons; ex- labor force. cludes ambulances,hearses and military vehicles. Industry(percent) - Labor forcein mining.construc- Newspapercirculation (per thowandpopulation) tion, manufacturingand electricity,water and gas as Averagecirculation of "daily general interest news- a percentageof total labor force. paper," defined as a periodical publicationidevoted Participationrate (percent)- total,male, andfemak primarilyto recordinggeneral news. It is considered * Participationrates are computedas the percentage to be "daily" if it appears at least four times a week. of populationof all ages in the labor force.These are Estimated absolutepoverty income kvel (USSper based on InternationalLabour Office(ILO) data on capita)- urbanand rural - Absolute poverty income the age-sexstructure of the population. level is that below which a minimal nutritionally Agedependency ratio - Ratio of population under 15. adequate diet plus essential nonfood requirements and 65 and over,to the workingage population(age are not affordable.These estimates are very approx- IS-64). imate measures of poverty levels, and should be interpreted with considerablecaution. HOUSING Estimatedpopulation below absolute povertr income .4veragesr:e of household(persons per household)- level (percent)- Percentages of urban and rural total, urban,and rural- A household consists of a populationswho livein "absolute poverty." Table 1.2
SOHALIA - Select be!opraphIc Indiestora
Total: 4,089,203 I. &MaulatIoa Hale: 2,048,691 Female: 2,040,512
2. Sua Ratlo 100.4 sales to 100.0 feaales. 46.0X I. OlsutrI6atioa Urban: 25.4X Rural: 28.6X Nomadlc:
4. C.Xl birth Rate 44-45 per 1,000
5. Ccuda DeaLitItAte 13-15 per 1,000 b. I&ZbSt )iLrtalityRate 146-180 per 1,000 live birtlhs.
.. 1IifuH&Pactaicy 45-49 years (both sexes) 19.5 U. )t_2d. 4Ai$a st iarriage Hale: 24.6 Female:
¶9. I t Literate Nale: 61.0 Female: 48.0
14..I.L,f rce Male: 74.9 (urban) 80.6 (rural) Patilzife&tIoURate Female: 32.6 (urban) 44.5 (rural)
1984. .. ,..L.: ~AtialyticailVolbtsue, Census of Population, - 78 -
Table 1.3 SOMALIA- Ass and Sex Distribution (). 1980 Survey
Urban Rural Noaic Ages Grout male Female Male ?eoule Male Yesmle
0- 4 7.6 7.2 8.6 7.8 8.6 7.3 5- 9 6.4 6.9 8.2 7.8 8.9 7.9 10 - 14 7.5 7.0 7.3 6.2 8.5 6.9 1S - 19 7.3 6.9 5.2 5.6 5.9 5.6 20 - 24 5.0 4.7 3.2 4.0 4.4 3.1 25 - 29 3.2 3.5 .2.4 3.3 2.2 2.7 30 - 34 2.7 3.0 2.9 3.6 2.8 3.1 35 - 39 2.0 2.1 1.9 2.1 1.6 2.2 40 - 44 2.5 2.3 2.8 2.9 2.9 2.2 45 - 49 1.3 0.9 1.1 1.2 1.3 1.0 50 - 54 1.9 1.4 2.2 1.9 2.5 1.5 55 - 59 0.6 0.4 0.9 0.7 0.8 0.2 60 - 64 1.0 t.1 1.3 1.2 1.6 0.8 65 + 1.3 1.3 1.8 1.9 1.7 0.8
All Ages 51.3 48.7 49.8 50.2 53.7 46.3
Source: AnalyticalVolume, Census of Ponulatlon, 1984 PAGE 1 TABLE 2.1 SOMALIA: GROSS DOMESTIC PRODUCT BY SECTOR CURRENT FACTOR COST. t975-85 (MILLIONS OF SOMALI SHILLINGS)
ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985
AGRICULTURE SECTOR 1 2,181.2 2.592.4 3,192.6 3,SS4.7 3,219.0 5,442.9 9,151.3 12,406.6 17,401.0 35,652.8 52,727.7 - _ -______-_ ------…_,______-______
CROP PRODUCTION 2 414.9 510.3 853.0 631.2 789.6 1.255.3 1,879.5 2.347.5 2.875.2 5.999.5 1t.015.8 LIVESTOCK * 3 1,540.9 1.833.6 2,366.0 2,627.2 2.044.1 3.561.5 6,309.7 8,771.3 12,477.0 25,444.9 35,882.6 FORESTRY 4 205.2 226.7 253.0 287.s 362.7 S82.5 876.0 1,171.8 1,923.1 3,795.6 5.343.4 FISHING 5 20.1 21.8 20.6 8.8 22.6 43.6 86.2 116.0 125.8 412.3 485.8
OTTHER COMMODITY SECTORS a 503.6 639.5 826.9 711.8 942.7 1,505.0 2,210.1 2,750.9 3,199.0 5,475.0 8,088.7 ------…______------
MINING AND QUARRYING 7 35.0 36.3 40.0 28.0 36.1 43.3 68.9 91.4 110.0 211.4 291.5 MANUFACTURING 8 226.4 337.2 439.1 434.0 572.5 928.8 1,332.0 1,621.3 2,093.4 3,399.0 5,435.0 ELECTRICITY 8 WATER 10 38.1 45.5 45.8 43.7 50.3 72.6 116.6 152.5 149.9 383.6 169.3 CONSTRUCTION II 204.1 220.6 302.0 206.1 283.8 460.3 692.6 885.6 845.7 1,48t.0 2,192.9
DISTRIBUTION SERVICES 12 725.9 642.8 802.1 989.0 1,067.5 1,797.3 2,499.4 3,348.3 4,930.8 9,886.8 14,625.7
TRANSPORT & COMMUNICATION 13 318.5 271.5 324.8 301.2 364.9 771.2 988.5 1,403.1 1,944.0 3,795.6 5,598.8 7RADE(WHOL/RET).IIOTELS & RES 14 407.4 371.3 477.3 687.9 702.6 1,026.1 1.510.9 1.945.2 2,986.8 6,091.1 9,026.9
OTIIER SERVICES 17 615.7 728.9 867.0 1,314.2 1.583.4 2,442.9 3,024.0 3.959.6 5,844.7 11.439.3 16.076.0
REAL ESTATE/INSURANCE/BANKIN 18 228.2 268.0 311.5 451.0 554.2 669.2 1,181.8 1,694.3 2,396.8 4,804.4 6.874.3 GOVERNMENT SERVICES 21 280.0 331.9 407.0 693.9 813.0 1,413.3 1,381.8 1,695.1 2,515.2 4,792.4 6578.6 OTHER 20 107.5 129.0 148.5 169.3 216.2 360.4 460.4 570.2 932.7 1.842.4 2,623.1 GDP AT FACTOR COST 23 4,026.5 4,603.6 5,688.6 6.569.8 6,812.5 11,188.0 16,884.7 22.465.3 31,375.5 62,453.8 91,518.1 ___ ------…__, ------______------
INDIRECT TAXES 24 448.4 478.3 649.6 919.1 1,287.8 1,145.9 2.149.6 2,184.9 2,944.9 2.537.1 4.899.3 GOP AT MARKET PRICES 25 4.474.8 5.081.9 6,338.2 7.488.9 8.100.3 12,333.9 19,034.3 24,650.3 34,320.4 64.991.0 96.417.4
1/ 198S ESTIMATES ARE PRELIMINARY.
SOURCE: MINISTRY OF NATIONAL PLANNING, NATIONAL ACCOUNT AGGREGATES' AND AND STAFF ESTIMAFES.
TABLE SOM/2Nfi PAGE I TABLE 2.2 SOMALIA: GROSS DOMESTIC PRODUCT BY SECTOR AT CONSTANT 1977 FACTOR COST, t975-85 (MUILLIONS OF SOMALI SHILLINGS)
ITEM 1975 1976 1977 1978 1979 1980 198t 1982 1983 1984 1985
AGRICULTURE SECTOR 31 2,747.1 2.845.7 3,192.6 3,225.7 2,361.7 2,511.7 2,920.0 3,229.2 3,320.8 3.541.2 3,799.1 - ______… ______------
CROP PRODUCTION 32 522.6 560.2 5S3.0 572.8 579.3 579.3 599.7 611.0 548.7 595.9 793.7 LIVESTOCK 33 1,940.7 2,012.7 2,366.0 2.384.0 1,499.7 1.643.5 2,0t3.3 2,283.0 2,381.1 2.527.3 2.585.4 FORESTRY 34 258.5 248.9 253.0 260.9 266.t 268.8 279.5 305.0 367.0 377.0 385.0 FISHING 35 25.3 23.9 20.6 5.0 16.6 20.1 27.5 30.2 24.0 41.0 3S.0
OTtlER COMMODITY SECTORES 36 634.3 702.0 826.9 645.9 691.6 694.5 705.2 716.0 610.4 543.8 S82.0 __ ___. ______…___…____ _ ------AND MINING QUARRYING 37 44.1 39.5 40.0 25.4 26.5 20.0 22.0 23.8 21.0 21.0 21.0 MANUFACTURING 38 285.2 370.1 439.1 393.8 420.0 428.6 425.0 422.0 399.5 337.6 391.6 ELECTRICITY 5 WATER 40 48.0 49.9 45.8 39.7 36.9 33.5 37.2 39.7 28.6 38.1 12.2 CONSTRUCTION 41 257.0 242.2 302.0 187.0 208.2 212.4 221.0 230.S 161.4 147.1 158.0 DISTRIBUTION SERVICES 42 914.2 705.6 802.1 897.5 783.2 829.4 797.5 871.5 941.0 982.0 1.063.6 ° __------___-____ -__ - --_ -- _-- -- *------I
TRANSPORT & COMICATION 43 401.1 298.0 324.8 273.3 267.7 355.9 315.4 365.2 371.0 377.0 403.4 TRAOE(WIUL/RET).HOTELS 8 RES 44 513.1 407.6 477.3 624.2 51S.5 473.5 482.1 506.3 570.0 605.0 650.4 OITIER SERVICES 47 775.5 800.1 867.0 1.192.6 1.161.7 1.127.3 964.9 1,030.6 1,115.4 1,136.2 1,158.3
REAL ESTATE/INSURANCE/BANKIN 48 287.4 294.2 311.5 409.3 406.6 308.8 377.1 441.0 457.4 477.2 495.3 GOVERNMENTSERVICES 51 352.7 364.3 407.0 629.7 596.5 652.2 440.9 441.2 480.0 476.0 474.0 OTHER 50 135.4 141.6 148.5 t53.6 158.6 166.3 146.9 148.4 178.0 183.0 189.0 GDP AT FACTOR COST 53 5.071.1 5,053.4 5.688.6 5,961.7 4,998.2 5,162.9 5,387.6 5,847.3 5,987.6 6,203.2 6,594.0
INDIRECT TAXES 54 564.7 525.0 649.6 834.0 944.8 528.8 685.9 568.7 562.0 252.0 353.0 GDP AT MARKET PRICES 55 5,635.8 5,578.4 6,338.2 6,795.7 5,943.0 5,691.7 6,073.5 6,416.0 6,549.6 6,455.2 6,947.0
t/ EStIMATES FOR 1985 ARE PRELIM[NARY. SOURCE: MININSTRY OF NATIONAL PLANNING AND STAFF ESTIMATES.
TABLE $GM/2tJ/2 - PAGE 1 TABLE 2.3 SOMALIA; EXPENDITURE ON GROSS DOMESTIC PRODUCT, CURRENT MARKET PRICES. 1975-85 (MILLONS OF SOMALI SHILLINGS)
------__--__------ITEM 1975 1976 1977 1978 1979 1980 1981 1982 *983 1984 198S
GROSS DOMtESTIC EXPENDtTURE 60 5.120.0 5,783.7 7,560.7 8,565.4 9,990.7 14,428.9 20,922.8 29.055.8 39,444.6 72.517.4116,479.1
CONSUMPTION 61 4.112.0 4.264.7 5,573.7 6.593.4 9,323.7 13,835.9 17.825.8 25.335.8 34.572.2 62.352.810t.7t7.6 PUBLIC 62 909.0 861.0 1,128.0 1,668.0 1,937.0 3.011.0 3,273.0 4.388.0 5,054.0 86448.8 11.647.2 PRtVATE 66 3,203.0 3.403.7 4,445.7 4.925.4 7,386.7 10.824.9 14,552.8 20,947.8 29,518.2 53,904.0 90.070.4 DOMESTIC INVESTMENT 67 1,008.0 1,519.0 1.987.0 1.972.0 667.0 593.0 3,097.0 3,720.0 4,872.5 tO,164.6 14,761.5 GROSS FIXED CAP. FORM. 68 684.0 818.0 1,240.0 1.021.0 1,157.0 1.154.0 1.287.0 2.070.0 3,775.2 9,027.2 13.461.5 BUILDING/INFRASTRUCTURE 69 348.0 362.0 477.0 350.0 396.0 394.9 440.5 708.4 1,245.8 3.159.5 4.S76.9 EQUIPMENT 70 336.0 456.0 763.0 671.0 761.0 759.1 846.5 t.361.6 2.529.4 5,867.7 8.884.6 CHANGE IN STOCK 71 324.0 701.0 747.0 951.0 -490.0 -561.0 1.810.0 1.650.0 1.097.3 1.137.4 1.300.0 RESOURCE BALANCE 72 -645.2 -701.8 -1,222.5 -1.076.5 -1.890.4 -2.095.0 -1,888.5 -4.405.5 -5,124.2 -7.526.4-20.061.7
EXPORTS (GOODS) 73 557.7 509.9 448.8 689.3 667.3 844.8 717.6 1,680.8 1.586.2 1,344.8 6.740.1 * IMPORTS (GOODS) 74 -1,021.0 -1,108.5 -1,617.2 -1,734.3 -2,480.9 -2,902.0 -2,656.5 -6,331.1 -7.088.4 -8.806.1-26.585.2 NON-FACTOR SERVICES (NET) 112 -181.9 -103.2 -54.1 -31.5 -76.8 -37.8 50.4 244.8 378.0 -65.1 -216.6 GDP AT MARKET PRICES 75 4.474.8 5,081.9 6.338.2 7,488.9 8,100.3 12,333.9 19,034.3 24,650.3 34.320.4 64.991.0 96,417.4
NET FACTOR INCOMtE FR ABROAD 110 1.9 7.6 13.2 22.0 15.7 -5.7 -28.3 -57.7 -75.6 -130.1 -125.0 GNP AT MARKET PRICES 11t 4,476.7 5,089.5 6,351.4 7,510.9 8.t16.0 12.328.2 19.006.0 24,592.6 34.244.8 64,860.9 96.292.4
SOURCE: NATIONAL ACCOUNT AGGREGATES. MNP AND STAFF ESTIMATES. -1ABLE SOM/2N/3 PAGE 1 TABLE 2.4 S04ALIA; EXPENDtTURE ON GROSS DOMESTIC PRODUCT. AT CONSTANT t977 PRICES, 1975-85 (MILLONS OF SOMALI SHILLINGS)
ITEM 1975 1976 t977 1978 t979 1980 198t 1982 1983 1964 1985
GROSS DOMESTIC EXPENDITURE 80 6,177.6 6,307.8 7.560.7 7,824.1 7,523.8 7.225.3 7,535.1 8,050.6 8,147.1 8.034.8 8.093.8
CONSUMPTION 81 4,908.1 4,640.4 5,573.7 6,034.6 7,034.4 6.95t.6 6.546.9 7,082.4 7,217.2 7,025.2 7,030.2 PUBLIC 82 1,144.8 945.1 1,128.0 1,513.6 1,421.1 1.389.5 1.044.4 1,142.1 964.5 839.2 839.2 PRIVATE 86 3,763.2 3,695.3 4.445.7 4,521.0 5,613.3 5,662.2 5,502.6 5,940.2 6,252.7 6.186.0 6.191.0 DOMESTIC INVESTMENT 87 1,269.5 1,667.4 1,987.0 1.789:5 489.4 273.7 988.2 968.2 929.9 1,009.6 1,063.6 GROSS FIXED CAP. FORM. 88 861.5 897.9 1,240.0 926.5. 848.9 532.5 410.7 538.8 720.5 896.6 969.9, BUILDING/INFRASTRUCTURE 89 438.3 397.4 477.0 317.6 290.5 182.2 140.6 184.4 237.7 313.8 329.8 EOUIPMENT 90 423.2 500.5 763.0 608.9 558.3 350.3 270.1 354.4 482.7 582.8 640.1 CHANGE IN STOCK 91 408.1 769.5 747.0 863.0 -359.5 -258.9 577.5 429.5 209.4 113.0 93.7 RESOURCE BALANCE 92 -541.8 -729.4 -1,222.5 -1,028.4 -1,580.8 -1.533.6 -1,461.6 -1,634.6 -1.597.5 -1,579.6 -1.146.8
EXPORTS (GOODS) 93 624.9 522.9 448.8 512.2 428.4 477.4 428.2 573.3 465.1 264.9 360.5 IMPORTS (GOODS) 94 -990.3 -1,145.6 -1.617.2 -1,513.1 -1.948.9 -1.985.2 -1,926.3 -2.318.1 -2.178.8 -1.831.0 -1.482.7 NON-FACTOR SERVICES (NET) t22 -176.4 -106.7 -54.1 .. -27.5 -60.3 -25.8 36.5 110.2 116.2 -13.5 -24.6 GOP AT MARKET PRICES 95 5,635.8 5,578.4 6,338.2 6,79S.7 5,943.0 5,691.7 6,073.5 6,416.0 6,549.6 8,455.2 6,947.0
NET FACTOR INCOME FR ABROAD 120 .2.4 8.3 13.2 20.0 11.5 -2.6 -9.0 -15.0 -14.4 -12.9 -9.0 GNP AT MARKET PRICES 121 5,638.2 5,S86.7 6,351.4 6,815.7 5,954.5 5,689.1 6,064.5 6,401.0 6,535.2 6,442.3 6,938.0
SOURCE: NATIONAL ACCOUNT AGGREGATES, MNP AND STAFF ESTIMATES. TABLE SOM/2N/4 iPAE 1 TABLE 3.1 SOMALIA: BALANCE OF PAYMENTS (MILLIONS OF US $ )
-- _------______------__------__---_--__-_-----______-----______-----__------_ ITEM 1975 1976 1977 1976 1979 t196 t916 1962 1983 1964 t185 ------______------__------
EXPORTS (F.O.B.) 33 88.6 61.0 71.3 109.5 106.0 134.2 114.0 136.9 100.7 62.0 92.S LIVESTOCK 55 57.0 47.9 47.6 90.6 75.3 t10.7 98.0 105.7 72.0 33.1 66.O BANANA 56- 12.9 14.0 8.4 9.4 11.6 8.1 6.0 14.0 15.0 14.1 12.0 OTHERS S7 18.7 19.1 15.3 9.5 19.1 24.4 10.0 17.2 13.7 14.8 13.5
IMPORTS (C.I.F.) 34 162.2 176.1 256.9 275.5 394.2 461.0 422.0 484.0 450.0 406.0 362.0 FOREIGN EXCHANGE 59 162.2 176.1 256.9 192.0 323.4 331.0 205.0 204.0 206.0 156.0 111.0 GRANTS IN KIND 61 - - - 21.0 15.1 69.0 140.0 157.0 147.0 151.0 138.0 LOANS IN KIND 62 - - - 62.5 55.6 61.0 77.0 123.0 97.0 99.0 113.0
TRADE BALANCE 32 -73.6 -95.1 -185.6 -166.0 -288.1 -326.8 -308.0 -347.1 -349.3 -344.0 -269.5
NON-FACTOR SERVICES (NET) 35 -28.9 -16.4 -6.6 -5.0 -12.2 -6.0 9.0 23.0 24.0 -3.0 -6.0 TRANSPORT & INSURANCE 36 -2.9 -3.0 -1.4 -0.6 1.6 -5.3 1.3 -3.5 -9.6 -10.0 -10.5 GOVERNMENT.N.E.I 39 -26.0 -13.4 -7.2 -4.4 -14.0 -0.7 7.7 26.5 33.5 7.0 4.5
RESOURCE BALANCE 31 -102.5 -111.5 -194.2 -171.0 -300.3 -332.8 -299.0 -324.1 -325.3 -347.0 -275.5 ______------_ ------W ------
INTEREST PAYMENTS 71 -1.0 -1.0 -1.0 -1.0 -1.0 -2.0 -10.0 -14.0 -21.0 -44.0 -43.0 PRIVATE TRANSFERS (NET) 42 1.9 4.2 13.1 26.0 35.9 57.0 64.0 50.0 51.0 72.0 20.0
CURRENT BAtANCE 44 -101.6 -106.3 -182.1 -144.0 -26S.4 -277.9 -245.0 -283.1 -295.3 -319.0 -293.S
CAPITAL ACCOUNT
OFFICIAL GRANT AID 43 100.2 39.7 105.9 78.0 58.1 143.0 150.0 157.0 148.0 174.0 179.0 DIRECT INVESTMENT 80 6.7 2.2 7.8 0.3 ------
PUBLIC MaLT LOANS. NET 45 59.0 68.1 59.9 79.3 84.0 87.0 79.0 123.0 100.0 46.0 69.0 DISBURSEMENT 46 62.9 71.0 63.6 84.0 87.1 97.0 93.0 131.0 107.0 106.0 114.0 REPAYMENT 47 3.9 2.9 3.7 4.7 3.1 10.0 14.0 8.0 7.0 60.0 45.0
PRIVATE CAPITAL. NET 103 -18.4 1.2 10.8 7.0 23.0 2t.0 3.0 -36.0 -39.0 -40.0 -33.0 (INCL. ERRORS AND OMISSIONS)
OVERALL BALANCE 104 48.9 2.9 2.3 * 20.6 -100.3 -26.8 -13.0 -44.1 -86.3 -139.0 -85.5
FINANCING ItO -48.9 -2.9 -2.3 -20.6 100.3 26.8 13.0 44.1 86.3 139.0 88.5
CENTRAL BANK 105 - -1.0 -1.5 -8.0 85.0 43.0 33.0 64.0 47.0 13.0 28.0 0/W USE OF FUND CREDIT 51 ^ - - - - 4.0 30.0 34.0 44.0 -3.0 32.0 PAGE 2 TABLE 3.1 SOMtALIA: BALANCE OF PAYMENTS (MILLIONS OF US S )
------______------______,- _--- __-- __------ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1934 198S
COMMERCIAL BANK. NET 106 -48.9 -1.9 -0.8 -12.6 15.3 -16.2 -20.0 -19.9 39.3 29.0 -31.S ARREARS .107 ------71.0 -58.0 OEBT RELIEF tO9 ------26.0 150.0
MEMO ITEMS:
GROSS FOREIGN RESERVES 69 68.4 84.9 120.0 126.3 51.0 25.0 42.0 14.0 16.0 6.0 8.0 IN WEEKS OF CASH IMPORTS 70 5.1 23.2 28.0 34.9 8.2 3.9 10.7 3.6 4.0 2.0 6.0
______.______NOTE: DATA FOR EXPORTS AND IMPORTS BOTH ARE UNDERRECORDED. t/ PRELIMINARY ESTIMATES. 3/ INCLUDES COUNTERPARTS TO VALUATION AoDJUSTMENTS. SOURCE: DATA PROVIDED BY THE CENTRAL BANK OF SOMALIA. IMF; AND STAFF ESTIKATE. c TABLE SOM/38/2 - PAGE 1 TABLE 3.2 SOMALIA: VALUE OF EXPORTS BY MAJOR COMMODITIES BASED ON FOREIGN EXCHANGE RECORD (MILLIONS OF SOMALI SHILLINGS)
ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985
BANANAS tt 80.9 88.2 53.1 59.0 73.2 51.2 -39.6 113.7 103.3 284.4 533.0 LIVE ANIMALS 12 358.7 301.8 299.5 570.4 474.1 639.5 1.001.9 1,516.9 1,122.1 514.4 2,604.0 MEAT AND MEAT PRODUCTS 13 59.3 37.1 32.1 0.7 7.3 6.5 2.6 0.3 2.7 - - HIOES AND SKINS 14 20.7 44.4 23.6 29.7 56.4 41.8 18.5 56.2 20.9 74.8 7.4 FISH AND FISH PRODUCTS tS 17.4 23.3 21.2 4.3 2.7 1.5 9.6 35.2 33.0 7.6 169.2 MYRRH 16 14.3 11.3 11.9 14.8 21.0 61.5 28.8 50.5 89.9 49.3 172.8 OIL 9 - - - - - 61.0 - 58.8 42.7 89.6 63.0 OTHER 17 6.3 4.1 7.7 10.2 32.7 15.4 2.9 4.7 8.4 76.1 26.5
TOTAL 18 557.6 510.2 449.1 689.1 667.4 878.4 1,103.9 1.836.3 1.423.0 1.096.2 3.575.9
SOURCE: CENTRAL BANK OF SOMALIA
TABLE SOM/3T/2 - 86 -
Table 3.3
Somalia: Exportsby Commodit-.1980-85 (In millionsof. US2j
1980 1981 1982 1983 1984 1985
Live Animals 101.7 98.0 105.7 72.0 33.1 66.0 Bananas 8.1 6.0 14.0 15.0 14.1 13.0 Fuel Oil 9.8 - 3.9 3.0 4.3 1.6 Meat& Meat Products 1.1 0.4 - 0.2 - Fish & Fish Products 0.3 0.9 3.0 2.3 0.4 0.2 Hides& Skins 7.0 2.3 6.3 1.5 3.9 4.3 Myrrh 3.7 3.7 3.7 6.3 2.4 3.9 Other 2.5 2.7 0.3 0.4 3.8 3.5
Total 134.2 114.0 136.9 100.7 62.0 92.5
Source: Somaliauthorities and IMF. 87-
Table 3.4
Somalia: Number and Value of LivestockExports. 1976-86
Total Total Value,f.o.b. Sheep Goats Cattle Camels Livestock (Millionsof ('000) ('000) ('000) ('000) ('000) So. Sh.)
1976 385 381 58 34 858 301.9 1977 465 462 55 33 1,015 299.5 1978 739 715 77 22 1,553 570.6 1979 717 705 68 13 1,503 474.1 1980 745 736 143 17 1,641 639.5 1981 685 680 116 15 1,496 1,001.9 1982 730 719 157 15 1,621 1,511.9 1983 569 557 54 8 1,188 1t129.3 1984 389 362 8 4 763 670.8 1985 709 749 42 7 1,507 5,247.6 1985 2 34 34 -- -- 68 1986 2 81 82 3 1 177
!/ Exchangetransaction records. 2/ ThroughFebruary. Source: Ministryof Livestock,Central Bank of Somalia,and IMF. PAGE i TABLE 3.5 SOMALIA: VALUE OF IMPORTS BY MAJOR COMMODITIES BASED ON FOREIGN EXCHANGE RECORD (MILLIONS OF SOMALI SHILLINGS)
ITEM 1977 1978 1979 1980 1981 1982 1983 1984 1985
FOOOSTUFF 150 145.0 58.2 222.6 274.9 224.0 557.6 453.7 267.5 716.3 8EV & TOBACCO 151 44.2 62.7 62.4 48.4 15.7 57.6 112.1 79.4 43.5 TEXTILES/H.GOODS 152 16.9 34.3 26.4 20.9 23.7 22.5 36.2 37.3 70.4 MEDICINES/CHEN 153 43.5 33.8 44.3 143.7 49.4 70.0 126.1 64.4 40.0 MFG RAW MATERIALS t54 46.2 61.0 66.5 29.7 48.2 75.9 127.4 66.4 47.9 AGRI. INPUTS 155 1.7 2.7 22.8 30.5 8.4 1.4 20.0 0.2 - PETROLEUM 156 100.7 14.5 281.3 410.3 452.4 991.9 881.5 902.7 1,496.4 CONST MATERIAL 157 41.1 29.0 49.8 32.4 58.7 203.2 336.8 193.0 653.0 MACHINES & PARTS 158 156.6 181.9 205.2 240.2 141.2 219.8 209.5 293.1 567.0 TRANSPORT & PARTS 159 125.6 126.8 342.2 236.5 128.2 157.4 211.3 145.6 594.7 FARM MACHINES 168 - - 230.9 142.6 6.9 12.7 6.9 12.1 1.2 OTHERS 170 434.2 595.0 264.2 129.3 41.9 54.0 322.9 155.3 120.0 TOTAL 169 1.155.7 1.199.9 1,818.6 1t739.4 1,198.7 2,424.0 2,844.4 2.217.0 4,350.4
SOURCE: CENTRAL BANK OF SOMALIA NOTE: THIS DATA IS BASED ON FOREIGN EXCHANGE DATA COLLECTED BY THE CENTRAL BANK OF SOMALIA. IT EXCLUDES IMPORTS THROUGHiTHE FRANCO VALUTA SYSTEM AND FOREIGN CURRENCY ACCOUNTS. TABLE SOM/3T/10 -89-
Table 3.6
Somalia: Direction of External Trade, 1980-84 (In percent of total exports and imports)
1980 1981 19?2 toil _ _ _ Exporcs IMportsExports liports txportsImports txportsLmports lxpurta :aports
Industrialcountries 16.2 71.4 9.5 66.4 16.2 66.0 15.5 S6.6 9. 06.7 Of whicht France 0.4 7.5 0.7 2.7 0.4 1.6 0.2 2.3 1.0 4.8 Germany 1.4 4.8 0.1 7.2 O.S 7.2 0.4 6.1 _ 5.2 Italy 12.9 34.6 6.3 22.4 13.4 33.9 14.1 28.1 5.8 21.3 Japan - 1.3 -- 1.4 -- 0.7 -- 3.0 -- -- UnitedXtngdom- 0.2 7.9 1.2 6.4 0.9 5.0 0.6 7.4 1.5 4.9 UniotdStates 0.2 9.2 0.1 14.5 0.6 10.8 -- 12.0 1.0 20.3
Oil exportingcountries 79.2 7.8 76.3 8.8 70.8 l.1 68.9 1J.- 62.S 17.7 Of vhicht SaudiArabla 69.9 5.5 71.9 5.8 65.6 15.3 65.8 15.5 59.1 12.6 Afrtce 1.1 10.7 1.4 4.6 0.8 3.9 0.8 4.1 -- Of vhtich Djibouti 0.8 4.4 0.8 3.4 0.7 2.9 0.6 2.9 -- 3.3 tny, 0.3 4.0 - 1.1 - 0 .9 -- 0.9 -- 1.0 Asia 0.7 7.1 1.7 11.0 2.2 9.6 5.1 .0 .0 8., Of whicht China, People's Repubitc of 0.5 2.1 1.2 3.7 2.0 4.5 2.6 2.3 S.4 2.7 Pakistan - 1.0 - 1.0 - 1.0 - 1.0 - 1.0 ThailAnd - 0.9 - 4.5 - 2.4 - 0.6 2.9
Middlo east 2.7 0.3 10.8 5.7 9.5 0.9 9.2 0.9 18.9 1.0 of which: osemnArsb Republic - -- 8.2 - 7.2 - 7.0 -- 11.5 - moensPeople's DemocraticRepublic 2.1 _ 2.5 - 2.2 - 2.2 - 2.6 - U.S.S.R. and EasternEurope _ . - 0.4 - 0.3 - 0.3
Other 0.1 0.1 0.2 0.4 0-3 0-1 0.7 1.5 1.? Total 100. W l.0 0 100.0]&g0. 100.0 100.0 100.0 lO.Oa
Source: MNs Direction of Trade Yearbook 1984 and 1985; most data are derivedfrom partnercountrtes. -90-
Table4.1 Somalia: ExternalDebt Outstanding.19809-65 (In millionuof U.S. dollars;*nd of period)
1969 1961 1982 1908 1984 19S5
It. AcencTfis - ~ 294.6 861.7 432.1 476.0 531.4 457.6 1. Multilateral 14S.0 214.4 260.9 290.9 321.4 828.7 AfricanDev. Bank 2.8 2.5 2.2 1.9 1.9 4.3 AfricanDOv. Fund 7.4 7.1 11.0 17.1 24.1 30.9 Arab Fund 40.0 51.0 87.8 78.2 76.2 76.0 EEC/EIB 6.4 5.4 5.4 5.6 5.0 6.2 IDA 72.2 91.2 107.7 124.1 143.3 164.0 IfAD - 1.1 2.9 5.3 9.6 3.5 IslamicDov. Bank 7.6 29.2 28.6 22.8 22.8 4.5 OPEC Fund 9.8 28.9 36.8 35.7 35.7 39.3 2. Bilateral 148.5 167.3 171.2 186.1 210.0 134.1 KuwaitFund 30.7 87.6 41.4 54.8 78.2 82.5 Soudi Fund 117.8 129.8 129.8 130.3 138.8 61.8
II. Countries 380.5 406.7 433.9 456.6 490.3 869.1 1.. OECD 48.1 60.7 101.4 121.5 126.6 197.8
France - - 5.7 15.1 16.5 38.8 Italy 1.0 14.0 19.5 18.7 21.9 196.6 USA 47.1 46.? 76.2 87.7 89.1 46.0 Japan - - - - - 6.8 2. Other 222.8 236.7 223.4 224.8 262.2 251.8 Abu Dhabi 74.8 88.9 89.6 101.9 101.9 191.9 China 110.3 110.0 97.6 98.0 119.8 119.8 Iraq 29.8 28.1 26.4 18.4 16.5 18.5 Other1 8.1 9.7 9.9 9.9 24.0 13.6 8. Special 109.6 109.3 199.1 109.5 109.5 109.5
Bulgaria(est) 6.0 680 6.0 68. 6.0 6.0 USSR 103.0 103.3 103.1 103.5 103.5 193.6 4. ParisClub 1965 121.0
TOTAL,EXCL. IMF/AMF 676.0 ?88.4 868.0 991.8 1029.7 1137.9 IMP 17.8 46.8 79.6 122.7 112.8 142.4 AMf 5.7 31.2 37.7 43.2 43.2 49.5 Suppliers Ciedits - 104.1 103.6 103.3 103.3 212.9 FinancialInstitutions - 25.1 59.5 59.6 59.6 - GRANDTOTAL 698.5 996.4 1148.4 1280.5 1346.5 1642.7
1/ IncludesAlgeria, Romania, Denmark, Libya and Yugoslavia. Source: SomaliAuthorities, IMF and staffestimates. Table 4.2 Sonalta: Debt Service Payments, 1980-85 1/
(In millions of U.S. dollars)
1980 1981 1982 1983 1984 1985 Prov.
Amortizatton 6.9 14.3 10.0 8.9 64.0 2/ 61.0 31 Of which: I-) --) () () (34)f (16.0f Arah Monetary Fund () (-) () (~) (-) (5.5)
Interest 1.3 10.3 13.8 20.6 44.0 4/ 49.0 S/ Of which: IMF (0.4) (0.4) (3.3) (5.2) (4.7f (13.OF Arab Monetary Fund (--) (-) C--) (--) (--) (5.1)
Total 8.2 24.6 23.8 29.5 108.0 110.0
Total (excluding IMF and AMF) 7.8 24.2 20.5 ' 24.3 99.9 70.4
HemoranduimItems:
Debt service ratio 6/ 4.1 10.4 12.5 17.6 57.5 68.1 (ExcludIng IMF and AMF) (3.9) (10.4) (10.8) (15.7) (53.5) (43.7)
Source: IMF, Recent Economic Development, Septeniber,1986
I/ On meditum-and long-term public and publicly guaranteed debt; 1980-83 data on a cash basis; 1984-85 data on an accrutalbasis. 2/ On a cash basis, US$4 millton. 3/ On a cash basis, US$27 million. 4/ On a cash basis, USt7 million. 5/ On a cash basts, US$23 million. 6/ As percent of exports of goods and services (including workers' remittances). - 92 -
Table 4.3
Somalia:External Debt Arrears (Millionsof US Doll-ars; End of Period)
1984 1985
I. AGENCIES 35.627 22.563 1. Multilateral 20.220 18.441 African D-v. Bank 0.45 0.114 African DQv. Bank 0.19 _ Arab Fund 4.41 11.878 EEC/EAB _ _ IDA 0.696 IFAD IslamicDev. Bank 12.78 0.643 OPEC Fund 2.39 5.109
2. Bilateral 15.407 4.122 Kuwait Fund 1.97 0.617 Saudi Fund 13.44 3.505
II. COUNTRIES 168.68 125.81
1.OECD 54.84 - France _ Italy 54.84 USA Japan
2. Other 55.743 58.149 Abu Dhabi 37.62 40.097 Algeria - 0.116 China 13.33 16.666 Iraq - - Romania (east) 0.64 1.270 Yugoslavia 4.16 -
3. Special 58.11 67.66
Bulgaria (east) 3.45 4.007 USSR 54.66 63.655
TOTAL ex. IMF/AMF 204.311 148.374
IMF - 15.194 AMF 4.49 10.277
Credit Lyonnais 5.583 -
GRAND TOTAL 214,385 173,845
Source: Data provided by Somali authoritiesand staff estimates. - 93 -
TABLE 4.4 SOMALIA: AVERAGE TERMS OF NEW COMMITMENTS BY CREDITOR, 1980-85
TYPE OF CREDITOR 1980 1981 1982 1983 1984 1965
BILATERAL LOANS Interest Rate () 3.7 3.3 1.6 2.1 0.0)- Maturity (years) 19.8 29.6 26.9 22.2 21. U Grace period (years) 6.2 8.1 8.5 4.1 6.C) Grant element (%) 40.4 53.0 63.7 45.4 6q9. --
MULTILATERAL LOANS Interest Rate (%) 0.8 4.8 2.1 3.0 0.3 0.) Maturity (years) 27.9 12.2 25.7 36.1 49.6 42.9 Grace period (years) 6.1 5., 5.1 7.6 10.1 83 Grant element (X) 58.2 26.6 51.6 57.4 33.1 .1
SUPPLIERS CREDITS Interest Rate (7.) -- 8.0 ------Maturity (years) -- 5.9 Grace period (years) -- 0.4 ------Grant element (-.) 4.6 --
FINANCIAL INSTITUTIONS Interest Rate (%) -- 7.7 Maturity (years) -- 11.5 Grace period (years) - 1.5 Grant element (%) -- 9.0
TOTAL ALL CREDITORS Interest Rate (%) 2.0 5.9 1.8 2.5 0.2 0.8 Maturity (years) 24.6 13.4 26.4 28.1 28.9 42.9 Grace period (years) 6.1 3.9 7.0 5.6 7.1 8.8 Grant element (/) 51.0 22.9 58.6 50.5 7:3.5 78.1
SOURCE: World Bank Debt Reporting System - 94 - Table 4.5 August 8, 1986 SOMALIA:EXTERNA DEBT sERVICEOBLIGATIONS, 1986-90 1/ correct±Oh1Z ~~(Inthousands of U.S. dollars)
L' k itm M 4 3357. 3354.3 79401433032 %si2a. VMu.2095. 50325A. 5952. 14934.1 74457.0 31164.1 M194.3 5143. 0. IltiSateral *43. 22559.162V12. MUM1. 19164.10356.2 1291.1 17M11.90133. 404. 5126. 6233 ML62. 9469.639622.
AMrC"kw,. lot 406.4 43L.0 344.9 677.9 567.2 12451 67.4 493. 1136.0 671.9 423L9 1506.9 W.49 339.0 .7 AngemaW. Fand 67.1 25.2 324.7 16.1 329.5 445.6 132.1 361.6 4937 IRA. 366.4 553. 33S3.0 4.1 69.3 ArabFew 3733.3 33954 7643.1 5662 26653 030.5 WA0. 3249.7 9753. 532.9 3721. VMS. 1026W3VW HU73. Evaem IaWot. Oak L.g 25.4 2.4 0.0 36.7 36.7 29.2 39.5 241.1 264.1 33.5 242.6 734.6 31.S 3235 155 363.3 1637.2 2500. 1536.9 1724.7 2361.6 5303. 57463 3344.4 5427.2 1744.9 3112.0 1629.2 1739. 316.0 an1 0 573.5 173. 0.O 23.4 23.4 L*O 247.3 247.3 9.4. 275. 36. 31557 279.3 635.0 Islamictoy. bib 423.5 211.5 634. 4235 200.7 624.2 42.5 510.4613.9 423.5136.0 603. W17. 171.0546.5 gm P.6 3502.5 135. 36375 3332. 116.6 3619. 3502.5 5.2 35. MU2. 71. 328.4 3502.5 65.6 3564. SIfled.Tfut F.i) 234". 1394. 4133.W 9.0 0W5033. 40135.03329.0 335. 46690.0=16. 54W$.43310.0 14933.0 2665. 51595.0 Arbt Ut.5w Fad 2533.2900.0 23L 2316.0 2921. 215M.021917. SW5. 332.0 5.0 0.0 0.0 LO LO LS0
L. SietwaI n21.4 2735. 4305. 95732 32M4 124U. 15122 3434 W31.0 1732 2617.512W3. 391.52346.7 1O242.
1031 FOl 1313.1 1522.6 W55.7 3672. 1354.9 332.3 3672.9 131&33.65L6. 3612.9 1337.3 5010.2 3991.2 1273.6 5269. SUdi Fad 5900.3 1565.5 7453500.3L I531.5 7437.3 59433 S46UM 135. M30. 5310.2 726.5 5900. 126.6 756. 15'.Catrim 61396. 39254.1$60650.9 62335 30141.51303.0 6530.0 2731.0 1252a 64675.324566 3951.9 613151.352397 I1WL$
L. 10 cembin 22202 1454.141594.3 200454 13MI39393747.3 2300. 17615. 39711. 2657.6 1633.5 4695.1 M24C. 1432.0 46010.
Itm 2313.0~VM333. 5346. 2775. 3677. 6252 3523. 315.3 65533 3191.* 276. 6355. 3074.5 Z335.39 L53 Jtaly 16672. AU63360253.115a31.1 5024. 2545.1WW149 3.1 L 2630.? 17354. 4615.22203.1 119L. 335. 2533.1 la400 L0 44.3 44.3 5.0 149. 149.5 LS0 SW9. 38j. 3.0 194.3 394 360 3I.3 - 394.3 M3 30344 9609. 5264.1 3641.6 9247. 125.3 3613. 3915U1391. 3620. 359.2 52212. 4190. 33239 512.2
L A.ais 25 1.3W.8 29935.524165.7 413R1.536. 20L6 366. 3617.4 J333.5 374.4 2713. 1139A.4214W -. =LI. No ii 1012L.0239.7 12933. 50125.12453.7 12513. 053.1 2066. M21L3O0125.1 1643. 11713.3101. 1233.1 1133. movie 130.0 54.0 514.0 100.0 12. 152.0 135. 10.0 115.0 1SO.$ LO 5000 100. 6.0. 1I6. P4. of 05. 3275. 5.0 3275. 335. 3.0 1535. 1694.9 5.6 10974. 10974.9 5019495123 9036. Iraq 2351.1 3342.5 5643. 261. 96.1 3025. Mi20.2010 2. 765 25. 13.031.0 95.4 259.4 baul. 4611.0 512.0 6064.0 2525.9W93. 316. 1013. 451.1 15114.5 361.3 440.7 242.0 64I10 335 j12. WI.sd 5031.2 243.6 524.3 5031.2 1624 1193.6 1031.2 131.5 15UL? 5031.2 100.5 1131.7.1031j 69A.6..1100 W.msraliaf .Vi 7060.3139. 16957.31064.2 5166. 12315.0706.2 4614.111671.9 4215. 402. 327.5 LO 316E 1335.6 Froaca 13.4~~796.1 374.5 10.4 W7.4 63L.3 13.4 54L.7 62.1 71.5 540.1 611.6 0.0- 33,~i 536. Itels 5550.42445.2 3501.6 1110.4 1612. 2792. 1116.4 1660.2 277.6 HI00, 16318. 273.4 .5.0 1656. V1.S ILL 566.5 4444710514.2 5564.5 1152. 6137. 5664. 624.0 135.5 23322 25.6 2957.3 5.0 .A 5.0 U.LA. 211.0 2116.5 232.5 210.9 5304.5 20)5.4 210.9 5131.3 5912. 250.9 1753. 1j69. 5.0 116. 1736.0
3LSpKtal bilawdre 50619.01533. 12157.71030.2 193.7 1255. 106002 5533.7513339 100002 1M3. 1253.9503332 55357.1.223.
hlgwte 426. 0.0 42.5 607.7 LO 607. 607. 0.0 607.7 607.7 0.6 607. W07?' 5. 60.7. U.S.S.R 10592.51531. 15731.250192.5 193.7 .15731.210112. 1533.711731.2 50192.5153L. 15731.210192. 153L7*,1173.2 Ill. Tit,! J01753.2ML$2. 113363.2 136972.3 52174.6 59149.3 14730.3 43051.3 51975.6 124190.2 391907163935. 502354 3434.1.13519.2
1/Coversmedium and long-termdebts only; serviceobligations on externaldebt outstandingat end-1985.
2/ 1985 Paris Club rescheduling.
Source: Ministryof Finance,External Debt Unit. PAGE I TABLE 5.1 SOMALIA: FINANCIAL OPERATIONS OF THE CENTRAL GOVERNMENT. 1976-86 (MILLIONS OF SOMALI SHILLINGS)
ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 lOTAL REVENUE 266 628.4 670.7 890.0 1,419.6 1.526.0 1.421.4 2.262.6 2.759.6 4,252.5 3,978.7 5,220.0
TAX REVENUE 2 544.7 576.4 708.6 1,228.2 1,377.1 1,242.1 2,067.3 2.477.9 3,463.5 2,979.9 4.582.4 NONIAX REVENUE 3 83.7 94.3 181.4 191.4 148.9 179.3 183.3 109.7 611.0 793.8 637.6 TRANS FROM LOCAL GOVT 260 - - - 12.0 172.0 178.0 205.0 -
TOTAL EXPENDITURE 6 672.6 1,611.8 1,622.5 2.371.1 3,244.0 3,204.0 2,580.8 3.252.6 5,214.1 8.801.5 11.290.0
ORDINARY EXPENDITURE 263 859.3 649.3 801.8 1.361.5 1,572.9 1,670.0 2.295.0 2,750.0 4,539.0 7,965.0 9.918.0 TRANS TO LOCAL GOVT 269 - - - - - 132.0 - 155.0 177.0 175.0 -
CURRENT ACCOUNT BALANCE 272 69.1 2t.4 88.2 58.1 -46.9 -380.6 -32.4 -145.4 -463.5 -4.161.3 -4.698.0
BUDGETARY DEV. EXPEND. 2/ 8 113.3 165.5 21t.4 186.9 224.2 162.0 285.8 347.6 498.1 66t.5 t.372.0 O1W DOMESTIC FUNDING 261 113.3 165.5 211.4 186.9 224.2 162.0 285.8 347.6 498.1 604.0 911.5 O/W CIP AIO 262 ------57.5 460.5
EXTRABUDGETARY EXPEND. 3/ 9 - 797.0 609.3 822.7 1,446.9 1.240.0 - - - - -
OVERALL SURPLUS OR DEFICIT(-) 10 -44.2 -941.1 -732.5 -951.5 -1.718.0 -1,782.6 -318.2 -493.0 -961.6 -4.822.8 -6.070.0
FINANCING: 11 44.2 941.1 732.5 951.5 1,718.0 1,782.6 318.2 493.0 961.6 4,822.8 6.070.0
FOREIGN (NET) 5 233.9 497.5 953.1 562.1 797.7 t.098.6 -22.8 667.0 1,256.6 2,257.9 5,025.0 O/W GRANTS 12 3.0 157.5 576.4 60.2 270.6 482.0 435.0 1,056.0 1.106.0 1,980.0 6,620.0 DOMESTIC (NET) 13 -189.7 443.6 -220.6 389.4 920.3 684.0 341.0 -174.0 -295.0 2,565.0 1,045.0 BANKING SYSTEM (NET) 14 -189.7 362.6 -222.2 408.9 920.3 671.0 347.0 -150.0 -295.0 2,573.0 875.0 OTHER 15 - 81.0 1.6 -19.5 - 13.0 -6.0 -24.0 - -8.0 170.0
MEMO 1lEMS:
FOREIGN FINANCED PIP 271 - - - - 875.8 1.168.0 1,139.2 2,113.4 1,421.9 2,520.0 6,568.0
I/ NET OF AMORTIZATION PAYMENTS. 2/ DEVELOPMENT EXPENDIIURE FINANCED FROM DOMESTIC SOURCES ONLY. 3/ RESIDUAL ITEMS CONSISTING MOSTLY OF THE EXTRABUOGETARY EXPENDITURE BY SOME MINISTRIES AND NET LENDING TO PUBLIC ENTERPRISES FOR PROGRAMS NOT INCLUDED IN THE DEVELOPMENT PROGRAM. IN 1975 AND 1976 THESE EXTRAORDINARY EXPEND. INCLUDED DROUGHT REHABILITATION EXPENDITURE FINANCED BY THE PROCEEDES OF SALES OF COD-ODITY AID. NOTE: DUE TO THE EFFORTS TO IMPROVE THE FISCAL DATA BASE. THE NUMBERS AND PRESENTATION MAY NOT CONFORM TO THAT OF EARLIER REPORTS. THE TOTALS FOR ORDINARY EXPENDITURE DIFFER FROM THE TABLE ON FUNCTIONAL CLASSIFICATION FOR FEW YEARS ON ACCOUNT OF DEFENCE SALARIES. SOURCES: MINISTRY OF FINANCE o'.IMF. & CENTRAL BANK OF SOMALIA. PAGE 1 TABLE 5.2 SOMALIA: CENTRAL GOVERNMENT REVENUE. 1975-85 (MILLIONS OF SOMALI SHILLINGS)
------__------__------ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985
TOTAL REVENUE 4 628.4 670.7 890.0 1,419.6 1,526.0 1.421.4 2.250.6 2,587.6 4,074.5 3.773.7 5,220.0 *u.mwu u.~. w..w uS ...... nSse.S...... wui.Umm...... u...... u...... in...... s...... u U .UuUuUuU... TAX REVENUE 2 544.7 576.4 708.6 1,228.2 1.377.1 1,242.1 2.067.3 2.477.9 3.463.5 2,979.9 4.582.4 -am inwu. u..n.= fhs-.u. .u.,4..u-. o.s.au=...... uuinin ...... unuwsu.. ama..... WUU . DIRECT TAXES 122 109.1 tt3.6 136.5 193.4 2t3.6 211.3 353.4 420.6 S28.2 439.9 482.9 TAXES ON NET INCOME 16 45.2 54.0 59.1 74.4 90.8 94.6 145.8 133.3 269.2 302.7 311.4 TAXES ON EARNED INCOME 17 40.8 47.4 55.1 63.0 83.0 86.2 113.2 90.5 94.7 123.5 141.7 TAX ON WAGES 18 17.6 21.3 25.3 32.1 38.7 40.6 59.3 EXTRAORDINARY 78.2 94.4 123.1 141.5 TAX I/ 19 23.0 26.1 30.5 35.9 44.3 45.6 53.9 12.3 0.3 OTHER INC04E TAXES 0.4 0.2 20 4.4 6.6 3.3 6.4 7.8 3.4 32.6 42.8 174.5 179.2 169.7 TAXES ON PROPERTY 21 10.5 12.3 16.0 45.0 60.5 67.2 142.2 84.5 166.5 136.1 REGISTRATION TAX 166.5 22 10.5 12.3 16.0 45.0 60.5 67.2 142.2 84.5 166.5 136.1 166.5 ENTERP. TURNOVER TAX 3/ 37 53.4 47.3 61.4 74.0 62.3 49.5 65.4 202.3 92.5 1.1 5.0 C INDIRECT TAXES 123 435.6 462.8 572.1 1,034.6 1,163.5 1,030.3 1t713.9 2,057.3 2,935.3 21540.0 4,099.5 TAXES ON GOODS & SERVICES 23 148.1 164.8 179.6 227.1 71.0 139.0 312.5 472.0 304.? 456.7 1.129.2 SUGAR S SPIRITS 24 93.2 1OO.O 78.2 96.5 19.6 51.0 196.7 323.2 106.5 177.6 326.5 FISCAL MONOPOLIES 25 49.6 60.0 96.3 118.6 18.1 55.0 5S.8 33.7 116.3 MOTOR VEHICLE 93.1 245.4 TAXES 26 1.3 1.3 1.3 2.8 4.8 6.1 6.3 7.4 10.4 7.2 SALES TAX 176 9.1 ------71.9 181.7 OTHER 27 4.0 3.5 3.6 7.2 28.5 26.9 53.2 57.7 69.5 108.9 366.5 TAXES ON INTER. TRADE 28 246.7 254.2 341.5 704.4 944.0 765.2 1.206.4 1,398.5 2,322.1 1,853.4 2.640.2 IMPORT DUTIES 29 230.7 241.0 329.4 687.1 927.9 746.6 1,156.1 CUSTOMS 1,275.3 2,196.3 1.816.1 2,550.3 DUTY 30 177.9 189.7 255.0 572.8 774.6 565.9 922.4 1,039.1 ADMIN/STAT TAX 1.662.0 1,333.0 1,719.1 . 31 52.8 S1.3 74.4 114.3 153.3 180.9 233.7 236.2 536.3 483.1 EXPORT DUTIES 32 831.7 16.0 13.2 12.1 17.3 16.1 18.4 50.3 123.2 123.8 37.3 89.4 STAMP TAXES 33 40.8 43.8 51.0 103.3 148.5 126.6 195.0 186.8 308.5 227.9 330.1 NONTAX REVENUE 3 83.7 94.3 181.4 191.4 148.9 179.3 183.3 109.7 611.0 793.3 637.6 muumuua= fhsfl.na asalf Os....sawaso .a.s.a= n.a.s- aOssam,. swan.... saussa.. un----. OPERATING SURPLUS 117 - 14.8 - 21.t 19.5 24.3 42.1 9.4 94.8 PROPERTY 69.8 141.6 INCOME FROM: 35 52.6 54.8 91.6 74.4 1O7.0 131.5 67.3 28.3 PUBLIC ENTERP. 10.4 30.2 148.1 36 47.9 52.5 80.4 71.7 97.2 123.1 62.0 26.0 0.7 SHARE OF PROFITS 38 - 141.7 43.3 51.3 72.7 66.2 90.7 118.2 53.0 26.0 0.7 141.7 SHARE OF DEPR. 4/ 39 4.6 - 1.2 7.7 5.5 6.5 4.9 9.0 - - OTHER 5/ 40 - - 4.7 2.3 11.2 2.7 9.8 8.4 5.3 2.3 9.7 30.2 6.4 - PAGE 2 TABLE 5.2 SOMALIA: CENTRAL GOVERNMENT REVENUE. 1975-85 (MILLIONS OF SONALI SHILLINGS) …------_------__------__------__-----_-- 1984 1985 ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 _------…------__------____--_-__------. -
NON-TAX REVENUE (CONT.) 2¶.0 1b.6 37.1 ADMIN. FEES & CHARGES 6/ 41 23.2 16.2 39.5 24.1 10.5 10.0 47.2 13.7 42 1.7 3.0 2.9 3.5 5.4 7.2 26.7 49.4 11 .5 92.2 75.3 FINES AND FORFEITS - 35 .0 352.5 209.6 ARREARS/PUB ENTERP. 175 ------8.9 7.3 210.5 25.7 OTHER 7/ 43 6.2 5.5 47.4 68.3 6.5 6.3
------______------I/THIS IS AN ADDITIONAL INCOME TAX ON THE EARNINGS OF NONGOVERNMENT WORKERS. 2/ GROSS P.T.T RECEIPTS LESS THE ORDINARY EXPENDITURE OF THE MINISTRY OF POST AND TELECOMMUNICATIONS. 3/ THE 'TURNOVER TAX- IS. IN FACT, NOT LEVIED ON TURNOVER. IT IS LEVIED AT RATES DETERMINEO BY THE MINISTER OF FINANCE ON SOME PUBLIC ENTERPRISES THAT REPORT NET PROFITS. 41 THE SHARE OF DEPRECIATION IS TREATED AS DOMESTIC CAPITAL TRANSFERS 1N THE CENTRAL GOVT. BUDGET CLASSIFICATION. THESE TRANSFERS ARE REQUIRED BY LAW. 5/ INCLUDING MINING EXPLORATION, FISHERIES, AND OTHER CONCESSION LICENSES. 6/ INCLUDES HARBOR & WAREHOUSE FEES. SCHOOL FEES, AIRPORT TAX, PUBLICATION AND NOTARY RECEIPTS. AND REGISTRATION FEES ON SHIPS. 7/ INCLUDING CAPITAL TRANSFERS FROM DOMESTIC SOURCES. SOURCES: MINISTRY OF FINANCE, IMF. & CENTRAL BANK OF SOMALIA.
TABLE SOM/5A/2 PAGE 1 TABLE 5.3 SOMALIA:FUNCTIONAL CLASSIFICATION OF CENTRAL GOVERNNENT ORDINARY EXPENDITURE. 1975-85 (MILLIONS OF SONALI SHILLINGS)
ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1 83 1984 1985
TOTAL 7 559.3 649.3 801.8 1,361.5 1.572.9 1.670.0 2,795.2 4.164.9 5,470.1 5,552.4 6,973.0
GENERAL PUBLIC SERVICES 44 192.4 205.9 263.7 465.5 588.5 582.5 1,382.2 2.634.9 3,199.9 2.726.8 4,121.2 PRFSIOENCY 45 19.9 20.1 21.6 32.0 34.3 31.1 34.7 38.9 26;6 34.5 39.4 JUSTICE AND RELIGION 1/ 46 25 0 26.7 30.6 43.9 45.3 52.5 91.6 101.3 146.9 141.2 158.4 INTERIOR AND POLICE 2/ 47 57.9 60.7 69.3 127.8 1tO.7 124.4 177.4 144.0 176.0 223.6 307.8 FOREIGN AFFAIRS 48 23.3 27.6 40.3 45.3 51.9 50.0 59.6 136.6 178.8 219.9 427.2 FINANCE 3/ 49 66.3 70.8 101.9 213.6 342.6 320.7 1.015.2 2,207.2 2,666.1 2,102.4 3.180.3 PLANNING 4/ sO - - - 2.9 3.7 3.8 3.7 6.9 5.5 5.2 8.1
OTHER PUBLIC SERVICES 118 145.2 165.4 199.7 512.5 552.3 601.2 850.4 852.7 1,367.5 1,876.9 1.864.t DEFENSE 51 145.2 165.4 199.7 501.9 533.0 588.4 823.6 825.9 1,300.0 1.785.9 1.750.9 PEOPLE*S ASSEMBLY 119 ------7.0 7.0 10.1 10.6 12.1 NATIONAL MILITIA 120 - - - 10.6 19.3 12.8 19.8 19.8 24.8 44.9 55.0 1 REVOLUTIONARY PARTY 200 ------32.6 35.6 46.1 %0
SOCIAL SERVICES 52 127.2 160.3 198.6 233.8 261.3 283.9 359.4 426.3 516.9 545.3 555.8 1
EOUCATION 53 56.7 77.7 97.0 115.0 131.5 143.2 184.5 207.7 251.2 261.0 245.9 HIGHER EDUCATION 54 13.6 19.1 23.8 31.7 35.7 37.9 40.4 46.6 62.8 66.3 68.5 HfEALTH 55 41.3 45.6 57.8 63.8 62.2 74.5 98.4 110.0 128.7 138.4 153.9 INFORMATION 56 12.8 14.3 16.1 17.3 20.2 19.9 2S.8 40.8 48.5 47.9 56.1 LABOR 5/ 57 2.8 3.6 2.6 2.5 7.7 3.3 4.7 13.5 17.3 22.7 21.3 SPORTS 58 - - 1.3 3.5 4.0 5.1 5.6 7.7 8.4 9.0 10.1
ECONOMIC SERVICES 59 94.5 117.7 139.8 149.7 170.8 202.4 203.2 251.0 385.8 403.4 431.9 AGRICULTURE 60 24.6 29.4 24.4 26.9 27.2 27.9 31.1 52.4 91.7 96.2 56.3 LIVESTOCK 61 15.2 17.0 19.8 19.8 22.2 24.6 32.3 35.3 52.3 56.4 74.8 FISHERIES 6/ 62 2.2 4.0 3.4 3.0 6.4 12.0 3.9 5.1 29.7 28.2 30.0 MINERAL AND WATER RESOURC 63 0.6 9.2 6.6 7.9 16.8 39.2 17.2 23.6 50.1 53.4 75.4 INDUSTRY 64 2.2 3.9 0.8 1.2 1.7 1.3 2.5 3.2 5.4 7.1 7.0 COMMERCE 65 2.7 3.1 3.3 3.2 4.8 2.5 3.2 3.3 3.4 4.4 5.8 PUBLIC WORKS 66 17.6 21.0 24.2 22.8 21.0 23.0 26.1 26.1 30.1 38.8 47.6 IRANSPORTATION 67 28.3 30.1 34.4 39.8 44.8 40.0 53.9 53.9 61.9 53.1 55.9 PACE 2 TABLE 5.3 SOMALIA:FUNCTIONAL CLASSIFICATION OF CENTRAL GOVERNMENT ORDINARY EXPENDITURE. 1975-85 (MILLIONS OF SOMALI SHILLINGS)
ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985
ECONOMIC SERVICES (CONT.) POST 6 TELECOMM. 7/ 68 - 19.5 21.3 23.6 25.1 28.7 41.0 49.3 54.1 65.7 TOURISM 8/ 69 1.1 - - - - 4.2 1.4 1.8 3.7 3.8 4.3 MARINE TRANSPORT 70 - - 3.4 3.8 2.3 2.6 2.9 5.3 5.4 4.6 5.6 JUBA VALLEY 204 ------2.8 3.3 3.5
------__--__------_------___-----_------1/ PRIOR TO 1982. MINISTRY OF JUSTICE AND RELIGION INCLUDED CUSTODIAL CORPS AND YOUTH CENTRES. 2/ IN 1977 *POLICEO WAS TRANSFERRED TO THE *PRESIDENCY* AND *INTERIOR' WAS CHANGED TO *LOCAL GOVERNMENTS AND RURAL DEVELOPMENT.0 3/ DATA ARE AOJUSTED TO EXCLUDE AMORTIZATION PAYMENTS: THE REMAINDER CONSISTS MAINLY OF PROVISION FOR SUBSIDIES AND CONTINGENCIES. 4/ FROM 1978. THE 'STATE PLANNING COMMISSION.- WHICH HAD BEEN INCLUDED IN THE 'PRESIDENCY" DURING 1975-77 WAS PROVIDED A SEPARATE BUDGET. 5/ IN 1977 THE MINISTRY OF LABOR AND SPORTS BECAME TWO SEPARATE MINISTRIES. 6/ UNTIL 1977 *FISHERIES' INCLUDED *NARINE TRANSPORT' ALSO. 7/ OPERATING DEFICITS OF THE POSTS AND TELECOMM.; OPERATING SURPLUSES. DEFINED AS GROSS RECEIPTS LESS ORDINARY EXPENDITURE. ARE SH1OWN IN TABLE 5.2 UNDER OPERATING SURPLUSES OF DEPARTMENTAL ENTERPRISES. 8/ THE MINISTRY OF TOURISM. WHICH WAS ABOLISHED IN 1976. WAS RE-ESTABLISHED IN 1978. SOURCE: MINISTRY OF FINANC. INF. 6 CENTRAL SANK OF SOMALIA.
TABLE SOM/5A/3 PAGE 1 TABLE 5.4 SOMALIA: CENTRAL GOVERNMENT WAGE BILL 1/. 197S-85 (MILLIONS OF SOMALI SHILLINGS)
ITEM 1975 1976 19?7 1978 1979 1980 1981 1982 1953 1964 19B5 …------_------__------___------
TOTAL 2/ 71 149.5 172.8 206.9 311.5 311.6 384.5 436.5 464.2 573.6 646.3 683.8
GENERAL PUBLIC SERVICES 72 60.2 63.2 70.4 114.2 117.7 124.6 164.5 166.5 220.4 256.2 290.9 PRESIDENCY 73 4.6 5.3 6.3 10.6 4.2 4.6 5.6 4.0 6.9 6.9 6.4 JUSTICE AND RELIGIOUS 3/ 74 12.7 14.3 11.3 25.5 28.4 32.6 41.2 42.5 46.3 47.6 S9.0 INTERIOR AND POLICE 75 38.1 37.6 46.9 .71.2 77.0 78.1 104.3 104.3 125.4 147.7 154.2 FOREIGN AFFAIRS 76 1.6 1.7 2.0 2.2 2.2 3.2 3.3 3.7 4.1 4.4 6.1 FINANCE 77 3.0 4.3 3.4 3.6 4.7 4.7 6.7 8.2 16.3 27.6 38.6 PLANNING/PEOPLE'S ASSEN. 78 - - - 1.1 1.2 1.3 1.5 2.1 2.2 2.4 2.5 REV. SOCIALIST PARTY 210 ------1.9 1.7 19.2 21.4 21.9
SOCIAL SERVICES 79 54.9 70.6 96.1 123.0 137.4 171.2 191.8 215.8 256.8 272.5 264.7 EDUCATION 80 33.0 48.0 70.1 86.0 98.6 122.0 135.5 156.5 185.6 195.1 186.2 HtGHER EDUCATION 61 1.2 0.9 1.1 1.2 1.1 0.8 1.0 1.1 1.3 1.8 1.S HEALTH 82 17.2 17.4 20.3 28.6 30.4 37.3 46.1 47.9 58.0 63.4 63.6 INFORMATION 83 2.8 3.1 3.0 3.6 4.1 4.3 4.6 5.0 6.0 5.8 6.9 LABOR/SPORTS 84 0.7 1.2 1.6 3.6 3.2 6.8 4.6 5.3 5.9 6.7 6.S O
ECONONIC SERVICES 85 34.4 39.0 40.4 74.3 56.5 79.6 70.2 71.1 66.? 102.4 101.9 AGRICULTURE 86 3.9 5.0 5.0 10.2 7.4 14.2 6.6 7.1 9.3 11.5 11.1 LIVESTOCK 87 6.5 7.7 6.8 t2.7 10.0 15.9 12.9 13.4 15.8 17.9 19.1 FISHERIES/MARINE TRANSPOR 88 1.0 1.7 2;1 6.1 3.1 4.3 3.3 3.5 7.1 S.9 4.9 MINERAL AND WATER RESOURC 89 0.2 0.3 0.3 3.1 0.7 3.6 2.0 1.6 0.9 2.5 2.5 INDUSTRY 90 0.4 0.5 0.6 11.0 0.9 1.2 1.3 1.5 1.8 2.3 2.2 COMMERCE 91 0.7 0.6 0.6 0.7 0.7 0.8 1.0 0.9 1.0 1.2 1.2 PUBLIC WORKS 92 7.8 9.3 8.9 11.2 12.0 11.4 15.2 14.6 16.5 t1.0 17.2 TRANSPORTATION 93 9.5 9.1 10.1 12.5 12.9 1S.7 14.4 14.8 16.3 19.6 18.3 POST 6 TELECOMM. 94 4.1 4.8 6.0 6.8 8.2 10.3 11.2 11.2 16.4 21.5 22.7 TOURISM 95 0.3 - - - 0.6 0.8 0.9 1.0 1.2 1.2 1.4 JUBA VALLEY 212 ------0.7 0.8 0.8 INTERIOR 219 - - - - - 1.4 1.4 1.3 1.7 _ -
TOTAL PENSION 218 - - - - - 9.2 1O.0 10.8 12.7 t2.9 26.3
…------__------__------I/INCLUDES SALARIES AND OTHER PERSONAL ENDOWMENTS AND ALLOWANCES. 2/ THIS TOTAL DOES NOT INCLUDE THE WAGE BILL OF THE MINISTRY OF DEFENCE. SINCE 1974, DETAtLS OF THE ORDINARY EXPEND. OF THE MINISTRY OF DEFENCE HAVE NOT BEEN PUBLISHED. 3/ INCbIUDES CUSTODIAL CORPS AND YOUTH REVOLUTIONARY CENTRE. SOURCE: MINISTRY OF FINANCE. IMF 6 STAFF ESTIMATES. PAGE t TABLE 5.5 SOMALIA: FUNCTIONAL CLASSIFICATION OF CENTRAL GOVERNMENT BUDGETARY DEVELOPMENT EXPENDITURE. t975-85 1/ (MILLIONS OF SOMALI SHILLINGS)
-- ___-- ______…__ ITEM 1975 1976 1277 1978 1979 1980 1981 1982 1983 1984 1985
TOTAL 96 113.3 165.5 211.4 186.9 224.2 t62.0 285.8 347.6 498.1 661.5 911.5
GENERAL PUBLIC SERVICES 97 1.2 1.0 1.1 1.5 1.5 4.1 8.4 2.7 9.5 20.9 138.2 ------…______------PRESIDENCY 98 1.2 1.0 1.1 1.5 1.5 4.1 - - - - - MINISTRY OF PLANNING 215 ------3.0 2.7 2.7 1.3 35.6 LOCAL GOVT/RURAL AFFAIRS 216 ------5.4 - 6.8 t9.6 51.6 FINANCE 220 ------51.0
SOCIAL SEVICES 99 16.7 22.7 24.3 26.8 24.5 11.0 36.4 51.7 56.8 113.1 226.1 ------…______------EDUCATION 100 13.4 18.0 17.1 17.4 17.8 7.9 33.3 47.8 49.2 72.8 97.3 HIGHER EDUCATION 1O0 0.5 1.4 1.7 2.5 1.8 1.5 0.6 0.7 1.3 3.6 62.0 HEALTH 102 - 1.2 2.6 2.2 1.0 - - - - 12.1 27.3 ' INFORMATION 103 2.3 - 0.7 1.3 - - 2.0 19.9 LABOR 20.0 104 - - 1.5 3.0 3.9 1.6 2.5 3.2 4.3 4.7 19.5 SPORTS 105 0.5 2.1 0.7 0.4 ------
ECONOMIC SERVICES 106 95.4 141.8 186.0 158.6 198.2 146.9 241.0 293.2 431.8 527.5 547.2 ______------… ------AGRICLTURE 107 25.4 30.2 49.7 31.7 45.5 50.0 76.0 96.2 197.0 203.6 178.6 LIVESTOCK 108 16.1 22.6 23.1 24.6 37.7 30.i 55.5 58.8 67.8 98.4 163.3 FISHERIES 109 6.3 3.8 1.2 9.3 28.4 9.2 7.0 12.9 t6.6 27.1 2t.4 MARINE TRANSPORT 110 - - 10.5 2.2 0.8 0.9 0.6 0.4 2.7 1.1 2.9 MINERAL S WATER RESOURCES itt 20.3 35.9 24.4 19.9 19.4 14.4 41.3 64.0 70.0 93.9 69.2 INDUSTRY 112 22.4 26.9 50.1 36.8 41.2 30.9 27.4 22.9 23.6 15.6 - PUBLIC WORKS 113 5.9 11.4 27.0 34.1 21.5 11.4 20.7 25.2 14.5 TRANSPORTATION 37.4 71.4 114 - 11.0 ------POST & TELECOMMUNICATIONS 115 ------12.5 12.8 36.6 43.5 31.5 TOURISM 116 - - - - 3.7 ------JUBA VALLEY 217 ------3.0 6.9 8.9
1/ INCLUDES ONLY DEVELOPMENT EXPENDITURE FINANCED FROM DOMESTIC RESOURCES. SOURCE: MINISTRY OF FINANCE.
TABLE SOM/SA/5 PAGE 1 TABLE 6.1 SOMALIA: MONETARY SURVEY, t976-86 (MILLIONS OF SO.SHILLINGS; END OF PERIOD)
1984 1985 1986 ITEM 1976 1977 1978 1979 1980 t981 1982 1983
-4.645.4 -5.867.7 -9.532.1 FOREIGN ASSETS (NET) 1/ 1 515.2 802.2 936.6 316.4 144.8 71.6 -640.8 -2.380.4 -4.989.7 -9.649.0-13.871.6 CENTRAL BANK OF SOMALIA 2 380.6 558.1 609.3 79.5 -194.6 -804.0 -1.947.3 -3.134.2 344.3 3,781.3 4,339.5 NATIONAL COMM. BANK 3 134.6 244.1 327.3 236.9 339.4 875.6 1,306.5 753.8 5.023.8 5.260.8 9.616 2 11.347.0 12.898.1 DOMESTIC CREDIT . 4 1.110.8 t,182.9 1,715.7 2.957.t 3.879.5 4.545.7 4,378.2 5.252.0 6.867.5 CLAIMS ON GOVERNMENT (NET) 5 124.4 -97.8 311.1 1.231.4 1.902.4 2.249.6 2,100.0 t.805.0 1.163.0 1.511.1 2.071.2 *.966.2 CLAIMS ON PUBLIC ENTITIES 6 640.5 905.5 1,002.5 1,278.6 1.551.1 1,721.5 1.300.0 3.726.9 4.023.9 4,064.4 CLAIMS ON PRIVATE SECTOR 7 345.9 375.2 402.1 447.1 426.1 574.6 1.623.8 2.292.8 5.077.6 9.117.3 9.973.3 MONEY 8 994.9 t,325.1 1.728.0 2.335.2 2.783.2 3.619.3 3,911.1 4.156.5 3.787.5 4,176.6 CURRENCY IN CIRCULATION 9 475.0 718.5 1,030.0 1.356.3 1,507.9 1.891.0 1.455.7 1.355.5 1.899.8 2.801.0 3.177.8 5.32°.8 5.796.7 DEMAND DEPOSITS 10 519.9 606.6 698.0 978.9 t.275.3 1.728.3 2.455.4 1.600.2 2.785.3 3,113.3 OUASI-MONEY 11 205.1 219.5 318.8 477.7 597.9 747.1 1.083.5 1.191.6 -1.707.0 -6.423.3 -9.720.6 OTMER ITEMS (NET) 1OS 426.0 440.5 605.5 460.6 643.2 250.9 -611.6 -2.467.7 -1,447.0 -6,124.1-t0,120.4 0 VALUATION ADJUSIMENT 106 - - - - 160.7 161.9 -514.1 -1,551.6 -916.1 -260.0 -299.2 399.8 t' OTHER ITEMS (NET) 107 426.0 440.5 605.5 460.6 482.5 89.0 -97.5
1/ INCLUDES VALUATION ADJUSTMENTS. SOURCE: IMF, INTERNATIONAL FINANCIAL STATISTICS. AND DATA PROVIDED BY SOMALI OFFICIALS.
IABLE SOM/6M/1 PAGE I TABLE 6.2 SOMALIA: SUMMARY ACCOUNTS OF THE CENTRAL BANK OF SOMALIA, 1975-86 (MILLIONS OF SOMALI SHILLINGS ;END OF PERIOD) .______.______.______ITEM 1975 1976 1977 1978 1979 1980 1981 1982 198? 1984 1985 ------__-_------___------_--…------_----
FOREIGN ASSETS 20 445.2 537.4 755.0 818.7 321.4 158.4 529.4 216.8 277.7 165.0 346.6 CLAIMS ON GOVERNMENT 23 33.3 262.0 377.2 883.6 1.658.8 2.439.7 2.959.9 3,995.4 6,055.0 6,334.2 7,315.7 CLAIMS ON PUBLIC ENTITIES 24 107.1 105.4 162.1 182.6 174.4 240.1 220.6 192.2 201.0 647.5 1,446.2 CLAIMS ON COMMERCIAL BANKS 25 548.8 212.5 412.3 367.3 299.2 412.6 825.1 1,424.0 1,897.5 2,424.4 2.522.0 UNCLASSIFIED ASSETS 1/ 28 40.2 54.9 100.8 147.3 175.8 185.4 254.7 599.7 1,839.7 2.110.2 7,255.0 TOTAL ASSETS/LIABILITIES 27 1.t74.6 t,172.2 1.807.4 2.399.4 2.629.6 3,436.2 4,789.7 6,428.1 10,270.9 11.681.3 18,885.5 ------…______------
CURRENCY 28 421.0 453.2 666.6 962.1 1,247.8 1,674.5 2,162.5 1,656.2 1,708.5 2,329.2 4.206.9 CIRCULAR CHECKS 29 11.8 10.8 18.5 23.1 13.9 27.9 40.0 65.8 89.0 142.0 156.0 DEMAND DEPOSITS 30 45.1 106.7 86.4 99.7 68.4 69.7 53.6 171.4 229.8 398.7 80.5 PUBLIC ENTERPRISES 31 43.4 100.2 75.8 81.0 59.1 52.3 45.3 158.0 212.0 392.0 66.0 SPECIALIZED FIN. INST. 32 1.7 6.5 10.6 18.7 9.3 17.4 8.3 t3.4 17.8 6.7 14.5 COMMERCIAL BANKS' DEPOSITS 33 51.3 62.1 71.7 96.8 138.8 160.0 200.3 276.1 267.0 590.7 639.5 GOVERNMENT DEPOSITS 34 271.5 137.6 475.1 572.4 427.5 537.3 710.3 1,895.3 4,250.0 1,956.1 1,893.9 FOREIGN LIABILITIES 35 168.2 156.9 196.9 209.4 243.7 352.6 1,333.4 2,164.1 3,411.9 5,154.7 9,995.6 l ALLOCATION OF SORS 36 51.3 47.6 48.0 50.7 71.8 92.5 103.3 96.9 273.0 356.0 558.0 _ CAPITA'. AND RESERVES 37 34.1 48.2 62.7 77.5 83.0 113.9 354.5 311.2 375.5 482.7 751.9 0 UNCLASSIFIED LIABILITIES 2/ 38 120.3 149.1 181.5 307.7 334.7 407.8 -16S.2 -208.9 -333.8 271.2 603.2 t
__ __,,______.______.______…_ SOURCE: CENTRAL BANK OF SOMALIA, ANNUAL REPORTS. IMF, AND DATA PROVIDED BY THE SOMALI AUTHORITIES. i/ MAINLY CAPITAL PARTICIPATION AND THE REVALUATION ACCOUNT. 2/ INCLUDES SMALL AMOUNTS OF TIME AND SAVINGS DEPOSITS OF PUBLIC ENTERPRISES.
TABLE SOM/6M/2 PAGE 1 TABLE 6.3 SOMALIA: SUMMARY ACCOUNTS OF THE N4ATIONAL COMMERCIAL BANK OF SOK>LIA. 1975-86 (MILLIONS OF SOMALI SHILLINGS; END OF PERIOD)
ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985
CASH 40 31.5 39.4 44.1 79.0 95.2 166.6 271.5 200.5 353.0 429.4 419.4 DEPOSITS WITH CENTRAL BANK 41 51.3 62.2 74.5 96.9 139.0 160.1 200.3 264.1 306.0 618.5 739.4 FOREIGN ASSETS 42. 230.7 140.3 249.5 376.8 240.4 339.4 930:4 1,428.0 906.6 599.7 4.436.1 CLAIMS ON PRIV S PUB SEC 43 934.6 880.9 1,116.6 1,222.1 1,551.3 1,737.0 2.075.5 2.371.7 3.254.6 4.590.5 4,648.9 UNCLASSIFIED ASSETS 44 48.3 34.1 92.8 61.1 179.2 159.7 859.2 1.24.2 1.998.7 1.397.3 2.368.0 TOTAL ASSETS/LIABILITIES 45 1.296.4 1,156.9 1,579.5 1,835.9 2.205.1 2,562.8 4,336.9 5,388.5 6.819.1 7,635.4 12,613.8
CIRCULAR CHECKS 46 51.0 50.3 77.5 123.8 189.9 236.9 433.9 789.5 911.6 629.6 481.1 DEMAND DEP. OF PRIV.& PUB. 47 328.9 414.5 522.0 600.3 913.3 944.1 1.204.8 1,510.2 1,725.5 2,012.1 4,359.2 TIME 8 SAVINGS DEPOSITS 48 178.9 203.7 217.6 316.9 474.8 594.6 743.2 1,078.1 1,185.7 1,595.4 2,778.0 FOREIGN LIABILITIES 49 3.4 5.7 5.1 49.5 1.7 - 54.8 121.5 152.8 255.5 656.8 LIABILITES TO CENTRAL BANK 50 497.1 230.3 418.1 382.7 371.3 435.6 810.9 1.465.7 1,825.0 2,361.2 2,587.0 CAPITAL AND RESERVES 51 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 UNCLASSIFIED LIABILITIES 52 222.6 237.9 324.7 348.2 239.6 337.1 1,074.8 409.0 1,004.0 767.1 1,737.2
-_____--______--______..______.______SOURCE: CENTRAL BANK OF SOMALIA. ANNUAL REPORTS. IMF, AND DATA PROVIDED BY THE SOMALI AUTHORITIES.
TABLE SOM/6M/3 PAGE 1 TABLE 6.4 SOMALIA: SUMMARY ACCOUNTS OF THE SOMALI DEVELOPMENT BANK. 1975-84 (MILLIONS OF SOMALI SHILLINGS)
-----.------_------___------__------ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984
CASH AND DEPOSITS VITH BANKS 60 1.4 15.0 24.6 37.0 21.2 27.6 16.3 11.3 58.4 21.7 LOANS 61 116.4 107.9 124.6 125.8 154.8 179.2 227.6 230.3 261.1 369.2 INVESTMENTS 62 13.0 17.1 17.1 25.7 26.0 34.0 13.0 50.5 39.5 28.9 OTtER ASSETS 63 9.5 24.3 26.4 47.3 51.8 66.2 20.1 30.5 31.6 12.2 TOTAL ASSETS/LIABILITIES 64 140.3 164.3 192.7 235.8 253.8 307.0 277.6 322.6 390.6 432.0
FOREIGN LIABILITIES 65 6.0 4.8 10.2 13.5 12.0 20.1 35.4 44.4 46.8 71.2 OTHER LIABILITIES 66 32.8 43.4 53.6 58.1 56.9 80.0 16.8 42.8 96.7 87.3 CAPITAL AND RESERVES 67 101.5 t16.1 128.9 164.2 184.9 206.9 225.4 235.4 247.1 273.5
SOURCE: SOMALI DEVELOPMENT BANK TABLE SOM/6M/4
0oJ - 106 - Table 6.5
Somalia: Distributionof Ranking System Credit by Economtc Activity, December 1980-September1985 I/
Agri- Industry culture and crafts Trade Other Total 2/
(In millions of Somali shitlings;end of period)
1980 December 307.4 497.0 1,047.7 125.0 1,977.1 1981 December 502.0 587.4 1,098.6 108.0 2,296.0 1982 December 677.3 719.0 1,428.0 99.5 2,923.8 1983 December 639.8 470.8 2,214.9 130.3 3,455.8
1984 March 1,295.5 698.2 1,340.8 376.1 3,710.6 June 480.9 325.4 3,020.7 427.9 4,254.9 September 742.8 554.1 2,753.6 434.8 4,485.3 December 1,053.3 488.1 3,119.2 577.4 5,238.0
1985 March 777.2 244.1 3,652.1 579.0 5,252.4 June 685.5 563.7 3,528.4 591.9 5,369.5 September 886.5 154.8 3,831.5 603.7 5,476.5
(In percent; end of period)
1980 December 15.6 25.1 53.0 6.3 100.0 1981 December 21.9 25.6 47.8 4.7 100.0 1982 December 23.2 24.6 48.8 3.4 100.0 1983 December 18.5 13.6 64.1 3.8 100.0
1984 March 34.9 18.8 36.1 10.1 100.0 June 11.3 7.6 71.0 10.1 100.0 September 16.6 12.4 61.4 9.7 100.0 December 20.1 9.3 59.6 11.0 100.0
1985 March 14.8 4.6 69.5 11.1 100.0 June 12.8 10.5 65.7 11.0 100.0 September 16.2 2.8 70.0 11.0 100.0
Sources: Central Bank of Somalia, Bulletin, various years; and data provided by the Somali authorities.
I/ Includes Central 8ank and Commercial and Savings Bank credit to nongovernment sector only. 2/ Outstanding total differs slightly from the monetiry survey because this sertes is not revised by the monetary authorities. Table 6.6
Somalia: Number and Amount of Loans Approved by the Somali Development Bank, 1981-85
(In Millions of Somali Shillings; end of Period)
1981 1982 1983 1984 1985 Number AMount Number Amount Number Amount Number Amount Number amount
Agriculture 139 10.6 116 8.6 83 16.8 142 54.2 158 234.3
Livestock 13 1.2 2 0.3 4 1.8 9 12.0 4 5.0
Fisheries - -- 2 0.9 3 6.0 6 50.7
Industry 34 23.2 19 35.7 33 45.7 26 110.5 36 308.9 O
Transport 6 3.9 4 1.3 5 7.9 - 2 36.0
Construction and housing ------3 21.0 I/
T.ssrIsm 2 6.0 -- -- t -- 0.5 1 1.5
Otimer 2 0.1 17 2.8 2 8.0 5 9.3 4 3.9
Totasl 196 45.0 158 48.7 129 81.1 186 19.5 214 661.3
I/ Data for 1985 includes mining, which was previously included in otlher.
Source: Somali Development Bank. Table 6.7 Somalia: Interest Rate Structure. June 1981-February 1986 (in Percent)
Interest rates oan credits Interest rates oe de2ostts Frro From From From From From r.om From From 6/30/81 6/30/62 111/85 2/1/66 6130/01 6/30182 1/1/63 111/3S 211186
CesazrJl lljak ftv*te sector tthItelal dtscount rate 6.0 8.0 12.0 12.0 Ordinary savings 6.0 6.0 12.0 12.0 v.&Jeranrentcredits 6.0 8.0 12.0 12.0 Time savings 3 months 6.S B.5 14.0 14.0 Time savings 6 months 7.0 9.0 15.0 15.0 C.jsercalj bank Time savings 12 months J.5 9.5 16.0 16.0 Credit to cooperatives ) ) IS.0 15.0 Tie "avings 24 sonths S.5 10.5 17.0 17.0 a.1. sAll-beale farmers ) ) Til_ saviags over 24 months 9.0 11.0 12.0 22.0
Cr.dtt to public ) ) 19.0 * 19.0 ei,terprlsds ) )
Credit t) export ) 10.0 ) 12.0 IS.0 15.0
Credit tu nationjl ) ) o private enterprises ) ) 19.0 20.00
Credit to foreign enterprises 12.5 14.5 20.0 21.0
Developm;eot Lank MedIuftere (2-6 year) loans to *igriculttcar and handicratt 10.0 10.0 14.0 14.0 )-4dlu.-ters (2-6 year) Iu4nb to tndustry agd mining 11.0 11.0 1S.0 15.0 externdl accounts 4vJlum-term (2-6 year) Ordinary savings 7.0 Io.snato others 12.0 12.0 16.0 16.0 Ti1e savings 3 months 8.0 L..tn.-tcra (7-20 year) Time savings 6 months 6.5 1). n s to a,triculture Time savings 12 manths 9.0 .Aodh.andicraft 11.0 l.0 15.0 15.0 Time savtngs 24 months or longer 10.5 lnung-tera (7-20 year) W.sis to tndustry mad mintig 12.0 12.0 16.0 16.0 L...le-aerm(7-20 year) 14.4ub tu4 others 14.0 14.0 17.0 17.0
S.,. .. , Oil jprt,vtideJ by the Somali authuorit es. - 109-
Table 6.8
Somalia: Exchange Rates, 1983-86 (Somali shillings per U.S. dollar)
Commerctal Free Official bank market arket market 1/ (average) (average)
1983
January 1-8 15.2057 -- January 9-28 14.8641 -- -- January 29-July29 15.2606 July 30-August30 15.6305 - -- August 31-October22 15.7567 -- -- October 23-December31 17.5556 -
1984
January1-September 14 17.38 -- -- September 15-December1 26.00 - --
1985 2/
January 36.00 78.0452 88.98 February 36.50 81.1667 89.44 March 37.00 81.9841 91.39 April 37.50 83.6133 92.59 May 37.50 83.6133 93.80 June 40.60 84.4250 97.82 July 40.60 84.4250 101.54 August 40.60 84.4250 102.09 September 40.60 84.4250 100.70 October 40.60 84.4250 107.15 November 40.60 84.4250 110.49 December 42.50 84.4250 114.69
1986 2/
January 54.50 84.4250 114.76 February 54.50 84.4250 122.90 March 58.50 84.4250 138.63 April 62.50 84.4250 148,13 May 66.50 84.425o 152.89 June 70.50 84.4250 153.95 July 74.50 84.4250
1/ 'liddlerates. _/ Beginningof period.
Source: I'F. PAGE 1 TABLE 7.t SOMALIA: PRODUCTION OF AGRICULTURAL CROPS. 1975-85 (THOUSAND METRIC TONS)
ITEM 1975 1976 1977 1978 1979 1980 1901 1982 1983 1984 1985
MAIZE 1 103.6 107.6 t11.3 1O7.7 108.2 110.5 157.3 150.0 235.0 270.1 382.0
RICE 2 4.- 5.4 8.4 12.1 t3.4 16.7 7.7 20.0 2.8 4.2 6.2
SORGILM 3 134.7 139.3 145.1 141.1 140.1 140.5 206.9 235.0 120.0 221.2 226.0 BEANS 4 9.4 9.3 10.2 10.1 8.2 9.3 2.5 5.9 20.8 31.6 39.0
TOTAL STAPLES 5 252.7 261.6 275.0 271.0 269.9 277.0 374.4 410.9 378.6 527.1 653.2
SESAME 6 37.3 38.8 40.6 40.0 40.6 38.4 27.t 57.0 59.5 46.0 100.0
GROUtONUTS 7 2.6 2.7 2.8 2.8 2.9 2.9 0.8 3.2 2.6 5.0 3.9 VEGETABLES 8 24.7 25.7 26.9 26.5 26.6 27.2 20.3 102.2 82.0 95.0 67.0
COTTON 9 3.0 3.1 3.3 3.2 3.3 3.3 1.6 3.3 4.0 4.0 2.9 SUGAR CANE 10 370.0 333.3 320.0 3t1.5 265.0 419.5 378.2 483.2 449.7 342.3 416.0 I SUGAR 11 30.6 33.2 30.0 24.0 21.4 29.1 26.8 34.1 30.8 30.5 39.5 BANANA 12 106.0 96.6 65.2 69.7 72.2 60.4 69.0 78.7 98.9 62.2 60.0
URCE: DATA PROVIDED BY MINISTRY OF AGRICULTURE AND CENTRAL BANK. BLE SOM/7C/I PAGE 1 TABLE 7.2 SOMALIA: BANANAS-AREA. YIELDS AND EXPORTS
------_ _- - _ _------1985 ITEM 1975 1976 1977 1976 1979 1980 1981 1982 1983 1984
4.400.0 4.500.0 5.100.0 CULTIVATED AREA (HA.) 15 8.342.0 7,422.0 7.1OO.0 6.831.0 6.000.0 4.600.0 3.600.0 4.300.0 2.700.0 PRODUCING AREA ( HA.)t/ 16 6,148.0 5,319.0 5,200.0 5,200.0 5,800.0 2.600.0 2.900.0 2.800.0 2.800.0 3,000.0 60.0 PRODUCTION (OOO'TONS) 17 106.0 96.6 65.2 69.7 72.2 60.4 59.0 78.7 98.9 62.2 20.7 22.2 VIELO (TON/HA.)2/ l8 17.2 18.2 12.5 13.7 12.5 23.2 20.3 28.1 35.3 62.4 47.9 45.3 EXPORTS (OO'TONS) 19 81.8 72.5 53.8 57.5 55.5 35.4 34.3 50.7 234.4 283.9 871.0 EXPORTSIN1LL SO.SH.;708)3/ 20 80.9 85.1 64.7 70.2 68.5 46.6 66.2 153.6 5.927.0 19.227.0 EXPORTS-L1NIT VAL(SO.SH/TON) 21 989.0 1.174.0 1.216.0 1,221.0 1.234.0 1.316.0 1,930.0 3.030.0 3.756.0
I 1/ PRODUCING AREA IS LESS THAN TOTAL AREA. AS REPLANTING IS REQUIRED EVERY 3-4 YEARS. 2/ VTELDS EXPRESSED PER HECTARE OF PRODUCING AREA. 3/ DO NOT AGREE WITH BALANCE CF PAYMENTS FIGURES AND TRADE DATA IN TABLES 3.1. 3 3. AND 3.5. *4ICH ARE BASED ON FOREIGN EXCHANGE RECORD. AND FORIEGN TRADE RETURNS DATA. DATA FOR 186 REFER TO THE %JANUARY-dUNE PERIOD. SOURCE: NATIONAL BANANA BOARD, ANNUAL REPORT; CENTRAL SANK OF SONALIA. ANNUAL REPORT: AND DATO PROVIDED BY THE SOMALI AUTHORITIES.
TABLE SOM/7C/? PAGE 1 TABLE 7.3 SOMALIA: PRODUCTION Of SUGARCANE AND SUGAR t975-85
ITEM 1975 1976 1977 - t978 1939 o980 198I 1982 1983 1934 1985
CULTIVATED AREA (000 HA.) 22 7.0 6.6 8.9 6.0 6.7 8.1 10.2 9.3 It.*- 7.3 tO.O-
HARVESTED AREA (000 HA.) 23 - - 3.6 3.5 3.0 -6.6 8.2 6.5 8.3 5.t 5.3
YIELDS (TON/HA.) 24 - - 88.9 69.0 87.1 63.6 48.1 56.6 54.2 sl.1 52.0 SUGARCANE HARVESTED(O00 TON 25 370.0 333.3 320.0 311.5 265.0 419.5 378.2 483.2 449.7 242.3 4t6.0 SUGAR PRODUCTION (000 TONS) 26 20 6 p3.2 30.0 24.0 21.1 29.1 26.5 34.1 20.8 10.S 39.6 EXTRACTION RATE IX) 27 8.3 10.2 9.0 7.7 6.1 6.9 7.0 - 7.0 6.3 S.1
I/ YIELDS EXPRESSED PER HECTARE OF HARVESTED AREA. SOURCE: CENTRAL RAWC OF SOMALIA. ANNUAL REPORTS. TABLE SOM/7C/3
l -113-
Table 7.4
Somalia: Producer Prices for Major Crops, 1978-86 1/
(In Somali shillings per quintal)
197 1979 1930 1981 1982 1983 1984 1985 1986
Nominal produeer price 56.0 56.0 66.0 170.0 185.0-215.0 2/ 245.0 475.0 900.0 1,300.n Rea1lprice tndex 90.7 73.4 54.4 96.9 86.0-99.9 83.5 84.2 l1S.7 125.0
Nomieal producer price 75.0 75.0 120.0 180.0 160.0 360.0 650 0 1,500.0 3/ 1,500.0 3/ "tes prtee tadex 90,7 73.4 73.8 76.6 62.5 91.6 66.0 144.1 107.7 Sorghum 1el0*5"c producer price 75.0 75.0 120.0 160.0 160.0 220.0 4S0.0 1,300.0 It 1,300.0 3/ 'est prtce ladex 90.7 73.4 73.8 68.1 55.5 56.0 59.6 124.9 93.3
nice (unn1tled) 4/ Nointal producer price 28S.0 285.0 265.0 320.0-280.0 32n.0-260.0 420.0 .. ... 1RaI' prico iadex 90.7 73.4 46.1 35.8-31.3 29.2-2S.6 28.1 .. ...
Cotton Nominal preducer prtce 260.0 260.0 300.n 350.0 350.0 800.0 1,500.0 2,000.0 .. Real' price index 90.7 73.4 53.2 43.0 35.0 58.7 30.5 55.4
Soso" eoittnalproducer petce 240.0 240.0 300.0 450.0 700.0 870.0 910.0 S.000.0 'Real petce Ladex 90.7 73.4 57.7 59.8 75.9 69.2 37.7 150.1
Memorandumitems
Consumr Prtce index 5/ 110.2 136.3 216.7 313.4 384.2 524.0 1,006.8 1,387.9 1.657.3 6/
Sourcest Date provided by SOtAWRUIT; th Agricultural fDevelopment Corporation; snd the Ministry of Agrteulture.
1/ fteflated by the consumer price iade:. Ti The Price range asespectfted to differenttate for quality. Ti ThGesepetces reflect the prev.iling market prices. T/ Utll 1980 the price for filled rtee was So. Sh. 350/quinatl and the prtce for unallted rice was So. Sh. 285/quintal. In 1911 the Covernment dtcoantinued purchasesof willed rice. The prices for unmilled short- and long-gratn rtev were set at So. 2 Sh. 320/quintat and So. Sh. 80/quintal,respettively. tn 1983 the prices for unmilled *hort- and long-grain rice were unifted 4 at So. Sb. 20/qutn:al. Subsequently, producer ptices for rice vere no longer set. S/ Period average, 1977 100.* T/ Projecton. Table 7.5
Somalia: Domestic Purchases of Grain by the ADC and Producer and Consumer Prices, 1979/80-1986-87
(In thousands of metric tons and Somali shillings per metric ton)
Maize Sorghum (whtte) Amount Producer Consumer Amount Producer Consumer Total purchases Period 1/ purchased price price purchased price prlce of grain
1979/80 8.6 750 1,160 52.3 750 1,160 60.9
1980/81 4.0 1,200 1,800 12.2 1,200 1,800 16.2
1981182 8.0 1,800 2,500 33.9 1,600 2,300 41.9
1982/83 2.2 1,800 3,250 8.0 1,600 2,650 10.2
1983/84 0.4 3,600 4,700 9.9 2,200 3,300 10.3
1984/85 0.7 6,500 8,100 0.4 4,500 6,100 1.1
1985/86 0.4 15,000 18,000 0.3 13,000 17,000 0.7
1986/87 ... 15,000 18,000 ... 13,000 17,000
Source: Data provided by the ADC.
1/ February-January. PAGE 1 TABLE 8.1 SOMALIA: SELECTED DATA ON PUBLIC AND PRIVATE SECTOR MANUFACTURING INDUSTRIES ENGAGING 5 OR MORE PERSONS (VALUES IN MILLIONS OF SOMALI SHILLINGS)
------___---_------__------___-----_ ITEM 1975 1976 1977 1978 1979 1980 181 19j2
NUMBER OF ESTABLISHMENTS (NO.) 1 299.0 265.0 272.0 277.0 258.0 168.0 170.0 t771.0 PUBLIC 2 46.0 47.0 48.0 53.0 47.0 39.0 PRIVATE 49.0 4j.0 3 253.0 218.0 224.0 224.0 211.0 129.0 121.0 PUBLIC SHARE t34.0 (%) 4 15.4 17.7 17.6 19.1 18.2 23.2 28.2 24.3 EMPLOYMENT (NO.) S t1,445.0 11,542.0 t2.324.0 12,482.0 12.863.0 10.800.0 13.300.0 13,400.0 PUBLIC 6 7,401.0 8.265.0 9,S57.0 9.735.0 9.970.0 8,600.0 PRIVATE 11,400.0 tt,300.0 7 4.044.0 3,277.0 2.767.0 2,747.0 2.893.0 2.200.0 1.900.0 PUBLIC SHARE 2,1OO.0 (X) 8 64.7 71.6 77.5 78.0 77.5 74.6 85.8 84.3 GROSS OUTPUT 9 405.1 489.8 574.5 536.4 882.2 844.3 964.5 1,869.0 PUBLIC 10 3t2.9 396.2 481.6 414.2 712.5 PRIVATE 674.2 721.3 t,563.0 1t 92.2 93.6 92.9 122.2 169.7 170.1 243.2 PUBLIC SHARE (X) 306.0 12 77.2 80.9 83.8 77.2 80.8 76.2 74.8 83.6 VALUE ADDED 13 138.4 209.8 281.1 268.2 283.5 447.8 356.9 467.6 PUBLIC 14 110.0 178.8 249.9 215.9 220.6 387.8 PRIVATE 276.5 402.5 15 28.4 31.0 31.2 52.3 62.9 60.0 80.4 PUBLIC SHARE 65.0 (X) 16 79.5 85.2 88.9 80.5 77.8 86.6 75.6 84.5 WAGES/SALARIES 17 52.3 62.2 72.1 85.6 98.7 91.1 156.4 194.0 PUBLIC to 42.4 52.5 64.3 73.8 85.6 77.8 PRIVATE 140.3 172.0 19 9.9 9.7 7.8 11.8 13.1 13.3 16.1 PUBLIC SHARE 22.0 (%) 20 81.1 e4.4 89.2 86.2 86.7 85.4 89.7 88.7 GROSS FIXED CAPITAL FORMATION 2t 67.4 127.8 102.7 91.8 85.0 46.5 t17.3 345.2 PUBLIC 22 63.6 126.7 97.1 87.9 65.7 PRIVATE 37.9 101.1 290.2 23 3.8 1.1 5.6 3.9 19.3 8.6 PUBLIC SHARE 16.2 55.0 (%) 24 94.4 99.1 94.5 95.8 77.3 81.5 86.3 84.1 GROSS OUTPUT/EMPLOYEE(OOO) 25 3.5 4.2 4.7 4.3 6.9 8.1 7.2 13.9 PUBLIC 26 4.2 4.8 5.0 4.3 7.1 7.8 PRIVATE 6.3 7.2 21 2.3 2.9 3.4 4.4 5.9 7.7 12.0 14.6 VALUE ADOED/EMPLOYEE('000) 28 1.2 1.8 2.3 2.1 2.2 4.1 2.7 3.4 PUBLIC 29 1.5 2.2 2.6 2.2 2.2 PRIVATE 4.5 2.4 3.6 30 0.7 0.9 1.1 1.9 2.2 2.7 4.2 3.1 WAGES AS A % OF VALUE ADOED 314 37.8 29.6 25.6 31.9 34.8 20.3 PUBLIC 42.8 41.4 32 38.5 29.4 25.7 34.2 38.8 46.5 50.7 PRIVATE 42.8 33 34.9 31.3 25.0 22.6 20.8 22.2 20.0 33.8 V.A. AS A % OF GROSS OUTPUT 34 34.2 42.8 48.9 50.0 32.1 PUBLIC 50.6 37.9 25.0 35 35.2 45.1 51.9 52.1 31.0 57.5 38.3 PRIVATE 25.7 36 30.8 33.1 33.6 42.8 37.1 35.3 32.9 21.2
------___---___-._------__-----__-----_------_--- SOURCE:MINISTRV OF NATIONAL PLANNING,*INDUSTRIAL PRODUCTION SURVEY'. TABLE SON/8M/I Table 8.2
Somalia: Industrial Output of Selected Products, 1980-86
1980 1981 1982 1983 1984 1985 1986 1/
Sugar (thousands of tons) 29.1 26.8 34.1 30.8 .30.5 39.5 47.0
Canned meat (millions of tins) 0.8 -- 1.6 0.5 0.6 0.6 0.5
Canned fish (thousands of tons) 0.2 0.8 0.6 - -- --
Milk (millions of lIters) 1.2 1.4 1.1 0.5 -- - ~ 3.4 Pasta and flour (thousands of tons) 7.5 5.9 3.1 10.6 12.6 14.3 19.3
Canned frutts and vegetables (thousands of tons) 0.4 0.7 1.1 ......
Textiles (millions of yards) 13.1 10.1 11.1 6.8 5.2 3.5 4.9
Boxes and bags (thousands of tons) 3.2 3.3 3.5 6.8 5.4 5.4 6.6 Cigarettes and matches (thousands of tons) 0.6 0.5 0.5 0.4 0.3 0.3 0.2 Petroleum products (thousands of tons) 248.4 -- 179.3 226.7 142.6 214.0 220.0
Cement (tihouisandsof tons) ------60.0 E:lectricity(millions of kwh) Production 59.8 69.1 75.7 91.9 112.0 109.0 (Consumption) (58.8) (61.8) (63.6) (71.8) (100.4) (92.8)
Soarces: Data provided by the Central Rank of Somalia; and the Mintstry of Comaerce and Industry.
1/ Prellitnary estimates. - 117 -
Table 8.3
Somalia: ManufacturingEnterprises Performance Indicators 1983-85
Sales Profit/Loss(-) Numberof Sh..ill SSo.lon) (So.Sb. million) *>loer 1983 1984 1985 1983 1984- 1985 1983 1984 1985
Enterprise.
1. Juba Sugar Complex 373 289 840 Loss -52 111 1,870 1,795 2,045
2. SNAI Sugar Factory 26 26 85 -82 -89 -23 1,863 1,277 2,625
3. 0O1 Mill 1/ 4 ...... -1.6 ...... 80 ...... 4. Wheat, Flour and Pasta Factory 100 ...... -7 ...... 297 ...
5. Meat factory,Kismayc 8 17 1 - -1.4 -8.5 303 219 185
6. MillkFactory 1/ 2 ...... -0.7 ...... 71 7. NatlonalBottling Company (private) 46 ...... Proflt ...... 160 ...
8. SNAI-BIASA 2/ 22 ...... 227 ..
9. Cigaretteand Match Factory 941 230 746 24 26.4 36.4 595 593 595
10. Somaltex 120 119 169 -10 -6.6 1.5 1,200 1,239 650 11. Foundryand Mechanical *orkshop 5 9 ... -2 -1 ... 109 120 so
12. AluminumUtensils 10 12 4 -1.5 -6.4 0.8 85 97 155
13. TanneryKa 7 23 ...... 5.t ...... 304 240 264
14. Petroleum Refinery 757 ... 1,522 ... 31.1 -7.2 179
15. Miscellaneous 263 .I...... t50
Sources: Ministryof Industryand Ministryof 4ationalPlanning.
1/ Out of operationfrom 1984. 2/ IncludedIn accountsof SNAI Sugar.Factory from 1984. PAGE 1 TABLE 9.1 SOMALIA: MOGADISHU CONSUMER PRICE INDEX. 1975-85 (1977-100)
------…------,------____ ------_ - ITEM 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985
GENERAL INDEX 1 79.4 91.1 100.0 110.2 136.3 216.7 313.4 384.2 524.0 1.006.8 1.387.9 (WEIGHT 100.0)
FOOD 2 76.2 86.6 100.0 112.9 137.6 244.3 343.0 364.9 512.6 1.102.4 1.249.0 (WEIGIIT 60. t)
BEVRAGES & TOBACCO I/ 3 - - 100.0 106.9 123.4 165.7 234.2 290.4 559.2 1.387.4 1.863.7 (WEIGHT 2.2)
CLOTHING 4 75.6 93.C 100.0 106.9 131.5 173.3 253.2 330.4 530.0 751.6 1.060.0 (WEIGHT 5.6)
RENT & WATER 5 95.8 97.9 100.0 100.1 109.1 151.2 227.4 374.5 409.9 604.5 1.064.2 (WEIGHT 15.3)
FUEL S L'GHTING 6 86.3 82.0 100.0 123.6 163.9 236.0 412.5 707.7 981.4 1.654.3 2.801.0 (WEIGHT 4.7)
MISCELLENEOUS 7 88.7 97.3 100.0 106.5 158.2 183.8 278.5 409.0 538.3 838.5 1,972.8 ' (WEIGHT 12.1) 00
1/ INCLUDED IN HMISCELLENEOUS* FOR THE PERIOD 1970-76. SOURCE: MINISTRY OF PLANNING. CENTRAL STATISTICAL DEPARTMENT.
TABLE SOM/9A/1 PAGE 1 TABLE 9.2 SOMALIA: MOGADISHU CONSUMER PRICE INDEX. 1976-85 (RATES OF INfLATION)
------___------__------ITEM 1976 1977 1978 1979 1980 1961 1982 1963 1984 198S
Gf-NERAL INDEX 1 14.7 9.8 10.2 23.7 59.0 44.6 22.6 36.4 92.1 37.9 (WEIGIT 100.0)
FOOD 13.6 15.5 12.9 21.9 77.5 40.4 6.4 40.5 11S.1 t3.3 (WEIGIT 60.1)
BEVRAGES 8 TOBACCO 1/ 3 - - 6.9 1S.4 34.3 41.3 24.0 92.6 148.1 34.3 (WEIGHT 2.2)
CLOTHING 4 24.1 6.6 6.9 23.0 31.8 46.1 30.S 60.4 41.8 41.0 (WEIGHT 5.6)
RENT 8 WATER 5 2.2 2.1 0.1 9.0 38.6 50.4 64.7 9.5 47.5 76.0 (WEIGHT 15.3)
FUEL & LIGHTING 6 -5.0 22.0 23.6 32.6 44.0 74.8 71.6 38.7 68.6 69.3 (WEIGHT 4.7)
KISCELLENEOUS 7 9.7 2.8 6.S 48.5 16.2 51.s 46.9 31.6 55.8 13S.3 (WEIGHt 12.1)
I/ INCLUDED IN *NISCELLENEOUS* FOR THE PERIOD 1970-76. SOURCE: MINISTRY OF PLANNING. CENTRAL STATISTICAL DEPARTMENT. TABLE SOM/9A/t -120- Table 9.3
Somalia: QuarterlyMovements in the CPI, 1984-86
(1977- 100)
8everages Rent Fuel General and and and Misce11a- index Food tobacco Clothing water power neous
1984 I 863.8 987.9 691.8 677.7 563.3 1,105.3 650.0 II 995.2 1,148.6 1,677.9 714.3 565.8 1,226.6 689.1 ItI 1,058.8 1,167.2 1,609.4 781.5 594.5 1,711.4 877.2 IV 1,111.7 1,105.9 1,570.3 832.8 694.3 2,57'.,1 1,137.7
1985 - 1,225.3 1,173.4 1;713.1 936.7 782.5 2,654.4 1,523.6 tI 1,431.3 1,347.1 1,866.9 1,020.8 968.6 2,808.7 2,000.0 III 1,418.1 1,256.5 1,927.1 1,123.1 1,093.3 2,870.5 2,100.7 IV 1,477.1 1,219.0 1,947.9 1,159.5 1,412.6 2,870.5 2,267.0
1986 I 1,641,1 1,370.1 2,245.5 1,249.8 1,635.8 3,202.0 2,427.6 II 1,913.9 1,611,7 2,306.3 1,342.7 1,877.3 4,254.7 2,705.0
Source: Data providedby the CentralStatistical Department of the linistry of National Planning. - 121 - 'Table9.4
Somalia: RetailPrices of Petroleum,1979-86
Diesel fuel Kerosene Gasoline So. Sh. So. Sh. So. Sh. So. Sh. USS per llter per liter per ltter per gallon per gallon 1/
1979 1.65 1.45 2.40 9.08 1.44
1980 2.15 2.00 3.00 11.36 1.80
1981 August 2.90 2.80 10.00 37.85 3.01
1982 January 6.53 6.00 10.00 37.85 3.01
1983 June 6.53 6.00 10.50 39.74 2.60
1984 November 8.30 9.85 13.00 49.21 1.89
1985 January 11.00 10.26 15.00 56.78 1.58 may 12.00 17.00 16.00 60.56 1.51 June 13.00 18.00 17.00 64.35 1.60 July 14.00 19.50 18.00 68.14 1.68 August 15.75 20.50 18.75 70.97 1.75 October 16.50 20.50 20.75 78.54 1.93 December 18.00 20.50 23.50 88.95 2.09
1986 February 19.00 20.50 25.50 96.53 1.77 March 20.00 21.50 27.50 104.10 1.78 Juno 20.00 21.50 27.50 104.10 1.48
Source: Xational Petroleum Agency.
1/ Converted at official exchange rate. PACE I TABLE 10. I SOMALIA: PRIMARY SCHOOL ENROLLMENT BY GRADE AND SEX ------______.______…-- ITEM 1974 t975 1976 1977 1978 1979 t980 1981 1982 1983 t984
GRADE I MALE 1 15.940 - 82.604 40.808 25. 33 39.365 30.422 40.565 32.049 24.802 26.994 FEMALE 2 8.393 - 51.001 27.448 16.498 23.598 17.850 19.244 t5.458 12.613 15.846 7OTAL 3 24.333 - 133.605 68.256 41,631 62.963 48.272 59.809 47.507 37.415 42.840
GRADE 11 MALE 4 14.235 - 26,129 54.182 30.969 23.397 29.407 25.660 25.608 22.379 20.484 FEMALE 5 5.937 - 12.104 32.323 20.783 14.593 17.612 14.552 12.314 10.774 10.791 TOTAL 6 20.172 - 38.233 86.505 51.752 37.990 47.019 40.212 37.922 33.153 31.275
GRADE 111 MALE 7 10.894 - tt.177 29.356 45.160 28.801 21,978 25.642 21.356 22.379 t8.885 FEMALE 8 4.051 - 4.219 12.263 27.151 18,607 13.778 15.196 11.762 10.100 9.694 TOTAL 9 14.945 - 15.396 41.619 72.311 47.408 35.7S6 40.838 33.118 29.809 28.579
GRADE IV MALE 1O 7.587 - 7.674 1O.496 26.914 41.512 27.306 19.288 21.431 17.986 17.689 FEMALE 11 2.456 - 2.798 4.092 t1i496 23,380 16.582 11.847 12.451 10.246 9.154 TOTAL 12 1O.043 - 10.472 14.588 38.410 64.892 43.888 31.135 33.882 28.232 26.843 N
GRADE V MALE 13 5.402 - - 7.424 9.985 25.608 38.110 10.577 16.571 20.121 17.547 -EMAIE t4 1.879 - - 3.001 4.169 1O.899 22.254 7.7t3 9.743 10.992 9.700 lOTAL IS 7.281 - - 10,425 14.154 36.507 60.364 18.290 26.3t4 31.1t3 27.247
GRADE VI MALE 16 5.867 - 5.64t 5.645 7.274 9.868 24.963 14.660 8.827 14.124 17.636 FEMAtE 17 t.866 - 1.908 1.992 3.012 4.123 10,867 7,451 6.591 8.426 9.416 TOTAL Ia 7.733 - 7.549 7.637 10.286 13.991 35.830 22.111 15.418 22.550 27.052
GRADE VII MALE 19 5.344 - 5.235 - - - - 14.323 12.959 8.222 12.543 FEMAIE 20 1.581 - 1.697 - - - - 10.534 6.690 5.706 7.455 TOTAL 21 6.925 - 6.932 - - - - 24.857 19.649 13.928 19.998
GRADE Vitl MAIE 22 4.235 - 5.531 - - - - 22.936 15.239 14.672 10.005 FEMAtE 23 1.236 - 1.799 - - - - 11.516 10.847 7.854 6.941 lOTAL 24 5.471 - 7.330 - - - - 34.452 26.086 22.526 t6.946 ns,wma=u ,snssssn m=s=c=.=, m======~=in=$c ~===ua===2M=mf= ~=2nS3=SS:U=SCSU *S-gcSS 55533g TOtAt - MALE 25 69.504 - 143.991 147.911 145.435 168.551 172.186 173.651 154.040 142.015 141783 7OTAL - FEMALE 26 27.399 _ 75.526 81:119 83,109 95.200 98.943 98.053 85.856 76.711 78.997
GRAND TUTAL 27 96.903 - 219.517 229.030 228.544 263,751 271.129 271.704 239.896 2t8.726 220.730
1/ ItN 1975. SCHOOLS WERE CLOSED DUE TO A CRASH LITERACY PROGRAN.
SOURCE: MINISTRY OF EDUCATION
lAUILESUM/I1/1 I PAGE 1 TABLE 10.2 SOMALIA: SECONDARYSCHOOL ENROLLMENT BY GRADEAND SEX
------_------__--__------_-- ITEM 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1964
GRADE IX MAIE 28 2.759 - 1,574 4.813 4.979 6.669 7,551 18.846 15.422 10.8668 8.624 FEMALE 29 624 - 253 1,809 1.911 2.188 3.150 7.606 7.277 6.908 4,249 TOTAL 30 3.383 - 1.827 6.622 6.890 8.857 10.701 26.452 22.699 17.776 12.873 GRADE X MALE 31 2.172 - 2.512 2.629 2.489 4.913 5.605 7.157 16.143 15.166 10.596 FEMALE 32 451 - 490 475 685 2.021 1.891 2.515 7.048 7.317 6.705 lOTAL 33 2.623 - 3.002 3.104 3.174 6.934 7.496 9.672 23.191 22.480 17.301 GRADE XI MALE 34 2,030 - 1.765 1.725 2.050 2.084 2.903 4.322 5.042 12.657 12.522 FEMALE 35 345 - 260 437 550 577 975 1.282 1.940 5.414 5.440 TOTAL 36 2.375 - 2.025 2.162 2.600 2.661 3.878 5.604 6.982 18.071 17.962 GRADE XII MALE 37 t.766 - 133 1.371 1.137 1.774 1.689 2.645 3.661 4.724 10.770 FEMALE 38 353 - 59 407 377 575 609 1.118 1.197 1.948 5.463 lOTAL 39 2.119 - 192 1.778 1.514 2.349 2.298 3.763 4.858 6.672 16.253 .. mmuau. ==man==* ..... u.m =u.a. .... suineauuasuins. uUmmuumi musuuuu .uw...... s..e.= .wun..uu= TOTAL - MALE 40 8.727 - 5.984 10.538 10.655 15.440 17.748 32.970 40.268 43.415 42.512 TOTAL - FEMALE 41 1.773 - 1.062 3.t28 3.523 5.361 6.625 12.521 17.462 21.587 21.877 GRAND TOTAL 42 10.500 - 7.046 13.666 14.178 20.801 24.373 45.491 57.730 65.002 64.389 "auuaanmuazum &=aunmoa =usn*mmuuuname=*= mouuwm =mnsoons suuuawu Sanwa=*= sUUUZUm ===meU
1/ IN 1975. SCHOOLS WERE CLOSED DUE TO A CRASH LITERACY PROGRAM. SOURCE: MINISTRY OF EDUCATION TABLE SOM/11/2 I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~7 IBRD 16413R1
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