After decades of conflict, the Federal Republic of Somalia is cautiously moving from fragility toward recovery. The journey remains long and uneven, but significant progress is evident.
Governance & Politics
President Hassan Sheikh Mohamud (in office 2022-) leads a federal government seeking to expand state-capacity, reconcile federal-member states and improve security. The opposition landscape remains fragmented; the militant group Al‑Shabaab is a persistent non-state actor and major security challenge.
In 2025 Somalia also secured a seat on the United Nations Security Council for two years, signalling improving international stature.
Economy & Outlook
According to the World Bank’s June 2025 economic update, growth in 2024 was ~4.0% and the outlook for 2025 was revised downward to ~3.0% due to aid uncertainty. Key growth drivers: remittances, agriculture, services. But heavy reliance on external assistance, and persistent food-security and capacity constraints weigh heavily.
A debt-relief-deal worth USD 306.5 million with the Arab Monetary Fund in April 2025 is a notable milestone in macro-economic reform.
Tourism, Infrastructure & Services
Tourism is emerging from decades of war. A September 2025 article noted that “growing stability fuels rise in tourism with vibrant markets, pristine beaches and desert rallies” in Somalia. Infrastructure remains weak (airports, roads, hotels) but return of diaspora investment and regional flights is contributing to early signs of sector revival.
The “Economic Update” further notes the need to build institutions for sustained growth.
Business Climate & Ease of Doing Business
Investing in Somalia remains very high risk, but improving. The 2025 Investment Climate Statement highlights that private-ownership laws are still being developed and institutional capacity remains very weak. Security, regulatory unpredictability, and weak property rights remain the major constraints.
Human Rights, Security & Governance
Human rights and security remain major Achilles’ heels. Reports by Amnesty International and EU agencies document serious violations: civilian casualties, sexual violence, child recruitment, restrictions on freedom of expression, and militia/clan-based abuses.
Al-Shabaab remains active. The withdrawal of AU peace-keeping forces in 2025 raises alarm for civilian protection.
Food-security crisis: A UN food-aid agency has warned hunger levels are rising sharply.
The Big Picture
Somalia is a country in transition — from war and statelessness toward institutional rebuilding, economic re-engagement and tourism revival. For adventurous investors, developers and tourists, the upside is significant (untapped markets, first-mover advantage). But the risks remain exceptionally high: security, governance, humanitarian fragility and infrastructure deficits dominate the risk-landscape.
Federal Republic of Somalia the sore thumb of the region
