weighted score 2.1 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Somalia
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Somalia as a sourcing destination.
Labour cost competitiveness
9
Extremely low nominal wages but entirely irrelevant — no formal labour market, no manufacturing capacity, and decades of conflict have prevented workforce development.
Supply base depth
1
Effectively zero manufacturing capacity. No industrial base. Only commercially relevant export is livestock through informal networks. No supply chain ecosystem.
Logistics & infrastructure
1
No functioning rail. Minimal road network. Ports below international standards. Internal logistics extremely dangerous. Among the worst infrastructure globally.
Workforce skills
1
Education system collapsed. Minimal literacy rates in conflict zones. No technical or vocational training infrastructure. Workforce skills limited to pastoralism and informal trade.
Scalability
3
Population ~18M but no productive capacity to scale. Decades of state collapse have prevented any industrial development.
Ease of doing business
1
TI CPI 9/100 — joint lowest globally. No functioning commercial legal framework. Al-Shabaab parallel governance. Clan-based dispute resolution. Commercial operations effectively impossible.
Trade access & tariffs
2
EBA eligible (duty-free to EU) but practical trade volumes negligible. UN charcoal ban. Arms embargo. Hawala-based financial system limits formal trade.
Sustainability baseline
1
Over half the population requires humanitarian assistance. Environmental regulation non-existent. IUU fishing endemic. Charcoal production driving deforestation.
Innovation & IP
1
No innovation ecosystem. No research institutions. No IP framework. Mobile money is the single notable technology adoption — driven by necessity rather than innovation capacity.
Quality standards
1
No functioning quality standards system. No certification bodies. Livestock veterinary certification minimal. No product safety framework.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Wage levels
- Somalia has extremely low nominal wages but this is irrelevant for sourcing purposes. Decades of conflict have prevented development of a formal labour market. Most economic activity is informal and clan-based.
- Labour availability
- Population of ~18M but large-scale displacement and minimal education infrastructure mean the available workforce lacks skills for any modern manufacturing or services operation.
- Cost of operations
- Security costs dominate any commercial calculation. Al-Shabaab taxation adds an unpredictable cost layer. Insurance premiums for Somali operations are among the highest globally.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Manufacturing capacity
- Somalia has effectively zero manufacturing capacity. There is no industrial base, no supply chain ecosystem, and no supporting infrastructure for manufacturing operations.
- Port infrastructure
- Mogadishu port handles most formal imports. Berbera (Somaliland) is being developed with UAE investment and is increasingly functional. Bosaso and Kismayo handle limited volumes. No port meets international standards.
- Internal logistics
- No functioning rail system. Road network extremely limited and poorly maintained. Overland logistics are dangerous due to Al-Shabaab checkpoints and clan militia activity.
- Key export: livestock
- Livestock accounts for ~60% of foreign exchange. Trade operates through informal clan-based networks to Gulf states with minimal documentation or traceability.
Trade Access & Business Environment
Trade Access & Business Environment
- Trade preferences
- EBA eligible as LDC, providing duty-free quota-free access to EU. Practical trade volumes are minimal — livestock goes to Gulf states, not EU.
- Business environment
- TI CPI 2025: 9/100 — joint lowest globally. No functioning commercial legal framework across most territory. Clan-based dispute resolution dominates. Al-Shabaab parallel governance in rural areas.
- Banking system
- Formal banking system barely exists. Hawala (informal money transfer) networks handle most financial flows. Mobile money (particularly through Hormuud Telecom) is the primary financial infrastructure.
- Foreign investment
- 70% of federal budget from foreign donors. Some diaspora investment in Mogadishu and Hargeisa (Somaliland). Turkey and UAE are the primary foreign investors. Risk profile deters all but the most risk-tolerant actors.