Hassan Sheikh Says Trade Disruptions Are Driving Up Import Costs and Cutting Government Revenue

New York (WDN) — Somalia’s customs revenue has fallen by about 40% amid disruptions around the Strait of Hormuz, President Hassan Sheikh Mohamud told the UN General Assembly on Thursday.

Hassan Sheikh said Somalia’s heavy reliance on imports from the Middle East has left the country particularly vulnerable to disruptions along the strategic waterway, which have also driven up the cost of food, fuel, transport and insurance.

The president did not specify the period covered by the 40% customs-revenue estimate or provide the underlying revenue figures. Earlier government data presented to the Cabinet in May, however, showed that the volume of goods entering Somalia had fallen by nearly 40% during the Hormuz crisis. The two figures measure different indicators.

Customs duties collected at Somalia’s ports and other entry points are an important source of domestic government revenue, helping finance public services and economic programmes. Lower import volumes can reduce customs receipts while higher shipping and insurance costs increase costs for consumers and businesses.

Hassan Sheikh told the UN that Somalia is continuing efforts to strengthen domestic revenue collection, public financial management and budget transparency, while improving the investment environment.

He said Somalia’s economy is expected to record real growth of 3.1% this year, despite continuing pressures from the global economy.

The president also called for the free and predictable movement of trade through the Strait of Hormuz, saying stability along the waterway is particularly important for vulnerable economies such as Somalia.

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