By Mohamed Mukhtar Ibrahim

The latest statistics on trade and investment between the United Kingdom and Somalia, released on 21 February 2025, paint a concerning picture of a declining relationship. Bilateral trade has plummeted over the past year, with exports and imports experiencing significant drops. This downward trend raises questions about the future of economic ties between the two nations and highlights Somalia’s challenges as it seeks to integrate into the global economy.

A Sharp Decline in Trade

Total trade in goods and services between the UK and Somalia stood at £34 million in the four quarters leading up to the end of Q3 2024. This represents a staggering 56.4% decrease compared to the same period in 2023. The decline is evident in both exports and imports. UK exports to Somalia fell by 41.2% to £30 million, while imports from Somalia dropped by 85.2% to just £4 million. These figures underscore a dramatic contraction in economic activity between the two countries.

Somalia’s position as a trading partner for the UK has also diminished. In the four quarters to the end of Q3 2024, Somalia ranked as the UK’s 180th largest trading partner, accounting for less than 0.1% of total UK trade. This marginal role reflects the limited economic engagement between the two nations despite historical ties and the potential for growth in agriculture, fisheries, and renewable energy sectors.

Foreign Direct Investment

The foreign direct investment (FDI) statistics illustrate the limited economic interaction between the UK and Somalia. In 2023, the UK’s outward FDI stock in Somalia was a modest £611,000, while the inward FDI stock from Somalia to the UK was less than £500,000. These figures highlight the lack of significant investment flows in either direction, suggesting that both countries have yet to explore the potential for mutually beneficial economic partnerships fully.

A Closer Look at 2023 Trade Data

The data for the entire calendar year 2023 provides additional context for the recent decline. Total trade between the UK and Somalia in 2023 was £48 million, a 52% decrease from the previous year. UK exports to Somalia fell by 60.3% to £29 million, with goods and services experiencing sharp declines. Exports of goods decreased by 6.2% to £15 million, while services exports plummeted by 75.4% to £14 million. On the import side, the UK brought in £19 million worth of goods and services from Somalia, a 29.6% decrease from 2022. Notably, imports of goods from Somalia were negligible, at less than £1 million, while imports of services accounted for most of the total.

Challenges and Opportunities

The decline in UK-Somalia trade and investment can be attributed to several factors. Somalia’s ongoing political uncertainty, security challenges, and underdeveloped infrastructure have likely deterred British businesses from engaging more deeply with the country. Additionally, the global economic slowdown and shifting trade priorities in the post-Brexit era may have contributed to the UK’s reduced focus on smaller trading partners like Somalia.

However, despite these challenges, there are opportunities for revitalizing the economic relationship. Somalia’s strategic location along key shipping routes and its untapped natural resources present potential avenues for collaboration. The UK could play a pivotal role in supporting Somalia’s economic development through targeted investments in infrastructure, renewable energy, and capacity-building initiatives. Strengthening trade ties could also benefit UK businesses by opening new markets and diversifying supply chains.

The Path Forward

The UK and Somalia must proactively reinvigorate their economic partnership to reverse the current trend. The UK government could consider offering trade incentives to encourage British businesses to explore opportunities in Somalia. Similarly, Somalia must continue improving governance, enhancing security, and creating a more conducive environment for foreign investment.

Conclusion

The latest statistics on UK-Somalia trade and investment reveal a decline in the relationship, with significant decreases in exports and imports. While the challenges are undeniable, there is potential for growth if both countries are willing to invest in their partnership. By addressing the underlying issues and exploring new opportunities, the UK and Somalia can lay the foundation for a stronger and more prosperous economic relationship in the years to come.

The road ahead may be difficult, but with concerted effort and collaboration, a brighter future is within reach.

Mohamed Mukhtar Ibrahim
Email: mohamed323@hotmail.com
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Mohamed Mukhtar is a former minister of petroleum and minerals in Somalia.