Somalia economy grows but literacy lags behind

Saturday September 14 2019

Students at Afmadow Primary School in Somalia.

Students at Afmadow Primary School in Somalia. Enrolment into primary school is 32 per cent. Pic: File 

NJIRAINI MUCHIRA
By NJIRAINI MUCHIRA
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The World Bank has applauded Somalia’s economic resurgence, but said that high levels of illiteracy pose a threat to long-term growth.

Despite being ravaged by years of instability and recurring terrorist attacks, Somalia’s economy — currently worth $7.5 billion — doubled its growth to 2.8 per cent in 2018, from 1.4 per cent in 2017.

The country is projected to grow its GDP this year by 2.9 per cent, and up to 3.5 per cent over the medium-term if the current reform momentum continues.

The resurgence comes after years of unsustainable fiscal policies, macroeconomic instability, conflict and state dissolution.

In a report released this past week titled Somalia Economic Update, the World Bank says the country must improve education to enhance productivity, sustain economic recovery, boost inclusive growth and reduce poverty.

Currently, Somalia is grappling with the worst human capital situation with only half of the population being literate, and the government allocating just one per cent of the total budget to education.

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“Somalia is laying the foundation for longer term economic development, but human capital development is essential for growth to be inclusive and sustainable,” said Hugh Riddell, the World Bank country manager for Somalia.

Investments

He added that attracting more public and private investment into Somalia’s education sector is fundamental to poverty reduction in line with the country’s new National Development Plan.

The World Bank says that Somalia is experiencing an economic renaissance with key segments like money transfer services, transport, telecommunications, wholesale and retail and other industries enjoying healthy growth.

Agriculture, which accounts for a third of the GDP, continues to be the mainstay of the economy.

In recent years, the country has grown the economy through wide-ranging reforms that include reconstructing core laws, regulations and policies for taxation and management of public spending, financial inclusion, integrity and stability, a competitive environment for business, and an attractive investment climate.

In the medium-term, the country’s economic growth remains vulnerable to risks like insecurity, weather and climate shocks, and political uncertainty. In the long-term, Somalia’s main challenge in accelerating economic growth is fragile human capital.

The country’s population has been growing at an annual average of 2.9 per cent for the past five years, but real GDP growth has not been enough to boost per capita income resulting in more than 69 per cent of the population living on less than $1.90 per day.

“Investing in Somalia’s human capital will be essential for the country to escape a fragility trap of economic exclusion and vulnerability, and put it back on the path to prosperity,” states the report.

Poverty rate

Somalia’s poverty rate, at 69 per cent, is among the highest globally, exposing households to poor living standards and low education levels as well as poor health, water and sanitation.

In 2016, the country’s gross enrolment ratio for primary school was 32 per cent, much lower than the average gross enrollment of 74 per cent in other low-income sub-Saharan countries.

More than three quarters of schools in the country were destroyed during the civil war and only 38 per cent of teachers are qualified, with only 13 per cent serving rural areas.

“Somalia’s school system will need to be rebuilt from the ground up,” the report notes.

It adds that 40 per cent of the country’s population is aged six to 18, a crucial demographic that must have the opportunity to acquire the knowledge, health and skills to become productive contributors to the national economy.

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