## Section I. Detailed Technical Assessment and Recommendations

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---

### Mission purpose and outcomes
- Technical assistance mission conducted during May 3– 14, 2023, to support the Somalia National Bureau of Statistics (SNBS) to compile 2022 GDP estimates.
- Mission purpose: provide technical assistance (TA) to SNBS to conduct a comprehensive GDP revision incorporating latest source data and methods and to update the base year from 2017 to 2022.
- Mission financed by the IMF Somalia Country Fund.
- Mission coincided with a mission on updating weights for the Consumer Price Index (CPI).

### Importance of updated national accounts
- Reliable national accounts statistics are essential for informed economic policymaking by the Federal Government of Somalia and for private sector, foreign investors, and public decision-making.
- December 2022 IMF Staff Report noted that “data provision has serious shortcomings that significantly hamper surveillance.”
- Updating national accounts is part of SNBS plans to improve availability and quality of GDP data for Somalia.

### Major compilation activities and methodological updates
- SNBS updated annual GDP time series up to 2022, incorporated new data sources, and rebased constant price estimates from 2017 to 2022.
- 2022 Somalia Integrated Household Budget Survey (SIHBS) results were incorporated and used to develop a more comprehensive measure of the level of household spending in 2022.
- GDP compilation system uses an Excel-based compilation system; a Sources and Methods document has been published on the SNBS website.
- Annual activity indicators remain limited to exports and imports (mainly Central Bank of Somalia - CBS) and government accounts; many component annual growth rates rely on assumptions in the absence of annual measures.
- Priority: develop an annual business survey and explore possible use of taxation information.

### Key preliminary results and statistics (2021–2022)
- Somalia’s real GDP for 2022 increased by 2.3 percent (compared with 3.6 percent in 2021).
- Preliminary estimates showed Somalia’s real GDP for 2023 increased by 2.3 percent.
- Gross national expenditure exceeds GDP by about 60 percent because of spending made possible by remittances and official transfers.
- Household final consumption expenditure is the largest component of GDP and increased by 5.2 percent in 2022; the level of household consumption is more than 100 percent of GDP.
- Non-food is the fastest growing household consumption component; food and housing assumed to have grown in line with the population.
- Government final consumption expenditure is 7.4 percent of GDP and increased by 7.7 percent in 2022.
- Capital formation accelerated to 35 percent growth in 2022.

- Preliminary Results - Somalia’s GDP: 2021 and 2022 (Constant 2022 Prices, percentage change from previous year)
  - GDP: 2021 — 3.6; 2022 — 2.3
  - Household final consumption expenditure: 2021 — 2.9; 2022 — 5.2
  - Government final consumption expenditure: 2021 — 9.3; 2022 — 7.7
  - Gross fixed capital formation: 2021 — 13.5; 2022 — 35
  - Exports of goods and services: 2021 — 17; 2022 — 13.7
  - Imports of goods and services: 2021 — 8.3; 2022 — 20.2

- Other related series
  - Population (persons): 2021 — 15,188,775; 2022 — 15,614,061
  - GDP per capita (US dollars): 2021 — 641; 2022 — 659

### Data quality, coverage, and uncertainties
- SIHBS covered all six Federal Member States (FMS), including Somaliland; results were scaled up using national population numbers, implicitly covering non-sampled regions by assuming national average consumption patterns.
- Government and livestock data have strong foundations; annual estimates of movements in expenditure rely on extrapolations and indirectly related indicators (chiefly imports) and are subject to uncertainty.
- Rebasing uses the existing CPI series because further work is required before an updated national CPI series can be published; for HFCE categories for Food, Housing and Other, new SIHBS weights are already built in.
- If splicing the old CPI series to a new CPI is followed, introduction of the new CPI (proposed in late 2023) would not affect GDP estimates published up to 2022.

### Planned surveys and censuses to improve statistical foundations
- SNBS will conduct a Business Census in respect of 2023, with implementation gearing up at the end of 2023.
- SNBS plans the first Population Census since 1985; can support improvements, especially if designed to provide measures of the informal sector.
- After Population Census results are available, SNBS plans to introduce a labor force survey, with a smaller sample to monitor developments more frequently than possible with a full census.

### Priority recommendations (summary and target dates)
- Publish final, updated and rebased GDP time series up to 2022 on the SNBS website. Explain the new sources and revised base year to users. — Target completion: June 30, 2023.
- Continue outreach to users and explain the new sources and revised base year to users. — Target completion: September 30, 2023.
- National Accounts staff to be involved in designing the Population Census and emphasize collecting data on employment by industry to estimate the informal sector. — Target completion: December 31, 2023.
- Maintain contact with other users of SIHBS data to ensure consistency and replicability of results; review experience of SIHBS to develop guidance for the next SIHBS. — Target completion: December 31, 2023.
- Explore development of additional data sources, including the Business Census, data from the taxation authorities, government wages, and additional surveys. — Target completion: March 31, 2024.
- Additional priority recommendation: plan that national accounts data gaps are addressed by the forthcoming Business Census, Agriculture Census, and Population Census. — Target date: September 2023.

### Implementation and next steps
- Further details on priority recommendations and related actions/milestones are provided in the action plan under Detailed Technical Assessment and Recommendations.
- Results may be revised after the mission due to checking or to be consistent with any revisions to source data.

*Source: Section I. Detailed Technical Assessment and Recommendations, IMF Technical Report – Somalia National Accounts Mission*

---

### 1somea2023003 - 2022. The greatest factor is the construction boom, but investment in equipment and machinery are also

### Economic context and external balance
- Construction boom and strong investment in equipment and machinery drove rapid growth in related imports, largely canceling their effect on GDP.
- Exports of goods and services grew to 17.5 percent of GDP.
- Imports of goods and services are 79.5 percent of GDP.
- Remittances and aid fund imports to an unusual degree—more than exports.
- Limited domestic production capacity means demand growth tends to be met largely by import growth.

### Assessment of the statistical system of Somalia
- Data provision has serious shortcomings that significantly hamper surveillance.
- Macroeconomic and financial statistics are being developed but there are few data sources and information systems are not yet adequate.
- Authorities’ Statistical Action Plan underpins further improvements, including further work on GDP by expenditure, a production-based estimate of GDP, and a new national CPI.
- Continued IMF CD support is needed to strengthen compilation and dissemination of national accounts, consumer price index, government finance statistics, external sector statistics, and monetary and financial statistics.

- National accounts developments:
  - Official estimates of annual GDP by expenditure began to be compiled and released in 2020; new estimates are released each June.
  - Estimates used a fixed base year of 2017; SNBS updated base year to 2022 as part of rebasing.
  - SNBS received technical assistance to develop a business register to support a business survey and production-based GDP estimates.
  - A business census is forthcoming (February 2023), and SNBS expects to publish production-based GDP estimates later in 2023.
  - A new population census is expected in 2024 or 2025, the first after 40 years.

### 2022 SIHBS — key findings
- SIHBS conducted during May–July 2022; foundation for improving national accounts household consumption levels and for updating CPI weights.
- Survey outsourced to a private company together with SNBS; planned frequency: five-yearly intervals.
- Published SIHBS report did not provide results for household expenditures or income; raw micro-level data had to be processed during the mission.
- Raw micro-level data had some misreporting and incomplete responses identified and resolved during mission processing.
- World Bank will undertake poverty analysis using SIHBS and derive independent consumption weights.
- Comparison to prior methods: household expenditure previously estimated from the 2016 High Frequency Survey; SIHBS had a bigger sample and higher detail; overall level of expenditure increased over extrapolated value of old methods by about 20 percent.
- Survey response rate: 96 percent.
- SIHBS expenditure requires adjustments to derive household consumption (steps shown in Appendix 1 in source).

- Measured composition of household consumption expenditure (annualized totals reported to the survey; COICOP 2018 classification)
  - Total: 36 416 459 USD; Share of total consumption 2022: 100; Share of total consumption 2016: 100
  - 01 Food and Non-Alcoholic Beverages: 18 749 601 USD; Share 2022: 51.49; Share 2016: 61.3
  - 02 Alcoholic Beverages, Tobacco & Narcotics: 751 307 USD; Share 2022: 2.06; Share 2016: 2.2
  - 03 Clothing and Footwear: 3 168 422 USD; Share 2022: 8.70; Share 2016: 7.52
  - 04 Housing, Water, Electricity, Gas and other Fuels: 3 858 754 USD; Share 2022: 10.60; Share 2016: 12.05
  - 05 Furnishings, Household Equipment and Household Maintenance: 1 843 200 USD; Share 2022: 5.06; Share 2016: 3.32
  - 06 Health: 563 800 USD; Share 2022: 1.55; Share 2016: 0.66
  - 07 Transport: 3 119 292 USD; Share 2022: 8.57; Share 2016: 1.2
  - 08 Information and communication: 1 464 078 USD; Share 2022: 4.02; Share 2016: 1.23
  - 09 Recreation, sport and culture: 198 401 USD; Share 2022: 0.54; Share 2016: 0.35
  - 10 Education services: 536 415 USD; Share 2022: 1.47; Share 2016: 1.08
  - 11 Restaurants and accommodation services: 342 531 USD; Share 2022: 0.94; Share 2016: 6.85
  - 12 Insurance and financial services: 108 184 USD; Share 2022: 0.30 (Combined with COICOP 13 in 2016)
  - 13 Personal care, social protection and miscellaneous goods and services: 1 712474 USD; Share 2022: 4.70; Share 2016: 2.22

- Observed consumption pattern changes:
  - Food share fell considerably (consistent with rising living standards).
  - Communications rose substantially (consistent with growth in mobile phone use).
  - Restaurants and transport showed larger-than-expected changes.

### Design and implementation recommendations for SIHBS and related surveys
- Coordinate with other users to ensure consistent treatment of adjustments, outliers, and data cleaning.
- Address shilling/dollar and quantity unit inconsistencies; perform data checking and timely follow-up with collectors/reporters.
- Implement follow-up probes on under- and mis-reporting (e.g., omission of meals outside home, dwelling rents reported as zero).
- Stratify and calibrate sample to the whole population; calibrate results for location, household size, household type once updated population data are available.
- Consider splitting extensive topical coverage into separate surveys if burden undermines response; despite breadth, response rate was 96 percent.
- Retrospective adjustment for 2022 results could be considered once current population structure information is obtained.

### Review of sources and possible future developments
- Rebase opportunity: introduce new sources and methods; SNBS updating base year from 2017 to 2022 consistent with five-year practice.
- Major change in 2022 rebase: incorporation of SIHBS results; SIHBS level of consumption higher than previous extrapolated estimates.
- Agricultural crop estimates (FSNAU) were investigated as a potential source to measure locally supplied food; exploratory results not yet suitable for national accounts due to time series inconsistency.
- Deflator recommendation: investigate a specific deflator for compensation of employees in government final consumption instead of using headline CPI.
- Interpretation of imports:
  - Somalia national accounts use imports data as indicators of domestic transactions (e.g., construction estimated from imports of building materials).
  - Two imports data sources: COMTRADE and CBS.
    - COMTRADE compiled by UN Statistics Division from partner countries; limited timeliness and incomplete for recent years.
    - CBS compiles data from Somalia customs returns and other sources; customs system partly decentralized and collects quantities not values.
  - Both sources show large increases in imports; growth of Somalia as a trans-shipment center means imports include increasing shares not destined for Somalia market.
  - Mission incorporated adjustment factors by product group for import indicators used to estimate domestic transactions to achieve smoother series without excessive growth rates.
  - For consistency, overall expenditure aggregates continue to use CBS exports and imports estimates without adjustment.
  - SNBS plans to develop a trade statistics unit.

- National expenditure and income measures:
  - GNDI about USD 16 billion.
  - GDP about USD 11 billion.
  - Gross national expenditure is about USD 17 million.
  - High values of official aid and remittances mean GNDI is considerably higher than GDP; data on net income from abroad are available from balance of payments statistics.

### Future Business Census and informal sector measurement
- Business Census:
  - SNBS planned a census of formal businesses in respect of 2023, with data becoming available in 2024.
  - Agriculture Census will be conducted; other industries covered in Business Census.
  - Planned annual conduct of Business Census to provide foundation for GDP by production approach; possibility to revert to smaller-sample annual survey after initial census to reduce costs.
  - Pilot test recommended to check data availability, respondent cooperation, questionnaire design.
- Informal sector considerations:
  - Informal sector is very large; macroeconomic measurement incomplete without measures of informal activity.
  - Business Census will be limited for industries dominated by informal enterprises unless complementary data obtained.
  - Population Census can be designed to support measurement of informal activities.
  - Population Census should collect household employment by industry; sales/financial data are not suited to census but employment and hours worked can be recorded.
  - Value added in informal sector can be estimated by multiplying number of informal employees by estimate of value added per person with downward adjustment relative to formal sector small-business productivity.

### Future Population Census
- No census since 1985; standard requirement and provides framework for representative samples.
- Next Population Census planned for Somalia in 2024; a date has not been set and funding/logistics are substantial.
- Earlier in report: a new population census is expected in 2024 or 2025, the first after 40 years.
- Importance for national accounts:
  - Provides foundation for components currently extrapolated on estimated population and growth rates.
  - Useful for measuring informal sector through household employment data.
- Employment data in census should be aligned with business survey definitions to derive informal employment as difference between total persons in each industry and formal business employment.
- Consider measuring hours worked to improve precision, subject to cost and respondent cooperation.

### Development of GDP by the production approach
- SNBS long-term plan to compile GDP by the production approach (value added by industry); currently GDP compiled by expenditure approach only.
- Project should stock-take existing indicators and identify gaps, use Business Census as starting point but supplement for informal sector.
- Sector measurement prospects:
  - Agriculture: planned census; livestock relatively well measured; SNBS plans to engage with FSNAU.
  - Concentrated/regulated sectors (government, large manufacturers, utilities, ports, telecommunications, finance) likely easier to measure.
  - Construction capital formation currently measured via imports of building materials with mark-up; if domestic production of building materials rises, measures of local supply needed.
  - Many industries have substantial informal activities (retail, construction, transport, personal services) requiring additional measurement.

### Administrative and survey sources to support production approach
- Ministry of Finance tax data:
  - System collects income tax information; business income and expense data reported by formal enterprises are available and can be supplied to SNBS.
  - Advantages: no additional funding required; annual availability helps fill need for annual trend indicators.
  - Usability assessment needed: industry classification suitability, understatement of activity, multi-industry conglomerates, coverage proportion in tax system.
- Labor force and employment surveys:
  - A regular labor force survey with employment by industry would enhance monitoring of economic trends.
  - SNBS previously conducted a one-off labor force survey; forthcoming Population Census provides framework for representative future surveys.
  - Quarterly or annual surveys collecting employment by industry and hours of work would be valuable.

### Compilation system and operational recommendations
- SNBS currently uses a system of customized Excel spreadsheets that are understood and amendable.
- Mission suggestions:
  - Use comments and text extensively to explain data sources and reasons for adjustments.
  - Add tables with growth rates in current prices, constant prices, and deflators to help identify errors or unusual movements.
  - Convert monthly CPI data by the monthly exchange rate and derive the annual average (rather than averaging monthly CPI values then converting at an annual average exchange rate) to better match exchange rates by month.

### Officials met during the mission
- Mr. Hashim Abdinoor — SNBS — National Accounts and Prices
- Mr. Abdulkadir Dahir Ahmed — SNBS — Prices
- Mr. Mohamed Noor Ahmed — SNBS — Prices
- Ms. Ayan Abdi — SNBS — National Accounts
- Ms. Naima Ibrahim — SNBS — National Accounts
- Mr. Abdirashid Khalif — SNBS — National Accounts
- Mr. Mohamed Abdinur Mohamed — SNBS — National Accounts
- Mr. Zahir Omar — SNBS — National Accounts

*IMF | Technical Report – Somalia National Accounts Mission*

---

### Appendix I. Adjustments to Derive Household Final Consumption from SIHBS

### Main adjustment steps
- 1) Convert to annual basis
  - Weekly data multiplied by 365/7; example: food spending collected for seven days; durables reported for previous twelve months.
  - Annual conversion does not give an exact match for the calendar year; products reported on a 52-week basis cover the year to May–July 2022.
  - Coverage: total SIHBS results refer to total consumption for the 7,212 households / 47,599 persons included in the SIHBS.
- 2) Add goods consumed without payment
  - Food and other aid or gifts from charities/NGOs/relatives abroad: USD 584,124 (USD 192 per capita).
  - Non-food aid/gifts from charities/NGOs/relatives abroad: USD 21,887 (USD 7 per capita).
  - Production for own use (mainly subsistence farming): USD 488,388 (USD 160 per capita).
- 3) Add imputed rent on owner-occupied dwellings
  - Result: USD 2,962,434 in total (USD 972 per capita).
- 4) Exclude non-consumption items
  - Intermediate consumption, second-hand goods (except retail margins), capital formation, taxes on income and wealth excluded.
  - Donations to mosques and other charities: SIHBS indicates USD 5 per capita, so left in household consumption for this rebase.
  - Jewelry treated as capital formation (valuables).
- Adjust for under-reported items
  - Qat purchases increased by 80 percent to be compatible with the level of imports; estimate of understatement for qat: USD 159,820 in total (USD 52 per capita).
  - Meals outside the home: no adjustment made.
- 6) Add financial services charged as a margin
  - Implicit fees (buy-sell spread on remittances and other money transfers) and banks' margin on interest estimated as 1 percent of inward and outward remittances: total USD 18,345 (USD 6 per capita).
  - Insurance premiums negligible; insurance services not added for this rebase.
- 7) Convert from survey population to national population
  - SIHBS coverage: 7,212 households, average household size 6.6 people, covering 47,599 people.
  - Total estimated 2022 population of Somalia: 15,614,061.
  - Adjustment factor: 15,614,061 / 47,599 = 328.3.

### Appendix II. Effects of Rebase — Key current price results (US Dollars millions)
- Household final consumption (Previously Published): 2017: 7,968; 2018: 8,497; 2019: 9,330; 2020: 9,989; 2021: 10,720.
- Household final consumption (New Results): 2017: 10,343; 2018: 10,518; 2019: 11,792; 2020: 11,809; 2021: 12,304.
- Government final consumption (Previously Published): 2017: 486; 2018: 495; 2019: 529; 2020: 595; 2021: 677.
- Government final consumption (New Results): 2017: 486; 2018: 495; 2019: 529; 2020: 595; 2021: 676.
- Gross fixed capital formation (Previously Published): 2017: 784; 2018: 868; 2019: 917; 2020: 939; 2021: 1,244.
- Gross fixed capital formation (New Results): 2017: 954; 2018: 1,168; 2019: 1,292; 2020: 1,340; 2021: 1,770.
- Exports of goods and services (Both): 2017: 994; 2018: 1,119; 2019: 1,131; 2020: 1,178; 2021: 1,532.
- Exports of which: livestock (Previously Published): 2017: 268; 2018: 294; 2019: 406; 2020: 402; 2021: 523.
- Exports of which: livestock (New Results): 2017: 288; 2018: 311; 2019: 406; 2020: 402; 2021: 523.
- Imports of goods and services (Both): 2017: 4,624; 2018: 5,122; 2019: 5,423; 2020: 5,818; 2021: 6,544.
- GDP at purchasers' prices (Previously Published): 2017: 5,609; 2018: 5,856; 2019: 6,485; 2020: 6,883; 2021: 7,628.
- GDP at purchasers' prices (New Results): 2017: 8,152; 2018: 8,178; 2019: 9,320; 2020: 9,104; 2021: 9,739.
- GDP per capita, US Dollars (Previously Published): 2017: 412; 2018: 419; 2019: 451; 2020: 466; 2021: 502.
- GDP per capita, US Dollars (New Results): 2017: 599; 2018: 585; 2019: 648; 2020: 616; 2021: 641.

### Appendix II. Effects of Rebase — Ratios and growth (selected)
- New/Previous (Ratio) for Household final consumption: 2017: 1.30; 2018: 1.24; 2019: 1.26; 2020: 1.18; 2021: 1.15.
- New/Previous (Ratio) for GDP at purchasers' prices: 2017: 1.45; 2018: 1.40; 2019: 1.44; 2020: 1.32; 2021: 1.28.
- Effect of Rebase – Growth Constant Price Estimates (percent)
  - Previously Published GDP growth: 2018: 3.8; 2019: 2.4; 2020: -0.3; 2021: 2.9.
  - New Results GDP growth: 2018: 3.1; 2019: 3.7; 2020: -2.6; 2021: 3.6.
  - Difference in percentage points (New - Previous) for GDP: 2018: -0.7; 2019: 1.2; 2020: -2.3; 2021: 0.8.
  - Previously Published household final consumption growth: 2018: 4.6; 2019: 5.1; 2020: 2.3; 2021: 3.9.
  - New Results household final consumption growth: 2018: 3.2; 2019: 3.4; 2020: -0.8; 2021: 2.9.
  - Difference in percentage points (New - Previous) for household final consumption: 2018: -1.3; 2019: -1.7; 2020: -3.1; 2021: -1.0.
  - Gross fixed capital formation previously published growth: 2018: 8.9; 2019: 3.3; 2020: 2.7; 2021: 15.8.
  - Gross fixed capital formation new growth: 2018: 21.1; 2019: 12.6; 2020: 4.1; 2021: 13.5.
  - Difference in percentage points for gross fixed capital formation: 2018: 12.2; 2019: 9.3; 2020: 1.4; 2021: -2.3.

### Analytical notes and methodological implications
- Current price estimates affected by new sources and methods; household consumption is higher reflecting SIHBS results.
- For the import growth extrapolator used for household consumption other than food and housing and for capital formation, CBS estimates were used rather than COMTRADE, changing trend growth rates.
- Constant price estimates moved from a 2017 base year to 2022; changes in the structure of relative prices and current price sources/methods affect growth rates of aggregates.

*IMF | Technical Report – Somalia National Accounts Mission*

### Section I. Detailed Technical Assessment and Recommendations ...................................................... 5

### Section I. Detailed Technical Assessment and Recommendations

### Mission purpose and outcomes
- A technical assistance mission was conducted during May 3– 14, 2023, to support the Somalia National Bureau of Statistics (SNBS) to compile 2022 GDP estimates.
- The mission’s purpose: provide technical assistance (TA) to SNBS to conduct a comprehensive GDP revision incorporating latest source data and methods and to update the base year from 2017 to 2022.
- The mission was financed by the IMF Somalia Country Fund.
- The mission coincided with a mission on updating weights for the Consumer Price Index (CPI).

### Importance of updated national accounts
- Reliable national accounts statistics are essential for informed economic policymaking by the Federal Government of Somalia and for private sector, foreign investors, and public decision-making.
- The December 2022 IMF Staff Report noted that “data provision has serious shortcomings that significantly hamper surveillance.”
- Updating the national accounts is part of SNBS plans to improve availability and quality of GDP data for Somalia.

### Major compilation activities and methodological updates
- SNBS updated annual GDP time series up to 2022, incorporated new data sources, and rebased constant price estimates from 2017 to 2022.
- The 2022 Somalia Integrated Household Budget Survey (SIHBS) results were incorporated and used to develop a more comprehensive measure of the level of household spending in 2022.
- The GDP compilation system uses an Excel-based compilation system and a Sources and Methods document has been published on the SNBS website.
- Annual activity indicators remain limited to exports and imports (mainly Central Bank of Somalia - CBS) and government accounts. Annual growth rates for many components rely on assumptions in the absence of annual measures.
- Priority is to develop an annual business survey and explore possible use of taxation information.

### Key preliminary results and statistics (2021–2022)
- The mission’s preliminary results showed that Somalia’s real GDP for 2022 increased by 2.3 percent (compared with 3.6 percent in 2021).
- The mission prepared preliminary estimates that showed Somalia’s real GDP for 2023 increased by 2.3 percent.
- Gross national expenditure exceeds GDP by about 60 percent because of spending made possible by remittances and official transfers.
- Household final consumption expenditure is the largest component of GDP and increased by 5.2 percent in 2022. The level of household consumption is more than 100 percent of GDP, reflecting a high proportion of consumption supplied from imports.
- Non-food is the fastest growing household consumption component, while food and housing are assumed to have grown in line with the population.
- Government final consumption expenditure is 7.4 percent of GDP and increased by 7.7 percent in 2022.
- Capital formation accelerated to 35 percent growth in 2022.

Preliminary Results - Somalia’s GDP: 2021 and 2022 (Constant 2022 Prices, percentage change from previous year)
- GDP: 2021 — 3.6; 2022 — 2.3
- Household final consumption expenditure: 2021 — 2.9; 2022 — 5.2
- Government final consumption expenditure: 2021 — 9.3; 2022 — 7.7
- Gross fixed capital formation: 2021 — 13.5; 2022 — 35
- Exports of goods and services: 2021 — 17; 2022 — 13.7
- Imports of goods and services: 2021 — 8.3; 2022 — 20.2
Other related series
- Population (persons): 2021 — 15,188,775; 2022 — 15,614,061
- GDP per capita (US dollars): 2021 — 641; 2022 — 659

### Data quality, coverage, and uncertainties
- Coverage improved: the SIHBS covered all six Federal Member States (FMS), including Somaliland; results were scaled up using national population numbers and thus implicitly cover non-sampled regions by assuming national average consumption patterns.
- While government and livestock data have strong foundations, annual estimates of movements in expenditure rely on extrapolations and indirectly related indicators (chiefly imports) and are subject to uncertainty.
- The rebased estimates make use of the existing CPI series because further work is required before an updated national CPI series can be published. For HFCE categories for Food, Housing and Other, the new SIHBS weights are already built in.
- If the practice of splicing the old CPI series to a new CPI is followed, the introduction of the new CPI (proposed in late 2023) would not affect GDP estimates published up to 2022.

### Planned surveys and censuses to improve statistical foundations
- SNBS will conduct a Business Census in respect of 2023, with implementation gearing up at the end of 2023.
- SNBS plans to conduct the first Population Census since 1985, which can support improvements, especially if designed to provide measures of the informal sector.
- After Population Census results are available, SNBS plans to introduce a labor force survey, with a smaller sample to monitor developments more frequently than possible with a full census.

### Priority recommendations (summary and target dates)
- Publish final, updated and rebased GDP time series up to 2022 on the SNBS website. Explain the new sources and revised base year to users. — Target completion: June 30, 2023.
- Continue outreach to users and explain the new sources and revised base year to users. — Target completion: September 30, 2023.
- National Accounts staff to be involved in designing the Population Census and emphasize collecting data on employment by industry to estimate the informal sector. — Target completion: December 31, 2023.
- Maintain contact with other users of SIHBS data to ensure consistency and replicability of results; review experience of SIHBS to develop guidance for the next SIHBS. — Target completion: December 31, 2023.
- Explore development of additional data sources, including the Business Census, data from the taxation authorities, government wages, and additional surveys. — Target completion: March 31, 2024.

Additional priority recommendations highlighted in the mission summary
- Plan that national accounts data gaps are addressed by the forthcoming Business Census, Agriculture Census, and Population Census. — Target date: September 2023.

### Implementation and next steps
- Further details on priority recommendations and related actions/milestones are provided in the action plan under Detailed Technical Assessment and Recommendations.
- Results may be revised after the mission due to checking or to be consistent with any revisions to source data.

*Source: Section I. Detailed Technical Assessment and Recommendations, IMF Technical Report – Somalia National Accounts Mission*

### 2022. The greatest factor is the construction boom, but investment in equipment and machinery are also

### 1somea2023003 - 2022. The greatest factor is the construction boom, but investment in equipment and machinery are also

### Economic context and external balance
- Construction boom and strong investment in equipment and machinery drove rapid growth in related imports, largely canceling their effect on GDP.
- Exports of goods and services grew to 17.5 percent of GDP.
- Imports of goods and services are 79.5 percent of GDP.
- Remittances and aid fund imports to an unusual degree—more than exports.
- Limited domestic production capacity means demand growth tends to be met largely by import growth.

### Assessment of the statistical system of Somalia
- Data provision has serious shortcomings that significantly hamper surveillance.
- Macroeconomic and financial statistics are being developed but there are few data sources and information systems are not yet adequate.
- The authorities’ Statistical Action Plan underpins further improvements, including:
  - further work on GDP by expenditure,
  - a production-based estimate of GDP,
  - a new national CPI.
- Continued IMF CD support is needed to strengthen compilation and dissemination of:
  - national accounts,
  - consumer price index,
  - government finance statistics,
  - external sector statistics,
  - monetary and financial statistics.
- National accounts developments:
  - Official estimates of annual GDP by expenditure began to be compiled and released in 2020; new estimates are released each June.
  - Estimates used a fixed base year of 2017; SNBS updated base year to 2022 as part of rebasing (see Section D).
  - SNBS received technical assistance to develop a business register to support a business survey and production-based GDP estimates.
  - A business census is forthcoming (February 2023), and SNBS expects to publish production-based GDP estimates later in 2023.
  - A new population census is expected in 2024 or 2025, the first after 40 years.

### 2022 Somalia Integrated Household Budget Survey (SIHBS) — key findings
- SIHBS conducted during May–July 2022; provides foundation for improving national accounts household consumption levels and for updating CPI weights.
- Conduct arrangements and data quality:
  - Survey outsourced to a private company together with SNBS.
  - Planned frequency: five-yearly intervals.
  - Published SIHBS report did not provide results for household expenditures or income; raw micro-level data had to be processed during the mission.
  - Raw micro-level data had some misreporting and incomplete responses that were identified and resolved during mission processing.
  - World Bank will undertake poverty analysis using SIHBS and derive independent consumption weights.
- Comparison to prior methods:
  - Household expenditure previously estimated from the 2016 High Frequency Survey.
  - SIHBS had a bigger sample and higher detail; SNBS considered it more reliable.
  - Overall level of expenditure increased over extrapolated value of old methods by about 20 percent.
- Survey response rate: 96 percent.
- SIHBS expenditure requires adjustments to derive household consumption (steps shown in Appendix 1 in source).

- Measured composition of household consumption expenditure (annualized totals reported to the survey; COICOP 2018 classification):
  - Total: 36 416 459 USD; Share of total consumption 2022: 100; Share of total consumption 2016: 100
  - 01 Food and Non-Alcoholic Beverages: 18 749 601 USD; Share 2022: 51.49; Share 2016: 61.3
  - 02 Alcoholic Beverages, Tobacco & Narcotics: 751 307 USD; Share 2022: 2.06; Share 2016: 2.2
  - 03 Clothing and Footwear: 3 168 422 USD; Share 2022: 8.70; Share 2016: 7.52
  - 04 Housing, Water, Electricity, Gas and other Fuels: 3 858 754 USD; Share 2022: 10.60; Share 2016: 12.05
  - 05 Furnishings, Household Equipment and Household Maintenance: 1 843 200 USD; Share 2022: 5.06; Share 2016: 3.32
  - 06 Health: 563 800 USD; Share 2022: 1.55; Share 2016: 0.66
  - 07 Transport: 3 119 292 USD; Share 2022: 8.57; Share 2016: 1.2
  - 08 Information and communication: 1 464 078 USD; Share 2022: 4.02; Share 2016: 1.23
  - 09 Recreation, sport and culture: 198 401 USD; Share 2022: 0.54; Share 2016: 0.35
  - 10 Education services: 536 415 USD; Share 2022: 1.47; Share 2016: 1.08
  - 11 Restaurants and accommodation services: 342 531 USD; Share 2022: 0.94; Share 2016: 6.85
  - 12 Insurance and financial services: 108 184 USD; Share 2022: 0.30 (Combined with COICOP 13 in 2016)
  - 13 Personal care, social protection and miscellaneous goods and services: 1 712474 USD; Share 2022: 4.70; Share 2016: 2.22
- Observed consumption pattern changes:
  - Food share fell considerably (consistent with rising living standards).
  - Communications rose substantially (consistent with growth in mobile phone use).
  - Restaurants and transport showed larger-than-expected changes.

### Design and implementation recommendations for SIHBS and related surveys
- Coordinate with other users to ensure consistent treatment of adjustments, outliers, and data cleaning.
- Address shilling/dollar and quantity unit inconsistencies; perform data checking and timely follow-up with collectors/reporters.
- Implement follow-up probes on under- and mis-reporting (e.g., omission of meals outside home, dwelling rents reported as zero).
- Stratify and calibrate sample to the whole population; calibrate results for location, household size, household type once updated population data are available.
- Consider splitting extensive topical coverage into separate surveys if burden undermines response; despite breadth, response rate was 96 percent.
- Retrospective adjustment for 2022 results could be considered once current population structure information is obtained.

### Review of sources and possible future developments
- Rebase opportunity: introduce new sources and methods; SNBS updating base year from 2017 to 2022 consistent with five-year practice.
- Major change in 2022 rebase: incorporation of SIHBS results; SIHBS level of consumption higher than previous extrapolated estimates.
- Agricultural crop estimates (FSNAU) were investigated as a potential source to measure locally supplied food; exploratory results not yet suitable for national accounts due to time series inconsistency.
- Deflator recommendation: investigate a specific deflator for compensation of employees in government final consumption instead of using headline CPI (headline CPI may overstate price changes when government wages did not increase in 2022).
- Interpretation of imports:
  - Somalia national accounts use imports data as indicators of domestic transactions (e.g., construction estimated from imports of building materials).
  - Two imports data sources: COMTRADE and CBS.
    - COMTRADE compiled by UN Statistics Division from partner countries; limited timeliness and incomplete for recent years.
    - CBS compiles data from Somalia customs returns and other sources; customs system partly decentralized and collects quantities not values.
  - Both sources show large increases in imports; likely growth of Somalia as a trans-shipment center means imports include increasing shares not destined for Somalia market.
  - Mission incorporated adjustment factors by product group for import indicators used to estimate domestic transactions to achieve smoother series without excessive growth rates.
  - For consistency, overall expenditure aggregates continue to use CBS exports and imports estimates without adjustment.
  - SNBS plans to develop a trade statistics unit.
- National expenditure and income measures:
  - GNDI about USD 16 billion.
  - GDP about USD 11 billion.
  - Gross national expenditure is about USD 17 million.
  - High values of official aid and remittances mean GNDI is considerably higher than GDP; data on net income from abroad are available from balance of payments statistics.

### Future Business Census and informal sector measurement
- Business Census:
  - SNBS planned a census of formal businesses in respect of 2023, with data becoming available in 2024.
  - Agriculture Census will be conducted; other industries covered in Business Census.
  - Planned annual conduct of Business Census to provide foundation for GDP by production approach; possibility to revert to smaller-sample annual survey after initial census to reduce costs.
  - Pilot test recommended to check data availability, respondent cooperation, questionnaire design.
- Informal sector considerations:
  - Informal sector is very large; macroeconomic measurement incomplete without measures of informal activity.
  - Business Census will be limited for industries dominated by informal enterprises unless complementary data obtained.
  - Population Census can be designed to support measurement of informal activities.
  - To measure informal sector size and nature, Population Census should collect household employment by industry; sales/financial data are not suited to census but employment and hours worked can be recorded.
  - Correct industry classification requires technical training and documentation.
  - Value added in informal sector can be estimated by multiplying number of informal employees by estimate of value added per person with downward adjustment relative to formal sector small-business productivity.

### Future Population Census
- Population Census:
  - No census since 1985; standard requirement and provides framework for representative samples.
  - Next Population Census is planned for Somalia in 2024; a date has not been set and funding/logistics are substantial.
  - Earlier in report: a new population census is expected in 2024 or 2025, the first after 40 years.
  - Importance for national accounts:
    - Provides foundation for components currently extrapolated on estimated population and growth rates.
    - Useful for measuring informal sector through household employment data.
  - Employment data in census should be aligned with business survey definitions to derive informal employment as difference between total persons in each industry and formal business employment.
  - Consider measuring hours worked to improve precision, subject to cost and respondent cooperation.

### Development of GDP by the production approach
- SNBS long-term plan to compile GDP by the production approach (value added by industry); currently GDP compiled by expenditure approach only.
- Constraints: paucity of level measures and indicators of annual trends.
- Project to develop GDP by industry should:
  - stock-take existing indicators and identify gaps,
  - use Business Census as starting point but supplement for informal sector.
- Sector measurement prospects:
  - Agriculture: planned census; livestock relatively well measured; SNBS plans to engage with FSNAU.
  - Concentrated/regulated sectors (government, large manufacturers, utilities, ports, telecommunications, finance) likely easier to measure.
  - Construction capital formation currently measured via imports of building materials with mark-up; if domestic production of building materials rises, measures of local supply needed.
  - Many industries have substantial informal activities (retail, construction, transport, personal services) requiring additional measurement.

### Administrative and survey sources to support production approach
- Ministry of Finance tax data:
  - System collects income tax information; business income and expense data reported by formal enterprises are available and can be supplied to SNBS.
  - Advantages: no additional funding required; annual availability helps fill need for annual trend indicators.
  - Usability assessment needed: industry classification suitability, understatement of activity, multi-industry conglomerates, coverage proportion in tax system.
- Labor force and employment surveys:
  - A regular labor force survey with employment by industry would enhance monitoring of economic trends.
  - SNBS previously conducted a one-off labor force survey; forthcoming Population Census provides framework for representative future surveys.
  - Quarterly or annual surveys collecting employment by industry and hours of work would be valuable.

### Compilation system and operational recommendations
- SNBS currently uses a system of customized Excel spreadsheets that are understood and amendable.
- Mission suggestions for improvements:
  - Use comments and text extensively to explain data sources and reasons for adjustments.
  - Add tables with growth rates in current prices, constant prices, and deflators to help identify errors or unusual movements.
  - Convert monthly CPI data by the monthly exchange rate and derive the annual average (rather than averaging monthly CPI values then converting at an annual average exchange rate) to better match exchange rates by month; distortion currently trivial due to stable exchange rate but relevant if exchange rate becomes more variable.

### Officials met during the mission
- Mr. Hashim Abdinoor — SNBS — National Accounts and Prices
- Mr. Abdulkadir Dahir Ahmed — SNBS — Prices
- Mr. Mohamed Noor Ahmed — SNBS — Prices
- Ms. Ayan Abdi — SNBS — National Accounts
- Ms. Naima Ibrahim — SNBS — National Accounts
- Mr. Abdirashid Khalif — SNBS — National Accounts
- Mr. Mohamed Abdinur Mohamed — SNBS — National Accounts
- Mr. Zahir Omar — SNBS — National Accounts

*IMF | Technical Report – Somalia National Accounts Mission*

### Appendix I. Adjustments to Derive Household Final

### Appendix I. Adjustments to Derive Household Final Consumption from SIHBS

### 1) Convert to annual basis
- Data in the SIHBS were collected on a seven-day, monthly, six-monthly and annual basis, depending on the product.
- Weekly data were multiplied by 365/7 to convert to an annual basis.
- Example: food spending was collected for seven days; durables spending was reported for the previous twelve months.
- Note: the annual conversion does not give an exact match for the calendar year; products reported on a 52-week basis cover the year to May–July 2022.
- Recommendation for future surveys: cover a whole year, ideally a calendar year.
- Coverage: total SIHBS results refer to total consumption for the 7,212 households / 47,599 persons included in the SIHBS.

### 2) Add goods consumed without payment
- Quantities of goods consumed without payment from SIHBS were multiplied by the market-equivalent price per unit.
- Main categories and SIHBS-derived values:
  - Food and other aid or gifts from charities/NGOs/relatives abroad: USD 584,124 (USD 192 per capita).
  - Non-food aid/gifts from charities/NGOs/relatives abroad: USD 21,887 (USD 7 per capita).
  - Production for own use (mainly subsistence farming): USD 488,388 (USD 160 per capita).

### 3) Add imputed rent on owner-occupied dwellings
- SIHBS asked households to estimate equivalent rent on rent-free and owner-occupied dwellings.
- Many owner-occupiers were unable to provide estimates or provided zero; values were estimated from other households in the same category.
- Result: USD 2,962,434 in total (USD 972 per capita).

### 4) Exclude non-consumption items
- Components excluded from household consumption (already excluded in expenditure data provided by CPI team):
  - Intermediate consumption (including business-related expenses and ownership-of-dwelling repairs).
  - Second-hand goods purchased from other households (no new consumption); include retail margins, purchases of second-hand goods from businesses, or imported second-hand goods.
  - Capital formation (products used for future production, including owner-occupied dwelling services). Example: vehicles for personal use are consumption; vehicles and tools for business use are capital formation.
  - Donations to mosques and other charities: in principle included as consumption by nonprofit institutions serving households; SIHBS indicates USD 5 per capita, so left in household consumption for this rebase.
  - Jewelry as an investment: should be included in capital formation (valuables).
  - Taxes on income and wealth: excluded (transfers, not consumption).

### Adjust for under-reported items
- Qat purchases recorded in the SIHBS were compared with imports; consumption was increased by 80 percent to be compatible with the level of imports.
- Estimate of understatement for qat: USD 159,820 in total (USD 52 per capita).
- Meals outside the home were very low relative to previous survey; no indicator to quantify understatement so no adjustment was made.

### 6) Add financial services charged as a margin
- Explicit financial fees included in SIHBS were included directly.
- Implicit fees (buy-sell spread on remittances and other money transfers) and the banks' margin on interest were assessed.
- Adjustment estimated as 1 percent of inward and outward remittances: total USD 18,345 (USD 6 per capita).
- Insurance premiums: negligible total value; insurance services not added to consumption for this rebase.

### 7) Convert from survey population to national population
- SIHBS coverage: 7,212 households, average household size 6.6 people, covering 47,599 people.
- Total estimated 2022 population of Somalia: 15,614,061.
- Adjustment factor to derive national totals from SIHBS totals: 15,614,061 / 47,599 = 328.3.
- Note: There has been no Population Census since 1985; population estimate may need reconsideration when new results become available.

### Appendix II. Effects of Rebase (Preliminary Estimates) — Key current price results (US Dollars millions)
- Table 5: Previously Published vs New Results (selected series)
  - Household final consumption (Previously Published): 2017: 7,968; 2018: 8,497; 2019: 9,330; 2020: 9,989; 2021: 10,720.
  - Household final consumption (New Results): 2017: 10,343; 2018: 10,518; 2019: 11,792; 2020: 11,809; 2021: 12,304.
  - Government final consumption (Previously Published and New Results): 2017: 486; 2018: 495; 2019: 529; 2020: 595; 2021: 677 (Previously Published) / 676 (New Results for 2021).
  - Gross fixed capital formation (Previously Published): 2017: 784; 2018: 868; 2019: 917; 2020: 939; 2021: 1,244.
  - Gross fixed capital formation (New Results): 2017: 954; 2018: 1,168; 2019: 1,292; 2020: 1,340; 2021: 1,770.
  - Exports of goods and services (Both): 2017: 994; 2018: 1,119; 2019: 1,131; 2020: 1,178; 2021: 1,532.
  - Exports of which: livestock (Previously Published): 2017: 268; 2018: 294; 2019: 406; 2020: 402; 2021: 523.
  - Exports of which: livestock (New Results): 2017: 288; 2018: 311; 2019: 406; 2020: 402; 2021: 523.
  - Imports of goods and services (Both): 2017: 4,624; 2018: 5,122; 2019: 5,423; 2020: 5,818; 2021: 6,544.
  - GDP at purchasers' prices (Previously Published): 2017: 5,609; 2018: 5,856; 2019: 6,485; 2020: 6,883; 2021: 7,628.
  - GDP at purchasers' prices (New Results): 2017: 8,152; 2018: 8,178; 2019: 9,320; 2020: 9,104; 2021: 9,739.
  - GDP per capita, US Dollars (Previously Published): 2017: 412; 2018: 419; 2019: 451; 2020: 466; 2021: 502.
  - GDP per capita, US Dollars (New Results): 2017: 599; 2018: 585; 2019: 648; 2020: 616; 2021: 641.

### Appendix II. Effects of Rebase — Ratios and growth (selected)
- New/Previous (Ratio) for Household final consumption: 2017: 1.30; 2018: 1.24; 2019: 1.26; 2020: 1.18; 2021: 1.15.
- New/Previous (Ratio) for GDP at purchasers' prices: 2017: 1.45; 2018: 1.40; 2019: 1.44; 2020: 1.32; 2021: 1.28.
- Table 6: Effect of Rebase – Growth Constant Price Estimates (percent)
  - Previously Published GDP growth: 2018: 3.8; 2019: 2.4; 2020: -0.3; 2021: 2.9.
  - New Results GDP growth: 2018: 3.1; 2019: 3.7; 2020: -2.6; 2021: 3.6.
  - Difference in percentage points (New - Previous) for GDP: 2018: -0.7; 2019: 1.2; 2020: -2.3; 2021: 0.8.
  - Previously Published household final consumption growth: 2018: 4.6; 2019: 5.1; 2020: 2.3; 2021: 3.9.
  - New Results household final consumption growth: 2018: 3.2; 2019: 3.4; 2020: -0.8; 2021: 2.9.
  - Difference in percentage points (New - Previous) for household final consumption: 2018: -1.3; 2019: -1.7; 2020: -3.1; 2021: -1.0.
  - Gross fixed capital formation previously published growth: 2018: 8.9; 2019: 3.3; 2020: 2.7; 2021: 15.8.
  - Gross fixed capital formation new growth: 2018: 21.1; 2019: 12.6; 2020: 4.1; 2021: 13.5.
  - Difference in percentage points for gross fixed capital formation: 2018: 12.2; 2019: 9.3; 2020: 1.4; 2021: -2.3.

### Analytical notes and methodological implications
- The current price estimates are affected by new sources and methods; household consumption is higher reflecting SIHBS results.
- For the import growth extrapolator used for household consumption other than food and housing and for capital formation, CBS estimates were used rather than COMTRADE, changing trend growth rates.
- The constant price estimates have been moved from a 2017 base year to 2022; changes in the structure of relative prices and current price sources/methods affect growth rates of aggregates.

*IMF | Technical Report – Somalia National Accounts Mission*

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_Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1somea2023003.pdf_