Somalia Investment Proposal

Hand in Hand initiative 2025

Somalia Investment Plans and Opportunities

HiH Investment Forum 2025

The investment proposal developed by the Somalia is available to download and review in various languages below, including details on Investment opportunities.

English Version

 


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Somalia Proposal

1. Why is Somalia Important?

Somalia holds strategic geopolitical and economic importance in the Horn of Africa. With a 3,333-kilometer coastline, it serves as a vital maritime corridor linking the Indian Ocean to the Gulf of Aden and the Red Sea—an advantageous position that offers significant potential for regional trade and logistics. In addition to its location, Somalia is a regional leader in digital finance, with one of the highest mobile money penetration rates in Africa. Somalia is rich in natural resources. 

The agriculture sector is the backbone of Somalia’s economy. The country boasts 8.9 million hectares of arable land, substantial underground water reserves, and three major rivers—the Shabelle, Jubba, and Dawa—which span a combined 2,500 kilometers. Somalia is also home to one of the largest livestock populations in Africa, estimated at 57 million animals, including 30.5 million goats, 13 million sheep, 6.6 million camels, and 5.5 million cattle. Agro-pastoral systems are especially prominent in the fertile river valleys of the south. The crop and livestock sector together contribute to over 70% of GDP and employing more than 80% of the population. The livestock sector contributes the largest share to GDP, and it is the primary source of employment (particularly for women and youth), and remains the top earner of foreign exchange. 

Somalia’s investment landscape is rich with potential—especially in sectors that are already driving economic performance and improving livelihoods, advancing gender inclusion, and enhancing resilience in one of the world's most dynamic regions.

2. Today’s opportunities

The most compelling opportunity is the transformation of Somalia’s agri-food systems through targeted four high-impact, investment-ready value chains: sesame, maize, dairy, and fodder. These sectors were selected based on their economic viability, export potential, and capacity to enhance food security and resilience. Somalia is already one of the world’s top producers of sesame, with strong demand in markets such as China and the East African Community. Maize, a staple crop, offers a pathway to reduce food imports and improve nutrition. The dairy sector presents a significant import substitution opportunity, with Somalia currently spending over USD 200 million annually on powdered milk. Meanwhile, the fodder sector is critical for addressing a 34% feed deficit that undermines livestock productivity. Together, these investment cases represent a total portfolio of USD 183.2 million, with an internal rate of return estimated between 23% and 32%, generate an overall Net Present value of 13.75 million, and a carbon mitigation potential of over 94,000 tCO₂e over 20 years, according to FAO’s Ex-ACT analysis.

3. What is Somalia’s Objective and Decade Agenda?

Somalia’s long-term development vision is articulated in the Centennial Vision 2060 and operationalized through the National Transformation Plan (NTP). These frameworks aim to build a resilient, inclusive, and prosperous nation by strengthening governance, diversifying the economy, and investing in critical infrastructure and human capital. Over the next decade, Somalia seeks to increase agricultural productivity by 60%, expand the use of irrigable land, and enhance value addition through agro-processing. 

Somalia is the top exporter of live animals to the Middle Eastern markets and takes pride in its livestock resources, such as cattle, camels, sheep, and goats, where the livestock and its products are the major contributors to Somalia’s economy. By addressing the structural challenges, boosting production capacities, and through coordinated efforts driven by respective institutions, the livestock sector anticipated USD 81 million in private investment, employment opportunities, and a USD 163 million increase to national GDP by 2029, these efforts will position Somalia on a path towards economic resilience and prosperity.

The government is also committed to empowering women, youth, and marginalized communities, ensuring that growth is both inclusive and sustainable. These objectives are closely aligned with the FAO’s Hand-in-Hand Initiative, which supports country-led, data-driven strategies to eradicate poverty (SDG 1), end hunger (SDG 2), and reduce inequalities (SDG 10). By aligning national priorities with global development goals, Somalia is positioning itself to lead a transformative agenda in the region.

 


Somalia Geospatial Typologies

Agro-informatics connects information technology with the management, analysis and application of agricultural data to design more accurate and targeted agricultural interventions. The use of new technologies and techniques in agriculture, such as satellite imagery, remote sensing, and geographic information systems, enable the transformation of data into actionable information.

Poverty

Potential

Efficiency

Poverty
Potential
Efficiency
Click on individual maps to get detailed view on FAO GIS platform



Government of Somalia: Investment cases in Somalia

 


Somalia Investment Cases and Interventions

Sonnet Malakaran Sesame

Sesame

Somalia is one of the world’s leading producers of sesame, a high-value oilseed crop that plays a critical role in rural livelihoods and export earnings. Cultivated mainly in the southern regions—particularly Lower Juba and Middle Shabelle—sesame thrives in the country’s favorable agro-climatic conditions. Annual production is estimated at over 50,000 metric tons, with strong demand from international markets such as China and the East African Community (EAC), as well as growing domestic interest, especially for sesame cake used in livestock feed.

Despite its potential, the sesame sector faces several structural challenges. Productivity remains low due to traditional farming practices, poor-quality seeds, limited irrigation, and minimal mechanization. The absence of processing infrastructure and weak market linkages further constrain value addition and expose farmers to price volatility. Climate variability, overreliance on a few export markets, and limited access to finance for smallholders exacerbate these issues, hindering the sector’s growth and resilience.

To address these challenges, a targeted investment of $82.1 million is proposed to increase sesame production by 50% over five years—from 50,000 to 75,000 tons. The plan includes establishing a sesame oil processing factory to enhance value addition, reduce post-harvest losses, and secure sustainable markets for 100,000 producers. The initiative will also promote improved seed systems, climate-smart practices, contract farming, and the use of sesame cake in livestock feed. With an expected IRR of 27%, ROI of 3.4, and a payback period of 3.77 years, the investment is projected to benefit 170,000 people directly and 700,000 indirectly, while contributing to climate resilience with a carbon balance of -131,364 tCO₂e.

Sonnet Malakaran Maize

Maize

Maize is a staple crop in Somalia and a critical component of national food security and rural livelihoods. It is primarily cultivated in the Lower Shebelle region—Somalia’s agricultural heartland—where it serves as a key source of nutrition for households and a major input for livestock feed. Despite its importance, domestic maize production remains far below national demand, with only 75,000–80,000 metric tons produced annually against a requirement of over 1.2 million tons. This shortfall is met through costly imports, highlighting the urgent need for increased local production.

The sector faces several constraints, including erratic rainfall, limited irrigation infrastructure, poor access to quality seeds and fertilizers, and high post-harvest losses. Yields average just 1.0–1.5 tons per hectare—well below regional potential—due to traditional farming practices and weak extension services. In addition, fluctuating market prices further threaten productivity and farmer incomes. However, with targeted investments in climate-resilient seed varieties, irrigation systems, and value chain infrastructure, Somalia has the potential to significantly boost maize output and reduce import dependency.

This investment case proposes a $81.3 million initiative to increase maize production by 50% over five years—from 80,000 to 120,000 tons. Key interventions include the establishment of a maize flour processing factory, expansion of irrigation, and promotion of drought-tolerant varieties. The project aims to support 100,000 producers, improve post-harvest handling, and strengthen market access for both domestic and regional trade. With an expected IRR of 25%, ROI of 3.1, and a payback period of 3.93 years, the initiative is projected to benefit 118,000 people directly and 708,000 indirectly, while contributing positively to climate resilience with a carbon balance of 5,121 tCO₂e.

Sonnet Malakaran Dairy

Dairy

Somalia’s dairy sector has long been a cornerstone of rural livelihoods and nutrition. This is more than a traditional sector; it is a high-growth, high-impact opportunity. Investment in livestock offers a direct pathway to scale economic returns while improving livelihoods, advancing gender inclusion, and enhancing resilience in one of the world's most dynamic regions. Despite the country’s vast livestock population, including millions of cows, camels, and goats, the sector remains underdeveloped and vulnerable to climate shocks. Key constraints include limited cold chain infrastructure, high energy costs, low-yielding indigenous breeds, and inadequate veterinary and feed services. Yet, growing urban demand, especially in Mogadishu, presents a strong case for revitalizing the sector.

Somalia currently imports over $200 million in dairy products annually, primarily powdered milk, emphasizing a major opportunity for import substitution. Milk production is concentrated in peri-urban areas such as Mogadishu and Baidoa where demand is rising due to urbanization. However, average milk yields remain low—1 to 2 liters per cow per day—compared to regional averages of 5 to 10 liters. The sector also suffers from weak market system and limited private investment. With strategic interventions, including improved breeds, cold chain systems, and processing facilities, the dairy industry could meet growing domestic demand while creating jobs and improving nutrition.

This investment case proposes a $4.8 million initiative to increase fresh milk production from 3,460 liters/day in 2025 to 7,900 liters/day by 2029. The plan targets 8,000 livestock keepers and includes investments in milk collection centers, cold chain infrastructure, animal health services, and feed supply systems. It also promotes private sector partnerships to scale up processing and distribution. With an IRR of 32%, ROI of 4.17, and a payback period of 3.5 years, the project is expected to benefit 8,000 people directly and 48,000 indirectly, while contributing to climate resilience with a carbon balance of 17,318 tCO₂e.

Fodder

 

Fodder

Fodder production is a critical yet underdeveloped component of Somalia’s livestock economy, which contributes the largest share to GDP, is the primary source of employment (particularly for women and youth), and remains the top earner of foreign exchange. With over 80% of the population relying on livestock-based foods, primarily meat and milk, the sector is also essential to national food and nutrition security. The livestock sector faces a severe 34% feed deficit, driven by recurrent droughts, overgrazing, and degradation of natural pastures. These challenges significantly reduce livestock productivity and increase mortality during dry seasons. Despite these constraints, Somalia has strong potential to scale up the cultivation of drought-tolerant fodder crops such as Napier grass, Sudan grass, and alfalfa, particularly in irrigated areas of Lower Juba and Lower Shebelle.

The growing demand for high-quality feed from commercial dairy farms and livestock exporters presents a compelling case for investment in the fodder value chain. However, the sector remains constrained by the lack of commercial fodder production systems, limited feed processing and storage infrastructure, and high transportation costs. In response, Somalia joined a regional initiative in 2023 to transform the feed and fodder sector through sustainable rangeland management, improved conservation techniques, and multi-stakeholder collaboration. These efforts aim to enhance resilience and reduce the risks associated with feed insecurity.

This investment case proposes a $15 million initiative to produce 38,000 tons of dry matter annually, targeting 200,000 livestock keepers and traders in Lower Juba and Lower Shebelle. The strategy includes the promotion of climate-resilient fodder crops, establishment of feed processing units, and integration with livestock quarantine and export systems. With an IRR of 23%, ROI of 3.8, and a payback period of 3.5 years, the project is expected to benefit nearly 196,000 people directly and 700,000 indirectly, while contributing to climate adaptation with a carbon balance of 14,611 tCO₂e.

 


 


Contact

For more information, please contact the Hand-in-Hand team.