Somalia and Ethiopia to register stronger GDPs, World Bank says

MOGADISHU, Somalia - The World Bank projects that the Federal Republic of Somalia and Ethiopia are set to register stronger Gross Domestic Product (GDP) despite being low-income countries, and probably do well across Africa.

The review carried out in June places Somalia’s GDP at 3.7 percent, up from 3.1 percent which was recorded in 2023 while Ethiopia's GDP is likely to hit 7 per. The figures are consistent and the best across Africa, the international lender says.

Compared to the previous review in January, the projections represent a 0.2 and 0.6 percent upgrade, pointing towards improving economic prospects in the first and second quarters of this year.

Next year, the Horn of Africa nation which is battling violent extremism, inter-clan conflicts, and political wrangles, could register up to 3.9 percent of GDP, World Bank projections show.

Generally, growth in low-income countries (LICs) slowed growth last year, to about 3.8 percent, but the lender now says the prospect will recover to five percent this year, and improve further to an average of 5.4 percent in 2025-2026, the report reads.

"Nevertheless, the average figure for LICs represents substantial downward revisions from January projections, primarily due to an ongoing high level of conflict across LICs and a consequent delay in improvements in some heavily conflict-affected LICs," the World Bank says.

Despite shortcomings in terms of governance, there has been noticeable political stability in most African countries which have struggled for decades. Somalia and Ethiopia have improved the local production of goods and services.

The international lender further notes that many of these countries continue to struggle with persistent vulnerabilities and fragility, especially in the Sahel region, where violent events have increased sharply in the past year.

"Elevated violence and extreme weather events have continued to displace people, disrupt food supplies, and exacerbate poverty. Many LICs face difficult policy trade-offs. The policy space to support the poor has narrowed or been depleted in many countries, while high financing needs and limited access to new funding continue to endanger debt sustainability."

GAROWE ONLINE