Somalia’s telecom market has managed to keep going despite lacking a regulatory body since 1991, when a dictatorial regime was overthrown, and despite the efforts of Islamic militant groups to close down internet services. Tariffs are among the lowest in Africa. However, the absence of regulation has also led to problems with frequency spectrum coordination and interconnection between networks. To address this, Parliament in July 2017 began to consider a draft National Communications Bill aimed at setting a legal and regulatory framework for the telecoms sector. There are also fibre-optic broadband links connecting Somalia across the Kenya border.
Despite the lack of effective national governance, Somalia maintains an informal economy largely based on livestock, remittance/money transfer companies, and telecommunications. Somalia’s government lacks the ability to collect domestic revenue and external debt – mostly in arrears – was estimated at 93% of GDP in 2014. Agriculture is the most important sector, with livestock normally accounting for about 40% of GDP and more than 50% of export earnings. Nomads and semi-pastoralists, who are dependent upon livestock for their livelihood, make up a large portion of the population. Economic activity is estimated to have increased by 3.7% in 2016 because of growth in the agriculture, construction and telecommunications sector. Somalia’s small industrial sector, based on the processing of agricultural products, has largely been looted and the machinery sold as scrap metal.
In recent years, Somalia’s capital city, Mogadishu, has witnessed the development of the city’s first gas stations, supermarkets, and airline flights to Turkey since the collapse of central authority in 1991. Mogadishu’s main market offers a variety of goods from food to electronic gadgets. Hotels continue to operate and are supported with private-security militias. Formalized economic growth has yet to expand outside of Mogadishu and a few regional capitals, and within the city, security concerns dominate business. In the absence of a formal banking sector, money transfer/remittance services have sprouted throughout the country, handling up to $1.6 billion in remittances annually, although international concerns over the money transfers into Somalia continues to threaten these services’ ability to operate in Western nations.