Page 20 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.74, # 2, 2017, pp. 4-31

government revenues, which required to finance the public services and development process of
the country. This also means that the existing huge gap between the domestic commodities
exports and imports is expected to get narrower, in relative sense, through time.
Notwithstanding, achieving the planned growth rate of the GDP and realizing the emphasized
structure of the expenditure components of the Somali GDP by 2019, revealing tremendous
challenges of the nation development, and supporting the sought after enhancing international
competitiveness of the national economy of Somalia, given the prevailing fact that the Somali
economy is expected to increase its linkages with the world economic system, at large.

• Somali GDP Structural Changes through Different Sectoral Development Behaviour
during SNDP Period

The sectoral distribution and share of the GDP shown in Table -3- reflects the aimed at
objectives for increasing the role of productive and infrastructure sectors, to achieve and enhance
the diversification of the Somali economy. Hence, achieving stable and sustainable development
through time. This, by and large, depends on the direction and realization of the planned
restructuring and growth rather than on the magnitude. Therefore, the assumed structural
development of the national economy, which effectively creating the economic growth and
stabilization through developing and expanding productive, infrastructure and services sectors is
based on sectoral comparative and competitive advantages. Accordingly, The SNDP targets are
aiming at enhancing balanced development and ensuring a viable inter-sectoral integration and
linkages. This would be approached with special emphasis on developing the needed
infrastructure to support the productive sector activities, and to increasing its productivity and
role to leading a sustainable development and growth in the economy. Thus, the outcome result
is expected that the Infrastructure sector would grow by a compound annual rate of 26.2 percent
during the next three years, as it is embarking from quite low base at the initial year of the plan.
Such targeted growth would resulting in the infrastructure sectoral share in GDP increasing from
4.2 percent in 2016 to 7.2 percent in 2019. This is of paramount important development step to
facilitate the right growth of productive activities, particularly agriculture, livestock and
fisheries, which are the backbone of the Somali economy, and are lacking the availability of
appropriate physical and marketing infrastructure, as well as related production facilities.

Given the existing physical infrastructure condition in Somalia, and given the need to creating
growth and development, as well as generating employment in the country which characterized
with high, and above African average, of unemployment rate, especially, among the young and
active segment of the national population. Therefore, it is absolutely imperative to expand the
infrastructure sectors and other support sectors of the economy, particularly, transportations,
ports, energy, communications, storage utilities, and marketing facilities, in order to capture and
optimize the economic benefits of the economy’s comparative advantage, and those likely
benefits of the economies of scale, and hence, to achieve sustainable development and job
creation in Somalia. Consequently, the productive sector is expected to grow by an annual
compound rate of 4.6 percent during the SNDP period (2017-2019). The table below depicts

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