Industry and Commerce

Somaliland is a strong trading nation, largely due to its location at the crossroads between Europe, the Middle East and Asia. Its main trading partners are Saudi Arabia, UAE, Yemen, Ethiopia, China, Pakistan, India, Kenya, Brazil, Thailand and Malaysia. The primary exports are livestock, gums (frankincense), hides and skins, while imports are predominantly food, fuel, and manufactured goods.

The subsistence nature of crop agriculture and the modest development of the manufacturing sector offer immense investment opportunities in the food and manufactured goods import sector. This has led to the development of small, family-owned wholesale and retail businesses, peddlers, and street vendors who dominate the commercial and retail trade. The sector is highly competitive and is characterized by complex institutional arrangements and practices. It is, however, beset with inadequate financial resourcing, a problem which hinders its development and prevents it from realizing its full potential.

On average, Somaliland imports between 450,000 and 500,000 metric tons of food, and just above 360,000 metric tons of non-food items. Wheat and wheat flour constitutes approximately 38 % of the food imports by volume, followed by sugar (35 %), rice (14 %), cooking oils and legumes (7 %). Other important food commodities are pasta, dates and biscuits.

Non food items imported include building materials, clothes, cars and car spares, fuel, among others. Another unclassified major import is Qat, a mild narcotic. Official total imports in 2010 were approximately 16,173 tons, accounting for about 1/3 of total imports in value.