Overcoming Poverty in Somalia: The Role of Education, Climate Resilience, and Economic Inclusion

The World Bank's 2024 report on Somalia highlights persistent poverty, worsened by climatic shocks, with 54% of the population below the poverty line. Addressing education, economic inclusion, and resilience to climate impacts are critical for reducing poverty.

The World Bank’s 2024 report on Somalia’s poverty and equity assessment, produced in collaboration with the Somalia National Bureau of Statistics (SNBS) and other local agencies, provides a detailed analysis of the country’s enduring poverty and the challenges Somalia faces in reducing it. Despite some macroeconomic progress, including achieving a milestone under the Heavily Indebted Poor Countries (HIPC) initiative that slashed external debt to just 6 percent of GDP and Somalia’s accession to the East African Community in 2024, the country’s growth has not been sufficient to raise GDP per capita or lift a significant portion of the population out of poverty. Somalia continues to rely heavily on imports for basic commodities, and the economy remains vulnerable to external price shocks. Moreover, the country’s political fragility, exacerbated by high levels of insecurity and exposure to climatic shocks, makes achieving long-term economic stability and poverty reduction difficult.

Persistent Poverty and High Urbanization

Poverty in Somalia remains alarmingly high, affecting over half of the population. The report finds that 54 percent of the Somali population lives below the national poverty line, with urban areas holding the largest share of the poor due to the high rate of urbanization. While urban poverty is high, nomadic communities suffer the most, with a staggering 78 percent of nomadic households living in poverty. Rural poverty has also worsened in recent years. Between 2017 and 2022, poverty levels in rural and nomadic areas increased, while the overall national poverty rate remained stagnant due to population movement from high-poverty areas to urban centers. This internal migration helped offset what would have been an overall increase in poverty. If population movement had not occurred, the national poverty rate would have increased by approximately 2 percentage points, as rural areas in particular saw negative consumption growth.

Education and Remittances as Key Factors

Household size, education levels, and remittances are crucial in determining poverty levels. Large households and households with internally displaced persons (IDPs) tend to experience higher poverty rates. In contrast, households where the head has achieved higher levels of education are less likely to be poor. Education emerges as a protective factor, with those attaining secondary and tertiary education faring better in terms of economic well-being. However, education levels in Somalia remain extremely low, with most of the population lacking even primary education. Remittances, particularly from abroad, are also a significant factor in reducing poverty, especially in urban areas. Households receiving international remittances have better outcomes in terms of consumption and overall welfare. However, in rural and nomadic areas, where formal wage employment is scarce, having a wage earner in the household does not necessarily correlate with higher consumption or improved economic standing. Wage earners in these areas often participate in low-return jobs that fail to lift families out of poverty.

The Scale of Non-Monetary Poverty

Non-monetary poverty, which includes deprivations in education, sanitation, and housing, affects an even larger proportion of the population than monetary poverty. More than 75 percent of Somali households are considered non-monetary poor, with the nomadic population experiencing the highest levels of deprivation. In rural and urban areas, a considerable share of the population is chronically poor, meaning they experience both monetary and non-monetary poverty. Only 15 percent of the population is neither monetarily nor non-monetarily poor, underscoring the widespread nature of deprivation in Somalia. Education access remains highly unequal, with secondary education showing the greatest disparities based on region and household income. Nomadic communities are particularly disadvantaged, with extremely low enrollment rates in both primary and secondary education.

A Unique Labor Market with Low Participation

Somalia’s labor market is uniquely characterized by very low labor force participation (LFP), driven by limited opportunities both in agriculture and non-agricultural sectors. Agriculture, which in many low-income countries absorbs a significant share of the labor force, plays a much smaller role in Somalia’s economy, with less than a third of the population engaged in agricultural activities. The scarcity of viable agricultural land and the country’s arid climate limit opportunities in this sector. Outside of agriculture, wage employment dominates, but the jobs available are often low-paying and insecure. Only a small percentage of the working-age population holds high-quality jobs that offer benefits such as paid leave and employment contracts. These better-paying jobs are concentrated in urban areas and are more likely to be held by individuals with higher levels of education. The lack of economic opportunities is compounded by social and cultural factors, as focus group discussions revealed that certain jobs are deemed unsuitable for individuals from particular social groups, adding another layer of friction to the labor market.

Climatic Shocks Exacerbate Poverty

Climatic shocks, particularly droughts, further complicate efforts to reduce poverty. The report highlights the profound impact of recent droughts, which have devastated rural and nomadic communities, causing significant reductions in household consumption and pushing many into extreme poverty. Over two-thirds of Somali households reported severe negative economic impacts from climatic shocks, with the poorest regions and households most affected. In regions where drought has hit hardest, the poverty headcount is higher, and the ability of households to cope with such shocks is limited. The assessment underscores the importance of building resilience among Somali households to help them withstand future climatic shocks, which are likely to become more frequent due to climate change.

Overall, the report emphasizes that poverty reduction in Somalia will require not only sustained economic growth but also targeted policies to improve service delivery in urban areas and strengthen rural and nomadic livelihoods. Expanding access to education, particularly for the poor and marginalized groups, and promoting climate-smart agricultural practices are critical for building resilience against future shocks. Economic inclusion, particularly for women, IDPs, and nomadic populations, is also highlighted as a key factor in ensuring long-term poverty reduction and stability in Somalia.