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Closing Somalia’s Fisheries Governance Gap: A Policy Paper for Marine Biodiversity, Food Security and the Blue EconomyReport

Closing Somalia’s Fisheries Governance Gap: A Policy Paper for Marine Biodiversity, Food Security and the Blue Economy

The report, authored by Khalid Mohamed Mohamud and Yusuf Hassan Ali from the Institute of Public Finance of Somalia (IPFS), argues that Somalia’s fisheries crisis is not simply about overfishing or illegal foreign vessels. Instead, the deeper problem is a governance gap: Somalia has vast marine resources, but lacks the institutions, infrastructure, monitoring systems, and policy implementation needed to convert those resources into sustainable national welfare. The paper presents fisheries governance as a critical issue connected not only to marine conservation, but also to food security, employment, public revenue, state-building, coastal stability, and the development of Somalia’s blue economy. Main Argument of the Report Somalia possesses one of the largest marine domains in Africa: Coastline: approximately 3,333 km Exclusive Economic Zone (EEZ): more than 1.07 million km² Estimated sustainable fisheries potential: over 200,000 metric tons annually Despite this enormous resource base, Somalia captures very little domestic benefit from fisheries. The report argues that: Fish stocks are poorly monitored. Illegal, unreported, and unregulated (IUU) fishing remains widespread. Infrastructure such as cold chains, ports, storage, transport, and processing facilities is underdeveloped. Licensing systems are inconsistent and weakly enforced. Fisheries data systems and registries are incomplete. Domestic value addition is extremely limited. As a result, Somalia loses large amounts of potential income, employment, food access, and public revenue. Key Findings 1. Huge Gap Between Resource Potential and Actual Domestic Catch The report identifies a major mismatch between Somalia’s marine potential and current harvest levels. Although Somalia could sustainably harvest well over 200,000 metric tons annually, documented catches in 2022 were only around: 6,000 metric tons by artisanal fishers 13,000 metric tons by industrial foreign fleets Total documented catch: roughly 19,000 metric tons The report stresses that this does not mean Somalia should immediately increase fishing intensity. Instead, it shows that Somalia lacks the governance systems required to properly manage and benefit from its fisheries resources. The authors argue that low domestic catch can coexist with high external extraction because much fishing activity occurs beyond effective Somali monitoring and regulation. 2. Somalia Faces a Food Security and Nutrition Paradox Despite abundant marine resources, fish consumption in Somalia remains extremely low. The report notes: Somalia’s per capita fish consumption: 3.3 kg African average: 9.1 kg Global average: 20.7 kg The report explains that this is not simply due to cultural preference. Instead, it reflects: Weak cold-chain systems Poor transportation Limited fish processing Weak domestic market integration High inland distribution costs As a result, coastal fish harvests fail to translate into broad national nutritional improvements. The paper emphasizes that fisheries policy should therefore also be treated as food-system policy. 3. Massive Economic Leakage Through IUU Fishing and Weak Governance One of the report’s strongest findings concerns the loss of fisheries value to foreign actors. According to cited estimates: Somalia’s domestic fisheries sector value: about US$135 million Estimated value captured externally through IUU fishing: about US$306 million The report argues that Somalia’s problem is not only low production, but also weak control over access to its marine resources. The paper identifies several causes of value leakage: Unlicensed or weakly monitored fishing Opaque access agreements Weak inspection systems Limited domestic processing Poor tax and fee collection Lack of traceability systems The authors argue that fisheries rents are largely captured outside formal Somali institutions, weakening both public finances and incentives for domestic investment. 4. Fisheries Governance is Linked to Security and Stability The report highlights how fisheries governance intersects with coastal security and piracy. Weak governance, unequal distribution of marine benefits, and IUU fishing can contribute to grievances and instability in coastal communities. The paper argues that fisheries governance should therefore be seen as part of Somalia’s broader state-building and stabilization agenda. 5. Somalia Has Improved Policies, But Weak Implementation The report recognizes significant policy progress in recent years: Federal Fisheries Law adopted in 2023 Somalia Fisheries Master Plan endorsed in 2024 Launch of the Badmaal fisheries project Biodiversity conservation initiatives launched in 2026 However, implementation remains weak. By April 2025: Only 2 fisheries management plans had been developed out of a target of 20. Fisheries registries remained largely non-operational. Patrol days were still recorded at zero. Climate-resilient fisheries infrastructure was not yet operational. Scientific stock assessments were absent. The report concludes that Somalia currently has “more policy architecture than implementation depth.” The Governance Gap Framework The authors define Somalia’s fisheries governance gap as the distance between: what Somalia’s marine resources could generate under proper management, and what the country currently captures in terms of food, jobs, public revenue, biodiversity protection, and sustainable economic development. The report identifies four interconnected deficits: Weak knowledge of fishing effort and stock conditions Low domestic value capture Weak integration of fisheries into food systems Limited state capacity for enforcement and coordination Major Policy Recommendations The report strongly argues against jumping immediately to advanced quota systems or complex fisheries markets. Instead, it proposes a phased and realistic reform strategy. Phase 1: Build a Minimum Viable Governance System The report recommends immediate priorities such as: Digital registries for fishers, vessels, and licenses Public disclosure of offshore fishing licenses Standardized landing-site logbooks Risk-based monitoring and surveillance systems The authors argue that these foundational systems are more important than advanced reforms at Somalia’s current stage. Phase 2: Invest in Infrastructure The report recommends investments in: Landing sites Ice production Cold storage Hygienic handling systems Transportation infrastructure Infrastructure is presented not only as an economic investment, but also as a governance tool because it improves inspection, monitoring, traceability, and enforcement. Phase 3: Protect Artisanal Fisheries and Expand Co-Management The report recommends: Legally protected inshore artisanal fishing zones Restrictions on industrial vessel encroachment Community-based co-management systems Greater participation of women in fisheries governance The authors argue that centralized government control alone is unlikely to succeed in Somalia’s context. Phase 4: Introduce Traceability and Certification Once basic monitoring systems exist, Somalia can begin implementing: Verified legal sourcing systems Traceability programs Sustainability certification in selected fisheries However, the report warns that certification is premature without functioning cold chains and data systems. Phase 5: Shift to Transparent Performance-Based Access Agreements The final phase would involve: Transparent offshore licensing Standardized access contracts Monitoring requirements Observer programs Public reporting of fishing agreements Stronger enforcement conditions Only after foundational governance systems exist should Somalia consider more sophisticated quota systems. Economic Theory in the Appendix The report includes a bioeconomic explanation of fisheries management. It explains that: Fish stocks are renewable resources. Open-access fisheries create incentives for overexploitation. Without regulation, fishers continue entering the fishery until profits disappear. Poor governance leads not only to ecological damage, but also to economic inefficiency and lost national welfare. The report applies this theory directly to Somalia, arguing that the country risks losing both ecological sustainability and economic value unless governance systems improve. Overall Conclusion The report concludes that Somalia’s fisheries challenge is fundamentally an institutional and governance problem rather than simply an environmental issue. Somalia does not lack marine resources. Instead, it lacks: effective monitoring systems, reliable fisheries data, infrastructure, enforcement capacity, transparent licensing, and coordinated governance institutions. The authors argue that Somalia should avoid false choices between: conservation and development, artisanal livelihoods and public revenue, exports and domestic food security. Instead, Somalia should focus on building governance systems capable of aligning all of these goals simultaneously. The central message of the report is that Somalia’s future fisheries success depends not on catching more fish immediately, but on building the institutional foundations needed to transform marine abundance into long-term national welfare.

May 28, 2026PDF available
Somalia’s Tax Gap: Why Closing It Matters for the Country’s FuturePolicy Brief

Somalia’s Tax Gap: Why Closing It Matters for the Country’s Future

Somalia’s tax system faces a significant challenge, with a tax-to-GDP ratio of around 3%, one of the lowest globally, highlighting a substantial gap between potential and actual revenues. The tax gap—the difference between what should be collected under full compliance and optimal policy, and what is actually collected—was estimated at 34% in 2023, with actual revenue reaching $329.5 million and a potential exceeding $500 million. The largest shortfalls were in income tax and sales tax, both showing gaps above 60%, while customs duties, although the largest revenue source, still face leakage due to administrative fragmentation and evasion. Contributing factors include the collapse of state institutions post-1990s, limited tax reach due to insecurity and armed groups like Al-Shabaab, dominance of the informal economy, weak intergovernmental fiscal arrangements, low public trust, and lack of broad-based taxes like VAT and excise duties. The Federal Member States (FMS) like Puntland and Jubbaland collect and retain their port revenues, creating regional disparities, while inland states remain underfunded. Informal taxation, regressive local levies, and absence of visible public services further discourage voluntary compliance. To address this, the paper proposes a multi-dimensional Domestic Revenue Mobilization strategy combining policy reforms such as enacting a VAT law, implementing the new Income Tax Act, introducing excise duties, and reducing exemptions; with administrative improvements including expanding the Integrated Tax Administration System (ITAS), modernizing customs, digital tax payment systems via mobile money, and using third-party data for analytics. Furthermore, establishing a national customs revenue-sharing framework is critical for national equity and effective state-building. Trust-building through improved services, phased formalization of the informal sector, and investment in governance and security are essential to close the gap sustainably. The aim is to eventually increase Somalia’s tax-to-GDP ratio from its current 3% toward an ambitious long-term goal of 15%, reducing reliance on foreign aid, increasing service delivery capacity, and strengthening the social contract between citizens and the state. The findings of the Institute of Public Finance – Somalia (IPFS) stress that fiscal reform is not merely technical but foundational to peace, development, and legitimacy in fragile states like Somalia.

October 21, 2025PDF available
Foreign-Exchange Leakage, Offshore Consumption, and Capital Flight in SomaliaResearch

Foreign-Exchange Leakage, Offshore Consumption, and Capital Flight in Somalia

Executive Summary This report encapsulates the comprehensive efforts undertaken to develop and implement a Unified Chart of Accounts (UCoA) and standardize the annual budget formulation and preparation process for the year 2024. Concluding in December 2023, this initiative marks a pivotal advancement in the financial management framework, ensuring consistency, transparency, and efficiency in fiscal operations and reporting. Introduction Background The introduction of a Unified Chart of Accounts and the standardization of the budget preparation process are critical components of enhancing public financial management (PFM). These measures are designed to align with international best practices, facilitating better fiscal analysis, reporting, and decision-making. Objectives To develop a comprehensive UCoA applicable across all government entities. To standardize the 2024 annual budget formulation and preparation process, enhancing its efficiency and transparency. Development and Implementation Process Unified Chart of Accounts (UCoA) Design and Development: The UCoA was meticulously crafted to accommodate the diverse financial transactions and reporting needs of all government entities, ensuring compatibility and comparability. Stakeholder Consultation: Input and consensus from various government departments and agencies were sought, ensuring the UCoA’s applicability and acceptance. Implementation Training: Extensive training sessions were held to familiarize finance personnel with the UCoA’s structure and application. Standardized Budget Formulation Process Process Design: A standardized process for the 2024 annual budget formulation was developed, incorporating timelines, templates, and guidelines. Pilot Testing: The process was pilot tested with a select group of departments to gather feedback and make necessary adjustments. Finalization and Rollout: Based on pilot feedback, the process was finalized and rolled out across all government entities. Achievements and Impact Enhanced Consistency: The UCoA provides a standardized framework for financial transactions and reporting, improving comparability across periods and entities. Improved Efficiency: The standardized budget formulation process streamlines budget preparation, reducing redundancies and improving timelines. Increased Transparency: These initiatives contribute to greater fiscal transparency, facilitating improved oversight and public accountability. Challenges Encountered and Solutions Several challenges were encountered during the project, including resistance to change and the need for extensive training. These were addressed through comprehensive change management strategies and the provision of targeted training and support. Next Steps Monitoring and Evaluation: Ongoing monitoring and evaluation will be conducted to assess the effectiveness of the UCoA and the standardized budget process. Continuous Improvement: Feedback mechanisms are in place to identify areas for improvement and ensure the UCoA and budget process remain relevant and effective. Expansion and Integration: Future efforts will focus on further integrating these initiatives with other PFM reforms and technological advancements. Conclusion The successful development and implementation of the Unified Chart of Accounts and the standardized budget formulation process represent significant milestones in the journey towards improved public financial management. These initiatives are foundational to achieving greater fiscal discipline, transparency, and accountability, laying the groundwork for sustainable economic growth and development.

June 24, 2024·By Mohamud

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