Somalia’s Trade Agreements
Introduction
Somalia, strategically located in the Horn of Africa, has been increasingly active in establishing and strengthening trade agreements both within the region and globally. The country is leveraging its geographic position and historical trade connections to foster economic growth and integration into the global market. This report provides a comprehensive overview of Somalia’s trade agreements, highlighting its engagement in multilateral and bilateral trade frameworks.
1. Multilateral Trade Agreements
These involve multiple countries and are often established under the auspices of international or regional organizations, and Somalia’s commitment to multilateral trade agreements reflects its desire to integrate into regional and global economic systems. Some key multilateral engagements include:
A. East African Community (EAC)
Somalia officially joined the East African Community (EAC) in this year 2024. As a member, Somalia benefits from the trade facilitation and economic cooperation offered by this regional bloc. The EAC provides a platform for Somalia to increase its trade within East Africa and tap into a larger market.
B. African Continental Free Trade Area (AfCFTA
Somalia is on the path to becoming a member of the AfCFTA. The agreement, which is currently under Somalia’s Parliament to ratify, aims to create a single market across Africa, encouraging intra-African trade by eliminating tariffs on 90% of goods. Once ratified, this could significantly boost Somalia’s trade prospects across the continent.
C. Common Market for Eastern and Southern Africa (COMESA):
The Somali Cabinet of Ministers has approved Somalia’s joining to COMESA, and the agreement is awaiting final ratification by the Parliament. COMESA, as a large regional trade bloc, offers opportunities for Somalia to access a broader market and participate in economic cooperation with other member states.
D. World Trade Organization (WTO) Accession
Somalia is actively pursuing accession to the World Trade Organization (WTO). This process involves extensive negotiations and reforms to align Somalia’s trade policies with global standards. Accession to the WTO will integrate Somalia into the global trading system, providing a platform for dispute resolution and access to global markets.
2. Bilateral Trade Agreements
These are agreements between two countries, focusing on the reduction of trade barriers and the promotion of economic cooperation. Somalia is actively engaging in bilateral trade agreements to strengthen its economic ties with individual countries. Key bilateral agreements include:
A. MoU Somalia-Uganda for Bilateral Trade Agreement:
These are agreements between two countries, focusing on the reduction of trade barriers and the promotion of economic cooperation. Somalia is actively engaging in bilateral trade agreements to strengthen its economic ties with individual countries. Key bilateral agreements include:
B. MoU Somalia-Ethiopia for Bilateral Trade Agreement:
In 2024, Somalia signed a significant bilateral trade agreement with Ethiopia in Mogadishu. This agreement is expected to deepen economic ties between the two neighboring countries, facilitating the flow of goods and services across their borders.
C. Memoranda of Understanding (MOUs) with Other Countries:
Somalia has been proactive in negotiating MOUs with other several countries, including Sudan, Egypt (Masar), Kenya, Turkey, Oman, and Bahrain. These MOUs lay the groundwork for future bilateral MoU trade agreements, focusing on areas such as trade facilitation, investment, and economic cooperation.
The Ministry of Commerce and Industry is responsible for overseeing commercial and industrial activities for the State of Somalia, directing these activities in accordance with the requirements of national development.
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