Mogadishu — Somalia’s customs-based domestic revenue has fallen by approximately 40 percent as disruptions in the Strait of Hormuz continue to affect trade and drive up import costs, President Hassan Sheikh Mohamud said in his address to the 81st session of the UN General Assembly.

“The disruption has also contributed to an estimated 40% decline in our customs-based domestic revenue,” Mohamud told the General Assembly. He described customs revenue as an important source of funding for economic reforms, growth and efforts to reduce poverty.

The President did not specify the period covered by the 40 percent estimate or provide detailed figures showing customs revenue before and after the reported decline.

Import Dependency and Price Pressures

Somalia imports approximately 90 percent of what it consumes, with a significant portion of that trade passing through logistical hubs in the United Arab Emirates and Oman before being transferred to Somali ports, including Berbera, Bosaso and Mogadishu. The country relies heavily on imported food, fuel and other essential goods, leaving households and businesses exposed to higher shipping costs and supply chain disruptions.

According to Somalia’s Federal Customs Authority, food imports fell 40 percent between February and March 2026, as port calls dropped sharply across the country. Bosaso, one of the busiest entry points for goods from the Gulf, saw the steepest decline, with port calls down 59 percent.

The President also said disruptions around the Strait of Hormuz had pushed up the prices of food and fuel in Somalia, as well as inflation, transport costs and insurance premiums for goods shipped to the country. As reported in FTL Somalia’s coverage of the inflation crisis, domestic fuel prices more than doubled from approximately US$0.60 per litre to roughly US$1.50 per litre, driving headline inflation to 6.3 percent in the first quarter of 2026 [citation:1].

A report submitted by Somalia’s national statistics agency to the Cabinet in May found that the volume of goods entering the country had fallen by nearly 40 percent during the disruptions. The government also reported that food prices had increased by 10 percent, while healthcare costs rose by 14 percent, with some other goods recording even sharper increases.

Humanitarian Consequences

The economic pressure comes as Somalia faces a rapidly intensifying hunger emergency. According to a joint assessment by the Food and Agriculture Organization, OCHA, UNICEF and the World Food Programme, 6 million people, 31 percent of the population, are facing critical levels of food insecurity, including 1.9 million children facing acute malnutrition, of whom 493,000 face severe acute malnutrition. A risk of famine has been identified in Baidoa, where internally displaced people face catastrophic hunger conditions.

Food prices linked to fuel price increases and maritime supply chain disruptions have risen by up to 20 percent, weakening household purchasing power and pushing families closer to the brink. The 2026 Somalia Humanitarian Needs and Response Plan is currently only 15.2 percent funded, severely limiting the humanitarian response at a time when needs are escalating.

The trade disruption compounds an already difficult economic picture. As reported in FTL Somalia’s coverage of the trade deficit, Somalia’s merchandise trade deficit widened to US$2.13 billion in the first quarter of 2026, with imports rising 16 percent year-on-year to US$2.48 billion.

Government Response and Fiscal Context

President Mohamud said his government was continuing efforts to increase domestic revenue despite the external pressures. He told the General Assembly that Somalia had strengthened public financial management and budget transparency while working to deepen the financial sector and improve the investment climate.

The customs revenue collapse comes amid broader fiscal strain. As detailed in FTL Somalia’s coverage of the fiscal situation, domestic revenue increased by 7 percent to US$100.6 million in the first quarter of 2026, but bilateral grants fell to zero and total external grants declined by 18 percent [citation:11]. The government’s fiscal deficit narrowed to US$17.0 million, but capital expenditure dropped 58 percent to just US$6.5 million, signaling slower implementation of development projects.

The longer-term fiscal trajectory has been one of gradual improvement. As reported in FTL Somalia’s coverage of the domestic revenue increase, Finance Minister Bihi Egeh stated in November 2025 that domestic revenue had increased by 80 percent over three years through stronger collection efforts [citation:10]. The Upper House also approved legislation in September 2026 to establish a National Revenue Authority to strengthen tax administration [citation:4].

Critical Note

The 40 percent decline in customs revenue is a significant fiscal shock for a government that was already operating with limited financial buffers. Customs duties account for a substantial share of government tax revenue, making the customs base a critical vulnerability when trade is disrupted.

The President’s estimate, however, lacks the specificity needed for independent verification. He did not specify the period covered by the 40 percent figure or provide the underlying data. This is not a minor omission. For a claim of this magnitude, which will shape fiscal policy and donor engagement, transparency about the baseline and methodology matters. The government has previously published customs data through the Federal Customs Authority and the National Bureau of Statistics. There is no reason it could not provide more detail now.

The broader economic picture is also concerning. Somalia’s structural dependence on imports and its narrow export base, with livestock accounting for 75 percent of merchandise exports, as detailed in FTL Somalia’s coverage of export concentration, leave it acutely vulnerable to external shocks [citation:3]. The customs revenue collapse is not just a fiscal problem. It is a symptom of an economy that lacks the diversity and buffers to absorb disruptions in distant waterways.

What makes this moment particularly precarious is the convergence of multiple shocks: the Hormuz disruption, the drought, declining aid, and the remittance challenges documented in FTL Somalia’s coverage of financial exclusion costs [citation:2]. Each of these pressures would be manageable in isolation. Together, they represent a compounding crisis that Somalia’s fiscal and humanitarian systems are not equipped to absorb. Until the structural vulnerabilities are addressed, Somalia will remain at the mercy of events far beyond its borders.

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