World Bank: Only 21% of Somali households receive more than eight hours of electricity daily

NAIROBI: Somalia’s economic growth slowed to an estimated 3 percent in 2025, down from about 4 percent in 2023–24, as declining foreign aid, prolonged drought, and rising living costs weighed heavily on demand and left real GDP per capita broadly stagnant. The findings were published in the Eleventh Edition of the Somalia Economic Update (SEU) 2026, Navigating Shocks, Powering Growth, released on 13 May 2026 by the World Bank Group. The slowdown reflects reduced humanitarian and security‑related assistance, drought impacts on agriculture and livelihoods, and higher prices that constrained household spending. Inflation accelerated to 3.7 percent in 2025, up from 3.3 percent the previous year, driven mainly by food, utilities, and transport costs. Poverty reduction stalled as aid cuts, drought, and rising food prices worsened food insecurity and limited household welfare.

“Somalia has made important progress in strengthening macroeconomic management and institutions under difficult conditions,” said Hideki Matsunaga, World Bank Group Country Manager for Somalia. “However, overlapping shocks are slowing growth and putting pressure on jobs and household livelihoods, underscoring the importance of addressing key structural constraints, particularly in expanding access to reliable, affordable, and sustainable electricity.”

The outlook has weakened, with real GDP growth projected at 2.8 percent in 2026 and 3.1 percent in 2027, constrained by continued aid reductions, climate variability, global price shocks, and limited productive capacity. Inflation is expected to rise to 6 percent in 2026 before easing over the medium term as conditions stabilise. Food insecurity remains highly sensitive to rainfall outcomes, aid flows, and price shocks.

A special focus of this edition is household access to reliable, affordable, and sustainable electricity. According to the World Bank’s 2025 Multi‑Tier Framework (MTF) Survey, 71 percent of households report access to electricity, but only 21 percent receive more than eight hours of supply per day, limiting productivity and resilience. With nearly all electricity generation diesel‑based, global fuel price increases quickly translate into higher domestic inflation, production costs, and household expenses, disproportionately affecting poorer households.

The report urges strengthening sector governance and regulations, promoting scalable renewable energy investment, and modernising transmission and distribution infrastructure to lower costs, reduce vulnerability to fuel price shocks, and support competitiveness and livelihoods.