Somalia
Somalia sustains itself through informal systems: remittances at 20-50% of economy, livestock at 40% GDP, 4% growth in 2024-25, while formal state capacity remains limited.
Somalia's economy functions through mechanisms that bypass formal state structures entirely—remittances and livestock exports sustain the population while the formal government struggles to establish territorial control. GDP reached $13.89 billion in 2025, with growth upgraded to 4% for both 2024 and 2025 based on strong exports and remittances. Diaspora remittances increased 14.2% from $2.1 billion in 2023 to $2.4 billion in 2024, representing 20-50% of economic activity and making Somalia the world's fourth-most remittance-dependent economy. Most flows process through hawala networks and mobile money platforms rather than formal banking. Livestock contributes 40% of GDP and over 50% of export earnings, with unprocessed livestock products comprising 76% of total exports in 2022. In 2024, livestock exports more than doubled year-over-year (132% increase), performing at 207% of target. Somalia formally joined the East African Community in 2024, enabling formalized regional trade. The current account deficit is projected to narrow to 10.2% of GDP in 2025 as livestock exports improve. Downside risks include the Ethiopia-Somalia Red Sea port contestation, climate shocks, persistent insecurity, and slow domestic revenue growth. The country demonstrates how informal economic systems—remittances processed through clan networks, livestock traded through traditional routes—can sustain populations where formal state capacity has collapsed, creating a parallel economy that functions independently of government.