The Trends of Price Electricity and Food, July 2022

 Somaliland is independent state in the Horn Africa, which stands for peace, democracy, stability, prosperity and cooperation in the region, officially declared independence from Somalia in 1991, but still not recognized. Somaliland’s economy is making steady recovery, shaking off the adverse effects of COVID-19 to record 3% growth but it faces high inflation, extreme drought, water shortage and rising up fuel prices which has severely affected community life. Somaliland’s GDP amounted to $2.9 billion while GDP per capita estimated $697 in 2020, compared to $688 in 2019 on Power Purchasing Index living less than $1.9 per day.1

Inflationwas moderate between 2.4% to 3% in the first quarter of the year, with the Consumer Price Index (CPI), but headline inflation rate picked up in the second quarter 4% with rising steadily recently skyrocketing for essential commodity and fuel prices during the month’s May to June, 2022. With respect to the volatile componentsinflation rate has been increasing slower in second six months on this year compared to the same period lastyear. Inflationary pressure on the communities since the start of the pandemic, Somaliland has been battling high levels of inflation. Prices of fuel, electricity and staple foods have increased due to the interruption of global production and supply chains.

Like other arid and semi-arid regions in the Horn Africa, Somaliland has been facing drought since the rain failed. While drought is seasonal and recurrent, the intensity of the crisis is not simply a result of a lack of rain. Also, the current drought is consequently taking place at a time when pastoralist have been unable to sell livestock for export for two consecutive years. But now the livestock exported in Berbera port after two year embargo on Saudi Arabia. In January 2022, the Somaliland National Drought Committee estimated that over 800,000 people in the country were experiencing acute food insecurity and water shortages due to three consecutive failed rainy seasons. The situation has not improved since, and if the current drought conditions persist, it is expected that over I million people will need emergency assistance in the coming months.2

The Somaliland CPI shows that the Food Price Index was high during the first six months from January to June 2022. In particular, there was a constant monthly increase in the food prices beyond August 2021. The current food prices has caused almost all prices of food items to increase, while price of some items have doubled. This means that household income cannot pay for the same amount of goods and services as it could previously. Present food inflation and price up of electricity adversely affecting the standard of living of many Somaliland households particularly the most vulnerable groups in society such as low wage earner, people affected drought and those on a fixed income. It has also seriously affecting government income and expenditure, undermines the country’s economic growth and it has led to worsening levels of poverty in the state. The economy of the country has been hit hard by Covid-19, locust, drought, and pilgrimage restrictions. In the last year 2021 recorded a trade deficit $2,346,793,407 with imported $2,616,784,914 worth of goods and exported $269,991,507. Due to the country high depend on imports this was led to instability and imbalancetrade. 

It is a report that we have prepared on the increase in the price of electricity and the price of living food,  titled  (The Trends of Price Electricity and Food) by Bashir Mohamed. The report focuses on the growing risk of recession, the reasons for the change in food and fuel, the type of inflation in the country, the measures that can be controlled now and in the future.

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https://www.diblomaasi.com/the-trends-of-price-electricity-and-food/