The End of Somaliland’s Exceptionalism

Somaliland’s leaders often tout the nation’s peace and stability in an otherwise volatile region. Yet beyond the rhetoric, corruption, economic inequality, and political decay are eroding its foundations. 

At the height of Britain’s winter of discontent in January 1979, Labour prime minister Jim Callaghan held a press conference. As the country ground to a halt due to widespread strikes, Callaghan dismissed the turmoil as merely the “parochial view” of a small number of critics. His words were fatefully paraphrased by The Sun the following day as “Crisis? What crisis?” – a facetious expression that would harken the end of his premiership. A BBC article reflected on that headline as capturing “the popular impression of a government unaware of a very serious state of affairs which had sneaked up on it”. A few months later he lost an election and his party would spend the next 18 years lounging on the opposition benches as the Tories reshaped the country. 

Forty-five years later, and some 6,000 km away, a similar scene unfolds in Somaliland, where the director of the presidency Mohamed Ali Bile, in the midst of war, crippling inflation, and strained national morale, declares that the country is experiencing an era of unprecedented success. “Today is a better day for our country than it has ever seen,” he said. 

These words were addressed to new graduates, most of whom will remain unemployed and are desperately dreaming of opportunities abroad. But was he entirely wrong? When you consider that absentee MPs are paid thousands of dollars each month, coupled with the sheer impunity of the state and its allies, there indeed has never been a better time in Somaliland; that is if you’re an unscrupulous politician or businessman linked to the ruling elite. 

In recent years, the nation’s trajectory has been marked by uninhibited tribalism, worsening economic inequality and rampant corruption. These deepening fractures have unfolded alongside the erosion of a meaningful national identity – or perhaps the emergence of a dysmorphic one – that has defined the political climate for the last fourteen years, coinciding with the country’s governance by the Kulmiye party. 

While there has undoubtedly been economic growth during this period, the distribution of its benefits has been limited. New millionaires emerged overnight following the 2011 introduction of the 5,000-shilling note—a decision, along with other corrupt monetary policies from the immortalised Kulmiye 1.0 administration (2010–2017), that continues to haunt the country today. To say that much of the wealth accumulated since 2010 has been ill-gotten would be an understatement. This era has been rife with opaque memoranda of understanding lauded as foreign engagement, close ties with the Djiboutian dictatorship, and the initiation of the counterproductive Somalia-Somaliland talks (2012–present), previously outlawed in 2003.

The overall decline in central state legitimacy since President Egal, coupled with unregulated market-led development, has severely hindered popular mobilisation against a status quo that Claire Elder, an expert on conflict and Somali affairs, has described as an ‘oligopolistic state’ and a ‘peaceocracy’ “rather than a national, democratic government”. As a result, we are often condemned to hear the pleas of the poor on Facebook– “Mudane madaxweyne hoos inoo eeg” (“Mr President look down at us”) to no avail.  

Today, Somaliland’s economy is rife with currency instability, stagnating productivity, widespread unemployment, and high inflation. Agriculture remains an embryonic productive sector with goods arriving largely from neighbouring Ethiopia. In urban areas, exorbitant electricity prices, ranging from $0.60 to $0.73 per unit, imposed by state-sanctioned monopolies, continue to burden households and hinder much-needed industrialisation.  Current inflationary pressures tied to oil prices hovering around $1.20 – $2 per litre have been attributed to external shocks by the Ministry of Finance Development, namely the Houthi blockade of the Red Sea. Others, however, have pointed to allegations since 2020 of an illegal oil import monopoly by President Bihi’s inner circle, linked to the controversial oil trading company Trafigura that assumed control of the Berbera Oil Terminal re-nationalised in 2018.

Another recent issue reported to have affected markets is a dispute between traders and the government at Berbera Port. The conflict concerns the alleged use of an illegal scanner to impose fees of $50 (450, 000 SLSh) on imported goods alongside $1000 in customs duty. Originally purchased by DP World, the scanner was intended to replace time-consuming physical inspections of containers prior to the port’s upgrade. Berbera currently hosts a capacity for 500,000 containers  annually, with associates of the government allegedly seeking to capitalise on the port’s operations with a ‘scanner fee’. Traders refusing to pay found their cargo withheld from 28 July before eventually succumbing to government demands on 14 August. As a heavily import-reliant nation, Somaliland depends on Berbera as its sole port, and the 17-day conflict has caused these scanner fees, among other costs, to trickle down to consumers and small traders contending with goods now doubling or tripling in price.

In a world where the dollar is king, domestically produced goods are scarce, foreign investment is dwindling and nearly every public service is monetised, it seems that despite the accolades of global port rankings, precarious times lie ahead for the millions of Somalilanders already struggling to make ends meet. 

The murder of a nursing mother in the Gacmo-Dheere area of Hargeisa in March this year by a municipal council worker ordered to remove livestock prompted brief outrage but little reflection. Though the perpetrator responsible has since been arrested, the incident was telling of a more sinister and systemic issue of government impunity.  Somaliland has devolved into a state where public officials operate with a pervasive contempt for the people they are sworn to serve. Simple questions are met with indignation, accountability with laughter and this culture of impunity manifests in various forms of violence against the public. In this harrowing and extreme instance, a mother was mowed down by a vehicle and left for dead - though she could have easily been killed by expired medicine authorised by state negligence. 

Despite a fourteen-fold increase in the national budget since 2010, Somaliland has failed to adequately invest in public services and infrastructure, with projects since 2012 often funded by international aid. Primary health care remains difficult to access for much of the rural population whilst criminally unregulated, but profitable, private health facilities run rampant in urban centres. State-run services fare no better; chronically under-resourced and staff often unpaid with hospital directors amassing personal wealth with misappropriated funds. Elsewhere, a surge in reported cancer cases and yet the businessmen caught importing expired food and medicine are left unscathed. These same men, upon wrecking carnage on the health of the poor, when ill themselves are seldom found in the country’s dire hospitals but go abroad to India or Europe. 

Amid state-sanctioned drug (khat) trades, entrenched business monopolies, and unregulated health practices, one must ask if today there is a functioning government in Somaliland, and if so, who does it serve?

In the grand scheme of things, Somaliland’s institutions wield little power, their capabilities are questionable, and the integrity of these institutions is seldom upheld by those within them. While the country enjoys its relatively peaceful environment compared to its neighbours (Ethiopia and Somalia, where the bar is set extremely low), the violence of poverty and corruption is only addressed with hollow condemnations by an opposition composed of former ministers.

The erosion of public trust in the neutrality of traditional leadership has also become a major destabilising factor. Once the nation’s saving grace, the proliferation of clan elders associated with either the government or opposition in recent years has coincided with the rise of a malignant form of amateurism and a political class preoccupied solely with self-preservation. Unable to develop policies or politics that resonate with the electorate, this class derives its support exclusively by dividing the country along tribal lines. The more unscrupulous among them decry clan or regional marginalisation while they embezzle from state coffers and build lavish homes in the capital.

The aspiration of a robust multiparty democracy in the short-lived Somali republic was never fully realised, and in many respects, the current system in Somaliland is as much an iteration of the 1960s as it is the correction of a profound mistake. Politicians in Hargeisa today, much like their counterparts in Mogadishu decades ago, lounge in comfort, indifferent to the oppressive poverty afflicting their constituents.

The distinctive consensus-led and traditional democratic culture which had distinguished Somaliland from its regional counterparts has seemingly died a premature death and we now find ourselves squarely in the middle of the ‘waa markayagi’ (it’s our time to eat) era. Though undoubtedly the bulk of the country’s misery today lies at the doorstep of the ruling party, this is more deeply rooted in the formation of ‘Habar-Habar’ politics, facilitated by ten-year quotas for three national parties. These quotas, of course, emerged at the behest of the men who for the next twenty years would come to benefit from them. 

Beyond the hybrid model

Since its re-establishment in 1991, Somaliland’s government has prioritised security as its primary objective, as reflected by an 83% budget allocation to that in 1999. While security remains the largest area of state expenditure (roughly 40%), public expectations of the government have steadily grown over time. However, the state’s social contract continues to revolve around clan appeasement through government appointments and grandiose development projects (such as dams), rather than a transition towards rational, institution-based governance typically associated with a maturing democracy. The failures of the liberal world order in other parts of the Horn of Africa have fostered a complacency in Somaliland’s “hybrid democracy,” a blend of traditional clan influence and a parliamentary system, which has yet to bear economic fruits for much of the country.

This political framework routinely reveals its fragility during election season, where the delicate equilibrium of tribal appeasement is disrupted, and the outward appearance of democracy falters, revealing deep-seated tensions rooted in the unequal distribution of economic resources. Kidane Mengisteab, in The Crisis of Democratization in the Greater Horn of Africa, noted that the traditional sector [clans] “affects election outcomes without influencing policy in any meaningful way. In essence, a neo-patrimonial system where clans dominate voting blocs but do not formulate demands and simply pick their next king. 

Burao, Somaliland’s second-largest city and a historical stronghold of influential sub-clans, exemplifies this disconnect between political power and economic development. Despite wielding substantial political influence and hosting the largest livestock market in the Somali-speaking Horn, Burao has seen little economic gain from this position. The city grapples with high rates of small business closures, mainly attributed to poor economic conditions, such as logistical challenges in accessing goods. A report by the Danish Refugee Council (2024) further underscores the city’s economic fragility, with over 32% of survey respondents depending on family remittances, highlighting the glaring absence of sustainable, large-scale enterprises. Although the ruling Kulmiye party has traditionally garnered support from clans in Burao and pockets of the Eastern regions, successive administrations have failed to implement policies or legislation that could stimulate economic growth in the region. 

Conversely, Borama, the nation's third-largest city in the west, has reaped some economic advantages due to its proximity to Hargeisa’s thriving private sector, benefiting from positive agglomeration effects that have partly boosted the local economy. Within the DRC (2024) report, a household survey shows that the average highest income earners in Somaliland are concentrated along the Berbera corridor (Hargeisa, Berbera, Wajaale) with nearby Borama ($720) surpassing Burao ($626). Discourse in both cities, however, remains dominated by clan representation in government, paradoxically perceived as the primary path towards national unity. This overemphasis on clan-based politics, which fails to address widening economic inequality, poses a serious threat to Somaliland’s long-term stability.

These underlying divisions were further exposed by the recent memorandum of understanding signed with Ethiopia on 1 January this year. President Bihi’s visit to Addis Ababa had been preceded by a series of notable events: a gathering of Dhulbahante elders in Jigjiga ahead of the Sool conflict (December 2022); Ughas Abdirashid’s (Gadabursi) alleged appeal to bypass the Somaliland government in favour of direct engagement with Ethiopian regional bodies (Oromia); calls for Ethiopian control of Zeila; and a meeting between Ughas Abdirashid and Garad Jama (Dhulbahante) in Addis Ababa, three months before the MoU signing.

These developments—whether or not directly fostered by Ethiopia—were unlikely to go unnoticed by Prime Minister Abiy Ahmed, who has long spoken of his prophetic vision for his nation’s access to the sea. Much like his TPLF predecessors in Somalia, Abiy has sought to exploit long-standing clan and regional grievances in Somaliland to extract concessions along its 850 km coastline.

Predatory regional actors have sought to exploit Somaliland’s internal grievances, further undermining the state’s stability and autonomy. The eastern regions of Somaliland in particular have long been the epicentre of economic and state injustices. Despite their wealth in natural resources such as minerals, livestock, frankincense, and myrrh, it remains largely neglected by the central state apparatus. Of the country’s 20 custom points—responsible for 75% of national tax revenue—only five are located in the east: Beer (Togdheer), Burao (Togdheer), Ainabo (Sool), Las Anod (Sool), and Erigavo (Sanaag). Traders in these regions are often subjected to extortionate fees - some of up to $30- on sacks of basic goods (e.g. rice) transported via buses or trucks. 

While the distance between Burao and Las Anod is much greater than that between Borama and Hargeisa, the concept of economic gateway cities remains the same. Just as Hargeisa functions as a commercial hub for the west, Burao occupies a similar position for the east - its economic stagnation mirroring the deeper marginalisation faced by cities like Las Anod and Erigavo, now exacerbated by ongoing conflicts.

Compounding Somaliland’s regional disparities is its overreliance on Berbera’s deep-sea port, combined with state failure to extend infrastructure beyond the Berbera corridor. This infrastructural neglect has isolated vast areas of the country from growing regional trade networks, producing a corrosive competition for access by non-state actors that threatens to weaken the state’s bargaining power with regional partners. Domestically, this disconnect is entrenching a two-tiered economy, where some regions thrive commercially while others remain mired in underdevelopment and clan militias.

Reckoning with the past and confronting the future

The 1993 Borama Conference that selected President Egal to lead the re-established republic marked the beginning of a tumultuous path to state building in a country in dire straits. The Somali National Movement (SNM) had self-imploded and its shrapnel had threatened to drive the country to ruins. Today, some of these remnants, as frantic and dangerous as ever, occupy the highest offices in the land, sadistically watching the country deteriorate as they tighten their grip on the civic life and enterprise that helped Somaliland rise from the ashes of war in the early mid-1990s. 

It would be easy to write off Somaliland as yet another promising African country that tragically had its potential destroyed by authoritarianism and corruption. However, such a view might be hyperbolic, as in many such cases, the imperial hand of the United States or Europe is never far away. While foreign interference is indeed a reality, Somaliland’s wounds feel painfully self-inflicted. 

Somaliland must reverse course on the years of economic and regional disenfranchisement. Continuing with the current superficial and fragmented model of governance will not only weaken Somaliland’s domestic legitimacy but also erode the state’s agency in the broader regional integration of the Horn of Africa. Calls for “Somaliland la wada leeyahay” (“A Somaliland for All”), solidarity or national defence can only be realised with meaningful political and economic reform that empowers communities beyond trivial ministerial or parliamentary posts.

Encouraging steps, such as anticipated reforms to taxation laws (e.g., Law No. 23/2019 formerly Law No. 12/2000) offer a glimmer of hope but are just the beginning. A brighter future is possible—where Somaliland is food secure, where mothers can give birth without the fear of preventable deaths, and where taxpayers’ loyalty to the state is not undermined by the presence of destabilising clan militias or oligopolies.

As Somaliland’s youthful electorate, despite their limited access to modern services, continues to grapple with the very 21st-century challenge of misinformation, the stakes have never been higher. In this new era, marked by oil exploration, and growing foreign interests from its regional neighbours as well as the UAE, Turkey, and China, it is no longer enough to romanticise Somaliland’s fragile, homegrown peace.

The views in this article are those of the author and do not necessarily represent Geeska's editorial stance.