Housing Finance in Somalia


This profile is also available in French here.

To download a pdf version of the full 2022 Somalia country profile, click here.

Somalia is home to 15.8 million people, 60% of them live in rural areas. Agriculture dominates the economy. Housing supply does not meet the ever-increasing housing demand or cut into the existing (and increasing) I housing deficit of two million units.  Housing developed by the private sector is too expensive for most Somalis. Access to affordable housing is limited and constrained by location.

Somalia’s Gross Domestic Product (GDP) at current market prices in 2020 was US$7 628 million and US$502 per capita, increasing by 2.9% in 2021.   Higher GDP is largely due to the recovery from the COVID-19 pandemic, with a 1.1% increase in per capita consumption of non-food items and an increase of household final consumption expenditure of 3.9%.

The Somalian banking sector is largely governed by Islamic banking with some conventional banking. Islamic banking is interest-free banking governed by principles of Islamic Sharia Law. Access to finance or the acquisition of credit is one of the major stumbling blocks for most people wishing to build or buy a house in Somalia. The lack of emphasis on government-regulated housing has allowed the private sector to dominate the housing, construction, and development market.

In 2020, a National Development Plan (2020-2024)   was adopted that outlined a five-year plan to improve and grow the economy as well as reduce poverty. This should have a positive impact on the development sector, starting with constructing roadworks. There are also opportunities for the government to facilitate and foster public-private partnerships for private sector involvement and investment in affordable housing sector development. However poor access and general lack of availability of data has been identified as a key problem by the Federal Government of Somalia, which has made significant efforts to improve this, which can be seen in the availability of more data and statistic.

Find out more information on the housing finance sector of Somalia, including key stakeholders, important policies, and housing affordability:

Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2022 edition, which has up-to-date profiles for 55 African countries and territories.

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