Climate Investments Could Halve Somalia’s Economic Losses: World Bank

Strategic investments in climate resilience and development could cut Somalia's projected climate-related economic losses by half while creating more stable jobs and boosting productivity, according to a new World Bank Group report.

The Country Climate and Development Report (CCDR) for Somalia, launched jointly by the Somali Government and the World Bank, highlights how targeted investments in climate-smart sectors can strengthen economic growth and support the country's ambition to reach middle-income status by 2060.

Climate Change Threatens Somalia's Economic Future

Somalia is among the countries most vulnerable to climate shocks, including recurring droughts, floods and extreme weather events.

The report warns that without urgent climate action, Somalia's GDP could decline by up to 13.5 percent by 2060 compared with a scenario where climate impacts are absent.

Such losses could significantly weaken economic growth, worsen unemployment and deepen the country's existing fragility.

"Our focus is to ensure that climate action directly benefits our communities while building a stronger, more resilient Somalia," said Bashir Mohamed Jama, Somalia's Minister of Environment and Climate Change.

"Our priority is to ensure that climate resilience supports economic stability and opportunity for our people."

Linking Climate Action to Jobs and Productivity

The report emphasizes that resilience investments should be closely linked to job creation and economic productivity.

By investing in climate-smart sectors, Somalia could convert resilience efforts into employment opportunities and more sustainable livelihoods.

"Building a climate-resilient Somalia is a shared responsibility," said Hideki Matsunaga, World Bank Country Manager for Somalia.

"With smart investments, particularly in resilient rural livelihoods, climate-smart cities, and stronger institutions, Somalia can break the cycle of vulnerability, create jobs, and unlock its development potential."

Priority Areas for Climate-Smart Investment

The report identifies several sectors where targeted investments could deliver significant economic and social benefits.

Key priority areas include:

• Climate-smart agriculture to protect food production and rural incomes

• Resilient urban development to support rapidly growing cities

• Disaster risk management and early warning systems

• Improved water resource management

• Stronger public institutions and governance systems

These measures could help reduce climate-related economic damage while strengthening economic productivity and employment.

Progress Amid Persistent Challenges

Somalia has made important progress in recent years toward stabilizing its economy and strengthening governance.

Notable milestones include:

• Completing the Heavily Indebted Poor Countries (HIPC) Initiative debt relief process in 2023

• Joining the East African Community (EAC) in 2024

Despite these advances, the country continues to face major challenges.

Decades of conflict, institutional fragility and climate shocks have repeatedly disrupted livelihoods, displaced millions of people and placed pressure on public services.

Shifting from Crisis Response to Long-Term Development

The report stresses the importance of integrating climate action with broader development strategies, allowing Somalia to move beyond emergency responses toward sustainable economic growth.

Investments in early warning systems, disaster preparedness and climate-resilient infrastructure can protect communities while also supporting economic productivity.

Analysis suggests that combining climate action with higher-quality economic growth could significantly reduce long-term climate-related economic losses compared with a "business-as-usual" approach.

Need for Stronger National Leadership

While Somalia will continue to rely on international funding in the short term, the report highlights the need for stronger national leadership in climate planning and financing.

Greater cooperation with the private sector will also be crucial to convert resilience investments into long-term employment opportunities and reduce reliance on humanitarian assistance.

The World Bank says coordinated policies and sustained investment could help Somalia transform climate challenges into opportunities for economic growth and stability.