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Somalia, long mired in fragility, now stands on the cusp of a transformation. With modest growth, escalating resource exploration, and shifting security dynamics, opportunities once unimaginable are reshaping the nation’s trajectory. While challenges remain formidable, a confluence of economic promise and military momentum seems poised to outlast the malignant grip of militant groups.
After years of stagnation, Somalia’s economy has registered a modest upturn. Real GDP growth averaged just 2.4 percent annually between 2019 and 2024, with per capita output shrinking slightly, according to the World Bank. Nonetheless, 2024 marked a minor reprieve: growth rebounded to around 4 percent, up from 4.2 percent in 2023, buoyed by improved agricultural yields after favorable rains. Fiscal prudence delivered a slim surplus of 0.1 percent of GDP, thanks to better tax collection and restrained expenditure.
In 2025, the World Bank expects growth to hover between 3 and 4 percent in the medium term, while the African Development Bank projects GDP growth of 3.8 percent. Beyond 2025 the path is hazy, but if Somalia holds its course, reform and discovery could lift future returns, especially once political consolidation gives way to stability under a new administration after next year’s elections.
Resource wealth may yet prove the game-changer. Somalia’s offshore and onshore hydrocarbon prospects have attracted substantial Turkish interest. Following accords in 2024, the Turkish Petroleum Corporation (TPAO) conducted seismic studies covering 15,000 square kilometers for offshore oil exploration. Preparations are underway for three land blocks totaling 16,000 square kilometers in gas exploration. In June 2025, President Hassan Sheikh Mohamud inspected the research vessel Oruc Reis after a successful seismic survey. The first phase of Somalia-Turkey offshore oil exploration is now officially complete, and results are expected to be announced in September 2025. Turkish officials suggest discovery of oil phase will begin in December 2025. Optimism centers on an impending presentation of results expected before year-end, with hopes high for viable reserves that could underpin sustained investment.
Such discoveries would dovetail with institutional reform. In August 2025, the World Bank approved a development policy financing package aimed at improving revenue mobilization, accountability, and delivery of public services. The program is designed to reduce Somalia’s dependency on aid and build foundations for future growth. Should hydrocarbon proceeds materialize, they could finance infrastructure, education, and security, fueling Somalia’s leap from aid-dependence to revenue-led development. Beyond hydrocarbons, there are smaller but notable developments in minerals. Reports of gold deposits in parts of Puntland, Galmudug, and North East are attracting artisanal miners, and there is growing speculation that foreign partners may soon take interest in structured mining ventures.
Somalia’s progress depends on security, long its Achilles’ heel. Al-Shabaab launched a major offensive in February 2025 across Middle and Lower Shabelle. The government, backed by African Union forces and Ma'awisley clan militias, repelled much of it, killing hundreds of militants and recapturing most lost ground. Elsewhere, U.S. airstrikes and Somali offensives have battered militant strongholds. In Puntland, ISIS affiliates have been steadily weakened as local forces killed scores of foreign fighters and regained territory in mountainous areas. The jihadist foothold there is visibly eroding.
The acceleration of offensives, combined with dismantled command structures and shrinking safe havens, suggests that defeat for both al-Shabaab and ISIS affiliates is becoming inevitable. More importantly, the lure of oil, minerals, and development may at last eclipse jihadist appeal. Armed groups, once able to hold swathes of territory, increasingly face shrinking options as state authority and economic hope expand.
Somalia heads to the ballot box next year. Whoever governs thereafter will enjoy a four-year mandate and, potentially, the means to deliver. Should election results avert upheaval, the incoming administration could jump-start exploration, institutional reform, and security consolidation. The present window offers a compelling opportunity to solidify gains. In that scenario, Turkey’s offshore findings may roll into onshore development, hydrocarbon revenues could bolster a fiscally sound state less reliant on subsidies, and security forces could finish off fragile militant holdouts.
Parts of Somalia remain fragile, but they are not destined to falter. Modest economic growth, bolstered by improved agriculture and fiscal reform, has created a foundation. More importantly, the expectation of hydrocarbon wealth has injected fresh ambition into Somalia and its development partners. Meanwhile, security gains on two fronts, al-Shabaab’s erosion across central Somalia and ISIS’s collapse in Puntland, suggest the long shadow of terror over Somalia may be receding. If the upcoming election in 2026 delivers legitimacy and discoveries yield wealth, a new Somali renaissance may yet emerge, sparking a race for foreign direct investment.
