Somalia's Customs Revenue Drops by Nearly 40% Due to Closure of Hormuz Strait

The Somali government has stated that the disruptions in the strategic route of Hormuz have significantly impacted the country's economy, with Somalia's customs revenue dropping by nearly 40 percent .

President Hassan Sheikh Mohamud, delivering a speech at the 81st session of the United Nations General Assembly, stated that the disruptions to the movement of goods and vessels have directly affected government revenue and the overall economy of Somalia.

The decline in customs revenue comes at a time when Somalia is heavily reliant on imported goods, making disruptions in supply chains and rising transportation costs directly impact the domestic market.

The problem is not limited to government revenue alone, as the prices of food, fuel, and transportation have also risen, while costs associated with insurance and the export of goods have increased.

The United Nations has previously reported that fuel prices in Somalia have risen significantly, which has also increased the prices of food and water and transportation costs.

The impact of the disruptions in the Hormuz route has also been felt on the import side. A report presented by the United Nations indicated that the volume of food imported into Somalia has decreased by 40 percent compared to the period before the onset of the crisis, affecting the availability and purchasing power of people for essential food items.

Somalia is currently facing intertwined economic and humanitarian crises, with rising prices of goods and fuel coinciding with challenges related to food scarcity and the purchasing power of poor households.

The United Nations has previously warned that millions of Somalis are facing high levels of food insecurity.

However, the Somali government has not clarified the exact duration of the nearly 40 percent decline it pertains to , nor has it disclosed the monetary value of the customs revenue that is said to have been lost.

The President's speech comes at a time when concerns about the impact of Hormuz disruptions are intensifying, with international agencies warning that disruptions in this vital route could affect energy, trade, transportation, and food prices in many countries, especially those with fragile economies.