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Somalia, October 26, 2026 - Somalia’s membership in the East African Community (EAC) has opened the door to a larger regional market. But as the country looks for ways to finance public services and reduce its dependence on external assistance, a critical question remains: can regional integration translate into stronger domestic production, more jobs and higher government revenue?
Somalia became a full member of the EAC on 4 March 2024, joining Burundi, the Democratic Republic of Congo, Kenya, Rwanda, South Sudan, Tanzania and Uganda in the eight-country bloc. The Community’s regional integration framework offers opportunities for trade, investment and the movement of goods, services, capital and people.
For Somalia, the potential is significant. The country has an extensive Indian Ocean coastline and economic opportunities in fisheries, livestock, agriculture, ports and other private-sector activities. Better access to regional markets could help Somali producers reach more customers, while clearer trade rules and improved transport links could make cross-border business easier.
But membership alone does not guarantee those outcomes.
The World Bank’s Somalia Public Finance Review 2026: The Next Stage of Public Finance identifies a narrow domestic revenue base as one of the country’s central fiscal challenges. Somalia collected domestic revenue equivalent to 6.3% of gross domestic product in 2025, compared with approximately 15–17% among peer countries, according to the review.
The report also highlights the country’s dependence on imports and external inflows, alongside constraints in tax administration, institutional capacity and coordination between levels of government.
These weaknesses matter for regional integration because the benefits of a larger market depend on whether businesses can produce competitive goods and services, reach customers, comply with trade requirements and operate within predictable regulatory systems.
In its separate 2025 Economic Assessment of Somalia’s Accession to the East African Community, the World Bank identifies potential gains including access to a market of more than 300 million people, lower trade costs through the reduction of tariff and non-tariff barriers, greater investment appeal and participation in regional infrastructure projects.
The assessment also makes clear that realising these benefits requires substantial institutional work. Somalia must align relevant laws and regulations with EAC frameworks, strengthen its institutions and coordinate implementation across government agencies.
One important area is customs. Somalia’s public finance review calls for stronger customs administration, better compliance and more effective revenue collection. Regional integration could support these efforts through more consistent procedures and improved trade facilitation, but the country must ensure that reforms are implemented effectively and that the fiscal implications are carefully managed.
Tariff changes require particular attention. Aligning Somalia’s customs arrangements with the EAC’s Common External Tariff could change the duties applied to different imported goods. The effects would depend on the products involved, the transition arrangements and how the reforms are implemented. It would therefore be premature to assume that regional integration will automatically increase customs revenue or lower prices for Somali consumers.
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The World Bank’s 2025 accession assessment recommended a phased approach to implementing the Common External Tariff, taking account of Somalia’s financial and administrative capacity. That recommendation reflects the need to balance regional commitments with domestic economic conditions.
The opportunity extends beyond customs revenue. If Somali businesses can expand production and sell more goods and services, economic activity could widen the base from which government collects taxes. Investment in fisheries, agriculture, logistics, energy and port infrastructure could support this process, provided businesses have the security, skills, finance and infrastructure needed to grow.
Yet increased trade does not necessarily translate into higher domestic revenue. Imports may rise without a comparable expansion in local production, while informal economic activity and weaknesses in tax administration can limit the revenue government collects. Somalia’s challenge is therefore to use integration to support a more productive economy, rather than relying on trade volumes alone as a measure of success.
The same principle applies to jobs. Access to regional markets may create opportunities for traders, transport operators, manufacturers, service providers and young entrepreneurs. But the number and quality of jobs created will depend on whether Somali firms can compete, expand and employ more people.
For the government, this creates a link between regional economic policy and public finance reform. Stronger businesses and a broader productive base can potentially support higher domestic revenue. More effective public spending, in turn, can help finance infrastructure and services that make it easier for businesses to operate.
The two agendas must therefore advance together. Regional integration can create opportunities, but Somalia still needs stronger tax administration, predictable rules, effective public institutions and cooperation between the Federal Government and Federal Member States.
The country also faces a transition in external financing. The 2026 Public Finance Review estimates that external grants could decline from around 5 per cent of GDP to below 1 per cent by 2030. This increases the importance of building a more sustainable domestic revenue base, while avoiding reforms that impose unnecessary costs on households and productive businesses.
For Somali traders and producers, the test of EAC membership will be whether it becomes easier to access regional markets, secure investment, transport goods and compete under clear rules. For citizens, the longer-term question is whether economic opportunities translate into more livelihoods and a government better able to finance essential services.
Somalia has joined the regional bloc. The next stage is turning that membership into practical economic gains.
The central question is no longer simply whether Somalia belongs to the EAC, but whether regional integration can help build the productive economy and stronger domestic revenue base the country needs to finance its future.