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Overview of Customs – FGS and FMS
The Federal Government is ultimately responsible for Customs legislation, all policy and procedures, and ensuring there is harmonization in Customs throughout the Federal Republic.
Based in Mogadishu, it is also responsible for the Customs operations at Mogadishu airport and seaport, which contribute significantly to domestic revenue.
The airport continues its growth with international flights from Ethiopia, Kenya, Qatar, Turkey, Uganda and the United Arab Emirates (via Bossaso & Hargeisa).
Mogadishu port will see major investment over the next five years, with the port operator improving facilities for Customs and developing a container terminal. The port will also be expanded to allow larger commercial vessels to berth in Mogadishu.
Exports via Mogadishu port diversified from 2019 to 2020. The UAE remains Mogadishu’s largest trading partner, accounting for 48% of its exports, whilst Kenya stands at 10% and Oman at 9%.
The top three importing countries have remained steady during the same period of 2019 to 2020. The UAE accounts for 38% of imports, China 26%, and Kenya 12%.
As the airport and port expand, Somali Customs will introduce mechanisms to ensure that expansion does not impact service. A larger physical examination of consignments and cargos, and risk management strategies, will be vital in adjusting to expanding port operations.
History of Somali Customs
Investment in a nation’s Customs department, especially at its early stages, can result in very positive outcomes. A clear example of this can be seen at the start of Somalia’s independence. Between 1960 to 1969, Somalia received British and Italian subsidies during a transitional investment period.
These subsidies ultimately funded 31% of the new nation’s budget for the first three years of its independence. The budget included a five-year plan and over US$100 million in loans and grants that were required to focus on investment and infrastructure. The idea was that if better accessibility to the ports was achieved through improved infrastructure, then an increase in exports of livestock and plantation crops would result in higher Customs revenue.
The results were indeed positive. It lead to Somalia joining the international market for livestock, and Somalia managed to double the value and number of livestock exported – surpassing banana exports, which was Somalia’s leading export at the time.
The hope that a similar outcome can be achieved by investing in the Customs department and improving its capacity. The department has shown steady revenue growth over recent years, most notably displaying a 47% increase in revenue.