Somalia was formerly a socialist oriented economy undergoing market oriented structural adjustment until 1991. Stabilization and macroeconomic adjustment programmes were implemented during the 1980s under auspices of international credit and aid agencies. However, most economic activity was disrupted by the break down of the Somali state in 1991.

Crop and livestock production, forestry and fisheries accounted for the bulk of gross domestic product in 1991. Livestock is still the predominant agricultural export and an important source of products needed for subsistence. Crop cultivation generated sufficient surpluses to sustain the informal economy until 1990.
GDP was estimated in 2001 to amount to US$ 4,1 billion and gross domestic product real growth rate stood at 3%. GDP per capita was estimated at US$ 550 in the same year and inflation was estimated at 20% in 2002.
According to some sources GDP composition by sector in 200 is as follows:  agriculture 65% , industry 10% and services 25%. Principal growth sectors in the Somali economy are agro-industry, petroleum and development infrastructure. Economic date are difficult to collect and subject to a wide margin of error.
The country has a few light industries, including sugar refining, textile and petroleum refining.
According to the latest international sources, total exports amounted to US$ 88 million in 2001 and a consisted mainly of livestock, bananas, hides, fish, charcoal and scrap metal. Saudi Arabia and the United Arab Emirates are the main export partners with each 29% of exports in 2000, followed by Yemen with a share of 28% . Imports totaled US$ 355 million in 2001 and main commodities imported were manufactured goods, petroleum products, foodstuff, construction materials and gat. Main  import partners were in 2000 Djibouti (27%), Kenya (12%) and India (9%).

All foreign aid is coordinated by the Somalia Aid Coordination Body. It is comprised of UN agencies, individual donors and NGOs. USAID provides funding to the Secretariat and the European Union is the largest donor, financing projects for rural development, life stock production, irrigation and other physical infrastructure.
The northern part of the country is encouraging investment as it revitalizes its infrastructure. Several projects have received foreign investment, financed in a large part by the European Union. The city of Berbera, controlled by autonomous Somaliland, in recent years thus increased trade and traffic through low cost services and manageable customs.
Oil reserves were discovered in the colonial era by both British and Italian geologists, but oil majors involved in exploration activities left the country in 1991. Exploration is resuming in recent years as companies from France, the UK, the UAE and China have attained exploration rights granted by the Transitional National Government, the Somaliland government and the Puntland government respectively. Total FinaElf, which has been operating in the port of Berbera throughout the civil war, signed an exploration deal with the Transitional government in early 2001 to explore areas off the Somali coast. Rovagold of the UK, Dubai-based Zarara and two Chinese firms signed exploration deals with the Somaliland government. Chinese firms are reportedly conducting exploration activities in Puntland.
Somalia also contains significant proven natural gas reserves of 200 billion cubic feet. Distribution of imported petroleum is carried out by the local Iskash Oil Company. Total FinaElf rehabilitated and operates an oil terminal in Berbera and supplies fuel to the airports located in Berbera and Hargeisa, the capital of Somaliland.