Things have never been easy for Maako Sheikh Isaaq, who sells fried snacks from a makeshift stall in Mogadishu’s Dharkeynley district. That struggle has become all the harder as the impact of the war in the Gulf – thousands of kilometres away – ripples through Somalia’s economy, forcing up prices and driving away customers.
Her income used to be enough to keep her family afloat and, just barely, support others. But import-dependent Somalia has been severely affected by the closure of the Strait of Hormuz, which has pushed people like Isaaq – already living on the margins – to the brink.
In a paper published shortly after the US-Israeli war on Iran began in February, Somalia’s statistics bureau warned that the country was facing a “severe and multifaceted macroeconomic shock”. Within days of the conflict, domestic fuel prices in Mogadishu had surged by over 100%, immediately feeding into consumer prices.
The International Monetary Fund’s own assessment of the regional fallout of the war puts Somalia in a category of low-income countries it considers structurally defenceless against this kind of supply-chain shock – a group that also includes Sudan, Yemen, and Afghanistan.
These are economies that have little in the way of reserves or fiscal headroom to cushion the impact of rising fuel, food, and fertiliser prices on households and businesses. Somalia has “no shock absorbers”, a finance ministry official told The New Humanitarian.
Somalia imports around 90% of what it consumes. Much of that trade passes through logistical hubs in the United Arab Emirates and Oman before being transferred to smaller vessels bound for Somali ports, including Berbera, Bosaso, and Mogadishu.
“We’re just trying to make enough money these days to make it through the night.”
According to Somalia’s Federal Customs Authority, food imports fell 40% between February and March, as port calls dropped sharply across the country. Bosaso, one of the busiest entry points for goods from the Gulf, saw the steepest decline, with port calls down 59%.
At least partly driven by the fallout of the war in the Gulf, including the closure of the Strait of Hormuz, Somalia’s annual inflation rate soared to its highest peak in recent history of 9.23% in March 2026 before stabilising a little since then.
Isaaq used to make 200-300 samosas, bajia fritters, and other small fried snacks each morning with a group of women to sell in the afternoon. Now she makes about half that amount, and says she often cannot sell everything she prepares.
“I mainly rely on flour and sugar, and both have gone up in price. So, I’m making less, while people are buying less because they don’t have as much money as they used to,” she explained. “We’re just trying to make enough money these days to make it through the night.”
Everybody feeling the pinch
Isaaq is one of millions of displaced people who fled drought and a rural insurgency by al-Shabab, an al-Qaeda-linked group, before settling in Mogadishu. Her neighbours, like her, are trying to stay afloat by cutting back on portion sizes and making only the most necessary purchases.
Wholesalers in Mogadishu have little option but to pass on their increased costs to customers. One wholesaler, whose business sits between the goods arriving at Mogadishu’s port and the capital’s smaller corner shops, said the price of a 50-kilo sack of sugar had risen from $28 to $34, rice from $40 to $53. Gas cylinders, used for cooking, have almost doubled in price, from $13 to $24.
Beyond staple foods, a wide range of other goods that Somali consumers rely on also pass through the Gulf, said Salah Hassan, who runs a grocery store in Mogadishu’s Yaaqshiid district. “People aren’t talking about the other things we need, like notebooks, shampoo and soap, spices, oats, and powdered milk,” he said.
“Many of Mogadishu’s residents work for daily wages and already struggle with poverty, so they were not in a strong position to begin with,” he added. “This has significantly increased the pressure on them.”
Mogadishu’s transport system relies on a large fleet of privately owned rickshaws. Just over two weeks after the war in Iran began, dozens of drivers gathered at the city’s central KM4 junction to protest soaring fuel prices.
The drivers typically pay to rent their rickshaws, as well as a monthly tax and their fuel costs. Yassin (who gave only his first name), 22, who has been driving a rickshaw for three years, said he typically takes home just $4-$6 a day. “If you get to $6, you’ve had a long day,” he noted.
Yassin, who has two children, used to be able to cover his family’s monthly grocery bill at between $80-$100. “I’m now using my savings to manage my daily costs and I’m not sure how long we can continue like this for,” he said.
Mogadishu’s economy can look, in places, like it’s booming. Along Airport Road and in parts of Medina, new cafes and restaurants have opened in recent months. A construction boom has also taken place, reshaping the city’s skyline.
But Mogadishu has always been a city of sharply divided fortunes, and the current crisis has only sharpened the gap. For residents of the more marginal neighbourhoods of Dharkeynley and Yaaqshiid, the packed cafes a few kilometres away appear remote.
These are households that have been forced to shoulder further shocks over the past year, including deep cuts to both US and UK aid and, crucially, the collapse of the Somali shilling.
A disappearing currency, and climate shock
Somalia’s economy had long been dollarised, but that trend accelerated dramatically earlier this year. In April, traders in Mogadishu began refusing to accept or exchange the currency, which has remained in circulation since the fall of Somalia’s government in the 1990s, despite no bills having been printed since then.
The government has since declared the rejection of the shilling a crime and announced plans to reintroduce a new currency, but many traders have refused to relent. For the city’s most vulnerable residents, the shilling’s disappearance from circulation has added yet another burden.
Sharif Noor, a mechanic, told The New Humanitarian that “US dollars have less barakah” – an Islamic term meaning blessing – because they do not go as far as Somali shillings, which can still be used in much smaller denominations.
Mohammed Ali Hussein, a community leader in northern Mogadishu, said the shift away from the shilling had replaced lower prices with dollar-denominated ones: “Small purchases that might once have cost 1,300 shillings, for example, are now rounded up to 50 cents, making everyday goods more expensive.”
“Somalis already have to pay for almost everything themselves. It’s not as though the government provides healthcare or education, so even small price increases can make life much harder.”
Hussein said many people in the city rely on the generosity of others when they cannot make enough to cover their costs. But with prices increasingly denominated in dollars, it is harder for people to share small amounts of money or give just a few cents to those in need.
“Somalis already have to pay for almost everything themselves. It’s not as though the government provides healthcare or education, so even small price increases can make life much harder,” Hussein said.
An additional problem is looming in the countryside. Four failed rainy seasons in a row have wiped out assets and livelihoods, with more than half a million people displaced this year alone. Most are heading to the southern town of Baidoa or Mogadishu in the hope of finding work or aid – despite the severe cuts to humanitarian budgets.
Aid agencies are also being forced to absorb higher shipping costs as food cargoes are re-routed around South Africa to avoid the Bab el-Mandeb Strait and Red Sea corridor as the Gulf crisis widens, reducing the volume of relief goods they can purchase.
All told, more than six million people countrywide are facing acute food shortages. Among the hardest-hit areas is Burhakaba district in southern Bay region, where aid agencies warned earlier this year of a “credible risk of famine”.
That risk could deepen further as forecasters track a rapidly strengthening El Niño expected to bring severe flooding to Somalia later this year, layering a new threat onto a countryside already stripped bare by drought.
This article is republished from The New Humanitarian under a Creative Commons license. Read the original article.
A Mogadishu-based journalist covering Somalia and East Africa
