Trade Dependence and Demographic Dynamics as Determinants of Long Run Economic Growth in Somalia from 1993 to 2024

Abstract This article examines the long-run relationship between real gross domestic product (GDP), exports, imports, and total population in Somalia over 1993–2024. Annual data from the World Bank’s World Development Indicators and the Statistical, Economic and Social Research and Training Centre for Islamic Countries are analysed using a log-linear specification. Augmented Dickey–Fuller and Phillips–Perron tests, an Engle–Granger residual-based cointegration test, ordinary least squares, pairwise Granger tests, and residual diagnostics are applied. All variables are integrated of order one. The residual test provides evidence of a lo ng-run association, although inference at the 5% level is sensitive to the critical-value convention and is therefore interpreted cautiously. In the estimated levels equation, the export elasticity is − 0.692, the import elasticity is 1.043, and the population elasticity is 0.401. Exports and imports are extremely highly correlated (r = 0.997), so the separate trade coefficients should not be treated as precisely identified causal effects; the more defensible result is that Somalia’s trade structure is strongly associated with output. Pairwise tests indicate predictive precedence from exports and imports to GDP, while population shows no such relationship. The findings point to export diversification and value addition, productive use of imports, stronger trade institutions, and investment in human capital and employment as priorities for more resilient growth.