Since 1991, Somaliland economy has fallen victim to pressures from the absolute freedom of movement of the goods and services which impacted on the country’s economy due to the absence of regulating agencies of the state economy. Another critical challenge against the country’s shrinking economy is the frequent livestock ban from the middle eastern countries for political and social reasons. This frequent ban has never led the policy makers think twice and seek alternative destination of the country’s single export. This makes Somaliland to be described as a ‘banana republic’.

Not only the livestock ban, but also the currency and foreign exchange markets have remained in the hands of few and brought pressure both on the state and private economies. This undermines the role of the central bank to serve both as a regulatory and a monitoring agent. This doesn’t seem that this argument is contrary to the country’s free movement of goods and services, but to protect the interest of the poor, institutionalization of a mixed economy in the form of a fair and a free market are necessary.

Therefore, the role of the state in regulating the market flow and influencing the role of the non-state actors’ involvement in the state economy should remain effective and efficient.

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