Sections type: The Economy & Finance

The seizure of an Israeli-linked ship by Houthi forces in the Red Sea and repeated attacks on commercial shipping threaten to pile additional pressure on Yemen’s economy by raising the costs of imports. Shipping to Yemen already incurs increased transport and logistics costs due to its designation as a “high risk” area. According to a 2021 UNDP assessment, war premiums,…

Prime Minister Maeen Abdelmalek Saaed denied allegations of corruption against his government made in a parliamentary report during a press conference on September 4. The alleged violations include mismanagement and corruption amounting to YR2.8 trillion (approximately US$1.9 billion) across the electricity, energy, telecommunications, and financial sectors. Saaed attacked the report of a parliament fact-finding committee, calling the accusations malicious and…

The government approved an agreement to establish a joint telecommunications company with an Emirati company to provide mobile phone and internet services in government-controlled areas on August 21, over opposition from several members of parliament. In a letter to Prime Minister Maeen Abdelmalek Saaed, 22 MPs in the government-aligned House of Representatives objected to the proposed sale of Aden Net…

Long-waited financial support for the government finally materialized after it reached a dire fiscal situation in June and July. On August 1, Saudi Arabia announced it would support the internationally recognized government with a US$1.2 billion grant to finance the public budget and prop up the value of the Yemeni rial. Saudi Ambassador to Yemen Mohammed al-Jaber stated that the…

Houthi authorities banned the sale of domestic gas cylinders from Safer in Marib during the last week of May. The heavily populated regions in the north will now be exclusively supplied with imported cooking gas through the Houthi-controlled port of Hudaydah. The decision will further economically undermine the government, already deprived of its main source of revenue following Houthi drone…

The government-held port of Aden received the commercial ship Blue Nile on April 8, without it being subject to inspection by the Saudi-led coalition at Jeddah, a first since the expansion of the conflict in 2015. The arrival followed a statement released by Aden Governor Ahmed Hamed Lamlas on April 4, encouraging shipping companies to operate direct routes to the…

The Houthi-controlled parliament in Sana’a passed a controversial law banning “usurious transactions” on March 21. Houthi authorities pushed the House of Representatives to prohibit interest-based transactions in Yemen’s banking sector after rejecting amendments proposed by the body’s joint legal committee. The law could have disastrous effects on Yemen’s economy, exacerbating its isolation and deterioration and discouraging investment. Parliamentarians appeared pressured…

On February 21, Saudi Arabia agreed to supply the Central Bank of Yemen (CBY) in Aden with a US$1 billion deposit to prop up Yemen’s faltering economy and support the value of the rial in government-held areas. The aid will not be deposited directly with the CBY-Aden, but rather handled through the Arab Monetary Fund (AMF) as part of the…

Oil production in government-held areas ground to an almost complete halt early in the month as Houthi drone attacks continued to strangle exports. With oil revenues representing the largest source of income for the government, any prolonged halt to its production and export would have dire effects on economic conditions, including an inability to pay salaries and depreciation of the…

Houthi drone attacks on Nushayma and Al-Dabba oil terminals in the latter half of October paralyzed oil exports and threatened to undermine government finances. Although its effects were not felt in October, prolonged loss of oil revenue would cut the government off from by far its largest source of revenue, which would have widespread knock-on effects, including eroding the ability…