Mokha Economic Brief /June 2026
June 2026 witnessed continued attention to economic reform files, without major changes in their overall trajectory. Key developments included the continued regulation of the exchange sector, the pursuit of smuggling networks linked to U.S. sanctions, and the reactivation of the Supreme Committee for Tenders and Auctions, as part of efforts to strengthen oversight of public funds and improve resource management efficiency.
At the same time, limited oil revenues and declining investment activity remained among the main challenges constraining the government’s ability to achieve tangible improvements in economic performance. These developments indicate that economic reform is not limited to regulatory and oversight measures, but is also tied to restoring state revenues, foremost among them oil and gas, improving the investment climate, and enhancing the efficiency of public institutions.
Reactivating the Tenders Committee: A Step Toward Strengthening Financial Governance
On 24 June 2026, the Chairman of the Presidential Leadership Council issued Republican Decree No. 44 of 2026, forming the Supreme Committee for Tenders and Auctions, chaired by Jamal Nasser Abdullah al-Aqel, after years of disruption and suspension in the committee’s work.
The decision came as part of the government’s efforts to strengthen oversight of public spending, reduce the irregularities that have affected the management of government contracts and procurement, and fulfill part of the financial and administrative reforms agreed upon with donors and international partners.
The reactivation of the committee restores one of the key oversight tools in the management of public funds. However, its effectiveness will depend on the regularity of its work, the commitment of government entities to tender procedures, and the activation of other related oversight institutions. Therefore, the importance of the decision lies in completing one of the institutional pillars of financial and economic reform, although its impact will remain limited unless accompanied by broader reforms in public financial management.
Precautionary Seizure of the Southern Transitional Council’s Funds
The Central Bank of Yemen in Aden instructed operating banks to implement a judicial decision ordering the precautionary seizure of the funds, balances, and accounts of the dissolved Southern Transitional Council, in connection with financial corruption cases. The measure was based on a decision issued by the Attorney General prohibiting the disposal of these assets until the completion of judicial procedures.
The decision pushes toward strengthening the role of state institutions in managing financial files of a judicial nature, and reflects the government’s attempt to employ its legal and banking tools within an institutional framework. It also aligns with a broader path focused on reactivating state institutions and granting them a greater role in managing financial affairs, after years in which the effectiveness of several government bodies had declined.
The Central Bank Moves to Launch the Bloomberg Platform for Foreign Exchange Trading
The Central Bank of Yemen in Aden announced its intention to launch the Bloomberg platform for foreign exchange trading among Yemeni banks in October 2026, in a step aimed at regulating the exchange market and enhancing the efficiency of foreign currency trading within the banking sector.
The adoption of the platform forms part of efforts to develop monetary market management tools and improve transparency in interbank trading operations. It is also expected to help strengthen oversight of the exchange market and reduce reliance on informal channels, thereby supporting the role of the banking sector in liquidity management and the regulation of foreign currency trading. The success of this step, however, will depend on the extent to which banks commit to using the platform, and on the Central Bank’s ability to expand its implementation and continue developing it.
Safer Company’s Readiness to Resume LNG Exports
The Executive Director of Safer Exploration and Production Operations Company, Eng. Salem Kuaiti, confirmed the company’s readiness to resume liquefied natural gas exports once the appropriate conditions are in place. He explained that maintenance work carried out during the suspension period had preserved the readiness of the facilities and infrastructure, and that the company’s technical teams are capable of restarting the production and export system once activity resumes. He added that the return of gas exports would provide an important financial resource to support the public budget and revitalize the energy sector.
Liquefied natural gas is one of the most important revenue sources that the Yemeni economy has lost during the years of war, making public finances more dependent on limited resources. Technical readiness provides an opportunity to restart this sector once suitable conditions are available. However, this remains contingent on the stability of the security situation and the protection of production and export facilities, as these factors are no less important than operational readiness.
The Central Bank Expands Oversight Measures on the Exchange Sector
On 10 June, the Central Bank of Yemen in Aden suspended the license of Al-Ittihad Money Exchange Company in Lahj Governorate and closed its headquarters, as part of its measures against non-compliant exchange facilities. This brought the number of companies and establishments suspended or stripped of their licenses by the Central Bank to 96.
This step falls within a series of measures taken by the Central Bank in recent months to tighten oversight of the exchange sector and regulate its activities. Stricter supervision of exchange companies is viewed as one of the tools the government relies on to curb financial violations, strengthen market discipline, support monetary policy stability, and restore the role of formal financial institutions in managing the banking sector.
Suspected Fraud Involving German Funding for Projects in Houthi-Controlled Areas
The German newspaper Welt am Sonntag revealed what it described as the largest fraud case in the history of the German Agency for International Cooperation (GIZ), involving projects implemented in Yemen since 2015 with funding exceeding €100 million. According to the investigation, tens of millions of euros are suspected to have disappeared or been misused within projects managed in Sana’a and other areas under Houthi control.
The case includes suspicions of fake invoices, unimplemented projects, procurement manipulation, continued dealings with the Yemen and Kuwait Bank before U.S. sanctions were imposed on it, as well as the implementation of several projects in coordination with the Houthi-affiliated Supreme Council for the Management and Coordination of Humanitarian Affairs and International Cooperation (SCMCHA), which oversees the work of international organizations in areas under Houthi control.
The case highlights the scale of the challenges facing international aid programs in areas controlled by the Houthi group, where the group imposes a regulatory and administrative system that links the implementation of humanitarian and development projects to its institutions and local structures. In such an environment, the risks of misusing funds or diverting them away from their original objectives increase. This requires donors to review their oversight and implementation mechanisms, and to reduce reliance on channels that allow the group to influence the flow of aid and redirect it in ways that support its military operations.
U.S. Sanctions Raise Concerns Over Oversight of Oil Imports
U.S. sanctions revealed that a vessel which unloaded a shipment at the port of Mokha was linked to a network accused of transporting and marketing Iranian gas. The incident drew attention to shipping routes entering ports under the control of the internationally recognized government. It also brought back to the forefront the importance of tightening inspection procedures on vessels and cargo, and verifying their owners and operators, amid growing attempts to circumvent international sanctions.
The incident raises questions about the final destination of such shipments, particularly given the Houthi group’s continued reliance on fuel and energy smuggling networks to secure part of its needs and sources of financing. If the shipment, or part of it, is proven to be linked to entities operating inside Houthi-controlled areas, this would indicate gaps in the oversight system governing vessel movements into government-held ports, and would require a review of inspection procedures and coordination with international partners.
The case also shows that sanctioned energy transport networks have increasingly relied on multiple routes and intermediaries to conceal the movement of shipments and the identity of their beneficiaries. This raises the importance of strengthening maritime oversight and intelligence-sharing to prevent Yemeni ports from being used in activities that may serve smuggling networks or reach, directly or indirectly, sanctioned entities.
Rising Shipping Costs Intensify Pressure on Yemeni Markets
Yemeni traders have incurred growing losses as a result of the sharp rise in maritime shipping costs, driven by continued security disruptions in the Red Sea and risks facing navigation through the Bab al-Mandab and Hormuz straits. This has prompted several shipping companies to raise freight and insurance fees, increasing the cost of delivering goods to Yemeni markets.
The impact of these increases does not stop at the commercial sector, but extends to final consumers, as part of the transportation cost is passed on to the prices of imported goods. Importing companies are also facing greater pressure due to higher operating costs, at a time when the local market is witnessing declining purchasing power and weak economic activity.
This development confirms that the Yemeni economy remains vulnerable to changes affecting international shipping routes, given its reliance on imports to meet most of its basic commodity needs. As transport and insurance costs continue to rise, local markets remain exposed to new waves of price increases, even if domestic factors remain stable.
Conclusion
The developments of the second half of June 2026 showed that the Yemeni economy continues to operate within an environment where security, financial, and institutional challenges overlap. The government continued to take measures to regulate the banking sector, strengthen oversight of the exchange market, and reactivate some state institutions, alongside attempts to restore activity in the oil and gas sectors. However, these efforts still face challenges that limit the speed at which they translate into tangible economic improvements.
At the same time, regional developments revealed their continued direct impact on the Yemeni economy, whether through rising shipping costs, risks associated with maritime movement, or the growing activity of smuggling networks and attempts to circumvent international sanctions. These variables place additional burdens on trade movement, increase import costs, and limit the chances of market recovery in the near term.
The government’s ability to improve economic performance remains tied to restoring state revenues, foremost among them oil and gas revenues, which have sharply declined since exports stopped as a result of attacks and threats carried out by the Houthi group against export ports and oil export facilities. These attacks led companies and shipping carriers to refrain from resuming export operations. Improved economic performance also depends on the continuation of financial and administrative reforms, strengthening the efficiency of oversight institutions, and providing a more stable environment for economic and investment activity. Together, these files represent the key pillars for reducing economic pressures, restoring public revenues, and achieving a degree of stability in the coming period.
