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Entrepreneurs breathe new life into Somalia

July 05, 2021
topic:Economic Opportunity
tags:#Somalia, #entrepeneur, #youth
by:Bob Koigi
The recent announcement  by Ismail Ahmed, founder of the Global money transfer company Wordremit, that he would invest $500 million of his own wealth to support development projects in the Somaliland, his birth place, is the latest pointer to the growing role of Somali entrepreneurs, at home and in Diaspora, to rebuild their country, which has been ravaged by decades of civil war

Through the Sahamiye Foundation, Ahmed will invest in healthcare, education and infrastructure projects over the next 10 years; he will do so by investing in building the capacity and skills of the local community to become literate, get jobs, and run businesses. He is also keen to invest in Somaliland’s startup accelerators. 

Ahmed is alive to the devastating impacts that decades of conflict have had on the economic growth of the country and the well-being of its people, with illiteracy, due to the collapse of the education system, being a key contributor to the sorry state of affairs. Hundreds of entrepreneurs are joining Ismail to pick Somalia from the ashes of war by supporting enterprises that are creating jobs and contributing to the overall economic growth of the country. 

Changing the narrative of unemployment

"Somaliland is a nation that has built itself from the ground up, embracing technology and entrepreneurship to make progress that was never thought possible,” Ahmed said in a statement. “However, Somaliland still faces development challenges that require significant investment to lay the foundations for economic growth, good health and prosperity.”

In a country with one of the youngest populations in the world (over 70 percent of it is under the age of 30), Somalia has also had to grapple with one of the highest levels of youth unemployment. 

But young Somalis are now changing the narrative by being job creators than seekers. From ICT and agriculture to retail and manufacturing, small businesses being led by young men and women are becoming commonplace. These businesses have become safe havens for young people keen on turning away from crime. 

“Micro, Small and Medium Enterprises (MSMEs) are an important part of Somalia's business environment. Indeed, sectors such as manufacturing, services and ICT are not as advanced," notes a report  dubbed The Somali Micro Small and Medium Enterprises ecosystem: challenges and opportunities.  

"It is widely recognised that entrepreneurs play a vital role in promoting the private sector and economic growth in Somalia because they embody private ownership and entrepreneurial skills, and contribute to job creation and the diversification of economic activity," the report further states. "MSMEs have been viewed by some governments and donors as a means of creating employment opportunities and alleviating poverty. MSMEs promote entrepreneurship and innovation in Somalia, which play a vital role in achieving development goals in the country.” 

Such entrepreneurs include Amina Farah, who founded the Khayraad Development Association. A multi-purpose self help group, the association is involved in fishing business, boat making and processing of resins and gums targeting the beauty industry. 

Having moved into the fish drying business, Amina is now into exporting fish, having captured the Ethiopia, UAE, Rwanda and Yemen markets.

“The fish business has opened opportunities for me by connecting me to more local and international markets. With the expansion of business, this has also meant increasing the number of people I work with which means more jobs for especially the young people," Amina told FairPlanet. "Having diversified into other areas of business for sustainability also means more jobs for ordinary Somalia people." 

While there are no official figures on the number of enterprises registered in the country, Somalia’s Directorate of SMEs estimated them to be 6,000 spanning from small stories to large companies. 

Bureaucracy and high costs hinder young Somali entrepreneurs 

But these businesses have had to contend with the prohibitive cost of doing business and a tough operating environment that has slowed down their ambitions.

The World Bank Ease of Doing business 2020 ranked Somalia as the worst country to do business in out of the 190 countries reviewed, citing the number of days it takes to open a business and the costs involved. An entrepreneur spends 70 days and pays $900 to have a business license.

The government, alive to these hiccups, has, through various interventions - among them the 2020-2024 development plan, been investing in creating an enabling an environment for entrepreneurs to run businesses and thrive in.

“The Somalia entrepreneurship ecosystem and the dedication by local businesspeople, among them youth and women to find sources of income while rebuilding their country is a classic example of how boosting local investment is a key dirver of economic growth, irrespective of how long this may take,” said Naomi Otande from the University of Nairobi School of Economics. 

Image: Ismail Salad Hajji dirir. 

Article written by:
Bob Koigi
Bob Koigi
Author, Contributing Editor
Embed from Getty Images
Hundreds of entrepreneurs are labouring to pick Somalia from the ashes of war by supporting enterprises that are creating jobs and contributing to the economic growth of the country. 
© Sadak Mohamed/Anadolu Agency
Embed from Getty Images
Small businesses led by young men and women grow more ubiquitous around Somalia, and have become safe havens for young people keen on turning away from crime. 
© -/AFP
Embed from Getty Images
“The fish business has opened opportunities for me by connecting me to more local and international markets." Amina Farah
© Ohamed Abdiwahab/AFP
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