Somalia’s economy is operating in a near vacuum. This is due mainly to lack of effective legislation to regulate the various sectors.
Although the private sector seems ready to play its role in economic development, limited regulatory support is becoming a major drawback. This is not the only shortcoming. Private investors have a problem finding qualified manpower, they say.
The situation is a hindrance to creating a robust business sector. These two crucial issues need to be addressed. Somalia’s private sector needs a number of legislations to formalise the economy and establish professional and competitive grounds for business.
Such legislations include those required to regulate banking, insurance, transport, taxation, telecommunication, media, energy, urban development, and investment, just to mention a few. The number of laws needed to create a vibrant economic and social environment are numerous. A strong and sustained government intervention is necessary.
The private sector, in most cases, is ready to assist the government to draft such laws. In fact, in this issue of The Somalia Investor, we have outlined a number of government-private sector partnerships in formulating laws. However, Parliament’s output in this respect falls below the expectations of the public and the business community.
The passing of laws has become a slow, tedious and protracted affair, mainly due to lack of capacity and political instability. The underdeveloped human resource is also crippling the private sector’s desire to achieve sustainable growth.
Every sector of the Somalia economy imports skilled labour. A huge investment needs to be channelled into the education system, especially in the establishment of vocational and technical training centres to provide the much needed technical skills to drive the economy.
The government, in partnership with international donor agencies, should invest in technical training institutions to produce skilled labour and fill in the huge holes in Somalia’s human resource capacity. The country’s economy cannot be sustainably developed with imported raw materials and expatriates alone. Home-grown labour is necessary to develop a firm and lasting knowledge base.
We know that this takes time and resources. However, building this foundation now is critical to the overall social-economic stability of the country. These tasks cannot be left to the government alone. The private sector should set aside a part of their budgets towards supporting the government in its legislative endeavours, and also in the establishment and sustenance of national training centres.