For good reasons Somalia has been billed as “the last frontier country in the world.” Investors, economists, profiteers, multinational companies as well as countries looking to expand geopolitical footprint have their radars choking with frenzy.
The whole of Somali is said to be geologically seductive to players in the mega extractive industry. The minerals, though yet to be ascertained, are said to be immense and diverse. Oil and gas, iron, gold, uranium, copper and rock salt all lie beneath awaiting activation.
Somalia’s hydrocarbon is what has got every other industry player training his economic arsenal towards our country. And who wouldn’t? The oil industry is the biggest industry in the world and boasts over 5000 years of existence.
The country is looking forward to maximizing on this lucrative industry once actual discoveries are made. Currently seismic studies are underway and indications are pointing towards good times ahead.
Good times ahead is what every other citizen in the country is yearning for following a painful past. The oil dollars will help heal the wounds and wipe away endless tears that have been shed for lost loved ones, collapsed hospitals and education system, road infrastructure and government institutions.
However with great wealth comes great responsibility. Oil wealth is but a means and not an end to itself.
For the country to make good “Oil wealth is but a means and not an end to itself,” it will need to shade practices such as corruption that are widespread in its fledgling institutions. The government has to embrace sound financial management practices while coming up with innovative ways to diversify the economy so as to evade the dreaded Dutch disease.
It is upon the government to ramp up security and legislate laws for a conducive business environment that attracts much needed capital. Such laws should also call for transparency and accountability while empowering civil societies who act as public watchdogs.
Due diligence needs to be taken to check against crippling resource curse. Equitable distribution of the revenues and investing in the welfare of the citizenry is critical. Establishment of future generations fund ensures this national heritage spreads to future generations.
Extractive industries though highly lucrative, come with volatility. Diversifying the economy and establishing a fund to that effect should act as a shock absorber. Currently the oil industry has seen prices tumble to low depths that have negatively disrupted world economies. Warning shot? Yes.
In this issue we engage several key stakeholders to shade light on the status and the finer details of the industry. The issue will take you through various sectors of the economy that the country will immensely benefit by investing in. In a cash-strapped country, our writers also head to Egypt and share on innovative ways of raising capital domestically for mega infrastructural projects.