Here, some facts and tips to take note of as you prepare to invest in the Somalia:
The dollar economy: Somalia, since the fall of the government in 1991, has seen the value of its currency depreciate to a state where today, trading in the local currency does not make much economic sense. For this reason, the country relies on the United States dollar as the main legal tender. The price tag on most of the essentials, from accommodation costs to cargo hauling charges, is done in dollars; not to mention immigration matters. The down side: International Bank of Somalia CEO, Mr Hassan Yusuf says that the dollar economy is hurting local business development. In his view, a swift mechanism to put in place the Somalia shilling would be indicative of a good way forward. Currently, banks do not trade in the Somalia shillings, but they are working on how to solve this small problem.
Company registration documents should be in order. In case you are experiencing any difficulty, consult the Somalia Chamber of Commerce for assistance. Have a well put company profile that clearly explains who you are and what you are interested in as a company.
Know the culture
There are cultural aspects that are unique to specific societies. Such cultural peculiarities also spill into the business world. For instance, the value of trust among Somalis is very high. This may not be the case in other societies. It is therefore important for an investor to know the cultural peculiarities so that you can benefit from them. And still on cultural issues, religion is taken very seriously by Somalis. That means that as a non- Muslim investor, you will have to understand and learn to respect the influence that religious teachings have on various business transactions. Take a short course on the Somali culture or hire a local cultural expert.
Conduct market research…even on a small scale
This will help you understand the sector you intend to get into. You will know your market better, understand your clients better and know the available gaps in the industry. Conducting a market study can reveal some market dynamics that are not easily grasped by the public and may lead to higher business growth, apart from being able to prevent false starts.
Keep your transactions above board and legitimate
If you are to buy land, let it be legitimate and let the seller have the needed papers at the right place. If you are to get into a transaction involving large volumes of trade, say, shipments from abroad, ensure that you fully understand your terms and conditions. Understanding the terms of reference could save you millions of case and hours that can be wasted in back and forth processes.
Keep your eyes open Opportunities in Somalia are everywhere. All you need to do is be alert and spot them. An investor already living in Mogadishu asks; “Many people see security is a threat. What if you decided to look at it as a business opportunity? Think of the kind of private security firms that you can set up, the equipment you’d need, the people to employ and the firms and private citizens who will need your services….?” That is what keeping your eyes open means.
Partner with local individuals or local companies
The government encourages investors, especially the international firms to partner with local firms. The reason for this is pretty simple; it is easier and more practical to operate through local partnership compared to going it alone. The same applies to individual investors. The arrangement also helps in the transfer of the much needed skills from the skilled (investors or returnees) to the much less skilled locals.