Somalia’s real estate construction is big in potential, but the challenges to surmount require much wisdom and passion.
Ayan Abdi Diriye
Players in Somalia’s real estate industry have to contend with a major dilemma. Amid a steep rise in the demand for housing is the scarcity of skilled labour and shortage of construction materials. These are in addition to scanty regulation. But it is these very yawning gaps that provided inspiration to one skilled Somali entrepreneur to return home.
Osman Ahmed Ali returned to his motherland Somalia with the aim of reforming the construction and consulting sector through his construction firm Somtech Engineering and Construction.
“This is definitely very fulfilling for me as a person. What else is better than building your own country? It is exciting to see the huge gap in housing. It means a good market potential for this industry. There are many challenges, but as an experienced engineer who understands this environment, I have ways to get around them with my team and end up with quality buildings,” he says.
Somtech is currently undertaking 28 projects in Mogadishu alone, with each project running at a cost of between US$20,000 and 1 million. The projects include a wide range of buildings, from residential villas to apartments and offices.
“It is exciting to see the huge gap in housing. It means a good market potential for this industry. There are many challenges, but as an experienced engineer who understands this environment, I have ways to get around them with my team and end up with quality buildings”
– Eng. Osman Ahmed Ali, SOMTECH Managing Director
The construction giant is now set to settle on a deal with Unicef to put up 800 classrooms across the country. The firm has also began a design and consultancy work for a United Nations body with a big presence in the country. It further advises the government on building and construction matters.
The construction industry in Somalia has several ripple effects, among them job creation and value addition to property. It is teeming with several youths interested in acquiring practical skills.
Somtech, Mr Ali says for example, has a pay roll of at least 60 to 100 people every day engaged in the construction work. Many of them had no skills at the point of recruitment. “We are very happy to teach the youth skills in construction. It is good to see them deeply engaged in the works that earn them some decent living and keep them from antisocial behaviours. I have seen several of them acquire basic skills that have enabled them earn a living in a way they never knew three years ago. I think even security improves as we create more jobs,” Mr Ali says.
Somalia is set to increase its investment portfolio, according to an IMF report released last year. Much of the increased investment, states the report, is projected to be used to purchase imported equipment to renovate dilapidated infrastructure and housing. A number of firms have already imported heavy equipment used in prefabrication to speed up construction work.
Mr Ali also says the country could do well with a new cement factory to supply the industry with the commodity that is presently in high demand.
The state nonetheless needs to do a lot of work to provide an attractive environment for investors. Regulations in land and planning are necessary sooner than later as the new Somalia takes shape. The will help to avoid a situation in which unplanned buildings later get demolished to give way to other necessary infrastructure.
Industry players like Somtech will be relying on these improvements and the fact that the Somali diaspora is keen to return home to rebuild the nation. After all, the government too stands to benefit from regulations, and this will be through structured ways of earning revenue from the growing industry.