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Entrepreneurialism: the only real economic policy for an uncertain age

Today, just looking around many cities in Somalia, it is safe to say that the entrepreneurial spirit is back and not a moment too soon. Many Somalis both at home and from the Diaspora have developed, organized and manage a business venture or two despite many risks to make a profit across Somalia.

Liban Obsiye

Entrepreneurship comes naturally to most Somalis. This is not misplaced praise but a simple reality which is built on the strong historical traditions of self-reliance and pastoralism. After independence, a failed experiment with scientific socialism and monopolis­tic state owned enterprises was imposed under the late Siad Barre administration only to be followed by a two-decade disastrous civil war which destroyed all public and private institutions leaving the countries key industries in the hands of a few.

Today, just looking around many cities in Somalia, it is safe to say that the entrepreneurial spirit is back and not a moment too soon. Many Somalis both at home and from the Diaspora have developed, organized and manage a business venture or two despite many risks to make a profit across Somalia.

Due to limited government regulations, setting up a business, in often new markets, has proven lucrative for many entrepreneurs who have invested in areas as a far and wide as laundrettes, restaurants, construc­tion, import and export, security, media and education. Many of these companies which often started off with just its owner and a few investors, today employ many people who in return support so many more of their family members and friends on their salaries.

More than NGO’s and aid, it is arguably Soma­lia’s entrepreneurs that offer the best hope for the country’s aspirations of internal revenue generation and job creation that will turn the tide of poverty and all its accompanying ills. Understanding this only too well, and hamstrung by weak bureaucratic capacity, the Somali Government has welcomed mainly Somali and Turkish investors to operate with light touch or no regulations at all, as it focuses on growing the economy whilst fighting the last pockets of terrorism on its soil and fixing the unstable and often confusing national politics.

Entrepreneur’s impact on Somalia’s economy is clear from the rise in employment, increasing traditional market trading like in Hamar Weyne and the rising cost of commercial property in major cities including Mogadishu and Hargeisa. However, despite these successes, there is more that can be done to bet­ter understand the impediments to entrepreneurialism and economic development in Somalia by the Central Government and regional administrations.

Like everywhere else, those entrepreneurs who have turned their ideas into an economic reality are less in number than those who are still dreaming of success and those who do not even know where to start. Even less are those who are implementing their vision but have yet to turn their ideas into profit.

Across the world, Governments are scrambling to provide institutional support to entrepreneurs in order to boost economic growth, create jobs and foster a culture of innovation and competition. It is as if the entire planet has collectively and finally woken up to the fact that multinational companies and large scale investors, the darlings of economic policies since the 1980’s, are no longer the only long term sustainable economic partner for development.

Globalisation has increased cross border trading and the multinational companies abilities to invest across the world efficiently. However, in a backlash against globalisation at the local level and rising protectionist rhetoric from the USA, it is more prudent for Gov­ernment’s, especially those in the developing world like Somalia, to focus on supporting entrepreneurs to create the Small to Medium Enterprises and Industries that are likely to create jobs at home, transfer skills and keep production local to manage costs and create a reliable and profitable national supply chain.

Networks like Start Up Grind in Mogadishu and Fursad Fund have ensured the process of entrepreneurialism is understood better at the community and mainstream level nationally by potential and actual entrepreneurs, policy makers and financiers, including banks. Furthermore, Fursad Fund has, under its visionary and energetic leader Deeq Mohamed and his army of dedicated staff, started lending to small business owners, including women, and supporting them in the process of growing their businesses.”


– Author

The key challenges for Somali entrepreneurs today are many but among the most important are financ­ing, competition, intellectual property and access to regional and international markets. Ironically, due to remittances from abroad, many business leaders I have spoken to in the past have seldom complained about low purchasing power but more of unfair competition, especially barriers to entry in key markets such as energy, telecommunications and food.

On the matter of financing, there are more investors with cash then know what to do with it in Somalia and in recent years there have been examples of partner­ships between investors and innovators. However, these are still rare and most investors still seek to acquire the ideas and small companies they see as potentially profitable or as competitors. This clearly is problem­atic for any economic policy which seeks to develop a competitive product and service markets where innovation, competition and consumer protection are a central feature.

Despite the lack of coordinated regulatory progress on the part of the Somali Government, many other platforms have sprung up to support entrepreneurs, large and small, across Somalia with financing, men­toring and management support. Many Somali banks today, themselves an example of the best traditions of entrepreneurialism, provide all the above-mentioned services and support with innovatively designed risk management systems and procedures.

More impressively, networks like Start Up Grind in Mogadishu and Fursad Fund have ensured the process of entrepreneurialism is understood better at the com­munity and mainstream level nationally by potential and actual entrepreneurs, policy makers and financiers, including banks.

Furthermore, Fursad Fund has, under its visionary and energetic leader Deeq Mohamed and his army of dedicated staff, started lending to small business owners, including women, and supporting them in the process of growing their businesses. These are examples of best practices that need to be shared, evaluated and implemented on a wider scale by all partners who are concerned with the economic devel­opment of Somalia, including the central Government, banks, the UN and international financial institutions.

Somalia’s National Development Plan and its very competitive investment law, both endorsed by the Cabinet last year, are the best evidence of the central government’s understanding of the importance of en­trepreneurialism in Somalia’s economic future. However, the simple fact is that it has proven difficult to attract investment to Somalia because of the perceived high risk posed by insecurity despite the great opportunities avail­able in all sectors. In response, as a short to long term measure, the next government must prioritise champion­ing the cause of entrepreneurs to generate the revenue required to achieve its socio-economic and security goals sustainably and independently.

Chief among the enablers such as financing can be achieved in partnership with Somali banks, NGO’s, the international financial institutions and development partners. However, the Somali Government is solely responsible for ensuring that the investment law and national business policies and legislations are harmon­ised to ensure that entrepreneurs can invest alone or with international partners fairly and securely. Office space is expensive anywhere in Somalia and Innovation Hubs with free Wi-Fi and business advisors available to provide guidance from different partners will be crucial in nurturing and guiding talent. With this simple inexpen­sive set up it will be easy to identify future innovators and link them with financing, investors and eventually, the markets. To make entrepreneurship work there must be a collective effort to support Somalia’s best and brightest by all. Ideas change lives and entire societies. Therefore, entrepreneurs and innovators are desperately needed for Somalia’s economic, social and political transformation. The next government must prioritise supporting them alongside winning international investment to realise its socio-economic ambitions and fulfil the promise of development for the Somali people and nation.

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