SomalilandBiz – Business News, Guides & Insights in Somaliland http://www.somalilandbiz.com Inform. Educate. Inspire Mon, 12 Nov 2018 15:39:36 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.8 http://www.somalilandbiz.com/wp-content/uploads/2018/03/cropped-somalilandbiz-avatar_550x550-32x32.png SomalilandBiz – Business News, Guides & Insights in Somaliland http://www.somalilandbiz.com 32 32 WorldRemit Somaliland – Pilot for New Africa Strategy http://www.somalilandbiz.com/banking-financial-services/worldremit-somaliland-pilot-for-new-africa-strategy/ http://www.somalilandbiz.com/banking-financial-services/worldremit-somaliland-pilot-for-new-africa-strategy/#respond Thu, 08 Nov 2018 17:21:27 +0000 http://www.somalilandbiz.com/?p=1220 Most of us have all heard of WorldRemit – a UK based global money transfer company founded by Somalilander Ismail Ahmed. They have really shaken up the remittance industry through innovation and embracing new technologies. Some key facts about WorldRemit: Founded 8 years ago Have more than 800,000 customers sending money around the world to […]

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Most of us have all heard of WorldRemit – a UK based global money transfer company founded by Somalilander Ismail Ahmed. They have really shaken up the remittance industry through innovation and embracing new technologies. Some key facts about WorldRemit:

  • Founded 8 years ago
  • Have more than 800,000 customers sending money around the world to over 145 countries
  • The company is handling 1.2m transactions a month, up 60 per cent from the previous year
  • A Series C funding raise back in Dec 2017 valued the firm at more than $670 million
  • Last year WorldRemit became Arsenal FC’s first-ever online money transfer partner in a global sponsorship deal
  • They plan to serve 10 million customers connected to emerging markets by 2020

So they’re well on the way to becoming a unicorn (worth $1bn+). What’s the significance of the Somaliland market then? A small market with many competitors such as the market leader Dahabshiil. Somaliland was indeed one of the first countries WorldRemit started off with and made a significant move back in 2013 when they enabled direct remittances to Zaad mobile wallets – it was somewhat revolutionary as someone from the diaspora abroad could send money direct into a relative’s Zaad mobile money wallet within minutes (anytime via their phone) – even Telesom who actually own Zaad did not have the foresight to offer this.

More recently however WorldRemit opened an office in Hargeisa for another strategic pilot.

worldremit somaliland - launch ceremony

The launch ceremony back in August 2018 was attended by Ismail Ahmed himself and other leading signatories. The new office was opened – located on the first floor of Nuur Hawse Plaza on 26 June Main Street in Hargeisa.

worldremit hargeisa - new office exterior

It was unfortunate however that the company completely rebranded a couple months after! If you checkout their website they’ve gone with a totally new colour (purple) and new logo type.

So how is Somaliland the pilot for this new African strategy? Well, they launched an ewallet themselves which would allow Somaliland locals and residents to store and send money abroad via theWorldRemit app. This will kind of set a new precedent as with no formal banking sector it has traditionally been difficult to send money out the country in a fast, cost effective manner. WorldRemit’s broader strategy is to target intra-Africa money transfers that has traditionally been amongst the most expensive in the world (according to World Bank). Founder Ismail Ahmed said:

“Africa is a crucial market for us and over the next few years, we will expand our services so customers can send and receive with WorldRemit, getting the benefits of our fast, secure online service.”

To further illustrate this point, in a recent article, Ismail was asked:

Where do you see market growth now?

“Until now our business was about sending remittances from developed markets to developing countries. Because of digitisation now we are starting sending money within and between developing countries, particularly in Africa where we recently launched the intra-Africa transfers. Because of mobile money, we don’t need to collect cash, so it’s easier to do a digital cashless service for consumers in Africa. Another case is small businesses that want to buy goods and services from Asia, whether it’s India or other markets. So we can allow an east African small business to instantly send money to a bank account in India, instead of those businesses relying on legacy banking and SWIFT systems which could take days.”

Source: https://www.euronews.com/2018/11/08/i-m-one-of-the-biggest-users-of-our-app-admits-worldremit-s-ismail-ahmed

Somaliland is therefore the perfect territory to pilot this new service targeting:

  • All types of businesses that need to pay suppliers from abroad – with such a high rate of importation, this is a huge opportunity.
  • Expats living in Somaliland – there is a growing number of expats now living in Somaliland (predominantly the capital Hargeisa) and they need to send money out to their home countries.
  • Other outbound remittances to students and patients (those who travelled for medical help) abroad.

Outbound senders will have the option of sending for cash pickup, direct bank transfer or to other mobile wallets.

All this is being started in Somaliland first and will then be rolled out across the fast-growing economies of East Africa – Kenya, Rwanda, Tanzania and Uganda.

We are in no way affiliated with WorldRemit but just giving credit to the on-going innovation which should hopefully have a positive impact on local business people and residents of Somaliland. Unfortunately the ‘main banks’ in Somaliland have failed to penetrate the market, bring technological innovation and service the needs of the people. Increased competition can only benefit the end customers. The only downfall is when (if) WorldRemit scale we cannot envisage many other jobs being created – other than a few people at their Hargeisa office. We can only wait and see. Also, how much tax will they generate for the Somaliland government? Again, we will wait and see.  All in all however this WorldRemit Somaliland ‘pilot’ has most probably been a success. What are your thoughts?

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DP World and Somaliland Ground-Breaking Ceremony – October 2018 http://www.somalilandbiz.com/dp-world-berbera/dp-world-and-somaliland-ground-breaking-ceremony-october-2018/ http://www.somalilandbiz.com/dp-world-berbera/dp-world-and-somaliland-ground-breaking-ceremony-october-2018/#respond Mon, 22 Oct 2018 14:36:47 +0000 http://www.somalilandbiz.com/?p=1215 On Thursday 11th October 2018, DP World launched the first stage of its Berbera port expansion, designed to equip the Somaliland port for major vessels and transform it into one of Africa’s pre-eminent facilities in the breakaway region. Due to this, a landmark ground-breaking ceremony with Somaliland’s vice president, Abdirahman Saylici and DP World senior management […]

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On Thursday 11th October 2018, DP World launched the first stage of its Berbera port expansion, designed to equip the Somaliland port for major vessels and transform it into one of Africa’s pre-eminent facilities in the breakaway region. Due to this, a landmark ground-breaking ceremony with Somaliland’s vice president, Abdirahman Saylici and DP World senior management took place in Berbera, Somaliland. Rather than us regurgitating the key facts, you can read the full press release from Dp World here:

Somaliland hopes the port expansion – which was first agreed in 2016 – will boost its economy by attracting other international investors, reduce unemployment and set it on the road to independence from Somalia.

Crucially, at the ground-breaking event in Berbera, we learned that the contracted firm for the DP World Berbera Port is long term DP World partner Shafa Al Nahda. Shafa Al Nahda is also UAE-based and has been a historic contracting partner for DP World in the last decade with both collaborating on various projects.

dp-world-berbera-ceremony-contracting-company

A few other key notes:

  • The ceremony was attended by senior members of Somaliland government and received widespread media coverage – both nationally and internationally.
  • There was no Somali representation at the official port signing ceremony, although representatives from Djibouti, Ethiopia and the EU were present.
  • Ethiopia’s absence sparked many questions and concerns from attendees. Somaliland Foreign Minister, Saad Ali Shire, held a press conference the next day and said the following:

“Ethiopia didn’t attend the conference – but that doesn’t mean that they have abandoned the deal that we have signed with them. Their physical presence at the DPW Berbera launch doesn’t validate or invalidate the deal. The deal is still on, and will be carried out, God willing.” Shire said.

  • DP World CEO says outlook positive amid Djibouti dispute

 

We as Somalilanders are very excited by the prospects of the Berbera port and very much hope this is the first of many milestones to come!

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Indian Canteen Hargeisa Restaurant http://www.somalilandbiz.com/startups/indian-canteen-hargeisa-restaurant/ http://www.somalilandbiz.com/startups/indian-canteen-hargeisa-restaurant/#respond Thu, 20 Sep 2018 15:51:02 +0000 http://www.somalilandbiz.com/?p=1206 A sign of a flourishing economy is its services sector and more specifically the food and hospitality sector. A positively moving economy means more disposable income for its people and this creates demand for higher end restaurants. This is certainly true of Somaliland and specifically its capital Hargeisa – in the past couple of years […]

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A sign of a flourishing economy is its services sector and more specifically the food and hospitality sector. A positively moving economy means more disposable income for its people and this creates demand for higher end restaurants. This is certainly true of Somaliland and specifically its capital Hargeisa – in the past couple of years we have seen a number of higher quality restaurants and indeed hotels spring up all over the place. Pop over at any of these restaurants on any evening and it is bustling with customers, especially in the high summer season when all the diaspora flock to the motherland.

One startup and the newest higher end restaurant in the market is that of Indian Canteen Hargeisa. They describe themselves as the first restaurant in Hargeisa to offer authentic Indian and Pakistani cuisine and officially opened July 2018. There is certainly a market for this as there are a lot of synergies between what Somalilanders eat and that of Indian/Pakistani food – a good old Biriyani is not too dissimilar to the daily rice and meat staple. What’s more there are a greater number of expats living in the city, a lot of whom have South Asian descents. A common complaint has been that of a ‘lack of food variety’.

The execution of the restaurant looks very impressive, with a natural garden landscape setting:

Indian Canteen Hargeisa - outside image

 

Indian Canteen Hargeisa - garden image

Nice Brand Identity

The founders have also admirably invested in creating a unique and appealing brand identity, starting with this slick logo:

Indian Canteen Hargeisa - logo

As well as this, they created a nice video which gives a bird’s eye view of the restaurant (did they use a drone for this?)

You can watch the short video on their Instagram page here:  https://www.instagram.com/p/Bmu-QEugrcu/?taken-by=indiancanteen

Active on Social Media

Though they only recently opened, the founders have embraced social media, specifically Facebook and Instagram, as we know the target audience are active on social media. They have posted somewhat regularly and generated over 1,000 followers (at the time of writing) with some positive reviews and messages coming through too. This should be common practice but the reason why we’re highlighting this is that this is unfortunately not the norm in Somaliland – how many businesses do you know that have an active, engaging social media presence? A simple look at one of the other major restaurants in Hargeisa  – Sultan Restaurant – shows that their last post on their Facebook page was in 2016! A case of resting on their laurels with many more entrants to the market and increased competition.

Way Forward

We wish Indian Canteen Hargeisa restaurant the best of luck and commend them on their startup. A Somaliland startup that is thinking about building a brand and embracing Social Media.

A few further recommendations however:

  • Add the Menus on the Social Media pages – Facebook actually allows you the ability to add Menus directly on the Facebook page, just like the restaurant here:  https://www.facebook.com/E3Ranch/app/160363220729661/
  • Launch own website – what business does not need a website in this era?
  • Build up reviews and encourage customers to follow social media pages

Finally, make sign up with food delivery service Gulivery if not already 🙂

In the near future, we hope to invite the founder(s) and get more insights into their journey and will update here.

 

 

 

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Rising Oil Prices in Somalilland http://www.somalilandbiz.com/energy/rising-oil-prices-in-somalilland/ http://www.somalilandbiz.com/energy/rising-oil-prices-in-somalilland/#respond Thu, 13 Sep 2018 11:41:41 +0000 http://www.somalilandbiz.com/?p=1187 An ongoing stand-off between the Somaliland government and fuel suppliers has lead to oil price rises in the country. In this short post we’ll look at the potential implications of this. In the first weeks of September, reports from Somaliland say that the price of fuel has increased following a dispute involving the Somaliland president […]

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An ongoing stand-off between the Somaliland government and fuel suppliers has lead to oil price rises in the country. In this short post we’ll look at the potential implications of this.

In the first weeks of September, reports from Somaliland say that the price of fuel has increased following a dispute involving the Somaliland president Muse Bihi’s administration and Berbera Oil Group (BOG) companies (that fall under the umbrella of the Berbera Oil Terminal).

The dispute resulted from a circular that was issued by President Muse Bihi (read more about it here), which requested the government to nationalise the management of Berbera Oil Terminal but the firms subsequently rejected the president’s bid. The firms said that they will hand over the oil terminal when the Somaliland government reimburses the BOG the funds they used to renovate the oil terminal in the prior absence of state involvement. Which is fair enough at first thought; we’re not however privy as to the nature of the discussions.

The Somaliland administration later said that it will import a specific fuel which led to another concern. The Berbera Oil Group (BOG) companies have started to increase the price of fuel in a retaliation bid to the fuel remarks made by the administration. Business people and vehicle operators are lamenting about the price of fuel whose litre currently costs 10,000 Somaliland shillings which is equivalent to one dollar. If you compare this to the 8,000 per litre it was capped at earlier this year, representing an approx. 25% increase.

This will need to be resolved as Somaliland’s entire urban population depends on fuel for day to day activities such as manufacturing and agricultural productivity. Cars are practically the only way to get around and so this will affect the whole urban population, especially small business owners. This ongoing stand-off between the state and oil companies is beginning to penalise Somaliland’s growing economy which is heavily private sector based. We hope it gets resolved as soon as possible and we’ll provide further updates on this as and when we get updates.

 

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Negative Effects of Ethiopian Agricultural Imports on Local Somaliland Farmers http://www.somalilandbiz.com/agriculture/negative-effects-of-ethiopian-agricultural-imports-on-local-somaliland-farmers/ http://www.somalilandbiz.com/agriculture/negative-effects-of-ethiopian-agricultural-imports-on-local-somaliland-farmers/#respond Tue, 04 Sep 2018 13:21:47 +0000 http://www.somalilandbiz.com/?p=1163 The vibrant, Somaliland-Ethiopia trade in agricultural goods is having a detrimental effect on local farmers in Somaliland. This is mainly due to the fact that cheap imports of food from Ethiopia are driving prices down in local markets. This has led to a collapse in the incomes of local farmers and farmers who simply cannot […]

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The vibrant, Somaliland-Ethiopia trade in agricultural goods is having a detrimental effect on local farmers in Somaliland. This is mainly due to the fact that cheap imports of food from Ethiopia are driving prices down in local markets. This has led to a collapse in the incomes of local farmers and farmers who simply cannot compete.

The modus operandi of Ethiopian farmers is to leverage good harvests and then choose to export their surplus agricultural produce to Somaliland at very low retail prices. The main goods exported to Somaliland’s local markets are sorghum and maize, the very goods that Somaliland’s farmers specialize in making. To add insult to injury, Ethiopia’s agricultural farmers are able to gain competitive advantage through government subsidies and transport assistance from the government to export their produce over the border to Somaliland. This has created the situation where Somaliland’s farmers and merchants see their local produce suffer from a lack of demand.

Ethiopian Wheat Farm

Image source: http://www.theafricancourier.de/business/why-ethiopia-is-on-track-to-become-africas-industrial-powerhouse/

Local farmers in Somaliland are increasingly pointing fingers at the Somaliland Ministry of Agriculture which has done little to alleviate their concerns or have shared any potential action plans to overcome this issue. Observers in Somaliland are surprised as this Kulmiye-led government’s campaign promises included focusing on agricultural as one of Somaliland’s central sectors for growth. In mitigation, President Bihi’s government has in recent months revived major agricultural projects to replenish the country’s food basket by sowing 11 square kilometres in the Wajaale area and around 900 hectares more in the Xaaxi (Haahi) valley, both in the Gabiley district. Nevertheless, Somaliland’s local farmers and merchants are currently suffering with many not being able to afford to send their children to secondary education.

Somaliland’s government should emulate their Ethiopian counterpart which is using its authority to support their own farmers by providing them with nearby markets such as Somaliland for their surplus goods. Somaliland’s government should consider instituting import controls in particular to ensure that they are able to better support their own local farmers and merchants. At the very least, concentrate on the core crops grown by the local farmers (sorghum and maize).

We are hopeful of strong governance in the all important agriculture sector that can improve livelihoods for farmers.

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SomLite – Affordable Solar Lighting Products in Somaliland http://www.somalilandbiz.com/startups/somlite-affordable-solar-lighting-products-in-somaliland/ Tue, 22 May 2018 14:40:42 +0000 http://www.somalilandbiz.com/?p=1122 Continuing our series profiling startups in Somaliland we take a look at SomLite - a social enterprise making high-quality solar lighting accessible and affordable to rural Somalis in Somaliland.

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Name: Abdishakur Ahmed
Company Name: SomLite
Location: Hargeisa
Date Launched: December 2014
Website: www.somlite.so

1. How did you come up with your idea and what was the inspiration behind it?

I was raised in a rural village without electricity and this later inspired me to start sustainable energy company that focuses on off-grid rural communities across Somaliland. This is how I came up with SomLite.

2. What is your elevator pitch (your business in a snapshot)?

Rural Somalis don’t have enough cash at one time to buy solar products outright; nevertheless, they spend far more on a year’s worth of kerosene than the total cost of a solar light. We therefore have introduced a rent and own financing model that lets customers pay in instalments on their mobile phones.

3. How did you know there was a market for your product?

Rural communities are already spending a lot of money on Kerosene and low quality solar products with upfront sales. We introduced to them a better and cleaner products with flexible payment schedule that inquire them to spend the same amount as they are spending on kerosene.

4. Describe your business model – how do you make money?

We sell solar products to rural customers on instalment. We have commotion-based sales agents in all the communities we operate now and our sales agents earn a percentage of every sales they make.

5. When did you launch and tell us a bit about the challenges of getting started?

We started SomLite in December 2014. Some of the biggest challenges we faced and still facing are lack of access to finance and road accessibility. Small businesses in Somaliland don’t have access to financing that matches their category. Most of the debt financing available in the country have unrealistic collateral demands that small businesses cannot provide. Road to remote and rural areas are also a big challenge to our operations especially during raining seasons. Proper roads do not exist in most rural areas thus we are forced to use rugged roads.

6. How did you finance your start-up?

Grant money and co-founder’s contribution

Abdishakur-ceo-somlite-somaliland

7. To date, what has proven to be the most successful form of marketing?

99% of our customers are villagers and the best form of marketing for our project has been a direct reach out to customers. Then getting customers to talk about our products and spreading the news to nearby villages. Our customers are our biggest ambassadors.

8. What have been the key challenges to date?

Lack of access to reasonable debt financing

9. Tell us about your biggest mistake and what you’ve learned from it?

When we started SomLite we entered agreements with our community based sales agents, however, as the legal framework in the country is not strong these agreements were not enforceable if any part infringes it. We had a number of cases where our agents infringed the agreement and we couldn’t do anything about it. From this experience, we learned to reduce our dependency on the legal framework and explored other traditional forms of engagement, such as evolving community influencers to safe-guide the agreed terms.

10. Tell us about your future vision for the company and where you see yourself in 5 years?

I believe sustainable energy is the base pyramid on which other foundations of agricultural and livelihoods are build. Our vision is to bring affordable, clean and reliable electricity to rural and peri-urban communities in Somaliland so that communities will use electricity to harness and utilize their local resources. For example, increasing agricultural productivity by providing affordable energy for irrigation, and increasing electricity connection to rural social services like health clinics and schools.

In 5 years time we aim to increase our product portfolio by building mini-grids

11. What are your plans for ‘giving back to the community’?

SomLite is a social enterprise and we constantly measure our impact on the society. In 2015, for example, Abaarso Tech university and students from HEC Paris (French Business School) evaluated the social impact of our program and found it had measurable and positive impact on the communities served.

They found out that our solar lamps have allowed small businesses to open two extra hours after sundown, young children to study an extra two hours during the night time, and household income to increase by an average of 120,000SLSH ($12.50) per month. Our aim is to maximize this impact by providing affordable energy that meets to rural communities’ energy needs to catalyse economic development and social well-being.

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Top 10 Economic Achievements in Somaliland Since 1991 http://www.somalilandbiz.com/economy/top-10-economic-achievements-in-somaliland-since-1991/ Wed, 16 May 2018 14:36:49 +0000 http://www.somalilandbiz.com/?p=1098 #10 LIVESTOCK We start off with Somaliland’s most important commercial sector. Livestock is the major export of Somaliland contributing to 60% of GDP and around 85% to foreign export earnings (Somaliland National Development Plan, 2012 – 2016). Somaliland possess one of the world’s largest camel populations and livestock with high levels of demand from Gulf states […]

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#10 LIVESTOCK

We start off with Somaliland’s most important commercial sector. Livestock is the major export of Somaliland contributing to 60% of GDP and around 85% to foreign export earnings (Somaliland National Development Plan, 2012 – 2016). Somaliland possess one of the world’s largest camel populations and livestock with high levels of demand from Gulf states such as the UAE and Saudi Arabia (especially during the busy hajj season). Moreover, Somaliland’s livestock sector employs over 70% of the population making it the most important sector since independence and this is still the case in 2018.

Somaliland-Economy-Livestock

#9 INVESTMENT IN FACTORIES & REAL ESTATE

Somaliland’s peace has led to it becoming a key inward destination for Foreign Direct Investment (FDI) and investment from its economically active diaspora. An example of a major FDI deal in Somaliland is the $17 million Coca-Cola plant based in the outskirts of Hargeisa. The Coca-Cola plant in Somaliland was set up (in a JV agreement) by the multi-billion conglomerate and day to day operations transferred to a local management team named Somaliland Beverage Industries (SBI).

Somaliland’s diaspora remains one of Africa’s most engaged diaspora sending over $1 billion in remittances a year according to the World Bank. This means that Somaliland’s economy is mainly powered by the private sector and investment from the diaspora. This has led to a real estate boom in the capital and regional capitals. Land prices in Hargeisa have quadrupled since independence and all over the city construction has increased at a phenomenal pace signifying the purchasing power of Somaliland’s large diaspora.

Somaliland-Beverages-Industries

#8 BALANCED BUDGETS

Somaliland’s dual chamber democracy means that the government of the day is to share the national budget to parliament once a year. It is then up to Somaliland’s parliament (House of Representatives) to approve the national budget for the fiscal year. This has enabled Somaliland to become more transparent in terms of financial accounting and this has also motivated successive governments to boost state coffers. Somaliland’s balanced budget has enabled the government to consistently pay on time security personnel, civil servants, teachers and medical professionals.

Somaliland’s budget has seen successive year-on-year growth which a testament to the efficiency of Somaliland’s customs agents throughout the country is. Somaliland also receives very little foreign aid. For instance, in 2017 the budget was $362.5 million and foreign international aid only accounted for $16 million of the budget. Also, as part of Somaliland’s decentralised governmental system, local governments can raise their own local budgets to improve service delivery at the local level.

Somaliland-Parliament

#7 DIASPORA BUSINESS SUCCESS STORIES

Somaliland has one of the largest and deeply engaged diaspora populations in Africa. Somalilanders live far and wide in regions as diverse as Canada, the US, the UK, Scandinavia and the Gulf. This has meant that many Somalilanders have set-up businesses with success. Examples include, Dahabshiil, Africa’s largest money remittance company as well as Mohammed Yusuf, the founder of multibillion hedge fund Invicta Capital Limited, which owns the rights to the James Bond film franchise.

Another recent business success story can be found in Ismail Ahmed of World Remit, a major fintech company based in London. WorldRemit specializes in sending money via mobile phones. Ismail Ahmed was inspired by his experiences in Somaliland and he leveraged this to turn World Remit into a company today worth $670 million and one of the UK’s most successful fintech companies.

Ismail-Ahmed-Worldremit

#6 AVIATION & TOURISM

Somaliland’s aviation sector has seen considerable growth, powered by the regular trips from its large diaspora. This has led to Somaliland modernising its central airport, Hargeisa Egal International Airport. Somaliland’s government is also currently outlining plans to turn Berbera International Airport into a modern, high-tech airport with the assistance of the UAE government (as part of the UAE Berbera Naval Base deal signed in 2017). Somaliland’s aviation sector boasts international carriers such as Ethiopia Airlines, Fly Dubai, Air Djibouti, Air Arabia and Turkish Airlines which is planning to set up a base later this year.

Although still in its early stages, Somaliland has witnessed good growth in its tourism sector since its independence. Somaliland’s principal tourism attraction are the Laas Geel caves; these are cave formations found in the rural outskirts of Hargeisa and contain some of the earliest known cave paintings in the Horn of Africa. Other tourist sites include Ga’an Libah mountains and Sacadadiin Islands. This vibrant tourism market is spearheaded by Somaliland’s Ministry of Tourism and world-renowned archaeologist Dr Sada Mire.

Hargeisa-Airport-FlyDubai-Plane

#5 INTERNATIONAL EDUCATIONAL INSTITUTIONS

Since 1991, Somaliland has seen the growth of good quality universities throughout the country. Somaliland’s most successful university academically is Amoud University based in the Awdal region. Amoud University can lay claim to one of Somaliland’s most dedicated and hard-working student bodies with faculties of Medicine, Social Sciences and others. Other high-quality, public universities include the University of Hargeisa which is expanding rapidly and was funded entirely by contributions from the diaspora.

We mustn’t forget the renowned SOS HG Sheikh Secondary School which is the only school in Somaliland that provides an internationally recognised curriculum – Edexcel IGCSE (UK Curriculum).

Somaliland has also seen the creation of a world-class secondary institution in the Abaarso School of Science and Technology, which is a non-profit, co-educational boarding school in Abaarso, located 18 km west of the capital of Hargeisa. Abaarso has been able to attract world-class educators and professionals from North America and many young Somalilanders have went from Abaarso to Ivy League universities such as Harvard, Yale and MIT.

Abaarso-School-Somaliland

#4 TELECOMS & INNOVATION

Somaliland’s telecoms sector has seen explosive growth following independence on May 18th, 1991. The vast majority of this growth has been driven by a dynamic private sector which has set up mobile communication towers throughout the country. These developments have allowed Somaliland to leapfrog industrial development with the emergence of various ICT and service-orientated cottage industries in key cities.

Another major innovation in Somaliland is mobile banking which is a world leader and admired by industry titans such as Bill Gates of Microsoft. Somaliland, has one of the world’s highest rates of digital transactions. Most transactions are on Zaad, a service of the largest mobile-phone operator, Telesom. A survey in 2013 found that the average customer made 34 transactions per month – a higher rate than almost anywhere else in the world according to the Bill & Melinda Gates Foundation.

3g-ad-somaliland-telesom

#3 BERBERA PORT

In May 2016 the Government of Somaliland signed a 30-year agreement with DP World to develop and manage Berbera Port at a cost of $442 million. This was by far the biggest Foreign Direct Investment (FDI) deal ever signed in Somaliland and has the potential to completely transform the Somaliland economy. You can read more about the DP World Berbera deal here…

Under the tripartite agreement terms, the Federal Government of Ethiopia would invest in infrastructure to develop the transit road known as the Berbera Corridor whilst DP World will develop Berbera Free Zone in phases, with the first phase focusing on 4 square kilometres of land out of the 12.2 square kilometres earmarked for the project. Such is the importance of this tripartite deal for Somaliland that economists predict Berbera Port will become a multi-billion regional maritime and logistics hub in the future.

DP World sign at the entrance of Berbera Port (September 2016)

#2 CENTRAL BANK & CURRENCY

In 1994, Somaliland’s late President, Mohamed Ibrahim Egal established the Central Bank of the Republic of Somaliland based in the capital Hargeisa. President Egal foresaw the Central Bank as serving as both a monetary authority and a commercial bank for the country. The Somaliland Central Bank was one of the first institutions in the country enshrined in Somaliland’s Constitution through the Central Bank Law.

Read about potential developments with the central bank here

Central-Bank-Somaliland

#1 PEACE

It goes without saying, had Somaliland’s elders and population never established peace, there would be no conducive environment for economic growth. Somaliland’s government is based on three different branches. First is the legislative branch in the form of the House of Representatives and House of Elders, followed by the Executive Branch which includes the President’s Office. Finally, the judiciary branch which includes the Supreme Court and Constitution. The hard-won peace in Somaliland allowed the private sector and commerce to develop organically throughout Somaliland. Watershed conferences include the Burao Conference of 1991 and the Boorama Conference of 1993

Somaliland-Boramo-Conference-1993

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Somaliland Legislative Round Up April/May 2018 http://www.somalilandbiz.com/general/somaliland-legislative-round-up-april-may-2018/ Mon, 14 May 2018 12:14:51 +0000 http://www.somalilandbiz.com/?p=1092 As with all other countries there are new laws and legislations discussed, passed and put into practice all the time. From a business perspective, it is important to stay updated on latest legislations that may have direct or indirect consequences. To this end, we’ve rounded up all the legislative changes during the past couple of […]

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As with all other countries there are new laws and legislations discussed, passed and put into practice all the time. From a business perspective, it is important to stay updated on latest legislations that may have direct or indirect consequences. To this end, we’ve rounded up all the legislative changes during the past couple of months:

Somaliland Electrical Energy Act passed by Parliament

Date: 22nd April 2018

Somaliland’s Parliament, the House of Representatives approved the passage of the Somaliland Electrical Energy Act. The legislative bill is passed to spur investor interest. In addition, Somaliland has one of world’s highest electricity rates and the Electrical Energy Act is passed as a way of combating high consumer costs. It also affects Somaliland Business.

Source: Somaliland Parliament (House of Representatives) Press Office

Somaliland Procurement Act passed by Parliament

Date: 6th May 2018

Somaliland’s House of Representatives, its central legislative authority approved the passage of the Procurement Bill on the 6th of May 2018. This was the last remaining Public Financial Management (PFM) Bill to be passed by Somaliland’s Parliament. Now possessing the President’s signature, this will mean that all the PFM Bills will now become the law of the land.

The new Procurement Act will reform the public procurement systems of Somaliland to bring them to modern and international standards that embrace best practices whilst reducing the scope for corruption. The Bill seeks to organize public procurement management in Somaliland to ensure that it (public procurement) is not done in a discretionary manner but in a structured manner that ensures (goals) economy (value for money), efficiency, transparency, equal opportunity (to all candidates, particularly to Somaliland businesses), and professionalism.

The rules and procedures in the Bill will be applicable for use of all public funds (regardless of the source) and by all public entities that have been provided with budget and responsibility for public service delivery.

In short, the bill will ensure application of common rules/procedure and standards across all public entities, i.e. Central Government Ministries and their Departments and Agencies, Local Authorities, public institutions, public corporations and state enterprises. It will therefore be easy to compare performance of various public entities and to audits procurement transactions.

According to local sources, the Government of Somaliland will implement this Procurement Act as soon as possible and are looking forward to the expansion and successful continuation of PFM reforms in the Procurement Pillar of the program.

Source: PFM Reform Coordination Unit

Somaliland Government Bans Onion Imports to Aid Local Farmers

Somaliland’s government has issued a directive to ban onion imports. This drastic measure was put in place in order to aid local farmers. According to the Director General of the Ministry of Commerce and Industry, Dr. Osman Hussein Warsame; “the time has come to motivate local farmers so that they can increase their farm outputs.”

Dr. Osman Hussein Warsame said that “The government has banned importation of onions from neighbouring countries so that our farmers could reap the benefits of their labour. Furthermore, onions from Somaliland farms have just been harvested so we had to motivate our farmers who have for a long time been pushed to the wall by imports of farm produce from other countries.”

As described on MENAFN.com, the directive states that onions from Somaliland should be given priority and that no onions should be imported until these supplies are exhausted.

Source: MENAFN.com

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Somaliland: a new Government, a new Central Bank? http://www.somalilandbiz.com/economy/somaliland-a-new-government-a-new-central-bank/ Wed, 25 Apr 2018 15:16:37 +0000 http://www.somalilandbiz.com/?p=1062 Background to the Central Bank of Somaliland It was under the late President, Mohamed Ibrahim Egal that Somaliland created the Central Bank of the Republic of Somaliland  based in the capital Hargeisa. Although the Head Office of the Central Bank has always been based in the capital, Hargeisa, the Central Bank has seven other branches, […]

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Background to the Central Bank of Somaliland

It was under the late President, Mohamed Ibrahim Egal that Somaliland created the Central Bank of the Republic of Somaliland  based in the capital Hargeisa. Although the Head Office of the Central Bank has always been based in the capital, Hargeisa, the Central Bank has seven other branches, and four foreign exchange offices in regional capitals such as, Berbera, Boorama, Lasanood, Burao and Erigavo as well as an exchange office in the border town of Wajaale.

President Egal foresaw the Central Bank as serving as both a monetary authority and a commercial bank for the country. The Somaliland Central Bank was one of the first institutions in the country enshrined in Somaliland’s Constitution. In line with Article 3 of the Constitutive Law of Somaliland Bank, the Central Bank of Somaliland is responsible for:

  • Maintaining price and exchange rate stability
  • Promoting credit and trade condition which support balanced economic growth
  • Supporting the economic and financial policies of the government where possible

In 2012, under the Ahmed Mohamed Mohamoud “Silanyo” presidency, Somaliland’s parliament passed the Central Banking Act into law. According to the 2012 Central Banking Act law, the principal objectives of the Central Bank of Somaliland includes:

“… fostering monetary stability, maintaining the internal and external value of the Somali shilling, and promoting credit and exchange conditions conductive to the balanced growth of the economy of the Republic, and within the limits of its powers, it shall contribute to the financial and economic policies of the State.”

In the aftermath of the Central Banking Act, it was expected that the Somaliland legislative branch would sign into law the Commercial Banking Act, according to the former governor of Somaliland’s Central Bank, Abdi Dirir who spoke to Reuters in 2012. According to SomalilandBiz’s sources, the draft Commercial Banking Act continues to languish in the House of Representatives six years after it was intended to be passed. Nor is it clear whether the Somaliland Central Bank will process applications for licenses of Islamic Banks until the Commercial Banks Law is promulgated.

The New Administration and the Central Bank of Somaliland

Since the advent of a Kulmiye-led government, first under President Ahmed Mohamed Mohamoud “Silanyo” and President Musa Bihi Abdi, Somaliland’s populace has suffered from dangerously high levels of inflation. Widespread inflation has been exacerbated by the fact that the Somaliland Central Bank does not control the hard currency in circulation in Somaliland. It is under this backdrop that on the 21st April 2018, the current President, Musa Bihi Abdi named a new Governor to the Somaliland Central Bank. According to the Somaliland News Agency (SOLNA) the president through decree number RSL/XM/WM/222-83/042018 has announced the hiring of a new Governor and Chairman of the Central Bank of Somaliland, Ali Ibrahim Jama (Bagdhadi). This move is seen as the government’s latest attempt to combat the inflation levels that are crippling Somaliland’s economy and causing the price of consumer goods and the cost of living to skyrocket.

Observers point to a pattern of the current administration empowering the Central Bank of Somaliland since President Bihi’s inauguration where he spent a large portion of his inauguration speech touching on his administration’s plans to combat inflation. This is also proven by the Central Bank of Somaliland’s ultimatum on 16th April 2018 to all private financial institutions to register at the Central Bank. These same private financial institutions which includes; private banks, money transfer services, payment providers and foreign exchange traders are also required to renew their operating licenses within 3 weeks to ensure they meet the ultimatum. Analysts point to the boldness of the new government’s policy programme for tackling inflation. The Central Bank of Somaliland now has a new executive leadership, including a new Governor and a new Tender Board. If the current administration of President Bihi can empower the Central Bank to become a genuine monetary authority in the country, then this will go a long way towards reaching President Bihi’s campaign promise to successfully combat inflation.

Potential Developments for the Central Bank of Somaliland

There are developments that are ensuring that the current cabinet remains confident of reaching its inflation related goals. One such development can be found in the aftermath of President Bihi’s state visit to the UAE in March 2018 when the President informed Reuters that he expects the UAE government will make a hard currency deposit into Somaliland’s Central Bank. Although there was no definitive agreement, recent developments in relation to Somaliland’s relations with the UAE show that this hard currency deposit is very likely. On 23rd April 2018, the UAE took the unprecedented step of accepting Somaliland Passports exclusively following the visit of a high-powered 12-man delegation to the President’s Office in Hargeisa the day before. If the UAE government deposit tens or hundreds of million in dollars or dirhams into Somaliland’s Central Bank, then this will go a long way to increasing the Central Bank’s foreign currency reserves in USD and/or Dirhams. In turn this will play a key role in combating the high levels of inflation that are plaguing Somaliland’s legal tender, Somaliland Shillings. This is because the greatest challenge causing Somaliland’s high inflation levels include the existence of a parallel exchange rate. This access to hard cash and forex currency for Somaliland’s Central Bank will mean that the government will not have to resort to setting the official exchange rate which in turn will stifle Somaliland’s resilient and vibrant free market economy.

Next Steps For The Government

In conclusion, if the current government is serious about combating inflation then they will need to ensure the privatization of the banking sector by passing the long awaited Commercial Banking Act which has remained stationary in Somaliland’s House of Representatives since 2012. Since the delay, Somaliland has seen the explosion of mobile banking services which have penetrated the entire population and caused Somaliland’s economy to become increasingly dollarized. Without a Commercial Banking Act enshrined in law, only Somaliland’s Central Bank is legally allowed to act as a commercial bank which it barely does. This in turn means that consumers are hoarding their savings and money either in hard cash or on mobile banking services. This not only serves to undermine the local currency and dollarize the economy, but it also exacerbates the high levels of inflation already holding back Somaliland’s economy from reaching its full potential.

 

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Cup of Art Coffee House Hargeisa http://www.somalilandbiz.com/videos/cup-of-art-coffee-house-hargeisa/ Wed, 11 Apr 2018 09:19:29 +0000 https://staging.arcticonline.com/somalilandbiz/?p=779 Returning to Somaliland with an entrepreneurial spirit…that’s the goal right? This short video gives a glimpse of this sister and brother partnership with their hip looking coffee house in the capital of Somaliland. SMEs are the driving force of most economies and this is no more apparent than in Somaliland. On top of this there […]

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Returning to Somaliland with an entrepreneurial spirit…that’s the goal right? This short video gives a glimpse of this sister and brother partnership with their hip looking coffee house in the capital of Somaliland. SMEs are the driving force of most economies and this is no more apparent than in Somaliland.

On top of this there is a flourishing café culture in Hargeisa and everyone looks a cup of tea /coffee 🙂

We love stories like this and will be adding many more!

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