Somalia’s immense economic potential highlighted at Mogadishu conference

31 May 2023

Somalia’s immense economic potential highlighted at Mogadishu conference

Mogadishu – Somalia’s economic potential has been under the spotlight for the past two days at a gathering of Somali government, international partners, local entrepreneurs and foreign firms, with a goal of highlighting opportunities for business with international companies.

“The Somalia Economic Conference marks a pivotal moment in our nation’s history. It is a declaration of our commitment to chart a new course towards economic prosperity and a brighter future for all Somalis – we invite you to join us on this transformative journey to invest in Somalia and to partner with our private sector,” the country’s Prime Minister Hamza Abdi Bare said at the opening on Tuesday.

“To our international partners, I urge you to see beyond the challenges that Somalia has faced in the past,” he added. “Look at the immense opportunities that await you here. Invest in our industries, transfer your technology and expertise, and be a catalyst for change.”

His views were echoed by the UN Secretary-General’s Deputy Special Representative for Somalia, George Conway.

“I look forward to seeing tangible results from this conference, especially new business partnerships that will help trigger economic growth for the country in the long term, that will create jobs and economic opportunities, and which will improve socio-economic conditions for all Somali people,” Mr. Conway, who also serves as the UN Resident Coordinator and Humanitarian Coordinator for Somalia, said at the event’s first day.

Others in attendance included Somalia’s Deputy Prime Minister Salah Jama, and the Italian Ambassador to Somalia, Alberto Vecchi, in addition to representatives from Somali businesses and business associations.

Somalia is widely considered to have immense economic potential from its agricultural and aquaculture sectors, but with insecurity and other challenges, such as the humanitarian crisis stemming from the climate crisis, hampering efforts to achieve this potential. According to the World Bank, its Gross Domestic Product is forecast to rebound to 2.8 per cent this year and increase to 3.7 per cent next year.

The Somali Economic Conference was organized by the Federal Government of Somalia’s Ministry of Commerce and Industry and the UN Industrial Development Organization (UNIDO). The event was financed by the Italian Agency for Development Cooperation (AICS) as part of its efforts to increase economic opportunities and job creation in Somalia through the creation of synergies between the Somali and the Italian private sectors.

“Italian enterprises are recognized as central actors in the Italian system of development cooperation and play an increasingly important role in the effectiveness of AICS’ interventions. Our approach is to promote actions that can effectively lead to co-development and mutual benefits, such as the event we are witnessing today,” the head of AICS’ regional office in Nairobi, Giovanni Grandi, told the gathering.

Also involved in the gathering were elements of the Government of Italy, the Somali Chamber of Commerce and Industry, IBS Bank, the European Union Delegation to Somalia and the UN Development Programme (UNDP).

International partnerships

UNIDO has been working extensively with Somalia’s private sector, primarily with developing local businesses and seeking international partnerships. It has noted that the private sector – which has had to face the hardships of insecurity, climate shocks and the COVID-19 pandemic – needs to be better networked with international businesses for its long-term growth.

In his remarks at the event on Tuesday, the Managing Director of UNIDO’s Directorate for SDG Innovation and Economic Transformation, Berger Gunther, expressed hope Somali entrepreneurs will take advantage of the conference and the foreign investors from Italy present to strike new business partnerships.

“Somalia is rapidly re-emerging as an economic actor of critical and strategical relevance in the Horn of Africa region. Its private sector, despite all odds, has been adaptive resilient over the years to the numerous internal and external shocks the country has had to endure,” Mr. Gunther said in a video message.

He added that the time had come to expose Somalia’s private sector markets as a destination for business trade and investment, noting that “events like the one we are opening today should definitely contribute to this objective.”

A key aspect of the UN’s support for the development of Somalia’s economic potential has been the Productive Sectors Development Programme (PSDP), a UN flagship programme – implemented by UNIDO together with the UN Food and Agriculture Organization (FAO) and the UN International Labour Organization (ILO) – to support sustainable development through partnerships between government and the private sector.

The PSDP also involves Somalia’s Ministries of Commerce and Industry; Agriculture and Irrigation; Fisheries and Marine Resources; Livestock, Forestry and Range; Labour and Social Affairs at both the federal level and their counterparts at the Federal Member State level.

“Somalia is increasingly focusing on the so-called ‘triple nexus,’ linking humanitarian assistance, development priorities and peacebuilding efforts. With improved political and economic stability, we can increase momentum towards comprehensive long-term solutions to build Somalia’s resilience,” Mr. Conway said in his remarks.

“Initiatives like this conference, and programs like the PDSP, have contributed to a paradigm shift towards longer-term sustainable development solutions, where the private sector clearly has a critical role to play. This includes through promoting entrepreneurship, supporting micro-, medium- and small- enterprises, facilitating access to finance, and unlocking investments.”

Local responses

The sentiments expressed by guest speakers at the event were echoed among the hundreds of attendees from Somalia’s business sector, with many of them highlighting the need for help to modernize the country’s technologies in important sectors with huge growth potential, such as construction, fisheries, livestock and agriculture.

“Somalia is ready for business. We have oil, a long untapped coastline full of fish, and arable land. The world is welcome to invest in Somalia,” said Deqa Mohamed Salah, an entrepreneur who runs a cosmetics business.

“This conference is very important for my business because it has given me an opportunity to meet many clients from Somalia and outside the country – I am glad I attended this event,” said Shukri Mohamed Bashir, another entrepreneur.

The Somalia Economic Conference included hosting the 2nd Italy-Somalia Business and Trade Forum on Tuesday, and the 1st Somalia Private Sector Partnership Meet today.