As the foreign minister says “It took him 20 minutes to obtain license for a new business in the UK online, in Rwanda one day max could be enough but it took him a whole month to obtain a license for a new business in Somaliland in 2009.”
Hargeysa (Somalilandsun) -The minister of foreign Affairs, Dr.Sa,ad Ali Shire has presented a detailed analysis about the failure of Somaliland in attracting foreign investment which could have been vital for economic growth and the creation of employment for the country’s youth, the minister who spoke at a ceremony where the former Minister of commerce Mr Hussein Adam Egeh (dayr), who is now the new spokesperson of the presidency handed over that post to the recently appointed minister of Commerce, Mr Omer Shuayb Mohamed, the foreign minister said “ investment is vital for a country’s economy, it is a prerequisite for job creation, without it there can be no jobs, every job that is created means that someone has made investment, investment comes from three sources, foreign investment in to the country and the two other sources are the government and its people, government investment is an element of a country’s budget, in our case we have allotted 10% of our budget for spurring investment,” the minister pointed to the fact that the public are not making the required investment in to their country “ a study revealed that we save only 11% of our income and we spend 89% of our income, investment and savings are two factors that come hand in hand, the more you can save the more you can invest, we need to save at least a 30% of our income, investment and saving margins say a lot about a country’s future thus it is imperative that we make the transition from a consumer society to a saving society.” Said the foreign minister.
The foreign minister highlighted that Africa received an estimated 87 billion dollars in foreign investment in the year of 2014, the same year Somaliland attracted no foreign investment, lack of recognition, the absence of the required infrastructure and services such as Banking services, insurance services and lack of enough skilled or trained professionals are the chief reasons behind the country’s failure in attracting foreign investment, these are some of the challenges the Ministry of Commerce and its new minister have to find solutions for as Dr Sa’ad said in his speech.
The country’s business and commerce are facing major obstacles that stagnate their growth as a study that asked the business community of the biggest problems they face concluded that 49% of the businesses say they have no access to funding, there is no bank that can give them a loan nor is there any access to financial grant, both established and new businesses say funding sources and mechanisms whether loans or grants are non-existent hence leading to stagnation and failure to expand, as for first-time entrepreneurs with good business ideas it is an impossible task to locate the required start up capital either as a loan or through raising funds by going in to partnership with other individuals.
25% of the interviewed businesses say obtaining a piece of land in Hargeisa is impossible as land prices continue to be exorbitantly high, purchasing a plot of land and constructing it for a planned factory could cost twice or thrice as much as the whole factory could cost, land prices and rent fees are more expensive than some New York areas as the interviewed businesses point out, 7% of the interviewed businesses complained about taxes and how these taxes are collected, then comes electricity where many businesses believe squeezes their profits and sometimes costs them more than they pay their staff.
The foreign minister reflected on his personal experience to indicate how absurdly slow and ineffective is the country’s system for registering new business, in 2009 Dr Sa,ad Ali Shire wanted to open a new business and it took him a month to obtain a license in the country, it took him 20 minutes to register and obtain a license for a new business in the UK while doing the whole process online from his home and says when he went to Rwanda, he was told that obtaining a license for a new business could take one day max and says removing these restrictions and the ineffective bureaucracy and red-tape are some of the major challenges the new minister and the ministry of Commerce and Investment has to find solutions for if the country is to create an investor friendly climate that can convince foreigners to stay and put in their money rather than leave the country immediately when they see how ineffective the system is.
Dr Sa,ad Ali Shire, the Foreign minister says many foreign companies enquired about Somaliland and investment opportunities in the country while they were negotiating with DP World, and believes creating the required investment infrastructure and mechanisms should be the key to attracting foreign investment.
Source: The Republican
