“Because Somaliland is open for business as well as its well-established peace and stability as well as its economic potentials that remain untapped thence very lucrative for investment both foreign and local” Trade and foreign investment minister
By: Yusuf M Hasan
HARGEISA (Somalilandsun) – Somaliland is signaling to all potential investors that it is “open for business,” having progressed from a post-conflict situation to a state of political stability and sustainable economic development. Underpinned by this transformation, Somaliland is now firmly in a period where it is able to encourage foreign investment.
“Doing business in a new market always presents numerous challenges. This is particularly the case in Somaliland because it is not a recognized country, and investors might think that doing business in such a place is going to be a difficult and daunting task”
Says the minister of trade and foreign investment Dr Mohamed Abdilahi Omar as he elaborates on the new developments that are fast-tracking local, Diaspora and foreign investments in various sectors of the country that remain untapped then lucrative.
According to the Trade and Foreign investment minister Dr Mohamed Abdilahi Omar whose ministry has put in place an investment guide to the country that is also easily available for download at the ministry’s investment portal guide www.somalilandinvest.com says there are many reasons to invest in Somaliland but singles out six namely Security and Democracy, New Foreign Investments , Sound Regulatory Reforms and many untapped sectors like Natural Resources /Livestock/Fisheries /Agriculture and Services .
“The main obstacle to major foreign direct investment has been the ignorance on the part of potential investors about Somaliland’s well-established peace and stability as well as its economic potentials” Said Dr Omar as he informed of the establishment of a foreign investment board that shall facilitate ease of foreign investment as well protection of subsequent investment.
The trade minister adds that apart from the six reasons detailed below other incentives for doing business in Somaliland include
- Investment Protection,
- mechanisms for Legal and Dispute Resolution,
- Guarantees against Expropriation,
- Labor Regulations and Work Permits,
- tax Exemptions and
- Land ownership and property leasing regulations among others
Six reasons to invest in Somaliland:
- Security and Democracy
Somaliland has witnessed a great deal of progress over the last 20 years of self-governance. Peace and stability has been restored through the efforts of the people of Somaliland. Democratic systems have been established and have continued to evolve after five successful elections at the presidential, parliamentary and local government levels. Well trained and professional security forces protect the population from terrorism and organized crime. This means that the foundations are now in place to build on these achievements to attract foreign direct investment and strengthen local capacities to promote sustainable employment and economic development.
- New Foreign Investments
Somaliland has extended its economic engagement with foreign governments within the region and beyond. It is engaged in negotiations with Ethiopia to finalize the first official bilateral strategic cooperation agreement. Djiboutians have invested heavily in Somaliland’s economy, including about $15 million in a Coca Cola factory which opened in 2012. Somaliland has used diplomacy to help explore recent efforts to attract FDI from Turkey, Malaysia, the UAE, Kenya, Egypt and China into Somaliland’s key sectors such as livestock and fisheries. In addition, a great deal of Somaliland Diaspora investment is coming from the UK, Norway, Finland, Denmark, German, Canada, and the United States.
- Sound Regulatory Reforms
Somaliland is reforming its once cumbersome regulatory framework to better promote investment. An Investment Climate Unit has been established within the Ministry of Commerce to streamline business registration. Important legislation—such as the Foreign Investment Law, the Islamic Banking Law, the Central Banking Law, the Electrical Energy Act, and the Commercial Banking Act—has either been passed or is making its way through Parliament.
- Natural Resources
Somaliland’s deposits of oil, gas and coal are attracting the attention of international investors, and agreements have been reached with Genel, DNO, Ophir and others over exploration and production rights. These contracts show investor confidence in Somaliland’s stability. Somaliland also has large proven deposits of minerals including gypsum, gold, iron, lead, and quartz, as well as gemstones such as emeralds, rubies, garnets, sapphires, aquamarines and opals. Furthermore there is a huge potential for renewable energy. Pilot projects in wind and solar energy are underway, and the legal environment is being reformed to better regulate the sector and protect investors.
- Livestock, Fisheries and Agriculture
Livestock exports, chiefly to the Gulf Arab countries, account for about 60% of Somaliland’s national income, but great potential exists for Somaliland to capture further global market shares. In addition, Somaliland has a fishery sector whose potential annual sustainable production is estimated at 40,000 tons. Agriculture is another sector with significant production and investment potential. With the introduction and trials of improved technologies, drought-resistant crops and better practices and research, the industry has the potential to be extremely successful.
- Services Sector
Telecommunications services will be enhanced by the new fiber optic cables which are being laid to connect Somaliland’s major cities and towns and establish links to the outside world. This new infrastructure will revolutionize the way in which business is done in Somaliland and provide new opportunities, including support to the financial services sector. Although financial services are not robust, prospects for improvement are increasing. Other business development services (BDS) are also increasing, and this promises to save investors the trouble and expenses associated with bringing in expat labor to provide such services.
Other potential sectors for investment include tourism, infrastructure and social sectors. With the support of this Investment Guide, the people of Somaliland are welcoming investors to come and see for themselves the unexplored and untapped opportunities that the country has to offer in all the sectors of its economy.
For more details peruse the ministry of trade and Foreign Investment http://somalilandinvest.net an Investment Guide Web Portal that provides an important clearinghouse of economic, legal, regulatory and investment information for local, Diaspora, and foreign investors.
Somaliland is open for business! http://somalilandinvest.net