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Somalia: the path to prosperity.

THE PAST EIGHT MONTHS HAVE seen Somalia and the rest of the Horn of Africa in the global media spotlight. The drought which began in July last year affected large areas, and led to acute food and water shortages, mass displacement and tens of thousands of deaths.

These hardships are not new to Somalis, but the 2011-2012 famine was the worst in living memory. As a result, the region has been the focus of extensive and largely negative media coverage.

February 2012 saw the UK host the London Somalia Conference, a landmark event in recent Somali history as representatives of more than 50 governments and international organisations gathered in London to co-ordinate a new international approach, with the needs of Somalis--in the words of the UK Foreign Secretary William Hague--"front and centre".

As a member of the Somali diaspora, I welcome this show of renewed commitment. I, and many others, were encouraged to hear Mr Hague acknowledge the shortcomings of past conferences and foreign interventions, and point to the success of more recent deployments. In many ways I share his confidence.

There have been signs recently that both the political and security situation is improving in South Central Somalia. The international community has a crucial role to play in the frontline struggle to overcome the difficulties.

As the conference made clear from the start however, lasting solutions must come from Somalis themselves. Yet business, trade and investment, which are surely a central part of this "change from within", were virtually absent from the agenda.

In less troubled areas such as Somaliland and Puntland, where trade is active and new industries are flourishing, the political climate is more stable and representative than in many other countries.

These areas can safely be said to have emerged from the hardships of the 20 years since the collapse of central government. They are important examples of functioning Somali societies that often go unnoticed by the international media, and we must recognise their significance in the greater scheme of rehabilitating the region as a whole.

There are many success stories from the business community. For example, our business, Dahabshiil, has grown significantly in 40 years from a small general store in what is now Somaliland, to a global money transfer company and Africa's leading provider of remittance services.

The company operates from its main offices in Dubai, London and Hargeisa, and handles remittances to Somalia and across the continent via a network of thousands of agents and payout locations--serving all and non-Somalis indiscriminately across regional and clan lines in over 150 countries.

Alongside the core remittance business, Dahabshiil Group encompasses a banking arm--Dahabshiil Bank International, an import and export trading arm and a telecoms firm--SomTel.

Dahabshiil was founded in 1970 in the town of Burao, in what was then northern Somalia, by my father, Mohamed Said Duale. Initially a general trading enterprise, we soon specialised in the tradebased transfer of remittances to Somalia from the growing migrant population in the Middle East.


These transactions formed the bulk of our business throughout the 1980s.


The outbreak of civil war in 1988 marked the end of this period. As the fighting swept through the region, hundreds of thousands of Somalis fled their homes and walked through the bush to refugee camps in neighbouring countries.

Our family lived with nomadic herdsmen until my father reached the Ethiopian border, where he found Somali refugees in desperate need of a way to send and receive money. With the help of his network of contacts in the Middle East we reestablished the business, offering remittance and other services to refugees. Operating in a war-torn region often carried high risks, but the new business began to grow in line with the steadily increasing global diaspora.

Dahabshiil Group now employs nearly 5,000 people. The money transfer business handles a large share of the $2bn that is remitted to Somalia each year while our banking arm offers a full range of financial services to private and corporate clients. In zoo9, we introduced the first debit card in Somali territories, a significant step in the region's economic development.

It is in the economy where Somalia's strengths and perhaps many of the answers to the region's problems lie. The key to unlocking Somalia's potential is international investment in social entrepreneurship and education. It will help Somalis help themselves by teaching them how to create new business opportunities, more jobs and as a result a more sustainable economy.

A growing economy would not only provide financial stability and promote Somalia as a viable business partner for the global market, but would also help to encourage political stability by demonstrating the economic viability of the country.

Trade has always been the life-blood of the Somali people. If we want to safeguard young Somalis from extremism and piracy we have to offer them genuine alternatives in the form of new business opportunities and jobs in growing sectors. That will require significant investment, not just from the diaspora but from the international community as well.


There are many reasons to be positive. The resilience of the business community is evident throughout Somali territories. Livestock, still the mainstay of the Somali economy, is booming thanks to strong demand in the Gulf. 95% of all goat exports and 52% of all sheep exports from the whole of East Africa come through two Somali ports.

In the 20 years since the collapse of state ownership, money transfer, telecoms, aviation, manufacturing and hospitality have all seen remarkable growth, diversifying the economy and transforming the business landscape.

The growth of technology is having a profound impact across all sectors of the economy, from nomads using mobile phones to check livestock prices in different markets, to members of the diaspora being able to stay in close contact with their business partners and to transfer money to wherever it is needed.

Industrial growth, however, is limited by the poor state of infrastructure in the region. That is why targeted investment in this area - in close partnership with the Somali business community should be a top priority for the international community.

We are now looking at projects to develop more sustainable financial products to help alleviate poverty, as well as partnering with the International Fund for Agricultural Development (IFAD), to encourage sustainable economic development in rural areas through diaspora investment in agriculture.

Much of the growth of the past two decades has been driven by diaspora investment--around half of businesses in the Somali regions are diaspora-owned. The annual remittance inflow to the region is far greater than that accounted for by aid, and without it the private sector would not be thriving as it is.

That is why, broadly speaking, I see the diaspora's role as being primarily commercial, while those Somalis with an intimate knowledge of the complex situation on the ground are best placed to lead a political recovery.

In the more stable Somali regions, business growth and political development have tended to reinforce each other, and this experience tells us that we need to harness the strengths of different groups in the best way possible.

Just as the diaspora has brought skills, knowledge and training to the Somali business community, so too can investors from Turkey, the Middle East, China and beyond. Turkish investors in particular have been quick to recognise Somalia's potential, and have ventured into areas predominantly Mogadishu--where Europeans have been reluctant to go.

This is exactly the kind of foreign involvement and endorsement we need in order to demonstrate Somalia's economic viability and to encourage others to follow suit. However, similar global investment is required across all Somali territories.

I still have high hopes that the London conference marks a turning point in the combined effort to overcome Somalia's problems. But it is easy to see why many Somalis are anxious that just as in the media coverage not enough attention was paid to what is currently working in the region. Perhaps many outsiders are not seeing the full picture?

If Somalia is to achieve a lasting recovery then we, as well as the international community must recognise and build upon the foundations already in place.

The commercial success that has resulted from inward investment, as well as the political success of some of the more stable and prosperous regions are great examples of where Somalis are getting it right. Both are part of the way forward towards a prosperous future.

By Abdirashid Duale, chief executive of Dahabshiil.
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Title Annotation:Somalia
Author:Duale, Abdirashid
Publication:New African
Date:Apr 1, 2012
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