In the heart of East Africa lies Somalia, a country poised for economic transformation, brimming with untapped potential and abundant resources. At the forefront of this transformation is Mohamed Dubo, the Director of the Somalia Investment Promotion Office (SOMINVEST), who is championing a bold vision to attract foreign direct investment (FDI) and reshape Somalia’s economic landscape. In an exclusive interview with Anadolu, Dubo articulated SOMINVEST’s mission to not only promote but also facilitate and support both foreign and domestic investors, with a particular emphasis on fostering stronger ties with Turkish investors. His message to the global investment community is clear: “Come and experience Somalia’s culture. Come and experience Somalia’s economy. Most of the information out there about Somalia might not be true. Come and explore Somalia. It’s a resourceful country.”
This article delves into Somalia’s burgeoning investment opportunities, the pivotal role of SOMINVEST, the growing influence of Turkish investors, and the nation’s efforts to create a conducive environment for economic growth. With a focus on productive sectors like agriculture, fisheries, livestock, energy, and finance, Somalia is positioning itself as an attractive destination for investors seeking high returns in a culturally rich and welcoming nation.
SOMINVEST: The Gateway to Somalia’s Investment Potential
SOMINVEST, the Somalia Investment Promotion Office, serves as the linchpin for the country’s investment strategy. Established to catalyze economic growth through foreign and domestic investments, SOMINVEST plays a multifaceted role in promoting, attracting, facilitating, and supporting investors. Mohamed Dubo, the agency’s director, outlined the organization’s comprehensive approach: “We start from investment promotion, attraction, and then we facilitate those who want to come and invest in Somalia, and then we support the existing investors in Somalia.” This holistic strategy ensures that investors are not only drawn to Somalia but are also provided with the necessary tools and support to thrive.
SOMINVEST’s mandate is to showcase Somalia as a land of opportunity, countering outdated or misleading narratives about the country. Dubo emphasized that Somalia is far more than the sum of its challenges. It is a nation rich in natural resources, cultural heritage, and human potential. From fertile agricultural lands to abundant fisheries and a burgeoning energy sector, Somalia offers a wealth of opportunities for investors willing to explore its potential. Dubo’s invitation to global investors is both passionate and pragmatic: “Come and explore Somalia. It’s a resourceful country.”
The agency’s efforts are not limited to promotion alone. SOMINVEST provides practical support to investors, including tax incentives, non-tariff assistance, visa facilitation, work permit processing, and land allocation. These measures are designed to lower barriers to entry and create a seamless experience for investors. By streamlining processes and offering tailored support, SOMINVEST is working to position Somalia as a competitive destination for foreign direct investment.
Somalia’s Investment Landscape: A Wealth of Opportunities
Somalia’s economic potential lies in its rich natural resources and strategic geographic location. Situated in the Horn of Africa, the country boasts a 3,300-kilometer coastline, one of the longest in Africa, making it a prime location for industries such as fisheries and maritime trade. Its fertile lands are ideal for agriculture, while its livestock sector is a cornerstone of the economy, with Somalia being one of the world’s leading exporters of livestock. Additionally, the country’s untapped energy resources, including solar, wind, and potential hydrocarbon reserves, present significant opportunities for investors in the renewable and non-renewable energy sectors.
Dubo highlighted the top five sectors for foreign direct investment in Somalia: agriculture, fisheries, livestock, energy, and financial services. These sectors align with Somalia’s natural strengths and offer high potential for growth and profitability. Agriculture, for instance, benefits from the country’s arable land and favorable climate, which can support crops such as sorghum, maize, and fruits. The fisheries sector is equally promising, with Somalia’s waters teeming with fish stocks that remain largely underexploited due to limited industrial capacity. The livestock sector, a traditional mainstay of the Somali economy, continues to thrive, with growing demand for Somali goats, sheep, and camels in international markets.
The energy sector is another area of immense potential. Somalia’s abundant sunlight and strong winds make it an ideal candidate for renewable energy projects, such as solar and wind farms. Additionally, exploratory studies have suggested the presence of oil and gas reserves, which could transform Somalia into a significant player in the global energy market. The financial services sector, meanwhile, is undergoing a transformation, with modern banking systems and mobile money platforms gaining traction, creating opportunities for fintech investments.
Dubo’s vision is to leverage these sectors to drive economic growth and create jobs for Somalia’s youthful population. With a median age of 18, Somalia has a dynamic and growing workforce that can support labor-intensive industries. By attracting investment in these key sectors, SOMINVEST aims to unlock Somalia’s potential as a regional economic hub.
Turkish Investors: Pioneers in Somalia’s Economic Transformation
Among the foreign investors showing keen interest in Somalia, Turkish investors stand out as trailblazers. Dubo noted that SOMINVEST receives a significant number of inquiries from Türkiye, reflecting the strong economic and diplomatic ties between the two nations. To cater to this interest, SOMINVEST employs Turkish-speaking Somali staff who engage directly with Turkish investors, facilitating communication and understanding of local opportunities.
Turkish investors are particularly drawn to greenfield investments, which involve establishing new operations from the ground up. “They want to come to Somalia, invest in Somalia, compared to other nationals who want to establish brownfield investments, meaning they want to invest in Somalia without necessarily coming,” Dubo explained. This hands-on approach has led to a significant Turkish presence in Somalia, particularly in the contract services sector.
Several high-profile Turkish companies are already active in Somalia, reshaping the country’s infrastructure and economy. For instance, Turkish firms manage the Mogadishu Port and Aden Adde International Airport in Mogadishu, two critical gateways for trade and connectivity. These operations have not only improved Somalia’s infrastructure but also created jobs and boosted local economies. Turkish companies are also involved in construction, processing, and manufacturing, contributing to the development of modern facilities and industries.
A significant milestone in Somalia’s investment landscape is the introduction of a new company law that allows 100% foreign ownership. This reform marks a departure from previous regulations that restricted full ownership by foreign nationals, making Somalia a more attractive destination for investors. The law has been particularly beneficial for Turkish investors, who have seized the opportunity to establish a strong foothold in the country.
The presence of Türkiye’s state-run Ziraat Bank in Somalia is another testament to the deepening economic ties between the two nations. The bank’s branch in Mogadishu has enhanced financial services, providing a stable and reliable platform for businesses and investors. By improving access to banking and financial products, Ziraat Bank has played a pivotal role in transforming Somalia’s financial environment, making it easier for investors to operate in the country.
The Legacy of Turkish Engagement in Somalia
The relationship between Somalia and Türkiye is rooted in a shared history of cooperation and mutual support. Turkish President Recep Tayyip Erdogan’s visit to Somalia in 2011 marked a turning point in bilateral relations. Initially driven by humanitarian motives, the visit laid the foundation for a broader partnership focused on development and investment. Subsequent visits by Erdogan, particularly in 2016, were explicitly development-oriented, bringing with them a wave of Turkish investors representing diverse sectors.
“Together with him was a sizable number of foreign investors representing various sectors in Türkiye who wanted to come and invest in Somalia. They have an established presence. Most of them are in the construction space. Others are in the service sector,” Dubo noted. The entry of Turkish Airlines into Somali airspace was a game-changer, improving connectivity and signaling Somalia’s openness to global business. The airline’s flights to Mogadishu have facilitated the movement of people, goods, and investments, further strengthening ties between the two nations.
Türkiye’s engagement in Somalia extends beyond business. The country has been a key partner in Somalia’s reconstruction efforts, supporting infrastructure projects, healthcare, and education. Turkish-built hospitals, schools, and roads have become symbols of this partnership, improving the quality of life for Somalis and creating a favorable environment for investment. This multifaceted engagement has earned Türkiye a reputation as a trusted partner in Somalia’s development journey.
Challenges and Opportunities: Building a Conducive Investment Environment
While Somalia offers immense opportunities, it also faces challenges that must be addressed to fully realize its potential as an investment destination. Dubo acknowledged the need for improvements in several areas, including the legal and regulatory framework, institutional arrangements, and the overall ease of doing business. “We need to do a lot of efforts in improving our legal and regulatory space. We need to improve a lot of our institutional arrangement. We need to improve our ease of doing business. And we need to improve our national perception towards foreign investors,” he said.
The legal and regulatory environment is critical to attracting and retaining investors. Somalia has made significant strides in this regard, with the new company law allowing 100% foreign ownership being a notable example. However, further reforms are needed to streamline processes, reduce bureaucratic hurdles, and ensure transparency. SOMINVEST is actively working to address these challenges by providing tax incentives, non-fiscal support, and facilitating access to land and permits.
Another challenge is the perception of Somalia as a high-risk investment destination due to its history of conflict and instability. Dubo is keen to change this narrative, emphasizing that Somalia is a welcoming and culturally rich nation with a stable and improving environment. By promoting success stories, such as the achievements of Turkish investors, SOMINVEST aims to reshape global perceptions and attract a diverse range of investors.
The ease of doing business is another area of focus. Somalia ranks low on global ease of doing business indices, but efforts are underway to improve the business climate. SOMINVEST’s facilitation services, such as visa and work permit assistance, are designed to make it easier for investors to set up operations. Additionally, the agency is working to enhance infrastructure, such as power supply and transportation networks, to support industrial and commercial activities.
Somalia’s Cultural and Economic Appeal
Beyond its economic potential, Somalia’s cultural richness is a significant draw for investors. The country is known for its hospitality, vibrant traditions, and diverse heritage, which create a welcoming environment for visitors and investors alike. Dubo highlighted Somalia’s cultural appeal as a key factor in attracting investment: “Somalia is culturally rich, highly receptive, and welcoming.” This cultural openness, combined with economic opportunities, makes Somalia an attractive destination for those willing to look beyond stereotypes.
The Somali people are known for their entrepreneurial spirit and resilience, qualities that have sustained the economy through decades of challenges. From bustling markets in Mogadishu to thriving diaspora-led businesses, Somalia’s economic vibrancy is evident. Investors who engage with the local community can tap into this dynamism, forging partnerships that benefit both parties.
The Path Forward: A Vision for Sustainable Growth
Somalia’s journey toward economic prosperity is just beginning, and SOMINVEST is at the forefront of this transformation. By promoting key sectors, facilitating investments, and supporting investors, the agency is laying the groundwork for sustainable growth. The partnership with Türkiye serves as a model for how strategic collaboration can drive development, and SOMINVEST is eager to replicate this success with investors from other countries.
Dubo’s vision for Somalia is one of inclusivity and opportunity. By attracting investment in productive sectors, improving the business environment, and showcasing Somalia’s cultural and economic strengths, SOMINVEST aims to position the country as a leading investment destination in East Africa. The agency’s efforts are already bearing fruit, with Turkish investors leading the way in transforming Somalia’s economic landscape.
As Somalia continues to rebuild and modernize, the opportunities for investors are vast. From agriculture to energy, fisheries to finance, the country offers a wealth of possibilities for those willing to take the leap. With SOMINVEST’s support and a government committed to reform, Somalia is ready to welcome the world to its shores.
In conclusion, Mohamed Dubo’s call to action resonates strongly: “Come and explore Somalia. It’s a resourceful country.” For investors seeking high returns, cultural richness, and the chance to be part of a nation’s renaissance, Somalia is a destination worth considering. With Turkish investors already paving the way, the stage is set for a new era of prosperity in Somalia, driven by global partnerships and a shared vision for growth.
