Somali Entrepreneurship

[Archdemos]

I wanted to get a better idea of some of the flourishing sectors in the Somalia/SL/PL areas. I understand the livestock sector accounts for a large share of trade. How many outfits operate in the value adding space further down the chain. How many companies are there that operate semi automated factories for meat processing ready for exportation. We already know much about the very successful mobile market, so I don’t need too much info on that.

 

Potentially highly profitable niche products like frankincense from ancient gum trees are said to be cleaned refined and exported to European perfumeries. How can we begin to add further value to this process?

 

I want people to come up with business ideas that can add real value to the country, not just the exportation of raw products. The challenge is how can we add value to our current crop of exports.

 

I know of a couple of tuna factories who mainly serve the national market i think, why have they not struck deals to serve supermarkets in the west. What are the type of capacity constraints they are dealing? Health & safety red tape, fishing fleet, operational capacity limitations?

 

Companies like Somcable if they deliver on their promise, can help revolutionise the business environment in Somalia. The opportunity this company presents is incredibly exciting.

[Somalia]

I'm looking for the same answers as you.

[Abu-Salman]

The same sectors that flourish in say Yemen etc are often relevant here too (as for frankincense, refiners get most of the profit and the trees are under threat):

 

The lucrative honey/ specialty honey sector has many advantages and is suited to small-scale producers;

Somalia is just ideal for honey production but again, traditional methods should be protected to avoid the same disasters as elsewhere as well as target the organic niche.

 

Aquaculture (prawns etc) or specialty marine products are higly suitable (preliminary studies done in Djibouti).

 

Processing hides (all the way up to consumer goods).

 

Fresh vegetables thrive in Ethiopia/Kenya (demand for fresh products in Djibouti and the nearby Gulf supermarkets).

 

As well as products always in high demand such as sesame, medicinal herbs or lemons (industrial uses in perfumes etc) etc.

 

 

 

In terms of manufacturing, there is some scope for IV solutions and other basic healthcare products that are more easily competitive (because of their bulky or more basic nature).

There is a thriving but chaotic local medicines import sector (no regulation, lack of cold storage facilities whether at the wholesale or retail level etc).

There is a steady demand for healthcare services though.

 

Another sector very much needed and where expertise is available is the publishing industry to satisfy the booming demand for textbooks that are both relevant and affordable.

There is a good demand for decent education too.

 

Textiles, carpentry and basic agriculture processing or tools (eg adapted technology irrigation pumps/tools) could also thrive, particularly if protected (eg, the Kenyan government only orders from local furniture makers).

 

 

Again, with courageous policy makers and less corruption, the less technology intensive industrial sector could take off (including refineries or cement plants).

There are even decisive local advantages such as raw materials or ports and location that cut transport costs (no country built its industries by following the IMF and other open trade advocates recommendations)...

 

 

 

PS: The key to all that is again transparent and well-informed policy-making that prioritizes local public interest;

honest traders seem often penalised or discouraged when others with less scruples undercut them (dubious medicines, inferior prestations or conflict of interests such as referral to a clinical relation etc)

[Chimera]

Great suggestions, especially the potential for a Honey producing sector. I made a related post on the "We must re-invent ourselves" topic in the Camel Milk Debate section. This is the type of stuff I will be investing in one day Insha-allah, with guaranteed high returns:

 

Chimera;709465 wrote:

Somali Marine fleet

:

 

Trawler - $424,359

 

We need 10 of those = $4 243 590

 

Fish Freezing Vessel - $1,800,000

 

We need 2 of those = $3 600 000

 

The returns on such investments is enormous. The Tuna fish industry has the potential to bring in $6 billion annually.

 

Somali Agricultural Army:

 

Combines - $40 000

 

We need 10 of those to gather the bumper harvests = $400 000.

Farm Tractor - $20 000 - $30 000

 

We need 10 of those = $200 000 - $300 000.

 

Milk Cooling Tank - $2000

 

We need 100 of those to become a real heavyweight exporter of Milk = $200 000.

 

Silos - $10 000 / $15 000

 

The most important component of the post-Harvest period. It is estimated by the Somali Agricultural Technical Group that around 80 000 tons of food falls victim to bad storage facilities every year. That's a significant chunk of the Somali harvest that could be used for a less rainy day.

 

20 of those would be sufficient = $200 000 / $300 000.

 

1.7 million Coffee seeds = $426 000

 

Coffee plantations are a must for Somalia's fertile soil, which can grow anything. Its a mega-industry that keeps on growing, especially now that China is rising on the scene and its people are becoming more cosmopolitan with Cafe's popping up left and right. The figure I have used is from an initiative spearheaded by our

Indonesian kin in Bali.

 

All of the above is roughly 15~ million dollars. The dream of creating a self-sufficient Somalia that is a heavy-weight exporter of agricultural products is

absolutely

within our reach.

 

.

In Somalia you can establish farms or deploy fishing fleets anywhere in the country because the soil is perfect, and our seas are rich.

[Abu-Salman]

Both the frankincense for which we are among the very few producers, and which was exported for ages, as well as the niche honey are ideally suited to Somalia.

Fishing and agriculture have quite enormous potentials as well;

Sh Sharif was just pleading for Somalis to consider these areas while praising Somalis for their trading skills, when speaking to the local diaspora yesterday night.

 

However, the goals should not be about just production and profits for their sakes but for creating livelihoods for all and to guarantee equality;

besides, more money means nothing if dementia, stroke etc increases (which is the case even for low levels of air pollution as a new study just reported by the Lancet has found).

 

Actually, creating "needs" as an economic model and the resulting "wealth" seems like a self-defeating mirage;

researchs show for instance that homogenised, processed milk is actually poisonous alongside countless similar or worse consumer products that rely on artificial demand creation, do not respond to a basic need or whose production system is ill-advised (fruits ferried by air or on long distance, households chemicals and cosmetics etc when local products keep more of their vitamins, are less harmfuls or many alternatives to chemicals exist...).

 

Thus, labor intensive systems and industries, those ensuring decent livelihoods and are fundamentally sustainable should be pursued (traditional beekeeping is an excellent example).

 

Again, if great care is not taken, all those resources and, most crucially, the local environment could follow the same path as elsewhere with soil degradation, diminishing fertility, lasting pollution etc now unsolvable problems even in places such as the United States.

 

Indeed, combines, trawlers and other machines may prove to be counterproductive unlike appropriate or intermediate technology, which happens to be more suited to local skills and economy and even more profitable over the long term.

 

These are some of the reasons why an adaptation of the Cuban and similar models is infinitely better in terms of equality and frugality, fair access to quality healthcare and education, limited use of resources and pollution etc than the IMF/World Bank monitored unrestricted capitalism which has lagely failed (consumerism, poor general health status, inequalities, insecurity, pollution and environmental destuction are the norm even in places where it seems decent levels of income have been secured for the multitude)...

 

 

 

PS: sorry to come accross as idealistic but economics, health or social well-being etc are deeply intertwined though artificially separated; even merely multiplying factories or export manufacture has all sorts of direct or indirect health implications, hence why an honest leadership and fostering awareness are all-important...

[Blessed]

This is a very good thread, Archi. These are great ideas suggested here and I would add that there is potential in every sector, education, health, retail, hospitality and food production (even milk is imported, why?) in particular. I think banking is a slowly emerging sector and there's much potential there. Going home, you see potential everywhere to be honest. The main issues for entrepreneurs and potential investors is the lack of skilled work force back home and the unwillingness of those who posses the skills to return, this poses a bigger obstacle than securing funding and exporting equipment.

[Taleexi]

A month ago I came back from home and wherever I went I saw opportunity for wannabe entrepreneurs. In any field, don't take what I write on its face value I would urge everyone travels there and assesses what kind of project he or she can undertake of course considering his/her capital leverage, skill set and potential customers.

[Abu-Salman]

True, particularly if regulation keeps crooks at bay.

 

In fact, my very own mother has started a business with good potential that provide them with steady incomes (much harder to do similar things in Djibouti), though sales are still small volumes and heavily disrupted since the Ethiopian invasion and the ensuing mass displacement & chaos (demand is largely restricted to Hargeysa or Bossaso now).

 

Still, the potential returns and prospects, even in the healthcare field alone, are considerable with minimal stability or regulations & law enforcement.

 

Is it not ironic that a so-called "failed" state provide much better business opportunities and potential than others?

 

 

 

PS: the very lucrative unprocessed honey, used as medicine and even for surgical dressing, is another sector sadly hampered by fraudulent practices but it has definitely serious promises for small-scales producers and local communities; it is promoted by charities and traditional hives produce quality honey more sustainably (modern hives and methods are destructive for bees worldwide and their honey do not fetch high premium prices in places such as the Gulf).

[Alpha Blondy]

service sector might be worth investing in.... there is nothing to do in this country. more activities needed. there is plenty of money here and disposable income is very good.

[Archdemos]

*Blessed;794772 wrote:

The main issues for entrepreneurs and potential investors is the lack of skilled work force back home and the unwillingness of those who posses the skills to return, this poses a bigger obstacle than securing funding and exporting equipment.

You've hit the nail on the head there Blessed. People are just too comfortable and have become averse to risk taking. We talk the talk but very few of us are brave enough to vote with our feet.

[burahadeer]

^^^ the money is there so are lot small plants.Have seen those refine stones into smooth building blocks,burn mud to make red stones,paint factories etc for construction,bottled water,soft drink,milk,nails,mattresses,pillows,meat factory that go to Dubai,tuna etc & ofc the great telecommunications industry...it's all about money & skilled labour available(sometimes they bring few people from india to train).