Somalia investment conference spurs interest, gov't pledges

[Titanium]

Delegates at the two-day Somali Reconstruction and Investment Conference and Exhibition in Nairobi on May 28th and 29th expressed interest in the many untapped opportunities in Somalia, while officials said the Somali government is working toward enacting adequate foreign investment legislation in an effort to create a more favourable business environment.

The event, organised by the Somalia government alongside the Kenya National Chamber of Commerce, the Somali Chamber of Commerce and investment firm HanVard Africa, attracted 250 delegates from regional and international companies in the mining, oil and exploration, construction, banking, water, and hospitality sectors.

"Policymakers, development organisations and potential investors in virtually all sectors of the economy had a chance to interact, network and share their ideas," said HanVard Africa Chief Executive Officer Hassan Noor. "We hope the business contacts exchanged will enable them strike deals and engage in business opportunities in the near future."

In the coming months, organisers and the Somali government will coordinate exploratory tours to take company executives across Somalia to evaluate available opportunities, he told Sabahi.
Addressing investor concerns

Companies need good tax structures, operational laws and assurances on property rights before engagement can begin, said East African Chamber of Commerce, Industry and Agriculture Chairman James Mureu.

"When a country is recovering from lawlessness, disputes abound over land and the government needs to put clear legal protections so that investors do not encounter problems," he told Sabahi.

To address this issue, Somali Deputy Minister for Public Works and Reconstruction Nadifo Mohamed Osman said her ministry is working to create a favourable investment climate, as established policies are essential to enact the written and verbal investment commitments made at the conference.

"The laws governing foreign and local investment in Somalia are not perfect yet," she told Sabahi. "Now more than ever, we are spurred to work on pending national strategic plans for investment."

"We understand that time is a luxury we cannot afford and we are returning home to ensure there are laws that protect investors and the Somali people," Osman said.

Somali Ambassador to Kenya Mohammed Ali Nur said his government is developing economic zoning plans in areas under their control where policies can be enacted in short order.

He said each region in Somalia has specific economic potential and unique investment needs, but appropriate overall policies are needed if economic development is to spread across the country.

But while new policies will aim to encourage foreign investment, he said the government will reserve certain business sectors for domestic investors to ensure there is a level playing field and expand opportunities to small-scale investors.

"If the investment [conference] was just about big business I would have said no, but the small [investor] needs to be included in the overall growth of the economy," he told Sabahi. "The restricted sectors may be those that supply to the local people."

Nur said businesses in need of non-skilled labour should seek workers locally to address the high unemployment in each Somali region. "Anything is open, but we are cautious not to give hard competition to the locals," he said.

Investors seeking to establish their businesses in Somalia can contact the Somali embassy in Kenya, Nur said, adding that the Somali government is working hard to re-open embassies and diplomatic missions in several countries to facilitate investment and link investors with ministries in Somalia.
Business opportunities

Minister Osman said conference-goers expressed great interest in oil, gas exploration and shipping, but stressed other areas of Somalia's economy are just as important. "Somalia's needs are much greater; it needs millions of new jobs for the poor and mainly rural population, and it needs substantial investment in infrastructure," she said.

Somalia's 10 million people constitute a market with a lot demand for consumer goods and services, but there are too few manufacturing companies in the country, said Hirsi Dirir, director general of Dahabshil Bank International, which is headquartered in Djibouti.

Dirir said Dahabshil, which rented a booth at the conference, will help investors fill that supply shortfall by providing loans and other needed financial services that target those underdeveloped business sectors. "The bank will focus on areas such as industry, energy, agriculture, oil, mining, construction and food processing," he told Sabahi.

Before the conference, Suresh Aggarwal, director of Nairobi-based Athi River Steel Plant Limited, said he thought it was unwise to invest in Somalia, but later changed his mind.

"I attended the conference out of curiosity, but in the end, I must say I was convinced that establishing a steel manufacturing company in Somalia will have good returns," he told Sabahi.

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