CilmiDoone wrote:But where is the economic logic is building this road... to
Erigavo. You would think there is a vibrant industrial sector in Erigavo or highly productive large scale farms or minerals and oil Somalis
Somalis and their emotion
There has to be an economic rationale for building any road, but especially so if it is a 300KM+ long road.
This will be a road of about 300km which, if we assume a cost in the region of $1m per KM , implies a cost of around $300m to build the road. In reality, the cost is likely to be higher than $1m per KM considering the mountainous topography of the area where the road is being built, and the cost of building bridges where required. So say that, hypothetically speaking $300 million was collected from all Somalis, both in the diaspora and back home, in donations (lol). Now, assuming that dream to be true, imagine what could be done with $300m... this is a huge amount of money, enough to create jobs for almost everyone in S/L, if the money is invested in a smart way, into projects that create sustainable jobs and provide a return on the investment. So what, potentially, could be done with this money?
The $1m per KM figure I mentioned is entirely arbitrary but my issue with this whole project is the opportunity cost of it and the fact that this project will provide a minimal to nil return on investment. I do believe that raising large amounts of money from the diaspora/locals is, to an extent, feasible and realistic. But the best way to spend that money, if it is raised, is by investing it in projects that (a) create sustainable jobs and (b) provide a sustained return on investment in perpetuity, the proceeds from which can then be reinvested - building a road to nowhere does neither of those things. Resources are scarce and projects have to be prioritised. Yes, Erigabo is a main town, but that does not justify prioritising the funding of a $300km road that will provide minimal to nil return on investment over the funding of projects that create sustainable jobs, improve people's quality of life and provide a high return on investment, in perpetuity.
- Invest $25m in a fishing fleet transportation; storage, freezing, processing and transportation facilities. Create jobs. Earn hard currency though exporting the catch. The government can tax the operations of the entity. Revenues can be re-investing in either enlarging the operations of the entity, improving the technologies and operational methods, branding & marketing, entering new markets or in new industries altogether.
- Invest $35m in mechanised abattoirs & tannaries on the outskirts of the major cities, storage, freezing, processing and transportation facilities. Create jobs. Earn hard currency though exporting the products. The government can tax the operations of the entity. Revenues can be re-investing in either enlarging the operations of the entity, improving the technologies and operational methods, branding & marketing, entering new markets or in new industries altogether.
- Invest in $25m in farming in fetile parts of Awdal/Waqooyi galbeed/the South, significantly increase the land under cultivation, drill wells to irrigate those farms, get the universities & professionals with the requisite technical knowledge to improve agricultural methods; bring in drip irrigation, bring in fertilizers and encourage import substitution of whatever produce can be produced domestically. Improve food security, reduce food prices, improve peoples quality of lives, create jobs. Earn hard currency though exporting the products. The government can tax the operations of the entity. Revenues can be re-investing in either enlarging the operations of the entity, improving the technologies and operational methods, branding & marketing, entering new markets or in new industries altogether.
- Nationalise all universities (ban all non-government owned universities) and create a government funded
independent univeristy. Invest $50m in a
proper university/research institute that has a modern campuses, is fully equipped and that employs the most qualified, experienced and talented members of the Somali diaspora. The university should have faculties for applied sciences/technology/engineering/medical sciences&technologies, medicine/nursing/midwifery, economics/business/sociology, religious studies/Somali history/Somali literature. This university/research institute should: provide excellent teaching, free of charge, to all qualified students. This university should also conduct cutting-edge problem-solving based research to address the technological/economic/social/health issues within the country and come up with practical solutions and authoritative recommendations. The university should have close links with and directly work with companies/industry/schools/hospitals/government departments.
- Invest $50m in light manufacturing of imported consumer goods that can be produced or assembled within the county even if we have to import the required raw materials e.g. shoes, clothes, furniture, construction materials, foodstuffs (flour, edible oils etc.)
- Invest $115m in a small power plant, dramatically bring down the price of electricity and encourage light manufacturing. Build power lines to the major cities, with the support of donors/friendly nations.
The problem is that they are trying to build roads (a) without the necessary funding in place and (b) without a clear justification or understanding of what the expected economic benefits are; and (c) without a thorough and genuine analysis of the relative importance of these road projects. There os no strategy, no vision, no plan and no prioritising. We are talking about a place that has almost no industry to speak of, that produces no goods of its own and that exports very little, that has no formal economy or jobs to speak of, that has no tax base, seeking to use its scarce resources to invest in expanding its road network, to small towns and villages of no economic significance or relevance to speak of. As opposed to investing in projects and initiatives that will result in currency inflows, job creation, taxation income and other forms of return on investment, in perpetuity, which xould then be utilised to invest in either in infrastructure projects or more revenue-generaring investments. Government cant invest in infrastructure if it has no way of generating revenue because there is no tax base, because there are no formal jobs, because there is very little in the way of formal economic activity. Solution? invest in revenue generating job creating projects.
