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Uganda missing out on new business in Somalia

Thursday, February 7, 2013
By Joshua Kato and Agencies

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It is early evening in Mogadishu. Although the war-ravaged city is largely dark, there are well-lit structures that look like  buildings on the ocean. These structures are in one line running from the south of the city towards the seaport. They are about 100 metres apart from each other.

“Those are huge ships waiting to dock at the seaport,” Maj. Henry Obbo, the Ugandan Contingent spokesman, says. Just a year ago, this was impossible. There was no way such a big number of ships would sit like ducks on the open waters without being scared of attacks from the militant al Shabaab.

Peace is on the horizon across Somalia. Business opportunities are opening up across the country, which is why huge ships are coming in. “On average, we have 15 huge ships docking here every week,” said Ugandan Contingent commander, Brig. Micheal Ondoga. But it is not only the seaport that is busy. Not far away from the seaport lies the international airport. “Flights have increased from just eight a day a year ago to over 20. Some of these include cargo planes that are bringing in goods,” said Capt. Tabaro Kiconco, the commander in charge of security at the airport.

Business picking up

Business in Somalia is on the rebound and it is growing so fast that only those who are astute will benefit from it, according to economic analysts. “There are business opportunities all over the place, right from the construction industry, the steel and metal industry, the telecommunications sector, the transport industry and hotel sector,” said Somali president Hassan Sheikh Muhamud. He added that the country welcomes everyone who wishes to be part of its reconstruction.

At the seaport, a businessman has set up several giant warehouses that will store goods offl oaded from the ships before they are  transported elsewhere. “It is amazing that somebody can set up such a huge investment in a war zone, but that is the spirit of Somalia,” says Muhamed Noor, who works at the seaport.

Booming construction industry

There is a boom in Mogadishu and it is not from exploding bombs. On the road from Mogadishu to Kismayu, the biggest activity now  involves trucks carrying sand to the capital. At the seaport, a lot of the cargo coming in is construction materials.  Reconstruction of Kismayo, Marka and other places captured by AMISOM will soon kick off. “There is a building coming up at every corner of a street,” says city mayor Mohamed Nur Tarzan. The noise of hammers and chisels hitting and cutting away has  replaced the crackle of sub-machine guns that characterised the city for most of the last 20 years.

The construction work has given thousands of youth employment as casual labourers. “We are paid $3 per day for helping out with the construction work. It is better than before,” says Hassan Aman, a casual labourer at a site near the airport. This is good money given the fact that about 43% of the Somali population lives on less than a dollar a day.

A missed opportunity But a close check at the steel and concrete materials shows that none are imported from Uganda. Instead, cement comes from as far as India, while iron sheets come from various Arab states and Kenya. There are several cement producers in Uganda such as Hima and Tororo Cement that should certainly explore this market.

Busy city

Across the city, big shops and super markets have returned. There are traders walking briskly as they crack deal after deal. There are also restaurants that operate until deep into the night. It is clear that though battered by war, Somalis are highly entrepreneurial and risk takers.

One Nairobi-based Somali businessman gave the following explanation for the success of many  Somali businesses. “I think you need to be a Somali to understand this. One thing that is unique about Somalis is the issue of trust. People will come to you, they will give you their money without signing a document and they will say, ‘Here is my money, help me.’ and five or six people will come together entirely due to trust. This is one of the main assets we have.

“If someone wants to open a shop somewhere, he will call his cousins in London, South Africa, Mogadishu or Mombasa, and they will contribute. They will enable him to open the shop, and he will do the same thing for others. Trust is the secret of the success of the Somalis. Somalis are amazingly energetic and dynamic. Because of the war, there was no central government or institutions to help people, so everyone had to do their own thing. You have to depend on yourself. Everybody has relatives who are suffering, so everyone feels responsible for doing things for other people. The war is one of the main reasons behind all this energy and entrepreneurial activity,” he says.

There are money transfer joints, especially Daahabshil, across the city. It is through this outlet that Somalis in the diaspora have been sending money to relatives back home.
At the moment, the government is revitalising the Bank of Somalia, now housed in a small building near the old building that was bombed during the war. “The reactivation of the banks means that businessmen will now receive loans to run their businesses,” says Hassan Ahmed Samata, a banker who has lived in Kenya for many years.

The telecommunication sector, dominated by three companies; Nation link, Hormund and Somafone, stayed alive even at the peak of the wars. This meant that as far as communication was concerned, there was no gap. “It is one of the cheapest telephone systems in this region if you are calling within,” says an AMISOM soldier.

Businessmen are happy that unlike before when one had to hire guards to keep watch over their business in Mogadishu, the improved security means that huge expenses previously channeled to private guards are now invested back into the business. In addition to supplying fat, it is also a rich source of carotene, particularly B-carotene, the richest precursor of vitamin A. Red palm oil has the highest content.


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