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Somalia: Investors Keenly Eye Somalia Opportunities
Capital FM
Monday, June 03, 2013

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After 22 years of civil strife and political turmoil, a new era has dawned on Somalia and the country is embarking on a dynamic path of political and economic renewal.

This is after the successful liberation of large territory from the control of Al Shabaab militia last year by the African Union Mission in Somalia (AMISOM) which widened a window of opportunity for lasting peace in Somalia.

Many investors are now seeing Somalia as an increasingly enticing market for investment as the country starts rebuilding itself from scratch.

Simatech Shipping, one of the largest feeder service companies in the Gulf, the Indian Sub-Continent, Far East and East Africa, has started providing shipping services at Mogadishu Port in Somalia.

Container trade to Mogadishu, the country's capital city, was suspended some years ago due to the political situation and the risk of piracy. With the absence of container services, traders have had to depend on break bulk operations using smaller vessels.

Simatech Shipping started its services at the port in January this year and has already invested close to Sh1billion.

Country Manager in Somalia Noaman Akram says things are looking bright and that this was the time for investors to venture into the country.

"We started looking at Somalia about a year and a half ago and my first visit to Mogadishu was in January 2012. We were motivated after being approached severally by many NGOs and UN organisations to offer logistics services at the port of Mogadishu. We went there and luckily enough we found good people who were ready to guide and support and encouraged us to kick off," Akram said at an interview with Capital FM Business.

The firm has however urged banks especially from the East African region to take the lead adding that the significant requirement at this stage in Somalia is provision of financial services to allow easy flow of money.

Jazeera Palace Hotel is another investment in Mogadishu city according to the General Manager Justus Kisaulu. The investors saw the business potential in the country and took the risk.

Despite the insecurity situation at the time, the five star hotel was constructed in 2010 and as Kisaulu says; they believed that there would be peace at some time in the country for faster economic growth.

The hotel officially started its operations in 2012.

"I moved to Mogadishu last year to be able to work well in my position and as you know, things were still not very good. There were attacks here and there especially in the town. But for us to have a hotel of about 70 rooms with even presidential suites, it means our priority was capitalizing on the business potential we saw ahead," Kisaulu says.

"Our aim with my fellow directors was not joining the 'insecurity song' about Somalia but taking part in rebuilding the country."

He says the hotel has been able to attract all kinds of tourists with one of their marketing strategy being assuring their customers of total security and giving good services. All the visitors have to be accompanied by armed security officers from the airport to the hotel and vice versa.

"We don't just accommodate any person because they are visiting Somalia. No... we start vetting them way early by looking at where the visitor is coming from and why he or she is in the city," he says.

"I am a Kenyan and a father of two but my family still lives in Nairobi for various reasons. But Somalia is a safer place even if I am not with my family there."

The crucial issues to be addressed in the country are infrastructure and provisions of basic social amenities like water, food, proper shelter, energy among others.

"Somalia is very important to us and the first reason is that we are neighbours," says Jackson Machuhi, East Africa head of sales at Barefoot Power Africa, a manufacturer and distributor of solar lighting products.

"If Kenya has only 31 percent power penetration, what about Somalia? We have plans to go there too and be counted as among the developers of the country," he said.

The first Somali Reconstruction and Investment Conference and Exhibition held in Nairobi last week was evidence that indeed the Somalia government is open for investors.

The two-day event brought together key policy makers from the Government of Somalia and Somaliland, top decision makers from international and regional development organizations, and participants from public and private sector.

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