How Kenyans are angling for a piece of Somalia’s rebuilding

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Friday, May 31, 2013

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More Kenyan companies are forging business ties with Somalia as rebuilding of the war-torn country gathers momentum.They want to take leading role in its reconstruction as world powers scramble for the resources and opportunities in the country. Somalia has faced civil strife for the last three decades with State security agents and international forces battling armed militia across the vast nation.

The Horn of Africa nation had also been held at ransom for several years by pirates just off its coastline. In a report dubbed “Pirates of Somalia: Ending the Threat, Rebuilding a Nation”, released in April, the World Bank estimated that piracy off the Somali coast cost the global economy an estimated $18 billion (Sh1.494 trillion) annually. Such security lapses have made it difficult for both local and international firms to do business, degrading its infrastructure.

Today, the world’s commitment to rebuild Somalia presents vast business opportunities in various sectors such as education, infrastructure, mining, fishing, energy and banking.

Joining the bee-line by India and Djibouti, are several Kenyan companies. Data from the European Union on Somalia’s bilateral trade patterns indicates that Kenya is the third largest import partner for Somalia after Djibouti and India.

Key trade partner

In 2011, Somalia imports from Kenya amounted to Euros 81 million (Sh8.8 billion). This surpassed imports from China, Egypt and the United Arab Emirates, UAE.

“ Somalia is ripe for investment and for us we are intent at making it the tenth country within which we establish a strong presence,” said Mr Benson Kanyuru, Davis & Shirtliff Somalia country manager.

The company, which deals in water and energy solutions is planning to set up a regional office in Somalia by next month. It is confident there is enough business potential to make the move commercially viable.

“ Somalia has white sandy beaches which will be prime for resorts and hotels like we have in Malindi,” he explains.

In addition to the provision of water services, the company is also hoping to reap big with its solar powered street lamps ideal for the nation.

Athi River Mining is also angling for a share of the pie. The company plans to supply steel and metal works that will be used in the construction of buildings, roads and bridges.

“We are starting with establishing trade links before we set up a physical presence because we need to have some logistics put in place first,” states Mr Prasad Karey, Athi River Mining sales and marketing general manager.

The company is concerned that deplorable state of the Northern Corridor and in security. Karey said while firms from the Middle East easily ship their goods, Kenyan firms have to move them to Mombasa, before shipping to Kismayu. This makes it more expensive.

“ Somalia presents a great opportunity for growth but some of the projects are capital intensive which require public-private-partnerships ,” observed Mark Smith, consulting tax partner at Deloitte East Africa.

The Somalia deputy minister Nadifa Mohamed Osman promised to develop the link infrastructure.

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