The real Somali Economy.

[Chimera]

At the moment it is quite clear that every single economic index doesn't have the slightest clue about Somalia's economic growth or real figures, the fact that they have placed the GDP ppp at $600 for two decades is a good example of that, remittances alone would add around $200 to that figure if you divided $2.5 billion by a population of 12 million. It is simply ment to discredit Somalia's progress, it is ment to paint a picture of 'insignificance' on the continent, evendo Somali businessmen operate a vast trade network connecting large swathes of Africa with the Middle East, Europe and Asia.

 

There used to be a very interesting study by an economist on http://www.civicwebs.com, about the Somali Economy and he made comparisons with neighbouring countries, the figures were something like this:

 

Somalia - $ 795

Ethiopia - $ 500

Kenya - $900

 

This was in 2001, today Kenya is at $1700, yet Somalia hasn't changed at all despite growing faster, how is that possible? It is not farfetched to state that Somalia's GDP per capita is $1500 give or take, making the Somali Economy worth atleast $18 billion today, a figure that in less than five years of stability would grow to $3000 with the diversified exports of livestock, oil, gas, fish and the increase of agricultural output + the growth of a service based sector fuelled by the Telecommunications companies in peacetime Somalia, and the immense investment and BRAINGAIN from the diaspora that would come with peace. If this is achieved by 2015, then the following could be a reality:

 

2020 | Somalia | 20 million people x $3000 = $60 billion. This would place us in the Top 15 African countries based on GDP, this is a reality that is very much achievable considering how business savvy and resourceful our people are, if only the guns were put down.

 

Sudan is a good example.

[FatB]

"if only the guns were put down." indeed

[Chimera]

- Somalia is currently challenging Australia's dominance in the Middle Eastern Livestock market, and stability would allow the expansion of this network to large meat-eating countries such as Turkey, Brazil and Indonesia.

 

Koly added that the rise in prices is deterring people from purchasing Australian livestock, resulting in a slump in sales. “Earlier, Australian animals constituted 90 per cent of stocks in the local market, but now that will fall to about 20 per cent. As a result, the market is flooded with cheaper Somali animals going at a rate of RO35-40 each.”

 

Ahmed said that with the rise in demand during Ramadan and Eid, the price of Somali goats went up from RO25-30 to the current high of RO35-40. “As for local produce, the quantity is just not enough to satiate the demand. Enough stocks are not available, making it commercially unviable.” -

Link

 

[Blessed]

Middle Eastern is a stretch you can ONLY get Somali meat in Super Markets in Oman but that's a good article. I hope other Gulf states start selling again.. There's definitely an export opportunity there. Australian meat stinks!

[Muriidi]

At the moment it is quite clear that every single economic index doesn't have the slightest clue about Somalia's economic growth or real figures

.. they were bluffing all along !

 

but ..

[Chimera]

Originally posted by *Blessed:

Middle Eastern is a stretch you can ONLY get Somali meat in Super Markets in Oman but that's a good article. I hope other Gulf states start selling again.. There's definitely an export opportunity there. Australian meat stinks!

Not really a stretch sis:

 

Big increase in meat consumption in Dubai

 

3 May 2010

 

The official attributed the steep hike in livestock imports to increased meat consumption and resumption of livestock imports from Somalia after the ban on the country’s livestock was lifted by the UAE’s federal authorities.

 

“Somalia, India and Pakistan are three major countries from where we receive cows, sheep and goats. Somalia is sending a lot of livestock these days after the Ministry (of Environment and Water) lifted the ban on their imports,” he explained. -

Link

- The new clean facilities, slaughterhouses and mega-ships that house, process and carry millions of Somali livestock has given us a boost in the UAE, and KSA markets. Somali traders have to find alternative markets for their stock though, plenty of hungry meat-eating countries willing to buy, incase the Sheikhs start acting funny again.

[Chimera]

Somalia will be the dark horse in future Africa, the phoenix that everybody dismissed, only for the phoenix to surpass them in the span of a few years:

 

How Somalia Thrives Amid Anarchy

 

 

To the surprise of many, there are numerous sectors of Somalia’s economy that have remained robust or have turned better than they were before the war. This is the Somalia you don’t get to read about.

 

Even more striking is the fact that a number of these sectors are more upbeat than those of the neighboring countries that have enjoyed relative peace.

One of the economic areas enjoying robust growth amid the volatility in the country is trade.

 

Abdullahi Abdi is a shop owner in Mall 24 in Minneapolis, Minnesota. He specializes in selling imported clothing and shoes. A citizen of Somalia, Abdi makes frequent journeys to his homeland to visit with his parents and siblings and clinch deals for his businesses in Somalia. He also runs retail outlets in Kenya.

 

Part of the businesses he runs in Somalia and Kenya include selling apparel, which he and his family import from the Middle East and Far East Asian countries.

The seasoned businessman told Afrika News that while both countries have vast markets, profits are larger in Somalia than in Kenya.

While Somalia has not known peace for close to two decades, Kenya has never been in turmoil since independence from Britain 43 years ago.

 

"There is a good market in Kenya, but the taxes levied on imported goods such as clothing and electronics are unbearably high. Somalia, on the other hand, is a free port that levies no taxes on goods. This makes commodities cheaper in Somalia,” said Abdi.

 

A pair of pants that costs two or three U.S. dollars in Somalia would cost double that amount in Kenya after tax. In addition, rampant corruption among police and immigration officials in Kenya who demand kickbacks for clearance of Abdi’s wares guarantee a rise in costs, which necessitates the hiking of prices “If you understand the system, there is a friendlier investment environment in Somalia than in Kenya or Ethiopia,” said Abdi.

 

Another sector that has survived the war and thrived beyond expectation is communication. It is one section of the economy that Somalia is well ahead of its neighbors, including Kenya-the strongest economy in the Eastern Africa region.

 

In November 2004, the BBC website reported that it takes only three days for a customer to get a fixed line phone in Somalia while it takes years to get the same service in Kenya.

 

Abdullahi Black, a journalist with Mogadishu-based Somali-language Tifatiraha Wargeyska Ayamaha daily says that fixed line calls within Mogadishu are free while it costs 10 cents to call a cellular phone. In Kenya, there are no free phone calls, mobile telephone calls on the other hand cost up to 75 U.S. cents a minute.

 

Also, internet service providers are rushing in to cut their piece of the Somali pie. “The cyber cafes in Somalia are charging less than 30 U.S. cents for an entire hour,” adds Black. This is in contrast to Kenya and other countries in the region where internet services cost twice as much.

 

The vast numbers of businesses are in a huge mall located in the heart of the city called Suuqa Bakaraha. Sahal Abdille, a Somali-American photojournalist in Mogadishu, said a new development after the civil war is the establishment of the city's biggest shopping complex.

 

This mega structure, which covers more than a square mile, houses hundreds of stores ranging from clothing stores, restaurants, financial institutions and telecommunications outlets,” Abdille said. “And like many other malls around the world, it runs all day.”

 

Many observers have pointed the success of Somalia to the big and largely patriotic Somali Diaspora community which they say has played a big role in keeping this country’s economy booming. It has kept in touch with its people back home calling and sending money using a highly effective traditional banking and money wiring system called Hawala.

 

Many members of the community living abroad, especially in Western and Middle-Eastern countries, are the source of livelihood to their relatives at home. A money wiring agent in Mall 24, Minneapolis, MN, who requested anonymity said he is usually busy throughout the day helping Somalis send money back home.

 

"I serve people sending money to Somalia daily. The Somali community living in the Twin Cities of Minneapolis and St. Paul alone sends money running into thousands of dollars to their relatives in Somalia and other parts of the world each day,” he says.

 

The businessman said that on an average week, he helps send between $60,000 and $ 80,000 to Somalia. In a month, he helps transfer between $1.8 to 2.4 million. However, he said that his Hawala is relatively new and he doesn’t have as much customers as the more established ones do. He said there are Hawala networks which send up to two hundred thousand dollars in just a week.

 

Unlike other services, money-wiring can extend to the remotest villages in Somalia, a trade many of Somalia neighbors are yet to muster.

Perhaps even more intriguing is the speed with which the money is received. “If money is sent from Minneapolis today, the receiver can collect it the following day even in the remotest villages in Somalia,” he adds.

 

Furthermore, the Hawala money wiring system is cheaper than other international money wiring services with a $100 costing a paltry $5 and $50 costs $2.50 to send.

 

Regarded as one of the most dangerous countries in the world, where institutions of governance collapsed for years, Somalis have devised a way of making the very best out of a bad situation. It makes one wonder whether a lawless nation may be what some parts of Africa may just need to deliver affordable goods and services to their people.

 

http://afrikanews.org/index.php?option=com_content&task=view&id=19&Itemid=26

[Chimera]

Some issues the Private sector should focus on:

 

- Literacy rate to atleast 65% (special attention to the enrollment of girls).

- Electrification rate to atleast 50%.

- Construction of a Satelitte city somewhere on the peninsula to attract investment - Zeila, Ras Hafun or Ras Kamboni are good contenders.

- Establish a transnational Somali Stock Exchange.

- Construction of many hospitals with maternity departments serving new mothers and their babbies.