By In recent years, Somalia has witnessed a remarkable transformation fuelled by the dynamic growth of the private sector. These organizations have emerged as powerful catalysts, playing a pivotal role in revitalizing the economy and driving positive change. As the war-torn nation continues to rebuild itself, the impact of private companies on the Somali economy cannot be overstated. This article explores how these businesses are reshaping the economic landscape, fostering employment opportunities, promoting innovation, and bringing hope to a nation on its path to recovery.
It’s evident that private companies have emerged as important drivers of economic growth. They are transforming key sectors such as telecommunications, finance, and energy. One sector that has experienced a significant transformation is the telecommunications industry, where telco companies invested hugely in network infrastructure, technological advancements, and expanding internet access across Somalia. This increased connectivity has not only facilitated communication but has also opened up new avenues for business and trade.
When it comes to enhancing other key infrastructure and Services in the absence of the government’s resources and capacity, private companies have stepped in to invest in and contribute to the redevelopment of key infrastructures in Somalia.
In the past 20 years, local companies such as Hormuud Telecom, Salaam Somali Bank, BECO, and Buruuj -a construction company- alone are estimated to have invested over $2.5 billion in the core infrastructure of the country, in sectors such as telecommunications, energy, finance, and construction, assuring long-term economic growth and sustainable development.
Mohamed Sadiq, Director of International Relations for BECO, a privately owned electricity company, has indicated that the company has invested $170 million in developing the country’s electricity network in recent years. Furthermore, he mentioned that a $220 million investment in green energy has been signed by the company.
Thirty percent of BECO electric production comes from renewable sources and their plan is to push that number to seventy percent in the coming year 2024said Engineer Mohamud the chief technical officer of BECO speaking at the SOMINVEST conference held in Mogadishu
There are many factors that need to be in place for a country to succeed economically. One of those factors is employment. In a country where there is dire unemployment, private companies have become the engines of job creation by providing valuable employment opportunities, particularly for youth. A good example is Hormuud Telecom, the largest telecommunications company in Somalia, which has created thousands of jobs for well over 35,000 individuals, making it the largest employer in the country.
Despite the challenging circumstances in the country, the private sector is thriving and pushing the envelope of what is possible. According to Mohamed Abdi, ICT Director at Hormuud Telecom, the telecommunications sector has seen the most growth compared to other sectors, providing millions of Somalis with affordable access to mobile phones and internet services.
Abdi added that “Somalia’s internet service is now the lowest in Africa, as well as the seventh lowest in the world due to the heavy investments in 4G, 5G, and fibre networks by privately owned operators.”
To wrap up, the impact of private companies on the Somali economy is undeniable. They have become powerful agents of change, propelling economic growth, and creating jobs. Their contributions are essential to Somalia’s recovery and its journey toward stability and prosperity. As the nation continues to rebuild, it is crucial to recognize and support the role of private enterprises in unlocking the immense potential of the Somali economy. With the right investments, policies, and partnerships, private companies can continue to be transformative forces, bringing lasting positive impacts to the people of Somalia.
Source: Hormuud
