Creating New Businesses, Jobs and a Better Future in the Northern State of Somaliland

July 29, 2014

Somaliland Business Fund

  • The Somaliland Business Fund (SBF) is supporting private sector development in agriculture, livestock, fisheries, manufacturing, and green energy
  • The SBF has awarded more than $10.5 million in grants to investment projects and $10 million in matching funds since 2012
  • The SBF is part of the $29 million Somalia Private Sector Development Re-engagement Project financed by the World Bank State and Peacebuilding Fund, Danida and Department for International Development

HARGEISA, July 29, 2014 – Changing professions from orthopedic surgeon to camel farmer may not seem like progress, but for Dr. Ismail Ali, it was an opportunity to blend science with tradition and enjoy a rural lifestyle away from urban sprawl.

Ali left the Somaliland capital for land in the nearby countryside in 2009 and used modern water conservation and feed production technologies to nurture his initial herd of seven camels. The herd thrived and multiplied under his scientific guidance, and four years later, Ali established the Saafi Camel Milk Dairy with a matching grant of $49,000 from the Somaliland Business Fund (SBF). Today, Ali is the proud owner of 28 female camels providing 150 liters of milk daily, he exports the meat of male camels, and his business employs 15 laborers to help with the business during peak season.

Ali is just one of many private entrepreneurs the SBF has helped since it opened its doors in 2012. With some preference for the priority areas of fisheries, gums and resins, and solid waste management, the SBF has awarded more than $10.5 million in grants to 175 investment projects, as well as matching private investments of an additional $10 million. The majority of projects are in agriculture, livestock, fisheries, manufacturing and green energy. Larger grants above $50,000 went to support renewable energy and solid waste management projects.

When fully operational, the businesses are expected to generate at least 3,000 jobs, of which about 40% are expected to be for women, such as Qani Abdi Alin.

Alin started Dheeman Tailoring and Fashions from her house. With her $6,000 investment into the male-dominated industry, her business has grown into a $180,000 company in four years, employing six tailors and seasonal workers. Alin is now exporting her designs to other African and Middle East countries. 

" Hard work and determination are especially important for women wanting to succeed in a man’s world "

Qani Abdi Alin

The SBF is part of the $29 million Somalia Private Sector Development Re-engagement Project (SOMPREP-II) financed by the World Bank State and Peacebuilding Fund, Danida and Department for International Development. SOMPREP-II also supports banking, investment climate and regulatory reforms, as well as public- private partnerships for developing the Port of Berbera and a solid waste management initiative for Hargeisa. These initiatives are backed by continuous policy making and analytical work. Other projects supported by SOMPREP-II include:

Managing Household Waste in Hargeisa

The capital city of Hargeisa is home to nearly one million people who generate approximately 130, 000 tons of solid waste every year, much of it disposed in ad hoc and unhygienic ways. The SOMPREP-II provided support for the creation of a framework for private sector involvement, following the ratification of a policy and bylaws for solid waste management. The SBF provided support to one of the two private companies contracted to remove waste; their services now cover 30,000 households.

While residents didn’t object to paying for water and electricity, paying for garbage disposal was a new concept to some. The project undertook an innovative communications campaign using billboards across the city, leaflets, radio, and television programs to address behaviors around waste disposal. Educating the public on safe waste disposal became a topic for school dramas, street plays, a workshop for Imams and religious leaders, and an SMS campaign for mobile phone subscribers. The public awareness campaign has now attracted the attention of other private sector companies who are applying for funds to join the waste disposal business to increase coverage to unserved parts of the city.

Supporting the Fisheries Sector

With its long coastline and rich variety of fish including spiny lobsters, yellow fin tuna, swordfish and more, the fisheries sector has great potential to generate exports, employment and build coastal societies in Somalia. Although the World Bank has been involved in developing fishing and supply chains in Puntland since the 2004 tsunami, work in Somaliland under the SOMPREP-II project has been more recent. The project has led to the registrations of hundreds of fishermen and vessels, as well as the creation of a database which will also include fishing villages. Developing strong, legitimate, coastal businesses that help keep youth away from Somalia’s notorious seafaring gangs was also a key recommendation of a World Bank report on piracy in 2013.

To create a wider enabling environment for the sector, the project supported the development of a policy for hygienic fish handling and has made recommendations for improving efficiencies within concerned government ministries that will provide a basis for future development partnerships. As in Puntland, the project will also fund a public awareness campaign on the benefits of eating fish in a society which traditionally prefers a meat-based diet and will target information to retailers on the safe handling, transportation and sale of fish. An evaluation of the project earlier in the year found over 180 (out of a target of 250 by end 2014) fishers were already benefitting from improved fishing techniques and several had received grants from the SBF to expand their businesses.

Upgrading Berbera Port

An important gateway for both inland trade and exports, the port is a relatively small, traditional anchorage which is cannot serve the growing volume of goods passing through its berths. Export volumes for many products, including livestock, have more than doubled between 2008-2011 due to increased demand from Saudi Arabia and other countries.

Following a comprehensive Strategic Economic Assessment of the Port based on stakeholder consultations, the World Bank helped the government leverage $6 million from UKAID in 2013 that will be used for technical support and procurement of two tugboats with the long-term aim of attracting private investment for large-scale infrastructure expansion and introduction of specialized terminals.

“Operating on the ground in Somaliland has taught us a lot can be achieved in fragile environments with the right local partners and we are now planning to scale up the project to other parts of the country,” said Michael Engman, senior World Bank economist who heads the largest private sector development in Somalia.

“Although we account for a modest part of the Bank’s $3 billion global support program for small and medium enterprises, the impact of this project goes a long way in demonstrating new ideas, approaches and providing wherewithal in some of Africa’s least developed and virgin markets.”