SOMALILAND’S PRIVATE SECTOR.

. BACKGROUND:<BR>
<BR>
Somaliland’s economy had been completely destroyed during the civil strife <BR>
in 1988. Most of the population sought refuge in Ethiopia, leaving behind <BR>
all their possessions. In Jan. 1991 when Siad Barre’s forces were defeated, <BR>
the population of Somaliland returned to their homeland traumatised with <BR>
their homes destroyed. In the first half of 1991,euphoria later turned into <BR>
desperation as employment opportunities were none existent.<BR>
<BR>
In such an environment it was astounding how the livestock traders contrived <BR>
ways to export their livestock in the “Haj season”. Many people observed <BR>
that livestock traders would have been more efficient to run the government. <BR>
It was the small vendors who managed to start the ball rolling. This had <BR>
its impact on other small enterprises which mushroomed in the towns as the <BR>
needs of the returnees increased while the informal sector was growing at a <BR>
rapid rate to satisfy such a demand. At Burao conference of clan elders <BR>
(and the central committee of the SNM), it was decided that the north should <BR>
separate from the south of Somalia - the north being the ex-British <BR>
Somaliland. Somaliland is yet to be recognised by the International <BR>
Community and this has greatly impaired its potential for economic <BR>
reconstruction.<BR>
<BR>
The 1988 war destroyed or seriously damaged every facet of life. The state <BR>
was the first to collapse. Economic and institutional infrastructures were <BR>
destroyed. Personnel property and sources of income disappeared. The <BR>
Borama Conference” which came about as a result of the “ Sheikh <BR>
reconciliation Conference at the end of 1992 brought about change of <BR>
government. Civil war has broken out again in Hargeisa on Nov. 15 1994 and <BR>
Buroa on April 1995. This seriously damaged any advances made by the <BR>
private sector. Traders were discouraged to invest in any business venture. <BR>
A semblance of normalcy returned when the reconciliation process was <BR>
completed at the end of 1996.<BR>
<BR>
The British in their quest for expanding “the empire” brought Somaliland <BR>
under its protection, primarily to supply meat to the British garrison in <BR>
Aden. This started off the export of sheep to Aden while the re-export of <BR>
sheep from Aden to Saudi Arabia was a common practice. At the time, <BR>
Somaliland purchased its imports from Aden. The penchance of Somaliland’s <BR>
population for travelling abroad coupled with this trade with Aden grew the <BR>
seeds for an outward-looking mercantalist society. It is important to <BR>
mention here that the Eastern part of Ethiopia-inhabited by Somalis is <BR>
intertwined economically to Somaliland whereby the bulk of its trade is via <BR>
Berbera.<BR>
<BR>
In this paper, we shall briefly discuss how the private sector functions, <BR>
the conditions of trade infrastructure, the existence of trade associations <BR>
if any and what constraints hold the expansion of this sector at bay.<BR>
<
<BR>
2. TRADE INFRASTRUCTURE<BR>
<BR>
2.1 PORTS<BR>
<BR>
Berbera Port has a 650m quay, 90m in breadth and can take seven ships of <BR>
moderate size along side at any one time. The port berths were last dredged <BR>
in 1986. The port facilities were pillaged or destroyed during the civil <BR>
war. As can be deduced from statistics supplied by the Berbera Port <BR>
Authority (Tables 1&2) the volume of commodities imported or livestock <BR>
exported increased. However, this obscures the fact that many traders are <BR>
not satisfied with the services rendered by the Port Authority. <BR>
Mismanagement, overstaffing and inept personnel are mainly to be blamed for <BR>
the poor services. The port’s problems should be tackled by the authorities <BR>
concerned or its services will deteriorate further. Although this was the <BR>
subject of enquiry by the Ministries of Finance and Commerce, their <BR>
recommendations are yet to be executed by the Port Authority. <BR>
Unfortunately, if matters remain as they are now, the Port Authority will be <BR>
incapable of maintaining the existing facilities and services as they are.<BR>
<BR>
Other ports such as Mait and Hees in the East, Zeila and Lughaya in the West <BR>
are suited only to small boats and are closed during the hot season June to <BR>
September. Lawyado at the border with Djibouti is a busy port used by <BR>
trucks - and handles some of the imports such as fuel and exports to <BR>
Djibouti. (The traffic through Lawyado decreased due to the introduction of <BR>
taxes instead of transit fees by Djibouti government).<BR>
<BR>
2.2 AIRPORTS<BR>
<BR>
The Berbera airport has the longest airstrip built for military purposes by <BR>
the Russians in the 1970s and renovated by the Americans during the 1980s in <BR>
the Cold War era. But now is used by civilian aircrafts. Both Hargeisa and <BR>
Berbera’s airports were ransacked during the civil war. Equipments vanished <BR>
while physical structures were damaged or destroyed. Some of the physical <BR>
structures at Hargeisa airport were repaired. During the civil conflict of <BR>
1994 - 1996 Borama and Kalabaydh ( about seventy five kilometres west of <BR>
Hargeisa) were used as alternative airports by both the passenger and cargo <BR>
planes. Physical structures as tower controls were constructed but both lack <BR>
a tarmac run - way or a passenger terminal. Buroa airport is under <BR>
construction now . Even with the reopening of Hargeisa airport, the <BR>
Kalabaydh airport retains a substantial volume of the cargo trade - which <BR>
includes “Kat” transportation. Passenger services at all airports are <BR>
rudimentary or non - existent.<BR>
<BR>
2.3 AIRLINES<BR>
<BR>
While airports are basically lacking the structures ( terminals and towers) <BR>
the number of airlines and their flights increased dramatically during the <BR>
last two years . The cargo trade by air has flourished during this period. <BR>
Most of the aircrafts used by the airlines are Russian made and manned by <BR>
East Europeans; the mechanical engineer usually flies with the aircraft so <BR>
as to be at hand whenever a problem arises. Daallo Airlines, a pioneer in <BR>
this field now flies to many destinations in Somaliland, Somalia, Djibouti, <BR>
Dubai, Sharjah, Jeddah, Nairobi & Addis Ababa and has agents in several <BR>
cities in Europe and N/America. Djibouti Airlines owned by Djibouti <BR>
nationals also flies to most destinations but is crippled by management and <BR>
technical problems. Intersomal is limited to Somaliland and Sharjah and <BR>
started flights to Djibouti. Recently Star and Damal airlines started their <BR>
operations in 1998 although under different names with cargo trade Passenger <BR>
services are now a major part of their operations. A list of their prices <BR>
and destinations is summarised in table 2-I .<BR>
<BR>
The airlines are frequented by traders who mostly go to Dubai and transit <BR>
passengers to and from Europe & North America. Statistics of such trade are <BR>
not available but is large and still growing.<BR>
<BR>
<BR>
TABLE 2-1 AIRLINES OPERATE IN SOMALILAND:<BR>
<BR>
<BR>
Airline Type of Company HQ. Branches /Offices Passenger Prices<BR>
Daalo Partnership Dubai Somaliland -6 Dubai <> Hargeisa<BR>
Somalia -3 $340.00<BR>
Jeddah<BR>
Djibouti<BR>
Damal Partnership Dubai Somaliland - 3 Dubai <> Hargeisa<BR>
$330.00<BR>
Star Private Dubai Somaliland - 4 Dubai <> Hargeisa<BR>
$330.00<BR>
Intersomal Private Dubai Somaliland - Dubai <> Hargeisa<BR>
$270.00<BR>
<BR>
<BR>
* Information supplied by Airline offices in Hargeisa Valid on June 2000<BR>
<BR>
<BR>
2.4 Sea and Land Transport<BR>
<BR>
This is in the hands of private persons or companies, the sea transport <BR>
mostly owned by foreigners.<BR>
<BR>
Tarmac Roads are limited to Dila-Gebelay-Hargeisa –Berbera-Buroa-Lasanod <BR>
road which is approximately 840 km. Most of the other roads are poor and <BR>
impassable during the rainy season. This not only hinders development of <BR>
these areas which lack a proper road but results in the depopulation and <BR>
massive rural movement to the urban areas in the vicinity of towns along the <BR>
road.<BR>
<BR>
Sanag region with fertile soil and abundant water has the capacity to <BR>
produce different types of fruits and vegetables- for local use and <BR>
export-as well as food commodities for consumption in somaliland, but is <BR>
seriously handicapped by lack of roads and is cut off from the rest of <BR>
Somaliland.<BR>
<BR>
There is also difficulty in shipping whereby the ships or boats used for <BR>
transportation are old and uninsurable. Many businessmen lost their <BR>
merchandise in the seas or goods were brought to their destination after six <BR>
months to one year from the agreed date of arrival. The shipping agents in <BR>
Berbera and Dubai should use strict-codes of conduct as well as attempting <BR>
to get insurable vessels. The premium might be high in the start but this is <BR>
bound to come down when Berbera port proves to be secure and efficient.<BR>
<BR>
2.5 Communication<BR>
<BR>
Somaliland never had a telecommunication system and traders were forced to <BR>
Mogadishu for their communication with the outside world . Hargeisa had a <BR>
radiophone owned by the government and the calls went through Mogadishu. <BR>
For the traders in Somaliland the system was rustic, slow and inconvenient. <BR>
During the early years of the 90’s the radiophone mushroomed in all centres <BR>
of trade and even remote villages. It was only in 1994 that the first <BR>
telecommunication company (STC) started its operations in June 1994. Before <BR>
this date traders travelled to Djibouti to contact their foreign partners. <BR>
Ordinary people also travelled to Djibouti or Addis Ababa to talk to their <BR>
relatives in foreign countries. STC services ceased at the outbreak of the <BR>
civil war in late 1994. Soltelco appeared at the picture in the beginning of <BR>
1995 to fill the void. STC re-started its services at the beginning of <BR>
1996. In their quest to capture the market, both companies reduced prices, <BR>
while services improved. Other telecom companies such as Barakat and <BR>
Aerolight also started their services, in 1998 Both use the GSM system and <BR>
facilitated for the population of Somaliland to contact other towns at <BR>
relatively reasonable prices. The internet and electronic mail services are <BR>
also introduced by all companies at the price of $6.00 per hour. As STC is <BR>
a joint stock company, it has opened new horizons for private investment in <BR>
Somaliland. Joint stock enterprises are a new Phenomenon in Somaliland. <BR>
When the capital outlay for any enterprise exceeds the half million dollars <BR>
mark the need for share-holders becomes paramount as nobody is prepared to <BR>
risk such an amount by himself. The notion of joint stock companies spread <BR>
to the other sectors of the economy such as the remittance agencies.<BR>
<BR>
<BR>
3.1 THE EXPORT & IMPORT TRADE<BR>
<BR>
<BR>
It is very difficult to compute the balance of payment of the country from <BR>
the statistics available which are by no means complete . Exports through <BR>
other ports other than Berbera and airports are not available. Likewise the <BR>
amount of money remitted by Somalilanders abroad is only an estimation. As <BR>
most of the population in Somaliland are pastoralists, the livestock <BR>
industry is the largest foreign currency earner. The net value of the <BR>
exports are not known but roughly could be calculated from the figures shown <BR>
in table 3-I . The somaliland two years development plan gives the figure <BR>
of 176.6 million US Dollar. Other exports include hides & skins and <BR>
frankincense and myrrh. The principle export market of sheep and goats is <BR>
Saudi Arabia but this has been banned by Saudi Arabian authorities in Feb. <BR>
1998, by claiming that Rift Valley Fever was found in some parts of <BR>
Somalia/Somaliland. However, when this was ruled out by UN agencies who <BR>
travelled and examined animals and persons in the alleged areas and despite <BR>
appeals by the league of Arab Nations the ban still stands. The sudden loss <BR>
of such traditional market was a heavy blow to the fragile economy of <BR>
Somaliland as there are no organised association for sheep exporters. The <BR>
export of sheep, goats and camels has decreased substantially as can be <BR>
discerned from the statistics in table 3-1.<BR>

<BR>
Although the livestock industry is the backbone of the economy of Somaliland <BR>
and the engine of growth it has been neglected by the government agencies <BR>
and the traders who took things for granted.<BR>
<BR>
The import trade on the other hand was dominated by Djibouti nationals who <BR>
brought to Berbera large shipments of rice, sugar, flour etc in the early <BR>
1990s but had decreased since then partly because gross profits dwindled as <BR>
taxes wire introduced by the government of Somaliland. Dollar prices of <BR>
imports of basic foods remained constant throughout 1993-1997. However <BR>
prices went down in 1997 – 2000 and now are about 80% of the 93 – 97 prices.<BR>
<BR>
<BR>
3.2 SMALL-SCALE BUSINESS<BR>
<BR>
This sector which comprises formal as well as informal small businesses <BR>
contributed to the socio-economic life in Somaliland during the last seven <BR>
years. As a sector which provided employment it has also contributed to the <BR>
retention of skills and/or skill creation (apprenticeships). In some <BR>
instances it took over or complemented public sector functions such as, <BR>
education, health, information and communication service. This sector <BR>
includes all the activities tabulated in Table 3-3.<BR>
<BR>
<BR>
Enterprises & Services Provided (1)<BR>
Enterprise Services<BR>
1. Metal work, Blacksmiths, Auto-repair workshops, electronic repair, <BR>
shoe-repairing Services repairs or making of implements<BR>
2. Woodworks Wood cutting, shaping, drilling for making furniture<BR>
3. Electronic bakeries Making bread & pastries<BR>
4. Brick Making Making bricks etc.<BR>
5. Power - Generation Power Supply<BR>
6. Grain - Milling Processing<BR>
7. Tailoring Tailoring Services<BR>
8. Radio phone/ Money transfers Communication and Money transfers<BR>
9. News Papers Dissemination of information<BR>
10. Pottery Making Household wares<BR>
11. Buses, Taxis, Donkey carts, Tippers & Trucks Transportation<BR>
12. Restaurants Food Preparation<BR>
13 Electric, Spare parts & Construction material shops, cold drinks & <BR>
snakes, fuel lubricant stations, pharmacies, bookshops, videos/photo studios <BR>
hardware and cosmetic shops, minimarkets Retail<BR>
14. Private Clinics Health Services<BR>
15. Private Schools Education<BR>
16. Construction Contractors Construction<BR>
<BR>
The characteristics and dynamics of the small-scale business ventures are <BR>
basically similar in all towns of Somaliland. These business are mostly <BR>
owned by individuals or families, 43% and 38% respectively whereas 18% are <BR>
partnerships(2). Petty trade is dominated by women.<BR>
<BR>
Some small businesses are for making a subsistence for destitute families. <BR>
The capital outlays for such businesses are small ranging from $ 20 - $ <BR>
1000. However, capital outlays range from $ 1,000 - $ 100,000 in the <BR>
larger businesses. The capital invested in the small manufacturing sector is <BR>
low vis - a - vis production demands. One of the most critical problems <BR>
facing the small manufacturing enterprises is spare - part shortages and the <BR>
difficulties and delays encountered in their procurement.<BR>
Somaliland totally depends on imports for their basic needs such as food, <BR>
shelter etc. Import substitution industries is not a priority for <BR>
Somaliland businessmen even when the raw materials are available. This is <BR>
partly explained by the fact that Djibouti businessmen dominate the import <BR>
sector and partly by the ignorance of somalilander’s of the opportunities <BR>
that exist. Investment in this field could play a vital role in the growth <BR>
of the economy.<BR>
<BR>
Substitutes could be produced locally for some of the food commodities and <BR>
might require aggressive marketing and even nationalistic appeals. Apart <BR>
from saving badly needed foreign currency, such industries by horizontal and <BR>
vertical linkages would make possible other industries to spring up and <BR>
thereby mitigate the serious unemployment problem that exists now.<BR>
<BR>
<BR>
4. TRADE FINANCE<BR>
<BR>
Financial Institutions do not exist in Somaliland as known in other parts of <BR>
the world . The Bank of Somaliland - a central bank - and its subsidiaries <BR>
which are known as commercial banks are limited to towns in the West while <BR>
the first branch in the East, started its operations in Buroa at the <BR>
beginning of 1998. It’s banking services are limited to and mainly deals <BR>
with government and local government revenues. The Somaliland shilling had <BR>
been introduced in October, 1994 and coincided with the outbreak of civil <BR>
war in Hargeisa. The government needed more expenditure for the war effort <BR>
while the Bank resorted to printing more money in the first two years of the <BR>
introduction of the new currency. This resulted in hyper-inflation. The <BR>
Somaliland shilling (SL) was fixed at 50sl to one US$ in October, 1994. The <BR>
rate of exchange is now 3400,00 S/L to the dollar (as of June 2000). This <BR>
brought havoc on the weak economy of Somaliland and wiped out the marginal <BR>
businesses and small traders. The small-scale businesses are financed by <BR>
the following methods:-<BR>
<BR>
1) Savings<BR>
2) Relatives or friends abroad.<BR>
3) Sale of property or livestock.<BR>
4) Aid agencies through local NGOs.<BR>
<BR>
As the propensity to save is very low, the first method of financing is <BR>
negligible. The last category is also small although proper statistics are <BR>
lacking. The credit-revolving schemes which are used by several NGOs <BR>
(mostly women NGOs) target women in general and the destitute in particular. <BR>
The loans are small ($300,00 - 1.000,00$) but was reported by a couple of <BR>
NGOs as being successful.<BR>
<BR>
1. Haybe, A/llahi & Dr. Abokor; Assesment Small-Scale Industries and <BR>
business ventures in Hargeisa & Borama, Hargeisa, Feb. 1996.<BR>
2. IBID, page 7<BR>
<BR>
<BR>
Some of the telecommunications companies received part of their finance from <BR>
their foreign partners. This joint financing is mostly limited to 25% from <BR>
the foreign partners. This only attests to the fact that foreign companies <BR>
or individuals are not averse to investing in Somaliland. Some of the Saudi <BR>
live-stock importers used to finance some of their partners to the tune of <BR>
one million dollars.<BR>
<BR>
Remittances of money was used sometimes as a source of trade financing <BR>
particularly prior to 1988. At the time the free movement of foreign <BR>
exchange was prohibited and remittance agencies went to the source and <BR>
invested the money entrusted with them in consumer goods. They paid the <BR>
money to the persons it was addressed to and charged them nothing. <BR>
However, this practice ceased with the acceptance of free movement of <BR>
foreign currency by the Somaliland government.<BR>
<BR>
The second category is probably the largest means of financing.<BR>
In the oil boom years, thousands of Somalilanders emigrated to the Gulf <BR>
states in search of jobs. The migrant workers sent back home to their <BR>
relatives substantial amount of their earnings. This money was used :-<BR>
1) for daily needs of the family or relatives<BR>
2) for investment in trade or property.<BR>
<BR>
The migrant workers were followed by hundreds of thousands that sought <BR>
refuge in Europe, North America, Australia etc in 1988 - 1995. The refugees <BR>
being familiar with the conditions back home, reduced their needs to the <BR>
minimum so as to salvage families and relatives left in the camps. The <BR>
remittance agencies which number more than twenty, supplied such services ( <BR>
transfer of money) . It is difficult to compute the total amount of this <BR>
remittance but was estimated at 150 million dollars per year This does not <BR>
include money sent though other means. The study growth of such agencies <BR>
corroborates the increase in transactions.<BR>
<BR>
The Largest Remittance comes from European countries specially U.K, followed <BR>
by the Arab countries and N/American.<BR>
<BR>
Some of these agencies are large such as Barakat and Dahabshil. It is <BR>
possible that they could play a more active role in the development process <BR>
of this country. This can be achieved by expanding their services, such as <BR>
opening accounts for customers, issuing cheques and giving credit to small <BR>
businesses who can provide a collateral for such a loan.<BR>
<BR>
<
<BR>
5. BUSINESS ASSOCIATIONS:<BR>
<BR>
<BR>
In the years of the dictatorship, all associations were banned and <BR>
co-operatives created by the regime took their place. These were political <BR>
associations who merely supported the decisions made by the regime and never <BR>
represented their interests. Their heads were hand-picked by the government. <BR>
In the years that followed the downfall of the dictatorship, anarchy <BR>
ensued . Suspicion was rife among the populace and individuals and <BR>
businessmen strove for getting the favour of the government. As many people <BR>
were pauperised, they tried to get their starting capital from the <BR>
government directly or indirectly .<BR>
<BR>
The livestock industry being the largest failed to make such associations. <BR>
As the biggest market for sheep and goats was Jeizan Saudi Arabia, or <BR>
through Yemen they related many incidents where they have been robbed <BR>
especially in Yemen or were coerced to accept commodities made in Yemen <BR>
regardless of their demand back home such as biscuits bottled water,soft <BR>
drinks etc. for payment it was also evident that two big exporters <BR>
monopolised the market and were favoured by the government. They paid five <BR>
dollars for the head of sheep or goat while others paid seven dollars .This <BR>
cartel did not see the creation of associations as their interest as <BR>
believed by small traders. Big traders had access to government ministers <BR>
and the president. They belied on the true conditions that existed in the <BR>
live-stock export sector. However such a grotesque injustice was revised in <BR>
1997 and the foreign exchange asked by the government was lowered .It was <BR>
only the cattle traders who conceived their situation and realised that <BR>
their mishap will continue if they don’t organise themselves into an <BR>
association. The cattle –traders association has now a committee of thirteen <BR>
and organise their export by controlling the influx of the market as well <BR>
as establishing a queuing system where every exporter knows beforehand when <BR>
his cattle will be ready for shipment. They are also planing to open <BR>
offices in all areas where cattle exporters exist.<BR>
<BR>
As related by the ministry of commerce, they assist businessmen through the <BR>
chamber by holding seminars and workshops in the fields of joint-venture, <BR>
joint stock companies etc.<BR>
<BR>
The ministry also tried to organise livestock traders so as to stop the <BR>
burgeoning supply which lowered the prices for sheep and goats. The <BR>
ministry planned for 14,000 heads to be exported every three days ie, about <BR>
1,700,000 heads per year. This was foiled by the exports so as to take <BR>
advantage of the situation. This did not continue as the businessmen felt <BR>
that they might be replaced by the Bosaso traders. The cattle prices also <BR>
went down because of a decrease in their demand. Other business association <BR>
include bus drivers (Hargeisa) truck owners and several of the petty <BR>
traders. However their organisational structure is weak and their <BR>
perception of their relationship vis-à-vis the government, the general <BR>
public, local government etc. is low<BR>
>
<BR>
6. MARKETING AND PROMOTION<BR>
<BR>
<BR>
Promotion of trade is a technique rarely understood by many of the <BR>
businessmen in Somaliland. Promotion of one’s product includes :<BR>
persuasive advertising, quality control schemes ,improving on quality, <BR>
perseverance on satisfying the customers, being informed about the new <BR>
technologies and methods etc, As business association could be of great <BR>
assistance in most of the business ventures ,it is essential that the <BR>
organisational structure of an entity or a group of entities should include <BR>
a department for obtaining such an objective. In business nothing could be <BR>
taken for granted as attested by the bureaucratic decision of the Saudi <BR>
Arabian authorities to ban the Somali live stock from entering its ports.<BR>
<BR>
Many respondents to the question of why live-stock traders could not look <BR>
for other markets observed that it was not necessary since they had been <BR>
satisfied with the Saudi market . For other products like frankincense and <BR>
myrrh, most of the traders sell at low prices at Djibouti because of their <BR>
ignorance of other markets. Hides and skins could also fetch much higher <BR>
prices if tanned and sent to other markets.<BR>
<BR>
Some fairs were held in Hargeisa by Yemen and Iran nut Somaliland traders do <BR>
not participate in any fairs outside the country. Participating in fairs <BR>
held in places like Dubai would have greatly enhanced the promotion of local <BR>
products.<BR>
<BR>
7. CONCLUSION<BR>
<BR>
7-1 CONSTRAINTS AND LIMITATIONS<BR>
<BR>
(a)- The lack of any financial institution limits the expansion of trade in <BR>
all sector of the economy. Banks are essential in the facilitation of trade <BR>
and the introduction of effective monetary policy. This might contribute to <BR>
the rate of exchange being study within acceptable limits. The problem of <BR>
settling all transactions in cash is highly insecure and dangerous.<BR>
<BR>
(b)- Management skills are low while book-keeping and accounting <BR>
procedures are rarely used by enterprises even with large capital outlays. <BR>
This is attested by the break-up of partnership in very short periods <BR>
and the aversion of normal people to partnerships. On the other hand the <BR>
individual or family businesses have a high rate of bankruptcy.<BR>
<BR>
(c)- Written agreements are usually avoided by the business people including <BR>
credits. Although this principle is enshrined in the Islamic religion, the <BR>
deeply rooted cultural suspicion of written documents over rides the <BR>
Islamic concept of written agreement between parties. This unnecessarily <BR>
results in disagreements conflict and long court proceedings (even courts <BR>
are not properly equipped as they lack competent personal ). As the staff of <BR>
the courts are very lowly paid corruption and nepotism had become a common <BR>
practice.<BR>
<BR>
(d). Physical trade infrastructure is far from satisfactory and needs a very <BR>
large investment to refurbish such structures.<BR>
<BR>
(e)- The government needs a concrete policy towards the private sector as <BR>
most of its actions seem to be desultory and most times infringe on the <BR>
rights of individuals or businesses given by the constitution.<BR>
<BR>
(f)- The lack of commercial laws (contracts, partnerships, company laws, <BR>
foreign investment laws etc) greatly limits the expansion of many sectors.<BR>
These laws even if they exist are neither effective nor divulged to the <BR>
public.<BR>
<BR>
(g)- There is a potential for developing the fishing industry, mainly for <BR>
export. However, as all the cold storage facilities at Berbera and Zeila <BR>
were destroyed, this industry is now limited to the export of shark fins and <BR>
catching fish on a very small scale while other governments take advantage <BR>
of this by catching fish in the somaliland seas unlawfully. Investment in <BR>
this sector could be highly productive and capital remains to be the biggest <BR>
constraint.<BR>
<BR>
<BR>
(h)- The airlines as well as Telecom. companies are hindered by the lack of <BR>
co-operation in the sphere of endorsing each other’s tickets for the former <BR>
or customers of different companies being able to communicate locally for <BR>
the latter. Although the companies mentioned above have already started on <BR>
such subjects as collaboration, merger etc. only Soltelco and Aerolite <BR>
succeeded in interconnecting their local services.<BR>
<BR>
7-2. RECOMMENDATIONS<BR>
<BR>
(I)- The ministries concerned with trade and finance should co-ordinate <BR>
their policies and replace their staff by employing more competent and <BR>
experienced personnel. The physical trade infrastructure should be improved, <BR>
i.e. the government should invest in the infrastructure not merely by <BR>
appealing to foreign donors but also by effectively collecting its revenues <BR>
and delivering a better service for the tax-payer. Streamlining of costs in <BR>
ports and airports and giving sufficient pay to their personnel (chosen on <BR>
merit, experience, education etc) will make these entities solvent and <BR>
enable them to improve on their services and equipment as well as <BR>
infrastructure .<BR>
<BR>
(ii)- The companies in the same sector should collaborate in their business <BR>
such as establishing an information centre while co-operation in all fields <BR>
possible is paramount.<BR>
<BR>
(iii)- The lack of management skills seriously militates against development <BR>
of all sectors. The legacy left by the civil war includes a serious brain <BR>
drain that affects the public as well as the private sector. The Somali <BR>
Diaspora should be addressed and attracted to play a positive role in the <BR>
development of their home-land.<BR>
<BR>
<BR>
(iv)- Workshops and seminars for management of small businesses<BR>
accounting, book-keeping etc should be organised by ministries concerned, <BR>
international and local NGOs. This might also include educating the <BR>
business people on the principles of joint ventures , partnerships , join <BR>
stock companies, written agreements , marketing etc. At the same time <BR>
technical and vocational schools linked to local industries as well as <BR>
apprenticeships should be a priority in the development process.<BR>
The Arab/Islamic aid agencies and partners should be addressed in assisting <BR>
in this field.<BR>
<BR>
(v). The government should promulgate all commercial laws and disseminate <BR>
them to the public. Tariffs charged at ports and airports should be widely <BR>
known to the public. Transparency will minimise the evasion of taxes, <BR>
corruption and misunderstandings among concerned parties.<BR>
<BR>
<BR>
(vi)- Business association should be encouraged by the government <BR>
authorities and business people should be informed through the public media<BR>
and workshops mentioned above of the advantages f such associations.<BR>
The chamber of commerce should open offices in all the main towns as well as <BR>
having agents abroad (especially the Gulf states ). The Arab chambers of <BR>
commerce should assist in this endeavour when and if the chamber of <BR>
commerce of Somaliland proves capable of doing its job. Trade associations <BR>
should not be seen as antagonistic to the chamber of commerce but <BR>
complementary to the reconstruction of the chamber. These should also <BR>
assist in taking advantage of any prefrential agreements such as the Lome <BR>
convention for ACP countries or any other schemes.<BR>
<BR>
(vii)- Trade partners in Arab countries should be aware of the horrendous<BR>
problems that face businesses in Somaliland and should abide by the <BR>
Islamic, humanitarian and international laws. For this the Arab chambers <BR>
of commerce should play a leading role in the improvement of relations and <BR>
encouraging their members to play more active role in the development <BR>
process of the private sector.<BR>
<BR>
<BR>
(viii)- Industrial relations is a subject that will surely arise as <BR>
development of this sector grows. It should be addressed from the start as <BR>
this might alleviate some of the disputes ;that might later impede progress.<BR>
<
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