Several steps are being taken to improve trade and investment in Somalia. Access to global markets is particularly high in sectors such as fisheries and agriculture. Somalia’s integration with the Horn of Africa offers better prospects for trade. Thanks to this solidarity, trade-in Somalia has been greatly boosted. This has greatly improved the economy of Somalia.
Somalia is facing many challenges in these activities. Nevertheless, Somalia offers significant opportunities for foreign investment. Somalia is taking several initiatives to attract foreign investment, particularly in the agriculture and energy sectors. The Somali government is making efforts to improve trade policies and investment to increase foreign investment and promote long-term economic growth in Somalia.
Strategic Location and Trade Opportunities
Somalia is essential in terms of trade. It has transit points for many countries. Its ports connect Somalia with other countries for commercial purposes. Somalia has a strategic location for trade with the Horn of Africa. Somalia is the only country that has a trade route connecting Asia, the Middle East, and Somalia.
The port of Mogadishu, the capital of Somalia, is also known as one of the most important transit points in terms of trade. Due to all these reasons, Somalia’s trade volume in 2020 increased by more than 2 billion dollars. If the political instability and terrorism end here, this country can also join the list of big countries in terms of trade.
Key Sectors for Investment: Agriculture, Fisheries, and Energy
Somalia is a backward country but by nature, it has many natural resources. Despite having many natural resources, Somalia is deprived of utilizing them. Agriculture accounts for 60% of Somalia’s total GDP. Apart from this, the fishing industry here is one of the untapped longest coasts of Africa.
When it comes to energy, Somalia has excellent weather, which has resources for generating energy from solar energy, hydropower, and oil, but these are untapped. Despite having all these resources, Somalia is not utilizing these resources due to political instability and conflicts here. If these challenges are overcome, the conditions of Somalia can be improved. Foreign international investment is also very important.
Government Reforms and Investment Incentives
If we talk about the steps taken for business and commercial improvement in Somalia, there is no doubt that the government here is trying day and night for the economic and economic development of Somalia. Somalia is a backward country due to some serious challenges here, but it does not lack resources at all. A few years ago, in 2020, the World Bank released a list in terms of doing business, in which it was stated that Somalia is at number 173 out of 190 among countries that create ease of doing business.
This is surprising because two decades ago, Somalia was ranked last. Among the main efforts have been reforms in Somalia’s tax department and the establishment of Special Economic Zones (SEZs). Foreign investors did not come here, but now according to recent surveys, foreign investment has increased to 500 million per year. All these positive indicators show the improvement of Somalia.
Finally, Somalia is certainly a backward country, but it has trade markets, important ports, excellent sectors of agriculture, energy, and fisheries, and all the natural resources. This country is lagging behind many other countries due to serious problems here. Among its major challenges are political instability, terrorism, and conflicts. If these challenges are overcome, the economic and financial condition of Somalia can be improved. And foreign investors can also come here.
