Tag Archives: Somalia

Somalia – security reshuffle after palace attack

Dalsan Radio/allAfrica

Somalia: Abdiweli Reshuffles Security Docket After Al Shabaab Presidential Attack
9 JULY 2014

A pickup truck carrying soldiers of the Somali National Army.
Somali prime minister Abdiweli Sheikh Ahmed has sacked the police commissioner and the director of Somali intelligence following Al Shabaab militant group attack on the presidential palace in the capital Mogadishu.

Mohamed Sheik Ismail and Mohamed Abdullahi Hamud are the new police commissioner and interim intelligence chief respectively after a letter from PM Abdiweli office immediately sacked both police commissioner and intelligence director.

Khalif Ahmed Ergo was also appointed as the new internal security minister with immediate effect after former minister Abdullahi Gulet resigned months ago.

The PM has also instructed various police chiefs in Banadir province which the city is part of to work together to improve the security of the capital Mogadishu.

The PM move comes following Al Shabaab militant group assault on the heavy fortified Mogadishu presidential palace famously known as Villa Somalia on Tuesday.



Somalia – Al Shabab attack presidential palace


Al Shabab has carried out an armed assault on Somalia’s presidential palace, penetrating the fortified complex. Security had been increased after al Shabab attacked the parliament building over the weekend.

Mogadischu Somalia Regierungssoldaten Juli 2014

The Shabab attackers reportedly blew themselves up after penetrating the presidential palace, known as Villa Somalia, on Tuesday. Officials reported that the internationally backed president, Hassan Sheikh Mohamud, elsewhere at the time of the attack, remained safe under the protection of guards from the African Union’s 22,000-strong AMISOM force.

“There were at least nine attackers, all have been killed, and the situation is under control, the attack is over,” security official Abdi Ahmed said on Tuesday. “There were eight blasts towards the end of the fighting, believed to have been suicide vests. They detonated themselves.”

Police said the attackers had launched a two-pronged assault on the complex, setting off a car bomb at the rear of the compound and then storming in via another entrance. On Tuesday, a Shabab spokesman confirmed that the al Qaeda-linked group had launched the attack, and claimed fighters managed to seize the president’s office inside the compound.

“Our commandos are inside the so-called presidential office,” Shabab spokesman Abdulaziz Abu Musab told the news agency AFP on Tuesday. “We are in control of the headquarters of the apostate regime.” He had added that “the enemy suffered high casualties during the operation, which is ongoing.”

‘The peaceful state’

Witnesses told news agencies that the heavy gunfire and several blasts died down about an hour after it began. The speaker of the parliament was reported to be inside the presidential palace at the time of the attack but was said to be safe after.

Nicholas Kay, the UN’s top envoy to the country, condemned the attack, calling it “an attempt to rob Somalis of the peaceful state they deserve.” Kay added that “terror will not win.”

In February, Shabab fighters also assaulted the presidential palace, penetrating the complex before guards killed them. In May, the group also launched a similar suicide attack against the national parliament while in session, killing several guards and staff before AMISOM and Somali government forces restored control.

Over the weekend, al Shabab claimed a car bomb attack outside of Somalia’s parliament (aftermath pictured). Days before, al Shabab killed a legislator.

Al Shabab has also claimed a host of attacks abroad in recent days.

mkg/rc (Reuters, AFP, dpa, AP) DW

Somalia – how to deal with Al Shabab defectors


No easy way forward for Al-Shabab defectors

BAIDOA, 12 June 2014 (IRIN) – Anwar Ahmed*, 50, an Al-Shabab defector, was drawn to Somalia’s Salafist armed group both by the promise of a wage and a belief in the Islamic ways of “rights and justice for all”.

Stationed in the Bakool provincial capital of Hudur, Ahmed worked mainly as a sentry, while also corralling residents to answer the call to prayer, collecting road taxes – up to US$300 for freight trucks and between $10 and $20 for cars – and assisting in the collection of zakat, the 2.5 percent tax on annual earnings paid in either cash or kind.

Ahmed’s own pay was modest: $20 or $30 every few months during his three year stint with the armed group, never enough to provide for his four children and wife. “ On a personal level, there was nothing to gain,” Ahmed recalls. “I thought Al-Shabab were real about Islam’s call for justice for all. But it was based on a big lie. The commanders got it all.”

Disillusioned, he made his way to Baidoa, crossing the hills, surviving on the generosity of herders who gave him water and milk. After being screened by Somali intelligence officials, he entered an ex-combatants programme.

The former killer

Gabeyre Mohamed*, 28, was a member of the elite Amniyat, Al-Shabab’s “secret service”, whose operatives were reportedly implicated in Nairobi’s Westgate mall attack in 2013.

Upgraded from being an Al-Shabab foot soldier to joining a five person Amniyat cell, Mohamed acknowledges it was an honour to be chosen, but despised his role as a killer. “I was given a pistol, a name and a picture of them and sent to kill them. I always lied and came back and said this man is nowhere to be seen.” His conscience told him to leave. “I made up my mind, as I believed I was being sent to kill innocent people.”

“I believed I was being sent to kill innocent people”

At the Baidoa ex-combatant centre he gets no money, but three meals a day, and the hope of a driver’s licence and an education. “I will not return to Al-Shabab,” Mohamed says. “Even the promise of heaven will never make me go back.”

Ahmed and Mohamed are among those who have left Al-Shabab and sought to make a new life. But working out what to do with Al-Shabab defectors is not easy either for the Somali authorities or for the UN Assistance Mission in Somalia (UNSOM).

Waldemar Vrey is director of UNSOM’s  Rule of Law and Security Institutions Group (ROLSIG), with part of its brief being to deal with former Al-Shabab ex-combatants.

Vrey describes the work as “delicate”. Applying Disarmament, Demobilisation and Reintegration (DDR) to an organization officially declared a terrorist group has its own difficulties, not least when it comes to gaining donor support.

High risk and low risk

Under current procedures, defectors from Al-Shabab are vetted by the National Intelligence and Security Agency (NISA) and the AU Mission in Somalia (AMISOM). They are classed as either “high risk” or “low risk”.

Vrey says around 1,000 “low risk” ex-fighters have received some rehabilitation and skills training. Those who want to go home can do so “if it is agreeable to the communities”.

Vrey points out that there is no shortage of replacements for those wanting to quit Al-Shabab. “As 1,000 defect, another 1,000 are recruited. It is not as though recruitment will stand still.” Current estimates of the number of active Al-Shabab fighters vary from 5,000 to 9,000.

It is with the more experienced fighters that the dilemmas become more serious. “The high-end guys, the ones that are hardened, the ones NISA feels cannot go through the rehab process, they have to go through a judicial process,” Vrey points out. “The majority of them are sitting in jail and it is with them we have stumbling blocks.”

The trials have brought new dangers. There was a series of assassinations of civilian judges presiding over court cases for high risk Al-Shabab fighters, who had either defected or been captured. The solution of the authorities was to bring in military tribunals. But the tribunals’ readiness to apply the death penalty drew disapproval from the international community and human rights organizations.

A road-map for ex-combatants

In an attempt to find lasting solutions for fighters who want a new start, in April 2013, the Transitional Federal Government published a road map for a National Programme for the Treatment and handling of Disengaging Combatants and Youth at Risk in Somalia.

The initiative came in the wake of significant military victories by AMISOM and Somali national forces against Al-Shabab in Mogadishu in August 2011, Belet Weyne in Hiraan province in February 2012 and then with the securing of Baidoa and the southern port of Kismayo.

Four Transitional Facilities (TF) for low risk ex-Al-Shabab fighters are in various phases of development, in Mogadishu, Baidoa, Belet Weyne and Kismayo.

A NISA official in Kismayo, who declined to be identified, told IRIN that former combatants are examined on the basis of their previous history and ideological convictions, which determine the kind of threat they may still pose. The process can be long and laborious. “The longest screening I was involved in took about one month. Some might tell the truth immediately. Others might not say anything, while in other cases stories will change.”

UNSOM’s legal considerations associated with rehabilitation of ex-Al-Shabab fighters, has provided for interventions from outside the mission, with a three man unit, known as the Serendi team – named after Mogadishu’s TF – funded by the Norwegian, Danish and Spanish governments.

“They see us as disassembling their force and we are a target”

Serendi team members include a Special Forces bodyguard and a European-based Somali engineer who fled Somalia during the civil conflict of the 1990s, back on a two-year sabbatical.

Team members did not want to be identified, highlighting the threat from Al-Shabab. “They see us as disassembling their force and we are a target”, one pointed out. The same dangers apply to everyone involved in DDR. A Serendi team member told IRIN that around 70 percent of Al-Shabab disengaged fighters who had been screened had been classed as low risk.

The Serendi team’s methods blend Countering Violent Extremism (CVE) techniques, including individual mentoring and the sharing of experiences between the ex-Al-Shabab, with skills training programmes for livelihoods. DDR experts say building-up self-esteem for ex-fighters is vital.

The militias outside Al-Shabab

Vrey notes that the focus on the war against Al-Shabab has overlooked the activities of other militias. Having profited from two decades of Somalia’s breaking down into a failed state, some groups continue to prosper.

They include clan-based militias, through to the private armies of warlords and business concerns raising their own armed forces to protect their financial interests.

A February 2014 briefing by the Somalia and Eritrea Monitoring Group highlighted dangers of small-arms proliferation following the partial lifting of the country’s arms embargo and the scale of violence used by different militias.

The briefing noted “indiscriminate attacks” by Abgaal and Habar Gedir clan-based armed forces on civilian areas in December 2013, “resulting in the killing and wounding of children, women, and unarmed young men; rape; looting and burning of villages, and extrajudicial executions.”

Vrey said the advantage of other armed groups was they “are not Al-Shabab,” which spares DDR programming the pitfalls of engaging with a terror listed organisation. Furthermore, most militias were already within their communities, making it easier for local authorities to end conflicts through economic revival programmes and other grassroots initiatives.

Ensuring proper facilities for ex-combatants takes time. For example, the location of a TF in Kismayo was recently identified, but security and infrastructural problems slowed things down. To carry out a 30-minute recce of the building, the Serendi team required an escort by Kenyan AMISOM soldiers, NISA, the Somali National Army and close protection security officers. Meanwhile, Al-Shabab defectors in the port city are living in safe houses.

Peaceful solutions within the clans

In Baidoa, where the French funded TF is about to open, the delays have given clans a bigger role in the rehabilitation of about 120 ex-Al Shabab combatants.

A Baidoa elder, Abdul Kadir Hassan, told IRIN that families were taking responsibility for ex-combatants and working out if they could be trusted. “It depends on the individual, but by leaving, most ex-fighters have made up their minds already. So they are seen as safe.” Hassan stressed that DDR was crucial for peace in Somalia.

Elder Adan Abdi, told IRIN about 90 percent of Al-Shabab forces were Somali and “joined because they had no means”. But he stressed that “Al-Shabab is a foreign ideology” and the foreigners would have to be hunted down, not rehabilitated.

Clan elders have an important role to play in managing clan feuds caused by the conflict. Hassan said a family could request “blood money” as a form of reconciliation, but wide scale poverty made this an unrealistic solution.

“We argue that they were brainwashed, so they were not in their right minds and in this way we can often resolve things through clan justice”

He says it is better to defend the ex-fighters on the basis that they were not free at the time of their actions. “We argue that they were brainwashed, so they were not in their right minds and in this way we can often resolve things through clan justice”.

However, clan elders say the development of the centres is hugely important. For Abdi, there have to be enough centres and they must be able to cater properly for the former fighters. “If someone is hungry and you say come and eat, but there is no food, will they come? The answer is no.

“If you offer them a life they will come. If the centres provide, the ex-combatants will contact their friends in Al-Shabab and tell them it’s not as bad as we thought and they will come as well. And then this thing will end very quickly”.  IRIN

Somalia – Al Shabab moves to impose harsh dress code for women


Somalia’s al-Shabab militants impose dress code

Somali women wearing full face veils Many Somali women wear the niqab even in areas not controlled by al-Shabab

Somalia’s al-Shabab militants have rounded up around 100 women and ordered them to comply with a strict Islamic dress code or risk being whipped.

The women were arrested in Buale, about 300km (185 miles) south-west of the capital, Mogadishu.

BBC Somali analyst Mohamed Mohamed says it is rare for al-Shabab to carry out such mass arrests.

The al-Qaeda-linked group controls much of southern and central parts of Somalia.


The women were arrested in the market, taken away and warned before being released.

Because it was their first offence, they were not punished but they could be whipped in public if caught again.

Our analyst says the temperature can reach 35C (95F) at this time of year and so many women preferred to wear lighter, traditional clothes than those approved by al-Shabab.

The women were told to wear a niqab, which covers all of their body and face, leaving just a small slit for their eyes.

Al-Shabab, whose name means “The Youth” in Arabic, advocates the strict Saudi-inspired Wahhabi version of Islam.

They have stoned to death people accused of committing adultery and amputated the hands of thieves.

A UN-backed government, aided by African Union forces, has pushed al-Shabab out of the country’s main cities but it continues to stage deadly attacks there. BBC

Late rains give cause for worry of Somalia food security

UN News Service

Late rains give rise to concerns about harvest prospects, food security in Somalia – UN

Somalis need support in a wide range of activities, from cropping to livestock breeding and fisheries. Photo: FAO/Frank Nyakairu

2 June 2014 – The United Nations today voiced increasing concern over the food security situation in Somalia, as food stocks from the previous harvest become depleted and prices continue to rise sharply, and the country experiences late rains and erratic weather patterns.

The situation is being exacerbated by conflict and inadequate funding for priority actions designed to address the needs of hard-hit communities, according to a new report by the Food and Agriculture Organization (FAO).

“The people of Somalia cannot afford to wait to see how the next harvest turns out. They need urgent support to improve their food security and maintain their livelihoods, most of which depend directly on agriculture,” said Luca Alinovi, acting Head of FAO’s Somalia Office and FAO Representative in Kenya.

FAO and its partners are urgently seeking $18 million to scale up rapid interventions to prevent and mitigate the further deterioration of the food security situation, the agency said in a news release.

A “weak” January harvest coupled with a delayed start to the 2014 gu season (April-June) have fuelled concerns for the food security situation. FAO noted that harvests were “well below average” in the central and southern areas of the country, following weeks of late and erratic rainfall, as well as flooding around rivers.

Lower stocks, coupled with the market and trade disruptions, led to double-digit increases in wholesale prices of maize and sorghum in some areas.

In the main producing areas of the south, April retail prices of maize and sorghum were as much as 60 and 80 per cent higher, respectively, than one year earlier, also due to the scaling back of humanitarian assistance operations.

The gu rains resumed in early May, but rains will need to continue through the end of June in order to prevent further deterioration of the food security situation in Somalia.

Conditions are expected to improve slightly in August and September when the harvest is ready for consumption, but the positive impact is likely to be moderate given the unfavourable prospects of the current season.

The number of people in need of humanitarian assistance in Somalia is currently estimated at about 860,000, including over 200,000 malnourished children under five years of age. UN

Somalia – Al Shabab attack on parliament

Somalia parliament attacked by al-Shabab in Mogadishu

Al-Shabab were pushed out of Mogadishu in 2011 but are still able to mount attacks in the Somali capital

Islamist militants from the al-Shabab movement have attacked the Somali parliament in Mogadishu, leaving several people dead.

Explosions and gunfire were heard and witnesses reported seeing bodies.

Al-Shabab, which is linked to al-Qaeda, once controlled large areas of Somalia but was pushed out of major cities in 2011 and 2012.

However, it is still able to mount complex attacks. It has frequently targeted the UN-backed parliament.

A car bomb outside the gates of parliament exploded shortly before midday local time (09:00 GMT), followed by more blasts and bursts of gunfire.

“The lawmakers and the other workers were rescued as soon as the car bomb exploded. But the terrorists are still firing from inside a mosque nearby,” the Reuters news agency quoted a police colonel as saying.

Four police officers had died, he told Reuters.

An al-Shabab spokesman told the AFP news agency: “The so-called Somali parliament is a military zone. Our fighters are there to carry out a holy operation.”

It is not clear whether gunmen managed to get inside the building on Saturday.

Somalia has experienced almost constant conflict since its government collapsed in 1991.

Some 22,000 African Union troops are helping the fragile government battle al-Shabab.

With Mogadishu and other towns now under government control, basic services such as street lighting and rubbish collection have now resumed.

Many Somalis have returned from exile, bringing their money and skills with them.

The parliament in Mogadishu – which operated as a transitional assembly from 2004 to 2012 – has been attacked several times, including in 2009 and 2010.

Last month, a Somali parliamentarian was blown up and another shot dead in separate attacks.

In February, al-Shabab militants attacked the presidential palace in Mogadishu, leaving at least 16 people dead.

Al-Shabab, whose name means “The Youth” in Arabic, advocates the strict Saudi-inspired Wahhabi version of Islam.




Somalia – Al Shabab attack on AMISOM central region

Somalia’s al-Shabab attack army hotel in Bulo-burde
mali Islamist fighters have attacked a hotel in a strategic central town the militants lost control of last week.

A car bomb exploded outside the hotel in Bulo-burde where African Union (AU) peacekeepers and Somali army commanders were staying, witnesses told the BBC.

Gunfire continued for five hours and about 14 people – fighters from all sides – died, they said.

The al-Shabab Islamist group said it was behind the attack and that 30 AU and army commanders had been killed.

The authorities have yet to comment on the attack and communications to the central Hiran region went down not long after the fighting and gunfire ended, the BBC’s Ibrahim Aden reports from the capital, Mogadishu.

Al-Shabab, which is linked to al-Qaeda, has waged an eight-year insurgency to overthrow the weak UN-backed government and create an Islamic state in Somalia.

Key bridge
Witnesses said the car blast happened at 02:00 local time (23:00 GMT) and the fighting went on till about 07:00.

About 24 people were also wounded in the raid and have been taken to hospital, they said

Our correspondent says al-Shabab had occupied Bulo-burde for more than five years.

The town, which has a strategic bridge over the River Shabelle and is at a crossroads linking various regions of the country, was an important base for al-Shabab.

Bulo-burde was captured as part of an ongoing AU and government offensive against al-Shabab, which controls much of south and central Somalia.

Somalia’s militants have pledged loyalty to al-Qaeda
The 22,000-strong AU force (Amisom) is helping the government battle the militants.

Al-Shabab lost control of Mogadishu in 2011, but has intensified bombings and mortar raids in the city in recent weeks.

Al-Shabab at-a-glance

“The Youth” in Arabic
Formed as a radical offshoot of the Union of Islamic Courts, which controlled Mogadishu, in 2006
Controls most of southern Somalia
Estimated to have 5,000 fighters
Announced merger with al-Qaeda in 2012

Meanwhile, Amisom spokesman Col Ali Adan Humad has denied there were any casualties when an Amisom convoy was attacked near its base in Arbiska outside Mogadishu.

Al-Shabab had released a statement saying that seven Burundian peacekeepers and five American nationals travelling in the vehicles were killed on Monday afternoon.

Last month, al-Shabab fighters stormed Villa Somalia, the seat of government in Mogadishu, killing at least 11 people.
Amisom and Somali government forces march around Bulo-burde after its capture last week




Somalia – army and Ethiopians retake Bay and Bakool areas from al-Shabab


Somalia: Somali, AU Troops Retake Towns From Al-Shabab

By Gabe Joselow

Nairobi — Somali government and African Union forces say they have recaptured territory that was held by the al-Qaida-linked militant group al-Shabab. A government official says the offensive is just the start of a fresh effort to oust the group from its remaining strongholds in Somalia.

Somali forces were supported by Ethiopian soldiers who belong to the AU force AMISOM in the operations against al-Shabab, which began on Friday.

“So far, over the weekend, we had at least five towns in Bay and Bakool region that Somali National Forces and AMISOM recaptured from al-Shabab,” government spokesman Abdirahman Omar Osman told reporters, adding that there were no major setbacks.

Major battle

Two of the towns are in the Gedo region, including Burdhubo, which VOA’s Somali service reports is home to one of the largest al-Shabab bases in southern Somalia.

Residents reported hearing heavy fighting in the area on Friday, although an AMISOM spokesman told VOA that al-Shabab fighters are mostly retreating when they see the AU soldiers coming.

Regional forces had been successful in driving the militants out of major cities in the past, but until the recent operations, had not reclaimed significant ground since Kenyan troops took control of the port city of Kismayo in 2012.

“Our aim is to not stop this operation until we take over all the districts, all the areas that al-Shabab currently occupies,” Osman said. He said the weekend fighting is just the beginning of a much larger military campaign.

Humanitarian aid

To avoid power vacuums in newly liberated towns, Osman said the first priority for the government is to provide humanitarian aid, then to establish local administrations to deliver basic services.

In an audio statement posted on a pro-jihadi website, al-Shabab leader Ahmed Abdi Godane called for Somali citizens to take up arms against foreign forces.

“I call upon the fighters to defend the religion and to fight against the enemies,” he said. “Ethiopian soldiers who have come thousands of kilometers should not outlast you,” said Godane.

Al-Shabab, which seeks to establish Islamic law across Somalia, continues to control territory in some parts of the country and also retains the ability to wreak havoc in the capital Mogadishu.

Last month, al-Shabab fighters stormed the presidential palace, Villa Somalia. The president was unharmed but 17 people were killed.  allAfrica

Bomb attack on Somali presidential palace


Somali presidential palace: ‘Car bomb’ attack in Mogadishu

President Hassan Sheikh Mohamud President Hassan Sheikh Mohamud was in the building during the attack


A car bomb has exploded at the gates of Somalia’s presidential palace, followed by an attack by gunmen, police in Mogadishu say.

A fierce gunfight is now said to be underway inside the compound.

President Hassan Sheikh Mohamud has called the UN envoy to Somalia to say he was not harmed during the attack, envoy Nick Kay has tweeted.

The UN-backed government is battling al-Qaeda-linked group al-Shabab for control of the country.

Senior police officer Abdikadir Ahmed told the Reuters news agency the fighting was going on in the house of a military commander within the presidential compound, near the palace.

“The car bomb hit and exploded and other al-Shabab cars with armed men drove inside the palace, and heavy fighting is still going on,” he said.

Mr Kay said: “Sadly some lives lost. I condemn strongly this terrorism.”


Somalia’s economic challenges


Five challenges for Somalia’s economic reconstruction

View over a section of Baraka market in Mogadishu

NAIROBI (IRIN) – Somalia’s economy has managed to survive state collapse, maintaining reasonable levels of output throughout the country’s two-decade-long civil war. Now, with political recovery and transition slowly underway, the country’s economy faces new hurdles.
Investors have come to Somalia looking to cash in on the rebuilding process and abundant natural resources in areas such as agriculture and livestock, fisheries, and oil and gas. More innovative fields, such as mobile technology, have also been taking off, although they still only impact a minority of the population (22.5 out of every 100 inhabitants have a mobile phone subscription in Somalia, significantly lower than the developing world average of 84.3).
It is hoped these developments will lay the groundwork for broader economic growth. The second pillar of the president’s Six Pillar Strategy to stabilize the country is economic recovery. In line with this, Somalia aims to build a transparent, formalized, globally competitive economy that collects tax revenues.
But the government faces a number of challenges as it works towards these goals. IRIN looks at some of the most pressing problems.
Somalia’s government does not have the capacity to participate in certification schemes or to provide authenticity documentation that would enable businesses to sell goods globally. Firms instead have to find unconventional, and often costly, workarounds.
Although sesame seeds are grown in large quantities in Somalia – in 2012 the country was the 12th largest producer in the world – exporting them is a challenge.
“Just before the famine, there was a very good season of sesame, and I remember talking with a businessman who explained he was forced to take the sesame in Somalia and nationalize it in some way in Indonesia to sell it to Germany,” said Luca Alinovi, regional director of the Food and Agricultural Organization (FAO) at a recent event in Nairobi on Somalia’s foreign direct investment prospects. “This is quite an inefficient way to deal with it – but the only way if you’re not able to have a proper certificatory regime, a proper EPA [Economic Partnership Agreement] between Somalia and Europe.”
Alinovi notes that similar mechanisms are used when it comes to exporting many fishery products.
“This means that the government of Somalia loses money,” he said. “We need to have much stronger capacity to support the country and the people to have those regulatory frameworks which help the people do business properly.”
Trade difficulties
Somalia is not a member of any regional economic blocs, and it has few formal trade deals with other nations. The US and the European Union currently have no trade agreements with Somalia, and the country is not a member of the World Trade Organization, compounding the difficulties local firms face when competing regionally and internationally.
In 2012, Somalia exported goods worth US$693 million (509 million euros), according to data from the European Commission’s Directorate-General for Trade. While this represents a significant increase – in 2008, exports were less than half that number – the country still runs a large trade deficit. In 2012, its imports were valued at $1,818 billion (1,335 million euros).
It also exports less than other countries: Somalia is the 171st largest exporter in the world, and it has the fourth lowest GDP per capita, according to the CIA World Factbook.
Somalia’s biggest export market is to the United Arab Emirates (UAE), which takes in more than half its total exports. Just three countries (UAE, Yemen and Oman) account for 82.5 percent of all exports, predominantly in livestock, out of Somalia.
Regional partners often impose strict restrictions on Somalia, mainly out of security fears. “Borders sometimes are closed,” said Hassan Noor, CEO of Hanvard Africa, a consultant firm that focuses on East Africa. “People fly from Mogadishu direct to Istanbul. They can fly to Dubai. But they can’t fly to the next-door neighbor.” (There are no direct flights between Mogadishu and Ethiopia, for example, although there are to Djibouti, Kampala and Nairobi.)

A woman buys meat from a local butchery in Mogadishu

As a result, businesses have to go to great lengths to trade with other countries. “Businesses register in Dubai in order to get access to finance and the like,” said Nick Haslam of advisory firm Adam Smith International.
This also means that businesses are less transparent. “Who is behind certain business sectors? It’s like an onion. Every time you peel some layer, you discover other friends behind it without necessarily being very officially present,” added Alinovi.
Currency reform
Restoring the credibility of Somalia’s currency will also be crucial to economic development. The Central Bank has identified “the introduction of new and unified currency” for Somalia as one of its strategic goals for the next five years.
“There were (and still are) several versions of the same currency (Shilling) in circulation concurrently, and most of them are fake currencies,” the bank noted in its Strategic Plan 2013-2018.
Since the early 1990s, no bank notes have been printed officially. “The collapsing of the Central Bank and the banking system left a vacuum for monetary and regulatory control and totally shattered the country’s payment system,” noted the report. This led to “currency substitution and the growth of the parallel currency market,” with warlords and militias issuing their own currency.
This means that there is a large black market for currency. Officially, Somalia’s shilling trades at around 1,200 to the US dollar, but it is about 15 times that rate on the black market.
In mid-2013, the International Monetary Fund resumed relations with Somalia after 22 years. For now, it will not provide loans to the country, but it pledged to provide technical assistance and highlighted currency reform as a major priority.
But the Central Bank is still struggling. Central Bank Governor Yussur Abrar resigned in November after just seven weeks, citing claims of corruption and government interference, and while an interim leader has been appointed, the Bank has yet to find a full-time replacement.
“There’s a lack of capacity, and also there’s huge corruption,” said Shirwa Jama, the International Development Law Organization’s Somalia country representative. But he noted that “all these things can really be addressed if the government has the commitment to improve rule of law, to capacitate and work with international partners.”
Managing oil deals and revenue
Nowhere are the problems and potential of the Somali economy better exemplified than in the oil and gas industry.
There are massive reserves, and even before the collapse of government, large firms were exploring the possibility of mining oil and gas. But lack of legislation and political wrangling at regional and national levels impede development in this sector.
“There is currently growing hostility between the Federal Government of Somalia and regional administrations that have signed oil deals independently of the government,” a UN Monitoring group on Somalia and Eritrea noted in a July letter to the Security Council. Divergence between the 2008 petroleum law – which is invoked by Federal Government petroleum officials – and Somalia’s Constitution is exacerbating this hostility.”
Some large firms, including BP, Chevron and ConocoPhillips still hold exploration rights dating back to before the civil war and have had discussions with the central government. In August, Soma Oil and Gas, a British firm founded earlier in 2013, signed an agreement with Mogadishu to begin exploring oil – much to the chagrin of the Puntland and Somaliland governments, which have separate deals with other firms.
It remains unclear how old contracts will be resolved and who will have the ultimate right to negotiate new deals. “Oil and gas has huge potential, but the current uncertainty surrounding federal and regional states and the lack of agreement over resource sharing and taxation means that it will be very difficult for that sector to take off until those issues are resolved,” noted Haslam.
Social engagement
There is also a need to ensure that economic growth benefits the people, especially as foreign direct investment grows.
Following the collapse of the Siyad Barre regime in 1991, the private sector stepped in to provide most basic goods and services, and has actually performed relatively well throughout this period despite rampant insecurity and lack of infrastructure.
“Everything is being provided by the private sector – water, electricity, telecommunications, everything,” said Hanvard Africa’s Noor. “In the absence of a government, in the absence of a regulatory framework, with nobody else coming to provide those services, they had to do what they could do.”
“Businesses have created their own informal, enabling environment,” said Haslam. “People form strong networks to overcome [poor] access to finance, for example, relying on customary or Sharia law to overcome disputes, and local knowledge is paramount.”
But while a system of customary law and close clan ties worked to support society (through mechanisms such as Zakat – giving a proportion of one’s wealth to charity), some of these networks are now being eroded, argues Alinovi. “Because of a set of changing mechanisms in the inter-clan relations in the last 20 years, a lot of the obligation that the businessmen used to have to the society, for the social fabric surrounding [them], has begun disappearing,” he said. “The businesses in Somalia are becoming less relevant for the society.”
With international investment, there are fears that the influx of foreign money will give rise to greater cronyism and corruption. “Risk is for the investor, but also risk is for the local people,” said Noor. “We don’t want to become like Niger Delta.”  IRIN