Country FilesEast & HornCountry Profile 2014: SOMALIA

Wed,17Oct2018

Posted on Thursday, 06 February 2014 21:46

Country Profile 2014: SOMALIA

alt Only inching towards stability

President Hassan Sheikh Mohamud’s government survived its dangerous first year in office as Somalia’s first internationally-recognised administration in 22 years. But fully fledged legitimacy is still some way off. The new Somalia certainly offers possibilities–across the board of society, economics and governance – but Mohamud will need to show a strong hand if those possibilities are not to vanish once again.

 

 

TABLE OF CONTENTS:

TOP SOMALI COMPANIES

TOP SOMALI BANKS

 

theafricareport-somalia-72dpiOnly inching towards stability

The new government’s full legitimacy is still clouded by cases of corruption

A tightening up of the remittance market could cause pain for millions of Somalis

President Hassan Sheikh Mohamud’s government survived its dangerous first year in office as Somalia’s first internationally-recognised administration in 22 years. But fully fledged legitimacy is still some way off. The new Somalia certainly offers possibilities–across the board of society, economics and governance – but Mohamud will need to show a strong hand if those possibilities are not to vanish once again.

The new era has brought a wave of optimism, and there have been clear signs that Mohamud’s government can tread new, hopeful ground. After being pushed out of Mogadishu by 17,000 African Union AMISOM troops, Somalia’s Al Qaeda affiliate, Al-Shabaab, is thought to have only 5,000 militant fighters, sharply down from 20,000 five years earlier. To make up for lost territory, the group’s hard-line leadership under Ahmed Abdi Godane chose the route of spreading global terror – in the process ensuring the full attention of US special forces.

MISCONDUCT, ‘NEW DEAL’

Mogadishu and other major cities have benefited from fiscal surges. Diaspora and foreign money is returning, as is much-needed infrastructure like roads and Internet. Mogadishu hosted a music festival in March, something unthinkable a year ago. But Mohamud’s government has done little to suggest 2013 will be remembered as anything other than a year in which 2012’s hope was somewhat diluted. Corruption in Somalia remains rife. The European Union in September pledged a $2.4bn sum that was dubbed Somalia’s ‘New Deal’, meant to bolster Mohamud’s governance. But no sooner was the ink drying on that deal than the president was facing another internal crisis: the central bank governor, Abdusalam Omer, stepped down after only seven months following a UN report claiming the bank had become as lush fund for the political elite. Around 80% of bank funds were withdrawn for private use while accounted revenues for passports and visas ranat barely 4%. Mohamud’s replacement of Omer with a woman, Yussur Abrar, at least sent out a modernist message. She resigned too, after seven weeks.

Livestock remains Somalia’s biggest export. But Mohamud must ensure legislator sabide by the provisional constitution adopted in 2012 and crackdown on fraud at Somalia’s principal cash hubs such as Mogadishu’s port, which can only account for 20-25% of its incoming funds.

At least piracy has dropped 93% as Western fleets increasingly patrol the Gulf of Aden. A group of 70 countries gave $350m in September to help eradicate the scourge. Somalia’s skies are also becoming more profitable. Traffic has increased at Mogadishu’s Aden Adde International Airport, largely thanks to a resurgence of the country’s unofficial carrier Jubba Airways. And the renovation of Hargeisa’s Egal International Airport has raised hopes Somaliland could become a regional hub too.

HARDER-LINE OPERATIVES

Security is Somalia’s biggest priority and the battle against both clan violence and Al-Shabaab is far from won. Horrific attacks in Mogadishu have dispelled myths that the capital is safe. The Jubaland region, home to besieged Kismayo, brokered a two-year transition deal during which it will be led by Ahmed Mohamed‘ Madobe’ Islam, a hard-line warlord. That sent an unfortunate signal that if you fight hard enough, you can win. There were strong indications that the internal Al-Shabaab shake-up, in which several key figures were eliminated,had produced a harder-line group focused on hitting back outside Somalia, as with the September operation in Nairobi.

Genel Energy, a Turkish-British oil company which had discovered new reserves, pulled out because of safety concerns. Doctors Without Borders left in August, putting as train on thread bare local services. However the famine that claimed 260,000 lives between 2010 and 2012 is mercifully over.

But Barclays may have dealt Somalia its biggest financial blow. A decision to close the accounts of Somali remittance firms, upon fears they’re laundering Al- Shabaab money, will remove a third of Somalia’s $1.5bn remittance market on which millions of Somalis are dependent. Should that verdict stick, analysts anticipate the spread of more poverty.

 TOP SOMALI COMPANIES

No companies from Somalia featured in The Africa's Report's Top 500 Companies in Africa 2013.

 TOP SOMALI BANKS

No banks from Somalia featured in The Africa's Report's Top 200 Banks in Africa 2012.



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