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Friday, March 31, 2023


    AfCFTA: Somalis unwavering commitment

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    The future is in Africa and the political east, with their abundant resources, growing populations, and shifting world order. As an African country, it is important to take part in projects that will help the continent’s economy. The AfCFTA is one of these projects. It focuses on lowering tariffs and non-tariff barriers and making it easier for people and labor to move freely, as well as for people to live, work, and invest. The AfCFTA is, succinctly, a free trade agreement meant to bolster trade in Africa.
    More specifically, we see the AfCFTA as practice for joining the WTO, since many of the requirements and conditions are the same as those of the WTO.

    There are many issues that affect the capability of successful membership and participation, but we can definitively say that the Somali government is working hard on it. Recently, the government started a campaign to increase security within the country and has since made enormous progress. As soon as peace is reached, the next step will be to fight corruption and clean institutions of people who aren’t doing their jobs. Once insecurity and corruption are dealt with, stability will arrive, and institutional development can begin in earnest.
    Somalia is making up for a lot of mistakes and getting ready for business. This, along with its other good qualities, makes it an attractive place for investment and business.

    It has a strategic geopolitical location that gives it access to both an ocean and two continents. This is one of the good things that nature has given it. This has always made Somalia a hub for trade since ancient times and will continue to give it regional prominence and importance when it comes to trade and business. Somalia’s location as a historic trade hub has made it more understanding, communicative, dynamic, and innovative, as it has always come into contact with and dealt effectively with many people of different backgrounds.

    Somalia’s natural resources range from huge untapped reserves of natural goods such as iron ore, uranium, tin, bauxite, copper, phosphate, meerschaum, gypsum, natural gas, oil, gems, frankincense, myrrh, and salt to lands with cultural sites, scenic mountains, forests, deserts, long stretches of beaches, and agricultural lands that account for 70% of land area.

    Many of the industries of the country also have huge potential; for example, livestock, agriculture, fishery, environment, telecommunication, energy, finance, construction, technology, security, health, education, and service-based industries.

    The country’s human capital includes a growing young population and a creative, professional, and influential diaspora that is interested and active in the country, comes from various industries and experiences, and can truly level up the development and intellectual environment of the country. The diaspora is not only a source of skill but of funds too, as it is well known that remittances make up a huge part of the economy.
    All these factors, along with the fact that peace and stability are rising in the country, point to a very appealing and profitable environment to invest in, as huge markets of consumers are opening up and many producers of goods and services are coming into existence. Moreover, the country has more than enough resources it can exploit in order to come out of poverty and instability.

    Somalis have been known traders since ancient times, trading with the ancient Chinese, Arabs, Egyptians, Greeks, Africans, and Romans. In more modern times, Somalia’s entrepreneurial spirit can be gleaned from the survival and contributions of business people during a time of conflict and virtual statelessness. SMEs in Somalia have been the key to survival since the government collapsed in 1991. Ever since then, they have been providing goods and services for families up and down the country through periods of relative peace and conflict at a time when public institutions were either absent or too fragile to function. SME’s make up more than 80% of all businesses in the country and are mainly found in commerce, trade, and service-based industries that range from restaurants to consultancies. However, we recognize that they require guidance and funding in order to perform to their full potential rather than just making ends meet, and as such, they represent a significant untapped resource.
    Entrepreneurship is crucial to raising the standard of living and promoting the development of the economy. Small and medium-sized enterprises are recognized as solutions for economic growth, modernization, job creation, and income generation.

    The government and private sector leaders have been jointly working to make the business environment less harsh and more conducive to greater prosperity and have taken many steps. Some of these include establishing the Somali company law, which was passed by parliament on December 26 and will provide significant changes to the registration and management of companies in Somalia. The labor law was recently passed because we realized that one of the driving forces behind sustainable economic growth was defeating unemployment, as jobs help people lift themselves out of poverty. Designing a legally inclined framework in which people could work was the main purpose, as the right internationally approved enabling environment was necessary to make sure that labor in the country was safe.

    We have also tried to attract investors and partners for development, business, and trade; in pursuit of this, we have created favorable policies for investment and are in the process of creating an investment law that will put the country at an advantage. We have created programs to modernize companies in the key productive sectors to boost the economy with projects such as the successful EDU, which was a joint project by the Ministry of Commerce, the Chamber of Commerce, and UNIDO. Lastly, the adoption of a web portal is underway that will enable the registration of businesses online and the development of “one-stop shops” that integrate all registration procedures and authorities under one roof and rollout to each Federal Member State so that trade within and outside the country is more streamlined and efficient for both nationals and foreigners.

    Overall, it is in our strategic interest to look outside of our borders and see who and how we can benefit, and Africa is a clearly great candidate for our prospects as they are our regional neighbors from whom we can learn a lot, especially in the area of trade and investment networking both regionally and globally.
    Somalia is not only ready to develop but is also willing to help put Africa on the map, whether it comes to economics, education, or technology.

    We are committed to fulfilling the AfCFTA, and we look forward to a shared prosperity for all in the near future.

    Author: Prof Ciise M. Xalane



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