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Introduction

Startups are increasingly playing a critical role in the world’s socio-economic development through the development of innovation and aiding optimization of current economic sectors to sustain national growth and global prosperity. IITE Institute successfully hosted a Roundtable Forum which was held at the Conference Hall of Afrik Hotel, Mogadishu City, Somalia by 21st August 2021. The Theme of the Roundtable Forum was Lobbying Legal Framework for Startups in Somalia: Unlocking Market Opportunities’’.

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For small businesses and startups to thrive and prosper, a combination of supportive policies and an accommodative environment is a must. Small businesses should be supported with encouraging regulations, trusted with sound investments, and protected from both external and internal predatory corporations. If they are awarded those privileges, they are ready and able to help back and boost the economy.

In Somalia, all those amenities are out of reach. With little government efforts and hostile environments, startups are finding it very hard to sustain in markets. The very policies that would act as the bedrock for their prosperity are almost non-existent. Small businesses constantly face barriers to market entry and competitive disadvantages. They have limited access to capital investments and encounter fierce challenges in resources mobilizations. That reality has, in many aspects, hindered the economic development of Somalia.

The Roundtable Discussion

To address that issue and initiate a conversation, IITE Institute hosted a roundtable discussion on Lobbying Legal Framework for Startups in Somalia to thrive and prosper by unlocking the market opportunities. High profile delegates from the Somali Government, Businessmen and Women, Start-ups, Small & Medium-sized Enterprises (SMEs), banks, startup Incubators, conglomerates, youth startups, Members of the Academia, and all relevant stakeholders from the Civil Society Groups have attended the event for a colorful discussion with diverse views. As a result, the roundtable discussion has paved the way for a relevant conversation on the actualities at the ground and even proposed solutions and strategies to create a viable and conducive environment for small businesses.

Mr. Ibrahim Isse Abdulle, the Director of SMEs & Corporates at the Ministry of Commerce & Industry of Somalia, made his presentation as the keynote speaker for the roundtable discussion event. Mr. Ibrahim embraced the efforts of the private sector and believes that today private sector is more powerful than the governmental institutions. Businesses in Somalia are failing because of a lack of support from the government. There is no government funding for Startups in Somalia. Everyone has in mind job creation and that comes after supporting startups. Youth have ideas and talent but lacking the capital to start the business. Peace, education, and the economy are the baseline for job creation. He mentioned the need for government funding, guarantors, and enabling environments for startups while the Startup Act is paramount for the success of national economic development. Startup Act requires funding and lobbying with relevant institutions.

A panel discussion at the roundtable has, in particular, communicated and dissected the reality in hand and how best to collaborate in order to lobby legal framework for startups in Somalia to thrive and prosper in the local and international markets. Among the panelists in the roundtable panel discussion were Mr. Ahmed Mohamed Omar, the Director Business Registration Licenses, Ministry of Commerce & Industry of Somalia; Mr. Abdishakur Afrah, Head of Corporate, SMEs & Retail for Premier Bank; Mr. Yussuf Omar Ahmed, Revenue Director, BRA & Mogadishu Municipality; and Mr. Mohamed Bashir Osman, CEO and Chairman of Daauus Company.

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The panelists have, in detail, discussed the challenges and even suggested thoughtful alternatives to the Government and the relative stakeholders. Mr. Yussuf Omar Ahmed, Revenue Director, BRA and Mogadishu Municipality, has highlighted those startups after being incubated and trained, face mounting challenges in resources mobilization and that has, as a result, contributed to many businesses being out of markets. Coming from a background of business incubation and acceleration, Mr. Yussuf Omar Ahmed has emphasized the importance of setting up coordination mechanisms among government layers for startups and SMEs to have a smooth and sound ecosystem. Mr. Mohamed Bashir Osman, CEO of Daauus Advertising Agency, on the same agenda, underlined the need to reduce registration fees and taxes by the government. Mr. Mohamed has also noted down the significance of having sound and direct capital investments and cash loans from banks in Somalia. He also mentioned confusion on where to get licenses either MoCI or BRA.

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Mr. Ahmed Mohamed Omar, Director of Business Registration Licenses Ministry of Commerce & Industry of Somalia, on the issue, has underscored what is like to bring big brands to Somalia. “Though Somalia ranks low in Ease of Doing Business, Somali entrepreneurs do still have to take risks and bring big brands in Somalia,” he explained. He also discussed the Ministry’s commitment to passing and enacting laws in support of SMEs & Startups. Mr. Ahmed Mohamed Omar has referenced the establishment of the SMEs Department at the Ministry of Commerce & Industry of Somalia as an example as well as the passed SMEs Policy at the ministry.

Mr. Abdishakur Afrah, Head of Corporate, SMEs & Retail of Premier Bank Somalia, as a member of the epanellists, discussed the vital role banks can play in lobbying legal framework for small businesses. It is highly needed in Somalia to give directives to all entrepreneurs to establish their businesses by overcoming the barriers.

Conclusion

At the end of the event, a declaration addressed to the Somali Government, Banks, Somali Chamber of Commerce, Notaries, Development Agencies and the Academia was issued and read. The declaration conveyed and highlighted the important points and messages at the Roundtable Discussion. It has called for every stakeholder to take a lead in streamlining current trends for a sustained and developed ecosystem for small businesses in Somalia. The Roundtable Discussion has initiated a relevant discussion on the issue, spearheaded an important conversation on what small businesses in Somalia are lacking, and has, most importantly, produced alternative solutions and strategies to challenge the status quo.

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During the closing remarks, at the event, all have attested to the importance of having conducive environments for small businesses in Somalia to flourish. State Minister, Ministry of Labor and Social Affairs (MoLSA) of Somalia, H.E Abdi Ahmed Qasim, on closing remarks at the event, have reiterated the Government’s commitment in spearheading efforts to formulate policies and procedures to help the small businesses to flourish. H.E Abdi Ahmed Qasim, has on the final say, pledged to consider the important points discussed at the event and at the same time do the necessary actions to enable a supportive environment for Startups.

Finally, Dahir Hassan Arab, the Rector of SIMAD University, made his closing remarks touching real-life experiences in line with business profits and losses. The Rector also emphasized the need to utilize the local resources when making businesses like having a boat and fishing from Somali waters (Water bodies).

Immediate Action Plans

The startup bill will ensure that Somalia’s laws and regulations are friendly, clear, planned, and work for the tech ecosystem. This will contribute to the creation of an enabling environment for growth, attraction, and protection of investment in tech startups. In Somalia, young people are the most valuable natural resource, at home and abroad. Their ingenuity, creativity, innovation, and entrepreneurial spirit are evident to all.  IITE of SIMAD University will partner with the legislature to develop an enabling environment to turn their passions into ideas that can be supported, groomed, and scaled. This will lead to the formulation of government policies that protect and promote the interests of Startups and SMEs as the key action points below suggest:

  1. Train and equip entrepreneurs with business and management skills: drafting business plans, use of efficient accounting systems, and frugal fund management,
  2. Establishment of Somali Trade Information Portal (STIP),
  3. Development of clearer road map for Agricultural entrepreneurs aimed at developing the Agricultural sector (Dairy farming, Crop Farming, and Fishing),
  4. Improvement of power generation and development of other critical infrastructures,
  5. Funding of research and development centers,
  6. Provision of information on alternative sources of funding opportunities for MSMEs and required conditions for accessing such funds for SMEs & startups growth,
  7. Develop SMEs & startups that are in line with Somali cultures and traditions.
  8. Collaborate with the Private Sector to help drive SMEs & startups through the provision of funds that create jobs and reduce poverty in Somalia.
  9. Develop technology for startups & SMEs in Somalia,
  10. Developments of policies that will help integrate the informal sector into the MSMEs Sub-sector of the Product or Manufacturing sector and waste recycling management, and
  11. Local Governments should set up a Migration Council to liaise with the International Organizations for Migration and other key Stakeholders. The Council will place particular emphasis on involving the private sector through public-private partnerships and innovative funding mechanisms to spur the growth of the private sector and develop new solutions to longstanding challenges that face startups & SMEs.

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IITE Institute

IITE Institute serves as a hub for nurturing innovation, technology, and entrepreneurship education in Somalia and the region. It provides project-based learning, workshops, and problem solving case-study competitions to boost local innovations and creativity.

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