Working with anarchy: Private business in Somalia succeeds

Nov 6, 2007, 10:03 GMT

Mogadishu - Mogadishu, the Somali capital, is often described as hell, but resident Samira Mohamed says she lives a normal life.

Bullet-scarred buildings line the narrow streets as gunshots punctuate conversations of friends enjoying tea. Weapons, like rice, are a staple for nearly every family. Fighting rages in every corner with innocent civilians caught in the crossfire.

'I have lived in this violence for more than 17 years. When I hear blasts and gunfire I feel fear, but once it stops, I relax and remember my business and begin selling again,' said Mohamed, 29, who owns a dress shop in Bakara Market, often the epicentre of fighting between government troops and insurgents.

The sense of normalcy she boasts of goes beyond just her nine to five job. Mohamed is able to send her children to school, use a computer and access water, despite the lack of government to provide these services.

Violence and lawlessness have convulsed Mogadishu and most of Somalia since 1991, but people like Mohamed are able to live a life marginally similar to other countries in Africa thanks to an entrepreneuring private business that has picked up where government has left off.

For one, Somalia's mobile phone services are cheaper than in any place on the continent, due to vigorous competition and link ups with foreign companies which have driven down prices - and the lack of sluggish government bureaucracy that often impedes telecoms development in Africa.

Schooling hasn't had the same visible success, with the majority of Somali children not enrolled, but private business has stepped in to provide education when a constant government turnover was unable to.

'We approached parents to persuade them to accept private education and explained they had to pay the student fees, because most of the parents did not have any understanding of private schools,' said Mukhtar Ghedi Ibrahim, director of public affairs for an umbrella organization representing schools in south and central Somalia.

He said he has seen a marked improvement since his group began operating in 2001, with 58 schools falling under its mandate.

Tuition fees range by grade, but parents pay between three and six dollars for elementary school classes per month and between 10 and 15 dollars for secondary school.

Somalia has helped coin the term failed state.

The Horn of Africa country has seen no effective rule since the 1991 fall of dictator Mohammed Siad Barre. A succession of 14 internationally-backed administrations has been incapable of cementing effective rule in the country and it has descended into lawlessness, conflict and despair.

Seventeen years of anarchy have prevented much infrastructure from developing. So, without an electricity grid, metering or payment systems, scores of small private utility companies have devised their own scheme.

They have divided cities into manageable areas and provide Somalis with the option of day, night or 24-hour service and charge by the light bulb in lieu of meters - a major cost for Somalis.

'We buy equipment from Dubai mostly second hand as we aren't able to buy new ones. We collect the fee per light bulb or if the contract is by kilowatt per hour, we collect the fee at the end of the month,' said Mohammed Yusuf Tumal, who operates an electricity company.

Even airlines have managed to flourish, using international safety standards to self-regulate and have their aircraft checked by professionals in airports they land in, like Dubai and Nairobi.

The challenges for business to set up in such a lawless place are plenty, and difficult to overcome. Many school houses used during the Siad Barre regime have been overtaken by displaced persons looking for shelter, leaving organizations bereft of infrastructure.

And with each changing government since 1991 have come different ways of operating and doing business, and sometimes, the burden of taxes.

'The transitional federal government now takes a service tax from us for landing and air navigation. The cost we incur at this time is more than in the past,' said Abdirahman Hassan Mohamoud, manager of Jubba Airlines.

The World Bank says Somalia's private business needs cooperation with government to thrive. But until one actually holds on to power for long enough, the entrepreneurs say they are doing just fine.

'Somalia is a unique success story,' said Sibel Kulaksiz, a World Bank official once responsible for private business development in the country.