Ethiopia raising minimum civil servant salary from $35 to $44 per month

[Midas]

They really do operate much like multi-national corporation.

This one operates factories in Mogadishu, sources agricultural products from Somalia but is headquartered in Dubai. Dubai is treated as a gateway into global markets.

Som Seed Agri – Specialists in Sesame

somseedagri.com

View attachment 372553


But look how many locations they exist in:
View attachment 372552

I gotta say I didnt realize our businessman where this skilled. I cant imagine how many assumptions I made about the weirdness of living standards in somalia because of these kinds of distortions.

Wallahi who knows there might even be a couple somali billionaires out there but because their assets are so widely distributed its impossible to accurately measure. You know I guess the fact that in a economy as large as Kenya the fact that these guys could start a building boom should have been a sign of the kind of capital they had behind them

 

[Guure⁸]

Also, another point, @Midas this company was founded in Somalia in 1982, just like Moumin, ADCO, Horseed, Al-Barakat (Hormuud), Dahabshil, Shabeel Group, MSG, and others they were all established in the 1980s. Omaar Group, however, was founded earlier, in 1974.


This growth is largely thanks to the nationalization and cooperative movement of the 1970s. It allowed Somalia’s economy to come under domestic control, breaking foreign monopolies that formed after the colonialists made laws barring Somalia from full economic particpation, and paved the way for Somali owned businesses to emerge across sectors in the 1980s.

I always thought omaar is a foreigner owned company ngl

 

[Garaad.XIV]

Lmaao Lebanon out of the bunch is mentioned as an example. Lebanon’s government basically ran what was a Ponzi scheme with its banking system, using new inflows to cover old obligations until it collapsed. It actually reminds me a lot of Albania’s economic breakdown in the 1990s, when pyramid schemes wiped out savings and triggered a nationwide crisis

It actually shows you the advantages Somalia has since it has steady inflows of diaspora capital acting like a natural reserve, less dependency on outside loans because communities finance housing and businesses themselves, a built-in cushion when crises like drought or inflation hit, and flexibility through trade and local pooling of resources instead of depending heavily on IMF bailouts or foreign creditors.

All of this works like a safety net that keeps Somalia from falling into the debt and currency crises seen in countries with rigid exchange rate systems.

Though for how long will the cash inflow from the diaspora be steady?

 

[Idilinaa]

Though for how long will the cash inflow from the diaspora be steady?

It will be continuous, because the diaspora don’t just send money , they act like transnationals, running parallel businesses at home and abroad. That gives them a permanent stake in Somalia’s economy.

But in reality, the economy isn’t as dependent on diaspora capital as people think. Most foreign capital now comes from regional trade and Somali owned business networks, not just from money transfers.

I gotta say I didnt realize our businessman where this skilled. I cant imagine how many assumptions I made about the weirdness of living standards in somalia because of these kinds of distortions.

Wallahi who knows there might even be a couple somali billionaires out there but because their assets are so widely distributed its impossible to accurately measure. You know I guess the fact that in a economy as large as Kenya the fact that these guys could start a building boom should have been a sign of the kind of capital they had behind them

It’s actually very hard to pin down how many Somali billionaires there are, because Somalis generally don’t flaunt wealth or openly talk about it. You could walk right past a very wealthy Somali and never know , they’ll often drive average cars and dress plainly.

I mentioned this once in the ''Somalis should be president of Kenya" thread, when a Somali billionaire appeared on a talk show to explain Somali wealth dynamics. I had never even heard of him until then.

Thinking back we all hear about the same ones that make themselves known to others through public engagement. The challenge is that net worth is usually judged based on disclosed assets, revenue streams, or publicly available financials. Since Somali business culture keeps these things private, it’s difficult to measure.

That said, it’s clear some must have billionaire level wealth. The fact that Somali business groups and individuals regularly finance projects and property worth hundreds of millions suggests they are sitting on capital reserves in the billions

I always thought omaar is a foreigner owned company ngl

It's owned by a Reer Waqooyi businessman, Jamac Omaar Seed, along with various Somali shareholders in Djibouti and Somaliland. It’s a multinational conglomerate, which makes it easy to mistake as foreign owned, especially since it began as an international trading company with offices abroad before rebranding into Ominco.

Since then, they’ve built multiple multimillion dollar industries in Somaliland, including fish processing, steel factories, concrete production, fuel storage terminals, and several agro-food manufacturing plants. They employ thousands of people and have developed a portfolio of internationally recognized brands and products through their abroad operations.

 

[Idilinaa]

The same goes for Frankincense. Many Somali-owned businesses distill it into various products abroad to bypass accreditation, certification, and lab setup bottlenecks. They then package, brand, and sell it to different markets. For example:


View attachment 372535
View attachment 372536

They sell it even at the BBS mall in Eastleigh:

https://bbsmallnairobi.com/store/dhulkii-lubaanta/

Another company I found on LinkedIn appears to be part of multiple businesses owned by descendants of the Majerteen royal family, who collectively inherited and manage the frankincense trees.
View attachment 372537

It actually surprised me how many Somali owned companies are distilling abroad in the UK/West or UAE while being registered both there and in Somalia. This is ironic considering the misleading narratives online about exploitation. While that may have been true over a decade ago, today Frankincense harvesters are likely earning a decent income from a value chain they effectively control. Meanwhile, the Somali owned companies probably generate profits in the millions, and diaspora entrepreneurs have even built sustainability mechanisms to manage operations.


As far as I know, Botanika is the only company that has successfully bypassed barriers to central distilling locally. However, this setup distorts Somalia’s trade/export statistics because the value and profit return is much higher than what official figures suggest.

This source from 2016 lays it out. Somalis run parallel companies abroad or in some cases do joint ventures between Somali entrepeneurs and local producers.

They destill their own essential oils and sell it. It's a woman owned cooperative business.

I'll conclude with this, there is one thing that's apparent @Midas is that with the strengthening of local value chains that is happening across Somalia means that we will see a steady rise in wages.

 

[Zak12]

because Somalis generally don’t flaunt wealth or openly talk about it

This sort of reminds me of that thread I saw about the Kuwaiti prince that used to spend his vacations in Somalia because according to him, the locals didn't bother him, even when wearing simple clothing.

Translation:
Host: In every vacation we notice you go to Salalah (Oman)
Prince: I used to go to Somalia before but after the coup (civil war) that took place in Somalia and due to the fact that they burned my farm, homes, electricity generators and cars I substituted Somalia with Oman.
Host: You used to go to Somalia for hunting?
Prince: Not really I used to go there for leisure, It's the only country with no complexity. You can wear your Wizar (macawiis) or khamiis and no would care or bother you or even know about you but unfortunately after what took place there everything has changed.
Host: Your highness, as a major head of state, you have the ability to go to resorts in the Alps, the Caribbean or the Mediterranean. Non of these places appealed to you?
Prince: No not really, even though I actually saw all of them. What I am looking for is to spend my time in a place with no complexity
Host: can you tell us what makes you look for simplicity?
Prince: It’s my philosophy as a human being. What do we need from this life? We need to live our life without being bothered by others. We want to live our lives in good health. Nothing will be rewarding to you as much as this.

 

[Idilinaa]

This sort of reminds me of that thread I saw about the Kuwaiti prince that used to spend his vacations in Somalia because according to him, the locals didn't bother him, even when wearing simple clothing.

It goes to show that you could be the wealthiest person in the room but amongst Somalis you are just an ordinary person.

It goes to proves what this African who studied Somali business people said about how the rich and poor among Somalis keep a level of contact alien to most other Africans.

He also said that his Somali friend is one of the richest people in Uganda but drives a ramshackle car.

A Somali with money is not going to go around and overspend on bunch of luxury items, so it really doesn't show on them. It's funny because its quite the opposite of Africans in Africa and African Americans.

That Somali billionaire in Kenya i shared before actually explained this to Kenyans on their talk show that they have more wealth than they realize but they either blow their money on stuff or lack the ability to pull their resources together because they keep themselves apart.

 

[Idilinaa]

It will be continuous, because the diaspora don’t just send money , they act like transnationals, running parallel businesses at home and abroad. That gives them a permanent stake in Somalia’s economy.

But in reality, the economy isn’t as dependent on diaspora capital as people think. Most foreign capital now comes from regional trade and Somali owned business networks, not just from money transfers.

@Garaad.XIV @Midas @Zak12 @Guure⁸

In Kenya they actually lose a lot of money and experience routine capital flight. They receive investment but at the same time experience loses of billions in capital flight. I actually suspect a big portion of this is actually Somalis sending back their profit to Somalia/Somaliland/Ogaden/Djibouti. In this paper they call it ''Profit Repatriation"

Effects of Capital Flight on Economic Growth in Kenya

There are people that become millionaires in the country and then leave, taking their money and investments with them lmaao.

https://www.businessdailyafrica.com/bd/economy/400-wealthy-kenyans-fall-off-dollar-millionaires-list-5168636

https://nation.africa/kenya/business/kenyan-dollar-millionaires-fall-on-capital-flight-jitters--5040436

https://nation.africa/kenya/news/million-dollar-panic-why-the-super-rich-are-dumping-kenya-4269202

 

[Idilinaa]

@Garaad.XIV @Midas @Zak12 @Guure⁸

In Kenya they actually lose a lot of money and experience routine capital flight. They receive investment but at the same time experience loses of billions in capital flight. I actually suspect a big portion of this is actually Somalis sending back their profit to Somalia/Somaliland/Ogaden/Djibouti. In this paper they call it ''Profit Repatriation"

Effects of Capital Flight on Economic Growth in Kenya

View attachment 372590

There are people that become millionaires in the country and then leave, taking their money and investments with them lmaao.

https://www.businessdailyafrica.com/bd/economy/400-wealthy-kenyans-fall-off-dollar-millionaires-list-5168636

https://nation.africa/kenya/business/kenyan-dollar-millionaires-fall-on-capital-flight-jitters--5040436

https://nation.africa/kenya/news/million-dollar-panic-why-the-super-rich-are-dumping-kenya-4269202

I never connected this until now how it distorts Somalia's trade on paper. It might also just be the reverse its Somali companies and business people in Somalia that set up parallel businesses in major trading hubs in East Africa/UAE etc to bypass the trading barriers, bottlenecks and reputation to reach global markets.

Because why would Somali business men in Bosaso and Mogadishu of all places operate business in Nairobi? When they already established themselves in Somalia? So it's quite literally strategic maneuvering on their part

What this implies is that large amounts of capital flows back into Somalia from abroad via these business connections and it's unaccounted for as well on paper.

Been reading this further @Midas @Zak12 this paper actually points to something very interesting about the different approaches being made. How in Kenya much like other developing countries focus on only FDI and assume that only advanced economies can invest in other countries but this is unlike what China, Singapore, Malaysia did they recognized the value of OFDI(Outward Foreign Investment) as a path to economic growth and development. Meaning they encouraged their domestic companies to invest abroad to create economic growth and development that emanate from these investments. You invest make more money abroad and then repatriate that income back.

It's very interesting that this is the exact approach Somali companies in Somalia took as well. It's quite interesting to see how Somalia basically leapfrogged doing this in Africa as well. Because imagine this focus on FDI only for the money to leave.


The same paper also points out what i said to @Garaad.XIV earlier that , diaspora business capital that is repatriated back to Somalia functions as natural foreign currency reserves that will stabilize exchange rates in Somalia and gives Somalia the ability to pay for imports, but its reverse for Africa high capital flight it further nukes their exchange rates because its creates shortage.

 

[Midas]

@Idilinaa rember when we were talking about mobile money transactions? And how people were arguing about how it didnt equate to the size of the economy being bigger ?

One of the biggest flaws of that argument even if it was true. Is that as somebody whos been to kenay before. Everything was paid through mobile money transactions just like jn somalia. But yet if you look at this article from 2022

You see that there was barely any difference between somalias and Kenyans mobile transactions amount. The probelm with that is how does this make sense when Kenya has a pouplation of 55 million vs somalia with a pouplation of 18 million and if you looked at the gdp of each country youd see that Kenya had a gdp per capita that was 3.6 times greater than somalia.

Yet somehow in 2022 they had an economy 10 times as large ?

 

[Midas]

Look at this as well also from 2022

 

[Midas]

I guess the foreign outward investment was the key to how we rebuilt our economy. Its incredible we were able to do this with no government and recurring floods/droughts/famine.

 

[Idilinaa]

@Idilinaa rember when we were talking about mobile money transactions? And how people were arguing about how it didnt equate to the size of the economy being bigger ?

One of the biggest flaws of that argument even if it was true. Is that as somebody whos been to kenay before. Everything was paid through mobile money transactions just like jn somalia. But yet if you look at this article from 2022


View attachment 372604

That first article is writing outdated BS when it said "60% of Somalia are semi-nomadic-pastoralists". In actuality 64% of Somalis are urban live in towns/cities across the country, 24% are rural and live in villages and only 11% are pastoral/nomadic. This is from Household Budget survey of 2022.

It's important to point out because most of those Urban Households make their living through Small businesses and wage labour. The 24% in rural villages benefit from this financial inclusion as well.

Mobile money adoption is more about the trade and capital flow and it created high financial inclusion, that boosted business, savings and income, it's not something simply picked up or adapted to people moving around grazing livestock.

Mobile money introduction increased economic activity

Not only did Mobile money increase consumer spending, but it also helped grow countless small and medium sized Somali businesses.

You see that there was barely any difference between somalias and Kenyans mobile transactions amount. The probelm with that is how does this make sense when Kenya has a pouplation of 55 million vs somalia with a pouplation of 18 million and if you looked at the gdp of each country youd see that Kenya had a gdp per capita that was 3.6 times greater than somalia.

View attachment 372605View attachment 372606



Yet somehow in 2022 they had an economy 10 times as large ?

View attachment 372607View attachment 372608

Look at this as well also from 2022

View attachment 372609

Me and @Barkhadle1520 took notice of this . Their own central bank said this btw and their mobile money to GDP ratio was nearly the same as ours which was 36%

Mobile money transactions equivalent of half of Kenya’s GDP

Central Bank of Kenya data shows that mobile money transactions stood at Sh3.98 trillion ($38.5 billion), having increased by Sh346 billion (10%) from 2017.

www.paymentscardsandmobile.com

Mobile money use in Kenya hits Sh724.8 billion monthly in 2024

Similarly, the average number of monthly transactions increased to 223.5 million, compared to 202 million in 2023 and 190 million in 2022.

eastleighvoice.co.ke

We ended up calculating what that 36% of GDP was based on this break down:

We consulted someone and removed non GDP related like P2P. It gave us a figure of 20.4Bn for the whole year , which means if 20.4bn is 36% of gdp / gdp = 56.7 billion in 2018.

To break down of what they represent:

The 36% would likely represent services and consumption like:

Like
- Retail trade & markets
- Transport services
- Telecom, utilities, education, health payments
- Small business activity and commerce
- Part of remittances once they’re spent in the local economy

Whereas the rest of the remaining 64% represents:
- Agriculture (Crops, fisheries, livestock etc)
- Industry & construction
- Imports/exports
- Government spending
- Finance (hawala, banking, micro-finance etc)

But you get the gist of it , I’m working on explaining activity in each of those areas more fully. I just wanted to quickly come back and share this with you: I found something directly tied to what we discussed earlier about the impact of Somali businesses abroad and how it feeds into economic growth inside Somalia.

 

[Midas]

That first article is writing outdated BS when it said "60% of Somalia are semi-nomadic-pastoralists". In actuality 64% of Somalis are urban live in towns/cities across the country, 24% are rural and live in villages and only 11% are pastoral/nomadic. This is from Household Budget survey of 2022.
View attachment 372611

It's important to point out because most of those Urban Households make their living through Small businesses and wage labour. The 24% in rural villages benefit from this financial inclusion as well.
View attachment 372612
View attachment 372618

Mobile money adoption is more about the trade and capital flow and it created high financial inclusion, that boosted business, savings and income, it's not something simply picked up or adapted to people moving around grazing livestock.
View attachment 372615

Mobile money introduction increased economic activity
View attachment 372616

Not only did Mobile money increase consumer spending, but it also helped grow countless small and medium sized Somali businesses.
View attachment 372617




Me and @Barkhadle1520 took notice of this . Their own central bank said this btw and their mobile money money to GDP ratio was nearly the same as ours which was 36%

Mobile money transactions equivalent of half of Kenya’s GDP

Central Bank of Kenya data shows that mobile money transactions stood at Sh3.98 trillion ($38.5 billion), having increased by Sh346 billion (10%) from 2017.

www.paymentscardsandmobile.com

View attachment 372613

Mobile money use in Kenya hits Sh724.8 billion monthly in 2024

Similarly, the average number of monthly transactions increased to 223.5 million, compared to 202 million in 2023 and 190 million in 2022.

eastleighvoice.co.ke

We ended up calculating what that 36% of GDP was based on this break down:
View attachment 372614

We consulted someone and removed non GDP related like P2P. It gave us a figure of 20.4Bn for the whole year , which means if 20.4bn is 36% of gdp / gdp = 56.7 billion in 2018.

To break down of what they represent:



But you get the gist of it , I’m working on explaining activity in each of those areas more fully. I just wanted to quickly come back and share this with you: I found something directly tied to what we discussed earlier about the impact of Somali businesses abroad and how it feeds into economic growth inside Somalia."

Wow thats incredible. I guess then its possible were already at a 3k gdp per capita. Which isnt too crazy since Kenya with gdp per capita of 2k and a population of 55 million doesnt seem to have living standards that are much better than what we have in Somalia

The only thing is somalia is lacking is that we didnt have a state that woukd have diverted part of this economic surplus into education and public infrastructure.

 

[Midas]

I wonder if we could get satellite images comparing urban settlements in Somalia across the last 2 deacdes and see the changes.

 

[Midas]

There is already a simialr thing being done in a couple countries

 

[Idilinaa]

I wonder if we could get satellite images comparing urban settlements in Somalia across the last 2 deacdes and see the changes.

There is already a simialr thing being done in a couple countries
View attachment 372619View attachment 372620

Thats a really good idea. To do this for various towns in Somalia so that people can see the growth and have a retrospective look at it. It will surprise many. Also going through those Somali Archive accounts that show old videos of various towns would help as well, that's what i plan on showing when i talk about the cross regional housing and construction boom.

It's literally striking the how much mogadishu has developed, rebuilt and grown in a decade or so;


The post i made that showed Borama's growth:

You are right some of them didn't even exist or was smaller settlements back during the Kacaan times.

Borama 1983

Borama 2025

Now it even has recreational spaces like amusement parks, highly accredited educational institutions etc. You can backtrack and look at the development and starting point of other towns or cities in Somalia and if you can find past images to contrast it with, it would be similar.


Some places start as villages that grow into towns, and others as towns that grow into cities. Cities like Hargeisa, Jigjiga, and Mogadishu are now evolving into modern metropolitan hubs with high-rise apartments, skyline buildings, large shopping malls, and bustling markets.

What’s unique about Somalia is how decentralized this growth is. Towns, cities, and villages are spread out but well connected something you don’t really see in Ethiopia unless its Galbeed because everything is bottlenecked and concentrated in Addis.

 

[Idilinaa]

Wow thats incredible. I guess then its possible were already at a 3k gdp per capita. Which isnt too crazy since Kenya with gdp per capita of 2k and a population of 55 million doesnt seem to have living standards that are much better than what we have in Somalia

The only thing is somalia is lacking is that we didnt have a state that woukd have diverted part of this economic surplus into education and public infrastructure.

If you read that survey I shared, you’ll notice 60% of Somalis reported their living standards as good and improving. Most households across all regions had access to basic services piped water, electricity, improved sanitation, etc.

But here’s the key: all of this is privately delivered, which means you need income to pay for it. The idea that Somalis earn just $600–700 per capita is physically impossible, they wouldn't afford anything. For example, in surveys, even the lowest income I’ve seen was a rural camel milk farmer earning around $7 a day (about $215 a month). Once that same farmer connected to urban markets, their income jumped to $20 a day. When they joined business cooperatives, they reported making as much as $3,200 per month.

There are countless direct income statements and surveys across sectors that point to the same conclusion: Somalia’s real GDP per capita is likely closer to $3,000–4,000. And incomes are rising because of value chain development, stronger market integration, and cooperative models.

One of Somalia’s big dilemmas is that state-building was derailed, while the private sector expanded and developed so quickly that it got far ahead of government institutions. Now the public sector is playing catch-up , registering/licensing businesses, expanding the tax base, and building public-private partnerships to speed up development.

In the long run, it’s far more efficient if the state collects revenues and channels them into public goods like education, healthcare, and infrastructure, instead of leaving communities and businesses to shoulder those costs directly, as happens now.

 

[Midas]

If you read that survey I shared, you’ll notice 60% of Somalis reported their living standards as good and improving. Most households across all regions had access to basic services piped water, electricity, improved sanitation, etc.
View attachment 372626

But here’s the key: all of this is privately delivered, which means you need income to pay for it. The idea that Somalis earn just $600–700 per capita is physically impossible, they wouldn't afford anything. For example, in surveys, even the lowest income I’ve seen was a rural camel milk farmer earning around $7 a day (about $215 a month). Once that same farmer connected to urban markets, their income jumped to $20 a day. When they joined business cooperatives, they reported making as much as $3,200 per month.
View attachment 372627

There are countless direct income statements and surveys across sectors that point to the same conclusion: Somalia’s real GDP per capita is likely closer to $3,000–4,000. And incomes are rising because of value chain development, stronger market integration, and cooperative models.

One of Somalia’s big dilemmas is that state-building was derailed, while the private sector expanded and developed so quickly that it got far ahead of government institutions. Now the public sector is playing catch-up , registering/licensing businesses, expanding the tax base, and building public-private partnerships to speed up development.

In the long run, it’s far more efficient if the state collects revenues and channels them into public goods like education, healthcare, and infrastructure, instead of leaving communities and businesses to shoulder those costs directly, as happens now.

The common pattern in development/industrialization weather your talking about britian in the early 1800s or Japan and china who caught the up the fastest. Is the existence of a native merchant class. Who independently drives both economic growth and industrialization through reinvestment. For all of southeast Asia's success this is the element they lack with the situation being even worse in Africa. This is where we stand out the most in that our possession of a native merchant class we have the key element required to drive economic growth and industrialization.

One of the biggest pitfalls so many countries face is that agricultural/mineral are both subject to being taken over by either the former land owning elite or the new polticsl elite . Who then can basically put it all in the hands of a few people who extract the rents from these commodities and line their own pockets instead of reinvesting it on productive assets. This is why land reform is constantly talked about by economists as the key to development.

We entirely sidestepped this issue becuase of the mercantile nature of pastrolism/agropaatraolism where you sell your products. Instead of acquiring land and buying serfs.

 

[Midas]

You'd be surprised how much this comes up time and time again. People think it only applies to stuff like oil or maybe minerals
Without realizing countries whose economy is built off exporting stuff like wheat,coffee,timber,cocoa, etc all face this problem . Forget about Africa just look at Latin America. The reason Spanish colonalism is so terrible is that they created these large estates called hacienda's and the landowning elite that formed from this is are the ones who 500 years later their descendants still dominate the economy. Ask yourself even though they've been independent for 200 years why are these countries still not developed ? Its because all these Latin American economies are structured around the exports of these crop goods and minerals. They have been constantly stuck in the commodity boom and bust cycle since the global economy took off in the 19th century