original link:Somalia’s export crisis! (1)
Somalia, as beloved as it is, is a 60-year long Greek tragedy. From a flourishing nation forged from patriotic zeal to, arguably, a textbook example of African ineptitude.
Somalia today suffers from the same problems facing dozens of other African countries: terrorism, poverty, creeping inequality, rampant extremism, and hypocrisy.
Yep, for the average Somali the situation is nightmarish. That said Somalia is getting better, albeit excruciatingly slowly, a system of governance is being implemented and swathes of Somalis are seeing an increase in their direct and economic security. In this short piece, I wish to discuss how we, Somalis, can all enhance the latter.
I’m no economist, nor a businessman, but it’s not hard to see that the path to wealth is paved with consistent profit. For Somalia to escape its poverty rut it must stop focusing inwardly and start focusing outwardly. Petty donations and new soccer stadiums don’t grow national wealth, exporting resources do.
Somalia’s current export market is largely based on livestock exports to Saudi Arabia(~40%). This export monotony is slightly offset by a host of agricultural exports and a few niche exports. Thus it would be an understatement to declare Somalia’s export market to be extremely limited.
Enhancement of the export sector:
Due to the lack of internal structure, Somalia’s national export capabilities are currently hampered. Roads are often beset by terrorists and bandits thus causing a financial disincentive for any budding entrepreneur. Said spoilers also hamper any chance of large scale economic projects within the nation.
That said, Today we will focus on ….
Somalia should promote export diversification, 38% of Somali exports(2019) are live animals that are prone to dying on transit, disease, and other biological hindrances. The Somali government should instead intensify its efforts on the agricultural and mineral sectors.
Currently, there is a healthy demand for Somali oil(sesame) seeds, resins, gums, and other vegetable saps. These account for 34.9% of the Somali exports, market growth could be achieved through government loans to farmers who currently produce said goods, government subsidies for any student attempting to study agricultural studies, increasing demand through expanding the import market, and free rapid(6months — 1 year)educational courses for current farmers.
We should note that oilseed exports such as sesame seeds have grown by a whopping 85.9%(2018–2019). From 2012 Somalia has been crowned the 12th largest sesame producer in the world. The sector employs a healthy section of the labor force due to its labor intensiveness and is an example of how diversification can help Somalia grow.
This growth was, however, not completely spontaneous and was majorly due to USAID GEEL( Somalia Growth, Enterprise, Employment, and livelihoods) program. Said program taught thousands of rural farmers sesame production techniques and granted them plots to test their knowledge. Thus Displaying the impact education has on the economic growth within Somalia. That said, we will no doubt see a “monkey see monkey do” attitude by the rest of the farmers which will further catapult the market to economic maximization.
Somalia also produces $2.4million worth of fruits/nuts(1.2% of exports). To grow the sector the government could implement the previous suggestions as well as offering pesticides to farmers, offering subsidized agricultural machinery to farmers, investing in insulated storage warehouses to reduce perishability, and offering quality assurance programs.
On the other hand, Somalia’s mineral sector is, to say the least, abysmal. Currently, the mining sector primarily produces limited amounts of copper, ores, slag, and ash. The current government has begun a comprehensive plan to develop several oil production plants over the next 10 years but has ignored its mineral resources. Ironically heavy investment in the small scale mining sector could offer the government a well needed economic lifeline.
Investment in small-scale mining primarily through educational/vocational support, importation of surveying equipment, the importation of basic mining equipment, and the importation of purification equipment would rapidly grow the number of minerals exported. This in turn would cause a metaphorical, gold rush that would employ a substantial amount of the youth.
This was a short piece on how diversification could expand the Somali export sector. Investment by the government or even the private sector will offer us both economic security and expand the knowledge base of the country.
In the next piece, we will discuss methods to refine our livestock exports.