'Our Customers can also use the Internet via their Computers.' The by yaoyufang


									‘Our Customers can also use the Internet via their Computers.’
     The Deputy General Manager Mr. Abdulahi M. Hussein
  Somali Business Review
Somali Business Review
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             04 Editorial Note:
                                                                               Business May Prosper Without Peace,
             Industrial Analysis                                                        But For How Long?
             05 Impact of High Energy Cost on the Somali                      The business activities in Somalia’s capital, Mogadishu, are
                Economy                                                       returning to normal after 2 years of conflict in the city. The
             06 Exit of the Ethiopian Forces Gets Business                    activities were boosted by the return of internally displaced

                Booming Again                                                 persons (IDPs) and those who crossed borders.

             07 Somalia attends AU Trade Ministers Conference
                                                                              The companies that import construction materials got the
             08 Experts: Invest in theAgricultural Sector for                 largest share of this business boom. Also relatively high
                Economy Recovery                                              number of labor got temporary jobs from renovating of
             09 Private Sector Promises Job Creation Projects                 homes and other properties destroyed during the Transitional
             10 Interview with ILO- Somalia Country Director                  Federal Government and their allied Ethiopian forces on one

             12 Interview with Telcom Somalia                                 side and insurgents. Though their wages are not up to the
                                                                              world standard, but it may be enough to feed their families.
             Cover Story
                                                                              Another important factor that stimulated business activities
                                                                              is the relative peace that prevails in Mogadishu at the
             13		 Managing	Business	in	Post	Conflict	Somalia                  moment. The Somali Business Community (SBC) realized that
             15 Managing or Coping with Events as they happen?                their business can’t prosper without peace; so it is in their
                                                                              best interest to contribute to the peace building efforts. In
                                                                              this direction, SBC has to come up with new initiatives to
             Human Resource                                                   mediate among different political groups for the interest of
                                                                              their country and people.
             16 Preparing tomorrow's Employees
                                                                              Despite large quantity of foodstuff available in the markets,
                                                                              households are still complaining about inflation. Although oil
             Special Coverage                                                 prices has fallen sharply in the last three months, but it has yet
                                                                              to affect electricity prices and transportation costs including
             18 Somalia’s missing Million: The Somali Diaspora                that of airlines. Wholesalers blame the insecurity costs and

                and its role in Development - UNDP Report.
                                                                              insurance premium imposed by the shipping companies due to
                                                                              the increase of piracy along the coast of Somalia.

                                                                              Another important event was the SBC meeting held in Djibouti
                                                                              on March 21-22, 2009. The meeting brought together
   Chief Editor: Dahir Arab                                                   representatives from the Somali Business Councils, Women

   Production Editor: Abdulahi Behi
                                                                              and Youth Associations and the United Nations to discuss
                                                                              possibility of creating decent work for the Somali youth.
   EDITORIAL BOARD:                                                           Although, the SBC has shown commitment towards creating

   Abdulkadir Katib                                                           employment opportunities for the youth, but the reality on
                                                                              the ground is that they can do little without external support.
   Ahmed Ugas                                                                 They need technical support and free interest loans to be able
   Yousuf Moalim                                                              to invest in huge projects that can create mass employment

   Design & Production:

   Mohammed Hussein                                                           Exploitation of the agricultural sector is the best way that
   Mohamed Jesow                                                              Somalia can tackle soaring food prices as well as create

   Advertising Manager: Mohamed Zubeir
                                                                              secure employment opportunities for a large part of its
                                                                              citizens. However, local farmers argue that the World Food

   Distribution Manager: Ahmed Yousuf                                         Program (WFP) is the major obstacle to their food production

                                                                              as it dumps a large quantity of aid food during harvesting.
   Printer: Graphic Lineups Ltd.                                              Agrarians recommend the role of UN’s Food and Agriculture
                                                                              (FAO) in Somalia should be strengthened to create food
                                                                              security and ask WFP to buy locally
            The Magazine is published quarterly. Contributions
    are most welcome and are highly encouraged via email. The Editor
reserves the right to edit in a way deemed necessary. Opinions expressed in
    articles or adverts do not necessarily reflect those of the Publisher.

Somali Business Review                                                 4
Impact of high
energy cost on the
Somali economy
By: SBR Team
Energy in one form or another has always
been used to drive human economic and
social activities, hence being classified as
a strategic resource in all Countries.
Early man mainly utilized wood-fuel and
thereafter coal was discovered in Europe
which helped to propel the Industrial

Discovery of Electricity
Discovery of electricity in revolutionized
the utilization of energy especially for
Industrial purpose as it was relatively
cheaper to produce.

It is also renewable and environmentally       This will enable its use in Vehicles. Japan    Unilever and Coca cola have shifted
friendly. Electricity is mainly produced       and the US are due to release their first      their main plants to Egypt and South
through hydro power, Geothermal and            fully electric cars this year.                 Africa respectively.
Power alcohol-mainly from byproducts
of sugarcane. This is mainly done in           (b) Wind energy;                               Ethiopia has also substantial hydro
Brazil where cars also use this form of        Great strides have been made in this vital     electricity tapped from its rivers but no
energy.                                        and abundant resource whereby wind             commensurate Industrial consumption.
                                               energy is tapped, stored in Batteries and
Trains, which are main vehicles for mass       then distributed on demand.                    The Somali experience
transportation of people on land first                                                        Due to lack of a strong central
used wood-fuel, then shifted to coal and       (c) Solar Energy;                              Government which should take the lead
presently most use diesel. Though, some        This is a fast expanding source of energy      in facilitating such vital Infrastructure,
trains in the first world use electricity.     especially in India and Spain, the later has   electricity production and distribution
                                               even managed to tap excess solar energy        has been left to the private sector whose
The main disadvantage of electricity           and export to Central Europe.                  investment criteria are guided by short
is that it can not be used in a mobile                                                        term and maximum profits, while such
environment like cars etc but there has        (d) Nuclear Energy:                            projects require long-term investments.
been some progress made in this regard.        This is high investment and high
                                               technology source of power. Its                The result has been expensive and
Oil and Gas                                    sustainability and safety are yet to be        unreliable electricity power supply, but
The entry of Oil into the energy circuit       fully established. Mainly pursued by           the Customers just have to persevere for
resulted in great strides especially in the    highly Industrialized powers                   lack of choice, though it is really hurting
mobility and logistics Industry. It became                                                    Business.
quite easy to transport goods and people       Regional electrical power situation.
from one part of the world to another.         Uganda is the leading producer of hydro        Fuel cost /per   Electricity    Period
This greatly increased world trade etc.        electric power but it has limited Industrial   200 litre drum    Cost/KW
Additionally, Oil was less polluting and       capacity for consumption, hence it exports     $275              $0.8         Oct. 2008
by then relatively cheaper than coal.          to power hungry neighboring Kenya              200               $0.9         Nov. 2008
                                               which has a large Industrial base but          180               1            Dec. 2008
Most of the world’s proven Oil reserves        no sufficient capacity to produce hydro        160               1.3          Jan. 2009
are believed to be in the Middle East,         electric power. It has turned to expensive     138               1.2          Feb. 2009
hence the region’s importance to world         diesel powered electricity generation.         120               1.2          Mar. 2009
economy. Russia also has substantial
Oil and Gas reserves and serves Western        This has increased cost of operating           Despite the world crude oil prices as
Europe.                                        Business in Kenya, leading to most of the      shown above having greatly reduced,
                                               Giant Industries relocate to more low-cost     the cost of electricity in Mogadishu
Global trends in Energy                        production countries especially Egypt          has increased from USD 0.8/KWT in
Due to increased oil and Gas prices,           and South Africa which have lower prices       October, 08 to USD 1.2 in March, 2009.
most Countries have gone overdrive in          of electricity due to more efficient ,hydro    One would wonder what rational is used
research of alternative and sustainable        generation as opposed to diesel generated      to determine this pricing, but the sure
sources of this vital resource.                electricity.                                   thing is that it is hurting Business, and
                                                                                              by extension the economic situation of
(a) Electric Batteries: Research has led       Both countries have big rivers, human          the people.
to production of Batteries that can store      and financial resources for tapping the        The situation in Puntland is no different,
more electricity and for longer periods.       electricity. Giant manufacturers like          except there is a useful input by the

Somali Business Review                                             5
Government owned power supply which                  This might be as good an opportunity          It cannot be gainsaid that Somalia,
charges usd0.4/kwt but it is only for a              as any to point out the fact that fuel in     especially with its large rivers, abundant
few hours per day, followed by Telcom-               Somalia is transported and stored in          sunshine and great wind-power has great
Puntland which charges USD 0.8/                      200 Litre drums mainly on Lorries. This,      potential for alternative and sustainable

kwt and the most expensive producer                  apart from being very uneconomical is         sources of power, but like all other major
charged USD 1.00/kwt. This means,                    extremely dangerous. Great loss of life       Infrastructural investment strong and
most industrial users have two meters;               and property could occur incase of a fire/    stable Government is a prerequisite for
Government and one private to ensure                 accident either during transportation,        creating an enabling environment
uninterrupted power supply.                          handling or storage.

                  Exit of Ethiopian Forces Gets
                   Business Booming Again
At the end December 2006, when                       Main Enterprises looking forward for a        rent once peace fully returns.
Ethiopians arrived in Mogadishu and the              boom with the advent of relative peace
security situation was at its worst due              which has been given more impetus with        This has provided an opportunity for
recurrent insurgent attacks to Government            the election of a new Government in           Traders	 to	 reap	 good	 profits	 and	 also	
locations and their supporters mainly                Djibouti most Businesses are generally        prepare well for the big Business when
targeting the Ethiopian forces. This                 expected to do well although the              total peace comes and the Government
resulted in thousands of people leaving              following Business lines are expected to      and other big players will also engage in
the City seriously impacting negatively              start	reaping	the	benefit	of	the	Ethiopian	   major reconstruction efforts, hopefully
on Business.                                         withdrawal and return of legitimate           with full support from the International
                                                     Somali Government sooner.                     Community. This will be multi Billion
It was with a measured optimism that
City residents joyfully cheered the exit
of the Ethiopian forces hoping that
normalcy will be restored and Mogadishu
will slowly reclaim its past glory as the
Somalia Business and Cultural nerve.

Insecurity and uncertainty
In an environment of Insecurity Businesses
were not able to cost effectively acquire
the requisite inputs in terms of supplies
and even Employees. This made it more
expensive to operate. Business also
requires an atmosphere where one can
accurately foresee future for purposes of
planning. During this period of heightened
insecurity	it	was	even	difficult	to	ascertain	
what will happen in the next hour leave
alone in the next month. It is extremely
difficult	for	a	Business	to	operate	in	such	
an environment.

Most Enterprises failed due to lack
of Customers, constant robberies and
grenade attacks among other factors.

Experiences prior to the Ethiopian
invasion                                             Peace is pivotal to all human activity        Dollar activities.
Admittedly there were many insecurity                especially Business, for without it one
problems since collapse of Central                   cannot plan and as is general knowledge       Food stuffs
Government in 1991 but Business                      to work without a plan is to plan to fail.    Food is always a big Business everywhere
has always prospered though with                                                                   and every time. Similarly this applies
difficulties.	 This	 has	 been	 a	 wonder	 to	       Building and Construction Materials           in Bakara market where during the
most Countries how Business could be                 With the cessation of hostilities             height of the Ethiopian invasion Food
conducted in Somalia without Law and                 enters a period of reconstruction and/        Stores were almost collapsing due lack
order. Newspapers and Radios around                  or renovation of destroyed buildings          of both supplies and even customers.
the round carried numerous stories about             and other infrastructure. Owners and          People have now returned to their
these feats.                                         Developers have started to build or repair    normal residences and reestablishing
                                                     their buildings and demand is high for        old Business acquaintances. Business
It	 is	 difficult	 to	 fathom	 but	 it	 happened.	   different building material such as cement,   in food stores both for Wholesalers &
The factors for this relative Business               play wood, timbers, paint, nails etc. This    retailers is good once again. >>>
success in a highly unlikely environment             is in anticipation of the high demand for
are still yet to be fully understood.                Residential and Business premises for

Somali Business Review                                                   6
Domestic essentials                                                                                   coming       in   extremely
The most immediate                                                                                    handy in Mogadishu due
basic needs for Returnees                                                                             to displaying a variety
back to the City are                                                                                  of goods with the added
cooking          utensils,                                                                            advantage of lower prices
electrical     appliances,                                                                            due to lower operating costs
beddings, water pipes                                                                                 as they mostly don’t factor
and	fittings	among	others	                                                                            in rent, Employee among
since most People left in                                                                             other costs.
an unplanned manners
leaving their property                                                                                Their ability to deliver at
unattended hence to                                                                                   the doorstep is an added
looting and other forms                                                                               advantage as they are able
of misuse.                                                                                            to connect well with their
                                                                                                      customers at their homes or
They now have to roam                                                                                 places of work.
the vast Bakara market
in search for bargains                                                                                Citizens’ plea
for the items as Somalia                                                                              Mogadishu and most of
like every other part of                                                                              Somalia has not known
the World is experiencing                                                                             peace for a long time
acute	 inflation	 making	                                                                             and this has destabilized
it extremely necessary                                                                                families where some are
to stretch the Dollar as                     Hawkers and Porters                                      unable to fully account for
much as possible.                            Every City in the world has its fair         lost relatives even to-date. Property
                                             number of Hawkers and Porters. Nigerian      of unknown value has been lost in the
In addition to the above there is also the   Hawkers have been reported to be the most    destruction leave alone the opportunity
need for the Returnees to eventually plan    notorious as they are reputed to seriously   cost of the war which would run into
furniture and other secondary needs.         harass Customers until they agree to part    Billions of Dollars especially in terms of
                                             with their hard earned money. Somali         unutilized resources, opportunities etc.
According to a family back from Nairobi      Hawkers are more subdued and not as
last week, most of their domestic property   aggressive but they somehow make their       Now that the people are praying day
                                             fair amount sales all the same.

had been looted and they needed to buy                                                    and night to Allah (swt) to guide the
almost everything for their house again.                                                  Leadership and Citizens towards
                                             Hawkers are a mobile shop and are            understanding and permanent peace so
                                                                                          as normalcy can fully return

                                                                                                       failure of their regulators
By: SBR Team                                                                                           to     exercise     adequate
                                                                                                       control and supervision
The Fifth Ordinary                                                                                     over the operators, African
Session      of   the                        Partnership Agreements negotiations
                                                  and the WTO Doha Round can be           countries have not been spared from the
African Union (AU) Conference                                                             contagion effects of the crisis.
of Ministers of Trade was                            successfully concluded.
concluded on 20th March,                                                                  During the conference, representatives
2009 at the AU headquarters                              The ministers underscored the
                                                          need to harmonize timelines     from India and China presented on
in Addis Ababa, Ethiopia.                                                                 India’s free tariff preference scheme
The conference was                                         and    positions    among
                                                            African countries and         for Least Developed Countries (LDCs)
attended by 43 countries                                                                  and China’s duty free quota free market
and several Regional                                        regions in the negotiating
                                                             process.                     access for LDCs.
Economic Communities
and Organizations.                                                                        Somalia was represented by Mr.
                                                              Addressing the opening
                                                              ceremony, Au Trade          Abdurashid Mohamed ‘Irro’, the
“The Fifth Ordinary                                                                       Minister for Commerce and Trade.
Session      of    the                                        Commissioner,         Ms
                                                              Elisabeth Tankeu, said      Leading a delegation comprising
AU Conference of                                                                          of	 ministry	 officials	 and	 the	 Somali	
Ministers    of Trade                                        that the Fifth Ordinary
                                                            Session of the AU             Chamber of Commerce, the minister
is a key institutional                                                                    held bilateral meetings with several
framework of the African                                   Conference of Ministers of
                                                         Trade is holding in the midst    African trade ministers on the sidelines
Union which provides                                                                      of the Conference.
the forum and opportunity                               of the most serious crisis that
for Trade Ministers to review                        has	afflicted	the	global	economy	
                                                  in living memory.                       The minister highlighted the role
developments, take stock and                                                              of Somalia in trade and commerce.
assess policy implementation,” AU said

                                             She said although the crisis has not been    “Somalia currently depends on mainly
in a statement.                                                                           on imports of goods. However, we are
                                             the making of African countries, the root
                                             causes	being	the	greed	of	some	financial	    encouraging exports of local products”
During the two day meeting the African                                                    said the minister
Ministers discussed how the Economic         operators in Western countries and the

Somali Business Review                                          7
                                                                                              shortage of labor in respect of quantity
                                                                                              and quality. This has been mainly due to
                                                                                              the following factors:
                                                                                              •     Low farm income
                                                                                              •     Civil strives
                                                                                              •     Recent urbanization with
                                                                                                    opportunities of better pay for
                                                                       arable lands of              unskilled labors.
                                                                       the country to
                                                                       drought tolerant       Inadequate Capital for Rehabilitation
                                                                       cereal         crops   of Infrastructure
                                                                       such as sorghum        Poverty, inappropriate farming practices
                                                                       which dominates        and inadequate institutional support have
                                                                       cultivated crops.      undermined	 the	 generation	 of	 sufficient	
                                                                       Maize is also          capital resources for infrastructure
                                                                       grown, but because     development. Many farm assets such
                                                                       of its lower drought   as irrigation infrastructure and farm
                                                                       resistance, good       equipment were destroyed during the
                                                                       harvests are only      civil war and no one could dare to even
                                                                       assured in good        import farm machineries due to lack of
                                                                       rainfall years, that   security.
                                                                       are 3 out 5 years.
                                                                                              Poor Marketing Infrastructure and
                                                                      Farm Inputs             Services
                                                                      Although the farm       Poor marketing has affected agricultural
Somali Institute of Management and                                    inputs are available    production and income levels of the farm
Administration Development (SIMAD)             to some extent, they are unaffordable to       families. This particularly affects the
in conjunction with Hormuud Telecom            majority of the farmers. The quality of        horticulture sub-sector due to inadequate
Inc. organized an Academic Debate              imported inputs such as seed and agro-         market information, competition for
on the Exploitation of the Agricultural        chemicals cannot be assured due to lack        local market with neighboring countries
Sector to Rebuild the Economy. Over 50         of capacity of the Ministry of Agriculture,    and lack of capacity for agro-processing.
participants that encompass academicians,      for phytosanitary inspection and enforce       Other factors include poor feeder roads,
intellectuals and business community           quality standards.                             lack of marketing organizations and
attended the event, which was held in                                                         capacity for agro-processing.
Mogadishu on February 12, 2009. The            Poor Agronomic and Cultural Practices          High Cost of Irrigation
objective of the debate was to encourage       With respect to rain-fed agriculture,          The high cost of irrigation is related to high
the private sector to invest in the            this pertains to mono-cropping or dual         cost	of	fuel,	inefficient	irrigation	methods	
agricultural sector to revive the economy      cropping. Currently, farmers grow              and frequent repairs and reconstruction
through creating secure employment             mainly two cereal crops namely sorghum         of	shallow	 wells.	The	flooding	problem	
opportunities as well as tackling the          and maize, a practice that contributes         of the major rivers poses a challenge to
soaring food prices that deteriorated the      depletion of soil fertility. Other problems    agricultural and irrigation development
quality life of many Somalis.                  include untimely sowing, lack of seed          due to frequent destruction of irrigation
                                               selection, seed broadcasting, lack of crop     and communication infrastructure that
As matter of fact, Somalia has a plenty        rotation and inadequate weed control.
of agricultural land but the misfortunate                                                     are very expensive to rehabilitate. There
is that only 1.6% of Somalia’s total land      Lack of Appropriate Technology                 is therefore need to invest in permanent
area is cultivated, and 69% is permanent       Farmers lack appropriate technologies to       flood	 protection	 works	 to	 prevent	
pasture. There are two main types of           match those in neighboring countries and       frequent recurrence of the problem.
agriculture, one indigenous and the other      international standards. Even where the        Inadequate Extension Services
introduced by European settlers. The           technologies are available, the farmers        The poor performance of the sector is
Somalis have traditionally engaged in          lack economic capacity to procure and          partly due to poor extension services.
rain-fed dry-land farming or in dry-land       apply the technologies. In addition farmers    The main weaknesses of the extension
farming complemented by irrigation from        lack knowledge and skills necessary for        service include:
the waters of the Shabeelle and Jubba          improved agricultural performance.
rivers or from collected rainwater. Maize,                                                      •	 Few	qualified	extension	staff	with		
sorghum, beans, rice, vegetables, cotton,      Degradation of Agricultural Land
                                               through Soil Erosion                                a staff: farmer ratio of 1: 20,000
and sesame are grown by both methods.                                                           • Uncoordinated extension
                                               Most of the crop land has been subjected
The working paper was presented by             to soil erosion partly due to poor                  services because extension
Professor Mohamed Elmi Gure an                 farming practices. This problem has                 workers are answerable to different
agrarian who tough at Somali National          been aggravated by a combination of                 organizations.
University before the collapse of the          indiscriminate de-vegetation, occasional         • Inadequate technical know-how
central government in 1991 and he found        intensive downpours, and overgrazing.               due to limited training and on-job
that the following as the constraints of the   The seriousness of the erosion problem is           skills development.
development of the agricultural sector:        evidenced by presence of huge gullies on         •	 Lack	of	financial	&	logistical	 	
                                               many in farms.                                      capacity of the Ministryof
Inadequate Rainfall                            Loss of farm labors through rural-urban             Agriculture, to provide effective
Rainfall which ranges from 300-600 mm          migration.                                          extension services. This, coupled
per annum and characterized by erratic                                                             with inadequate incentives and
distribution is the major constraint to        There has been a remarkable immigration             career development opportunities
agricultural production. This constraint       of the agro-pastoral labor in the last              has resulted in demoralized public
has limited cropping activities in the         three to four decades which resulted in             sector extension personnel >>>

Somali Business Review                                             8
Lack of Agriculture Financing                 former director of the Agricultural             	 •	 To	continue	such	useful	debates		
Mechanism                                     Research and Extension institute in                  and engage small farmers in future
There	is	no	formal	agriculture	financing	     Afogoye district near Mogadishu has                  debates;
arrangements for investment and               also emphasized the importance of               	 •	 To	encourage	and	facilitate		     	
procurement of farm inputs. Recent            such debates and he underlined that                  returning of agricultural manpower
surveys have indicated a need for a farm      Somalis can sustain food security if the             from major towns to their respective
credit package.                               agricultural sector invested properly                villages and farms;
                                              and he promised to contribute with his          	 •	 To	combine	private	sector	        		
A few farmers who have had access to          expertise voluntarily.                               investment with agricultural

farm credit from revolving funds have                                                              technical know how;
recorded better performance than those        The      following   recommendations            	 •	 To	encourage	business	community		
without access to such credit.                were made by the experts in order to                 to import healthy seeds, fertilizers
                                              take forward the development of the                  and pesticides
Professor Ahmed Hirabe Hassan the             agricultural sector:

                     Private Sector Promises Job
By: SBR Team              Creation Projects
Somali Business Community (SBC) from
Somalia and abroad gathered in Djibouti
for two-day brainstorming meeting
aimed at creation of job opportunities for
Somali youth. The meeting was organized
by	the	United	Nations	Political	Office	for	
Somalia (UNPOS) in conjunction with
United Nations Development Program
(UNDP) and International Labour
Organization (ILO).

The SBC and UN agencies that attended
the meeting discussed the challenges
and constraints encountered in the
development of entrepreneurship.

The Somali Business Community
                                              documents focusing on the development           A number of business analysts told SBR
was keen to take the lead in creating
                                              of youth employment.                            that creation of decent work for the
employment to save the Somali youth
                                                                                              youth of Somalia calls for the investment
from	adversaries	and	difficulties	they	are	
                                              The meeting was the second of its kind          in the marine resources, agricultural and
facing at the moment.
                                              in which the International Community            livestock sectors; and this can be realized

                                              wants to engage the Somali private sector       through providing free interest loans to
The business community underlined that
                                              to	play	a	leading	role	in	the	post-	conflict	   the private sector by the international
the youth is the country’s future and need
                                              reconstruction efforts of Somalia.              financial	institutions
to	be	saved	from	human	trafficking,	drug	
addiction and migration to Yemen and
Libya via the two deadly routes, Gulf of           SIMAD - BAKARA STUDY CENTRE
Aden and Libyan Desert.

At the end of the meeting, the Business
Community formed a 22-member steering          CEMED provides one year training course for the managers of private and
committee, which has been divided as           public enterprises in Somalia in the area of:
follows: 10 members for SBC in Somalia;        •	Business	accounting		•	Computer	studies	•	 English	language		•		Management
3 members for each of the SBC in Dubai,
Kenya and Djibouti; 2 members for SBC          Indoor and Outdoor Trainings                     Special course:
in South Africa; 1 member for SBC in           •	 Secretarial	Skills                            •	 Daceasy	accounting	for	windows
Uganda. The mandate of the Steering            •	 Bookkeeping	&	accounting	systems              •	 Peachtree	complete	accounting	
Committee is to develop and implement          •	 Setting	up	Computerized	Accounting            •	 Quick	books	program
job opportunities and Youth Employment                                                          •	 Excel	accounting	
Strategy as well as proposing project                 For Futher Information please contact:- Tel: 657836/ 924646 - Mogadishu

Somali Business Review                                             9
International Labour Organisation (ILO) has been operational and actively working alongside the
somali people contributing to stability, peace and economic development by supporting the creation of
decent work opportunities and developing community, public and private sector capacities to sustain
equitable employment and livelihood opportunities. ILO country director Paul Crook talked to SBR,
while he was attending Somali Business Commuity meeting held in djibouti on March 21-22, 2009.
The following are the excerpts from the interview.
                                                                                             and guidelines in health and safety. We
                                                                                             create an awareness of rights, support
                                                                                             the administrations as they develop so
                                                                                             they have inspectors who can advise,
                                                                                             support business structures so they can
                                                                                             assist their members in making sure
                                                                                             health and safety measures are taken,
                                                                                             and encourage workers to look after
                                                                                             their rights and organize themselves
                                                                                             as workers associations, cooperatives
                                                                                             and labor unions so they will be able
                                                                                             to bargain properly with other elements
                                                                                             within tripartite agreements.
                                                                                             We also have to make sure that people are
                                                                                             not exploited. For example, in situations
                                                                                             where there are over ten people for every
                                                                                             one job, people can be exploited [because
                                                                                             of the basic laws of supply and demand].
                                                                                             Unless we have socially responsible
                                                                                             companies and business owners, this will
                                                                                             remain an issue. Our discussions with the
                                                                                             business community in the last couple of
                                                                                             days have shown how much they want
                                                                                             to create more jobs. So we have actually
                                                                                             seen social responsibility from all the
SBR: Many Somalis, particularly the           to	 resource	 conflicts.	 Nevertheless,	 we	   partners. And that is an important thing.
youth, have little knowledge about the        have to continue to support the intensive      It is not a matter of opposition but one of
ILO. Can you tell us about what the           work of job creation to be able to address     collective bargaining in which each side
ILO stands for and what it has been           community needs, support individuals in        presents its strength.
doing in Somalia?                             their households and generally support
                                              communities to build infrastructures           There a lot of people who got disabled
Paul Crook: Let	 me	 first	 give	 a	 brief	   for the public good. We also continue          during the civil wars and who find it
background on ILO. The International          to develop enterprises to give people an       difficult to get jobs from the private
Labor Organization (ILO) was founded in       opportunity to build their entrepreneurial     sector. How can the ILO influence the
1919 as a response to employment issues       skills. We are also working with               employers to allocate a quota for the
that came up after World War I with a         administrations to ensure that we develop a    disadvantaged people?
vision built on the premise that universal,   holistic and inclusive decent work agenda
lasting peace can be established only if      which will support the reconstruction and      Paul Crook: Again it is a very important
it is based upon decent treatment of          development efforts in Somalia .               question. I would speak from ignorance
working people.                                                                              if I said we could insist on quotas. I met
                                              SBR: Many workers complain about               a very interesting gentleman who came
ILO’s unique position is “tripartite“         low wages and hazardous working                from Baidoa. He trained in Malaysia and
stance bringing together employers,           environments in Somalia. What are              works as a physiotherapist for those who
employees and governments to jointly          ILO’s intentions towards improving             are less able. I raised to him the issue of
shape policies and programmes.                their working conditions?                      those who are mentally challenged as
                                                                                             well. We also have a major issue of drug
ILOs role in Somalia is to strengthen the     Paul Crook: This is a very critical            substance abuse in Somalia which leaves
ties between these tripartite elements.       question. It is not a question for ILO         a number of people mentally challenged
I think what I said at the Somali             alone, because it goes back to the             due to the effects of drugs.
Business Community meeting about the          tripartite issues. We have to increase
Philadelphia Declaration that “poverty        awareness of employee rights amongst           I asked this doctor to come up with a
anywhere is a threat to prosperity            the business community and point out           proposal to support the associations for
everywhere” is noteworthy and is one          they have a responsibility to ensure that      the disabled, because I still think we are
of the guiding principles of the ILO          workers are able to work in safe, healthy      some way off being able to say please
which also include cultivating peace and      and secure conditions. This also goes for      have a quota. What we should be doing
justice.                                      the employees to ensure that they too are      is insisting on standards. For instance,
                                              aware of their rights at work.                 building standards which emphasizes on
In Somalia, we have found ourselves                                                          ramp access for those who are physically
victims of security perceptions in the        Quality	 employers,	 with	 social	             challenged to access public buildings.
last 18 months. UN suffered very badly        responsibility, approached us asking
in 2008 for various reasons mostly due        for a hand in implementing measures            I think it is a matter of actually looking

Somali Business Review                                            10
to work together because I think there are     other infrastructure projects as well.        and Somaliland to go on a study tour
still issues to deal with before we have                                                     to Uganda, where they can discuss the
a regulatory framework where we can            Does the ILO have plans to extend             decent work agenda in progress. ILO’s
insist on quotas. The issue of minority        such professional trainings to other          support stands to all three sides of
is also another challenge because              professionals such as doctors?                tripartite association to put into action
employment should be on equitable                                                            and make sure that nobody’s rights are
basis. If the person is good enough, they      Paul Crook: We are not really in position     neglected.
should get the job.                            to teach doctors, our role is to help them
                                               to form free associations and develop         In April 2009 ILO celebrates its 90th
SBR: How can ILO empower                       the freedom of collective bargaining.         birthday. How will ILO Somalia
professional     associations     among        Such skill development is with our sister     celebrate this occasion?
others doctors, engineers, teachers,           technical UN agencies.
journalists, drivers, fishers in order to                                                    Paul Crook: We want to sign a decent
advocate and lobby for their interests         Many Somali professionals complain            work agenda which encompasses [and
and influence decision-makers?                 about the fairness of recruitment             addresses] this whole question of working
                                               process in the UN and International           out of poverty. We have heard every
Paul Crook: Again, it is an important          NGOs operating in the country. What           one who attended the Somalia Business
question. As we talked about the tripartite    has the ILO done to ensure a fair             Community meeting in Djibouti agree
elements and that associations are built       recruitment process?                          to create employment [opportunities],
on collective bargaining, it is important                                                    to sponsor the entrepreneurial spirit of
to	avoid	conflictual	points	since	so	much	     Paul Crook: All UN agencies have codes        the Somali culture and to see how we
can be achieved through negotiations.          of conduct and I am not in a position to      can actually work out of poverty. We
ILO can act as a facilitator to ensure that    speak for the other UN agencies. They         are looking to, as we have done here
social and economic development goes           have their own recruitment procedures         in Djibouti, sponsor social dialogues.
hand in hand because these professional        and UN agencies always recruit on an          It is necessary for us to work together
associations are very crucial for the peace    open account basis. If there are any          and take this forward. We also need to
and development of Somalia.                    complaints, then they should be raised        address social protection for those less
                                               with the concerned UN agencies.               able people who need our help.
Professional associations can play an
important role in stimulating what is          It is important for us to not get beyond      We	want	to	raise	ILOs	profile	which	is	
going on. We have seen doctors who             what	 we	 can	 actively	 influence.	 ILO	     sometimes not understood [by many].
voluntarily give their time to train others.   continues to work on any number of            What we are doing is creating decent
We at ILO want to take these associations      these	elements	[that	it	can	influence].	As	   jobs for decent people, paving the
forward and have supported the creation        Somalia reforms its administration, the       way for broader social and economic
of a Somali Engineers associations. The        recruitment laws should be upheld. All        advancement–strengthening individuals,
association encompasses members from           three administrations in Somalia have         their families, communities and
all the different regions.                     asked ILO to assist them to re-structure      governmental institutions.
                                               and update their current labour laws so
ILO sponsored two batches of Somali            once we get clearance to support them         The Somali Business Review’s giving
engineers in 2007 and 2008 to attend           in regard to working in Somalia, then we      me this opportunity to speak on these
a labor-based technology training held         would take forward these elements.

                                                                                             matters actually helps us to celebrate our
in Uganda. What is the impact of the                                                         90th year of ILO’s development, and to
project on Somalia?                            In the meantime, we have organised for        ensure we can continue to build on what
                                               representatives from Somalia, Puntland        is our mandate
Paul Crook: Actually an Interesting one
[question] again. We need to do further
work on this and it is one other thing we
continue to encourage is impact. If I give
one example [of its impact], one of the           Bakara Market-Opposite Abu-Hureyra Mosque- Mogadishu- Somalia
engineers, who actually left the country                                   Tel: 652930
in the early 1990s when the trouble
started and immigrated to the UK had
paid his own ticket to come to Nairobi
and we paid for his ticket from Nairobi,
Kenya to Kampala, Uganda. After the
training workshop, this gentleman said he
learnt a lot from the training and pledged
that he will go back home to Somalia to
contribute his skills. So with that mind
set, he went back to Somalia.
A number of people have learnt the
technical aspects of how to write
proposals so they can work with local
communities and local NGOs to help
them develop proposals for job creation
[initiatives] so that we use more cost-
effective and socially better labor-
based techniques instead of machines to
build roads. These proposals have been
implemented by Somaliland and Puntland
Road Authorities. Such skills can be
applied to not just road construction but

Somali Business Review                                             11
                                  Corporate Focus: Interview
Telcom Somalia, established in 1994 and it is the first major privately owned
company providing telecommunication services in Somalia. The Company
has added another cap to its features by being the first to introduce a new
value added service called GPRS. The deputy General Manager of Telcom, Mr.
Abdullah Mohamed Hussein spoke to Somalia Business Review (SBR) at its
Headquarters in Mogadishu. Following are the excerpts from the interview:
SBR: Could you please tell our readers        SBR: With reference to your preceding        accessed only with the SIM card of
more about your recently launched             answer, are there specific models of         Telcom Somalia.
GPRS which has been the talk of town          Mobile/Cell phones that GPRS can
of late?                                      operate on?                                  SBR: what is the scope of coverage
                                                                                             area or bandwidth for the GPRS
AM: First, I would like to take                                                              Internet?
this opportunity to thank our dear
customers as well as the potential                                                            AM: More or less as per our current
customers. GPRS is an abbreviation                                                            Mobile coverage which is most parts
for General Packet Radio Service. This                                                        of
new service is among the different                                                            Somalia. We are keeping a keen eye
services the company provides has                                                             on uncovered areas to meet upcoming
high quality speed and intended to use                                                        customer needs.
internet service through your mobile
(cell phone).                                                                                 SBR: What is the Company’s
                                                                                              strategy to promote this new
This service enables our valued                                                               innovative service?
customers to download anything they
require, visit the websites/WebPages,                                                         AM: The Company opens the GPRS
watch movies, and chat with their                                                             service to any one who has a mobile
friends by means of MSN Messenger,                                                            and use the service i.e. the SIM Card
send and receive massages, attach                                                             of Telcom Somalia automatically.
files,	pictures		etc	at	and	time	and	place	                                                It is 100% automated. We value our
via your cell phone.                                                                       customers so much that we do not want

They can also use this new modern
service not only through your mobile
                                                 “We are                                   to want to spare them unnecessary visits
                                                                                           to	our	offices.	Our	easy	and	user	friendly	
                                                                                           set up mechanism would enable most
phone but also via your personal
computer (PC) or laptop by connecting
a device known as Bluetooth or cable or
                                                keeping a                                  customers	 personally	 configure	 their	

GPRS Ups connections for computers.

SBR: what competitive advantage does
                                               keen eye on                                 In addition, we currently have internet
                                                                                           service to mobile service is free of cost
                                                                                           to the customer for an introductory
this new service add Telcom Somalia?

AM: It enables Telcom Somalia meet the
                                                uncovered                                  period!.

                                                                                           SBR: Finally, what other new services
current and foreseeable needs of our
valued	 customers	 and	 reflects	 our	
commitment to meet those needs in a
                                                  areas                                    do we expect from Telcom Somalia

sustainable manner.
The company always conducts a
market research to identify customer
                                                 to meet                                   AM: We are intending to offer some
                                                                                           more value added services to all our
                                                                                           customers, Including roaming services
preferences. Our research in the past
year informed the internet as the
Preferred mode of communication
                                                upcoming                                   while in neighbouring countries which
                                                                                           we hope to launch soon among others.

among our valued customers, and GPRS
is our response to those needs. Other
interventions to customer needs are to be
                                                customer                                   SBR: Ok thanks so much for such
                                                                                           an informative talk. Wish you all the
unveiled soon InshaAllah.

SBR: when did the company initiate
                                                 needs”.                                   AM: Thank you too for the opportunity
                                                                                           and the efforts of Somali Business
the GPRS project?                             AM: hhhhhh! Good. It can be used             Review to open up the brighter side of
                                              through any type of cell phones whether      Somalia to the world.

AM: The project began soon after the          it is Nokia, Motorola, the chine fashioned
completion of our Market research in          mobiles and others, but they should be the   At least we can take a break from the
late	2008	and	was	officially	launched	on	     2nd or 3rd Generation model.                 everyday negative media exposure for a
14th February 2009.                           Note that our internet service can be        change. I wish you very well too

Somali Business Review                                           12
                                                                                             & support.
Managing Business in                                                                         Benefits of Big Business
                                                                                             Benefits	 of	 Big	 Business	 are	 certainly	

Post Conflict Somalia                                                                        immense as they enable optimum
                                                                                             utilization of capital as the owners of
                                                                                             capital are able to invest it without
                                                                                             necessarily participating in the day to
                                                                                             day management of the business. This
                                                                                             provides	 a	 benefit	 both	 for	 investors	
                                                                                             and others through employment,
                                                                                             taxes, Business etc. Challenges of big
                                                                                             Business are different from those of
                                                                                             small Enterprises and their solution will
                                                                                             similarly be different.

                                                                                             Major Challenges
                                                                                             A major problem is the strategic allocation
                                                                                             of resources. Strategic allocation of
                                                                                             resources is the allocation of Resources
                                                                                             in such a way that it would give the
                                                                                             Business an edge above its Competitors.
                                                                                             It is common to see a wholesaler
                                                                                             import a very big consignment of a
                                                                                             single item which would probably take
                                                                                             longer	to	offload	instead	of	importing	a	
                                                                                             mixture which will move quickly and
                                                                                             hence maximize on returns. Apart from
                                                                                             committing funds (resources) which
                                                                                             should be generating more income, this
                                                                                             is creating more losses for the Company
Stunted Business growth: Pre 1991              the future.                                   in form of expenses incurred in storage,
Prior to the Civil war, most big Business                                                    additional transport, labour costs not to
Organizations in Somalia as in many            This is especially interesting as             mention risks involved in holding the
Countries then were owned and controlled       Immigrants from Somalia have taken            stocks	for	a	longer	period	i.e.	fire,	theft	
by the Government or its Agencies.             over a big percentage of distribution of      etc. Resources, the world over are getting
Businesses like Government were big            Petroleum, Mobile Airtime, Clothing and       thinner and thinner. All efforts should be
and	 largely	 inefficient.	 Governments	       Electronics in both Kenya and Uganda.         made to derive more from less.
placed strict controls on movement and         They have a good stake in Real Estate
foreign exchange. Poor communication           particularly in Nairobi’s Eastliegh &         Human Resources
among others factors also contributed to       South C Estates.                              Management of human resources is
slow growth of Business.                                                                     usually a hot potato in most organizations
                                               In most Countries, it would be almost         mainly because decisions made have
All these changed in the late 80s.mainly       impossible to conduct Business in the total   a direct bearing on lives of people.
as a result of the effects of Thatcherism      absence of Government but in Mogadishu        Nevertheless, it must be noted that
and her privatization, small Government        and other major towns Business and War        Human resource costs constitute a big
and free markets policies which spread         occur interchangeably. But the growth is      percentage of the expenditure of most
like	bush	fire	to	most	Countries	especially	   not easy to fathom. However, that is an       organizations. More importantly, the
in the Third world through world Bank/         area requiring much research & insider        quality and performance of the employees
IMF conditional-ties.                          information. It does not constitute our       play a pivotal role in providing the
                                               probe today.                                  organization with competitive advantage
Terrible Civil War followed by                                                               over its competitors.
Miraculous Business growth: Post               Enterprises maturing in a Vacuum              A casual look at most Enterprises in
1991                                           However, the fact is many Businesses in       Somalia would indicate obvious signs
Somalia had a far worse experience             Somalia have in the past two decades or       and symptoms of over-employment,
mainly by the advent of instability which      so matured from small to medium/Big           under-utilization, lack of training etc.
culminated in the civil war of 1991.           Enterprises. However, the mindset of          The importance of superior quality of
After the dust of the civil war had settled    most of the owners has remained the same      Staff in Business competition cannot be
Businesses started to pick up albeit           as that of one managing a small Business.     overstated. It is imperative for successful
slowly again but at a surprisingly faster      This was mainly as a result of big            organizations to recruit, motivate and
rate in the immediate consequent years.        business growth without corresponding         retain the best Talent if they want to
It was confounding to witness growth           growth in human capacity which is             remain at the top.
albeit small, in an almost permanent           mainly provided or facilitated by a stable
warlike situation and it would provide         Government. Enterprises developed in a        Controls systems
an interesting case study for historians in    vacuum; completely lacking in controls        When an Organization is small, it could

Somali Business Review                                             13
get	 away	 with	 insufficient	 controls,	         solving problems.                                 as a result of poorly trained staff. If
mainly because the investment levels are                                                            the organization had invested in some
low and it is mostly owner-managed.               First step would be decolonizing their            basic training to this staff member, it
However, as Business grows there has              minds as Fanon once said. Attitude                would have acquired a minimum of four
to be more reliance on systems trusted            towards jobs which do not place one               new premium customers who regularly
people. This is a major weakness in most          directly as “Incharge” of others should           transfer money to their families.
Somali Enterprises.                               change. Most of Generation Y view a job
                                                  in Production or Marketing being not as           Conclusion
Contributory Factors:                             prestigious as being a Human Resource             In the meanwhile, the growing number
Pre-civil war Management styles.                  Manager Etc. This has root even in the            of	Medium	sized	Enterprises	need	to	find	
Since most senior Managers got their              curriculums of most Academic institutions         their footing on processes and practices
training in the 80s when all Government           which give very little emphasis to direct         in their newly promoted league bearing in
and private systems were in place, they           wealth creation subjects like production          mind that the ball game is very different
will only do things how they know                 research and marketing. A solution                from the one Man show they were used
bests, not realizing that times have really       has to start with Academia as they are            to run.
changed and new innovative ways of                responsible for training for Industry
doing things have come up.                        to produce an appropriately trained               It	 is	 imperative	 for	 these	 firms	 to	 act	
                                                  Generation Y.                                     quickly to cushion themselves from
Few examples                                                                                        harsh effects especially in the fast
Probably take the case of Television              Staff training as an investment                   worsening economic squeeze brought
Management in Somalia. It is not strategic        I will illustrate this point using a personal     by the world economic crisis, in addition
to impose the pay as you watch (Pay TV)           experience when were quite green in               to the ever growing Global competition.
requirement used especially in the Arab           Bosaso. We were Four Lecturers and                The exposure is much greater leaving
world on a poor population like Somalia.          had just received our salaries in cash            them more vulnerable than ever before.
It costs around 10 Dollar per month to            so we visited a local Bank (call it Bank          They should factor staff training costs in
connect to a local TV Channel.                    A) seeking a simple money transfer                their budgets. Other stakeholders with
                                                  services.                                         an interest for sustainable development
This policy is counterproductive as it                                                              in Africa should also support these
reduces TV viewership while the objective         The four of us tried all the Somali we            initiatives.
is to increase the same. By simply,               could muster requesting to talk to a senior
reversing this policy and investing its           person who understands English. This              However, by and large and in the absence
Resources on capacity improvements to             was to no avail and we had to leave and           of a fully functioning Government, the
cover a bigger area, more content etc, the        visited a distance competitor (Bank B)            main responsibility in this regard remains
local TV industry would derive multiple           which served us well and has managed to           that of the individual Business owner(s)
benefits:                                         retain our loyalty to-date.                       as	they	are	the	ultimate	beneficiaries.
                                                                                                    To optimally execute this initiative, the
• Increase viewerships hence attract              From that date, the four of us have               viable option would be through continued

  more advertising revenue which is               influenced	 many	 others	 through	 word	          training at the work-place among other
  much more than the 10Dollar monthly             of mouth resulting in further loss of             avenues to bring the workers to desired
  fee.                                            Customers to Bank A. All this simply              levels of know-how
• Assist to increase purchase of TVs
  and accessories including increased
  electricity consumption etc hence
  improve local economy.
• Promote more interest in advertising
  resulting in more Business to itself,
  jobs and Taxes to improve services.
• The Television has been proved to                                                          •    Quality & cost effective products
  possess tremendous potential for mass                                                      •    Free delivery service
  education and empowerment which is                                                         •    Free Installations and maintenance
  most needed in Somalia.                                                                    •    Three months guarantee for each sale
                                                                                             •    New and used laptops
To return to the Importer/Wholesaler, if                                                     •    General Electronics
only He can allocate more resources in
marketing and distribution than storage
of	stock,	his	profitability	would	be	greatly	

Generation Y
This term simply refers to the young
generation. They are the backbone of a
Country’s wealth creators. It is said they
have modern knowledge but they are at
times	 difficult	 to	 control	 but	 they	 like	

Somali Business Review                                                 14
                                                   Going	 with	 the	 anatomical	 flow.	          the system to create collaborative,
                                                   The spine of an organisation is               coordinated – managed - movement
                                                   the path from mission and vision              toward the organisation’s goal.
                                                   to execution – through the spine
                                                   run the nervous system allowing               In Mintzberg’s work The Fall and Rise
                                                   the brain to deliver the message              of Strategic Planning he quoted a saying
                                                   for the feet to walk. And for the             – life is larger than our categories. Are
                                                   feet to pass the message back                 we	 now	 guilty	 of	 hiring	 specifics	 and	
                                                   they need some extra support,                 hoping (rather than knowing) we can get
                                                   say a bit of balance from the                 them	to	contribute	beyond	their	specific	
                                                   arms, if they are to deliver the              technical skills? Does the organisation
                                                   required mobilisation. Vision,                have the inherent skills to draw the
                                                   articulation, doing. The body has             best from the person to build further
                                                   systems allowing the messages to              competitive advantage beyond the key
                                                   be sent and received. In today’s              success factors available to all within the
                                                   business world, a great deal is               market? Or has your organisation taken
                                                   made of communication, the                    the decision to contract out functions to
                                                   central nervous system, but what              focus	in	on	specific	activities?	If	so,	then,	
                                                   of the backbone? The strategy can             obviously, skills required change and the
                                                   be equated to the spine and if it             manner of communicating objectives
                                                   is weak? We all know someone                  takes on a very different complexion.
                                                   suffering from back pain with all             Where is the information originating
                                             the commensurate worries. The strategic             allowing development of the strategy?
It is noteworthy how we have a tendency      process (See the diagram below) can be              Do the suppliers have a say in your
to take up the habits of the salesperson     seen as a quality training programme to             strategy development for example? Are
when we are looking to impress – “over-      be	followed	benefiting	the	overall	body,	           we all sharing a common understanding
technicalising” being the clumsy term        the overall organisation. Yet, procedures           of the words and phrases being used to
salespeople often use to cover the desire    are nothing without the people to make              describe something?
to drown us in technical terminology         them work and the management to
hoping we will become embarrassed by         ensure the people and procedures are in             Are we now working in an environment
our, seeming, ignorance and not hammer       harmony.                                            where we are executing for the here and
home those pertinent questions on value-                                                         now and starting to lose sight of the
for-money.                                       Mission, Objectives, Strategy,                  longer term? Within this, is it seen by
                                                            Tactics                              the teams in production, logistics and
The same is true of managers, or those                                                           marketing to manage their functions
masquerading as managers. How                                                                    day-by-day believing the vision, the
frequently have you heard people talk of                                                         creativity, is coming from elsewhere? “I
strategy and yet you are not convinced       Internal analysis         External analysis         am too busy making sure my discipline
they fully understand what strategy               Strengths              Opportunities           works to do anything else” may well
entails? Or add in the need for, say, a                                                          be a refrain amongst a number of your
strategic personnel policy. Stop, think,        Weaknesses                   Threat
                                                                                                 colleagues (contributing to the thinking
surely policy or strategy is a redundant                                                         that contracting out a function is a viable
word in this phrase? Save us from a jargon                       Options                         option). The strategic issues remain
without adding value to the meaning                                                              however; where is your knowledge base?
of the words; a personnel strategy,                               Choice                         Does the organisation have the skills to
personnel policy or even the strategy to                                                         draw the best from people above and
implement the personnel policy but not                                                           beyond delivery of a functional element
strategic policy? In today’s environment                    Implementation                       (otherwise why not simply contract out
we	are	in	danger	of	being	superficial,	in	                                                       and seek synergy elsewhere)?
a strange way, by becoming ever more                             Review
specialised	within	narrowly	defined	core	                                                        The tailoring of management education
areas of work, using words, terms and           With the feedback loops appearing to ensure      to	greater	specifics	obviously	has	pluses	
phrases	without	defining	what	they	mean	     lessons are incorporated systematically over time   and minuses but what does a well trained
for us and those we seek to communicate                                                          technical person (Or, for this matter, a
with; missing having the basics right in     If this analogy is to be taken further,             supplier	of	specific	functions)	add	to	your	
order to allow the technical elements to     the core muscles must equate to middle              organisation? If the overall structure of
be fully developed.                          management where knowledge is stored                the company is strong, the person slots
                                             in terms of technical competences,                  in – but what of adding value beyond
A Healthy Mind in a Healthy Body             the ability to add value to the data on             just slotting in to a function? What are
To take a sport analogy – all movement       company performance and a key link to               the consequences in terms of ability to
starts from the core muscles, those          cause any strategy to be executed.                  think outside the discipline, outside the
muscles in and around the base of the                                                            box, for elements of creativity, adding
spine through the midriff, only then         Specialist hiding in Specialism                     to the knowledge available for the
will movement radiate out to the limbs.      We have seen the various merits and                 business to utilise? Are we making short
Nice biceps are great for posing on the      cases made for this or that speciality              term	 efficiency	 the	 complete	 goal	 at	
beach but for doing the hard work of         being kingpin in how an organisation                the cost of effectiveness with regard to
competition overall conditioning is          develops but, not surprisingly, the                 finding	innovative	ways	of	reaching	the	
required. In the same way, a great HR        question is how the managers of all                 market as it evolves? Are we repeating,
department is something to behold but        the specialities come together in order             in a different fashion, the mistakes
if the people recruited lack direction the   to cause any movement to happen in                  synonymous with strategic planning
performance of the business will never       the	first	place.	The	parts	functioning	in	          versus strategic thinking?
reach its full potential.                    accordance to messages sent through

Somali Business Review                                              15
The Way Forward
The future has to be characterised by a
degree	of	uncertainty	and	continual	flux	
requiring further degrees of innovation
                                                                 Preparing tomorrow’s
and thinking beyond the conservative to
grant a business competitive advantage
– we can all do the conservative, this is
taught at business school.                          What would happen
                                                    to your Business if
With The Gulf economy growing at                    you are unexpectedly
unprecedented rates a cloak is being                unable to run it?
thrown	 around	 the	 flabbiness	 of	                Are     your      family
individual companies – are you in a                 members, co-owners,
position to challenge as the competition            managers          and/or
becomes	 ever	 fiercer	 with	 the	 entry	 of	       employees able to
lithe competitors into the market? Is it            cope?
time to follow the lead being set in terms          Do they possess the
of projecting how your organisation not             necessary skills to
only sells the strategy given to it from,           retain your Customers
say, a parent organisation but starts to            and possible increase
work through how this strategy really               them?
fits	 to	 the	 markets	 you	 are	 operating	 in.	
How it utilises the skills, knowledge and           Concept of succession
experience you have available to your               planning
organisation.                                       All       organizations,
                                                    whether in the private or public sectors,          Similarly succession planning enables
So what is to be done within the                    need	 to	 be	 able	 to	 find	 people	 with	 the	   an organization to forecast and identify
organisation? Follow the process and                right	skills	to	fill	key	leadership	positions	     positions that will fall vacant in the future
add value has to be the basic answer.               in their Organizations. Thinking ahead is          so as not to break their Psychological
Knowledge is the crucial element, how               an important rule of business. In addition         contracts with their customers or the will
to draw the tacit knowledge from your               to monitoring the daily operation of your          also divorce your Organization.
key team members and, thence, use this              business, you need to engage in forward-
knowledge to build and implement the                thinking in terms of human resources               This	 will	 facilitate	 the	 identification;	
strategy granting you competitive edge              among others in the future.                        training and grooming of suitable and
over others in the market.                                                                             talented Employees for possible smooth
                                                    Succession planning can be broadly                 take over. This ensures there is continuity
There are any number of contributing                defined	 as	 forecasting	 and	 identifying	        in the processes of the Organization.
tools and techniques allowing the                   future vacancies and planning on                   Continuity is extremely vital to ensure
development	 of	 specifics	 but,	 returning	        how	 to	 most	 cost-effectively	 fill	 those	      the maintenance of standards are to
to the sports analogy; if the basics are            vacancies.                                         satisfy both internal customers who
not right then no amount of extras will             Usually	after	identification	of	an	expected	       are Employees, share holders etc and
improve the functioning of the overall              vacancy, potential candidates are chosen           external Customers who buy and supply
body. Sending the right messages out has            and	 “prepared”	 to	 fill	 the	 vacancies	         to the organization are happy. For
to be the crucial element, listening to the         through training and mentoring.                    example an Employee being paid his
pulses coming back through the networks             Chosen successors generally are fairly             salary/allowances by the cashier is the
allows tailoring of the approach.                   ready to do the job or possess good                customer in that instance and the quality
                                                    potential for same.                                of service to him in that process has to
Making sure the spine (strategy) is                                                                    be the same as the service to an external
strong, the core muscles (the middle                The Psychological contract                         customer. This ensures Customer/
management) are well toned and working              Psychological contract means Human                 Employee satisfaction at all times. This
                                                    expectations upon contact. There is                leads to motivated Employees among

together ensuring the limbs have you
moving with style in a purposeful manner            always a certain expectation when two              other	benefits/	
toward the objectives set through quality           parties deal. These expectations are               Meeting expected standards is extremely
strategic thinking                                  formed from the impression given. When             vital to Business as it enables the Business
                                                    one fails to meet these expectations, it           honour its psychological contract with
                                                    is said the He has failed to honour the            both its internal and external Customers.
                                                    Psychological contract.
                                                                                                       Process of Succession Planning
                                                    For example if you are wooing a girl for           Step No 1.
                                                    marriage and you are not wealthy but you           Forecasting needs
                                                    always visit her home in your Uncle’s              This involves a critical audit of Human
                                                    car and treat her to expensive shopping            Resource needs of the future. Main
                                                    on borrowed money etc. You will have               sources are retirements and expiring
                                                    created an image of a well to do man but           contracts which will not be renewed.
                                                    when	you	finally	get	married	your	Uncle	           These are generally known as planned
                                                    will take his car back and you will not            exits for which elaborate planning can
                                                    always afford the expensive shopping etc.          be made for them.
                                                    She will obviously be disappointed and
                                                    you will have broken the psychological             Other exits are Employee resignations,
                                                    contract. Most likely result will be parting       desertions etc. High turnover in an
                                                    of ways through divorce.                           organization has serious repercussions
                                                                                                       on the balance sheet as it involves extra

Somali Business Review                                                    16
recruitment, training and other related                                                         An	 efficiently	 managed	 succession	
direct costs. Indirect costs involve lost       It	 is	 common	 to	 find	 many	 dissatisfied	   planning could be the difference between
experience and contacts which are lost          customers immediately after the demise          Business failure and continued success.
with the exited Employee and poor               of the Founder resulting in the Business        Business failure brings misery. Loss of
Organizational image as a result of this        folding up soon thereafter..                    income to the Owners, suppliers, taxes
high turnover. It is usually an indication                                                      to the Government and jobs for the
of extremely poor management in the             Those who don’t practice succession             Employees. A good succession planning
Organization.                                   planning in Somalia, base their argument        program is an important asset to any
                                                on Somali saying “Waano abbuuris                progressive	firm.
Step No 2.                                      baa ka horaysay” which can be loosely
Validation of the Vacancy                       translated as “Managers/Leaders are             Thinking outside the box
Progressive Organizations engage in             born, they are not being made” that             Most small and medium sized Somali
continuous to ascertain the need for            means whatever efforts you have put             Enterprises are family owned making
that position. Possibilities of relocating      in someone to prepare him/her for               succession planning outside the family
the duties to an Employee(s) who are            managerial post you can’t achieve unless        difficult.	Somali	Business	people	should	
currently underutilized or outsourcing          he/she has leadership talents. They             accept the changing Business scene and
the job altogether if that is more cost-        believe that Leaders are born but are not       learn to think outside the box.
effective to the Organization are seriously     made. They totally believe in destiny.          Possibilities of talented Employees being
explored in an meticulous analysis.                                                             gradually encouraged to purchase shares
                                                Many instances where this belief was            in	the	firm	and	eventually	being	prepared	
Step No 3.                                      applied the unprepared Inheritors mainly        to succeed the exiting owner/managers..
Preparing for Succession                        over-pampered Sons squander wealth
After the positions that are likely to fall     that has been accumulated over many             Planning to fail
vacant and their continued relevance            generations in very short span of time.         The	 benefits	 of	 a	 well	 designed	 and	
has	been	confirmed	as	still	adding	value	                                                       executed succession planning cannot
towards the Organization’s objectives.          Those who inherit Businesses without            be gainsaid. It is apparent that this
Employees	 with	 suitable	 qualifications	      sufficient	 preparation	 in	 terms	 of	         constitutes a crucial aspect of good
and	 potential	 are	 identified.	 They	 are	    succession planning mostly fail and they        Management. At the risk of sounding
then keenly prepared for taking over the        turn to another Somali saying which says        repetitive; Organizations should not plan
soon to be vacant responsibilities. This is     “ Meel iyo ninkiis ma kale haraan” which        for their failure by failing to carefully
done through an elaborate training and          again can be loosely translated as “ a          plan for their Businesses upon the exit of
mentoring programme                             wealth goes with its creator” This would        key people from the organization.
                                                imply that once the wealth creator dies
Step No 4                                       his/her wealth soon follows.                    Grooming successors from within the
A thorough and systematic evaluation                                                            Organization is an effective tool for
of the both the training programme              There	is	no	shortage	of	these	justifications	   motivating Employees as they will all
and the Candidate is conducted on a             in the Somali language.                         work hard and stick with the Company
periodic basis to ensure conformity to set                                                      in	 anticipation	 of	 benefiting	 from	 the	
standards and schedules. The successor is       Young people would steal the show.              capacity building in preparation for
given responsibilities gradually until He/      Entrepreneurs with limited formal               promotion	to	fill	vacancies	and	the	added	
She fully matures into the position after       Business education have a phobia for new        packs resulting from the promotions.
thorough preparation.                           ideas and always fear Young educated
                                                people would steal the show from them           The planning and execution of a good
After the Employee has been properly            and they will loose a grip of especially        succession plan is a must have for any
evaluated as having acquired the                customers which are the most crucial            progressive Organization as it provide
requisite skills and experience required        assets of any Business. The age factor          peace of mind to the all stake holders in
to handle the challenges of the position,       is also crucial as Somali is still largely      an Organization that things will always
proper handing over is then executed.           a conservative Country where age, more          go according to plan as we are well aware
This ensures a smooth hand-over with            than skills is still considered paramount.      Human resources are the most pivotal
minimum Business disruption.                                                                    and important among all the resources
                                                The cost of Business failure directly           required for conducting Business.
Succession planning in practice                 as a result of lack of proper succession
Every community engages in succession           planning especially after the Founder(s)        Succession planning among other
planning for their business in varying          have died or become incapacitated is            plans ensures that both the legal and

degrees. The Indian Duka Wallah stay in         enormous                                        psychological contracts are respected.
the shop with their intended successors                                                         This results in stable and long-term
from a very early age such that by the          Sources of successors                           relationships  without     unnecessary
time the Children are Adults they can           Within the Organization should be the           “divorces”
smoothly run the Business. Many other           preferred	first	choice	source	of	potential	
Communities do the same. Clear and              successors. Only after this source has
timely succession would enable the              failed to yield satisfactory results that
young	generation	to	keep	the	fire	burning	      external sources are sought, the next
without	finishing	the	firewood.                 being similar Industry/Businesses to get
                                                the	 benefit	 of	 Industry	 experience	 and	     SBR is enthusiastically welcomes
Somali Business Owners mostly do not            contacts. Incase there are still no suitable     business leaders and entrepreneurs
practice succession planning hence in           and willing Employees in the Industry,           who are interesting to give interview
case the Founder of the Business dies the       efforts should now be directed towards           about their companies, business
next of kin do not possess the requisite        searching in the bigger Employment arena         success and experience.
know	 how	 to	 efficiently	 and	 effectively	   possibly with the help of Recruitment
run the Business to maintain both the           Agents, Head hunters etc.                                       Contact:-
Internal and external Customers.                                                                editor@somalibr.com/ daahir02@gmail.com

Somali Business Review                                               17
Role of the Diaspora in Somalia Development
A validation workshop held to examine             in business, the study discovered that                     workshop participants:
a study entitled “Somalia’s Missing               they are also the major investors in the
Million: The Somali Diaspora and                  country and provided 80% of the start-up                    •	 Improve	communication	and	develop
                                                                    capital for small and                        mechanisms to streamline Diaspora
                                                                    medium enterprises                           projects/prioritise according to
                                                                    (SMEs).	       For-profit	                   need/ support on basis of merit/
                                                                    activities contribute                        effectiveness.
                                                                    to economic recovery                     •	 Enhance	funding	for	a	UN/	Diaspora	
                                                                    and           improving                     partnership focusing on PPP
                                                                    livelihoods. Some of                        and dynamic sectors and consult
                                                                    the returnees establish                     with Diaspora on new UN/ Diaspora
                                                                    businesses individually                     development projects.
                                                                    or as a group and pool                   •		Develop	mechanisms	toencourage			 	
                                                                    resources and manage                        Somali business groups to work
                                                                    business at the executive                   together, developing their capacity
                                                                    level. Investment is                        and facilitating their engagement with
                                                                    spread over various                         counterparts in other countries.
                                                                    sub-sectors such as                      •		Assist	in	the	formation	of	Chambers		  	
                                                                    small-scale industries,                     of Commerce to coordinate business
                                                                    telecommunication,                          councils.
                                                                    remittances and trade.                   •	Develop	strategies	to	promote
                                                                                                                research on Somali businesses (in and
                                                                      In the humanitarian                       outside of Somalia).
                                                                      efforts, the study                     •	Build	trust	between	UN	agencies	and		
                                                                      also revealed that the                    Diaspora organizations. Help build
Its Role in Development” was held                 Diaspora has proven capacity to send                          accountability tools that work for
in Nairobi on March 13th, 2009. The               immediate cash and supplies to address                        both sides.
study commissioned by United Nations              the emergency needs of the victims.                        •	Build	official	relationships	between		 	
Development Program (UNDP) Somalia                Funds are often mobilized by and                              UNDP and Diaspora organizations.
was prepared and presented by Hassan              distributed through the private media.                     •		Facilitate	Diaspora	participation	in		 	
Sheikh and Sally Healy.                           Contributions of this kind stretch beyond                     peace talks	•
                                                  local	affiliation	and	are	given	from	
The purpose of the workshop, attended by          a sense of patriotism or religious
over 40 Somalis scholars and researchers,         obligation towards the affected.
fund-raising organizations in Diapora and
implementing organizations in Somalia             In	 conflict	 and	 peace	 building,	
and UU agencies and donors, was to                the study established that the
review	and	enrich	the	findings	of	the	report	     Diaspora is a double-edged sword,
and to develop recommendations about              contributing	 significantly	 to	 both.	
a future partnership for development              Financial obligations to support
between the Diaspora and UNDP.                    the	 clan	 in	 times	 of	 conflict	 have	
                                                  endured. Yet Diaspora intervention
The study was aimed of discovering                in support of local reconciliation
the whereabouts of Somali Diaspora                and state building has been a key
as	 well	 as	 finding	 their	 contribution	 to	   ingredient for success, notably in
development, business, humanitarian and           Somaliland and Puntland.
peace building efforts in Somalia.                The following are some of the
                                                  recommendations made by the
Major findings of the study
In terms of development the study found
that the Somali Diaspora makes a major                                              Looking for Printing Solutions?.... then you no longer
contribution to the Somali economy                                                  have a problem............ you have reached point.
and livelihoods through remittances,
humanitarian assistance and participation
in recovery and reconstruction efforts.                                                                                  io

Remittance	flows	were	estimated	at	up	to	
                                                                                                                Qu ting
$1 billion in 2004 but could be as high as
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$2.3 to the country as of now. Remittances

represent 23% of household income
with up to 40% of households receiving
some assistance. Diaspora members                   Where printing is done
contribute to development through their             with THE zeal of
work for international development                  Dedicated Benedictan
agencies. Returnees contribute their                printing GURUs
skills and technical know-how, where
they teach in the local universities and                                              P.O. Box 49912 - 00100 Nairobi, Kenya
provide technical support to government                Kirinyaga Crescent off Kirinyaga Rd. Tel: 2244 284 Fax: 2213 214 , Cell: 0720 888 882 / 0721 115 383
departments. About the Diaspora role                                                           Email: info@graphic.co.ke

Somali Business Review                                                    18
Somali Business Review
              ∞ Countrywide coverage
              ∞ Customer reward programmes
              ∞ Social responsibility:
                   - Ambulance service
                   - Blood bank
                   - Assisting needy people

Somali Business Review

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