INVESTMENT OPPORUNITIES IN SOMALILAND
Somaliland has undertaken major steps to attract both national and international investors to the fecund productive sector of the country. The reforms and regulatory frameworks developed aim to boost investor confidence in all sectors. The Ministry of investment has made some imperative steps to create a conducive environment for investment.
An investment law (2021) that gives more incentives to foreign investors was in place accompanied by a national investment policy (2019). Somaliland now is ready for foreign direct investment (FDI) to arrive, the fertility of the country and its untapped resources are not only attractive to the investors but the investment potentials in Somaliland are felt by global and continental investors.
Somaliland is blessed with the second-biggest share of the Gulf of Aden waters – next to Yemen – with a coastline of 850 km long, spanning between Zaila to the west (border with Djibouti) and Elayo to the east (border with Somalia Indian Ocean). The Red Sea, particularly, the Gulf of Aden (near to the entrance of Bab-el-Mandeb straight) hosts one of the busiest global trading routes that facilitate economic movements between the eastern and western worlds.
The expansion of the Berbera Port and construction of a corridor road linking the Somaliland coast to Ethiopia promises to transform the potential for greater regional economic integration across the various Gulf of Aden and Red Sea economies. And, as a result of Somaliland’s close diplomatic relations with a variety of international partners, the country has developed a reputation as a credible, strategic, and well-intentioned pillar of peace and security in the Horn and East Africa.
The vision of the Berbera corridor is to create an integrated logistics, trade, and value addition hub that provides an efficient, competitive end-to-end transit, transport, and maritime services to land-locked countries within the IGAD region, particularly Ethiopia with a population of 110 million which is expected to double by 2045.
The government of Somaliland articulates why investors must have every confidence to step forward, citing six reasons.
- Dependable security and democracy practices.
- The abundance of natural resources such as oil, gas, coal, minerals and gemstones, energy, etc.
- The conducive business environment for both national and international investors.
- In the robust and state-of-the-art telecommunications sector, internal cables also offer grounds for further investment and improvement.
- Livestock, agriculture, and fisheries offer unlimited potential for investors
- Sound regulatory reforms create an investment climate.
Important legislations are available such as the Foreign Investment Law, the Islamic Banking Law, the Central Banking Law, the Electrical Energy Act, and the Commercial Banking Act have either been passed or making their way through parliament, there are also investment policies that were intended to further cement the investment climate and accessibility of the investors.
Based on the Somaliland Five Year Development Plan, there are six sectors in the economy that are regarded as priority sectors, and the government is seeking to encourage foreign investment in those sectors: banking and finance, livestock, agriculture, fisheries, industry, energy, tourism, telecommunication, ICT, roads, etc.
The most significant foreign direct investment (FDI) that the Republic of Somaliland has landed in the Berbera port deal with the Dubai-owned international ports managed by DP World. Somaliland government entered into an agreement with the Dubai-based ports operator. Expanding, and modernizing Berbera port, building a road linking Berbera and Ethiopia, building a free economic zone, and facilitating goods and services to Ethiopia and other landlocked countries are primary objectives of this investment.
Somaliland is rich in mineral resources and deposits of many kinds of gemstones like Emerald, Sapphire, Ruby, Aquamarine, Opal, and any kind of Garnet. There are also plenty of other minerals in Somaliland such as industrial minerals like iron ore, Titanium, Aluminum, Tungsten, Tin, Galena and other rare earth metals like Colum bite Tantalite, Molybdenum, and many other rare minerals which are only found few places in the world.
Investors will enjoy a 100% three to five year’s tax holiday on profits and 100% custom exemption on imported raw materials, machinery, equipment, installation, and any other outfits, supplies, and components imported for production purposes are exempted from import customs duties. Somaliland Government stands for establishing viable Public Private Partnerships (PPPs) to address large-scale infrastructure development that is beyond the financing capacities of the Government. Both foreigners and Somalilanders are freely able to purchase and sell the property as they wish. Land ownership rights are strongly upheld within Somaliland.