Somaliland: Avarice in the land of Alms
The level of Avarice (greed) among some of the
omnipotent leviathan businesses operating in
Somaliland’s free market is astounding, callous
businesses operating incessantly with impunity that
hoard, collude, manipulate and inflate already
artificially-inflated commodity prices. However with the
advent of the president’s recent appointment of high
level committee, we ca n hope to ascertain sustainable
solutions to the current exigency of the adversarial
factors inc luding the exogenous ones affecting
Somaliland’s economy, the overall rising inflation,
increasi ng exchange-rate and the depreciating national
currency, but more importantly the power and prowess to
shape the programs and policies pertaining to the
procurement of provisions must come under the sphere of
the government’s influence.
President Ahmed M. Mohamoud was right to institute a
high level committee to ascertain the determinants of
the inflationary pressures on Somaliland’s economy by
decree, given the dire situation that businesses in the
private sector created in this laissez-faire
environment, the president as the highest ombudsmen is
exercising his germane role to mitigate the price
volatil ity of the staple commodities in the country, the
president must claim the levers of economy, and the
government must be able gage the markets, curb, control
or put cap on the prices of essential commodities such
as staple foods.
This brazen inflation causing havoc in Somaliland is
apparent in the country’s economic indicat ors such as
the Consumer Price Index, the weak currency of
depreciating Shilling and exchange rate. The most recent
available economic data which was of the third quarter
for fiscal year of 2015, the aggregate inflation rate
stood at 12.5% for all items and a staggering 14.7% for
foo d. The year prior in 2014, the exchange rate went up
sharply and the Somaliland-shilling deprec iated by 23%
this all according to the Ministry of National Planning
and Development. The over all Inflation and the
constantly depreciating currency wanes the already
destitute purchasing power of a considerable demographic
of Somaliland’s population.
Somaliland’s current inflation crisis can be attributed
to the nexus of business tycoons and lar ge businesses
that either hoard the dollar, inflate the prices of
commodities including staple fo ods, and the gouging of
fuel prices concomitantly with the operational mobile
money platforms that do not utilize Somaliland’s
national currency.
The level of Avarice (greed) among businesses in
Somaliland is astounding, Somaliland’s poor are net
buyers of staple foods and are veritably most
susceptible to volatility in commodity prices, which
compels them to buy food in ever smaller portions of
single-use-sachets, where in the longer run they end up
paying more for it since they are unable buy it in bulk.
The want on greed and malfeasance of some of these
unethical business groups that thrive in the
unreg ulated, un-transparent and opaque state of commerce
in Somaliland have for far too long gone unabated. These
callous businesses are reaping profits by multiple folds
and continually remain indifferent to the plight of the
poor-consumers that are disproportionately burdened and
furt her impoverished by their greed. Somaliland
consumers are being fleeced, gouged by powerful
businesses that are able to distort the unregulated
Somaliland.
Somaliland does not have any more tools in its toolbox
to compensate for the structural defic iencies of its
undiversified and one dimensional economy lacking
domestic production, with exo genous constrains. Our
capabilities are limited given our economic outlook, no
matter how high essential commodity prices climb, with
our conditions there will be no consumer subsidies and
we do not have state-owned enterprises (S.O.E) to hedge
against these price volatilities.
To stem the high food prices the president cannot look
inward to Somaliland’s own domestic production, with no
large scale industrial farms in the country and our
agricultural production system that is reliant on
rain-fed farming where with less than 5% of the total
fecund geographical area of Somaliland is only under
cultivation. Somaliland imports roughly around four
hundred-thousand tons of food annually, as of last year
in 2014 food imports was 487,969 tons to be exact.
When it comes to the country’s currency which has been
losing value, the central bank with its limited foreign
reserves releases the Dollar in Somaliland’s market in
an effort to shore up the Shilling, but beyond that the
central bank does not have any other mechanism to
mitigate the depreciation of the Shilling. Even the
central bank’s enforced monetary policy of printing the
Shilling and buying and selling of the Dollar proved
dismal since without the legitimate commerci al banks
under its control it cannot deploy a downward revision
of foreign exchange capital req uirements to give it a
bigger bearing, and in the ephemeral existence of the
Somaliland Shilling, the currency lost value every year
since its creation 1994, and every administration
hitherto had a role to play in the currency’s
deprecation, this all according to a research carried
out by University of Hargeisa.
As much as we wish to be Pollyannaish, the fact remains
theses culprits operate in Somalilan d’s private sector
which accounts for over 90% of the country’s gross
domestic product, and for instance the wholesale and
retail sector is the second largest industry which
employs the most people in Somaliland. For this
disparity to be rectified Somaliland must institute or
prop-up its regulatory agencies which at the moment
remain ill- staffed, trained and equipped and lack the
enforcement clout and the impetus to act as the catalyst
of change.
In the last two decades, many businesses in Somaliland
found their niche in the buoyant privat e sector, sadly
however many more unethical business people under the
pursuit of their myop ic interest and determined to reach
financial apogees at whatever the cost have created the
adversarial exogenous factors that hurt the economic and
social affairs of people.
In the absence of regulatory institutions, greedy and
exclusively profit seeking businesses hav e run a havoc
in every industry, under the façade of working for the
betterment of the people. The wanton greed and
malfeasance seems to be common among many businesses in
different sectors of our economy.
The energy sector is not any different to all the other
sectors that gouge and have put profits above the
wellbeing of their people, while remaining indifferent
to the struggles of their people. Fuel prices have
cost-push inflation effect where it increases the prices
of other goods and services in the economy, so all the
services that have fuel as an input should decrease when
oil prices decrease like transportation and electricity,
but in Somaliland prices only go up and hardly go down
even when fuel prices plummet, and as we speak oil
prices are at their lowest prices in over a decade.
Adding insult to injury the public with no consumer
protection bear the brunt of expired goods and
counterfeit products on top of the inflated prices for
the staple-foods they subsist on. In addition to being
fleeced the public is further endangered by nefarious
businesses driven by greed, for instance the health
sector is filled with plethora of obsolete, deficient,
fake and pres cription drugs. It is harder to comprehend
the level of callousness and the despicability
demon strated by the businesses that are flooding the
markets with expired foods and counterfeit pr oducts
which are ineffective and the extremely low quality
medicines lacking any active ingre dients that they pass
on to their brethren as authentic.
In the absence of proper market guidelines and
regulations certain companies in Somaliland have
ballooned in size with some of them controlling the
whole supply-chain, and operating as the distributors,
wholesalers and the retailers that also own the storage
facilities and the transportation that their goods are
stored and transported in. These companies that
mushroomed have not only displaced workers and skewed
the prices of the goods that they import but they have
also encroached and intruded on to other sectors of the
economy as well, their overbearing has even reached the
small retailers in the informal sector, along with other
small retailers that sell directly to the consumers who
now cannot compete with these bigger businesses.
Somaliland government must not only be cautious but
rather be very wary of the very few lar ge companies that
do everything as they will only stifle competition due
to the default of their dominant positions and their
anticompetitive disposition. It was exactly a year ago,
when Ahmed M. Obsiiye member of Somaliland’s upper house
of parliament blatantly referred to this new breed of
businesses as “Bloodsuckers” (Ganacsigiina inyar oo
dhiig miirato ah baa samaysantaye). We must be cognizant
of the fact that the poor consumers in Somaliland are
the primary beneficiaries of competitive domestic
markets since prices of essential goods and services are
brought down by healthy competition, and the best way to
uplift the poor and ensure inclusive growth in
Somaliland is to promote small and medium enterprises (SMEs)
since they grow national economies.
These bloodsucking business in Somaliland’s private
sector remained beyond the reach of regu lations because
the governments’ prowess and sphere of influence was
solely limited to the security of the country since the
onset, with lack of resource hindering the government’s
ger mane role as the astute overseer of the programs and
policies pertaining to procurement of provisions.
Somaliland’s political predicament as an unrecognized
state without sufficient resou rces forced it to rely on
the private sector for the deliverance of the
all-important food commo dities that it could not provide
itself or sufficiently regulate the free markets they
operated in.
In all, once the high level committee concludes with
their findings, the president must initiate whatever
measures that will ease the burden and suffering of his
people, even-though we are far from a country where the
government has at its disposal the mechanism and the
where wit hal to halter the adverse effects confronting
its citizenry.
Our economic woes are domestically created by our own
business community that either hoard the dollar, inflate
the prices of commodities including staple foods, and
the gouging of fuel price s concomitantly with the
operational mobile money platforms that do not utilize
our own nation al currency- the Somaliland Shillings. So
we can be attuned to the needs of our people, we mu st
have properly fully fledged regulatory institutions with
the resources to gage the markets and initiate whatever
action that will safeguard our own consumers.
Inshallah until the day we have more Investors than
Aid-workers in Somaliland.
United we prevail.
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