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Now Is the Time for Somalia to Harness Its Comparative Advantage in Africa

Saturday January 11, 2025
By Mohamud Haji Elmi Guure 



Now Is the Time for Somalia to Harness Its Comparative Advantage in Africa

But let me explain first comparative advantage: Comparative advantage is an economic principle that explains how and why countries (or entities) benefit from specializing in the production of goods or services where they have the lowest opportunity cost and then engaging in trade. It is one of the foundational concepts of international trade theory. Somalia to boost its economy must focus on Livestock, Fisheries and Marine Resources, as well as its strategic location. 

Livestock: Somalia can potentially boost its economy by focusing on livestock development, but it requires strategic planning, investment, and addressing existing challenges. Livestock is already a cornerstone of Somalia's economy, accounting for over 70% of export earnings and providing livelihoods to approximately 60% of the population. Here is how focusing on livestock development could contribute to economic growth 

1. Increased Exports 
Somalia's livestock sector is one of the largest in Africa, with significant exports to Gulf countries, particularly Saudi Arabia, the UAE, and Oman. Improved animal health services, vaccination campaigns, and compliance with international standards can increase the volume and value of exports. 

2. Value Addition 
Investing in value-added products such as processed meat, leather goods, and dairy products can create new industries and jobs. 
Developing modern slaughterhouses, tanneries, and milk processing facilities could diversify income streams.

3. Job Creation 
Focusing on livestock development could create employment opportunities in herding, processing, coordination, veterinary services, and export-related activities. 

4. Foreign Direct Investment 
By prioritizing livestock, Somalia could attract investment from international companies and organizations interested in the livestock trade and processing industries. 

5. Rural Development: 
Strengthening the livestock sector supports rural communities, improves household incomes, and contributes to food security. 

Challenges to Address:

-To realize these benefits, Somalia must overcome several challenges: 
Infrastructure Deficiencies: Lack of transport networks, slaughterhouses, and cold storage facilities limits the sector's potential. 
- Health and Standards: Outbreaks of diseases like Rift Valley Fever have previously disrupted exports. Strengthening veterinary services and meeting international standards are essential. 
- Climate Change: Recurrent droughts and water scarcity threaten the sustainability of pastoralism. Climate-resilient strategies, such as improved water management and fodder production, are critical.
- Conflict and Instability: Political instability in some regions affects livestock production and trade routes.
Somalia's Livestock Socio-Economic Formation and Sustainability 

Livestock has been the backbone of Somalia's economy and society for centuries, deeply embedded in its socio-economic formation and cultural identity. It plays a significant role in the livelihoods of millions, providing not only food and income but also social capital and resilience in a challenging environment. 

Historical Significance of Livestock in Somalia 

Pastoralism as a Way of Life:

Pastoral nomadism has been the dominant mode of subsistence in Somalia for centuries, with herding camels, sheep, goats, and cattle across vast arid and semi-arid lands. Somali pastoralists developed extensive knowledge of managing herds in harsh environments, ensuring survival through practices like mobility, water conservation, and communal grazing systems.

Economic and Trade Networks: 

Livestock has historically been the main commodity for trade. Somali traders exported animals such as camels, sheep, and goats to neighbouring regions (Ethiopia, Kenya, and Djibouti) and across the Red Sea to the Arabian Peninsula. Livestock exports formed a critical part of the Somali economy during the pre-colonial and colonial periods, connecting Somali herders to global trade networks. 

Cultural and Social Roles: 

Livestock are not just economic assets but also symbols of wealth, social status, and clan identity. Camels, for instance, are seen as a source of prestige and are used in dowries, compensations, and traditional ceremonies. 

Herd sizes often determine a family's resilience to droughts or economic shocks, reflecting the communal and individual value of livestock in Somali society. 

- Livestock in the Modern Economy 

- Economic Contribution: 

Livestock contributes over 40% of Somalia’s GDP and more than 50% of export earnings. It remains the largest employer in the country, with over 65% of the population engaged in livestock-related activities. 

Major export destinations include Saudi Arabia, the United Arab Emirates, and other Gulf countries, with live animals being the primary commodity. 

Urban-Rural Linkages: 

Urban centres depend on rural livestock production for food supplies, particularly milk, meat, and hides. 

Nomadic and semi-nomadic pastoralists ensure the flow of livestock to urban markets, contributing to food security in cities.

- Challenges in Modern Livestock Economy: 

- Recurrent droughts and desertification threaten the sustainability of pastoral livelihoods. 

- Limited access to veterinary services, water, and pasture results in high livestock mortality during harsh seasons. 

- Periodic export bans (e.g., by Gulf countries) due to concerns about disease outbreaks like Rift Valley Fever significantly disrupt the economy. 

- Sustainability of Livestock Practices 

A)Strengths of Somali Livestock Sector: 
Resilience of Pastoralism: Somali pastoralists have adapted to the arid environment through mobility and communal resource management. 

B) Diversity in Livestock: A mix of camels, goats, sheep, and cattle helps pastoralists balance their herds based on available resources and climatic conditions. 

C) Cultural Integration: The deep cultural attachment to livestock ensures continued investment in this sector. 

Challenges to Sustainability: 

1. Environmental Pressures: Overgrazing and land degradation reduce the availability of pasture. Climate change exacerbates droughts and water scarcity, leading to livestock deaths and economic losses. 

2. Conflict and Insecurity: Ongoing political instability and clan conflicts disrupt grazing routes and access to markets. 

Insecurity limits pastoralists’ mobility, a key survival strategy in arid regions. 
3. Market Vulnerabilities: Dependence on Gulf countries for exports makes the economy vulnerable to trade disruptions. 

Lack of modern infrastructure (e.g., cold storage, transportation) reduces the competitiveness of Somali livestock in global markets.
4. Health and Veterinary Issues: 

Poor veterinary infrastructure leads to outbreaks of diseases like foot-and-mouth disease and Rift Valley Fever. 

Limited investment in veterinary services and training hampers livestock productivity.

Strategies for Sustainability: 

1. Improved Water and Grazing Management: 
Building water infrastructure such as boreholes and reservoirs to mitigate the effects of drought. 
Promoting rotational grazing and reforestation to combat desertification.

2. Strengthening Veterinary Services: Expanding access to vaccinations and disease prevention programs. Training more veterinarians and para-vets in rural areas. 

3. Modernizing Livestock Markets: Investing in infrastructure like abattoirs, transportation networks, and export facilities to improve the quality and competitiveness of Somali livestock. Diversifying export markets to reduce dependence on a few Gulf countries. 

4. Climate Resilience Initiatives: Introducing climate-smart livestock practices such as drought-tolerant fodder crops. Supporting pastoralists with early warning systems for droughts and climate change adaptation programs. 

Livestock and Somalia’s Future Development Opportunities: 

Value-Added Products: Somalia can diversify its livestock sector by developing industries for processed goods like leather, meatpacking, and dairy products. 

Regional Integration: Strengthening ties with East African and Gulf markets can provide more stable trade relationships. 

Investment in Education: Training the next generation of herders in sustainable practices and market access can enhance productivity.

Threats:

Without addressing environmental degradation, water scarcity, and market instability, the livestock sector may become increasingly unsustainable. 

Political instability and insecurity remain significant barriers to long-term planning and    investment.

Fisheries and Marine Resources: With one of the longest coastlines in Africa (approximately 3,333 kilometres), Somalia has untapped potential in fisheries and marine products. The Indian Ocean and Red Sea provide abundant fish stocks, such as tuna, lobster, and shrimp, which remain underutilized due to limited infrastructure and investment.

Strategic Location for Trade: Somalia's geographic position along major international shipping lanes in the Gulf of Aden and Indian Ocean gives it a natural advantage as a trade hub. Revitalizing port cities like Mogadishu, Berbera, and Kismayo could position Somalia as a key coordination and transshipment hub for the Horn of Africa and beyond.

But this is possible in Somalia only  if used 
The theory Lee Kuan Yew MPH (Meritocracy Pragmatism Honesty)

Through his theory Lee Kuan Yew transformed Singapore from a poor, resource-scarce island nation into a global economic powerhouse. His leadership style and policies have been studied worldwide for their success in nation-building and governance. 

Applying the principles of Lee Kuan Yew's philosophy—Meritocracy, Pragmatism, and Honesty (MPH)—to Somalia could indeed create the conditions for Somalia to harness its comparative advantage in Africa, but several contextual factors must first be addressed. 

How MPH Could Work in Somalia: 

1. Meritocracy: 
What it means: Selecting leaders and decision-makers based on competence and qualifications rather than clan-based affiliations or nepotism. 

How Somalia could benefit: Somalia's current political structure often prioritizes clan representation over qualifications, leading to inefficiencies. Meritocracy could foster innovation, improve governance, and create an environment conducive to leveraging Somalia’s key advantages (e.g., its coastline, strategic location, and diaspora).

2. Pragmatism: 

What it means: Practical, results-oriented decision-making rather than ideological or symbolic actions. 

How Somalia could benefit: Pragmatic policies could prioritize economic stability, investment in port infrastructure, and trade partnerships. Somalia's location along major shipping routes and its untapped fishery and energy resources could serve as the foundation for economic growth if managed pragmatically.

3. Honesty: 

What it means: Eliminating corruption and ensuring accountability. 

How Somalia could benefit: Corruption has historically been one of Somalia's biggest challenges. A transparent and honest system could rebuild trust in institutions, attract foreign investment, and allow development funds to reach their intended targets.

Challenges to Implementing MPH in Somalia: 

1. Political Instability: 

Frequent conflicts and lack of centralized authority undermine efforts to establish a meritocratic system. 

Clan-based power-sharing agreements, while a temporary stabilizing mechanism, often conflict with the principles of meritocracy and pragmatism.

2. Institutional Weakness: 

Building strong, capable institutions is a prerequisite for MPH. Many Somali institutions remain underdeveloped or politicized.

3. Corruption and Accountability: 

Transparency International consistently ranks Somalia among the most corrupt countries globally. Honest governance would require a massive cultural and structural shift.

4. Economic Foundations: 

While Somalia has a comparative advantage in sectors like fisheries, trade, and renewable energy, weak infrastructure and insecurity hinder economic development.

Comparative Advantage in Africa: 

Somalia's strategic advantages include 

Strategic Location: Its proximity to major global shipping lanes offers potential for becoming a coordination and trade hub. 

Marine Resources: With one of the longest coastlines in Africa, Somalia's fishery sector is largely untapped. 

Diaspora Influence: The Somali diaspora contributes significantly to the economy through remittances and could play a key role in knowledge transfer and investment. 

Renewable Energy Potential: Ample wind and solar resources could position Somalia as a leader in renewable energy in Africa.

Key Takeaways: 

Adopting Lee Kuan Yew's MPH framework in Somalia is possible but highly challenging without systemic reforms. Success would require: 

A concerted effort to reduce corruption. 

A commitment to rebuilding and professionalizing institutions. 

Investments in education to create a pool of skilled professionals. 

Policies that focus on Somalia’s comparative advantages, such as maritime trade and renewable energy.

While Somalia's path to stability and prosperity is steep, the MPH philosophy offers a compelling blueprint for achieving long-term success.

Conclusion 

Applying the MPH theory mentioned above could significantly advance progress across all sectors of Somalia's economy. 

Somalia’s livestock sector has been a cornerstone of its socio-economic formation for centuries, fostering resilience and cultural identity. However, to ensure sustainability, there is a need for substantial investment in infrastructure, climate adaptation, and market diversification. By addressing these challenges, Somalia can continue to leverage its comparative advantage in livestock for economic growth and improved livelihoods.

Investing in these sectors while addressing infrastructure gaps and governance challenges can unlock Somalia's economic potential. 


Written by Mohamud Haji Elmi Guure 
Co- founder of Drought Control Somalia 



Email: [email protected]
Website: https://gure14.wixsite.com/droughtcontrol  
Tel:+447949436464



 





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