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Somalia's Women are Determined to Drive Business

New Energy

In a dusty yard in Garowe, Somalia, Sagal Omar peers into a glowing pit where dozens of clay cook-stoves have just finished baking.

“Wait, wait, let me check these,” she says to a young man who’s lifting the stoves out. She crouches down over the pit, revealing sneakers beneath her abaya, and examines a few stoves, tapping to check for cracks. Satisfied, she tells her employee to stack them in the warehouse next to the pit. Once dry, the stoves will be painted in vibrant colors by women artisans, then moved to market.

At this makeshift factory, Sagal and her 40 staff built 400 cook-stoves last year, using clay and tin sourced locally. The stoves are designed to cut charcoal consumption by half, which is good for people’s wallets and the environment.

It’s an unusual profession for a 29-year-old, but Sagal believes there’s logic to it.

“When I returned to Somalia from the UK two years ago, I saw organizations working in renewable energy, but there were no women,” she says. “In our culture, women make the day-to-day decisions in the house, but none of the energy companies were targeting them.”

Sagal decided to start her own company, Women in Renewable Energy Somalia (WIRES), with initial funding from the Adventist Development and Relief Agency, who also provided materials for the first batch of stoves. The majority of WIRES’ employees are women, including 10 university students who volunteer part-time. Even the distribution network is made up entirely of women.

“I didn’t have the capacity to sell the stoves myself, so I took them to women who have shops, and showed them how they worked. Soon, everyone wanted to stock them!” says Sagal.

The clean, efficient cook-stoves are distributed through eight shops in Garowe, while another 15 women sell the product in rural areas. Last year, all 400 stoves were sold. Sagal’s goal this year is to expand production even further, which is why she enrolled in IFC’s training program for Somali entrepreneurs.

 

Tailored Solutions

IFC’s Somalia SME program develops skills of female entrepreneurs like Sagal to bolster the country’s private sector. This year, 18 Somali businesswomen and two businessmen will learn about finance, marketing and strategy, with modules adapted to their needs, whether they work with renewable energy or restaurants.

IFC Advisory Services has delivered similar trainings to nearly 200,000 individuals in 64 countries. The Somalia program is being rolled out in partnership with the Somali Institute for Development Research and Analysis (SIDRA), a private institute that supports the country’s public sector and businesses.

 

Fresh Ideas

On a Wednesday afternoon, the businesswomen discuss SWOT analyses in SIDRA’s boardroom. Their range of accentseverything from Somali to the Midwest to the Middle East to the East Midlandsgives away their diverse origins.

The trend of diasporic Somalis returning home is rising. Ravaged by conflict for close to three decades, Somalia has seen its share of instability, but these entrepreneurs and their burgeoning hometown, Garowe, are signs of a country on the mend.

Located in the arid region of Puntland, Garowe is surrounded by vast expanses of parched earth, with a few bushes and camouflage-clad soldiers adding the only splashes of green. Out of the dust, the town emerges almost as a surprise, a buzz of construction and commerce. Street vendors sell fresh bread and khat, whitewashed buildings—the headquarters of banks and governments—gleam under the sun.

Home to only 34,000 inhabitants, Garowe is the center of the state government. Its strategic location on the 750-kilometer highway to major cities Bosaso and Galkayo make it a hub for livestock and food trade. Puntland’s government, backed by international donors, has made strides in rebuilding infrastructure and social services. The more liveable the city becomes, the more it draws in people.

“Puntland and Somaliland are becoming inspirations,” explains Sahro Koshin, Deputy Executive Director of SIDRA. “Businesses that started in these areas five to 10 years ago are yielding results and are becoming role models to others. Now is a very good time for Somali young people to invest, and social media is playing a significant role in providing information and connecting people.”

“Just look around and you’ll see so many young, educated people with big ambitions,” says Zahra Saleh, another entrepreneur enrolled in the IFC training.

 

Starting Over

Zahra herself returned to Garowe in 2016 from the United Arab Emirates, where she resided for 27 years. She runs a small aerobics studio and salon, but dreams of opening a beauty school, where she can train young women in cosmetology.

“Access to finance is the number one problem for women,” says Zahra. “I’m new to the country, so I can’t get money without a guarantee or collateral.”

Scarce capital is compounded by challenges like security, poor infrastructure, complex trade logistics, nascent tax laws, and a private sector that is used to operating in absence of government.

The World Bank Group, through the Multi Partner Fund, supports a range of state-building initiatives in Somalia, including IFC’s work with the private sector. The Somali Core Economic Institutions and Opportunities Program is developing regulatory and policy framework for Somali financial institutions, to catalyze private investment and job creation across Somalia. Efforts are also under way to set up a One-Stop-Shop for business registration and support value chains in fisheries, gums and resins.

 

Risk and Reward

While change is a reluctant process in Somalia, those who have seen success, like Sagal, say that opportunities abound.

“My advice to Somali entrepreneurs is to take a risk. Many come back with big plans, but get scared as soon as they face their first challenge. The only way you can succeed in business is to do your research, have patience, and, above all, do not give up.”

By Neha Sud

nsud@ifc.org

February 28, 2017

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IFC’s support for entrepreneurs in Somalia reflects the Corporation’s deepening commitment to Africa’s fragile and conflict situations. In FY16, IFC made $206 million in investment commitments to sub-Saharan Africa’s fragile states, and $12 million in advisory commitments. IFC’s work is supported by donor partners Ireland, the Netherlands, and Norway.