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Ease of doing Business

Ease of doing business plays a crucial role in the SME development, entrepreneurship, and the overall economic growth for Somalia. It is one of the important indicators for not only Foreign Direct Investment (FDI) but also local businesses as well as processes, rules, and regulations that promote business-friendly environment.

The Federal Government of Somalia refers to recent ease of doing a business report for 2019 and the positive engagement that Somalia’s Ease of Doing Business (EDB) Team had with the World Bank Group Somalia Country Team in the past few months. A number of reforms and current practices have been discussed as well as key reform areas to improve doing business indicators and raise Somalia’s competitiveness ranking from the bottom to the top.

The Federal Government of Somalia recognizes the importance of trade and investment for socio-economic growth, and thus launched the investment law and other regulatory frameworks related to business environment reform to assure private sector development and attract trade and investment. The Prime Minister of the Federal Republic of Somalia has recently launched an online system to streamline the business registration and licensing process; Company Law was drafted and approved by the Cabinet of Ministers and the Parliament, and Somalia is in the process of institutionalizing the efficiency in business process through the establishment of One-Stop-Shop Center. This will help Somalia not only the internal reform required for foreign and domestic investment, business opportunities, and job creation; but also provides necessary tools to better negotiate the ongoing membership to international trade blocs such as WTO Accession, COMESA, AfCFTA, Horn of Africa Economic Integration Initiative, etc.

Furthermore, significant improvement has been made in the port operations such as administrative structure, port control tower, service, and cargo handling unit, fuel depots and distribution, security, warehousing, and container handling areas. The average turnaround (time between Container Vessel Arrival and Departure) is now 2-3 days from 10-12 days. Vessel traffic and volume of goods are on the increase as well as revenue from services and tax charges. Despite the existing legal and regulatory framework coupled with recent and ongoing reforms undertaken by the Government, Somalia came in last on the global list at 190 of 190 economies for the third year in a row according to 2019 Ease of Doing Business Report by the World Bank. It is, however, worth noting that this low ranking of Somalia’s ease of doing business is not due to lack of policies and laws as there was never a vacuum of policies and laws since 1960 independence and even before, but it is rather due to lack of reliable data, little or no inter-agency collaboration and information sharing as well as public advocacy and awareness.

The Federal Government of Somalia is committed to improve doing business and have initiated key government reforms benefiting small and medium businesses and raise public awareness. The Government is taking steps to encourage entrepreneurs and create an enabling environment for investment opportunities and job creation as well as promoting transparency and efficiency in government doing business processes. In so doing, the government is drafting Trade license law, insurance law, intellectual property, customs, banking, and other laws and policies to improve the business environment; and is fast-tracking ongoing legal reforms and operationalize; harmonize processes and agencies to establish single-window procedure and to ease doing business.

Mogadishu, Somalia

Mohamoud Harbi Road, Behind the Somali National Theater

+25268 3459526