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Somaliland is an emerging trade and shipping hub and growing market for U.S. companies, strategically located near the Bab al-Mandeb strait joining the Red Sea and the Gulf of Aden, a major sea lane through which one-third of the world’s shipping passes. Thanks to new investment, Somaliland is emerging as a major shipping hub for trade routes linking Africa, the Middle East and Asia.

The livestock sector is the backbone of Somaliland’s economy, with exports to markets in Gulf Arab countries, including Saudi Arabia, the United Arab Emirates, Yemen and Oman.

Somaliland’s workforce is growing, with 70% of its population under the age of 30. Somaliland hosts over 30 colleges and universities, both public and private, that produce thousands of graduates each year.

A highly stable democracy with strong rule of law in a volatile region, Somaliland is increasingly sought out by global investors as a reliable base for expanding commercial relations in Africa. Somaliland is investing in a growth-led future built on strong economic fundamentals.

Somaliland’s thriving services sector hosts a number of major international businesses, including an indigenous international airline, a highly competitive telecommunications industry and a $17 million Coca-Cola production facility that is a supply hub for the entire region. Somaliland has become an attractive area for oil and gas exploration activities, with several international companies actively exploring resources there. The nation is also capitalizing on other natural resources, including proven reserves of iron, manganese and coal, with select private sector partners. Several companies have signed production sharing agreements with the government and are involved in early-stage surveying.

Somaliland’s strategic location and strong government institutions have also spurred international agreements to enhance security, diplomacy and development in the region. In September 2016, the Government of Somaliland and Dubai-based global ports operator DP World agreed to build and operate a multipurpose port in Berbera with an investment of up to $442 million. The port is expected to become a regional trans-shipment hub, and efforts are underway to build a road between Ethiopia and the port of Berbera, Berbera Corridor, facilitating the transit of goods and services and promoting economic growth throughout the region.

Doing Business in Hargeisa 2012 ranks Hargeisa, the capital and economic center of Somaliland, above the regional economies of Eritrea and Chad in terms of the general ease of doing business. Among the indicators that evaluate business regulations, the report ranks Hargeisa as above the average of 46 Sub-Saharan African economies on dealing with construction permits (and ranked 86 out of 184 countries worldwide), getting electricity (ranked 84 worldwide), registering property (ranked 79 worldwide) and trading across borders (ranked 127 worldwide). When compared against the World Bank’s 2012 Doing Business rankings, Hargeisa was a better place to register property than Argentina and Greece (79 vs. 139 and 150, respectively), a better place to pay taxes than Brazil and Armenia (142 vs. 150 and 153, respectively), and a better place than Canada, Italy and India to get electricity (84 vs. 156, 109 and 98, respectively).   

The 2016 World Bank report entitled Somaliland's Private Sector at a Crossroads: Political Economy and Policy Choices for Prosperity and Job Creation credits Somaliland’s vibrant private sector as the driving force of the country’s economic growth. It states, “Somaliland economy is driven by the private sector. Unlike most other economies in the world, the government footprint is limited, amounting to under 10 percent of the gross domestic product.” Business owners consistently acknowledged Somaliland’s culture as a major economic asset and reported a high degree of product and process innovation, leading to higher productivity and sales performance. The report also highlighted oil and other extractive industries, expanded trade with Ethiopia, and sectors making use of its fiber-optic cable as promising mediums for further investment that also “constitute a historic, unprecedented opportunity for transformational growth and development.”  

For more information on opportunities in Somaliland, please contact the Ministry of Commerce and Investment’s Foreign Investment Promotion Office at (EMAIL).