Stock Exchange: Words You Don’t Normally Associate With Somalia, But You Should
By Dana Sanchez Published: January 26, 2016, 9:24 pm
Beach at Mogadishu. Photo: socialnewsdaily.comThe Somalia Stock Exchange made history when it started trading on Sept. 1, 2015, becoming the first ever to operate inside Somalia, the SomalilandPress reported. The problem is, that’s not exactly correct.
It’s true that Somalia’s first formal stock exchange has been in business almost five months — a milestone for the Horn of Africa country as it seeks to rebuild its economy after decades of lawlessness and conflict.
But Somalians have a historic commercial reputation as traders. Informally, Somalians have been trading shares for years.
Another stock exchange — one for pirates —was established in 2009 in Harardheere, 250 miles northeast of Mogadishu, WallStreetJournal reported on June 16, 2011.
The Harardheere stock exchange allowed investors to profit from ransoms collected at sea, which sometimes approached $10 million for successful attacks against Western commercial vessels.
Piracy turned Harardheere from a small fishing village to a town jammed with luxury cars, WSJ reported. More than 70 entities were listed on the Harardheere exchange. When a pirate operation was successful, it paid investors a share of the profits. A former pirate told Reuters, “The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials. . . . We’ve made piracy a community activity.”
Fast forward to 2015. Years in the making, the Somalia Stock Exchange was founded by the Somali Economic Forum, an independent organisation that wants to promote foreign direct investment into the country, according to a report in HowWeMadeItInAfrica.
It has 20 companies listed or in the process of doing so, according to Hassan Dudde, CEO of the Somali Economic Forum. This is a way for homegrown companies to raise capital for expansion and growth, Dudde told HowWeMadeItInAfrica. Companies that have listed or are in the process include telecoms, finance, logistics and commodities, he said.
The stock exchange is in its nascent stage, and probably still has five years to go before it will really take off, Dudde said. But its existence is important for ordinary Somalians.
Banks in Somalia operate under Islamic Sharia law, which prohibits collecting interest. Certain investments are also forbidden such as companies involved with gambling, alcohol, tobacco, and pornography.
Somalia suffered years of conflict and millions of citizens fled, but some businesses and sectors continued to thrive despite the chaos. These include companies involved in telecommunications, finance and cash transfers.
Somalia attracts an estimated $1.3 billion in remittances each year. The stock exchange is a way Somali expatriates can invest in homegrown companies, according to HowWeMadeItInAfrica.
Historically, Somalians have sold shares and made investments informally through family ties and known networks in a system of trust known as Hawala, according to the Somalilandpress. Hawala forms the foundation of Somalia’s international remittance sector.
“I know female households that whenever they have some funds they go to a company through somebody they know who is part of the management – and they ask them to buy shares on their behalf,” Dudde told HowWeMadeItInAfrica. “So it has been happening, just informally.”
A Somalian government backed by the international community was established in 2012 but parts of the country are still occupied by al-Shabaab.
“What a lot of people don’t know is the amount of cash money circulating within the economy of Somalia,” Dudde told HowWeMadeItInAfrica. “We don’t have enough projects to put money into. If you go to banks you will be surprised how much deposits they hold.”
But many of the banks in Somalia don’t invest in major projects, “so your money will sit somewhere and you won’t be making any profit,” Dudde said. “In fact, you will be losing money. Having factored in inflation, your purchasing power will decrease. But if you had the opportunity to buy shares of a company that publicly trades, and that you have enough information about, you will make money from that.”
Somalia is no longer a failed state but a recovering fragile country, according to Nicolas Kay, outgoing representative for the U.N. Secretary in Somalia.
The country had stabilized in the last three years, and al-Shabaab will not succeed in undermining its progress, Kay said, according to an NTVUganda blog by Charles Onyango Obbo.
An estimated 80 percent of the Somalian currency in circulation —the Somali shilling —is counterfeit, Obbo said.
“In almost every country in the world, that would have stopped the economy in its tracks. The Somalians went about this in remarkable fashion – by taking the fake currency as ‘legal’ tender in their transactions.
“And in the conditions of war, last year the country opened a Stock Exchange, and Somali companies listed,” Obbo said.
“Anyone who has been to Mogadishu in recent years will be struck by how rapidly Somalians exploit ‘peace windows.’Within days of AMISOM (African Union Mission to Somalia) kicking out Shabaab from a place, they move in quickly and start building things,” Obbo said.
One company that listed early in the Somalia Stock Exchange is Somali Postal Express, a logistics company created in January 2015, HowWeMadeItInAfrica reported.
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Safaricom’s changing outlook: A leader on a better way of doing business
Bob Collymore, CEO of Safaricom, Kenya’s leading mobile network operator, talks to Devex Impact associate editor Adva Saldinger.
Corporate leadership on the Sustainable Development Goals is not just for the largest, wealthiest businesses and individuals — it’s also about smaller companies that can help explain why the issues are important and contribute to scaling successful interventions or business practices.
Bob Collymore, CEO of Safaricom, Kenya’s leading mobile network operator, recently joined the B Team, an initiative co-founded by Richard Branson and Jochen Zeitz aimed at catalyzing a movement of business leaders to drive a better way of doing business for the well-being of people and planet.
Companies like Safaricom can help spread the word and offer a different perspective, and he’s honored to help provide that voice, Collymore told Devex in a recent video interview.
Rather than focusing on how to extract the most commercial value, the Kenyan telecom firm is now focused on being a player in an ecosystem and working together to tackle problems. In the end, Collymore said, commercial value tends to follow.
Watch the above clip to learn more about the B Team, how Safaricom is changing and finding unexpected benefits in tackling social challenges.
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Kenya’s female water tank masons are delivering measurable benefits to their communities and their country.
Source: Al Jazeera
Reality Check: Africa is not a country
Mehdi Hasan exposes the greatest misconceptions about the African continent.
Do you speak African? Well, neither do the 1 billion people on the continent.
Africa is home to 54 different nations, more than 2,000 languages and four of the world’s 10 fastest growing economies, but is often painted with a sweeping stroke of doom and gloom.
In this week’s Reality Check, Mehdi Hasan exposes popular misconceptions about the African continent.
Watch UpFront on Al Jazeera English on Fridays at 1930GMT.
Source: Al Jazeera
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Work on a 120 kilometre fibre cable project, that will offer automatic broadband Internet connectivity between Ghana, Burkina Faso and Togo begins on Tuesday at Bolgatanga, north of Ghana.
The project, which involves the establishment of a number of cell sites, is meant to ensure improved telecommunication services within the sub region and beyond.
It forms part of the countries’ commitment to join the World Summit on Information Society (WSIS) to develop broadband linkages connecting main towns and capitals in Africa by 2012.
Ghana’s Deputy Minister of Communication, Ernest Attuquaye Armah, who officially launched the project, said the development would give real meaning to Ghana’s quest for regional integration through effective deployment of ICTs as well as boost its associated trade and commerce.
The project was initiated after a ministerial declaration between Burkina Faso and Ghana in 2009 to start the fibre optic connectivity.
Vodafone Ghana Telecom Company, the largest telecom company in the country, is undertaking the project in partnership with the government of Ghana….more
Follow us: @theafricareport on Twitter | theafricareport on Facebook
There are two million more children in Nigeria than the whole of the EU
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African science research fund launched by AESA
From BBC News
A new fund has been launched for African science, amid concerns that research is too Western-focused.
A lack of investment may threaten Africa’s development, say backers of the Alliance for Accelerating Excellence in Science in Africa (AESA).
To address this the AESA will provide an estimated $100m (£65m) for Africa-focused research.
The AESA was created by the African Academy of Sciences with the financial backing of the Wellcome Trust, the Gates Foundation and the UK government.
Mauritian President Ameenah Gurib-Fakim, who helped launch the fund, told the BBC that the priorities for donor-backed research had often been set by people outside the continent, meaning that some African issues have not been addressed.
She said that the continent’s future depends on boosting African research.
“We need to be able to set our own agenda,” she added.
To start with the AESA will be supporting the work of seven African researchers across the continent.
These include Zimbabwe’s Dixon Chibanda who is trying to tackle the lack of mental health provision in his country, and South Africa’s Thumbi Ndung’u, who is researching how best to deal with tuberculosis and HIV on the continent.
Researchers from Ghana, Mali, Uganda and Kenya are also being backed by the new fund.
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Source: BBC News
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