Nairobi. Instead of going to a bank, preparing a business plan and
asking for a loan, as in the past, these entrepreneurs now prepare a
business plan, sell shares and implement the project. Somali-owned
businesses have also created jobs for local unskilled workers.
Somali Investment in Kenya charts the rise of Somali entrepreneurship
in Kenya in the context of economic breakdown in Somalia, its impact
on the Kenyan economy and the advantages and challenges.
Despite the collapse of the formal economy and of central government
in Somalia, a remarkably resilient 'parallel' economy has emerged.
Once a predominantly Asian residential estate, Eastleigh has become
the centre of Somali entrepreneurship in Kenya and is popularly
referred to as 'Little Mogadishu'. Eastleigh is at the centre of a
network of trade that connects the Arabian Peninsula, Somalia, Kenya
and East and Central Africa, with the Somali business community as the
common thread, says Chatham House.
Somali Investment in Kenya charts the rise of Somali entrepreneurship
in Kenya in the context of economic breakdown in Somalia, its impact
on the Kenyan economy and the advantages and challenges.
"Two factors characterise Somali business activities in Kenya. First,
they operate largely outside the formal economy of the country.
Secondly, they rely heavily, but not exclusively, on clan or kinship
networks of trust in their business dealings," Chatham House said.
Somali entrepreneurs have introduced new concepts of business in
Nairobi. Instead of going to a bank, preparing a business plan and
asking for a loan, as in the past, these entrepreneurs now prepare a
business plan, sell shares and implement the project. Somali-owned
businesses have also created jobs for local unskilled workers.
Growing Somali investment in Nairobi has also attracted banks and
other service-providers, demonstrating that urban refugees are not
necessarily a burden on the state and can be an economic asset.
"Although business rivalry often leads to overblown accusations that
Somali businesses are funded from the proceeds of piracy or
criminality, there are some genuine national security concerns about
activities within the Somali communities in Kenya. The long, open
border between the two countries provides easy access for the
supporters of extremist groups such as Al-Shabaab and Hizbul Islam to
recruit and raise funds in Kenya," Chatham House said.
"Eastleigh, Nairobi, Kenya and East Africa have benefited from the
entrepreneurial activities of Somali business people. These activities
have developed despite, or even because of, the collapse of Somalia.
The experience has not been without problems. Governments in the
region and internationally should think about ways of protecting
investors and bringing more of these activities in the formal
economy," it added.
By: Contributor
Source: http://www.cpifinancial.net/v2/News.aspx?v=1&aid=7549&sec=The%20Economy
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