Somalia raises stakes as country admitted to EAC regional economic bloc

Somalia was admitted as the eighth country to join the East African Community in what could turn around the fortunes of the region. Louise Cottar, Lead Advisor at Hormuud Telecoms in Somalia, discussed the implications of this move for the EAC and Somalia's economic landscape. Cottar highlighted the vast opportunities presented by Somalia's entrance into the EAC, particularly for the private sector. With a customer base twenty times larger than Somalia's, the EAC offers a massive market of around 170 million consumers, setting the stage for significant economic growth and trade prospects. Historically, Somalia has been a pivotal trading nation due to its strategic geographic position connecting Africa to Asia and the Arab peninsula. Leveraging this legacy, Somalia stands to benefit from increased trade within the East African bloc. While challenges such as inadequate physical infrastructure exist, Cottar emphasized the potential in the digital economy, citing Somalia's robust mobile money transactions amounting to $2.7 billion monthly as a testament to its digital readiness. Looking ahead, Somalia's extensive coastline, vibrant ICT sector, and potential in various industries like agriculture, livestock, minerals, oil, and fisheries underscore the country's promising trade opportunities. Cottar pointed out that Somalia's existing fiber optic network could serve as a crucial information bridge for landlocked African nations, further enhancing its relevance in the region's connectivity landscape. However, concerns persist regarding Somalia's stability, given its history of conflicts and internal unrest. Cottar acknowledged the need for effective rule of law to address issues like illegal fishing, oil extraction, and population movement without proper identification. Nevertheless, she stressed that the economic prospects stemming from increased trade could serve as a catalyst for peace and stability, advocating for the importance of opening up economies rather than isolating them. In terms of attracting investors to Somalia, a strong governance structure and a reliable judiciary system were identified as essential components for building investor confidence. While security measures are crucial, fostering a business-friendly environment through economic development initiatives can help allay investor concerns and drive sustainable growth in the region.