A Somali diplomat wants to start the Horn of Africa’s first ever stock exchange in neighbouring Kenya and he expects telecom, banking and money transfer firms that have defied decades of conflict to list their shares on the bourse.
“Somalis are very enterprising people ... and they want to join other east Africans that have working stock exchanges,” said Ambassador Idd Mohamed, deputy permanent representative to the United Nations.
“Initially the exchange will be based in Nairobi, but if the situation improves we could move it to Mogadishu.”
Firms that have continued to thrive in Somalia include Hormuud Telecom, a private company known beyond Somali borders.
Mr. Mohamed, who co-founded the Somalia Stock Exchange Investment Corporation (SSE), said he expected the bourse to attract both Somali-owned companies and international firms wishing to invest in the largely Muslim country and help rebuild it.
He was speaking at the signing of an agreement with the Nairobi Securities Exchange (NSE) for provision of expertise and support in the formation and development of the SSE.
“We are happy to assist them as we have assisted other countries like Rwanda. We hope we will be able to help them come up with sharia compliant sukuk bonds and halal equities,” said Peter Mwangi, the chief executive of the NSE.
Islamic sharia law forbids investments that pay interest or those made in certain companies such as brewers or gambling firms.
Together with Somali government soldiers, African Union troops who are battling the Islamist al Shabaab militants have made significant progress over the past year, bringing in a measure of normality to the capital and other parts of Somalia.
Those gains by the government and African forces, which followed many hard battles, have prompted nations such as Turkey to re-open their embassies in Mogadishu.
Regional firms, including banks in Kenya, east Africa’s largest economy, hope to follow in their footsteps when peace is fully attained.
If those companies do eventually move in, they will join a number of oil explorers who are already active in the semi-autonomous region of Puntland.
Somalia has no formal banking sector and its people rely heavily on money transfers, estimated to total more than $2-billion annually, from diaspora communities in Europe, North America and the United Arab Emirates.