Somalia has a population of almost 16,000,000 people and is Africa’s most culturally homogenous country with 85% of citizens ethnic to Somalia. Somalia was first featured in the global rankings of the StartupBlink 2020 Startup Ecosystem Ranking Report at rank 95. This is a relatively strong position considering the last 30 years of Somalia’s history.
For Somalia’s rankings in the Startup Blink Global map click here
Unique Ecosystem Advantages:
- Excels at producing software and data innovations
- Great opportunities for renewable energy
- Saas is emerging rapidly in the country
- Lots of public investment opportunities
- Mogadishu is the most innovative startup ecosystem in Somalia
Overview of Mogadishu’s Startup Ecosystem
Mogadishu is the most innovative city in Somalia. The public sector and local entrepreneurs have worked hard to foster high quality innovations aimed at solving some of the country’s biggest problems. At rank 587, Mogadishu ranked relatively high in 2020. Additionally, Mogadishu took 14th spot of Africa’s 36 ranked cities, an impressive feat and evidence of innovation being built under tough economic circumstances.
From data collected by the StartupBlink 2020 Startup Ecosystem Ranking Report, the GDP per capita of Mogadishu is $315. Additionally, the average cost of living is 73% cheaper than London. This makes Mogadishu an affordable city that provides startups with strategic access to the coastline on the horn of Africa.
According to information collected by the World Bank, Somalia has a ranking of 190 for ease of doing business and it is estimated that opening a new company in Somalia takes about 70 days. This is one of the slowest average times for opening a new company in the world and entrepreneurs looking to bring their startups to Somalia will have to take this into account.
Mogadishu is by far the most prominent startup ecosystem in Somalia, however it is not the only one in this region. Hargeisa is another city with a budding innovation hub that has a lot of activity and growth. Through fundamental policies and a few key initiatives the city of Hargeisa has developed a significant startup ecosystem that we expect to see much more of in the coming years.
Public Investment Opportunities
Somalia benefits from accessible foreign direct investment laws that allow for flexibility on investment opportunities. According to the Minister of Planning and International Cooperation of the Federal Government of Somalia, “Trade and investment are the key drivers of development that will ensure Somalia plays the fullest role in a changing and interdependent world. In support of this goal, Somalia has adopted one of the most flexible foreign investment laws in the world. This Investment law, most importantly, treats both foreign and national investors as enjoying similar economic and social advantages.”
Somalia is one of the most mineral and resource rich countries in Eastern Africa and despite its many years of civil unrest the economy maintained an informal, yet stable, status largely due to its mineral resources and exportation of livestock. With a democracy established and a President elected in 2012, the country has been working towards restoring itself as a regional hub for commerce, transportation, trade and industry. The government is now determined to restore the country and there has never been a better time to invest in Somalia.
With this in mind Somalia boasts one of the most internationally competitive Investment Laws. It provides investors with flexible incentives to ensure all their needs are met effectively and efficiently. It also provides investors with various incentives in the national priority sectors.
The most prominent of these sectors is the energy sector. Somalia has the highest resource potential of any African nation for onshore wind power, making it a great place for startups focused on renewable energy. The long-term objective of the Somali government is to create a renewable energy centred market that takes advantage of Somalia’s favourable renewable energy potential, such as solar, wind, hydro, geothermal and tidal. Investments in these sectors are highly encouraged.
International Aid and Assistance
Due to its history of instability and unrest Somalia has benefited from International Aid and Assistance for well over 30 years. The aid from International organizations such as the United Nations has helped not only rebuild the country but also has provided the right infrastructure to be built that can support the growing startup ecosystem.
The Government of Somalia has a positive attitude towards foreign direct investment at the federal and regional level. Gulf Arab states have started to make strategic investments in the country, with Saudi Arabia building livestock export infrastructure and the United Arab Emirates purchasing large tracts of farmland for commercial agriculture. The increase of trade and commerce since the civil war has boosted the local economy and many cities in the region have benefited, especially Mogadishu.
Collaboration and Innovation
The Response Innovation Lab has done an extraordinary job working on the research and promotion of the Somalian startup ecosystem. We were inspired to see how this organization is working around the world to showcase and develop innovation, together with local governments, in locations that almost never receive the spotlight. Very few would imagine that Somalia, with its challenging situation, has a growing startup ecosystem.
After mapping the ecosystem of Somalia with help of the Response Innovation Lab, we have seen that there are innovative projects in the country that we never would have imagined. The Somali ecosystem has a lot of potential, and organizations like the Response Innovation Lab are helping to fulfill it.
Response to COVID-19
In order to prepare Somalia for the coming pandemic, the Somali Response Innovation Lab built awareness of the virus through public health messaging. Through early support of the development of free use content that is endorsed by the government, critical information about the virus was shared on social media and through different communication channels to ensure that the Somali public was aware of the threat and informed on how to stay safe.
Along with help from the United Nations, the government in Somalia has implemented cash disbursement through mobile phones. By sending electronic vouchers by text message, that can be redeemed for seeds, tools, irrigation and storage to over 40,000 farmers. This has helped boost the local economy and avoid supply chain delays caused by COVID-19.
Mogadishu has 24 startups on the StartupBlink map that are currently creating solutions to local and national problems. The city excels in producing software and data innovations within the African context. Here are some of the most interesting startups from the list.
OGOW – A startup that provides electronic medical records (EMR) and a practical management system designed specifically for hospitals and clinics in Somalia
Gulivery – A startup that provides a delivery service platform for order fulfillment in Mogadishu and Hargeisa.
SolarGen – A regional renewable energy and water solutions provider. It is a distributor with strong technical expertise in the region.
Accelerators and Initiatives
According to data from StartupBlink, Mogadishu has 6 key accelerator programs that help support it’s startup ecosystem with funding and opportunities. The city also benefits from initiatives aimed at promoting investment in different industries. Here are the most important accelerators and initiatives in Somalia.
Sominvest – The Investment Promotion Office (SOMINVEST) helps to promote foreign direct investment, rebrand Somalia and advocates for improved investment policies.
Somali Technology Association Centre – An IT Hub that was founded in 2018 by a group of young educated Somalis based in Mogadishu. It was created out of UNDP’s Future Ready bootcamp and has created a startup that offers tech training as a service.
iRise – An innovation hub in Mogadishu with the aim of building and empowering young entrepreneurs. It offers creative workspaces as well as fully furnished office spaces to help startups innovate and network.
Innovate Ventures – Innovate Ventures is a leading Somali startup accelerator and early-stage startup fund. Their innovative accelerator program is a three month intensive incubator that provides entrepreneurs support and investment opportunities.
Response Innovation Lab – Foster partnerships that develop, pilot and scale innovations that overcome context-specific problems or barriers to the delivery of aid and community recovery.
Somali Resilience Innovation Lab – An interagency partnership offering effective innovations to enhance the impact of humanitarian and development interventions to improve the resilience of the Somali people.
Although Mogadishu has seen difficult times in the past, through public and international organizations and the promotion of key acceleration initiatives, Mogadishu has proven itself as a top 100 global startup ecosystem with potential.
Ultimately, Mogadishu is a city that is fostering its startup ecosystem in order to produce some high quality solutions to Somalia’s problems. The city is able to fund and promote the right startups and with some support from international organizations and improvement of the city’s infrastructure, the city could develop a strong startup ecosystem in Africa.
For more information on startup ecosystems download the Startup Blink 2020 Global Report