MoU signed to strengthen collaboration between Somalia and Rwanda

In the wake of the 2012 establishment of the Federal Government of Somalia, the country has been striving to overcome the challenges that have plagued it for the past three decades. Structural reforms have been implemented to bolster domestic business and attract foreign direct investments. Recently, the Somalia Investment Promotion Office and the Rwanda Development Board inked a landmark Memorandum of Understanding (MoU) to fortify investment cooperation between the two nations. Mohamed Dubo, the Director of the Somalia Investment Promotion Office, shed light on the MoU and the initiatives geared towards positioning Somalia as an attractive investment destination in an exclusive interview with CNBC Africa. Dubo highlighted that the collaboration stemmed from previous engagements and a mutual understanding signed during the visit of Somalia's Foreign Affairs Minister to Kigali a few months prior. The focus was on harnessing the existing infrastructure for economic cooperation, particularly in investment promotion. Drawing on Rwanda's success in investment promotion and business facilitation, both countries agreed to build a collaborative framework to enhance their economic engagement. The key theme emphasized during the interview was the need to shift the narrative from solely focusing on security and governance issues to include economic engagement and interaction. Dubo stressed the importance of exploring economic ties and investments across Africa to spur job creation and opportunities, especially given the continent's burgeoning youth population. Drawing parallels with Rwanda's economic transformation post the early '90s, Somalia aims to learn from its neighbor's experiences and replicate the success in enhancing economic integration across Africa. Three key points emerged from the interview: 1. Focus Areas for Investment: Somalia is keen on delving into Information and Communication Technology (ICT), financial sector reforms, manufacturing, and food processing, leveraging the countries' fertile land for agricultural production. Enhancing these sectors not only caters to domestic needs but also opens avenues for exports to address trade deficits. 2. Strengthening Financial Sector: Somalia has taken significant strides in fortifying its financial sector to support capital repatriation. The country has licensed two major international banks, from Turkey and Egypt, to bolster trade financing and smoothen capital flow. The aim is to streamline financial transactions, including remittances, which play a vital role in supporting livelihoods and investments in Somalia. 3. Image Building and Investment Promotion: Combatting the negative perception associated with Somalia is crucial to attracting foreign direct investment (FDI). The country is working on rebranding efforts through establishing investment linkages, emphasizing entrepreneurship among Somalis, and accentuating cultural heritage to redefine its image. By positioning itself as a logistical hub and focusing on infrastructure development, Somalia aims to project a positive narrative of economic growth and stability. A quote from the interview encapsulates Somalia's investment promotion strategy: 'Most of our reforms are checked from a sustainability perspective [...] we have started addressing the basics of brand building and image building of the country.' Dubo reiterated the importance of sustainable reforms, proactive economic strategies, and robust institutional frameworks to engender long-term economic growth and attract investments. In conclusion, the MoU between Somalia and Rwanda signifies a step towards bolstering economic cooperation and fostering a conducive investment climate in Somalia. By leveraging Rwanda's success and charting a path towards sustainable economic reforms, Somalia endeavors to attract FDI, stimulate economic growth, and reshape its image on the global investment landscape.