Somalia Culture of Business

By | July 24, 2022
Basic data
Capital Mogadishu
Population 1 million
Language Somali language
Religion Islam
State system federal parliamentary republic
Head of State Mohamed Abdullahi “Farmajo” Mohamed
Head of government Mohamed Hussein Roble
Currency name Somali Shilling (SOS)
Travel
Time shift +2 hours (in summer +1 hour)
Economy 2021
Nominal GDP (billion USD) ON
Economic growth (%) 3.9
Inflation (%) ON
Unemployment (%) ON

Somalia’s parliamentary and presidential elections, originally planned for 2020, then 2021, did not take place even in the spring of 2022. The Somali Parliament is bicameral. 275 representatives from the 4 main Somali clans (61 seats were allocated to each) and the 5th group made up of smaller clans (31 seats) sit in the lower house. The upper chamber, which was established in 2016, has 54 representatives who are appointed by the governments of individual federal states. Executive power is held by the president, the prime minister and the government. There are no official political parties in Somalia, and legislators are formally independent.

Part of the Somali Democratic Republic is the Republic of Somaliland, which unilaterally declared independence in 1991 and includes 5 of Somalia’s 18 regions. Its territory corresponds to the former British colony of British Somalia. Although Somaliland’s independence has not been recognized by any foreign government, Somaliland has built its own institutions and operates independently of Mogadishu. Based on the 2012 local elections, it was determined that the three political parties that will be able to seek political power in the next decade are Kulmiye, Somaliland National Party and Justice and Welfare Party. Municipal and parliamentary elections took place in May 2021. The current ruling Kulmiye party lost 1 seat behind the opposition Somaliland National Party, which formed a new parliamentary majority together with the Welfare Party.

Somalia’s economy is based on subsistence agriculture and pastoralism. The main sources of Somalia’s GDP include exports of live animals to the Gulf countries, remittances from the Somali diaspora and the growing ICT sector. The government’s economic priorities include exploration and extraction of energy resources, regulating a growing financial sector dependent on remittances from abroad, and attracting investors to Somalia’s ports. Agriculture remains the basis of the economy, but it is very vulnerable to climate change, natural disasters and locust invasions.

Somalia’s economy registered economic growth of 3% in 2021, despite the continued impact of natural disasters that negatively affect its agriculture. Political instability, more frequent attacks by terrorist groups and the continued postponement of elections negatively affect existing trade relations.

  • Programingplease: Yearbook 2010 of nation Somalia, including population, politics, and abbreviations.

Due to the unstable situation, the country is not promising except for the implementation of development projects financed by international institutions (mining industry, agricultural technology, energy, connections and infrastructure). The potential is to a greater extent in stable Somaliland: energy, meat and fish processing, agricultural technology, technology for processing agricultural products, construction and renovation of airports, supply of small aircraft, pharmaceutical and medical equipment. In the field of services there is a prospective geological survey.

This Summary Territorial Information is processed for a country that is so-called accredited. The information is provided in an abbreviated form.

Culture of business dealings

Subchapters:

  • Introduction
  • Addressing
  • Business Meeting
  • Communication
  • Recommendations
  • Public holidays

Introduction

In this section, the Embassy of the Czech Republic in Addis Ababa draws on its experience with businessmen from Somaliland. Given the region’s political situation and international standing, Somalilanders are very open to international trade. Their behavior is very friendly, it is necessary to count on immense hospitality. Personal negotiations are clearly the preferred option.

Addressing

At the beginning, it is necessary to evaluate if the offered product or service is also applicable on the local market and if it is possible to find a suitable partner with whom it will be possible to cooperate. In business circles, personal contact is strongly preferred, business relationships are established very complicatedly via e-mail or telephone. Somaliland’s economy is often overlooked, but wrongly so. Somaliland is open to innovation and new products. Financing is often provided from the Gulf States, or deals are made directly through intermediaries in Dubai. As in other countries of the region, it is necessary to be flexible and not expect specific results from the first visit. The Somaliland administration is very cooperative, as is the Somaliland representation in Addis Ababa.

Business meeting

It is a good idea to start arranging a business meeting well in advance, however Somalilanders tend to be flexible in their organization and are able to accept meetings requested at the last minute. It is advisable to confirm the meeting a day before or on the day of the meeting, remind of its purpose and repeat the venue. It is advisable to arrive on time for the meeting, even though the partner will probably arrive late. The perception of time is very different, and a delay of tens of minutes is not an exception. The partner usually does not comment on this fact. Try to act constructively and not stress the delay unnecessarily. It is good to reserve several days for the visit, follow-up meetings are often held, the partner can recommend meetings with other interested parties or partners. Formal clothing is appropriate for the meeting, in case of high temperatures, it is tolerated not to wear a tie. Discussions usually start with a short social conversation and questions about impressions of Somaliland. It is appropriate to mention some previous activity of the Czech Republic in the country and use it as a positive reference. The host usually offers tea or coffee to drink, it is polite to accept the drink and at least taste it. We recommend handing the counterpart written materials, sending prospectuses or brochures by email has an uncertain result. It cannot be expected that the partner will have a business card, and it is not good to rely on the fact that he will contact the Czech businessman himself on the basis of the business card. Gifts are not usually brought to the meeting. If you are invited to a household, it is advisable to bring less attention with you, but invitations to dinner at a restaurant are more common. Negotiations usually take place in a friendly atmosphere, the use of pressure or confrontation will not lead to results.

Communication

The ability to communicate in English is sufficient in business circles and in higher positions in the state administration, it is necessary to get used to the local accent. The population speaks English at a basic communication level. Personal negotiations are clearly preferred. If the partners do not know each other for a long time, business relations do not develop after email or phone. It is necessary to build personal trust first. Visit Allunitconverters for more information about Somalia culture and traditions.

Recommendation

Basic principles when dealing with Somali partners, respecting which will help the promotion of the business plan:

Familiarize yourself with business-economic priorities, opportunities and competition in the country of operation.

Prepare materials about the company in English.

Take your time. Gradually moving from general things to specific things will help the partner to better understand the proposals. Expect changes in the program and lateness of the partner, which are compensated by hospitality and a friendly atmosphere.

Due to the long lunch break, it is a good idea to plan your work schedule for the morning.

Prepare the project well and be specific in the argumentation, adhere to the agreed deadlines, establish a friendly relationship with the partner and maintain regular communication.

Public Holidays

January 1 – New Year

May 1 – Labor Day

June 26 – Independence Day

July 1 – Republic Foundation Day

In addition to the above, the Muslim holidays of Eid al-Fitr, Eid al-Adha and Ashura and others are also celebrated, the specific date of which depends on the Muslim/lunar calendar.

Somalia Culture of Business