Tag Archives: Somaliland

Power Economics 101: Harnessing Wind Energy in the Horn of Africa

Someone recently asked me about which sectors in Somaliland I thought might be attractive for potential investment. After all, frontier markets are rapidly gaining popularity amongst Western investors, from Myanmar to Nigeria. Particularly in Africa, there are so many different industries that seem promising – infrastructure, food and beverage, oil and minerals, and telecommunications. Private equity firms based primarily in London and Dubai have begun to zero in on neighboring Ethiopia, which has consecutively posted impressive GDP growth, has Africa’s 2nd largest population, and exports a wide variety of agricultural and mineral products.

Somaliland, however, has not received much attention from investors in comparison to other African countries. The ongoing instability and civil war in southern Somalia, as well as the maritime piracy industry off the coast of Puntland, has deterred many would-be investors from putting their money anywhere near Somalia. The few large-scale investments in Somaliland have mostly been funded by successful Somali businessmen from the diaspora.

Although not blessed with mineral wealth, arable land, or a large population, Somaliland does have a few sectors that might interest seasoned investors or savvy entrepreneurs.

Infrastructure is one major area. China, Ethiopia, and Somaliland have reportedly already signed a trilateral deal to expand and renovate Berbera’s port and build a sealed road all the way from Berbera to Addis Ababa. Ethiopia is one of Africa’s largest and fastest growing countries, but it is land-locked and relies almost entirely on Djibouti’s port for importing and exporting goods. Berbera is a deepwater port that could be very beneficial to both Somaliland and Ethiopia and would provide a competitor to Djibouti. In comparison to Ethiopia, the roads in Somaliland are horrendous. Most have not been repaired in decades and the road from Hargeisa to Wojaale (the Ethiopia/Somaliland border) is not even paved for the last 20 or 30 km. A smooth, sealed road all the way from Addis Ababa-Hargeisa-Berbera would vastly improve Berbera port’s importance and would provide a massive boost to Somaliland’s economy.

Although the infrastructure is in various states of decay, I believe the energy sector challenges infrastructure as the most badly-needed improvement for Somaliland’s economy. Power in Somaliland remains prohibitively expensive, and the country’s population pays close to $1 per kilowatt hour for electricity. To put that in perspective, Americans pay close to $0.12/kWh. Such a high price will guarantee that industry and manufacturing in Somaliland remain nascent and will prove to be a major impediment to expanding and diversifying the country’s economy.

Working on the wind turbine to try and cut the school’s energy costs

Why is the price of power so high? Years of civil war destroyed most of the country’s infrastructure, and Somaliland’s continued lack of international recognition has made it difficult to attract money from donors or companies interested in providing affordable energy solutions. There are no power plants here, and 100% of the power comes from expensive, environmentally-unfriendly diesel generators. Private generator owners charge neighbors exorbitant prices depending on their electricity usage, and it is not uncommon for households or small shops to pay per lightbulb!

The few power lines that run through Hargeisa sag languidly and only function to transport excess electricity from a large generator to neighboring houses and shops. Contributing to the dysfunctional, decentralized energy sector is the fact that diesel generators are expensive to operate. All diesel is imported from the Gulf. The boarding school where I live and teach has two generators – a small one for use in the daytime and a large, high-powered one used at night to power our security lights throughout campus. The school’s managing director told me that on average, we spend about $15,000 a year just on diesel for the generators!

Our electricity expenditures will decrease, inshallah…

Recently, our school has built and installed a wind turbine to try and reduce our costs and environmental pollution. I believe the wind turbine is the first of its kind in this country, and we imported all of the parts from China (the 20 meter tall base, the actual blade, batteries, etc.) A prominent Somali engineer who lives overseas helped manage and oversee the construction of the project. The process was time-consuming – from pouring the concrete foundation to renting a crane to help set the 20 meter base upright to hooking up hundreds of high-voltage batteries.

Now fully functional and by far the tallest structure on campus, the wind turbine is expected to cover 90% of our energy usage, and should pay for itself within a couple of years. We will continue to use the generators at times when the wind is still or if there are any problems with the turbine.

Xamse and Mustafe, posing in front of our 20 meter high wind turbine

To me, a wind turbine seems like the perfect solution to the school’s energy costs. Located about 20 km outside of Hargeisa in an open valley, Abaarso is incredibly windy most of the time. However, wind energy is a bit more complicated than many people realize, and should ideally be paired with another power source to maximize its benefit. If you think of hybrid cars, for example, the most successful ones combine electric power with gas-fueled power. With wind energy, you need a back-up power source for times when the wind is not blowing, the batteries are not fully carrying the charge, or you want to fine-tune your electricity usage by increasing or decreasing the voltage.

One potential option would be to combine wind energy with hydroelectric power imported from Ethiopia. The Ethiopian government has spent close to $8 billion on various projects to dam the Nile River and generate electricity. Ethiopia has become a major producer of hydroelectric power and there are now talks of the country exporting power to neighboring countries in the region. Such an option for Somaliland, however, would require an enormous upfront capital investment which would certainly require external financing from an organization like the IFC or the World Bank. High-voltage cables would need to be laid from eastern Ethiopia to the Somaliland border, but I have heard price estimates in the ballpark of $90 million to complete such an initiative. This project would cut electricity prices drastically for Somaliland’s population of over 3 million, but remains a pipe-dream without international recognition or clear access to funding.

Another alternative would be building a power plant that uses oil or coal and would service the capital city, Hargeisa, which is home to roughly half of Somaliland’s population. Building such a plant and revamping Hargeisa’s dilapidated electrical grid might cost in the neighborhood of $40 million and funding would also need to come from a variety of sources. At the same time, it could prove to be a great investment by monopolizing the country’s energy sector, providing power at a fraction of the previous cost, and making power affordable enough to encourage industry. Current power prices in Somaliland are prohibitively expensive for any kind of large industrial production.

Whatever the solution is, until Somaliland finds a more efficient way to provide power to its citizens, be it through a government-run energy monopoly or a private company, the country will face serious challenges in expanding its economy.

Moussa, Ismaciil, Maxamud, Xamse, Cabdikarim, and Mr. Siler

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Berbera and Harar Round II

I have really fallen behind on blogging lately. I have been busy at the school working six days a week and teaching three different classes. Most of my free time now is spent trying to figure out what I want to do after my contract ends on July 30th and identifying jobs I might be interested in after Somaliland. If anyone has any input about business analyst-type positions in frontier markets (Africa, Central/Southeast Asia), please send me a note.

In the month since I wrote my last blog post, I have managed to make two small trips, one to Berbera and one to Harar.

Berbera is Somaliland’s biggest and most important deepwater port. Located on the Gulf of Aden, Berbera has the potential to be a major player in the shipping and logistics industries in East Africa and the Horn. However, due to Somaliland’s lack of recognition and poor infrastructure, Berbera continues to be overshadowed and outmatched by its western neighbor, Djibouti. The Djibouti port handles almost all of the cargo heading from Asia or the Middle East and destined for Ethiopia. As a landlocked country with over 80 million people and one of Africa’s fastest GDP growth rates, Ethiopia needs a reliable port capable of handling its rapidly expanding imports and exports. There are talks of a trilateral deal between China, Somaliland, and Ethiopia to expand Berbera port and build a new road from Addis Ababa to Berbera, but until that happens, I do not see Berbera as realistically being able to serve Ethiopia’s freight needs. I am most clearly reminded of this every time I go from Somaliland to Ethiopia – the last 45 minutes from Somaliland towards the border in Wojaale are spent swerving and bumping on an unpaved dirt road. Without a sealed, tarmac road linking Somaliland with Ethiopia, there is no way that Berbera will ever become a legitimate cargo hub.

Ships at Berbera port

When Somaliland was a British protectorate, Berbera was used for shipping livestock, frankincense, and myrrh to Aden, in Yemen. During the hotter months, the Brits had to move their colonial outpost to Hargeisa, because it was simply too hot to live in Berbera year-round. It is reportedly one of the hottest regions on earth, and even when I visited in January, the temperature was probably over 90 degrees Fahrenheit.

Despite this, the beaches in Berbera are really beautiful and completely isolated. The town itself now has a population of less than 30,000 (mostly people who service the port or the international airport) and the beach that we went to was totally empty. Although beaches I visited in Kenya, Zanzibar, or Southeast Asia were more visually appealing, I actually preferred Berbera, purely because there was no one else. Being constantly hustled by beach boys or sharing the sea with hundreds of other tourists really cannot compare to being the only group of people on the beach as far as the eye can see. Not many travelers pass through Somaliland or the Gulf of Aden, and the only locals around seemed to be fishermen. I realized that Somaliland and Somalia must be some of the only places in the world where one can visit a phenomenal beach and be literally the only person there to enjoy it.

Dylan enjoying the scenery in Berbera

What the Gulf of Aden washed up...

Teachers

I made the 3 hour drive north with a group of other teachers and we spent the day swimming around, eating fish and chips at the Maan Soor Hotel, and generally enjoying the fine weather and peaceful surroundings. It was a great day trip, although the beach was much nicer than what we saw of the town itself. A lot of the aerial bombing damage from the Somali Civil War seems to have never been repaired, and the skeletons of decrepit buildings are still visible throughout town.

Camels on the way to Berbera

My most recent trip was last week for our midterm break. I visited Harar in eastern Ethiopia with a group of other teachers. This was my third visit to Harar, and it is quickly starting to feel like a second home for me. It is a great place to go for a short trip and to experience some of the things we cannot get in Somaliland (good food, beer, freedom to walk around without an armed guard, women without headscarves). Despite knowing the city well, I always enjoy exploring the alleys of the old town and finding new restaurants and cafes to sample.

Although eastern Ethiopia is predominantly Muslim, there are a number of Ethiopian Orthodox Christians in Harar. Although I am not religious, one thing I like about Ethiopians is that they are quick to come together with friends and family to celebrate the vast number of Christian and Muslim holidays. My last visit to Harar coincided with Eid al-Adha, and I was able to attend the massive Eid prayer at Harar Stadium. This time, we visited during the holiday of Saint Mary and were treated to a massive neighborhood feast. Our good friend in Harar, Ermiyas, explained to us that the whole neighborhood had been invited over for a celebration of the holiday – and this meant lots of injera, tibs, and talla to go around. Last trip, I sampled tej, which is a local Ethiopian honey wine. This holiday, we were each given a bottle of talla, a different Ethiopian homebrew. Talla is dark and not carbonated, with a malty flavor. I enjoyed it, and it just added to the celebratory, communal atmosphere.

Serving out injera and talla for St. Mary's Day in Harar

Another highlight of the trip for me was going to see Arthur Rimbaud’s house in the Old City. The famous French poet is rumored to have lived in the house in the late 1800s, although even our guide told us that he may never actually stayed in it. Either way, he lived in Harar for a few years during the time, and the house has now been converted to a spectacular museum.

The house is filled with poems he wrote and photographs he took in Harar, Yemen, Djibouti, and even Berbera. It was fascinating to see what the city of Harar looked like back then, and also to see portraits he took of local Hararis.

Arthur Rimbaud's House in Harar

Portrait taken by Rimbaud

Ethiopian portraits, circa 1880s

The part of the house that I enjoyed the most was the attic, which provided a colorful panoramic view over Harar’s Old Town. The varied colored glass provided a really cool photo opportunity and the room would have been an amazing place to have a meal and look out on a sunset over the city.

The attic at Rimbaud's house

Multi-colored view of Harar

Our last mission in Harar was to successfully feed some hyenas. Back in November when I visited, we tried to feed the beasts on the day of the Eid feast, and the hyenas were surprisingly not hungry at all. We realized that their lack of appetite was due to the fact that sheep carcasses littered the streets of Harar for the slaughter, and the hyenas had spent the day chomping on bones in rubbish piles throughout the city.

This time, we were lucky, and the menacing hyenas had regained their appetite. We watched with excitement as the Hyena Man whistled and lured them in with his bucket of meat scraps. They circled him and got disturbingly close, before one boldly ran forward and began eating scraps of meat out of his hands. After the Hyena Man had warmed up and was steadily feeding a group of three hyenas, he asked us if we wanted to try.

I had a great, yet terrifying time, feeding the hyenas first from a stick held out from my body, and then from the same stick held in my mouth. As my brother later pointed out, the fact that I didn’t get any rabies shots before moving to Africa must have been absent from my mind. Regardless, it was a thrilling experience and definitely something I will laugh about for years to come.

Feeding the beast

Danger is my business

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Where are all the Chinese?

Since arriving in Somaliland about four months ago, I still have yet to see a Chinese person. To be honest, I have not seen many foreigners at all except for the occasional Western aidworker, Saudi sheikh, or Sri Lankan gemstone prospector. By and large, every new person I meet here is a Somaliland local or a Somali from the diaspora who has come back.

You may be wondering why I would even expect to see any Chinese here – Beijing is thousands of miles away from Hargeisa and the two countries are worlds apart culturally.

But a fact largely unknown to many Westerners is that China’s interest in Africa has skyrocketed in the last decade, and the country is far outpacing the West in terms of business and investment on the continent. The Chinese can now be found in nearly every African country, and the jobs they are employed in are just as diverse as the places they choose to inhabit. There are roughly 1 million Chinese in Africa today, working as salesmen in Guinea, engineers in Kenya, restaurant proprietors in Uganda, coalmine managers in Zambia, roadworkers in Ethiopia, and oilfield technicians in Sudan.

A professor of mine in college, a former US diplomat in sub-Saharan Africa, recalled to our class how he had even encountered Chinese shopkeepers in N’Djamena – the sleepy and desperately poor capital city of Chad in central Africa. A student in our class from Zimbabwe chipped in, saying that in his hometown of Harare, the Chinese are everywhere. Their business acumen and increasing domination of Zimbabwean merchants has caused resentment, he said, as well as the fact that they tend to stick to themselves and make little effort to interact with the local population.

In analyzing Beijing’s relationship with the continent, the numbers speak for themselves: trade between China and Africa has increased from $9 billion in 1999 to roughly $100 billion this year. China is by far Africa’s largest trading partner, and the proof is everywhere I look. From mobile phones to flip-flops, nearly every good for sale here in Somaliland is a Chinese import.

Unlike China’s trade with America – which largely flows one-way with cheap Chinese goods being sold to American consumers – the import-export relationship between China and Africa is much more balanced.

On the export side, low-cost Chinese products have now reached even the most remote areas in Africa, including war-torn villages in the Congolese forest where cheap Chinese plasticware is imported by bicycle. Chinese firms have also signed deals with African governments to build huge infrastructure projects such as highways, stadiums, and railroads.

The Chinese have been very active in Ethiopia and from personal experience, the results are noticeable. Almost as soon as we crossed over the border from Somaliland to Ethiopia, the road to Harar transformed into a brand-new sealed road. This sparkling, Chinese-built motorway made the journey much faster and less bumpy than I had expected.

But the Chinese are equally invested in the other side of the trade equation – African commodities that can be imported to China. The African continent is home to a plethora of valuable natural resources that have been prized by colonial powers, imperialists, and traders for centuries. China, as the world’s largest country and most prolific manufacturer, is capitalizing on Africa’s vast supply of oil, minerals, timber, and even farmland.

Beijing has cozied up to petro-regimes from Angola to Algeria for decades and continues to import hundreds of millions of barrels of oil from the petroleum-rich, democracy-poor states of Sudan and Equatorial Guinea. It has also made massive investments in extracting minerals. China is currently building the world’s largest iron mine in Gabon and is the biggest buyer of coltan, a conflict-mineral almost exclusively sourced from the Democratic Republic of Congo and used in the production of mobile phone and laptop batteries. Thousands of tons of West African timber are shipped to factories in the Far East and Chinese agribusinesses have been busy securing land deals to allow them to begin industrial farming plots of land in Ethiopia and Mozambique.

The topic of China’s relationship with Africa is a heavily debated one. Skeptics criticize Beijing’s interest in the continent as the “2nd wave of imperialism”, finding fault with the fact that China only seems interested in the extraction of Africa’s resources, not in the continent’s economic development or helping its people graduate from ultra-poverty. Chinese firms look at investments in Africa from a business perspective, and spend little time assessing the political, humanitarian, or environmental impact of their projects. They overwhelmingly tend to hire Chinese laborers and often have little interaction with the local population. Internationally, China has been chastised for turning a blind-eye to human rights abuses in Africa and continuing to do business with authoritarian regimes that Western companies won’t go near.

The flip side of this is that China gets things done in Africa. When a Chinese construction company is hired to build a road, they build a road. They don’t spend months plodding through feasibility studies, environmental impact surveys, and letters from concerned donors like the UN, the IMF, or Western companies would. Chinese laborers are hard-working, rarely complain, and are willing to work for comparatively low wages in dangerous and desolate locations. Dambisa Moyo, a renowned Zambian economist, has praised China for its no-strings-attached, results-based investment in Africa, a far cry from the Western aid that she believes has crippled the continent and has accounted for its ongoing stagnation.

With all of this laid out on the table, the question remains – where are all of the Chinese in Somaliland?

Well, there are some, and I think Beijing will become increasingly interested in Somaliland in the years to come. I polled my students to see how many of them had ever seen a Chinese person in Somaliland, and was surprised to find that about 70% of them had. They assured me that there were Chinese dentists in Hargeisa, businessmen responsible for importing goods from Beijing, and engineers working for the country’s telecom and satellite television stations. One girl even said her next-door neighbors in Hargeisa are Chinese. I guess I have been looking in the wrong places.

To emphasize the magnitude of China’s takeover of Africa, I asked my students to think of everything they own – clothes, mobile phones, shoes, even their traditional Somali macawiis, a skirt-like piece of fabric worn by men here. Then I asked them where all of these things came from. They all replied, “China!” Their homework assignment for the next class was to ask their parents whether they owned anything from China when they were growing up in Somaliland or Somalia. The answers were overwhelmingly no. I pointed out to the students how cheap Chinese goods have effectively killed many African textile and clothes manufacturers, and they agreed that being a Somali shirt-manufacturer would be a doomed profession; one would clearly go bankrupt trying to compete with dirt-cheap Chinese products.

Realizing the potential importance of Somaliland, Beijing has begun to develop ties with Hargeisa. Somaliland’s president, Ahmed Silanyo, made a two-week trip to China in August to discuss potential opportunities in the country for Chinese investors. A trilateral deal has been signed between China, Somaliland, and Ethiopia to develop oil and infrastructure projects in the region. Reportedly, China plans to invest close to $4 billion on the project, which would build oil and gas pipelines from the Ogaden in Ethiopia to the Somaliland sea port of Berbera. In addition to the pipelines, China would expand and renovate Berbera’s port and build a major road and rail system from Berbera to Addis Ababa.

With a population of roughly 70 million, Ethiopia provides a huge market for Chinese goods. However, the country is land-locked and Djibouti’s port currently has a monopoly over the Horn of Africa. The hope is that a modern, renovated Berbera port could provide some competition and potentially overtake Djibouti or Mombasa as the premier port in East Africa. Such an investment in Somaliland would provide a much-needed boost to the country’s economy, which largely relies on diaspora remittances and livestock exports to keep afloat.

The question I am curious about is when the Chinese ultimately decide to come to Somaliland, will they be well-received or will they quickly wear out their welcome?

I am sure that China’s expansion into Somaliland is just over the horizon. There are roads that need to be built, a power system that needs to be laid, and plenty of opportunities for business-savvy entrepreneurs to introduce their goods to a new market.

Until that happens, the roads are potholed, consumer goods remain pricy, and I still can’t find any decent chow-mein in the whole country!

**If you are interested in reading more about the Chinese in Africa, check out:

The Atlantic’s “The Next Empire” and The Guardian’s “China’s Economic Invasion of Africa”

**Regarding China’s potential investment in Somaliland:

Reuters’ “Somaliland in Port Deal with China Businessmen” and SomalilandPress’ “Somaliland, Ethiopia and China to Sign Trilateral Deals”

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Cutting-Edge and Cutthroat: Telecommunications in Africa

As long I can remember, my cellphone has been the laughing stock of my friends. When everyone else had flip phones, mine still had an antenna and a bad tendency to pocket-dial people. While others got 3G and international roaming, I could never get bars inside my house. And in the last year, before I moved to Somaliland, my friends all converted to iPhones, Blackberrys, and Droids while I continued using the Motorola burner that my dad bought in 2005.

I’ve always paid my own cellphone bills, and as a student on a budget, opted for low-end, pay-as-you-go monthly plans. Most of my phones never had T9, so my texting skills are infantile. I’ve become accustomed to having a phone that doesn’t work half of the time, charges me 25 cents per text received, and functions more as a pager. Just ask my friends…I usually get their calls on my mobile and then call them back from my house landline phone.

Before moving to Somaliland, I tried to mentally prepare myself for a new life without many of the things I had always taken for granted – fast internet, a wide variety of food, and functional TV channels. I didn’t think much about whether or not I would have a mobile phone here.

Having traveled a decent amount, I’ve noticed that almost everyone I meet around the world has a mobile phone. It seems that no matter how poor or underdeveloped the country I travel to, everybody still can scrounge together enough money to afford a cellphone. Migrant fishermen in Malaysia, sketchy street-lurkers in Colombia, grandfathers in Morocco. When I was in Ghana four years ago, our driver had two cellphones. I can travel thousands of miles from home and back again, and the only person I ever meet without a mobile is my mom, who is quite happy to live without one.

I took this out of our van's window - I bet you 73 million Somaliland Shillings that she owns a mobile phone

Because of my travels, I was not at all surprised to discover that the telecommunications industry is alive and booming in Somaliland. In fact, all of Africa is becoming saturated with cellphones, and mobile companies and phone manufacturers are paying close attention. An emerging African middle class combined with the increasingly low prices of mobile phones mean that the continent now offers millions of potential customers in a large market that is only beginning to be tapped.

Somaliland is an ideal example of why the telecommunications industry is booming in Africa. In the late 1980’s, Siad Barre, the repressive dictator of the Somali Republic, launched repeated air attacks on Hargeisa. The bombing completely destroyed most of the city and crippled the infrastructure and development of the northern region. I doubt that telephone poles had been erected in the country back then, but if any did exist, Barre’s assault surely took them out.

Fast-forward 20 years and the story is quite different. Although Somalia remains trapped in continuous civil war, Somaliland has begun to develop, albeit slowly, and some foreign investment has trickled in – largely from Somali diaspora. Many of the major infrastructure challenges hindering development, such as poor roads and no electrical grid system, are incredibly expensive and difficult problems to solve. But what about phones?

Infrastructure challenges in downtown Hargeisa

That is where the mobile phone industry comes in. In the US and the UK, landline phones existed for decades before cellphones ever came around. Almost all of the continental United States is criss-crossed by telephone poles providing phone service to landlines in every household. Although arguably more reliable than the satellite coverage used by cellphones, landline phones come at an enormous start-up fee: the cost of installing thousands of telephone poles throughout the country.

For a country like Somaliland, where infrastructure is already poor and the government struggles to provide services with the small budget that it does have, mobile phones have provided the perfect solution. Not surprisingly, the telecommunications industry has taken off in the country.

It is interesting to note that not only are mobile phones ubiquitous here, they are also far more advanced than many of the phones I’ve seen in America. Sure, iPhones and Blackberries haven’t quite flooded the Horn of Africa yet. But the mobile I was given by my school here has many more features and capabilities than my mobile back home. A cheap Chinese model, it has a radio, camera, television, video recorder, and Bluetooth options. You can also use it for file storage and load mp3’s onto it. Those of you with smart phones are probably laughing, because I must sound out of touch if I think it is ‘cutting edge’ for a phone to be able to play mp3’s. But can your iPhone simultaneously hold two SIM cards and receive or place calls from both?

If you still think that my Somali phone’s capabilities are pathetic, I will ask you this: can you walk into a store in America with no cash or credit cards on you and buy a box of cereal with only your cellphone? No, you can’t. You can over here. Light-years ahead of the West, the mobile banking/payment frenzy has hit Africa.

In Somaliland, the service that allows you to make purchases with your cellphone is called Zaad and is provided by Telesom, the largest and most popular mobile provider in Somaliland. How it works is quite simple. You find a money changer on the street and give him a fixed amount of money, say $50. This money changer will take your cash and in return, text you $50 ‘credit’ on Zaad. This credit can be used like cash, and every merchant in the country has a Zaad account – even small qat shacks! So if you want to buy a Coca-Cola from a roadside stall, you can just Zaad the amount owed to the seller (a Coke costs about 3,500 Somaliland shillings, roughly 50 cents). You will then get a notification on your phone showing that your Zaad balance has been decreased by 50 cents and the merchant will get a text saying his Zaad balance has been increased by 50 cents. The beauty of Zaad is that it has the possibility of transforming Somaliland into a cashless society. In fact, many of our students pay their semester tuition via Zaad!

Mobile banking/payment services are an interesting topic and innovations in the fields will continue to help Africa for years to come. For many Africans who live in countries with few traditional and trustworthy banks, mobile banking is the sensible alternative. Companies are also expanding their range of services; in addition to mobile banking, some offer the options of international money exchanges and remittance transfers.

The West needs to catch up.

These guys are chewing qat under a tree on a hot Somali afternoon. They may have bought their qat via Zaad, a mobile payment service

I’ve discussed why telecommunications in Somaliland is cutting-edge, now I’ll talk a bit about why it is cutthroat. In America, if I have a plan with AT&T and my friend has a plan with Verizon, we can call each other’s phones even though we have different service providers. Having grown up in the US, I never even stopped to consider how incredibly inconvenient it would be if you were only able to place a call to a person who had your same service provider. Thankfully, a functional US legal system means that if AT&T tried to block its customers from being able to call Verizon customers, the US government would probably intervene and rule this action illegal, stating that AT&T was acting as a monopoly and abusing its market power – harming  the average American consumer.

The key assumption in the example is a functional judicial system where legal action can be taken and lawsuits can be filed if companies abuse their power. Welcome to Somaliland, where despite a relatively stable democracy and some legal process, disputes are most often settled through clan mediation.

The result of this is that the two largest telecommunications providers in Somaliland, Telesom and Somtel, do not connect to each other. Most people in the country use Telesom, but if they want to call a Somtel number, they cannot do it. They can only reach that number by calling it from a Somtel SIM card. This is very inconvenient because all of the teachers use Somtel, unlike the rest of the country. As I mentioned earlier, most phones here have a dual SIM capacity. I have two SIM cards, Telesom and Somtel, with two completely distinct mobile phone numbers. My phone can hold both SIM cards at once, and it asks me whenever I try and send a text whether I want to send it from my Telesom or Somtel number.

Truth be told, ‘cutthroat’ is a bit of an overstatement. Although the companies are ferociously competing against each other for market share, Telesom is far more popular than Somtel. In a country where two different service providers do not connect to each other, it is a huge barrier to entry that Telesom already dominates the majority of the market. If Somtel wants to get a new customer, it has to convince him that Somtel is a better company and also that other people will soon follow him and join Somtel. If Axmed switches from Telesom to Somtel, but no one else does, then nobody can ever call Axmed again.

Until next time, remember that although you may have a fancy new iPhone, I have two Somali numbers operating from one cheap Chinese phone. And it has a color TV feature! Step your game up, America…

A Telesom billboard

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A Lesson in Globalization: Food in Somaliland and Buying in Bulk

One of the most common questions I’ve gotten from friends regards the food that we get here. Do you get enough to eat in Africa? Do Somalis really have their own cuisine?

From my perspective on the ground in Somaliland, such inquiries sound naïve. The vast majority of Africans aren’t starving. Western charities and media love nothing more than a photo of a hungry-looking African child to attract donations and development dollars. (If you don’t believe me, read Michael Maren’s “The Road to Hell”, a scathing and disturbing analysis of NGO’s and the aid sector. Much of the book is based on the author’s experiences in Somalia.) Also, Somali cuisine does exist and it features elements from African, Arab, and Indian cooking. But to the average person in the West who is not familiar with the Horn of Africa, any mention of Somalia and food in the same sentence will probably lead to the topic of famine.

The famine that has crippled much of the Horn this year is an incredibly sad and serious situation that has no easy answer. Like almost every issue in Somalia, there are so many different factors contributing to the problem. Policymakers around the world have struggled for the last two decades on the issue of how to do something in Somalia without making things worse. Unfortunately, they have been largely unsuccessful and most attempts to build peace, stability, and development have been futile (see Blackhawk Down, the UN Operation in Somalia, the weak Transitional Federal Government, the rise of Somali piracy, al-Shabaab, etc.)

This blog post is about food, so although Somaliland has been fortunate enough to avoid the famine, I felt it necessary to put my two cents in about how tricky ‘fixing the famine’ in the Horn of Africa really is. Somalia is a classic example of a place where food aid has been used as a tool of war by warlords to prolong conflict and gain power. International actors meddling in Somalia’s affairs have historically created more problems than solutions.

I really had no idea what to expect in terms of food before I got here. I had read that Somali cuisine featured goat, beef, camel, laxoox (a spongy, fermented pancake similar to Ethiopia’s injera), sugary tea, and spaghetti – a remnant of the times when most of Somalia was an Italian colony. Interesting fact: the capital city is known as Mogadishu in English, Muqdisho in Somali, and Mogadiscio in Italian…

A typical lunch here. The only authentic Somali foods are laxoox (the spongy pancake) and xabxab (Somali for 'watermelon')

I was pleasantly surprised to find that a surprising amount of Western foods can be found in Somaliland. Peanut butter, Nescafe, ramen noodles, soy sauce, and Corn Flakes are all stocked on the school’s kitchen’s shelves. What I find interesting is where all of these products come from.

Kitchen shelf

From my international and development economics courses that I took in college, I remember learning about how Europe and the United States give enormous subsidies to their own farmers to incentivize them to keep producing agricultural goods. Even though highly-industrialized, technologically-advanced countries such as America and France have a comparative advantage in producing goods like automobiles, ipods, and heavy machinery, these countries also produce lots of agricultural commodities. In the US, attempting to reduce the size of the agriculture industry would be politically unfeasible. Politicians from ‘farm states’ represent constituents who rely on government subsidies to make it economically possible for them to continue being farmers. With these subsidies, Nebraskan corn farmers are able to grow massive surpluses of their goods. What does America do with all this extra corn? Some of it is turned into high fructose corn syrup and cattle feed. A lot of it is processed, packaged into bulk foodstuffs, and shipped to Africa to be handed out as USAID food aid.

As if offloading donations of ultra low-cost food isn’t enough to cripple African farmers, most Western countries also have high protectionist tariffs and import quotas to give their domestic agricultural producers an unfair competitive advantage. Just read about the European Union’s Common Agricultural Policy (CAP), which provides subsidies to European farmers and places restrictions on imports of any agricultural goods from outside of the EU. Cotton producers from Europe are eligible for a subsidy under CAP. But if you are a farmer in Burkina Faso growing cotton, tough luck. Not only are you trying to farm in one of the poorest and least developed countries in the world, but you also find that when it comes time to try and sell your goods on the international market, your cotton faces high import tariffs that you cannot afford to pay and that make it a bad economic decision for you to keep farming in the long-run.

This is all a very long-winded way of explaining why nothing I eat here in Somaliland comes from Africa. To be fair, most of our fruits, vegetables, and fresh meat are bought in the local market and may be relatively local. But overall, I am amazed at how far the different things I eat seem to have traveled.

The ‘long-life’ powdered milk we drink comes from Saudi Arabia. Honey comes from the UAE. Soy sauce is a product of the Philippines, our ramen comes from Indonesia, and our ketchup comes from Kuwait. Even our eggs travel across the Gulf of Aden from Yemen to get to our plates. That blows my mind, because there are chickens everywhere in Somaliland – someone needs to start collecting their eggs!

Saudi Arabian 'long-life' milk. Always powdered, usually full-fat...

Ketchup from Kuwait

We place bulk orders through one of the local gas station/food supply stores, and they get their goods shipped over from Dubai. To know that my Indonesian ramen crossed pirate-infested waters to get to me makes it taste even better!

My awe at globalization aside, I now appreciate the difficulties of buying in bulk. We buy four months’ worth of Corn Flakes, toilet paper, and flour at a time.  A scary percentage of the food I’ve consumed since being here has been either close to the expiry date or substantially past it. My worst case was when I realized that what I thought were flaxseeds in my wheat biscuit cereal turned out to be baby cockroaches. Yes…I ate baby cockroaches unknowingly for a week! Then I checked the expiration date hidden on the bottom of the crate of Weetabix and saw that they had expired in September 2010.

Mark posing against the 'Corn Flakes Tower'

Despite the bulk orders of Western foods from around the world, we still manage to eat Somali food a good amount. Laxoox, the spongy pancake, is served at every meal. Xabxab (Somali for watermelon) is sliced for us a couple times a week. We also get goat stews and sambusas when we are lucky.

The purpose of this post is to show not only what I eat over here, but also the unintended consequences that can occur from political decisions made very far away. UN food aid used as ‘conflict currency’ by Somali warlords, EU policies making it nearly impossible for Malian farmers to sell their rice  – all of these political actions have far-reaching effects across the globe.

Maybe all I want at the end of the day is to eat a peanut butter & jelly laxoox sandwich and drink a cold glass of milk while resting assured that everything I’m consuming has been produced on the African continent…

**Please enjoy the edible luxuries available to you in the Western world and go stuff yourself after reading this. Never take pesto or guacamole for granted again; someday you may move to Somaliland and have to live without it for a year.

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