The role of the private sector in creating employment opportunities in Somalia

Somalia’s population is estimated at 15 million. However, only 20 % of the population has jobs, equivalent to 3 million of the total population estimate. It is estimated that the average monthly salary in Somalia is 100 USD per month, leaving less than 0.3 USD daily. It means there is widespread poverty in Somalia. Universities and colleges in Somalia produce thousands of graduates who compete for the country’s very few available job opportunities.

The major cause of unemployment in Somalia due to the limited business opportunities which is not able to employ the existing human resource in the country. The limited employment opportunities within the government are also a significant reason for the soaring unemployment rates in the country. That said, the government and the private business in the country play a huge role in changing the unemployment figures in the country. 

Seventy percent of Somalia’s estimated 15 million are youth. This figure includes graduates and a skilled workforce. This staggering statistic is seen as a significant threat to the national security and stability of the nation. Existing research also points the limited employment opportunities have caused youth to emigrate in large numbers. 

According to research by Mohamed Saney Dalmar conducted in 2017, it is estimated that more than 60% of Somalia’s youthful population have the objective of leaving the country to get a better living.

Government role in employment 

Available statistics estimate that the government employees in Somalia to between 5000 to 6000 and earn an average salary of 500 USD a month. This reveals that the highest-paid employees in Somalia are those on the government payroll. Sadly, the government only employs an estimated 6000 people. 

“The workforce in government payroll is 6000 individuals. And the recruitment for those in the government’s payroll was done between 2013- 2016, and the government has halted recruitment,” says the Chairman of Somalia’s Civil Service Commission. 

Private Sector role 

The private sector is Somalia’s largest employer. It is estimated that close to 90% of Somalia’s working-class do work for the privately owned business. For example, Somalia’s leading Telecommunications firm, Hormuud employs 10,000 individuals, nearly twice the number of Somalia’s workforce on the government payroll. This is a true testimony that Somalia’s private sector is the backbone of the country’s livelihood. 

“It is an obligation made incumbent upon us by humanity; we are proud that we are Somalia’s leading employer. This is due to the fact we are a big company that works all over Somalia,” said Mahamed Noogsane, Head of Human Resources at Hormuud Telecomms.

Level of innovation in Somalia 

While there are thousands of graduates in Somalia, the level of innovation and creativity is very low in the country. The skilled workforce in Somalia are also focused in securing a job and don’t create new business initiative which leads to soaring unemployment rates in the country. Several banks including Salaam Somali Bank have supported the investments of many small-scale businesses that need capital to operate. Despite the existence of such opportunities, few unemployed people are ready to make the most out of it.

“We have supported many youth investments, and we will continue with these efforts. This saved youth from emigrating that would have endangered their lives while looking for a better livelihood,” said, Ahmad Farah Fidow, the Head of Murabaha at the Saalam Somali Bank.

Government efforts to address unemployment

Due to restrictions imposed as part of the IMF reforms, the government of Somalia has halted the recruitment of new employees. However, the government has recruited many on casual engagement funded through the budget from the taxpayer income.

Apart from the private sector and the government, many International Organizations operate in Somalia that hire ex-pats from their respective countries for jobs that locals can do. There are ongoing efforts to address this. There is a need for the Federal Government of Somalia to pursue with the same efforts the high unemployment rates and come with a plan to address this issue which is a big threat to national security.