The Price of Investing in Foreign Lands

Of all the lessons to be drawn from the recent Kenyan security crackdown of the Somali communities in the Eastleigh enclave of Nairobi, the most widely accepted maybe it’s time that Somali businesses quit investing in foreign countries where they stick out and begrudged, instead invest in their homeland. The Somali community’s success in Eastleigh, Nairobi has long elicited the envy of many Kenyans who for the longest time wondered how these mere refugees who entered their country two decades ago could run the city’s most lucrative shopping mecca while buying all the plots for housing. This has ultimately caused tension within communities in Kenya, leading to pervasive, but unsubstantiated accusations of links to piracy and terrorism activities. However, this recent police sweep and unwarranted targeting of Somalis in Kenya was a long time coming and it lies in the heart of the native’s resentment against thriving Somali business boom in their midst.

 

On April 1st, I was in Nairobi when a couple of grenade attacks that killed six people in two Somali restaurants in Eastleigh shocked the Somali community to the core, which then led the Kenyan government ordering all Somali refugees to go back to designated refugee camps. This also sparked unprecedented security crackdown in Eastleigh, where more than 5,000 people have been rounded up in less than a week and amassed them in the Kasarani stadium. Ironically, close to a quarter of century ago, following the civil war in Somalia, I began my own exodus into the diaspora from Eastleigh, Nairobi, where I was the victim of random police harassment. Witnessing this latest so called “security sweep” in Eastleigh, which is nothing else but a great chance for bribe-taking and harassment by the corrupt Kenyan police, thus I remember thinking: “Even though many things have changed in Kenya, including its leadership and the country’s overall landscape, what hasn’t changed is the relentless Kenyan police brutality of the Somali community.” Yet, despite the dramatic evolution of the Somali community in Kenya from early refugees to business entrepreneurs who contribute close to a quarter of the country’s GDP, their status as second-class citizens has remained static. Unfortunately, this is the price that the Somali business community pays for investing the bulk of their economy in a country like Kenya, where acute corruption is pervasive and acts as an accelerant to everything else that’s wrong in the country, including increasing poverty, crime and insecurity.

The prosperous Somali commerce concentrated in the Nairobi enclave of Eastleigh has thrived for the last two decades simply because of the unsurpassed Somali entrepreneurial acumen of providing goods and services to local and regional consumers at bargain prices, which are well below the market average. In fact, the unrivaled Somali commercial sprit is felt far beyond East Africa all the way to the Gulf States and Southern Africa, where they have demonstrated a knack of establishing businesses anywhere in the world. No matter wherever one travels in the large continent of Africa, Somali entrepreneurs are found establishing themselves as the new capitalists to be reckoned with and within few years easily dominate the market. The aggressive Somali business marketing combined with their ostentatious nature as people has created so many enemies in most African countries they’ve established their businesses, where they run the risk of being targeted for random crimes, including homicides. In result, there are few safeguards for their investments and mostly suffer catastrophic losses of investment or much worse lives.

For example, the scale and ubiquitous xenophobic attacks of Somali shopkeepers in the townships of South Africa has for long dominated the news. Since mid-1990s, after many young and ambitious Somali men in their search to escape the civil war back home immigrated into the country and started establishing small shops in these townships, but soon became victims of unparalleled violence after they were accused of either putting S. African shopkeepers out of business or undercutting their prices. In effect, hundreds of Somali-owned small shops were looted while others were burned to the ground by petrol bombs, eventually driving the Somali shopkeepers from the area by charging local thugs. Despite the gruesome violence against Somalis in S. Africa, the government has only paid lip-service, which left most of these shopkeepers to move back home in order to escape this type of targeted violence.

Another case in point took place in Ndola, Zambia a country where early Somali business investors thrived since its independence, when in 2012 a Somali businessman shot and killed one of his workers due to a wage conflict and he was immediately arrested for a lifetime imprisonment. Nevertheless, immediately after this incident the entire town’s folk took to the streets in riot mode and launched indiscriminate attacks against all Somalis in Ndola, including women and children, which lasted for an entire week as all Somali residents went in hiding.

Ndola, Zambia residents riot and loot Somali owned businesses

 

The time has come for most Somali business owners, especially those in Africa who seem to be caught between a rock and hard place to do some soul searching, to either choose of being constantly undermined in the hands of foreign countries where they’ve heavily invested, or to move back in their homeland and to establish their businesses, where the risks of insecurity run parallel of the opportunities. I’m in the opinion that the cost-benefit analysis favors establishing any business in one’s own country rather than in foreign land. Apparently, the main obstacle to most Somalis of investing in their homeland is the lack of security and political instability not conducive for a long term economic sustainability. Nevertheless, the risks of establishing business in post-conflict Somalia present many opportunities of tapping the economic potentials of the country, while at the same time rebuilding the country from the ashes of the civil war by creating jobs for the young and therefore contributing to the overall stability of the country.

In the end, the Somali federal government has a very important role to play in attracting the Somali businesses dispersed in the African continent by creating the necessary security apparatus to run a viable business, combined with incentives of tax reform and regulatory framework restructuring to promote economic sustainability. Perhaps this latest incident in Eastleigh might be a blessing in disguise that holds the key to creating an ever lasting peace and prosperity in Somalia, which became an elusive dream to achieve for the longest time.


Heikal Kenneded
heikalk@yahoo.com

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