A 20-year-old boy with a business idea and only 50 USD in his pocked succeeded in developing a profitable fish company in Somaliland. A supportive investor was crucial for his success. Norfund has initiated a fund that will enable him and other entrepreneurs to grow their business further in this challenging market.
Suleban Adam Osman started his business in Berbera, Somaliland, as a 20-year-old graduate. His business idea was to resell fish purchased from local fishermen in Berbera to the Hargeisa fish markets. With only 50 USD in his pocket, he invested in fresh fish and a freezer. Within six months of operation, Osman was able to open his first fish shop in Hargeisa.
Today, 15 years later, Osman is CEO and owner of Al Fathi (Fatxi) Fishing Company – a profitable fishing-, sales- and distribution-company in Berbera with 34 permanent employees. This is largely thanks to Norfund’s partner in Somalia, the small and medium sized enterprise (SME) Fund Manager Shuraako.
Shuraako has done a lot for my business. They facilitated the profession that I was missing, and Shuraako helped me with two new boats and a fuel tank. After that, the production has doubled!”
Suleban Adam Osman
The Nordic Horn of Africa Opportunities Fund
Somalia is one of the least developed countries in Sub-Saharan Africa with five out of ten Somalis being defined as poor. The Somali population lags behind most low-income African countries in availability and access to basic infrastructure such as water, sanitation systems, electricity lines and roads. The business environment is among the most challenging in the world. Access to capital is constrained, electricity supplies are limited, and the protection of investors is problematic. Some areas face severe security challenges, and international investments are few. However, Somalia in general, and Somaliland in particular, are now recovering from civil war and are rebuilding the legal framework to attract more investments.
In this context, Norfund has, together with the Danish DFI, IFU, and the Arsenault Family Foundation established a USD 10 million fund for supporting SMEs in Somalia. This is one of the first commercial investment funds in Somalia and will fill an investment gap by funding SMEs that have no other sources of capital.
Shuraako, a program of One Earth Future Foundation (OEF) is the Fund Manager of this new Fund. Shuraako, which means “partnership” in Somali, works in conflict-affected areas and underserved small and medium enterprise markets to develop a more resilient and responsible private sector.
All investments will be done on purely commercial bases with the aim to contribute to strengthening the Somali private sector.
Shuraako connects entrepreneurs with impact capital to foster economic growth, create jobs, and promote stability and peace.
Abdikarim Gole, Shuraako
New fishing boats and staff with health and safety training
The Nordic Horn of Africa Opportunities Fund has invested into Al Fathi Fishing. The aim is to support further expansion of the company, including the purchase of two additional fishing boats and equipment. A requirement, however, is that company is willing train all staff on health and safety procedures. The planned expansion is estimated to create 17 new permanent jobs and 24 additional temporary jobs.
The loan from Shuraako is good for any businessperson because it is going to help his economy to raise. He is also going to get more customers. This will create jobs!
Suleban Adam Osman
Commercial investments contribute to peace, prosperity and development
The new Fund is well received by the authorities.
In Hargeisha, Norfund’s CEO Tellef Thorleifsson recently met representatives of the authorities who said that the Somali people are business minded and that the government wants to support the private sector as this is the backbone of the society.
Somaliland needs a profitable private sector that contributes to job creation and economic growth and in order to achieve this, they need professional and commercial investors. They also said that investments like this Fund are important for building peace and prosperity in the region.