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

Every year universities and colleges in Somalia produce thousands of graduates who join the labor market in Somalia in search of opportunities that are hard to come by.

Owing to the decades of civil war in Somalia has widespread poverty levels and stunted economic growth.

This had led to acute levels of unemployment, with available data indicating nearly 68 percent of young people aged 14-29 years are unemployed.

Somalia has an estimated population of 15 million and has a predominantly youthful population estimated to more than 75 percent.

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 intention of leaving the country to get a better living abroad.

The reasons for the critical level of unemployment range from the quality of education, nepotism, inadequate jobs in the private sector, and lack of foreign direct investment in the country owing to the unpredictable security situation 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.

Government role in employment

Available statistics estimate that the government employees in Somalia are between 5000 to 6000 and earn an average salary of USD 700 per month. "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 classwork 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 Resource 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 people are ready to take that opportunity.

"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 significant threat to national security.