Nairobi set to host stock exchange for war-torn Somalia
Posted Wednesday, August 8 2012 at 19:40
- SSE is targeting to list private Somali-owned businesses with an operation base in Kenya.
- Targeted businesses are in various sectors of the economy including banking, telecommunication, oil and gas companies and Hawalas — money transfer firms.
The proposed Somalia Stock Exchange Investment Corporation (SSE) will operate from Nairobi until the war ravaged country stabilises.
The stock exchange is targeting to list private Somali-owned businesses with an operation base in Kenya.
The targeted businesses are in various sectors of the economy including banking, telecommunication, oil and gas companies and Hawalas — money transfer firms.
“It will initially be based in Nairobi then as the situation improves it will move to Somalia,” said Mr Peter Mwangi, the chief executive of the Nairobi Securities Exchange.
The Somalia exchange signed a memorandum of understanding with the Nairobi Securities Exchange on technical partnership to set up a stock market for the country that has seen years of war deprive it of any formal governance structures.
The ongoing military action to flush out Al-Shabaab militants in Somalia is expected to enter a decisive stage later this month with the planned takeover of the port of Kismayu, the militant group’s main operational base.
Ambassador Idd Mohamed and deputy permanent representative of Somalia to the United Nations signed the pact on behalf of SSE, stating that the exchange would serve as an attraction of capital investment during the country’s reconstruction.
“We intend to attract international business and investors as the country moves to stabilisation. Somalia receives over $2 billion annually from Somalis in the diaspora,” said Mr Mohamed.
The Somali community in Kenya has shown business acumen, especially in the clothing industry, with Eastleigh being their main business hub.
SSE will provide Shariah compliant products that will enable Somalia owned businesses to raise additional capital for expansion and setting base in a stabilised Somalia.
The NSE said the memorandum does not currently have any financial incentive for its participation. Mr Mwangi, however, said that it was in its strategic interest to do so as the partnership may have a commercial benefit when the market is developed.
Countries such as Turkey have also started making investments in Somalia as they seek a head-start to the unexploited market.
Kenya’s Capital Markets Authority has played a role in the setting up of Rwanda, Tanzania, and Uganda stock markets and is set to also participate in Burundi, DRC and South Sudan.