Resilience amidst post-Covi-19 economic crisis on Small and medium-sized Somaliland entrepreneurs

By: Asia Saeed Hassan

Somaliland small and middle business owners strive to provide their children live better than theirs despite cultural rigidity, lack of banking institution supports, and insurance organizations. They feel that everything is against their will, but they attempt to shape the entrepreneurship ecosystem in their communities. 

I interviewed a few numbers of entrepreneurs, and I asked them about their motives for being an entrepreneur. They have also talked about how did economic crisis impacted their businesses and how they are dealing with it. The story of Fatima is inspiring, and it clearly shows that entrepreneurship gives her a way to get rid of both the financial crisis and family problems.

In 2012, Fatima struggled due to a financial crisis after her husband lost his job, and they could not put food on the table. She was a housewife, had six children, and had little information about running a business. She had a hard time, her children were studying in school, and she was stressing about how the financial difficulties could affect her children’s future and marriage relationship.

After that heartbroken moment, she changed her saved gold into currency and started her business. The monetary value of her gold was around $650, and that was how her entrepreneurial journey began. Fatima has stated that she took risks because her children are the only legacy she will leave to the world and the love of her life.

Also, her business saved her relationship and the continuance of her children’s education. Fatima started to sell “Iskiriin” Icecream, which is a cold drink packed in a small plastic bag. Ice cream requires electricity to turn the beverage into ice. She sells Iskiriin and snacks to the children at school during break time.

A couple of years later, the economic crisis post-covid19 happened, and she struggled to monetize her business due to electricity costs, and it got difficult for her to meet her family’s needs. Fortunately, a man in her neighborhood told her that solar panel is inexpensive compared to electricity. Hence, she researched solar panel information and stores to get from them. Finally, she installed a solar panel on her home’s rough. The solar panel brought her face a big smile, and renewable energy saved her business. Consequently, this lessened the cost of Fatima’s business and boosted the profitability of her business.

I asked Fatima how the inflation-economic crisis did impact her business, and she said, “The inflation raised the cost of materials, and this led to a decline in business profitability. Before, the sugar sack was around SL SH 500,000, but now it is SL SH 800,000. Hence, this increased the input of business and reduced profit of the business.”

Fatima is not alone, and other Somalis are pushing forward in their business amid hardships. I asked two entrepreneurs how the inflation-economic crisis did impact their businesses, and here are their answers.

Abdiaziz Aden runs the Aden Nineteen Group of businesses based in Horn of Africa countries such as Somaliland, Somalia, Ethiopia, and Djibouti and responded to the above question. said, “Inflation has affected our business in two ways, and the first one is the prices of imported goods increased due to an increase in the shipping cost. The other factor is that customers’ purchasing power dropped, which has negatively influenced the sales of businesses. Before, the shipping cost of one container of ice-cream plastic cups was $3000, but now it changed to $17000. Also, purchase power declination has significantly impacted our business. For example, we used to make prior inflation around $400 sales per night for every branch, but now it is around $160.”

Shukri Abdurrahman started her clothing store in 2013 and it is based in the Sheikh district of Somaliland. She responded to the above question and said,  “Inflation has increased the price of imported goods, and this has decreased consumer spending. After the purchasing power of customers declines, they are less likely to buy stuff beyond their basic necessities. Hence, this damaged sales and the bottom line of my business. People don’t buy household items such as blankets, bedspreads, and pillows as they used to because that became a luxury for people that hardly get three meals a day”.

In summary, Somaliland entrepreneurs are pushing forward despite chaos and uncertainty. They are experiencing inflation hardships which could discourage them since things are not going smoothly. However, they are go-getters who overcome the economic crisis by coming up with new solutions like adopting renewable energy sources rather than giving up.

About the Author

Asia Saeed Hassan was a social entrepreneur working to reduce unemployment in Somaliland. With her startup, 2doon, she would offer services to build the skills and capabilities of Somali youth to prepare them to enter the labor market. Asia was selected as one of the top 20 Young African entrepreneurs of the Anzisha Prize in 2019. This selection would give her many opportunities to develop her skills and build a network. She attended several conferences and workshops around Africa, going to cities like Lagos, Cairo, and Sharm-Elsheikh. She also received a monetary prize that would help her continue scaling her startup. Asia remembers what happened next as a period of disappointment. In 2020 COVID-19 hit the world and prevented her from continuing with her entrepreneurial ventures. During this challenging period she was not left on her own, the Anzisha program offered young entrepreneurs training on mental health and financial help. Asia acknowledges that the period of her life as a social entrepreneur taught her many useful lessons and prepared her for what was to come. As she mentions, one of the biggest lessons was not to put all your eggs in one basket.

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