Somalia Targets Banks in New Push to Finance Businesses

GOOBJOOG NEWS | MOGADISHU: Somalia is seeking to deepen the involvement of local banks in financing investment projects as it moves to close the gap between business opportunities identified by the government and the capital needed to turn them into operating ventures.

The financing question featured prominently at a Strategic Investment Dialogue Forum in Mogadishu organised by the Somalia Investment Authority (SIA) and the Somali Bankers Association, where investment officials and banking executives discussed projects seeking funding and ways of improving access to finance for businesses.

Participants reviewed investment-ready projects, their financing requirements and the capacity of Somali banks to support business expansion. The discussions point to a growing focus on the financial side of Somalia’s investment drive, with authorities seeking closer links between institutions that identify investment opportunities and lenders that can provide the capital to develop them.

SIA Director General Faysal Adan Hassan stressed the importance of matching investment opportunities with the financing capacity of Somali financial institutions, highlighting the need for stronger cooperation between the investment authority and the banking sector.

Somali Bankers Association Chairman Dr Ahmed Khadar Abdi Jama said banks have a role to play in supporting investment and business growth, while calling for an effective framework to connect lenders with viable projects.

The talks also considered investment priorities under Somalia’s National Transformation Plan, which places private-sector development and economic growth among its wider development objectives.

Somalia has in recent years sought to strengthen its financial and investment institutions as it works to expand domestic revenue, attract capital and create conditions for greater private-sector participation. But access to finance remains an important part of whether investment proposals can move beyond identification and planning to actual implementation.

The latest dialogue therefore shifts attention from simply identifying investment opportunities to the question of how those opportunities will be financed. For banks, a stronger pipeline of commercially viable projects could create new lending opportunities, while for businesses, closer engagement with financial institutions could improve access to the capital required for expansion.

The government hopes closer cooperation between the investment authority and banks will help build a more effective link between investors, projects and finance as Somalia seeks to broaden the role of the private sector in its economy.