Somalia is ‘ripe for investment’, says Mogadishu hotel ownerFollow @MadeItInAfrica
The 20-year long civil war in Somalia makes the country an unlikely investment destination, with its capital city Mogadishu being branded the most dangerous city in the world. However, perceptions are changing with relative calm in Mogadishu and Somalis from the diaspora trooping back home to rebuild the nation. After 17 years in Holland, Abdulkarim Siad decided to move back home and start his own business.
He noticed that after years of war and ruin, Mogadishu was in need of many services and made the perfect place for investment. Siad told How we made it in Africa that although he had no background in hospitality, he chose to invest in the industry because of existing gaps in the market.
“I saw the demand to build a proper hotel in Mogadishu. The ‘hotels’ that were in existence were not designed as hotels; offices and residential houses were being converted to operate as hotels.”
In 2010, he began construction of the six floor 70-room Jazeera Palace Hotel in Mogadishu. The hotel, situated 300m from Aden Adde International Airport, began operations last year.
“We have an average of 70% occupancy,” said Siad. “We have so much demand for hotel rooms in Mogadishu. For 23 years there was no construction of hotels in the city. The country is slowly stabilising and becoming more peaceful and is attracting investors and international community workers who need these facilities.”
Siad said the biggest challenge he faces is insecurity. Last year, Al Shabab rebels carried out a bomb attack outside the hotel which targeted Somalia’s President Hassan Sheikh Mohamud and Kenya’s Foreign Minister Sam Ongeri who were holding a news conference. The hotel is situated nearby the heavily fortified African Union base and a United Nations compound.
“Approximately 50% of our income is going towards providing security. Access to supplies for hotel and restaurant services are also lacking in the country.”
Despite the security fears, Siad said he has no regrets about investing in Mogadishu.
“Home is the best. If you don’t build your country, no one else will build it, that is why I moved back to Somalia after 17 years in Holland.”
Somalia is ready for investment
The country, he said, is ripe for investment.
“It makes a lot of business sense to invest in Somalia today. Now is the time to invest in Somalia; that is what I believe. Every sector in Somalia is available and open for business and our government is willing to help investors.”
He expressed optimism that as investment flows and the economy grows, creating jobs for the youth, terrorism will be neutralised. Siad, who was attending the Africa Hotel Investment Forum in Nairobi, Kenya this week, said he is planning to build a bigger hotel in Mogadishu to meet growing demand.
“We need to start building a bigger hotel with bigger conference facilities. In two years we will be hosting 1,000 or more visitors in Mogadishu.”
The Jazeera Palace Hotel managing director said entrepreneurship has taught him to face challenges head on.
“I have learnt how to deal with challenges. When you become an entrepreneur you have to become aggressive and believe in yourself. Whether it is terrorism, financing or security challenges, you have to be strong and face them head on.”