War-torn Somalia is setting up a stock market to raise cash for fledging businesses, as the Horn of Africa nation seeks to rebuild from over two decades of conflict, officials said Thursday.
"This will bring back confidence to the Somali people and show the international business community that Somalia is ready for business," said Idd Mohamed, a Somali diplomat and deputy representative to the United Nations. "We have done much of the paperwork, and we hope that it will be operational in the next five to seven months," he told reporters.
The proposed stock exchange would initially operate out of the Kenyan capital Nairobi, since Somalia is currently riven between rival clans, government troops, Islamist insurgents, pirates and some 17,000 African Union soldiers.
Money from the Diaspora
Peter Mwangi, who heads Nairobi's stock exchange, signed an agreement Wednesday with Mohamed to pave the way for the establishment of the new exchange. The agreement tasks the Nairobi stock exchange with providing for the "technical development" of the future Somali bourse.
According to the World Bank, Somalia has seen significant private investment in commercial ventures, largely funded by remittances from Somalis living abroad. Noting that Somalia receives up to 1.6 billion euros annually from the Diaspora, Mohamed said that "with a well-built financial institution, the money will go a long way to improve the country's economy."
He said the exchange would serve as a bridge between Somalis and the world."It will be open for investors from everywhere, local or international," he said.
Somalia's weak and corruption-ridden transitional government - in power for eight years - is due to be replaced later this month via a UN-backed process in which elders will select new leaders.