Investments by returning refugees provide a lifeline to millions in Somaliland, which does not receive any direct foreign aid as it is not recognized internationally.

By Hussein Ali Nur, Guled Mohamed

Hargeisa, Somaliland – Almis Yahye Ibrahim remembers when he and his friends hit on the idea of building a university in one of the world’s most neglected corners, the Republic of Somaliland.

It was the winter of 1997, and they were hanging out in Helsinki’s cafes, keeping the Finnish winter at bay. That’s when they dreamt up the International Horn University.


Four years ago, armed with diplomas and savings and driven by a desire to make a difference, the three men and another friend who had been in Malaysia returned home to build their dream. The towering university now stands in Somaliland’s hilly capital Hargeisa.

“We had better lives and jobs in Europe,” said soft-spoken Ibrahim, the university’s president.

“It was not an easy decision to leave all that and return to a totally destroyed country wrecked by civil war.”

Investments by returning refugees provide a lifeline to millions in Somaliland, which does not receive any direct foreign aid as it is not recognized internationally.

This trend of Africans returning home to do business is taking tentative hold in several sub-Saharan countries.

As nations shake off war, adopt better governance, and cash in on a commodities boom, former refugees and other members of the African diaspora are coming back, drawn by patriotism and investment opportunities in a region which the International Monetary Fund expects to grow by 6.5 percent this year.

In Sierra Leone, Liberia, Nigeria, Ethiopia, and elsewhere, these returning nationals are using skills acquired abroad and local knowledge to do business.

“The returnees have transformed Somaliland,” said Abdullahi Ali, who drives a taxi for a returning refugee in Hargeisa.

Returning To Somaliland To Shape The Future
A general view shows workers constructing a perimeter wall in Somaliland’s capital of Hargeisa June 29, 2008. Investments by returning refugees provide a lifeline to millions in Somaliland, which does not receive any direct foreign aid as it is not recognized internationally. REUTERS/Guled Mohamed


A former British protectorate, Somaliland broke away from Somalia in 1991 when former dictator Mohamed Siad Barre was ousted, plunging the Horn of Africa country into anarchy.

Thousands of people left the North during Barre’s reign. He bombed Hargeisa to crush anti-government forces in 1988, killing thousands of people.

Some refugees began to return in the mid-1990s. Officials say the returnees now number in the thousands, with Somalis from other regions, also attracted here by the relative stability.

Ibrahim left in the 1980s and first went to Egypt before ending up in Finland. Of his friends, another also fled Somaliland while the two others are from Somalia.

Slightly larger than England and Wales, Somaliland has enjoyed relative peace and prosperity and has held democratic elections, with a presidential vote scheduled for next year.

Analysts say it is not recognized globally because of concerns that rewriting colonial borders would open a Pandora’s box of other secession claims.

The enclave’s annual budget stands at approximately $35 to $40 million. Analysts say around 80 percent comes from customs duties and earnings from the port of Berbera, on the Gulf of Aden. The diaspora contributes around $450 million annually in remittances.

In a move to lure refugees home, the administration has introduced tax waivers on new investments to fuel more growth.

Half of Somaliland’s cabinet and lawmakers are former refugees, who came back mainly from Europe and America. Former refugees have also become small factory owners or created businesses, for example in telecommunications.

Ibrahim, the university president, has even bigger dreams: he wants to fashion future leaders.

“We don’t have leaders in our country but we have managers. Our aim is to produce visionary leaders in the future who can bring back hope and amalgamate our people. There is a huge appetite for such leadership and we hope to be the source,” he said.

Ibrahim and his friends used their savings to start building the university. After they opened, they won grants from Islamic banks and institutions, mainly from Gulf states.

He estimated they had so far spent nearly $500,000. The grants help fund the day-to-day running of the university, including paying staff salaries.

Ugandan, Kenyan, and Asian lecturers provide tutorials in the university, which offers master’s degrees and Ph.D. courses, in conjunction with Malaysia Open University. Around 500 students pay an average of $450 per semester.


Despite its poverty, Somaliland and the region offer investment opportunities for those brave enough to return.

According to a European Union study seen by Reuters, the area has substantial untapped resources of oil, coal, and metals such as gold, platinum, copper, nickel, and zinc.

Oil majors such as ConocoPhillips, BP Plc, Royal Dutch Shell, and Chevron staked out claims in the 1980s in Somalia but suspended operations when the country imploded in the 1990s.

Somaliland’s 850 km (528 miles) of coastline also offers potential for a fisheries industry.

The mayor of Hargeisa, Mahamud Jiir, a former refugee who lived in Britain, says fresh investment has fueled a construction boom in Hargeisa, a city still speckled with ruins from the 1988 bombing attack.

“Diasporas are the heart of our economy,” said Jiir, an engineer who also owns a construction company which builds up to 50 new buildings in Hargeisa every month.

“We now waive tax on factory parts and other goods to encourage more diaspora investment. The economy is built on them. They are our lifeline,” he said, referring both to those who return and those who send money back.

Hassan Mahamud Hassan, 32, returned from neighboring Djibouti in January last year. He invested $500,000 to build the Imperial Hotel in Hargeisa.

The hotel now employs 40 people and caters mainly to returning refugees and aid workers.

“The country depends on us. Our staff are better paid than government workers. There is a need to educate new returnees on the best investment opportunities available,” Hassan said outside his hotel, as a group of men drank Italian cappuccinos at a next-door coffee shop.

Writing by Guled Mohamed; Editing by Clar Ni Chonghaile

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