Somalia bets big on port and airport to resurrect war-wrecked economy

Aboard Jubba Airways, a rickety plane filled with a cacophony of Somalis all speaking at the same time, we landed in Mogadishu.

A port that has for centuries been a major transit point in trade with other nations. The ancient silk routes lured many to its shores. It became cosmopolitan. It was fought over by the British and the Italians with the Italians managing to keep it.

They built whitewashed stucco buildings and turned it into a boisterous playground. Nowadays, all that is left of that era is ruins of once magnificent buildings, some partially, others totally destroyed.

In the 60’s post-colonial era, the centre of Mogadishu was where one went to hear tall tales laced with superstitious and outrageous characters. The residences used to ring out with sounds of the Beatles, Elvis and Ray Charles.

In the 70’s, it is rumoured that James Brown gave a performance in Mogadishu. A rumour that does not seem to bear historical basis. It seems tall tales are still quite alive in Mogadishu.

Ours was one of more than 500 flights than now land on a monthly basis at the Aden Abdulle International Airport.

“In March this year, we had 492 inbound flights that disembarked 33,757 passengers and the same number of flights transported 15,909 passengers outbound. So you can see there are more people coming in than are going out,” said Satmo Musoke, the senior air traffic management officer at Aden Abdulle airport.

“Compare that to October 2012 where 426 flights carrying 15,226 passengers inbound and 18,546 passengers outbound when we had more people leaving than coming in,” he said.

Somalis, it seems, are returning home in greater numbers than ever before.

“It is like a candle has been lit in a dark place and all can see it,” says Abdullahi Farah Qaarey, a former presidential adviser. “I have called my friends from around the world, and it seems like everyone is travelling back home. I am here to see what is happening”

The Aden Abdulle airport charges Sh4,200 for a single entry visa and as such derives its income from visitors such as ourselves and Mr Qaarey.

For journalists, who are especially targeted in Somalia, they are charged an extra Sh21,250 ($250) for accreditation.

The airport boasts a standard, active runway that can land an Airbus 320. The apron is tiny and this means aeroplanes can sometimes be held up in the air awaiting one to exit the active runway. Plans are afoot to build two more taxiways. The runway, I was to learn, doesn’t have an Instrument Landing System.

In the last two years, the airlines sector has become a relatively attractive commercial venture in Somalia, with the likes of Fly 540/Sax, Jubba Air and African Express all providing daily flights from Nairobi and the region.

Maintenance and safety has been outsourced to Nairobi and other neighbouring countries.

In the long-term though, if the fragile peace holds and as Aden Abdulle airport becomes more vibrant, the re-entry of more established international and regional airlines that offer better services—we were served a sandwich on the flight that didn’t impress by an even less impressive stewardess—and that are able to take advantage of lower fuel costs, on ground services and better trained staff will likely force the small local providers out of the market.

For now, they are making good sales with an ever increasing demand for domestic and cargo flights.

Tourism could eventually become a huge contributor to the income of Aden Abdulle airport. Sitting on a coast of over 3,300 kilometres, one could almost see the planeloads of tourists out to catch some beach action.

This prospect is still far off owing to negative perceptions, the reducing threat of Al Shabaab and political crises within the Federal government.

Even though Kenya has a similar topography as Somalia and relies on tourism for a quarter of its GDP, it is still a huge stretch to imagine a Serena Hotel Mogadishu.

On the ground, the person in charge was a jovial UPDF Major Remigio who heads the AMISOM component of the Aden Abdulle airport and is the officer commanding the Fire and Rescue department at the airport.

He explained that the only sources of revenue collection are, and for some time will be, from ports and airports in Mogadishu, Kismayo, Bosasso and other coastal areas. These ports will also act as points of entry for aid and remittance flows.

The challenges at the airport are security, instrumentation, use of ICT and human capacity .

“Our job here is not so difficult,” he said in a self-effacing manner.

“We have UPDF and Burundian forces who man the incoming and outgoing gates. They search passengers and luggage to ensure that everyone who gets onto an aircraft is secure. Inside the airport, SKA, a private security company handles the passengers screening.”

“Once they are on the plane, Satmo Musoke and his team of air traffic controllers take over. The immigration component we let the Somali Civil Aviation Authority handle,” he said.

Later in a meeting at the airport with President Hassan Sheikh Mohammed of Somalia, a former university professor and one of the most heavily guarded men, he talked of the challenges his nascent administration is facing.

“Our biggest challenges are dual. First is security, security and security. The second is state building. These problems are interlinked and can be solved together. But it will require patience, persistence and time.”

His administration faces the threat of renewed conflict for a number of economic and resource-based reasons.

After the collapse of the Siad Barre regime, in the words of Nurrudin Farah, ‘‘Mogadishu was invaded by warlords, rapists and those who have expropriated property and whose presence makes reconciliation impossible.’’

With property changing hands as many as five times, there are properties now in Mogadishu that have multiple ‘legitimate’ owners.

Some cases are beginning to crop up of people within the greater Somalia accusing the central government and Mogadishu of taking the lions share in resources and foreign currency.

Kenya’s President Uhuru Kenyatta has been steadfast in his support for a united and secure Somalia, something he views as a regional priority.

Sea port

In a squat, all concrete building, we were processed by UPDF soldiers, searched for weapons (something that was to become routine over the next few days) and ushered into a waiting room with low seats and air conditioning.

After a few minutes delay, we were ushered into another office. Behind the desk sat the Mogadishu sea port manager Abdillahi Ali Nour.

He did not offer much in the way of statistics, something else we were to encounter repeatedly. Market intelligence is non-existent and information is hard to come by.

Estimates in 2010 place the total value of imports at about Sh57 billion or $700 million. The major imports are staple foods such as vegetables at Sh16.4 billion, sugar costing Sh 5.7 billion and rice at about Sh4 billion.

Small imports were generators, electronics, satellite dishes, clothing, batteries, foodstuff amongst among other goods.

The total value of exports stood at Sh19 billion or $230 million, and included livestock and livestock products, charcoal, gums and resins. This created a trade deficit of over Sh38 billion or $470 million.

The main markets for the import and export trade were and remains Dubai, which functions as a sort of Somalia off-shore haven, Gulf states, East Africa, Asia and Turkey.

From these figures, it is easy to see why the fight for the control of the ports was a do or die matter among the rival armed groups and why the work of men like Dr Nour is crucial for the support of core government functions.

The Mogadishu sea port that has served the region for centuries is nowadays teaming with activity, over 5,000 people are employed mostly on a part-time basis as loaders and off-loaders with roughly 500 people in full-time employment.

The trucks in the shipping yard are ancient but they provide the route through which goods are transported to middlemen and to retailers. The sea port now handles between 30 to 40 ships a month and now attracts bigger freighters.

Last year, 222 vessels and 248 dhows docked at the port bringing with them 1.2 million metric tonnes of goods.

“Previously there were no big vessels docking here, they were not confident about security and we only had small business dhows that were susceptible to the Monsoon seasons,” said Dr Nour, nadding that with the country becoming more stable over the past two years, the port is recording growth in operations and expansion plans are underway.

Such facilities are the new government container terminal and the harmonisation of tariffs and port fees.

It is difficult to estimate the real value of exports and imports in and out of Mogadishu because most of the big ships with consignments bound for Mogadishu dock in Dubai and the cargo is then transferred to smaller vessels that then cross the Indian Ocean to Mogadishu due to security and fear of piracy.

In this regard, post 1991, Dubai and to a much smaller extent Mombasa have operated as an off shore business centre for Somalia with many of the now prominent Somali business elite co-locating their businesses in these two areas.

By DICKSON MIGIRO

Source: Businessdailyafrica