Issue No. 503

A Blue Economy in Somalia: Opportunities and Challenges
 

The blue economy-- economic activities related to oceans, seas, and coastlines-- is gaining traction globally. More countries are adopting sustainable models of harnessing the economic potential of their marine and coastal ecosystems. At the same time, climate change is  a major threat to the quality of maritime life. This limits countries from realising the full potential of their ports and shipping, fisheries, offshore wind, marine biotechnology, and a variety of other maritime natural assets. Building an economy based on the ocean that is also resilient to the consequences of climate change requires supportive policies, innovations in institutional and financial systems, and access to long-term and large-scale finance. 
 
In Africa, more countries are embracing the blue economy model. Just recently, the Federal Government of Somalia (FGS) organised a high-level meeting to strategise on harnessing the immense potential of its coastlines and oceanic natural resources. Somalia has taken steps towards building a blue economy despite significant challenges. These challenges include still poor governance and the absence of an appropriate policy and legislative framework, which chokethe macro-economy. 
 
The recent meeting came as no surprise given Somalia’s economic and regional ambitions.  The high-level meeting shows that Somalia is committed to investing significantly in harnessing its maritime resources as a way to rebuild its stagnating economy. Moreover, the FGS sees a blue economy as leverage with the East African Community (EAC), where it hopes to become an important regional player.
 
The extraordinary potential of Somalia’s blue economy is unparalleled in relation to most countries. Somalia is a crucial departure and entry point for some of the world's most vital international commercial shipping lanes with a coastline of over 3,000 kilometres long. . Most of Somalia's ocean freight is handled by several large ports, each with protected deep-water facilities. Mogadishu is responsible for most of Somalia’s general cargo imports and exports. Berbera, Boosaaso, and Kismaayo each specialise in shipping different commodities of general cargo and livestock. 
 
According to the Maritime Security Index, Somalia is in an extremely favourable situation in terms of both ability to sustain itself and resistance to the effects of climate change. This allows the country to invest in its maritime sector without first having to repair the damage caused by years of overfishing. One of the most valuable blue resources that Somalia has is its fishing industry. In 2014, international and local vessels together hauedl in more than USD 260 million worth of fish from Somali waters. Out of 38 countries in Africa that report their annual fish catches, Somalia has the 15th-highest catch.
 
However, these resources are largely under-utilised. In 2012, fish only accounted for roughly 3% of overall exports and 2% of the country's gross domestic product. Previous fear of being attacked by pirates caused a significant number of foreign vessels, especially industrial long liners and gillnetters, to steer clear of waters off the coast of Somalia. This delayed the development of a thriving marine sector.
 
Somalia’s embrace of the blue economy ideal is closely tied to its quest to join the EAC regional bloc. By becoming a full member, Somalia will be able to collaborate with other member states to better exploit its oceanic resources. Somalia’s southern neighbour Kenya has already made significant steps in developing its own blue economy. 
 
However, despite the benefits that Somalia stands to gain from an ocean-based economy, and despite its regional and international ambitions, several challenges make it difficult to achieve its blue economic goals. Most prominent, Somalia continues to face issues of poor governance that limit its ability to focus on developing a blue economy. The country is still emerging from a violent and chaotic past, and its nascent structures and institutions still lack the capacity to effectively exploit natural resources.

Currently, Somalia’s still nascent army and security structures make it almost impossible for the FGS to hold full control of its oceanic waters. Also, the country lacks resources such as human capital and financial support necessary to exploit the potential of a blue economy. Finally, Somalia lacks sufficient structures to guide the effective exploitation of a blue economy; existing legal and policy mechanisms are adequately enforced due to capacity. There are no proper institutions like the navy, maritime authority and parastatals empowered to help harness a blue economy.
 
To fully maximise the potential of a blue economy, Somalia needs to invest significantly in developing its coastlines and taking advantage of the natural resources in its oceanic waters. In areas where the country is deficient in resources and capacity, it might partner with other countries, such as thosewithin the EAC once it is admitted as a full member. Moreover, Somalia requires legislative reform, stronger democratic institutions, and progressive policies to create an enabling environment for a blue economy to take hold.