Daahir Calasow talks about monopolies in Somalia
- Thread starter Thegoodshepherd
- Start date
Nations try their best to avoid economic monopoly but in Somalia few individuals control every section of the economy.
When you have market structure characterized by a single seller, selling every product in the market and that seller faces no competition, as he is the sole seller of goods with no close substitute then the rest of the average citizens will be left in the dust scrambling for the scraps.
In Somalia (specially the South), Hormuud dominate the following business sectors:
How can the average citizen actually compete with humongous business conglomerate that controls every business sector of the country?! It's a huge blow and catastrophic calamity when one company controls the entire econom system of a nation. Hormuud shall be dismantled for the sake of future generations.
When you have market structure characterized by a single seller, selling every product in the market and that seller faces no competition, as he is the sole seller of goods with no close substitute then the rest of the average citizens will be left in the dust scrambling for the scraps.
In Somalia (specially the South), Hormuud dominate the following business sectors:
- Telecommunications.
- Real Estate
- Banking and financial services.
- Land
- Auto Sector (cars).
- Food (all types).
- Clothing.
- Petroleum.
- Government contracts.
- Agriculture
- Education
- Hotels, catering and Tourism
- Media
- Utilities (Water and electricity).
How can the average citizen actually compete with humongous business conglomerate that controls every business sector of the country?! It's a huge blow and catastrophic calamity when one company controls the entire econom system of a nation. Hormuud shall be dismantled for the sake of future generations.
The Hormuud model
Hormuud was established in 2002, largely on the legacy of the MTO Al Barakat, which was shut down due to US sanctions imposed in 2001. The company, and its predecessor before it, is owned by Ahmed Nur Ali Jimaale, based in Doha (Qatar).114 It operates out of Mogadishu, but has aligned entities operating in Hargeisa (Telesom) and Puntland (Golis). Its core markets ensuring its liquidity are telecommunications and the mobile payments facilitated through its mobile money platforms (Zaad, EVC and Sahal).115 The company maintains strong ties with the FGS and is one of the larger contributors to its tax income.
Regardless of its relatively recent establishment, the company has had remarkable success acquiring a major market share and has become the dominant player in both its core markets. Its success and ability to expand rapidly is frequently attributed to its dispersed ownership structure.
Generally, Hormuud-aligned entities have a complex shareholder structure covering thousands of larger and smaller shareholders. These shareholder structures generally reflect the power distribution of the entity's operating environment, thus ensuring all relevant stakeholders have an interest in the entity's continued (and profitable) functioning, allowing the company a substantial degree of soft power to protect its commercial interests. This shareholder structure also ensures the entity has a licence to operate across the territory (key in insecure environments), insures the company against a dominating interest that might withdraw resources, and establishes a degree of trust with its consumer base. It does, however, necessitate that services are split up and parcelled out across different entities in different territories in order to adequately reflect the different stakeholders in each environment (e.g. telecommunications and mobile payments are offered through different Hormuud-related entities across the Somali territories).
The companies’ diversified shareholder structures have allowed them to recruit in a relatively meritocratic manner across different constituencies instead of relying on patronage systems. This aspect has been frequently credited as a key factor in Hormuud’s ability to rapidly enter new markets and to deliver high-quality services compared to its competitors.
Coupled with more targeted financial incentives (especially in Mogadishu) and a similarly high-quality public CSR strategy, Hormuud has been markedly effective. As a CSR professional from the company explained: ‘We put the benches for students to hang out at the Hargeisa University campus. Next thing we know, the competition puts some benches next to ours. But we don’t care. We’re winning hearts and minds.’
Hormuud has championed its role as a replacement for the state, mediating between clans, and in this way has entered the Somaliland market. It has been able to mobilise discontent with the state service delivery to its advantage: ‘We cannot sit and watch when the state is unable to react: We have different shareholder structure. We have shareholders in every clan, which is how we gain access to every client
Hormuud was established in 2002, largely on the legacy of the MTO Al Barakat, which was shut down due to US sanctions imposed in 2001. The company, and its predecessor before it, is owned by Ahmed Nur Ali Jimaale, based in Doha (Qatar).114 It operates out of Mogadishu, but has aligned entities operating in Hargeisa (Telesom) and Puntland (Golis). Its core markets ensuring its liquidity are telecommunications and the mobile payments facilitated through its mobile money platforms (Zaad, EVC and Sahal).115 The company maintains strong ties with the FGS and is one of the larger contributors to its tax income.
Regardless of its relatively recent establishment, the company has had remarkable success acquiring a major market share and has become the dominant player in both its core markets. Its success and ability to expand rapidly is frequently attributed to its dispersed ownership structure.
Generally, Hormuud-aligned entities have a complex shareholder structure covering thousands of larger and smaller shareholders. These shareholder structures generally reflect the power distribution of the entity's operating environment, thus ensuring all relevant stakeholders have an interest in the entity's continued (and profitable) functioning, allowing the company a substantial degree of soft power to protect its commercial interests. This shareholder structure also ensures the entity has a licence to operate across the territory (key in insecure environments), insures the company against a dominating interest that might withdraw resources, and establishes a degree of trust with its consumer base. It does, however, necessitate that services are split up and parcelled out across different entities in different territories in order to adequately reflect the different stakeholders in each environment (e.g. telecommunications and mobile payments are offered through different Hormuud-related entities across the Somali territories).
The companies’ diversified shareholder structures have allowed them to recruit in a relatively meritocratic manner across different constituencies instead of relying on patronage systems. This aspect has been frequently credited as a key factor in Hormuud’s ability to rapidly enter new markets and to deliver high-quality services compared to its competitors.
Coupled with more targeted financial incentives (especially in Mogadishu) and a similarly high-quality public CSR strategy, Hormuud has been markedly effective. As a CSR professional from the company explained: ‘We put the benches for students to hang out at the Hargeisa University campus. Next thing we know, the competition puts some benches next to ours. But we don’t care. We’re winning hearts and minds.’
Hormuud has championed its role as a replacement for the state, mediating between clans, and in this way has entered the Somaliland market. It has been able to mobilise discontent with the state service delivery to its advantage: ‘We cannot sit and watch when the state is unable to react: We have different shareholder structure. We have shareholders in every clan, which is how we gain access to every client
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