How We Got Into 67% of Unemployment?

Ever since the collapse of the central government of Somalia, the country took a long stride to come to where it is today. All the governmental institutions collapsed and the private sector became the only lifeline for the nation. During these two decades of civil war, Somalia built an informal economy to survive on its own. It is an entrepreneurial culture that helped the East African nation during this critical period.

Today, Somalia enjoys one of the best telecom sectors in Africa; Mogadishu is the fastest growing city in Africa; the nation hosts 70% of its 16 million population who are under 30 years old; and hammer noises are heard everywhere in Mogadishu. All of these are great economic indicators that show a tide of opportunities is uncovering for Somalis.

But the challenge is these private-led developments could not keep pace with the population growth and job requirements for the nation. Though an entrepreneurial society, the lack of growth mindset among Somali MSMEs, cultural barriers, and other pressing priorities for the Somali government are making it hard for Somalia to offer job opportunities to more than 15,000 graduates every year. As a result, Somalia has a 67% unemployment rate, one of the largest rates in the world.

Why Is There So Much Unemployment?

Mismatch of Academia and the Labor Market

The 2020 data from 52 universities in Somalia collected by Iftiin Foundation show staggering evidence that our higher education institutions are producing graduates condensed in certain programs such as medicine. Mohamed (2021) captured it in a very succinct infographic below:

What type of graduates does Somalia need? This is clearly laid in the Somali National Development Plan (NDP9) 2020 – 2024. The priority development sectors for the nation are agriculture, livestock, fishery, and energy. Hence, Somalia needs graduates prepared for these sectors. Are we doing it? Simply, no.

The blame does not just go to the universities (as they have bills to pay), but also to the government which does not incentivize the youth to learn these priority sectors. For example, the Ministry of Education, Culture, and Higher Education (MoECHE) is transforming the education sector and is struggling to find local education experts such as teachers who can aid the ministry in undertaking this national effort. Why? Because youth are not interested in learning such programs citing bleak job opportunities as the main reason. To them, unfortunately, learning agriculture, livestock, fishery, or even becoming teachers is not attractive. Some universities are even offering education programs for free and, yet, very few are enrolling. 

Lack of Industries and Limited Corporate Companies?

Another unfortunate trend in Somalia is that every fresh graduate wants to start working with the government, international organizations, or big private companies. I am not sure how we got into this, but the “existing” market capacity cannot accommodate every graduate. For example, there are very limited big private companies in Somalia and they cannot consume the graduates supplied to the market every year. In addition, Somalia does not have giant industries to aid in hiring. The result? We are all caught in the unemployment trap.

Another unfortunate job-hunting behavior in the country is ignoring small companies. We at SIMAD iLab have a job placement program in which we connect talents with the local market demands. The challenge we have observed so far is that the youth do not prefer to work with small companies as they are not attractive. But this is a myth. MSMEs are the best place to acquire and build job-related skills. MSMEs give you a platform to test your skills. If you are an accountant, it is better to work for a clothing store and become their main accountant than getting lost in a giant corporate company. This is the kind of mentality we are building at our innovation hub. But it needs to be scaled up to the nation.

Lack of Growth Mindset Among Somali MSMEs?

A goldmine for tackling unemployment for Somalia would have been the Micro, Small, and Medium Enterprises (MSMEs). Eight six percent of working people in Somalia depend on the informal sector (MoLSA, 2020). But unfortunately, they lack a critical component to do so: lack of growth mindset. Somali MSMEs stay young forever; hence, unable to hire new staff.

Women-led small businesses are very good examples of this. We always talk about how women-led MSMEs helped survive Somalia during the civil war at a time when men’s mobility was limited for security reasons. But we forget to include in the discussion the kind of mentality these businesses passed to the current generations. The main goal of these businesses were/is only to support the family; never had/have the intention to grow the business. Go to Bakaro Market, the largest in the country, and you’d find the majority of the businesses have been in operation for decades. To this day, all MSMEs do have this mentality and it’s seriously impacting their growth potentials.

Are There Cultural Barriers?

Talk to Somalis about doing manual labor jobs, they will easily tell you it is not for them. Even those who are unemployed will give you this same response. Some even prefer to be unemployed rather than doing manual labor jobs. There are cultural barriers that led to this social behavior.

I met a graduate who was looking for a job and asked him the possibility of working as a waiter. I can still remember his facial reactions to this day. And this is the typical response most of the youth would give you. We all have grown into this myth.

As per IOM (2016) report, job matching in Somalia is a challenge not only due to the lack of skills but also due to a cultural barrier. As per the report, Somali people tend to avoid manual labors. This is due to the social attitude, lack of willingness to work and motivation to learn.

Somalia Has Other Pressing Priorities at the Moment?

If you carefully examine the government expenditure in 2020, you would realize that the Somali government has other priorities other than tackling unemployment. In Q3 of 2020, Somalia spent $685,270,734; security and salary consumed the highest portion of this expense. Although unemployment is arguably the second national challenge after security, yet government expenditures on job creation programs come nowhere near the top ten portions of government expenses.

I’m not questioning the government choices here, but I want to shed light that the Somali government’s priorities lie elsewhere today, not on tackling unemployment in the country.

Any Interventions?

Though changing social perceptions towards manual labors would take decades, I propose the following interventions for quicker changes in lowering the 67% unemployment rate in Somalia:

• The Somali government should include job creation programs as part of its priorities. Tackling unemployment is as important as security. Both are national challenges.
• The Somali government esp. The MoECHE should incentivize learning and teaching priority development sectors for the country. With the current setup, Somalia would not be able to produce top notch experts in the agriculture, livestock, fishery, and energy sectors.
• Regulate the energy sector to encourage more industries to evolve. Electricity is hindering Somalia’s progress. You cannot have one of the poorest nations on Earth with the highest electricity rates.
• Instill growth mindset into MSMEs in Somalia. Let them hire more staff and grow their businesses. This is the easiest and most effective job creation intervention for Somalia.
• Establish National Employment Agency to spearhead governmental efforts in tackling the rampant unemployment rate in the country.

Let’s stop unemployment being a choice in Somalia. Somalia is blessed with job opportunities; we just want to change our mentality towards certain jobs.

Mohamed Muse Hassan, Director, SIMAD iLab