Background & reasons for SSBP
One of the main challenges to address in Somalia is the high rates of unemployment, especially for youth and women. Private sector presents a great opportunity to contribute to the development of the country by providing job opportunities that will positively impact the livelihood of local communities.
Photo: Agnes Nygren
Somalia has suffered the consequences of an extended internal conflict for over two decades, which created possibilities for illegal activities and terrorism to grow in the country. According to the World Bank and the International Labour Organisation, Somalia is one of the lowest-income countries in the world (per capita income of US$ 226), where around 65% of youth and around 74% of women are unemployed. Despite the vulnerability of the country and the challenges they face, Somalia is a country with large potential of improvement in terms of economic and social development.
Private sector in Somalia has a vital role in creating and developing different work opportunities and income-generating activities. The lack of a controlling, steering and overarching public entity has enabled the private sector to develop in a seemingly vast pace and become relatively well functioning, despite security issues and lack of infrastructure. The stimulation of private sector actors working from a human rights-based perspective continues to be of vital importance to enable further development of a stronger and more inclusive economy that in addition to job creation has also the potential to contribute to the reconstruction of the country.
Remittances from the Swedish- Somali diaspora represent over SEK 500 million and have become an important factor within many Somalis’ income alternatives. The logic behind SSBP is that these remittances have the potential to be used more catalytically and contribute to even more investments and work opportunities if they are channelled together with sustainable and innovative business solutions.
Lack of funding and weak technical business acumen have been identified as thresholds that explain why the Somali diaspora hasn’t yet gone through with more investments and/or developed more businesses in Somalia. Even though there are several different Challenge Funds that focus on Somalia, they have often been out of reach for many people within the diaspora due to the heavy amount of co-financing required as well as associated risks. There is currently a lack of opportunities for smaller businesses with limited financial resources to gain access to financial and technical support. SSBP’s Challenge Fund component, in combination with the capacity strengthening module, seeks to fill that specific gap.