SOMALILAND: Stringent Vetting Of Foreign Investment Companies Is Vital In the Country

By Hassan Abdi Yussuf

Ever since present-day Somaliland Republic declared its unilateral resumption of sovereignty, scores of rogue and scam investors have been trying to set feet in it to fraud the Somaliland people savings and exploit its natural resources.

Nonetheless, past governments in Somaliland have failed and the current administration continues to ignore taking corrective and concrete measures aimed at sealing such loopholes allowing the occurrence of such shameful and humiliating episodes involving bogus companies – that made Somaliland a laughingstock in the Global Business Community.

The Somaliland government should squarely shoulder the blame for the lack of information and transparency in these hasty contracts with scammers without properly and thoroughly vetting them. This type of culture creates an information vacuum whereby normally is filled with speculations and rumor from hatemongers.

In April 2019, a company by the name of Singapore New Silk Company has commenced talks with the Somaliland government regarding investments involving construction of refinery at Berbera. They talked about spending millions of dollars coupled with the training and subsequently recruiting about 400 young graduates.

However, only minutes after releasing this news, background searches and investigations conducted on their capabilities quickly revealed otherwise as nonexistent company. The only proof of their being on the global map was an address on a High street in Singapore – they had all the hallmarks of professional scammers. Based on logical and rational thinking, such individuals of this caliber are looking for some agreement or memorandum of understanding (MOU) which they intend either to sell to potential investors or defraud companies in some illegal operations.

In last week, again a reportedly Chinese company in the name of Africa Agricultural Development Group has proposed to grow caster beans in the plain of Tog Wajaale. A large delegation led by the Minister of Agriculture has accompanied the Chinese potential investor. Upon reaching the Wajaale farming site, it was disclosed that this Chinese company would leased some 2,000 acres of farmland where they will grow Caster Beans.

Out of curiosity, I have Googled the uses of Caster oil and beans, and to my shock learned that whilst castor oil is used to treat constipation, it is also the source of high toxic and often military-grade poisonous material called Ricin.

More Seriously, the following extract from world-class Research shows that growing caster beans could be disastrously dangerous to the local community and the seeds could spread across the country in matter of few years:

“The leaves and especially the seeds of the plant contain the powerful toxin ricin and for that reason it is one of the most poisonous plants in the world: if you eat a half-dozen seeds and do not get medical treatment (which, obviously, I do not recommend) it can be fatal. Growing the plant as an ornamental or a crop is not illegal, but extracting and concentrating ricin from it is, as you would in effect be making a potent biological weapon (obviously, I do not recommend that, either”

Summing up, it is obvious there is total lack of controls, absence of accountability and coordination regarding on approval of large-scale investment opportunities. It is also clear that Somaliland has become the target of international scam and fraudulent investors.

In this context, I would recommend the adoption of the following Policies and Procedures – which I believe – would discourage any scammer and also safeguard the national resources from International and Local Criminal Groups.

The Ministry of Investment should have the SOLE mandate to approve or disapprove any application for any potential foreign as well as local investors in a pre-defined threshold.
The Ministry of Investment should formulate Investor Screening & Approval Due Diligence Policy. This document should be on the table as soon as possible and should be made public and well-distributed.
Every potential investor should go through at least the following validation and background checks before they are allowed to discuss business opportunities with any public or private organization in Somaliland Legal and Security Background check via the Secret Services, Ministry of Interior and related authorities.
Full Analysis of the investor’s business and financial capabilities. This process should be handled by qualified and experienced Chartered Accountants and or Corporate Bankers or Investment Experts.
Economic & Technical Viability Study: This should be handled by qualified and experienced economists or products experts who should ascertain whether the proposed projects/services will actually benefit the socioeconomic wellbeing of the population.
Only after this preliminary and screening process has been fully exhausted, the Ministry of Investment should give any potential large-scale investors the greenlight to start discussions and meetings with the concerned ministries, other government bodies, private companies and communities.

If we fail to put in place strict policies and procedures aimed at curbing such mediocre foreign investment process, scores of criminal and scammers would be knocking our doors, and Somaliland would remain a prey for a long of time.

The author Hassan Abdi Yussuf is a Geopolitical Analyst based in Hargeisa , Somaliland