Somaliland’s economic policy should increasingly distinguish between investment that simply facilitates consumption and investment that creates productive capacity.
That distinction matters.
A trading business can move imported goods from a port to a marketplace. A manufacturing company, by contrast, can transform capital into production, employment, skills, supply chains and locally made products. For an economy seeking long-term growth, the latter deserves particular policy attention.
This is why the Somaliland Government should actively encourage and facilitate productive enterprises such as Boodhari Mills, particularly as the country seeks to strengthen domestic food production and reduce its dependence on imported manufactured goods.
The government’s own investment policy recognizes manufacturing and agro-business as priority areas, describing industrialization as crucial to job creation and economic development. It also identifies food processing and grain mills among the opportunities available to agricultural investors.
Production Creates More Than a Product
The strongest argument for supporting a company such as Boodhari Mills is not simply that it produces flour. It is that a flour mill can become part of a much wider economic ecosystem.
Production creates demand for raw materials, transportation, storage, packaging, machinery maintenance, distribution and retail. If the supply chain develops further, it can also create markets for local farmers producing wheat and other agricultural inputs.
This is precisely the type of economic linkage Somaliland needs.
The Ministry of Investment and Industrial Development itself identifies agricultural processing, including grain harvesting, storage and grain mills, as an investment opportunity. It also acknowledges the potential for greater domestic agricultural production and the role of diaspora and local capital in food and agro-processing.
Supporting productive businesses therefore has a multiplier effect: one investment can create opportunities for many other businesses.
Government Support Should Be About Enabling, Not Owning
Encouraging companies like Boodhari Mills does not mean that the government should operate factories or take over private businesses. The government’s most important role is to create an environment in which serious investors can succeed.
That means predictable taxation, efficient licensing, access to industrial land, reliable electricity and water, improved transport infrastructure, reasonable customs procedures and protection of legitimate investments.
The Ministry of Investment and Industrial Development states that its mandate includes improving the investment climate, facilitating investment procedures, attracting national and foreign investment, and directing investment toward infrastructure and employment.
This policy should be applied particularly strongly to businesses that increase domestic production.
Manufacturing Can Reduce Import Dependence
Somaliland remains heavily dependent on imports, including food products such as wheat and wheat flour. The government’s own trade and economy information identifies wheat and wheat flour among major food imports.
This creates an important economic question: Why should Somaliland continue importing products that it can increasingly manufacture domestically?
Import substitution should not mean closing the economy to foreign products. Nor should it mean protecting inefficient businesses indefinitely.
Rather, it should mean creating competitive domestic industries capable of producing quality goods at commercially sustainable prices.
A successful flour industry can therefore contribute to a gradual shift from simply importing finished food products toward processing and adding value closer to the consumer.
Supporting Boodhari Mills Can Send a Bigger Signal
Government support for productive companies has an effect beyond the individual company receiving it.
It sends a message to other investors.
If an entrepreneur sees that a company investing substantial capital in manufacturing receives practical institutional support, that entrepreneur may become more willing to invest in another factory, agricultural project, processing facility or logistics business.
Investment is influenced not only by tax rates and market size, but also by investor confidence.
A government that consistently demonstrates that productive investment is a national priority can help create that confidence.
This is particularly important for Somaliland’s diaspora, which represents a significant potential source of investment capital.
The Diaspora Should Be Encouraged to Invest in Production
For decades, remittances have played an important role in Somaliland’s economy.
But the next stage should be about converting part of that financial capacity into productive ownership.
Instead of investing exclusively in houses, land and conventional commerce, members of the diaspora can consider participating in factories, agriculture, food processing, energy, logistics and other productive sectors.
Boodhari Mills can be presented as an example of this broader investment philosophy.
The company’s management has publicly indicated on several occasions that its shareholding is open to investment. That creates an opportunity for Somalilanders inside and outside the country to consider participating in a productive enterprise rather than merely supporting consumption.
Government Should Create Incentives for Productive Investors
Somaliland already has investment incentives designed to encourage productive activity. The Ministry of Investment and Industrial Development says qualifying investors can receive profit-tax holidays and customs exemptions on certain production-related machinery, equipment and raw materials.
The important question is how effectively such policies are implemented.
For manufacturing companies, the government should consider whether investors can obtain these incentives efficiently, transparently and without unnecessary administrative delays.
The objective should be simple: Make it easier to build a factory than to abandon the idea of building one.
That requires coordination between investment authorities, customs, taxation authorities, municipalities, infrastructure agencies and other government institutions.
The government’s industrial development department already lists among its responsibilities the promotion of domestic and foreign investment in manufacturing, technical assistance to food manufacturing using local inputs, and the development of policies that expand industrial business activity.
That institutional mandate provides a strong basis for a more proactive industrial policy.
Boodhari Mills Should Be Viewed as Part of a Bigger Strategy
The discussion should therefore not be reduced to whether one flour company succeeds or fails.
The bigger question is whether Somaliland wants to develop an economy in which more of its capital goes into production.
Boodhari Mills is relevant because flour production sits at the intersection of food security, manufacturing, agriculture, employment and trade.
If local agricultural production expands, a flour mill can potentially purchase more raw materials locally.
If local processing expands, farmers gain a larger potential market.
If manufacturing expands, more skilled and semi-skilled employment opportunities emerge.
If domestic production becomes competitive, Somaliland can reduce some dependence on imported finished products.
And if companies grow, they can potentially develop toward regional markets.
That is the economic logic behind encouraging productive investment.
The Government Should Reward Economic Value Creation
Not every investment creates the same economic value.
A policy framework that treats every investment identically may miss an important opportunity.
Investment that creates jobs, develops local supply chains, introduces technology, substitutes for imports, generates exports or adds value to domestic resources should receive particular attention.
The government’s own investment priorities recognize this principle, identifying industrialization, agro-business and manufacturing as areas with substantial potential and emphasizing job creation and economic development.
The goal should therefore be to establish a competitive investment environment, not simply an investment-friendly slogan.
A Partnership Between Government and Private Capital
Ultimately, Somaliland’s industrial development does not need to be financed by government; the private sector has the capital, entrepreneurial risk-taking and commercial discipline required to build sustainable businesses. The government has the responsibility to establish the legal, regulatory and infrastructure framework that allows those businesses to operate.
That is where the partnership should exist.
Government creates the conditions. Investors provide the capital. Entrepreneurs create the businesses. Workers create the production. Consumers create the market.
When these elements work together, economic development becomes much more sustainable.
A Message to Somaliland’s Investors
The case for supporting productive businesses such as Boodhari Mills is therefore larger than one company.
It is a case for changing the investment culture of Somaliland.
The country needs more investors willing to put capital into factories rather than only shops; agriculture rather than only land; processing rather than only importing; and productive enterprises rather than purely speculative assets.
For the government, the message is equally clear: productive investors should not merely be welcomed in speeches. They should experience that welcome through efficient institutions, predictable policies, infrastructure and practical facilitation.
For the diaspora and local business community, the opportunity is to become active participants in building Somaliland’s productive economy.
And for companies such as Boodhari Mills, continued transparency, sound corporate governance, quality production and responsible management will be essential to maintaining investor confidence.
Somaliland does not need to choose between trade and production.
It needs both.
But if the country wants a more resilient and diversified economy, production must become a much bigger part of the equation.
Supporting businesses such as Boodhari Mills is therefore not simply about supporting one private company. It is about encouraging a model of investment that can help Somaliland move from an economy that primarily imports and consumes toward one that increasingly produces, processes and creates value.
By Somalilandpost News
