National Post

Capitalist haven
National Post

It’s the only African country that doesn’t rely on foreign aid from the world’s rich governments. It’s a Muslim country in Africa that has had a functioning democracy for two decades. It’s an oasis of relative peace in one of the most vicious regions of the world, with a growing free-market economy, low inflation and a currency that has been appreciating against the U.S. dollar.

Somaliland’s story is all the more astonishing given that it is officially part of Somalia, a failed state best known for its piracy at sea and al-Shabaab terrorists on land, and given that it declared independence in 1991 after surviving a brutal repression by Somalia’s Marxist dictator.

The local clan-based governments calculated they would earn less by plundering the few merchants willing to risk the trip to port than by ensuring safe passage along the road system and sharing in growing port revenues. It was an enlightened business decision. Livestock exports of goats, sheep, cattle and camels, which account for some 60% of Somaliland’s total exports and GDP, has soared, almost tripling in the last five years alone, while Ethiopia — the dominant economy in the region — increasingly ships through Somaliland. The once-underutilized port has already undergone a major upgrade and, to keep up with the needs of its burgeoning trade, Somaliland has announced it will privatize the port. This week, Coca-Cola opened a US$15-million bottling plant in Somaliland, the country’s first major industrial investment since independence.