Overview

Through the country’s 9th National Development Plan, the Somali government considers ICT a national priority, noting its importance as a key enabler for sustainable economic growth, the flourishment of other industries, and productivity gains.  The Somalia Investment Agency (SOMINVEST) has developed an ICT and digital strategy to inform and guide investments in the sectors, including opportunities in critical sectors such as ICT enterprises, investments in research and technology, science and technology, mobile payment services, and the expansion of fiber optic networks to major towns and cities.

Somalia has two existing fiber optic network systems connecting it to the global internet: (1) the West Indian Ocean Cable Consortium’s (WIOCC) East Africa Submarine Cable System (EASSy), a 10 Tb/s fiber optic network; and (2) DARE1, a 100G subsea cable.  A third fiber optic cable—2Africa—is currently under development, aiming to connect Europe, the Middle East, and multiple countries in Africa, including Somalia.

Internet uptake in Somalia is rapidly increasing: There were 1.95 million Internet users in Somalia in January 2021 (12.1 percent of the population, an increase of 20 percent since 2020).  Despite the lack of stable energy sources and limited infrastructure, ICT and mobile communications are some of the fastest growing sectors and are generating profits.  ICT is the third largest industry by employment in Somalia.  Seventy-three percent of the population over the age of 16 in both rural and urban regions use mobile money.

The growth and expansion of fiber optic network systems have enabled the development of ICT-enabled businesses and ICT services such as mobile money payment systems.  Demand for internet and ICT services is significant due in part to the burgeoning youthful population.  It is estimated that 75 percent of Somalia are youth under the age of 35 years.  According to the Mobile Data Pricing 2020 Report, Somalia is ranked as the 7th country in the world and number one in Africa for the cheapest average consumer cost for 1GB of internet data.

Mobile money is widespread, with an estimated 73 percent market penetration, and remittance inflows of 22 percent of GDP represent opportunities for broad access to financial services.  According to a World Bank report, Somalia has a large diaspora, and diaspora remittances are estimated at $2 billion per year.  Three licensed mobile payments services providers are linked to the biggest mobile network operators.  Financial services are dominated by conglomerate groups, each containing a bank, a money transfer business, a mobile payments services provider, and a mobile network operator.  85 percent of adults have a mobile phone, and 82 percent of adults use a mobile phone for financial transactions, typically mobile payments.  Investment opportunities exist in the following areas:

ICT infrastructure: The country continues to expand its network infrastructure, such as the expansion of fiber optic cables throughout the country and connections to internet backbone cables.  Both public and private sector companies and institutions—such as education centers, universities, and schools—continue to expand and build ICT infrastructure.  

Hardware: Demand for high-quality personal computers with after-service and warranties is high and continues to rise.  Computer hardware accounts for nearly 50 percent of the IT market in Somalia.  Counterfeit and unbranded hardware computers constrain total computer hardware sales, but branded and reliable hardware products with good quality specifications, warranty, and after-service are in high demand.

Software: Demand for software solutions is high, and many local institutions and firms have increased demand for personal and official business use.

Consumer Electronics and Smart Devices: The use of smart devices such as tablets, smart TVs, smartphones, and accessories continue to grow.  U.S. mobile devices are available and competing for the middle to upper-income brackets, with U.S. brands like Apple now being used widely in the market.  However, the lower- to middle-end of the market is price sensitive, resulting in the wide use of cheap and often counterfeit mobile devices that are readily available and often sold as original devices to unsuspecting customers.

Services: More small and mid-sized (SMEs) companies are adopting e-commerce services such as food delivery, taxi hailing, etc.  The adoption of e-commerce has created a demand for mobile applications and services to conduct trade through online and mobile platforms.  Demand for ICT services for education is on the rise through virtual learning.  

Key opportunities are likely to be found in the expansion of fiber optic networks, the development of ICT infrastructure, and the promotion of branded ICT hardware, software, and cloud systems.

Information Resources

National Communications Authority

Address: Mogadishu, Somalia

Telephone: +252 613 77 91 91

Email: info@nca.gov.so

Website: https://nca.gov.so

Ministry of Communications and Technology

Address: Jamhuria Road

Email: Info@Moct.gov.so

Website: https://moct.gov.so/en/