Conversely, neglecting the private sector could allow the perseverance of spoilers in the business elite and would fail to create employment, income and business opportunities for the majority of the population, which would be detrimental to Somali’s stability and economic development.

In January 2013 the Department for International Development asked us to assess the overall business enabling environment, the main sectors of the economy, the binding constraints to growth and investment, and how the local and diaspora-funded private sector, which is particularly vital in the healthcare, education and water sectors, are overcoming these constraints. We carried out thorough analysis of the issues, combining research and field work in Mogadishu, Garowe, Bosasso, Nairobi, Dubai and London.

Using a market systems approach, our team identified a deficit both in technical and business skills and in market and regulatory information as binding constraints to growth and investment in the informal economy, in the short to medium term. We also recognised that over the medium to long term, the lack of a formal, functioning enabling environment would increasingly act as a constraint to growth.

On the basis of this analysis, we recommended a dual approach to address immediate impediments for businesses operating in the informal economy, whilst simultaneously laying the policy and regulatory foundations of a formal enabling environment, a process that takes many years. Within this framework we developed a selection of programme options for DFID. Firstly, we recommended establishing a business innovation centre that would offer skills and information. Secondly, we recommended an investment climate programme and thirdly, a means to ensure that the benefits of growth and investment are spread throughout the country.