U.S. suppliers of goods and services may use existing distribution channels, including wholesalers, retailers, and appointed agents or distributors, to access the Somalia market more effectively.  Major factors to consider when engaging distribution channel stakeholders are the transit time, processing procedures, distribution timelines, and product shelf-life to avoid importing goods that reach the market with only a short period before expiration.  Major distribution centers in Somalia are concentrated in cities and towns with large populations.

These major cities and towns include Mogadishu (the federal capital city), Hargeisa, Kismayo, Garowe, Jowhar, Bosasso, Galkayo, Beledweyne, and Baidoa.  Major seaports include Mogadishu, Berbera, Bosasso, and Kismayo.  Other ports include Garacad and Hobyo.  Goods may also enter Somalia via air (including air freight and courier services).  Major airports include Mogadishu, Hargeisa, Bosasso, Garowe, and Kismayo.

Deliveries can sometimes be delayed.  Planning for and allowing “extra” time when preparing delivery timetables is important.  Both sea and air entry points are reported to often have delays of a few days.  The Port of Mogadishu charges import demurrage for containers/goods not cleared within 12 days.  Negotiated exceptional cases grant up to 21 days, depending on the request when booking and the contents and the quantity of goods to be cleared.

Using an Agent or Distributor: Somalia does not have legislation that requires the appointment or retention of a local agent/partner as a distributor by the U.S. or other foreign companies exporting to Somalia.  

U.S. companies who want to export goods and services to Somalia may get support in identifying reliable local distributors or agents by reaching out to the relevant Somalia government institutions including SomInvest and the Somali Chamber of Commerce and Industry, an umbrella body that brings together various business  stakeholders in Somalia.

Moving goods and services within and outside the country remains a challenge for U.S. companies.  However, several companies have established wide distribution channels within the country to get goods and services to selling points such as hypermarkets, supermarkets, and shopping centers.  In Mogadishu, for instance, there has been an increase in the number of hypermarkets and supermarkets, making the distribution of goods and services more accessible than a few years ago.  Some leading local supermarkets include Hayata, Midnimo, and Sacadadin. 

Establishing an Office: U.S. companies who wish to have a physical, legal presence in Somalia may need to register with Somalia’s Ministry of Commerce and Industry as a foreign company.  It is also advisable to apply for relevant licenses from concerned ministries, departments and agencies, and municipalities before starting operation.  

For the latest Investment Climate Statement (ICS), which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and hiring employees, visit the U.S. Department of State’s Investment Climate Statements website.

Franchising: Franchising is growing in Somalia, with potential brand opportunities in fast food, pharmaceuticals, technology, automobiles, construction equipment, and agricultural equipment.  U.S. companies in these fields may explore possible partnerships with local partners.  Impediments to franchising include a weak commercial judicial system, limited intellectual property protection, and untimely resolution of IPR cases.  Because franchise systems are generally new in Somalia, there is limited understanding of the franchise model in Somalia.  Despite the challenges mentioned above, increased local inquiries about U.S. fast food and technology service providers’ franchises indicate growing local interest in franchising.

Direct Marketing: There is potential direct marketing in Somalia for consumer goods and electronic devices of U.S. origin.  Potential products include phones, computers, and automobiles.  Most U.S. products access the Somalia market indirectly, meaning U.S. companies typically use other regional and global distribution channels to enter the Somalia market through a “grey market” strategy.  There is also potential direct marketing for cosmetics and household consumables.

Joint Ventures/Licensing: Foreign companies may find joint venture opportunities and projects in collaboration with chambers of commerce, federal and state-level businesses, and investment institutions.  As public investment in infrastructure and related projects is expected to increase, there likely will be increased opportunities to use joint ventures with local companies to bid on government contracts.

Express Delivery: Somalia has a national express courier system.  Multiple delivery companies like DHL and Aramex provide international inbound and outbound courier services to major Somalia urban points such as Mogadishu and Hargeisa.  Transport management companies such as Dhaweeye and Rikab are increasingly becoming popular in Somalia.  The local food industry is growing due to increased access to these delivery systems, albeit primarily limited to urban areas, mainly in Mogadishu and Hargeisa.

Due Diligence: U.S. companies are highly advised to seek guidance and support from both Somalia federal government institutions and the chamber of commerce and industry to carry out initial and in-depth due diligence of potential Somali companies as partners to U.S. companies.