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Somalia connects citizens to a more prosperous future

Throughout the last decade, as Somali waters remained unsettled by piracy that followed almost twenty years of conflict, one man pursued the idea that his country’s future lay under those troubled seas. Mohamed Ahmed Jama, founder of telecommunications company Dalkom Somalia, believed that dependable, affordable access to the Internet would transform Somalis’ economic prospects. Laying submarine fiber-optic cable that reached his country’s far corners was the first step forward.

Dalkom’s founder and CEO, Mohamed Ahmed Jama. © Dalkom

Both the World Bank and IFC were already pioneering an underwater network to connect East Africa to the rest of the world, and Dalkom’s efforts made it possible to extend the cable to Somalia. Before Somalis had this virtual connection, its citizens went without anything that required fast, dependable online communication—like mobile banking, online health services, digital classrooms, and electronic government facilities.

Lacking these opportunities, most Somalis were left behind, and the country’s Information and Communications Technology (ICT) sector had no way to develop and attract investment. Dalkom’s efforts have changed that: today, the country’s telecoms sector is competitive.

Somalia’s tech transformation has also facilitated legislative advances that pave the way for long-term economic expansion. For example, in 2017 government officials passed Somalia’s landmark Communications Act, which would not have been possible without the public-private dialogue initiated by IFC and the World Bank. The Communications Act provides the legal starting point for investment and competition in Somalia’s ICT sector.

A LONG-TERM STRATEGY TO STRENGTHEN SOMALIA

IFC and the World Bank have supported the ICT sector in Somalia and the region through a number of instruments, including loans, grants, and contracts to implement targeted ICT solutions. IFC provided additional support to the country through the Somalia Investment Climate Reform Program. This forum connects the most powerful investors in the country with government officials to build trust, share best practices, learn from regional players, and support formalization of the sector.

Dalkom Somalia has played a critical role from the start of IFC’s engagement. Dalkom’s founder and CEO, Jama—who was already an experienced telecommunications executive when he determined to extend Internet access to Somalia—was a key founding member of the ICT Working Group that grew out of the public-private dialogue. Dalkom was also one of the founders of the West Indian Ocean Cable Company (WIOCC), the biggest pan-African carrier-to-carrier service provider, and of the Eastern Africa Submarine Cable System (EASSy), the biggest consortium of submarine cable operators in Eastern Africa.

The World Bank pioneered EASSy, working with governments and development partners on lending programs for Eastern and southern African countries, while IFC funded WIOCC with $150 million to commercialize capacity over EASSy. Together, EASSy and WIOCC have improved access and lowered bandwidth costs for more than 250 million Africans in at least 20 African countries.

IFC’s $35 million loan to Dalkom (part of the overall $150 million loan to WIOCC) helped the company connect EASSy to Somalia. Since then, Dalkom has become a key player in Africa’s broadband and ICT infrastructure sector. Most recently, it built a landing station within Mogadishu International Airport and is in the process of setting up a data center there to accommodate an internet Exchange Point (IXP). It will also host an “anycast” server for the “.so” domain name.

Dalkom plans to undertake additional investments in the country to deepen broadband connectivity, reduce costs, and encourage usage among the population by acquiring one of the existing mobile operators.

Somalia connects citizens to a more prosperous future

RESHAPING COMMERCE

Despite Somalia’s progress, investment in its ICT sector hasn’t always been a widely-shared priority. Since national conflict began in 1991, most development partner efforts have focused on humanitarian issues and had not engaged the private sector in a systematic way. IFC’s involvement was one of the first steps in this new, promising direction.

Even Jama, whose vision for Dalkom Somalia steered the effort forward, has been surprised by the way Internet connectivity has reshaped national commerce—and character. When an underwater cable was cut accidentally in June of 2017, 6.5 million Somalians temporarily lost their connection to the rest of the world, returning them to pre-Internet isolation and highlighting how far they had progressed. Millions of dollars of potential revenue vanished as institutions and sectors that now depend on the Internet went dark.

“I realized the impact of Dalkom’s efforts on the socioeconomic development of the Somali people during the blackout,” Jama recalls. “This has motivated me to build more cables and plan to extend the existing ones to further inland, so that I can reach out to more people and change more lives.”

These goals align closely with IFC’s priorities in the region as we work to extend the availability of technologies that promote sustainable growth and social inclusion. As one of the leading development financiers in the sector, IFC focuses on facilitating better broadband connectivity, supporting infrastructure sharing models, and partnering with mobile operators as they expand their networks to new areas, especially in fragile and frontier markets.

To read more about IFC’s work in telecommunications, visit www.ifc.org/TMT

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