Mogadishu (AX) — President Hassan Sheikh Mohamud has urged Somalia to shift its economic focus from post-conflict recovery toward investment, domestic production and the development of its natural resources.
Addressing an event on investment and economic development on Saturday, Hassan Sheikh said Somalia must build the confidence needed to attract both local and international capital. He said investors would remain cautious unless the country could offer improved security, stronger institutions and a stable, predictable business environment.
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“Investment cannot come without confidence,” the president said, pointing to government efforts to strengthen security, uphold the rule of law and improve the broader regulatory system.
He also urged the government to create conditions that would persuade Somalis who transferred their wealth abroad during decades of conflict to bring their capital back and invest at home.
Hassan Sheikh framed economic growth as a critical part of Somalia’s broader state-building effort, saying greater economic activity would support security, governance and the delivery of public services. He called on institutions overseeing security, justice and economic affairs to coordinate more closely.
The president said his administration aimed to reduce the country’s reliance on imports by expanding manufacturing, raising domestic output and developing export industries.
Somalia has introduced several measures in recent years to strengthen its investment regime. In 2023, Parliament approved the Investors and Investments Protection Law, which provides safeguards for domestic and foreign investors, including provisions on expropriation, the transfer of capital and the settlement of disputes.
Parliament later approved a new investment law in 2025. Legislation enacted in December of that year also created the Somalia Investment Agency and the National Investment Council, bodies tasked with promoting and regulating investment.
Economic diversification and private-sector growth have likewise been made central priorities under the government’s National Transformation Plan for 2025-29.
Yet securing significant foreign investment remains a formidable challenge. Persistent insecurity, weak state institutions and limited enforcement of commercial law and dispute-resolution mechanisms have long deterred foreign direct investment.
A US State Department investment assessment said that institutional weaknesses and security risks continued to pose serious obstacles despite Somalia’s regulatory reforms.
Hassan Sheikh said Somalia would be unable to realize its full economic potential through domestic resources alone, stressing the need for foreign capital, technology and expertise.
