Somalia courts China in Ningxia as Mogadishu seeks a new investment chapter
In Yinchuan, the windswept capital of China’s Ningxia region, a small delegation from the Horn of Africa tried to cast a very large shadow. Somali Prime Minister Hamza Abdi Barre stood before a hall of businesspeople and provincial officials at a newly minted Somalia-China Business Networking Conference and made a pitch that was at once practical and aspirational: come see Somalia for yourselves.
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“Directly explore,” Barre urged Chinese investors, describing a country determined to turn a corner after decades of war and isolation. He detailed Somalia’s investment-friendly policies and pointed to openings in natural resources, infrastructure and trade—sectors that could accelerate growth if coupled with the right capital and know-how. The forum, co-organized by Somalia’s embassy in Beijing and Ningxia’s regional government, drew more than 100 Somali and Chinese companies. And centered under the prime minister’s remarks was one phrase that has become the government’s north star: the National Transformation Plan, or NTP.
Why Ningxia, and why now?
Ningxia, home to many of China’s Hui Muslims and host of the China–Arab States Expo, projects itself as a gateway between Beijing and the broader Islamic world. For Somalia, a Muslim-majority nation with deep connections to the Gulf and the Red Sea, the symbolism is as important as the substance. The forum’s stated aim—to position Somalia as a strategic hub linking the Arab world, Africa and Asia—dovetails neatly with Ningxia’s own brand.
The timing speaks volumes. In late 2023, international creditors agreed to comprehensive debt relief for Somalia, wiping away billions and opening access to concessional financing after years of reform. The United Nations also lifted a three-decade arms embargo, a sign of growing confidence in the federal government’s stability. And Somalia joined the East African Community, aligning itself more tightly with a market of nearly 300 million people. Together, those milestones have emboldened Mogadishu to pursue foreign direct investment with new vigor.
That pursuit is happening as geopolitical currents reshape the Horn of Africa. Red Sea tensions have diverted shipping routes and raised insurance costs. Ethiopia’s search for sea access has roiled regional politics. Gulf states, Turkey and China are reconfiguring their economic presence along Africa’s eastern seaboard, largely through ports, logistics and energy. Somalia, strategically perched on the Strait of Bab el-Mandeb’s Indian Ocean approach, wants a piece of that map.
What Somalia is selling
Barre’s sales pitch leans heavily on the National Transformation Plan—Mogadishu’s blueprint to catalyze growth through infrastructure, improved governance and job creation. The government sees foreign capital as a critical accelerant, not a crutch. In practice, that means channeling investment into:
- Ports and transport corridors that connect the coast to inland markets, from livestock to light manufacturing.
- Energy—especially solar and wind—in a country where off-grid solutions can leapfrog legacy systems.
- Telecoms and digital services. Somalia has surprised many by becoming one of the world’s most mobile-money-reliant societies; building on that digital backbone could spur fintech, e-commerce and logistics.
- Fisheries and agro-processing, two sectors with clear export potential if cold-chain and quality standards are strengthened.
- Natural resources, including offshore hydrocarbons that have attracted interest but remain politically and technically complex.
Somalia’s private sector—scrappy, diaspora-backed and quick to seize opportunities—has kept commerce alive through crises. In Mogadishu’s markets, Chinese goods already line stalls, and Somali traders know Guangzhou as well as they know Nairobi. The government’s challenge is to move beyond containerized trade and into longer-term investment: factories, power plants, data centers, roads and ports.
What China wants—and where the competition is
For Beijing, Somalia is both a frontier and a familiar story. The country sits on the Maritime Silk Road, the seaborne artery of China’s Belt and Road Initiative. Just up the coast, Djibouti hosts China’s first overseas military base and an array of commercial ports. Ethiopia’s standard-gauge railway to Djibouti has cemented a logistics spine that China helped build. A southern complement through Somalia would, in theory, add resilience to regional supply chains.
Chinese state-owned firms have previously courted Somali infrastructure, including a widely reported agreement in 2019 to develop the Hobyo port in central Somalia. Follow-through has been uneven, a reminder that security and financing remain formidable hurdles. But the broader appetite is clear: fisheries, construction, energy, and digital infrastructure are all on Beijing’s radar—often with blended financing and provincial business delegations, like Ningxia’s, in the vanguard.
The competition, however, is already on the ground. Turkey manages Mogadishu’s main port and has trained Somali forces. The United Arab Emirates has expanded its footprint through DP World’s investment in neighboring North Western State of Somalia’s Berbera port and in logistics corridors across the region. Qatar and Saudi Arabia, meanwhile, are testing the waters in agribusiness and infrastructure. Somalia’s pitch in Ningxia is thus part courtship, part balancing act: draw in Chinese capital without crowding out existing partners—and ensure the projects align with national priorities.
The risk ledger investors will study
Somalia’s opportunity is real, but so are the risks investors will price into any deal:
- Security remains uneven, with Al-Shabaab able to disrupt supply chains and intimidate local partners. Gains by federal and allied forces are notable, yet fragile.
- Rule of law and contract enforcement continue to evolve. Investors will look for credible dispute resolution, transparent tenders and predictable regulations.
- Climate volatility—droughts followed by floods—hits infrastructure, agriculture and urban services, raising the cost of resilience.
- Maritime risks have re-emerged in the western Indian Ocean amid Red Sea tensions, complicating insurance and shipping schedules.
- Governance around natural resources and fisheries needs strengthening to avoid the twin perils of illegal extraction and local resentment.
None of these challenges are unique to Somalia, and some are improving. Debt relief has sharpened fiscal discipline. Central bank reforms and currency modernization are inching forward. Diaspora investors are building an early track record in energy, tech and real estate. The question for Beijing and other partners is whether project structuring—through guarantees, blended finance and phased builds—can make the risk-reward math work at scale.
Beyond the ribbon-cuttings
Attending a forum in Ningxia and signing MOUs is the easy part. The harder test will be measured in watts added to the grid, kilometers of road maintained after the photo-ops, cold storage that stays powered in midsummer, port cranes that run without months-long spare parts delays. That nuts-and-bolts view is where Somalia’s NTP lives or dies.
For Somalia, the calculus isn’t just macroeconomic. Every successful factory shift or fisheries hub can be a vote of confidence in the social contract, an alternative to war economy networks. For China, the calculus is geopolitical as much as commercial: demonstrating that Belt and Road 2.0 can be leaner, greener and more responsive to local priorities—particularly in regions where the reputational stakes are high.
So where does this leave the Somali premier’s plea to “directly explore”? If you’re a Chinese mid-cap contractor, a Gulf logistics operator or a Turkish EPC firm, the pitch is increasingly similar: co-invest with local businesses, build climate resilience into design, hire locally and keep timelines realistic. If you’re in Mogadishu, the homework is equally clear: de-risk through transparency, protect investors and citizens with fair contracts, and show that the NTP is more than a glossy brochure.
Ningxia offered a stage, and Somalia used it. The next act will be written not in conference halls, but on construction sites, in customs yards and along new roads that either knit the Horn together—or remain lines on a plan.
By Ali Musa
Axadle Times international–Monitoring.
