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Somaliland National Service Champaign should aim to Rehabilitate 5,000 Drought affected Nomads. The estimated USD 50m Scheme could be Financed through 1 to 5 years Govt Islamic SUKUK (Bonds) and Managed by our unemployed Graduates

First and foremost, I applaud the President of Somaliland His Excellency Musa Bihi Abdi for the launching of his Election Campaign “National Service Program”. I am a retired senior banker I had the opportunity to witness, first hand, the impact of government sponsored Socioeconomic programs in the Gulf Region over a period of more than 30 years. Capitalizing on this longstanding exposure, I intend to put forwardthe “highlights” of a comprehensive plan that could enable us to strikethe three crippling enemies of this great Nation with one stone. As we are all aware, Somaliland is plagued by the following 3 chronic diseases, and I am of the opinion that we have a golden opportunity to take the first steps towards the eradication of these diseases.

  1. Recurring drought in semi-arid climate.
  2. Large and growing population of unemployed youth.
  3. Chronic negative trade balance, resulting in severe shortage of foreign currency

I don’t have the right statistics, but the government could target resettlement of some 5,000 of the families devastated by the recent drought. At the same time, we can empower our youth via the National Services Champaign and employ them to implement and manage the followingrural rehabilitation and restructuring projects:

USD 20m program to Resettle Nomad as Rangers: 2,000 families will receive re-stocking of the herds they have lost to the drought. But we should not repeatthe old mistakes. The centuries old nomadic life style is obsolete and should be abandoned. This time, each family willbe assisted with the means of growing some fodder for their livestock with the aim of helping them settledown for most of the year.  Each family will receive a piece of land,ploughing hours, free seeds and some irrigation channels etc.  The assistance to the rural community should be in the form of USD 10,000 loan to each household.Loan Security: The Government will own the land and the ranger has to consistently grow and work on the land for the next 5 years. If he fails to do so, the Government will takeover the land and hand it to another ranger.If the resettlement of each of the 2,000 families cost USD 10,000, the entire project wil cost USD 20m.

USD 20m Upgrading of Subsistence Farming: 2,000 existing farmers will receive assistance in ploughing, irrigation channels, digging bonds, fodder storage, and some restocking of livestocketc. Loan Security: The government will acquire 50% of the farm and the 50% will continue to be owned by the farmer. If the farmer fails to meet his obligations, the Government wil takeover the 50% land it acquired and hand it over to another ranger for up to 5 years.   If the assistance to each of the 2,000 farmer is at USD 10,000, the entire project wil cost USD 20m.

USD 10m Assistance Small Fishermen: 1,000 smaller fishermen will receive fishing equipment and some livelihood support etc. This project could cost USD 10,000,000.

The Role of the Youth: Some 500 graduates will be hired for about 12 months under the “National Service Champaign”. The youth will be tasked to train the rural community, and also to manage these projects in terms of assessment, implementation, reporting, monitoring etc.

How to finance these projects: In order to finance these projects, the government will issueUSD50m Islamic SUKUK (bonds) repayable in annual instalments over 5 years at profit mark-up of 5% per annum. The Government will refinance these SUKUK through increased taxes on luxury and nonessential goods like Kaat, Cigarettes and cosmetics etc.  The Sukuk be denominated in USD 1,000 to 10,000 notes and will be purchased by the local community, international donors, and the Diaspora. The Government will make an annual repayment of anestimated USD13m (average) over the next 5 years as shows below, and this will not constitute any burden to the government budget.

Year1: 50m @10%+10m = 15m

Year2: 40m@10%+10m= 14m

Year3: 30m @ 10%+10m =13m

Year4: 20m@109%+10m= 12m

Year5: 10m@10%+10m = 11m

Average                             = 13m

 

Hassan Abdi Yousuf

Riyadh

Saudi Arabia

Hassan_ayousuf@hotmail.com