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Thesis Paper Updated June 2009

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Somaliland Small-Scale Industries Development And Constraints {June 2009} TABLE OF CONTENTS Acknowledgement ………………………………………………………………… Dedication …………………………………………………………………………….1 Declaration_________________________________________________ ________1 Abstract____________________________________________________ _________1 Chapter One________________________________________________2 Introduction_______________________________________________2 1.2 Problem Statement__________________________________________4 1.3 Purposes of the Paper______________________________________5 1.4 Structure of the Paper_____________________________________6 Chapter 2__________________________________________________7 Literature Review__________________________________________7 2.1 Definition of Industry:____________________________________7 2.2 Types of industries________________________________________8 2.2.1 Large Scale and Small Scale Production Compared______________9 2.3 Industrial Revolution_____________________________________11 2.4 Favorable factors enhancing the economic development of small-scale industries________________________________________13 2.5 Micro Finance and Small-Scale industries__________________14 2.6 Somaliland Industrial Revolution__________________________15 2.7 Somaliland Current Industries_____________________________15 2.7.1 Somaliland Small-Scale industries___________________________16 2.7.2 Importance of Small-Scale industries________________________16 2.7.3 Failed industries in Somaliland_____________________________20 2.7.4 Causes of failure in industries_____________________________21 Chapter three_____________________________________________23 Methodology_______________________________________________23 Chapter Four______________________________________________26 Data Presentation and Analysis____________________________26 CHAPTER FIVE______________________________________________40 CONCLUSIONS AND RECOMMENDATIONS___________________________40 Copyright © All Rights Reserved to Mohamoud Abdi Hassan (tiger) 1 (1)
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Page 1: Thesis Paper Updated June 2009

Somaliland Small-Scale Industries Development And Constraints {June 2009}

TABLE OF CONTENTSAcknowledgement ………………………………………………………………… Dedication …………………………………………………………………………….1Declaration_________________________________________________________1Abstract_____________________________________________________________1

Chapter One_____________________________________________________________2

Introduction_____________________________________________________________2

1.2 Problem Statement________________________________________________________4

1.3 Purposes of the Paper______________________________________________________5

1.4 Structure of the Paper______________________________________________________6

Chapter 2_______________________________________________________________7

Literature Review________________________________________________________7

2.1 Definition of Industry:_____________________________________________________7

2.2 Types of industries_________________________________________________________82.2.1 Large Scale and Small Scale Production Compared____________________________________9

2.3 Industrial Revolution_____________________________________________________11

2.4 Favorable factors enhancing the economic development of small-scale industries___13

2.5 Micro Finance and Small-Scale industries____________________________________14

2.6 Somaliland Industrial Revolution___________________________________________15

2.7 Somaliland Current Industries_____________________________________________152.7.1 Somaliland Small-Scale industries________________________________________________162.7.2 Importance of Small-Scale industries______________________________________________162.7.3 Failed industries in Somaliland___________________________________________________202.7.4 Causes of failure in industries____________________________________________________21

Chapter three__________________________________________________________23

Methodology___________________________________________________________23

Chapter Four___________________________________________________________26

Data Presentation and Analysis____________________________________________26

CHAPTER FIVE_______________________________________________________40

CONCLUSIONS AND RECOMMENDATIONS_____________________________40

5.1 Conclusion______________________________________________________________40

5-2Recommendation_________________________________________________________41

Bibliography___________________________________________________________42

Appendix I_____________________________________________________________43

Copyright © All Rights Reserved to Mohamoud Abdi Hassan (tiger)

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

Chapter One

Introduction

In 1988 bloody civil war broke in former Somali republic between the government of

Mohamed Siad Barre and Somali National Movement. In that decade of civil war, which

erupted every side of life in northern regions of former Somali republic now Somaliland,

has finally led the total collapse of Somali state in January 1991. After the collapse of the

Somali state, Somaliland declared it independence.

Although the country, Somaliland, is now peaceful and stable and has its own

government, yet, much of the consequences of the war are still visible. The country has

so far not been able to gain international recognition and this prevents it from obtaining

international long-term investments or loans. To make the matter worse, livestock exports

which has been the backbone of the economy for centuries no longer operates after the

Saudi authorities whose country constituted the largest market for Somaliland livestock

banned it on basis of suspected disease outbreak in Somaliland livestock in 1996.

The war destroyed or seriously damaged every aspect of life. Economic and institutional

infrastructures were destroyed, personal property and sources of income disappeared. The

returnee population war traumatized, their homes were destroyed and the country was

devoid of any kind of employment opportunities.

Now the people of Somaliland are recovering form the war effects and trying to establish

their economy on concrete pillars including industrial sector. The sector of industry, in

the near future is expected to play a curtail role and contribute in the developing of

Copyright © All Rights Reserved to Mohamoud Abdi Hassan (tiger)

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Somaliland economically and creating employment opportunities, because the industries

like a fore mentioned factories can play a very important role in the economic growth, not

only for employment opportunities but also for skills promotion and income generation as

well. Therefore, it become necessary to establish national small industrial organization,

which has the capacity to strengthen, direct, encourage, harmonize and promote private-

owned industries and locally processed production of local Small-Scale industries in

order to avoid overlapping and wasting our scarce resources.

Under these conditions small-scale industries in Somaliland and other business

enterprises were revived initially by returnee which were within a short time of period

impacted on all types of commercial transactions and production activities specifically

related to basic human needs like shelter, food, clothes and household commodities etc.

During the peaceful years in Somaliland the contribution of Small-Scale industries in

Somaliland to the economic and social life of the country has been tremendous. The

Small-Scale industries have participated the employment condition in the country; it has

contributed to the retention of skills as well as skill creation and saved some of the

country’s hard currency.

In this my paper, I will examine the constraints of Small-Scale industries in Somaliland

and impact of the nations economic as whole and the consequences of the problems

associated with the breakdown of small-scale industries in the country.

In this paper I will try to present in dept about the economic prospects of developing

Small-Scale industries in Somaliland. First industry is a broad term for any kind of

economic production, in economics and urban planning industry is a synonym for the

secondary sector, which is type of economic activity involved in the manufacturing of

raw materials in to goods and precuts.

Industries in the sense of manufacturing became a key sector of production and labor in

European and North America Countries during the industrial revolution. So, The

developing industries in Somaliland is the only one which benefited the above

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

.opportunities and it covered the needed for industries for the entire population of

Somaliland and saved hard currency for the country that was being to spend the

importation of industries form abroad countries.

The purpose of the study is to better understand the current situation of the factor

industries in Somaliland and their role of economy and to identify the existing industries

and their locations in the country. It will also focus on their weaknesses, strengths and

their capability in all aspects of economy, by examining their situation through

identifying in case of major opportunities and obstacles that might encounter their

economic influence. Generally, maturity of Somaliland industries is light industries and

established during the past eight years.

Somaliland industries produces different thing of materials such as: water bottling

factors, hard soap and powder soap factors, bread, mattress, cushions, soft drinks and

home furnishing materials.

1.2 Problem Statement

What is the main development in Somaliland Small-Scale industries?

What are the main constraints in Somaliland Small-Scale industries?

As mentioned above, this paper will focus on the small industry development and

constraint.

The purpose of the study is to better understand the current situation of the factor

industries in Somaliland and their role of economy and to identify the existing industries

and their locations in the country. It will also focus on their weaknesses, strengths and

their capability in all aspects of economy, by examining their situation through

identifying in case of major opportunities and obstacles that might encounter their

economic influence. Generally, maturity of Somaliland industries is light industries and

established during the past eight years.

Copyright © All Rights Reserved to Mohamoud Abdi Hassan (tiger)

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Somaliland industries produces different thing of materials such as: water bottling

factors, hard soap and powder soap factors, bread, mattress, cushions, soft drinks and

home furnishing materials.

The development in Somaliland Small-Scale industries and constraint.

The causes of constraint:

Lack of capital investment.

Shortage of skilled labor.

Lack of banking system.

Lack of technological support.

Limited of government regulation.

That is main constraint in small industry of Somaliland.

Impact in Somaliland Small-Scale industries development:

Direct contribution of the Small-Scale industries development to the economy are

the full employment they provide the citizens ,the hard currency the save in the

country, the tax the pay to the government and preliminary investment they made

such as the land the buy, vehicles they hire and the buildings the build or rent

Even though, there is no reliable source hard currency in the country, the breakdown of

light industries can increase the trade imbalance of the country.

1.3 Purposes of the Paper

The main objectives of this study are as follows:

To highlight the nature of small-scale industries

To discover the causes of constraints.

To know the role of the government to the small-scale industries.

To study number of employees of small-scale industries.

To study the skill of employees of small –scale industries

To study the investment policy in Somaliland.

To study the market competition in small-scale industries

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To study economic impact of small-scale industries.

In this my paper, I will examine the constraints of small-scale industries in Somaliland

and impact of the nations economic as whole and the consequences of the problems

associated with the breakdown of light industries in the country.

1.4 Structure of the PaperThe paper contains five chapters, which are as follow.

Chapter one highlights introduction of the paper, background to the overall

project, the statement of the problem, the aim of the research and the structure of

the paper

Chapter two literature review ,combines the information of Small-Scale

industries, their background, development, constraints

Chapter three is the methodology which mentions important things like the

population, sampling, sample size, data collection methods, important

assumptions as well as limitations of the study

Chapter four is the analysis of the outcome of the study, the trend of responses

and the weight of the sample.

Chapter five draws conclusions and suggests recommendations based on its

findings.

Copyright © All Rights Reserved to Mohamoud Abdi Hassan (tiger)

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Chapter 2

Literature Review

2.1 Definition of Industry:

Industry is the segment of economy concerned with production of goods. Industry began

in its present form during the 1800s, aided by technological advances, and it has

continued to develop to this day. Many "developed" countries (The U.S., the UK, and

Canada) depend significantly on industry. Industries, the countries they reside in, and the

economies of those countries are interlinked in a complex web that may be hard to

understand at first glance.

Industry in the second sense became a key sector of production in European and North

American countries during the Industrial Revolution, which upset previous mercantile

and feudal economies through many successive rapid advances in technology, such as the

development of steam engines, power looms, and advances in large scale steel and coal

production. Industrial countries then assumed a capitalist economic policy. Railroads and

steam-powered ships began speedily establishing links with previously unreachable

world markets, enabling private companies to develop to then-unheard of size and wealth.

Manufacturing is a wealth producing sector in an economy. Following the Industrial

Revolution, perhaps a third of the world's economic output is derived from manufacturing

industries—more than agriculture's share.

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Small Scale Industries may sound small but actually plays a very important part in the

overall growth of an economy. Small Scale Industries can be characterized by the unique

feature of labor intensiveness. The importance of this industry increases manifold due to

the immense employment generating potential. The countries which are characterized by

acute unemployment problem especially put emphasis on the model of Small Scale

Industries.

Small scale industries can be characterized with the special feature of adopting the labor

intensive approach for commodity production. As these industries lack capital, so they

utilize the labor power for the production of goods. The main advantage of such a process

lies in the absorption of the surplus amount of labor in the economy that was not being

absorbed by the large and capital intensive industries. This, in turn, helps the system in

scaling down the extent of unemployment as well as poverty.

It has been empirically proved all over the world that Small Scale Industries are adept in

distributing national income in more efficient and equitable manner among the various

participants in the process of good production than their medium or larger counterparts.

Small Scale Industries help the economy in promoting balanced development of

industries across all the regions of the economy. This industry helps the various sections

of the society to hone their skills required for entrepreneurship. Small Scale Industries act

as an essential medium for the efficient utilization of the skills as well as resources

available locally

2.2 Types of industries

There are two main types of industries which are:

I. Large-scale industry in general, heavy industry is viewed as more capital

intensive, as requiring a larger fixed facility, and as having a larger environmental

impact than light industry. Heavy industry can be also understood as that which

produces products for other industries instead of end users. For example, steel

mills or chemical plants are good examples of heavy industry facilities.

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II. Small-scale industry is usually less capital intensive than heavy industry, and is

more consumer-oriented than business-oriented (i.e., most of light industry

products are produced for end users rather than as intermediates for use by other

industries). Light industry facilities typically have less environmental impact than

those associated with heavy industry, and zoning laws are more likely permit light

industry near residential areas.11

2.2.1 Large Scale and Small Scale Production Compared

Modern times have witnessed a wonderfully rapid growth in the average size of the

individual business. Indeed, the change in the size of the business unit during the past

half-century is almost as striking as the change from house industry to factory industry in

the second half of the eighteenth century. The movement has gone so far and is still

proceeding so rapidly as to excite very general fear as to its social consequences. Certain

dangers resulting from the consolidation of large competing corporations will be

discussed elsewhere. But it is pertinent at this point, in connection with the subject of the

organization of production, to advert briefly to the advantages claimed for large scale

production and to the compensating advantages enjoyed by small scale producers.

Advantages of Large Scale Production. The advantages claimed for production on a

large scale resolve themselves into two general classes: (1) economies in making the

goods, and (2) economies in marketing the goods. As to the first, it is claimed that in

production on a large scale there is a saving in (a) capital cost, per unit of product, both in

fixed and in circulating capital; in (5) labor cost, owing to the possibility of more efficient

organization ; in (c) the possibility of making improvements, both through the

employment of special investigators and inventors, and through the comparison of

methods in different departments of the same factory or in the same departments of

different factories under the same ownership; in (d) the cost of superintendence; in (e) the

utilization of waste, as is instanced by the Standard Oil Company and the large beef and

pork packing companies; in (f) providing their own aids to making and marketing making

1 Small industrial development organization (Sido) Article news

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their own cans, boxes, etc., and owning railways and steamship lines, etc. In businesses

enjoying this last advantage, we sss

Among the second class of advantages claimed for large scale production, economies in

marketing the goods, are the following: (a) economy in securing trade, through

advertising and commercial travelers; (6) economy in "carrying " stocks of goods, a

relatively smaller stock being sufficient to meet the fluctuations in demand; (c) economy

in getting goods to consumers, through the power to secure better freight rates for large

shipments, and through the power possessed by some concerns to avoid "cross freights";

(d) economy in securing a foreign market, through the greater power of the large concern

to withstand the cutthroat competition common in "hard times."

The Strong Points of Small Scale Production. Against these alleged advantages of large

scale production may be set the following considerations which seem to promise a

continuation of a considerable measure of small scale production, at least in certain lines

of industry: (a) First of all, it is claimed by experts that in many lines of business a plant

of moderate size is the plant of really maximum efficiency in regard to capital and labor

costs. (6) In many cases the advantage of the large scale business in the matter of

concentration of power is neutralized by the fact that modern invention, especially in

connection with electricity, is revolutionizing the methods of distribution of power,

putting the small manufacturer on a level with his greater rival, (c) It is, furthermore, very

doubtful whether large scale producers can secure that minute and economical

supervision which characterizes small scale industry ; whether, in other words, hired

managers can compete in this regard with individual entrepreneurs who will reap all

gains as they bear all risks. (d) The small producer has a distinct advantage in his greater

power to know the personal wants of his market. In many industries the personal element

plays so large a part that the small producer will for a long time be able to hold his own,

even if he cannot oust the large producer from the field. Finally, by cooperation of

neighboring small producers, it is possible to secure much the same opportunities as to

(e) invention and improvement of processes and (f) utilization of " waste " that we have

spoken of as regularly inhering in large scale industry.2

2 www.Economywatch.com/worldindustreis.com

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It must be borne in mind that our comparison has been between small scale and large

scale production, not between small scale production and monopolized production.

Monopolized production is usually, though by no means always, production on a large

scale. But production on a large scale is not at all the same thing as monopolized

production. Had we been speaking of the production of monopolized goods, it would

have been possible to add many to the list of alleged advantages or economies in

production, and some of the advantages of which we have spoken would in the case of a

monopoly have been much more marked and undisputed. Thus in the matter of "cross

freights" and again in the case of advertising, many would admit advantages in the case

of a monopoly who would deny that they accrue simply to large scale production.

2.3 Industrial Revolution

The Industrial Revolution was a major shift of technological, socioeconomic, and cultural

conditions in the mid 18th century and early 19th century. It began in Britain and spread

throughout the world. During that time, an economy based on manual labor was replaced

by one dominated by industry and the manufacture of machinery. It began with the

mechanization of the textile industries, the development of iron-making techniques and

the increased use of refined coal. Trade expansion was enabled by the introduction of

canals, improved roads and railways. The introduction of steam power (fuelled primarily

by coal) and powered machinery (mainly in textile manufacturing) underpinned the

dramatic increases in production capacity. The development of all-metal machine tools in

the first two decades of the 19th century facilitated the manufacture of more production

machines for manufacturing in other industries.3

The effects spread throughout Western Europe and North America during the 19th

century, eventually affecting most of the world. The impact of this change on society was

enormous.

3http://www.wikipedia.org

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The first Industrial Revolution merged into the Second Industrial Revolution around

1850, when technological and economic progress gained momentum with the

development of steam-powered ships, railways, and later in the nineteenth century with

the internal combustion engine and electrical power generation.

Industrial and society

An industrial society can be defined in many ways. Today, industry is an important part

of most societies and nations.

A government must have some kind of industrial policy, regulating industrial placement,

industrial pollution, financing and industrial labor.

Industrial labor

In an industrial society, industry employs a major part of the population. This occurs

typically in the manufacturing sector. A labor union is an organization of workers who

have banded together to achieve common goals in key areas such as wages, hours, and

working conditions, forming a cartel of labor. The trade union, through its leadership,

bargains with the employer on behalf of union members and negotiates labor contracts

with employers.

2.4 The objectives of industrial development in the current development

1. Consolidation and maximization of efficiency and profitability of the existing

large enterprises in the public sector.

2. Creation of new public sector industrial units in fields vital to the national

economy.

3. Encouragement of foreign capital participation in setting up new projects in

public or private sector or through join ventures.

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4. Encouragement and development of the private sector to enable it to grow and

contribute to industrial growth.

5. Laying down appropriate principles of concentration and dispersion in location of

new projects.

6. Consolidation and regrouping of small-scale industrial units and handicrafts into

viable economic size in the form cooperation of support more sophisticated

industrial development.

7. Continuous survey of industrial opportunities and preparation of feasibility

studies for future industrial development of the country.

2.5 Favorable factors enhancing the economic development of small-scale

industries

1. The economic development of small-scale industries was heavily influenced by

seasonal factors. Since the second quarter, the small-scale industrial enterprises had

entered into the production busy season, thus lots of small private businesses stopping

production out of the influence of seasonal factors had restored their production.

2. As people’s living standard got enhanced step by step, the consuming demand was

enlarged unceasingly, thus industries closely related with people’s daily life such as food

processing and bean products processing were with an obvious growth tendency.

Therefore, enterprises and individuals involving in them all had achieved good

production benefits.

3. In the second quarter, the construction material industry entered into the production

and marketing busy season. The construction material production and other relevant

industries developed with a high speed. Lots of construction material industries such as

the cement and its relevant products, prefabricated parts, brick and tile manufacture, sand

mining developed well.

4. The manufacture enterprises such as wood processing, furniture manufacture, door and

window manufacturing and general-purpose equipment/universal equipment maintained

sound development momentum, including the manufacturing such as mechanical

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workout, pressing and handcrafts as well as individual industrial sectors such as the wood

material processing, wood, bamboo, and cane and palm fiber processing sectors.4

2.6 Micro Finance and Small-Scale industries

Small-scale enterprises plant, purchase and process inputs, innovate, improve their

productivity and modernize constantly. Their financial needs involve various

microfinance services: short-term loans to finance inputs such as fertilizers and labour,

storage and processing of products; medium- and long-term loans, equity finance and

leasing for equipment and seedlings; savings to smoothen consumption and uneven cash

flows, and to build assets to cover investment needs; insurance to protect their crops and

insure loan repayment; and payment services. Most small-scale enterprises operate their

forest-based activities jointly with other processing, service or agricultural activities, so

they seldom occur as separate enterprises.

Limited access to microfinance services is a constraint to the development of small-scale

enterprises. The riskier nature of their activities and the fact that they are generally located in

areas of remote access make it particularly challenging and costly for microfinance institutions to

reach out to them. Nonetheless, governments should restrain themselves from imposing ceilings

on interest rates that limit the ability of microfinance institutions to attain viability and provide

permanent access to their services to an increasing number of households. Subsidized targeted

credit programs, most often beset by poor loan collection rates, undermine the development of

sustainable microfinance and distort the market. Rural institutions should not be forced to provide

substandard financing products for smaller enterprises or to risk worsening their portfolio quality

by imposing mandatory forest lending quotas. Sound financial procedures, cost-recovering rates

and management autonomy of microfinance institutions should be respected.

Several government interventions can help microfinance services reach small-scale enterprises.

These include establishing a policy framework and financial infrastructure conducive to

microfinance, providing business development and market infrastructure in support of

production, strengthening the economic potential of small enterprises and enhancing the capacity

of microfinance institutions to serve them.

4 www.scripd.com/small-scaleidustries.com/economywatch.com

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2.7 Somaliland Industrial Revolution

When the industrial revolution began in Europe, they were much a like the recent

Africans. The European people were a primitive, a poor communities and un employed.

But eighteen century when the revolutionary exploded in Europe, they quickly their week

economy, began to develop their countries and elect the selves as super power nation.

All this changes come after they build industries and these industries contributed much to

their economics. After that time many nations flew the foot steps of European countries

they began industrialize their countries and this idea brought them sensible development.

In Somaliland, the revolution of industrialization began in the latest years of twenty

century and now Somaliland is the first face of the introduction of industrialization.

Majority of the industries have been established in the capital city of Hargiesa, but few

and important ones are togdher region (burco). The most of industries are light industries

in weight but they have variety of product which is sufficient in local market. These

home made products are foam, plastic, leather, juice, fiberglass, meat, chalk, bottled

water and etc

2.8 Somaliland Current Industries

Since the beginning of the peaceful years in Somaliland, forty two industries hwere

established in Somaliland as registers Somaliland industries association, mainly invested

by Somaliland’s Diaspora and local business people, most of these industries are light

industries, only two industries can be considered as heavy industries, Ileys detergent and

Hargeisa wheat flour are those who are heavy industries.5

In the beginning period of establishing industries in Somaliland a lot of problems has

faced from the government, the importers and the local people which prefer local

products to the foreign product.

5 Source: Somaliland Industry Association

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2.8.1 Somaliland Small-Scale industries

About 95% of Somaliland industries are Small-Scale industries, these industries produces

products related to human needs like, drinks, bakery, sweets, shoes, meat and fish. The

Small-Scale industries in Somaliland are nearly successful, although there are industries

which fully dominated the market like the foam manufacturing industries and spring

water factories.

2.7.2 Importance of Small-Scale industries

The role of Small-Scale industries development of a country can play an important role in

the process of a country’s industrial and economic development. In particular, small and

medium scale industries (SMIs) can make significant contribution to achieve social and

economic objectives such as; labor absorption, income distribution, rural development,

poverty eradication and balanced economic growth

Industries in Somaliland are mostly small sized industries which can provide their

products to Somaliland and rarely in the neighboring countries, but there are two heavy

industries which are so important to Somaliland and can offer hundreds of jobs to local

employees.

Ileys detergent, this industry was established march 2006 in Burao, it is the first of it’s

kind to be build in Somaliland, hundreds of investors joined to build this industry, about

10 million US dollars were spend during the commissioning. According their

productivity this industry can produce 120 tons of detergent daily if it works fully, bur

now it produces 60 tons of detergent.

This industry can provide 70% of it’s products to the neighboring markets in Ethiopia,

Somalia and Djibouti, but this industries faced a marketing problem which is still going

on, because a same products are still importing from Yemen and the government of

Somaliland does put a higher tax rate on the foreign products, this foreign product can

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breakdown the productivity of the local industries, other problem is joining markets in

neighboring countries like Somalia which a chaotic area and Ethiopia which did not open

the doors of its market to Somaliland products.6

The other important industry is Hargeisa wheat flour, and participated the rich market of

its products in Somaliland, it provided a good quality product to the market, but this

industry existed a short period due to a challenges and other problems which led the

breakdown of its production and finally moved to Ethiopia where it get a facilities which

they can’t get in Somaliland

These and other industries can change the employment condition of Somaliland and save

a hard currency if they successfully run and get their facilities.

Industrial and society

An industrial society can be defined in many ways. Today, industry is an important part

of most societies and nations.

A government must have some kind of industrial policy, regulating industrial placement,

industrial pollution, financing and industrial labor.

Industrial labor

In an industrial society, industry employs a major part of the population. This occurs

typically in the manufacturing sector. A labor union is an organization of workers who

have banded together to achieve common goals in key areas such as wages, hours, and

working conditions, forming a cartel of labor. The trade union, through its leadership,

bargains with the employer on behalf of union members and negotiates labor contracts

with employers.

Somaliland industrial production

6 Source: Somaliland Industry Association

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Somaliland industry has been fully influenced by the socio culture. The mentality of

pastoralists is always there it is not also far from other cultural influences.

First of all the industry is established without feasibility study. The technology is not

selected by the establishing members spares/ Raw material supply assurance needs

acceptable competitive price is not there selection of site for suitability and cost price

reduction is not there. They did not take any consultancy for the establishment of that

industry besides this there is no legally well dedicated memorandum and articles of

association as well as internal regulations as an regulatory France work, control and

smooth functionary of the entity in a transparent and accountable manner what also is

missing is the base of production which is totally unknown in this country culturally

including maintenance and over handing strategies.

This sector is the base of the success of any productive entity, economically, politically,

and administratively to be in concise. The majority of those in the industry lack

The know of the sector even the area they are in for business.

The technology and markets involved

The management and its evaluation and control

The lack of the strategy of planning marketing that needs to be based locally,

regionally and globally.7

All these factors and many others make the industrial production in Somaliland a burden

and un successful.

The public sector of the development of an industry for certain political reason for

example; to produce affordable production for its local population or to produce high

quality immersive production for export to carry a hard currency where have mainly the

raw material is ever 70% local to introduce certain technology in the country for the

welfare of its people.

The many factors and critters for establishment of an industry we are not courage able .

Adequate knowledge of industrialization is ministry.

7 Source: UNITED NATIONI IDUSTRIAL DEVELOPMENT ORGANISATION (article)

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

Human resource are 97% not available and even are not viable to be prepared

for the coming future needs.

Financial reasoning there are no investment and commercial bank in

Somaliland that an industry is dependant to in any country.

Poor and weak purchasing power where 10% of the local population are living

less then 2 US per family per day, there fore low consumption.

Lack of foreign market penetration due to market conservation of the

developed countries though certain products we allowed under trade

agreement term between governments specially developed and

underdeveloped.

Active Small-Scale industries in Somaliland1. Togdheer Mineral Water

2. Saafi Minerla Water

3. Hargeisa Spring Water

4. Ilays Detergent Industry

5. Hargeisa Plastic factory

6. All Khayraad Foam Factory

7. Foster Sam Sam Factory

8. BerrBara Tanney

9. Hargeisa Food and Beverage Industry

10. Raaho Foam Factory

11. Safa Food Factory

12. Gamuur Fiber Class Factory

13. jerinimo Factory

14. Golis Water Factory

15. Shifo Bure Natural Recourse

16. Hides and Skin Factory

17. Shamis Mineral Water

18. Togdher Union Electric

19. AllBaraka Natural Water

20. Hoodo Plastic Factory

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

21. Xareeda Mineral Water

22. Nadalo Food Processing Factory

23. Almis Conventional

24. United Basic Industries

25. Afgal Food Industry

26. Shaam Food Factory

27. Batuun Leather Taning

28. BerBera Fisher Glass

29. DurDur Factory

30. SaxanSaxo Factory

31. Indhadeero Soap Industry

32. Ilays Elecric Industry

33. Som/tires Factory

34. Marble Granite Factory

2.8.3 Failed industries in Somaliland

The failed industries of Somaliland or those who stopped work are much higher than

those who are currently working, about 61% of all industries in Somaliland have failed or

nearly failed and not working other 39% are only current working.

Those industries are failed or stopped working.

1- Hamdi shoes factory

2- Hargeisa sweets factory

3- Raasamal roofing and tiles

4- Nails factory

5- Lasqoray fish canning

6- Hargeisa oxygen factory

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

7- Nikol fish processing factory

8- Gummite marine products

9- Haybe edible oil

10- Emulsion and paints factory

2.8.4 Causes of failure in industries

There are many possible cause of failure at the sides of the government, importers and

consumers. The impact of industry failure can cause damage businesses, and its

consequence can affect the future investment of the industrial sector.

Here are the main factors that cause the failure of small-scale industries:

1. Lack of fund and difficulties in financing.

Lack of fund and difficulties in financing had become the main development constraint

factors for most enterprises. There were several key reasons that caused difficulty in

financing: First, the medium and small scale enterprises were usually with small size and

low credibility; secondly, lack of loans providers, specially, for those privately-owned

small industrial and commercial businesses. 8

2. Shortage of skilled labor

The labor is the most important factor of production so it has its consideration and

importance.

For this reason its availability is simple in Somaliland for this time, but the question is,

are they the right ones those fit the production lines?

In Somaliland the skilled labor is limited because of the civil wars, the vocational schools

either destroyed or not functioning properly.

8 International Labor Organization (news artcle)

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

Although there is unemployment in the country the greatest problem is due to shortage of

skilled labor that sabotaged the economic growth of society which in turn has a bad effect

the wellbeing of the citizens.

3. Lack of information and blindness in investment

Generally speaking, the small-scale industrial enterprises were with small production

scale and dispersive location as well as lacking a consummate information exchange

platform. The information occlusion made some enterprises pursue the market trend

blindly and lacked rationality in their investment, which led to the lack of market

competence and the development potential.

4. Shortage of Technological Development

There are several branches of technology and engineering specialized for industrial

application. This includes mathematical models; patented inventions and craft skill see

automation industrial architecture industrial design, industrial process, industrial arts and

industrial applicability, all of these technological development they are not exist in 9Somaliland.

5. Absence of banking role

Absence of banking system in Somaliland in of the causes of obstacles most of the

surveyed industries are complaining about the deficiency of effective banking system in

Somaliland. For example a result show that lack of banking system is 30% of major

impediments facing small-scale industries in Somaliland. Therefore the banking role is

can play a major role of failing industries and also succeeding industries, as the

respondents indicated 20% of them states that insufficient capital is cause of the failure of

industries, so if effective banking system is available in Somaliland they would give

loans to avoid capital shortage

9 Case Study of student-online electronic books

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

Chapter three

Methodology3.1 Date Collection Methods

The Research methodology that was used to accomplish this paper

was interviews which was gathered from people well-informed about

the failure of industries, the tool was questionnaire which was

developed to gather information from randomly selected population

The primary data are the results of the interviews and questionnaires.

The secondary data are the current information about the definition of

small-scale industries and their development and constraints, its

related literature review.

3.2 Sampling

The subjects of this research are small-scale industries based

Hargeisa, in this study I selected sample ten industry owners and

managers mostly faced decline and growth situation of their business

as probability and non-probability convenience sampling. These

industrialists will respond to survey questionnaires distributed. These

survey questionnaires are closed-ended questions asking about

impeding factors for their industries. In this study the

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

3.3 Limitation of study

Limitation of the study can be from different source. For example the

written scarcity of written document about “Literature Review” the

industries of Somaliland has became limitation to my research. Due to

this limitation and other constraint, this paper several other

limitations. Another limitation is, most of the interviewed were

reluctant to share information.

3.4 Limitations of the Data Study 

As we know, every research has its limitations that do not allow the researcher to perform

the research as accurately as needed, like other studies, the research limitations are the

following:

i      Distributing and collecting data

ii      Taking regular courses of university

iii      Time

vi     Cost

The major limitations of this research paper were cost, time and collecting data.

 

Time

 The time of this research paper was short and it is possible to have much time as well as  

resources to conduct enough as needed in the. The people involved when doing the

research were sensitive to this investigation of research.

 

   Cost

Cost was also a inevitable limitation that faced to this research because of the various

stages of the study. It needed same costly items including out relevant information from

the written books, electronic communications, printing the research paper and

photocopying of the preparing of this paper.

 

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

 

Difficulty in collecting Data Another main limitation which is associated with this research paper was the difficult of   

the research like questionnaire and performing the analyze.

Same of the organization, I distributing the questionnaire have different departments and

section and I found it difficult and confused which section is fit for the questioner to be

handed and this has lost more extra cost and time.

  The most problems that I met during the contributions of the questionnaire and

collecting data  were, the managers of the companies or human resource department

could not be seen first and it was also difficult to collect easily or quickly because very

manager was busy and did not try to respond as soon as you. Some times some of the

managers lost the questionnaire papers.

 The greatest problem that I met was lack of technical equipment like computer and

printer.

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FIGURE 1

10%

60%

30%

20 - 35 36-50 above 50

Somaliland Small-Scale Industries Development And Constraints {June 2009}

Chapter FourData Presentation and Analysis

This chapter shows the analysis of the research paper; it interprets the data contained by

the questionnaire, which was the primary data of the research.

The questionnaire contained about twenty-two questions, which we will analyze each one

to provide a detailed analysis about the information gathered.

The first question was about ages of the owner of the companies

the research has found that ages of 10% the managers of small scale industries is

between 20 – 25 years old, while 60% of the of them aged 36 -50 years old, and finally

30% of the managers interviewed aged above 50 years. This means that most of

managers aged 36 – 50 years.

See figure 1

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Page 27: Thesis Paper Updated June 2009

0%

40%

40%

10%

10%

elemantary

secondary

Bachelor

Master & PhD

Others

Somaliland Small-Scale Industries Development And Constraints {June 2009}

The second question was about the gender of managers.

The study has found that 90% of the total respondents were males while 10% were

females. This means most of managers of small scale industries are male because it’s a

hard job, it needs many hours to be worked.

See figure 2

FIGURE 210%

90%

male

female

The third question was about the educational qualification of the managers.

The study has found there were no managers in which their educational qualification is

Elementary, while 40% of the respondents were Secondary school graduates, at the same

time 40% of the respondents were Bachelor degree holders, while 10% were Master &

PhD holders, finally another 10% of the respondents indicated Others, including technical

institute, mechanical, etc.

For further clarification please look figure 3

The fourth question was about the kind of the organization.

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

The study has discovered that 20% of the organizations interviewed were service

industries, there were no merchandizing industries, 70% of the industries interviewed

were manufacturing industries, finally 10% of the industries matched all categories

including service, and manufacturing. This shows us that the small scale manufacturing

industries are increasing in our country. See figure 4

20%0%

70%

10%

0%

50%

100%

Service Marchendising manufacturing All

FIGURE 4

The Fifth question was about the legal organization of the industry.

The study has found out that 20% of the respondents were sole proprietorship industries,

while 70% of the respondents were partnership industries, finally 10% of the respondents

indicated that the legal type of their industries is corporation, this means that the most of

small scale industries in our country are partnership which means many shareholders

formed it. See figure 5.

FIGURE 570%

0%10%

20%

Sole propriator Partnership Corporation Others

The Sixth question was about number of employees work in this small-scale

industries in the country.

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Page 29: Thesis Paper Updated June 2009

FIGURE 7

30%

55%

15%

Invididualowners

Patrners

Hiredmanagers

Invididual owners Patrners Hired managers

Somaliland Small-Scale Industries Development And Constraints {June 2009}

The study has shown that 40% of the respondents described that 10 – 20 employees work

their industries, while 30% of the respondents showed that 21 – 30 employees work their

industries and finally 30% of the respondents indicated that more than 30 employees

work their industries permanently. This shows us that small size of labor force work in

the industries in our country, some of the managers indicated that they can increase the

number of employees work in their industries but the main constraint is lack of enough

investment, and that is why they can’t fully utilize their resources. See the table below.

Q # Question Choice Frequency Percentage6 Number of Employee works in your

industry 10 – 20 4 40%

21 – 30 3 30%

Above 30 3 30%

Total

The seventh question was about who manages the industry.

The study has found out that 15% of the respondents is managed by hired managers,

while 55% of the respondents showed that partners manage their industries and finally

30% of the respondents expressed that individual owners manager their own industries.

This shows us that small scale industries in our country needs to hire expert managers

who can lead more profits and can survive the company many obstacles which can result

to bankruptcy.

Lack of hired expert managers is one the main obstacles which led many small scale

industries opened in our country to shutdown after very short period.

See figure 7

The Eight question was about who manages the industry.

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

The study has found out that 30% of the respondents started their industries with limited

capital between $10,000 - $20,000, while 60% of the respondents started their industries

with an amount of capital between $20,000 - $30,000, finally 10% of the respondents

mentioned that they initial capital was estimated amount of money between $40,000 -

$50,000 dollars. The study has clarified one big constraint which emerges when investing

small industry and it is very limited initial capital, because if they were having more

capital, they could invest bigger industry. See this table.

Q # Question Choice Frequency Percentage8 Your Initial Capital was $10,000 - $20,000 3 30%

$20,000 - 30, 000 6 60%

$ 40,000 - $50, 000 1 10%

Total

The Nine questions were about does your organization get any Support from the government at the initial time?

The study has found out that 90% of the respondents indicated that they didn’t get any

support from the government of Somaliland, one the managers described that the

government it self is an obstacle for their industries because we import essential inputs so

the government allows not to impose a tax for the first five years of the industry’s life,

but should be very good if they make it free of charge in order to produce cheap products,

but when they impose it a tax, the finished goods we produce becomes higher than the

foreign goods, the government didn’t restrict the traders who import the products in

which our industries produces, and that results hazardous challenges which finally results

the bankruptcy of the local industries. In the other hand 10% of the respondents

mentioned that they receive supports from the government include, free registration of

the government, low cost trading license, sometimes they receive land to build the

industry. Most of the managers described that they need more support than the current

from the government.

The tenth question was about your yearly Income is estimated to be?

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FIGURE-11

10%

60%

30%Local

Abroad

Both

Somaliland Small-Scale Industries Development And Constraints {June 2009}

Q # Question Choice Frequency Percentage10 Your yearly income $10,000 - $20,000 7 70%

$20,000 - 30, 000 2 20%

Above- $50, 000 1 10%

Total

The study has discovered that 70% of the respondents earn an estimated yearly income

between $10,000 - $20,000, while 20% of them mentioned an average income of

$20,000 - $30,000, and finally 10% of the respondents described that yearly income they

receive is above $50,000. this question has discovered the yearly income or the revenue

in which small industries generate whole the year is too low, this point resulted that most

of the wealthy people in Somaliland discourage investing small-scale industries.

The eleventh question was about where do you obtain the raw materials used for production?The study has discovered that 10% of the respondents indicated that they receive their

raw materials in Somaliland, while 60% of them indicated that they import the raw

materials they use from abroad, finally 30% of them mentioned that they receive the raw

materials they use from both domestic and foreign markets. See figure 11

The twelve questions were about, If the raw materials are not available in the Somaliland, do you think it is an obstacle to your production?

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

The study has discovered that 90% of the respondents mentioned that it is big obstacle

since the raw materials their industries uses is not available in Somaliland, while 10% of

them indicated that they mentioned that it is not big threat if they didn’t find raw

materials in the country. This result shows us that one of the biggest challenges which

faces the small-scale industries is lacking raw materials in the country, because they

import raw materials, it costs higher cost which results to produce high price finished

goods, then the people prefer to buy foreign products instead of locally produced

products, because consumers always mention since there is no difference in the cost of

the two products, the imported foreign products are better than domestically produces

ones, so will prefer the foreign products, finally this increases the possibility of

bankruptcy. See figure 12

The thirteenth question regarding your Industry’s product, how many competitors do you face in your markets?

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90

10

0

20

40

60

80

100

Yes No

FIGURE-9

Yes

No

FIGURE 12

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FIGURE-14

40%

20%

10%

30%

0%5%

10%15%20%25%30%35%40%45%

Leader Follower Challenger Niche

Leader

Follower

Challenger

Niche

Somaliland Small-Scale Industries Development And Constraints {June 2009}

The research has found out that all small-scale industries face competition in their

market, 20% of small-scale industries described that they face their market a number of

competitors which is less than 10, while 50% of the competitors indicated that they face

their market more than 10 competitors, finally 20% of respondents indicated that they

don’t know the number of competitors they share same market. This shows us that

establishing same small-scale industries which produces same produces is a big threat

which can contribute the bankruptcy of the small-scale industries. See figure 13.

FIGURE-13

50%

20%20%0%

No Competition Fewer than 10 More than 10 Don’t know

No Competition Fewer than 10

More than 10 Don’t know

The fourteenth question asked According to the existing competition, your organization is?

The study has ascertained that 30% of the respondents are competition leaders, while

40% of small-scale industries are followers, 20% of them are challengers, and finally

10% are niche which means they are struggling to stick their position. See figure 14

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

The Fifteenth question asked Current situation of industry:

The study showed that 35% of the small-scale industries are in critical condition which

means they are struggling to survive or we can simply say they are in Break Even Point,

no profit, they cover their variable cost only, while 5% of the small-scale industries are

stagnant, they didn’t make any improvement also didn’t decline, while 15% of them are

making a decline, they are not willing to exist the coming years, finally 45% of small-

scale industries are making growing, the most of this group are newly established

industries at the same they receive most of their inputs in the local with cheap price, some

of them are bottled water industries, bakeries, electricity etc. see figure 15.

FIGURE 15

5%

35%

15%

45%

Critical: Struggling tosurvive

Stagnant Decline Growth

The Sixteenth question was In general, interpretations of regulations affecting my firm are consistent and predictable.

The study has discovered 10% of the respondents fully agreed that interpretations of

regulations affecting their firms are consistent and predictable, while 20% of them also

agreed, in the other hand 30% disagreed that interpretations of regulations affect their

firms also another 40% of the respondents fully disagreed that interpretation of regulation

has an effect in their firms. See figure 16

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

FIGURE 16

30%

40%

20%

10%

Fully Agree Agree Disagree Fully Disagree

The Seventeenth question asked was the following regulations have been serious

barriers to run my Industry:

The Study has discovered that 20% of the respondents underlined when obtaining

business license is serious barrier to many new small-scale industries, 15% of the small-

scale industries highlighted that labor regulations is a serious threat to their industries,

40% of the respondents mentioned that taxation regulation from the government is a

serious threat to their industries and finally 30% of the respondents indicated that

National Trade Policy is a constraint to the existence of their industries.

Therefore the government should try to lighten these threats to survive many struggling

small-scale industries. See figure 17

FIGURE 17

Taxation regulations,

40%

National Trade Policy, 30%

Labor regulations,

15%

Business Licensing, 20%

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

The eighteenth question asked was the tax paid to government by your organization

is logical and affordable

The study has discovered that 10% of the small-scale industries fully agreed that it is

logic and affordable the tax they paid to the government, while 20% of them agreed that

it is somehow logic and affordable tax, while 30% of small-scale industries disagreed and

described that they couldn’t affordable to pay the tax they paid to the government,

another 40% of them fully disagreed that it is totally a burden and an obstacle the tax they

paid to the government. This shows us that the government has imposed a heavy tax on

small-scale industries; one of the managers sampled mentioned that the government

makes input tax, sales tax and also profit tax, he mentioned that it is unaffordable to pay

all these taxes since they generate small amount of revenue. See figure 18

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10%

20%

30%

40%

Fully agree Agree Disagree Fully disagree

FIGURE 18

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

The nineteenth question was Does your organization get any subsidiary from the

government?

The study has discovered that there is no single small-scale industry which gets any

subsidiary from the government at all; all small-scale industries sampled confirmed that

the government didn’t plan any amount of its budget to give the small-scale industries as

a subsidiary. They confirmed that if the government gives the small-scale industries a

subsidy, many investors would get an encouragement of investing small and medium

scale industries. See figure 19

FIGURE 19

0%

100%

0%

20%

40%

60%

80%

100%

120%

Yes No

Question Twentieth what are the obstacles that face your industry?

The study has discovered that 10% of the respondents mentioned that unskilled labor is

the biggest obstacle which faces their industries, while 15% of the respondents mentioned

the most hazardous obstacles which faces is lack of advanced technology, 20% of them

are suffering from lack of micro finance {capital mismanagement}, another 20% of them

are suffering competition of imported products, 10% of the respondents described that

they are suffering from insufficient capital, and finally 25% of the respondents underlined

that their biggest threat is the legal constraints.

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

This shows us that the small scale industries in our country is faced on many challenges

and threat which needs to be solved, because the above mentioned challenges weakened

their production and also caused the bankruptcy of many small scaled industries

previously opened in Somaliland, if it is not solved together, it will also result the many

other small-scale industries which operates now to close its doors. See figure 20

FIGURE 20

Competition of imported products,

20%

insufficient capital, 10%

Legal constraints, 25%

Unskilled labor, 10%

Lack of advanced technology, 15%

Lack of micro finance, 20%

Unskilled labor

Lack of advancedtechnology

Lack of microfinance

Competition ofimported products

insufficient capital

Legal constraints

The Twenty First was does the government of Somaliland is doing well to remove these barriers.

The study has confirmed that 30% of the respondents agreed that the government is doing

well to remove the barriers opposing the small-scale industries, while 70% of the

respondents disagreed that the government is not doing its best to remove the barriers

opposing them, one of the managers said “the government is completely unaware the

Challenges and opportunities of the government so how it can solve the constraints we

are suffering from, he mentioned that Ministry of Industries didn’t serve the interest and

the development of the small-scale industries”. See this information in graphically please

look at figure 21.

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

30%

70%

Agree Dis-Agree

FIGURE 21

Agree

Dis-Agree

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

CHAPTER FIVE

CONCLUSIONS AND RECOMMENDATIONS

5.1 Conclusion

1- At least ten of the selected small-scale industries were owned by group of Somaliland partners.

2- All the small-scale industries were supported by the Somaliland government through tax exemption for their row material product exported from the out side of the country.

3- All the small-scale industries had same challenges facing their operations and they are

Competition between local and foreign product Lack of good marketing Lack of good infrastructure Shortage of skilled labor Obstacles in exporting Lack of banking system Lack of micro finance 4- All the product of these small-scale industries were consumed locally ,but

recently some of the began or preparing to export5- Most of small-scale industries had visible contribution to the economy at side of

Employment, Exports, Rents, Tax, leases and private contribution and charity.6- All the small-scale industries had take part the contribution of the reconstruction

Absence of banking system in Somaliland is the main causes of failures. Most of the surveyed industries are complaining about the deficiency of effective banking system in Somaliland. For example a result show that lack of banking system is 30% of major impediments facing small-scale industries in Somaliland. Therefore the banking role is can play a major role of failing industries and also succeeding industries, as the respondents indicated 20% of them states that insufficient capital is cause of the failure of industries, so if effective banking system is available in Somaliland they would give loans to avoid capital shortage.

The skills of the labor is important, we can say unskillful labor have effected the industries as above mentioned factors affected, as the result of the respondent stated the unskilled labor affects the industries in someway

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

The research discovered small-scale industries are in critical condition which means they

are struggling to survive or we can simply say they are in Break Even Point, no profit,

they cover their variable cost only, while 5% of the small-scale industries are stagnant,

they didn’t make any improvement also didn’t decline, while 15% of them are making a

decline, they are not willing to exist the coming years, finally 45% of small-scale

industries are making growing, the most of this group are newly established industries at

the same they receive most of their inputs in the local with cheap price, some of them are

bottled water industries, bakeries, electricity etc. .

5-2RecommendationSuggestion of this research is made according to the supposed causes of industrial failure. To begin with, recommendations with to regard of failure of industries are presented in following points.

Many small-scale industries in Somaliland are established with inadequate finance which may result a decline of the industry. In order to protect failure caused by financial problem, loans from the banks and other credit institution can cover their need of sufficient capital.

Somaliland industries would like to provide their products in a reliable market, but the foreign product takes a big share of the market. Although Somaliland is free market economy. However, is too good to the for local product if the government interfere the foreign goods by imposing on a high taxes.

Small-scale Industries need skilled and effective labor which can produce a dependable product.

To improve the knowledge and skill of small-scale industries employees through variety of training.

Establish industrial zone for all Somaliland cities to create the government. Strengthening government coordination and small-scale industries. Government should reduce the tax

Finally the certainty of the local customers is important point. Many customers prefer the foreign manufactured goods instead of consuming local products.

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

Bibliography

1- Small industrial development organization (Sido) Article news2-www.Economywatch.com/worldindustreis.com3-http://www.wikipedia.org4- www.scripd.com/small-scaleidustries.com/economywatch.com5- Source: Somaliland Industry Association6- Source: Somaliland Industry Association7-Source: UNITED NATIONIIDUSTRIAL DEVELOPMENT ORGANISATION8-International Labor Organization (news articles)9-Case Study of student-online electronic books/wkipedia.org10. Gamuur Fiber Class industry 11.Foster SamSam12. All Khayraad Foam Factory

Copyright © All Rights Reserved to Mohamoud Abdi Hassan (tiger)

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

Appendix I

University of HargeisaThesis questionnaire

Cover letter

Dear respondent

I am attending the faculty of economic and political science at university of Hargeisa

for May final research paper, currently I am carrying out a survey to find out

“Somaliland Small-Scale Industries Development and Constraints”

We will strictly keep the confidentiality of your responses, only the researcher will access

it, the information you gave us will be generalized.

The survey would take you no longer than 15-20 minutes to complete. I would ask you to

complete every question and most questions can be answered with a tick, but there are

also opportunities for you to add your own comments.

Data collected in this survey is for academic purpose only. I sure you that your views

will be treated in the strictest confidence and no personal identifying information will be

passed back to your company.

Your response could be a significant contribution to my research findings.

Thank you in advance

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

MAHAMOUD ABDI HASSAN

Tel : 4422059

Email: [email protected] ,[email protected]

UNIVERSITY OF HARGEISA

QUESTIONNAIREResearch Topic: Somaliland Small-scale industries development and constraints

Survey Questionnaire

INSTRUCTIONS: Please answer all questions. For multiple choice questions please tick the box that corresponds with your response. For the remaining questions, please FILL IN the blanks as indicated. Enterprise information

Entrepreneur Name……………………………………………………………………1. Owner: 2 Age 20-35 36-50 above

50Gender Male

Female

Education Primary

Secondary

Bachelor

Masters & PHD Others

2. Kind of organization Service Merchandise

Manufacturer

3. What is the legal organization of this Industry? Sole proprietorship Partnership Corporation other

4. Number of Employees 10-20 21-30 above 30

5. Who manage your Industry?

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

Individual owner(s) partners Hired Managers

6. Your Initial Capital was? 10,000-20,000 20,000-30,000 30,000-40,000 above50,000

7. Does your organization get any Support from the government at the initial time?Yes No

8. Your yearly Income is estimated to be? Less than

5000 5000-10,000 11,000-50,000 above50,000

9. What kind of products does your industry produce?Consuming

goods Commercial

goodsIndustrial

goodsothers

10. Where do you obtain the raw materials used for production? Local Abroad Both

11. If the raw materials are not available in the Somaliland, do you think it is an obstacle to your production? Yes No

12. Regarding your Industry’s product, how many competitors do you face in your markets? No Competition More then 10 Fewer than 10 Don’t know

13. Current situation of industry: Critical: Struggle to

survive Consolidation

Decline Growth

14. According to the existing competition, Your organization is? Leader Challenger Follower Niche

15. In general, interpretations of regulations affecting my firm are consistent and predictable.

Fully agree Agree Disagree Fully disagree

16. The following regulations have been serious barriers to run my Industry: Taxation regulations National trade policy Labor regulations Business Licensing Other

17. The tax paid to government by your organization is logical and affordable Fully agree Agree Disagree Fully disagree

18. Does your organization get any subsidiary from the government?Yes No

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Somaliland Small-Scale Industries Development And Constraints {June 2009}

19. What are the obstacles that face your industry?Unskilled labor Competition of imported productsLack of advanced technology Insufficient Capitallack micro finances Legal constraints

20. The government of Somaliland is doing well to remove these barriers.Agree Disagree

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