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