By Troels Mahieu-Sorensen

Somalia’s economy is growing steadily, and its recent accession to the East African Community (EAC) marks a turning point for regional integration. Yet, for many Somali entrepreneurs, the reality remains complex.

A business owner in Hargeisa or Kismayo trying to export honey, sesame, or fish products must navigate multiple trade regimes — East Africa Community (EAC), Common Market for Eastern and Southern Africa (COMESA), Intergovernmental Authority on Development (IGAD), and the African Continental Free Trade Area (AfCFTA) — each with its own rules, taxes, and standards.

This policy incoherence is not just a bureaucratic problem; it’s a barrier to inclusion. When regional systems don’t align, women and youth-led SMEs are left behind.

That’s where UNDP comes in. Through its partnerships with the EAC, COMESA, IGAD, and the AfCFTA Secretariat, UNDP helps governments move from policy ambition to implementation — simplifying business regulations, harmonizing customs procedures, and building digital and financial infrastructure that allows Somali enterprises to trade more easily across borders.

Institutional Innovation in Action

Reform alone is not enough. We also need institutional innovation — new ways of organizing finance and partnerships. One such example is the Resilience Impact Fund for the Horn of Africa (RIFHA), a blended-finance mechanism developed by UNDP and One Earth Future/Shuraako Capital.

RIFHA is designed to de-risk private investment and crowd in capital for Somali, borderland and regional SMEs working in renewable energy, agribusiness, fisheries, water, waste management and climate resilience.
It’s not just a fund — it’s a new institution that connects governments, investors, and entrepreneurs in fragile markets. By combining loans, technical assistance, and impact measurement, RIFHA turns resilience into an investable proposition.

Together with partners like Qatar Airways, Visa Foundation, and national Chambers of Commerce, UNDP is helping Somali enterprises access markets, finance, and digital tools — enabling women and youth entrepreneurs to grow businesses that strengthen peace and prosperity.

Digital Transformation: Somalia’s Next Trade Corridor

In today’s economy, digital connectivity is the new trade route. Yet, across the Horn, four in ten people remain offline. Mobile-money platforms aren’t interoperable across borders, and many small traders still rely on paper-based systems.

UNDP is tackling this head-on through its Digital Public Infrastructure (DPI) work — helping governments digitize business registration, trade licensing, and customs procedures.

In Somalia, UNDP’s is exploring a collaboration with the Danish tech firm cBrain paving the way for a digital public administration model that could revolutionize how entrepreneurs register companies, pay taxes, and access public services.

Through the UNDP/IsDB Tadamon Crowdfunding Platform UNDP is also expanding access to online finance, while RIFHA’s digital dashboard helps investors track real-time impact across the region.

As I said during the panel, “It’s not about apps — it’s about agency. Digital tools give people the means to trade, to earn, to belong.”

From Projects to Systems: Financing Real Transformation

Despite unprecedented global wealth, too much development finance remains project-based, short-term, and fragmented. UNDP believes that to truly unlock Somalia’s potential, we need systemic change through partnerships — breaking institutional, sectoral, financial, and temporal silos so that capital can flow where it drives the greatest sustainable impact.

This means moving from financing projects to financing systems — aligning policies, institutions, and diverse forms of capital around shared goals such as inclusive trade, digital transformation, and resilience.

Looking Ahead

As Somalia deepens its integration into the East African and continental markets, the priority is clear:

• Harmonize trade rules and standards under the Free Trade Agreement, COMESA, EAC and IGAD with Somalian rules and standards.
• De-risk investment through blended-finance mechanisms like RIFHA and other UNDP Partnerships with financial institutions.
  Empower borderland institutions and SMEs to digitize trade and formalize informal markets.
• If we get this right, the borders that once divided markets will become corridors of opportunity — connecting communities, driving inclusion, and powering Africa’s collective brilliance.

UNDP Somalia remains committed to working with the Government, the private sector, and regional partners to create the enabling environment, financing architecture, and digital infrastructure needed for a resilient, inclusive, and prosperous Somalia.

When policies, people, and partnerships connect — transformation follows.

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The author is an UNDP advisor on Food, Resilience and Impact Investing. The article is an abridged version of the presentation delivered by the author at the Business Week Africa Summit 2025 — Nairobi Edition held on 21 October 2025 under the theme “Collective Brilliance: Transforming African Businesses through Strategic Collaboration.”