ECONOMIC DEVELOPMENT AND EMPLOYMENT GENERATION IN THE PRIVATE SECTOR IN MOGADISHU, SOMALIA

BY

ISSE FARAH HASSAN

MDS/39710/131/DF

A THESIS REPORT SUBMITTED TO THE COLLEGE OF RESEARCH AND

ifiGIIER DEGREES IN PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE AWARD OF THE DEGREE

OF MASTERS IN DEVELOPMENT STUDIES OF

KAMPALA INTERNATIONAL

UNIVERSITY

MAY, 2015 DECLARATION

I, Isse Farah Hassan, declare that this thesis report is my original work and has not been presented for a Degree or any other academic award in any university or institution of learning.

Signed Date APPROVAL

I confirm that the work in this thesis report was done by the candidate under my supervision.

______D—O 1 ~ Dr. Otanga R~Je Dat~ DEDICATION

I dedicate this piece of work to my brother, Mohamed, my sisters, Ayan and Nasteho, my beloved wife, Ms. Samira, my son, Abdisamad, and my daughter, Hanan.

iv ACKNOWLEDGEMENTS

My sincere gratitude is accorded to the Almighty God for the gift of life that He gave me throughout my studies.

I am deeply indebted to my research supervisor, Dr. Otanga Rusoke for his patience with my inadequacies as he guided me through the research. Without his parental and professional input, this research would have been difficult to elevate to its current level.

Furthermore, i acknowledge with gratitude the contributions and co-operation made by the respondents from the selected private institutions for their willingness to provide the necessary information when i visited their offices during the research process. Without their cooperation, this study would have been impossible to accomplish.

I also acknowledge the authors whose works have been referenced in this study.

I would like to deeply thank all my lecturers at the College of Higher Degrees and Research. They adequately guided and equipped me with both theoretical and practical skills. I would also like to acknowledge the contribution of my colleagues from whom i enjoyed fruitful discussions on challenging topics.

Last but not least, I acknowledge the contributions of my parents, siblings, relatives and friends for their emotional and financial support during the course of my studies.

V LIST OF ACRONYMS

EU European Union

GDI Gender Related Index

GDP Gross Domestic Product

HEI Higher Education Institute

SPSS Statistical Package for Social Scientists

TFG Transitional Federal Government

UN United Nations

UNDP United Nations Development Programme

US United States

vi TABLE OF CONTENT

DECLARATION APPROVAL DEDICATION iv ACKNOWLEDGEMENTS v LIST OF ACRONYMS vi LIST OF TABLES xi LIST OF FIGURES xii ABSTRACT CHAPTER ONE 1 INTRODUCTION 1 1.1 Background of the Study 1.1.1 Historical Background 1 1.1.2 Theoretical Perspective 3 1.1.3 Conceptual Perspective 4 1.1.4 Contextual Perspective 4 1.2 Problem Statement 5 1.3 Purpose of the Study 6 1.4 Research Objectives 6 1.5 Research Questions 6 1.6 Hypothesis 6 1.7 Scope of the Study 7 1.7.1 Geographical Scope 7 1.7.2 Theoretical Scope 7 1.7.3 Content Scope 7 1.7.4 Time Scope 7 1.8. Significance of the study 7 1.9 Operational Definition of Key Terms 8

VI I CHAPTER TWO .9 LITERATURE REVIEW 9 2.0 Introduction 9 2.1 Theoretical Review 9 2.2 Conceptual Framework 11 2.3 Review of Related Literature 12 2.3.1 Economic Development 12 2.3.1.1 The Transport Sector 12 2.3.1.2 The Telecommunication Sector 15 2.3.1.3 The Education Sector 17 2.3.2 Employment Generation 18 2.3.2.1 Recruitment of Workers 20 2.3.2.2 Development of New Businesses 21 2.3.2.3 Increase in Income 22 2.4 Related Studies 22 2.5 Gaps of Research 24 CHAPTER THREE 25 METHODOLOGY 25 3.0 Introduction 25 3.1 Research Design 25 3.2 Study Area 25 3.3 Research Population 25 3.3 Sample Size 26 3.4 Sampling Procedure 26 3.5 Data Collection Methods 27 3.5.1 Questionnaires 27 3.5.2 Interview Guides 27 3.5.3 Document Review 27 3.6 Validity and Reliability 27 3.6.1 Validity 27

VIII 3.6.2 Re1iabi~ity ~ 28 3.7 Data Collection Procedures 29 3.8 Data Analysis 29 3.9 Ethical Considerations 30 3.10 Limitation of the Study 30 CHAPTER FOUR 32 DATA PRESENTATION AND ANALYSIS OF RESULTS 32 4.0 Introduction 32 4.1 Demographic Characteristics of Respondents 32 4.2 The Nature of Economic Development in the Private Sector in Mogadishu, Somalia.. 34 4.3 Employment Generation within the Private Sector of Mogadishu, Somalia 38 4.4 The Relationship Between Economic Development and Employment Generation in the Private Sector in Mogadishu, Somalia 42 CHAPTER FIVE 45 DISCUSSION OF FINDINGS, CONCLUSION AND RECOMMENDATIONS 45 5.0 Introduction 45 5.1 Discussion of the Findings 45 5.1.1 Economic Development within the Private Sector of Mogadishu, Somalia 45 5.1.2 Employment Generation within the Private Sector of Mogadishu, Somalia 46 5.1.3 The Relationship Between Economic Development and Employment Generation in Mogadishu, Somalia 46 5.2 Conclusion 47 5.3 Recommendations 48 5.3.1 The Nature of Economic Development in Mogadishu, Somalia 48 5.3.2 The Level of Employment Generation in Mogadishu, Somalia 48 5.4 Areas for Further Studies 49 APPENDICES 54 APPENDIX I: TRANSMITTAL LETTER FOR THE RESPONDENTS 54 APPENDIX II: INFORMED CONSENT ss APPENDIX III: RESEARCH INSTRUMENTS 56

ix APPENDIX III A: QUESTIONNAIRES .56 APPENDIX III B: INTERVIEW GUIDE 61 APPENDIX IV: STUDY BUDGET 62 APPENDIX V: STUDY TIME FRAME 63 APPENDIX VI: SAMPLE SIZE TABLE 64

x LIST OF TABLES

Table Page 3.1 Target Population and Determination of Sample Size. 25 3.2 Cronbach’s Results. 27 4.1 Demographic Characteristics of the Respondents. 30 4.2 The Nature of Economic Development in the Private Sector in 32 Mogadishu, Somalia. 4.3 Employment Generation within the Private Sector of 37 Mogadishu, Somalia. 4.4 The Relationship Between Economic Development and 40 Employment Generation in the Private Sector In Mogadishu, Somalia. 4.5 Regression Model 1. 41 4.6 Regression Model 2. 41

xi LIST OF FIGURES

Figure Page

1.1 Conceptual framework 11

XII ABSTRACT

This study investigated on economic development and employment generation in the private sector in Mogadishu, Somalia. This study was guided by the following objectives: i) to determine the nature of economic development in the private sector in Mogadishu, Somalia; ii) to find out the level of employment generation within the private sector in Mogadishu, Somalia; and to establish the relationship between economic development and employment generation in the private sector in Mogadishu, Somalia. The study employed a cross-sectional survey design. A sample population of 140 respondents was determined using Krejcie and Morgan (1970) table from a target population of 240 respondents. Closed ended researched devised questionnaires was used as a data collection tool. The collected data was analyzed using Pearson correlation coefficiency to determine the relationship between economic development and employment generation.The study findings revealed a high level of economic development and employment generation in the private sector. This is the reason there was a significant correlation between economic development and employment generation. The study recommended that there is need for the government to design policies that favor the participation of the private sector in promoting government programmes such as building modern road networks and • improvement of communication with Somalia and that there is need for the private sector to increase the level of employee training through seminars, workshops, conferences, in services etc so as to create the necessary skills expected of employees for better work • quality and general organizational performance.

XI I CHAPTER ONE INTRODUCTION

Li Background of the Study 1.1.1 Historical Background Economic development originated in the post war period of reconstruction initiated by the US. in 1949, during his inaugural speech, President Harry Truman identified the development of undeveloped areas as a priority for the west: “More than half the people of the world are living in conditions approaching misery. Their food is inadequate, they are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas. For the first time in history humanity possesses the knowledge and the skill to relieve the suffering of these people ... I believe that we should make available to peace-loving peoples the benefits of our store of technical knowledge in order to help them realize their aspirations for a better life... What we envisage is a program of development based on the concepts of democratic fair dealing ... Greater production is the key to prosperity and peace. And the key to greater production is a wider and more vigorous application of modem scientific and technical knowledge (Vásquez, 2008, p. 120).”

In economics, the study of economic development was borne out of an extension to traditional economics that focused entirely on national product, or the aggregate output of goods and services. Economic development was concerned in the expansion of people’s entitlements and their corresponding capabilities, morbidity, nourishment, literacy, education, and other socio-economic indicators (Todaro and Smith, 2011). Borne out of the backdrop of Keynesian, advocating government intervention, and neoclassical economics, stressing reduced intervention, with rise of high-growth countries (Singapore, South Korea, Hong Kong) and planned governments (Argentina, Chile, Sudan, Uganda), economic development, more generally development economics, emerged amidst these mid-2Oth century theoretical interpretations of how economies prosper (Sen, 2012). Also, economist Albert 0. Hirschman, a major contributor to development economics, asserted

1 that economic development grew to concentrate on the poor regions of the world, primarily in Africa, Asia and Latin America yet on the outpouring of fundamental ideas and models (Hirschman, 2011).

Africa has experienced high and continuous economic growth in the past decade, prompting analysts to argue that the continent has reached a turning point in its development history and is poised to play a more significant role in the global economy in the twenty-first century. The average annual growth rate of real output increased from 1.8 per cent in the period 1980—1989 to 2.6 per cent in 1990—2000 and 5.3 per cent in the period 2000—2010. Furthermore, 12 countries had an average growth rate above the developing-country average of 6.1 per cent over the period 2000—2010, and two countries (Angola and Equatorial Guinea) had double-digit growth rates. Unlike in the 1980s and 1990s, Africa’s average growth rate since the turn of the millennium has also been higher than the average growth rate of the world economy. The continent experienced a significant slowdown in growth due to the global financial and economic crisis of 2008/2009 (Osakwe, 2010). However the above mentioned economic development can not be mentioned without noticing the impact of the private sector on the economy of African Countries.

In a market-based economy, private firms contribute to poverty reduction through many channels. They reduce income poverty when productivity rises, job opportunities increase, and competition for workers drives up wages. By producing essential goods and services in large-scale production, they can also help to keep the price of essential goods and services down, increasing the real effective incomes of poor people, a point underscored by the Commission on the Private Sector and Development (UNDP 2004). As firms grow, they provide a larger source of tax revenues to the government, which in turn supports increased public investments.

However Somalia’s economic development remains unrated due to a severe lack of reliable data caused by ongoing political instability. The last time Somalia was fully graded and ranked was in the 2000 Index when it received a score of only 27.8. Violence and political

2 unrest have prevented Somalia’s private sector from developing a coherent and coordinated domestic marketplace (heritage.org). The 2012 Human Development Report estimates Somalia’s per capita GDP at $284 - against a sub-Saharan Africa average of $1,300 per capita. Poverty incidence is 73% (61% in urban centers and 80% in rural areas). Private Sector Development of Somalia during and soon after conflict has gained increasing attention, given the important contribution of the private sector to peace building and state building as a stabilizing economic force and source of sustainable growth. Indeed, private sector plays a role not only in employment generation, but in governance and broader state-building. This study investigated the impact of the economic development on employment generation in the private sector in Mogadishu, Somalia.

1.1.2 Theoretical Perspective This study was guided by Keynesian (2008) theory of unemployment, which states that volume of employment depends on the level of national income and output. Increase in national income would mean increase in employment. The larger the national income the larger the employment level and vice versa. This theory was related to my study because it focuses on unemployment and the root causes of unemployment. The theory also examined the economic growth and how the level of national income and output of a country affects the volume of employment of that country.

Economy is a social organization created by human beings to meet hurnan needs and human welfare. Any theory which purports to represent sound economics must provide a viable means for all members of society to acquire at least the minimum level of purchasing power needed for survival, development and full enjoyment of their human potential. If economic systems based on current theory are unable to provide sufficient employment opportunities, it means either the prevailing theory or its application is deficient.

3 1.1.3 Conceptual Perspective Sheffrin (2003) defines economic development as the sustained, concerted actions of policy makers and communities that promote the standard of living and economic health of a specific area. According to Sen (2012), economic development refers to the quantitative and qualitative changes in the economy. Such acts can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, social inclusion, health, safety, literacy, and other initiatives. In this study economic development was measured using investment in the transport sector, telecommunication and education sector.

Employment generation refers to the act of creating job opportunities through different income generating activities. In this study employment generation was measured using recruitment of new employees, development of new businesses and increasing income.

1.1.4 Contextual Perspective

Even before the onslaught of its ruinous civil war, Somalia was very poor by any standard. Today, it is in a much worse situation, and the poverty and unemployment of its people have increased enormously. As a result of Somalia’s 16-year devastating civil war, and since the country has not yet witnessed any meaningful political stability or economic development, the unemployment situation in Somalia is especially, heart-wrenching. It is a war that, according to UN reports, has caused “a massive destruction to the private sector which is the greatest means of production and employment opportunities in the country (UN, 2012).” This deplorable unemployment situation is also believed to have been contributing, immensely, to the equally bad situation of the civil strife with the existence of thousands upon thousands of illiterate young men who have no any marketable skill, whatsoever, and who use their guns as the only means of livelihood. This is so, because in the opinion of some experts, Somalia’s internal conflict is essentially a fight over scarce resources (Hassan, 2010).

If real security, stability, and a modicum of law and order are to be restored to Somalia, whose economy has been almost totally destroyed, the leaders of the Transitional Federal

4 Government (TFG) have to step up to the plate and do their level best to tackle the severe unemployment situation which now prevails in the country. The steps they have lately been taking, with the support of the African Union peacekeeping forces, in terms of collecting all kinds of weapons and destroying them - and, thus, pacifying the capital city

(Mogadishu) which currently experiences the worst insecurity situation in the country - are very commendable and appropriate steps. However, they are not sufficient measures and they should be complemented by equally decisive steps in the economic sphere — particularly in addressing the acute unemployment crisis.

1.2 Problem Statement According to the World Bank’s (2014) latest reports, Somalia’s labor force is estimated at 4.6 million (or 56% of the country’s total population estimated at 8.2 million). This figure for labor force comprises 1.6 million in urban centers (or cities and towns) and 3.0 million in rural and nomadic areas. This labor force is estimated to grow at 3.1% per annum. Total employment for this Somali labor force, including paid employment, self-employment as well as unpaid economically productive household works among the economically active population is estimated at 39% for urban, 59% for rural and nomadic population and 53% for the country as a whole. In other words, the unemployment rate stands at 66% for the urban and 41% for rural and nomadic areas. This translates to a 47% unemployment rate for Somalia as a whole — one of the highest unemployment rates presently taking place in Sub-Sahara Africa (Abdi, 2014). Stated differently, almost half of Somalia’s population is now out of work. (Under normal conditions, if this rate reaches 10% in a country, it would be considered a big disaster). Here, it is not surprising that the unemployment rate is significantly higher in urban areas, because when Somalia had a functioning central government, the overwhelming majority of urban dwellers used to get paid employment opportunities from the various government institutions (i.e., the civil service, the police, the national army, etc.) and its autonomous public enterprises. At present, the economic entities operating in the country mainly consist of telecommunications (especially telephone) firms, money transfer entities (or hawalas), water/power distribution firms and petty traders. But these private sector entities are far from being able to absorb the ever

5 increasing unemployed or under-employed labor force, particularly young armed male. This study investigated the impact of economic development on employment generation in the private sector in Mogadishu, Somalia.

1.3 Purpose of the Study To establish the impact of economic development on employment generation in the private sector in Mogadishu, Somalia.

1.4 Research Objectives i. To determine the nature of economic development in the private sector in Mogadishu, Somalia. ii. To find out the level of employment generation within the private sector in Mogadishu, Somalia. iii. To establish the relationship between economic development and employment generation in the private sector in Mogadishu, Somalia.

1.5 Research Questions i. What is the nature of economic development in the private sector in Mogadishu, • Somalia? ii. What is the level of employment generation within the private sector in Mogadishu, Somalia? iii. What is the relationship between economic development and employment generation in the private sector in Mogadishu, Somalia?

1.6 Hypothesis

There is no significant relationship between economic development and employment generation in the private sector in Mogadishu, Somalia.

6 1.7 Scope of the Study 1.7.1 Geographical Scope This study was carried out in Mogadishu, Somalia among the private sector firms. Mogadishu is the capital city and central administration station for Somalia. The researcher preferred this study area because it is home to very many private organizations.

1.7.2 Theoretical Scope

This study was guided by Keynesian (2008) theory of unemployment, which states that volume of employment depends on the level of national income and output.

1.7.3 Content Scope

This study looked at the nature of economic development, employment generation and the relationship between economic development and employment generation in the private sector in Mogadishu, Somalia.

1.7.4 Time Scope

This study will cover a period of 5 months, that is from December 2014 to April 2015.

1.8. Significance of the study It is hoped that the results of this study will provide the government sector with important information that will help them to provide adequate investment environment for the private sector so that it can generate and create employment opportunities as much as possible.

The policy makers might find the results of this study helpful in designing policies that favor the private sector such as tax holidays, etc that will encourage them to invest and develop the economy of Somalia.

The civil society will also find the results of this study relevant to them since they will be able to attach value to the investment of the private sector where employments will be generated and economic development promoted in Somalia.

7 Future researchers might also find the findings of this study helpful for future reference in a related study area.

1.9 Operational Definition of Key Terms Economic development: refers to the improvement of the economic well being of a community through efforts such as investment in transport, telecommunication, and education.

Employment generation: refers to a condition in which job opportunities are created through recruitment of workers, development of new businesses and increase in income to yield quick impact to demonstrate progress and employment to the job seekers and a foundation is established for sustainable livelihoods.

Private sector: refers to part of economy not controlled by government.

8 CHAPTER TWO LITERATURE REVIEW

2.0 Introduction The following chapter elaborates the theoretical review; then illustrates the conceptual framework showing the interaction between the study variables and concludes with the review of related literature. The Literature review of this study is an important part that provides the reader and other people what other writers and researcher have said on the same study. It provides evidences and facts that support the study undertaken by the researcher.

2.1 Theoretical Review This study was guided by Keynesian (2008) theory of unemployment, which states that volume of employment depends on the level of national income and output. Increase in national income would mean increase in employment. The larger the national income the larger the employment level and vice versa. This theory was related to my study because it focuses on unemployment and the root causes of unemployment. The theory also examined the economic growth and how the level of national income and output of a country affects the volume of employment of that country.

Economy is a social organizatidn created by human beings to meet human needs and human welfare. Aiiy theory which purports to represent sound economics must provide a viable means for all members of society to acquire at least the minimum level of purchasing power needed for survival, development and full enjoyment of their human potential. If economic systems based on current theory are unable to provide sufficient employment opportunities, it means either the prevailing theory or its application is deficient.

A few centuries ago that vast majority of the world’s population lived on the land and eked out a subsistence level existence from their own physical labor. This is no longer the case. As Winston Nagan observed in his paper, society has become so structured and economy

9 so specialized that today the vast majority of human beings are dependent on employment outside the home for their survival and welfare (Winston, 2009). Government policies, laws and regulations permeate virtually every aspect of modern economic and social life, effectively determining what types of activity can and cannot be carried out and thereby directly or indirectly determining the number and type of employment opportunities available to the population. Principles of justice necessitate that a government which interferes with economic activity in order to protect the rights of some must ensure conditions that support the basic economic rights of all its citizens. Guaranteeing the right to employment is not only just and necessary; it is also the only effective way to ensure that employment opportunities are available to all citizens.

Identification of potential or proven employment generating strategies by itself may not be sufficient to bring about their rapid, widespread implementation around the world. Existing economic theory and conventional policy measures are deeply entrenched among academics and policy-makers.

Therefore, it is necessary to re-examine the underlying theoretical framework that supports prevailing practices to show that it is both incomplete and insufficient to fully address the employment problem. In a report to the Club of Rome, Orio Giarini and Patrick Liedtke document the insufficiencies in current employment theory (Gianini, Orio and Liedtke, 1997). It is equally necessthy to evolve a more comprehensive theoretical framework that reflects the true role of various parameters in the generation of new employment opportunities Mogadishu, Somalia.

10 2.2 Conceptual Framework Independent Variable Dependent Variablè~

Economic Development Employment Generation

o Investment in transport o Recruitment of workers

o investment in telecoms e Development of new businesses e Investment in education o Increase in income

Intervenin Variable

Government policies

o Political instability o Corrnption High level of poverty

Figure 1.1: Conceptual framework adopted from Onen (2005)

According to figure 1.1, economic development (independent variable) was measured using investment in transport, investment in telecommunication and investment in education while employment generation (dependent variable) was measured using recruitment of workers, development of new businesses, increase in income. The relationship between the two variables is that when the private sector invests in the transport, telecom and education sector, employments would have been generated. This is because new workers will be recruited, new businesses would have been created through such investments and the workers will also have their earnings increased through income increment. However government policies, political instability, high level of corruption among government officials and recurrent poverty among the community members can also im~7ede employment generation in a given locality. This study established that there was a significant level of influence of economic development on employment generation in Mogadishu, Somalia.

11 2.3 Review of Related Literature 2.3.1 Economic Development Economic development ideally refers to the sustained, concerted actions of communities and policymakers that improve the standard of living and economic health of a specific locality. The definition of economic development given by Todaro and Smith (2011) is an increase in living conditions, improvement of the citizens self-esteem needs and free and a just society. He suggests that the most accurate method of measuring economic development is the Human Development Index which takes into account the literacy rates & life expectancy which in-turn has an outright impact on productivity and could lead to Economic Growth. However, economic development can also be measured by taking into account the GDI (gender related index).

Economic development can also be referred to as the quantitative and qualitative changes in an existing economy. Economic development involves development of human capital, increasing the literacy ratio, improve important infrastructure, improvement of health and safety and other areas that aim at increasing the general welfare of the citizens (Hirschman, 2011).

Economic development will only be successful if the whole nation is willing to give their best efforts towards its achievement. A lot of theories have been forwarded by different schools of thought about how economic development should be achieved. Many economists have suggested that each country should try to achieve modernization and industrialization in order to achieve economic development (Sheffrmn, 2003).

2.3.1.1 The Transport Sector

The transport infrastructure of Somalia comprises of approximately 22,000 km of roads (of which 2,600 km is primary roads), four major ports, and fifteen major airfields, four of which have paved runways. There are no railways, pipelines or inland waterways. Since the late 1980s, there has been very little investment in the development or maintenance of transport infrastructure, and the capital infrastructure stock that Somalia had built up by the late 1980s has been largely depleted. There are a number of high profile and potentially

12 profitable investments in Somalia’s transport infrastructure (Istanbul conference on Somalia, 2010). The recent rehabilitation of Mogadishu port (an initiative between the Transitional Federal Government of Somalia; Japan; the United Nations and the private sector) and the construction of Bossaso Air Terminal (an initiative between Puntland State; Saudi Arabia and the private sector) provide visible examples of transport infrastructure being rebuilt. Road transport is the principal mode of internal transport due to a lack of railway infrastructure and limited coastal shipping. Animals - camels and donkeys - continue to be the most important and only means of transport for many people. With a deteriorating road network, air transport plays a growing role. With a coastline of about 3,300 km, coastal shipping has much potential and the development opportunities are manifold.

A number of large scale transport infrastructure opportunities have been identified (such as roads leading to and from Mogadishu port) which would bring a political dividend to the TFG as well as alternative socio-economic and livelihood opportunities for certain target groups such as disaffected youth. Emergency rehabilitation of roads and bridges with labour-intensive rehabilitation has proved somewhat successful within Somalia and does provide opportunities for piloting public private partnership initiatives. Improvement of roads would further lead to increased public and individual transport-systems, hence, attract interested international actors interested in opening the Somali market. Somalia currently has no roads linking it to its neighbours that would handle major traffic as per international standards. Longer term plans for a major trunk road that links Kismayo in the south, through Mogadishu to Bossaso, Berbera, and Hargeisa in the north, could begin to be conceived as it would better integrate Somali trade into the broader Horn of Africa region (Istanbul conference on Somalia, 2010).

The implementation of transport infrastructure initiatives in Somalia could have a phenomenally positive impact with respect to security and stability. Transport infrastructure, by virtue of its significant scope and investment, if done in the right way, can have a catalytic role, transforming economic development. Through responsible

13 investment to significant and employment creation (a so-called ‘force’ for development) it can lead as an alternate to jobs within freelance militia and insurgency forces of the Somali war economy (Abdirashid, 2015).

Transport infrastructure, by making areas within Somalia and across the Horn of African more accessible, will encourage and open up communication channels beyond political, geographic or clan divisions. Transport infrastructure, by facilitating physical links, destroyed by war, can facilitate social and political links and enhance regional cooperation and integration. This is fundamental not only for Somalia, but for the Horn of Africa, and can play an important role in fostering reconciliation, mitigating conflict and deepening peace (United Nations, 2013).

The expansion and improvement of transport infrastructure will improve access to markets and contribute towards an enabling environment for the private sector and the expansion of productive capacity - which in turn, creates employment and business opportunities. An increase in commercial activities will restore business confidence and increase cash flow and livelihood of the areas positively affected (Istanbul conference on Somalia, 2010).

Investments into transport infrastructure would further translate into a tremendous improvement of the lives of women. Being the main transporters in African rural life, women carry a heavy load in production and movement of goods in Africa, all in constrained and isolated ways, without having access and time to more productive and/or socially beneficial activities. Limited access to travel facilities and access to transport increases maternal mortality rate, makes it difficult to save lives from preventable diseases, and heightens the risk of physical safety and security for women. Hence, investments into transport are extremely important for tapping into the economic and human potential of women. As a result, any design of transport infrastructure and facility design would need to understand what inhibits mobility and accessibility of both, women and men, in any given locationlsociety, time and travel patterns of women and men, how lack of transport impacts the use of labor, productivity of labor and access of women and men to services and livelihood means (such as education, health, water, social facilities etc.) Transport

14 projects that make such analysis have a much higher possibility for creating positive impact on women’s and men’s general wellbeing and their economic productivity. Investment in transport should be decided with feasibility studies on its value addition to economic sectors that are important to the country and its value addition to women’s access to markets and information (Abdulsamed, 2011).

The situation in Somalia is sometimes referred to as posing a threat of spill over of terrorism, piracy and illegal migration. With Somalia’s already vibrant business sector (particularly women within the business sector), an expansion of key transport infrastructure can provide an alternative positive economic ‘spill over’ and reduce the monopolistic hold that some powerful business ‘warlords’ have on the country (Abdirashid, 2015).

Transport infrastructure can also greatly contribute towards state-building by providing a very visible and positive link between the state and the provision of a common good for the benefit of the Somali people. Iconic examples, in Mogadishu, would be the rehabilitation of the road to and from Mogadishu port and the Mogadishu airport. It will also, through increased port (and other customs and taxation) revenues, duties from commercial exports/imports enable the government and local administrations to generate taxes, and to increase their revenues and better respond to the needs of the Somali people (Istanbul conference on Somalia, 2010).

2.3.1.2 The Telecommunication Sector

After the start of the civil war, various new telecommunications companies began to spring up in the country and competed to provide missing infrastructure (2014). Somalia now offers some of the most technologically advanced and competitively priced telecommunications and internet services in the world. Funded by Somali entrepreneurs and backed by expertise from China, Korea and Europe, these nascent telecommunications firms offer affordable mobile phone and internet services that are not available in many other parts of the continent. Customers can conduct money transfers (such as through the

15 popular Dahabshiil) and other banking activities via mobile phones, as well as easily gain wireless Internet access (Forbescustom.com 2012).

After forming partnerships with multinational corporations such as Sprint, ITT and Telenor, these firms now offer the cheapest and clearest phone calls in Africa. These Somali telecommunication companies also provide services to every city, town and hamlet in Somalia. There are presently around 25 mainlines per 1,000 persons, and the local availability of telephone lines (tele-density) is higher than in neighboring countries; three times greater than in adjacent Ethiopia. Prominent Somali telecommunications companies include Somtel Network, Golis Telecom Group, Hormuud Telecom, Somafone, Nationlink, Netco, Telcom and Somali Telecom Group. Hormuud Telecom alone grosses about $40 million a year. Despite their rivalry, several of these companies signed an interconnectivity deal in 2005 that allows them to set prices, maintain and expand their networks, and ensure that competition does not get out of control (Abdul, 2014).

Investment in the telecom industry is held to be one of the clearest signs that Somalia’s economy has continued to develop. The sector provides key communication services, and in the process facilitates job creation and income generation (The African Executive, 2010). Currently, there are about 11 licensed local operators whose networks cover the whole nation, but the biggest names are Somali Telecom which was the first private telecommunication company to open in Somali~ in 1994, Golis, Nation Link and Honnuud Telecom. Hormuud Telecom has sales of 40 million US Dollars a year. Most telecom companies provide landline services for about 10 US Dollars per month with free unlimited local calls. International calls cost 50 US cents a minute while surfing the web is charged at 50 US cents an hour, which makes it the cheapest rate in Africa. However the telecommunication companies have not competed only for customers. They have also cooperated with each other (oligopoly) to maintain their networks and set prices to ensure that competition remains healthy.

According to the World Internet Usage number of Internet users in Somalia went from 200 in year 2000 to 106,000 in 2011 and is still growing. Which means only 1.1% of Somalia’s

16 estimated population of 9,925,640(2011). There were about 512682 mobile subscribers in Somalia in year 2008 and it is now (2015) 6.1 Million (Lovels, 2015).

2.3.1.3 The Education Sector Education in Somalia refers to the academic system within Somalia. The Ministry of Education is officially responsible for education in Somalia, with about 15% of the nation’s budget allocated to scholastic instruction. The eruption of civil war in 1988 and the subsequent collapse of the central state in 1991 severely disrupted all public social services in Somalia. The education system in Somalia was entirely destroyed. Prolonged periods of instability and intermittent conflict constrained the ability of local populations and the international community to rehabilitate the country’s educational facilities and resources. Destruction of the sector went far beyond the deterioration of physical infrastructure. It is estimated that more than 80% of the educated elite left the country in the period since the conflict began (Lindley, 2008). This extended period of insecurity and instability has robbed a generation of young Somali men and women the chance to attend formal education. Somalia now suffers from one of the lowest literacy rates in the world (Cummings and van Tonningen, 2003).

The education system in Somalia started to fall apart long before the civil war. In the aftermath of the war with Ethiopia in the late 1 970s, and the subsequent economic collapse during the 1 980s, policy development stagnated with social services severely affected. In recent years, as stability and security has improved in parts of the country, a diverse range of actors (including local communities, the Somali diaspora, local and international NGOs, Islamic aid agencies, and the private sector) have made a significant contribution to the rehabilitation and development of the education sector.

Recent growth of the higher education sector has however been considerable. Shortly before the war, Somalia had only one state-owned university located in Mogadishu and enrolling approximately 4000 students (Hoehne, 2010). There are now close to 50 higher education institutions (HEIs) of different sizes and different capacities functioning across the country and enrolling over 50,000 students. The exponential growth of the higher

17 education sector, especially given the prolonged periods of insecurity experienced in parts of the country, challenges conventional wisdom that social and economic development ceases in the absence of a central government (Leesen, 2007). The absence of a central government and strong local authorities in Somalia has enabled and encouraged the privatization of the higher education sector.

In the absence of regulation by governing authorities in all three regions and the low capacity of teaching staff, the quality of education has suffered considerably. An alarming 86% of surveyed HEIs complained about low capacity of teaching and administrative staff. This is likely to impact the quality of education students are receiving, and the qualification and competence of graduates entering the public and private sector in Somalia.

2.3.2 Employment Generation The desire to expand decent and productive employment is at the heart of any nations’ macroeconomic policies geared towards poverty reduction. In spite of its importance, the implementation of policies on employment creation in many developing nations has not yielded much impact as there is a wide gap between the jobs available and the number of job seekers actively seeking work in most poor nations. Not only is the level of decent jobs diminishing, the challenges of globalization and economic liberalization has brought about new realities having uncertain implications for employment creation in many developing nations (Ogunrinola and Osabuohien, 2010). The high rate of labour force growth visa verse the low and dwindling rate of formal sector job growth has made the labour market in developing nations to exhibit some peculiar characteristics.

First is the widening of the informal sector where many who would have remained in open unemployment take up low-wage jobs or even self-employment while still hoping to pick up formal sector job when available. Second, the unemployed in the labour market in poor nations do not enjoy any form of unemployment insurance or any social benefit from the government. Third, the reported unemployment rates in official documents are usually very low due to high rate of disguised employment and underemployment in the informal

18 sector. Fourth, self-employment, part-time employment, and unpaid employment in family enterprises have a disproportionate share in total employment. All these are pointers to the need for a search for solution to employment problems in developing nations.

The role of employment in poverty-reduction programs in developing countries has received considerable attention the world over, in development strategies and policies. Many new employment opportunities in many developing countries are created in the informal sector whose rate of growth may be higher than that of the formal sector. It is not surprising that the lack of employment opportunities ranks at the top of youth frustrations—given the 67 percent youth unemployment rate (UNDP, 2012).

A majority of youth are willing to leave the country in search of alternative livelihood opportunities. Somalia risks exporting more pirates and terrorists because mass unemployment among its youths has deprived a generation of hope and left many vulnerable to radicalization. Imbalances between available education and training, and the skills actually required for jobs persist against a backdrop of the multiple shocks that have devastated the Somali economy, including conflict and environmental degradation (UNDP, 2001.

Seventy-three percent of Somalia’s population is younger than 30 with a large proportion of them idle - neither working or in school. Many have known nothing but conflict. Firstly, civil war which broke out after warlords toppled dictator Mohamed Siad Barre in 1991 and more recently, an insurgency by al Shabaab Islamic militants that has killed tens of thousands and uprooted hundreds of thousands more (UNDP, 2012).

Success in reversing the high levels of unemployment, along with underemployment and poverty, will depend on stimulating a diversified and growing economy through policies and programmes that address both demand and supply side considerations. The recognition that unemployment cannot be tackled by single actors working alone should be backed by coordinated responses that are well integrated into strategies confronting the wider crisis of the Somali economy (Barrett and Reardon, 2000).

19 Despite continued rural to urban migration, a large proportion of the population in many developing countries still live in rural areas and are mainly poor with over 30% overall classified as poor (UNDP, 2001). This increasing labour force in developing countries may not be absorbed productively in on-fann work given the limits to arable land, and increases in agricultural labour productivity through technology that reduces demand for labour. Employment opportunities in rural areas may have to rely on strengthening the ability of non-farm agricultural activities to absorb the labour. Diversification into non- farm activities constitutes on average about 45 per cent of rural incomes in developing countries and the “push and pull” factors driving this diversification are bound to persist (Barrett and Reardon, 2000). Push factors include changes in technology in agriculture that require less labour, creating labour surpluses and reducing agricultural labour opportunities, and pull factors include job creating in urban areas from industry that raise wages and employment opportunities there.

2.3.2.1 Recruitment of Workers

Recruitment is the process of finding candidates, reviewing applicant credentials, screening potential employees, and selecting employees for an organization. Effective recruitment results in an organization hiring employees who are skilled, experienced, and good fits with your corporate culture. Recruitment refers to the overall process of attracting, selecting and appointing suitable candidates for jobs within an organization, either permanent or temporary. Recruitment can also refer to processes involved in choosing individuals for unpaid positions, such as voluntary roles or training programmes. Recruitment may be undertaken in-house by managers, human resource generalists and/or recruitment specialists. Alternatively, parts of the process may be undertaken by either public-sector employment agencies, commercial recruitment agencies, or specialist search consultancies. The use of internet-based services and computer technologies to support all aspects of recruitment activity and processes has become widespread (Buford et al, 1995).

20 2.3.2.2 Development of New Businesses New business development concerns all the activities involved in realizing new business opportunities, including product or service design, business model design, and marketing. When splitting business development into two parts, we have: ‘business’ and ‘development’. The first things that come into mind when looking at business are: economics, finance, managerial activities, competition, prices, marketing, etc. All of these keywords are related to risk and entrepreneurship and clearly indicate the primary scope of the term ‘business development’. Development is very abstract and can be linked with some of the following keywords: technological improvement, cost reduction, general welfare, improved relations, movement in a (positive) direction, etc (Ford, et al 2006).

In the traditional definition of Business development, Business Development is mostly seen as growing an enterprise, with a number of techniques. The mentioned techniques differ, but in fact all of them are about traditional marketing. The main question in these issues is: how to find, reach and approach customers and how to make/keep them satisfied, possibly with new products. (Kotler, 2006) Since this definition is limited and lacks some essential factors in business developing, a complete new definition of Business Development will be introduced. Of course, the theory on “traditional” marketing is still correct and can be adopted from the old definition.

When supplying a solution, it is important to focus on the total offering you give instead of only focusing on the product or service. An offering is a package consisting of different proportions of physical product, service, advice, delivery and the costs, including price that are involved in using it. Hereby the advice, adaptation to the customer and the costs are the most important factors to get the right combination within the offering. (Ford et al., 2006; Hakansson et al., 2004) Drawing on contingency theory, an idea central to new business development is that different product-market- technology combinations can require different marketing strategies and business models to make them a success (Tidd et al., 2005). To chart the factors that are involved and create synergy between them, new business development draws heavily upon the fields of technology and business networks.

21 The new business development process is to recognize chances and opportunities in a fast changing technological environment. Often uncertainty arises because of new technology and their new markets.

2.3.2.3 Increase in Income

Income per capita has been increasing steadily in almost every country. Many factors contribute to people having a higher income such as education, globalization and favorable political circumstances such as economic freedom and peace. Increase in income also tends to lead to people choosing to work less hours. Developed countries (defined as countries with a 11developed economy”) have higher incomes as opposed to developing countries tending to have lower incomes (Case and Fair, 2007).

2.4 Related Studies Some studies had been done in areas related to this study; the researcher briefed the major results of some of them.

Nuradin (2011), Employment Status and Socio-Economic Development in Hargeisa Somaliland. This study indicates the relationship between the employment status and soeio-economic development in Hargeisa and the situation for both rural and urban areas based on poor according to basic needs such as health, shelter, food and etc especially in rural areas while as the urban itself there is a complex situation in employee according to the access in development.

Rownak (2010), 100 Days Employment Generation Programme. This study has been initiated to examine the extent the extreme poor people were addressed through this programme and how the programme affected their socio-economic conditions by analyzing the dynamics of implementation of 100 DEGP. The empirical evidence suggests that, the programme targeting was quite effective. It addressed the poorest segment of the country. It also had a significant positive effect on the food accessibility of the beneficiaries. It was revealed from the field survey that both the quality and quantity of food of the

22 beneficiaries improved and increased owing to the programme intervention. But it did not affect considerably other socio—economic conditions like, asset creation or reduction of indebtedness.

Yogo (2008), in an empirical survey of the link between employment and growth in sub Saharan African countries, is of the view that the employment issues in sub-Saharan Africa are mostly a matter of quality rather than quantity. According to him, the reason for the observed weak employment performances could not be found in labour market rigidities; but that the observed increase of working poor could be explained by the weakness of economic growth over time.

Walterskirchen (1999), Examining the relationship between economic growth, employment and unemployment in the European Union (EU), analyzed the link between economic growth and the labour market. He found that the relationship between GDP growth and change in unemployment is divided into two components: those changes in employment and unemployment rates governed by economic factors as well as those governed by demographic influences and labour market policies. He employed time series analysis for individual EU’S country, while for all the countries he employed the use of panel data. The finding of the study showed a strong positive correlation between GDP growth and change in the level of employment.

The researcher has chosen the study of Walterskirchen (1999), Examining the relationship between economic growth, employment and unemployment in the European Union (EU), because he focuses deeply on the relationship between economic development and employment opportunities of a country, though not in my country.

Although his study is based on European Union there is a relationship between his theory and the researcher’s study who wants to investigate the causes of unemployment and the relationship between economic development and employment generations in Mogadishu, Somalia.

23 2.5 Gaps of Research Several studies by (Yogo 2008; Nuradin 2011; Rownak 2010) have indicated that economic development and employment generation had been carried out in different parts of the globe but none of them has been carried out in Somalia. This study was therefore intended to provide literature regarding economic development and employment generation in Somalia.

24 CHAPTER THREE METHODOLOGY

3.0 Introduction

This chapter deals with the practical procedures which were used in carrying out this study. It gives details of the research design to be adopted, population of study, nature of sample, sampling procedure, data collection procedures and the final data analysis techniques that were applied. It gives the framework within which data was collected and analyzed.

3.1 Research Design

A cross-sectional survey design which is analytical and descriptive in nature, was used to study the relationship between economic development and emplo~ent generation. The study used a cross-sectional survey design because it is flexible in both quantitative and qualitative data collection. Quantitative data analysis was used to describe the statistics of the scores using indices that described the current situation and investigate the associations between the study variables using information gained from the questionnaires. Qualitative data aimed at expanding data obtained from quantitative data.

3.2 Study Area

This study was carried out in Mogadishu, the capital city and the central administration of Somalia. The researcher preferred this study area because it is home to very many private organizations.

3.3 Research Population According to a survey by Somalia Bureau of Statistics (2014), there are over 11, 000 business enterprises in the private sector with a population of over 30,000 employees in Mogadishu. However the researcher selected only a unit of the transport, education and telecommunication sector in this study. The researcher will only target managers and the technical staff of these three units which were estimated to have a target population of 240 participants.

25 3.3 Sample Size The researcher used Krejcie and Morgan’s (1970) table to determine the sample. According to Morgan’s table, for a population of 240 participants, a sample size of 148 is appropriate. Table 3.1 gives the summary of the sample size.

Table 3.1: Target Population and Determination of Sample Size

Category of Respondents Target Population Sample Size Managers Technical Staff Managers Technical Staff Telecommunication sector 10 70 6 44 Transport sector 20 60 12 37 Education sector 15 65 9 40 Sub Total 45 195 27 121 Overall Total 240 148

3.4 Sampling Procedure The researcher used purposive sampling method to select telecommunication, transport and education institutions within the private sector that are most vital in providing employment opportunities to the local community (Somalia Bureau of Statistics 2015).

The researcher used simple random sampling to select the technical staff from the selected institutions shown in Table 3.1. This was intended to give all the participants equal opportunity to participate in the study. The researcher further used systematic random sampling to select respondents who would be included in the study.

Last but not least, the researcher used purposive sampling technique to select the managers of the categories of respondents presented in Table 3.1. This is because they are considered more knowledgeable of the study subject.

26 3.5 Data Collection Methods 3.5.1 Questionnaires The researcher used closed ended questionnaires to collect data from the managers and the technical staff indicated in table 3.1. Closed ended questionnaires were used by the researcher because they are cheap, quick and cover a greater population than any other research instrument. A five (5) Likert scale was used to measure the variables in the study. That is, 1=strongly disagree; 2=~disagree; 3=not sure; 4~agree; and 5~strongly agree. Economic development was measured using investment in transport (5 items), investment in telecommunication (6 items) and investment in education (5 items) while employment generation was measured using recruitment of workers (5 items), development of new businesses (5 items) and increase in income (6 items).

3.5.2 Interview Guides The researcher used interview guides to capture data from key informants (the managers) cited in table 3.1. The researcher scheduled interviews with the management of two (2) telecommunication companies, two (2) bus companies and two (2) institutions of higher learning. The interviews were captured on a face to face basis. The researcher was able to take notes during the course of the interview. Interview was incorporated in this study so as to capture information that could have not been properly captured in the questionnaire.

3.5.3 Document Review The researcher reviewed data from World Bank, UN, UNDP and publications from the government of Somalia to establish the nature of economic development within the private sector and its impact on employment generation.

3.6 Validity and Reliability 3.6.1 Validity Validity of the instrument was obtained through the development of the scales with the help of the experts in the field of development studies using the Content Validity Index (CVI). This helped to confinn whether the dimensions of the concepts under study which

27 were operationally defmed, were appropriate or not. The following formula was used to determine the validity of the instrument:

CVI — items declared valid by experts — total number of items 27 CVI = = 0.84

According to Amin (2005), if the validity index is 0.70 and above, it means the items are valid. This therefore implies that a content validity index of 0.84 for this study means that the instruments were valid.

3.6.2 Reliability

The reliability of the questionnaires were improved through pretesting of pilot samples from ten (10) employees within the education and transport sector in Mogadishu though they were not included in the actual study. This enabled the re-phrasing of some questions. Furthermore, reliability of the scales were done with the application of Cronbach Coefficient Alpha for the computations so as to check for the internal consistency of the scales. According to Kline (2000), a commonly accepted rule for describing internal consistency using Cronbach’s alpha is as follows:

Cronbach’s — Internal consistency alpha a ≥ 0.9 Excellent 0.7 ≤ a < 0.9 Good 0.6 ≤ a < 0.7 Acceptable 0.5 ≤ a < 0.6 Poor a < 0.5 Unacceptable

For the purpose of this study, Tale 3.2 gives the reliability of the results.

28 Table 3.2: Cronbach’s Results

Constructs No of Items Cronbach’s Results

Economic development 16 0.861

Employment generation 16 0.781

The Cronbach’s results for economic development and employment generation on table 3.2 according to Kline’s (2000) interpretation means that the internal consistency was good.

3.7 Data Collection Procedures Before Administration of Questionnaires + An introduction l~tter was obtained from the College of Higher Degrees and Research of Kampala International University afler the approval of the validity of the research instruments. During Administration of Questionnaires + The researcher briefed the respondents about his intentions to carry out a study on their investments. + The researcher then asked the respondents to sign the informed consent form. + The researcher asked the respondent to answer all the questions in the questionnaires. After Administration of Questionnaires + The researcher later retrieved the questionnaires after 3 days and checked for the completeness of all answers. The researcher then arranged for data analysis.

3.8 Data Analysis Data from the field was compiled, sorted, edited and coded to have the required quality, accuracy and completeness. Then it was entered into the computer using Statistical Package for Social Sciences (SPSS v. 17.0) for further analysis. During the analysis of the data, frequencies and percentage distribution were used to analyze data on the profile of the respondents. Means and Standard Deviations were used to determine the nature of

29 economic development and the level of employment generation the private sector caused in Mogadishu, Somalia. The Pearson’s linear correlation coefficient was used to determine if there was a significant relationship between economic development and employment generation at 0.05 level of significance.

3.9 Ethical Considerations The following strategies were adapted to ensure the moral justification of the investigation.

Authorization: This involved getting consent of the respondents.

Anonymity and Confidentiality: The names or identifications of the respondents were anonymous and information collected from them was treated with utmost confidentiality.

Integrity: The researcher acted honestly, fairly and respectfully to all other stakeholders who were involved in this study.

Ascriptions of authorships: The researcher accurately attributed to the sources of information in an effort to celebrate the works of past scholars or researchers. This ensured that no plagiarism occurred.

Scientific adjudication: The researcher worked according to generally acceptable norms of research.

3.10 Limitation of the Study • Uncooperative behavior of some respondents, un-approachable respondents and those who were reluctant to give information limited the researcher in this study. However the researcher convinced the respondents that the work is for academic purposes only. • The researcher was also limited by privacy to information by mangers because of organizational policy regarding information disbursement. The researcher used his introduction letter from the College of Higher Degrees and Research of Kampala International University to explain to them his academic intentions.

30 This study covered a small geographical area (Mogadishu) hence generalization of the results to the whole of Somalia could be inappropriate.

31 CHAPTER FOUR DATA PRESENTATION AND ANALYSIS OF RESULTS

4.0 Introduction This chapter presents the analysis of the data gathered and interpretation thereof. It gives the demographic characteristics of respondents and variables used.

4.1 Demographic Characteristics of Respondents This section determines the demographic characteristics of respondents in terms of gender, age, education level, the type of private sector. To achieve it, questions were asked to capture these responses. Frequencies and percentage distribution table was employed to summarize the demographic characteristics of respondents. However out of the 148 questionnaires distributed, the researcher was able to retrieve 140 correctly completed questionnaires, making a retrieval rate of 95%. This study therefore used a population of 140 respondents to analyze the data in the preceding sections of this chapter.

Table 4.1: Demographic Characteristics of the Respondents

N=140

Profile of the Respondents Frequency Percentage (%) Gender Male 84 60 Female 56 40 Total 140 100 Age 20-29 44 31 30-39 68 49 40-49 28 20 Above 50 00 00 Total 140 100 Education Level

32 Certificate 46 33 Diploma 54 39 Degree 31 22 Masters 09 06 PhD 00 00 Total 140 100 Type of Private Sector Education sector 63 45 Transport sector 45 32 Telecommunication sectoi 32 23 Total 140 100 Source: primary data, 2015

Tables 4.1 revealed that majority (60%) of the respondents were male while (40%) were female. This implies that the male were dominant in the private sector. This is because the private sector is influenced by clan sector to marginalize the women. This eventually diminishes the chances of the women to get employment opportunities in Mogadishu.

Furthermore, Table 4.1 revealed that majority (49%) of the respondents were within the age group of 3 0-39 years, followed by those who were within the age group of 20-29 years represented by (31%) and (20%) of the respondents were within the age group of 40-49 years. None of the respondents was above 50 years. This implies that respondents within the age group of 30-39 years were dominant in the study. This could be because such age group is considered by the private sector as mature and experienced enough to work and deliver quality output. However the same age group (30-39 years) are the ones who suffer most from lack of employment in Somalia.

In addition to the above, Table 4.1 revealed that majority (3 9%) of the respondents were Diploma Holders, followed by (33%) who were Certificate Holders and (22%) who were Degree Holders. Only (6%) of the respondents were Masters Holders and None of them had a PhD. This means that Diploma Holders were dominant in the study. This could be

33 because Somalia has experienced decades of political instability hence paralyzing its education system. The number of people educated well enough to take up jobs in the private sector are very few. This makes the less educated to take up top jobs that could have been done by either Masters or PhD Holders. The majority of the surveyed respondents are not well educated hence can not get better job opportunities in the public sector hence leaving them to take up odd jobs in the private sector.

Last but not least, Table 4.1 revealed that (45%) of the respondents were from the education sector, followed by (32%) who were from the transport sector and lastly (23%) of the respondents were from the telecommunication sector. This means that education sector was dominant in the study. This could be because the education system is currently being revamped in Somalia so as to increase the literacy level of the community. Therefore a number of the local people are being recruited to take up jobs within these institutions.

4.2 The Nature of Economic Development in the Private Sector in Mogadishu, Somalia The first objective of this study was to determine the nature of economic development in the private sector in Mogadishu, Somalia. Closed ended questionnaires were distributed to managers and support staff of the selected private institutions. Table 4.2 gives the summary of the response.

Table 4.2: The Nature of Economic Development in the Private Sector in Mogadishu, Somalia

N=140

Economic Development Mean Standard Interpretation deviation Investment in Transport Most buses in Mogadishu ~re for private 4.39 0.693 Very true companies. Most commuter taxis are owned by private 4.33 0.757 Very true companies. The private sector has generally boosted the 4.28 0.837 Very true

34 growth of the transport sector of Somalia. Most of the special hire taxis at the Mogadishu 3.83 0.883 True international air port are privately owned. The private sector has participated in the 3.77 0.88 1 True building of modern road networks in Mogadishu. Average Mean 4.12 Very High Investment in Telecommunication Most telecommunication companies in 4.01 0.787 Very true Mogadishu are privately owned. Mobile telecommunication services are cheap in 3.94 0.819 True Somalia. There has been increase in the number of mobile 3.83 0.798 True phone subscribers in Mogadishu. There is internet availability because of 3.78 0.830 True investment in telecommunication by the private sector. There is easy access to information in 3.71 0.840 True Mogadishu. Telecommunication company contributes a lot to 3.66 0.73 7 True the GDP of Somalia. Average Mean 3.82 High Investment in Education There is easy access to educational services in 3.77 0.839 True Mogadishu. Literacy rates have increased in Mogadishu. 3.72 0.806 True So many private primary and secondary schools 3.60 0.899 True have been opened in Mogadishu. There are several privately created tertiary and 3.58 0.924 True institutions of higher learning in Mogadishu. Private education in Mogadishu is more 3.39 0.990 True affordable than the public education. Average Mean 3.61 High General Average Mean 3.85 High Source: primary data, 2015

35 5 4.01 — 5.00 Strongly Agree Very True Very high

4 3.26 — 4.00 Agree True High 3 2.51 —3.25 Undecided Fair Fair 2 1.76— 2.50 Disagree Un True Low

1 1.00 — 1.75 Strongly Disagree Very Untrue Very low

Table 4.2 revealed that majority of the respondents strongly agreed that most buses in Mogadishu are for private companies (mean=4.39, STD=0.693), and that most commuter taxis are also owned by private companies (mean=4.33, STD=0.757). The respondents also strongly agreed the private sector has generally boosted the growth of the transport sector of Somalia (mean=4.28, STD=0.837). In addition to that, the respondents agreed that most of the special hire taxis at the Mogadishu international air port are privately owned (mean=3 .83, STD=0.883) and that the private sector has participated in the building of modern road networks in Mogadishu (mean=3.77, STD=0.881).

Table 4.2 revealed that majority of the respondents strongly agreed that most telecommunication companies in Mogadishu are privately owned (mean=4.O1, STD=0.787) and that mobile telecommunication services are now cheap in Somalia (mean=3 .94, STD=0. 819). In addition to that, some respondents agreed that there has been increase in the number of mobile phone subscribers in Mogadishu (mean=3.83, STD=0.798) and that there is internet availability because of investment in telecommunication by the private sector (mean=3.78, STD=0.830). Due to internet availability, there is easy access to information in Mogadishu (mean=3 .71, STD=0. 840) hence this has contributed a lot to the GDP of Somalia (mean=3.66, STD=~O.737).

Table 4.1 revealed that majority of the respondents agreed that there is easy access to educational services in Mogadishu (mean=3.77, STD~0.839) and that literacy rates have increased in Mogadishu (mean=3 .72, STD=0.806). Furthermore respondents agreed that so many private primary and secondary schools have been opened in Mogadishu (mean=3.60, STD=0.899) and that there are several privately created tertiary and institutions of higher learning as well (mean=3 .58, STD=0.924). Respondents generally agreed that private

36 education in Mogadishu is more affordable than the public education (mean=~3.39, STD=O.990) in Somalia.

When asked to comment on the nature of economic development in Somalia, most of the key informants had this to say.

The economy of this country is still at its initial stage given the fact that it is just recoveringfrom internal unrests caused by militias.

I think Somalia is a promising country. So many private organizations and companies are staging up their head quarters in Mogadishu. We have the Europeans, Chinese, and even Arab investors. These people are investing in almost every sector. To this, I can say might boost our economy in one way or the other.

Somalia has the potential to develop economically. However so many internal wrangles and marginalization of women could hamper a faster development of the economy. It is men in most ofthe sectors. May be we in the private sector might turn that around. But it is not easy since the clans are also involved here.

The gross domestic product rate has been steadily increasing since 2005. What can I say. The economy is growing!

The above comments about the economy of Somalia, it can be very argued that indeed the economy has some future. However the government has also to play its roles if this development has to be realized. Otherwise all these anticipation might remain in pen and paper.

Furthermore, the researcher also wanted to find out what the key informants think on the contribution of the private sector in promoting economic development of Mogadishu. The researcher surntnarized their responses as below:

We in the private sector I think are the largest contributor to economic development of Mogadishu and Somalia as a whole. No doubt about. You can carry out research on this if you want to bet.

37 The private sector has been very instrumental in the economic development ofMogadishu. This is because there has not been a functional government in this country since 1991.

We have invested a lot In this country. Telecommunication and communication sector, and the transport sector is almost 100% private investment. Most of the institutions of higher learning such as universities are privately owned except one.

On the challenges faced by the private sector in Mogadishu, the following were the views of the key informants.

The government in most cases does not support us. We are almost invincible to this government.

A lot of insecurity in most of the trading regions have marred the country. It is not easy to do business here. Some times your property can be looted on the road, or some times our employees get killed in trying to reach very remote areas within Mogadishu. AMISSOM has tried to address this but their successes is not yet so profound to guarantee a safe and secure business area.

Actually we do not have Property rights in this country. Any body can claim right over what naturally belongs to you but you can not say anything.

The infrastructure in most parts of this country is not so well developed. The road net works are still not so modern to guarantee easy transportation of our good and services. The communications system is also still very weak The power supplies are almost limited to Mogadishu only and very expensive to be afforded by the local population.

4.3 Employment Generation within the Private Sector of Mogadishu, Somalia The second objective of this study was to find out the level of employment generation within the private sector in Mogadishu, Somalia. Table 4.3 gives the sununary of the findings.

38 Table 4.3: Employment Generation within the Private Sector of Mogadishu, Somalia N=140

Employment Generation

Recruitment of Workers The private sector is tl~e largest employer in 4.04 Somalia. ~ 3.91 of employment opportunities from the outset. ~ 3.86 many branches. The private sector recruits on a timely basis when I 3.46 need arises. The private sector recruits on merit not on 3.41 technical know who. Average Mean Development of New Businesses The private sector is responsible for much of the nation’s recent job growth and product innovation. The private sector has more stable employment than the government sector. The private sector provides greater opportunities for managerial and professional employment. The private sector purchases many of their inputs from other local businesses, thus increasing multiplier effects. Small businesses within the private sector score low in many measures ofjob quality: stability, full-time status, wages, pension plans, and health insurance coverage. Average Mean

Increase an Income ______The private sector is the best paying sector in I 3.83

financial 3.77 ~

39 The private sector provides its employees with 3.72 0.806 True loans to do personal businesses. The private sector provides entrepreneurial 3.66 0.737 True training to its employees. The private sector promotes income generating 3.13 0.954 Fair activities for its employees. The private sector encourages its employees to 3.05 0.819 Fair join saving schemes. Average Mean 3.54 High General Average Mean 3.69 j High Source: Primary data, 2015

5 4.01 — 5.00 Strongly Agree Very True Very high 4 3.26—4.00 Agree True High

3 2.51 — 3.25 Undecided Fair Fair 2 1.76— 2.50 Disagree Un True Low

1 1.00 — 1.75 Strongly Very Untrue Very low Disagree

Table 4.3 revealed that majority of the respondents strongly agreed that the private sector is the largest employer in Somalia (mean=4.04, STD=0.894) and it provides a large number of employment opportunities from the outset (mean=3.91, STD=0.919). Further scrutiny also revealed that respondents agreed that the private sector recruits workers to fill in its many branches (mean3 .86, STDO.862) and recruits on a timely basis when need arises (mean=3.46, STD1.081) and only recruits on merit basis (mean=3.41, STD=0.852).

In addition to the above, the researcher also asked key informants to comment on the ease of getting a job in the private sector in Mogadishu. Their responses were summarized as below:

We mostly advertise, interview and recruit employees who quaflfied for the job and have passed our interviews.

We recruit on merit. No back doors allowed. We take only people who are qual~fIed.

40 We mostly prefer clans that we belong to. This will help us to give good accountabilities and easily capture the culprits incase ofany financialfraud.

Furthermore, Table 4.3 revealed that majority of the respondents strongly agreed that the private sector is responsible for much of the nation’s recent job growth and product innovation (mean~4.3l, STDO.823) and that the private sector has more stable employment than the government sector (mean~4.27, STDO.741). In addition to that, respondents agreed that the private sector provides greater opportunities for managerial and professional employment (mean3.60, STDO.741) and that it purchases many of its inputs from other local businesses, thus increasing multiplier effects (mean=3 .41, STD”~3.41, STD~O.852). Similarly respondents also agreed that small businesses within the private sector score low in many measures of job quality: stability, full-time status, wages, pension plans, and health insurance coverage (mean3.39, STDO.990).

The researcher wanted to capture how multi-million cooperation promote the development of new businesses in Mogadishu, Somalia. The responses were summarized as below:

We normally give shares to small business.

We have training programs for teachers of primary and secondary schools. This is intended to equip the teachers with the necessary skills at the grass root level.

We use small businesses to market our products and services within Mogadishu.

Table 4.1 revealed that majority of the respondents agreed that the private sector is the best paying sector in Somalia (mean3.83, STDO.789) and it also gives employees financial incentives (mean3.77, STDO.823). Furthermore, respondents agreed that the private sector provides its employees with loans to do personal businesses (mean3.72, STDO.806) and even trains them on entrepreneurial skills (mean~3 .66, STD=O.737). Further scrutiny revealed that majority of the respondents agreed that the private sector promotes income generating activities for its employees (mean=3 .13, STD~=O.954) and also encourages them to join saving schemes (mean3.05, STD=O.819).

41 The researcher wanted to establish between the private and public sector, which one is the biggest contributor to employment opportunities in Mogadishu. The responses mostly indicated that the private sector was the largest contributor. This could be because of their good pay and limited job opportunities in the public sector. It could also be because most government workers are often targeted by Al-Shabab rebel group hence most people fear talking government jobs.

4.4 The Relationship Between Economic Development and Employment Generation in the Private Sector in Mogadishu, Somalia The third objective of this study was to establish the relationship between economic development and employment generation in the private sector in Mogadishu, Somalia. Table 4.4 gives the summary of the findings.

Table 4.4: The Relationship Between Economic Development and Employment Generation in the Private Sector In Mogadishu, Somalia

Variables Correlated - Pearson (r) Level of Interpretation Decision on H~ Significance Value Economic Development .672~* .004 Significant Rejected correlation Vs Employment Generation Correlation is significant at the 0.01 level (2-tailed).

Table 4.4 revealed a very strong, positive and significant correlation between economic development and employment generation within the private sector in Mogadishu, Somalia (r=672**, p<.05). This implies that economic development can is a good ground for employment generation.

42 4.5 Regression Model

Table 4.5: Regression Model 1

Model R R Adjusted Std. Error of Change Statistics Square R Square the Estimate R Square F dfl df2 Sig. F Change Change Change 1 .672a .451 .412 .27827 .451 11.524 1 14 .004 a. Predictors: (Constant), economic development

Table 4.5 revealed that economic development can significantly predict the changes in employment generation in the private sector of Somalia (F=1 l.524.,p<.O5). The results indicate that all the items under analysis in economic development together account for 41.2% of the variations in the level of employment generation within the private sector

(adjusted R2 = 0.4 12). This means that more than 50% of the intervening variable is what affects employment generation.

Table 4.6 : Regression Model 2

Model Unstandardized Standardized t Sig. Coefficients Coefficients B Std. Error Beta (Constant) -1.428 .856 -1.669 .344 Investment .804 .129 .839 6.234 .001 in transport Investment .780 .572 .333 1.363 .003 in telecom Investment .319 .410 .166 .778 .079 education a. Dependent Variable: employment generation

Table 4.6 revealed that the transport and telecommunication sectors are the variables that significantly affect employment generation in Mogadishu (p<.05). This implies that investment in the transport and telecommunication sector provide greater employment opportunities to very many community members hence promoting economic development.

43 Educational sector on the other hand was found not to significantly influence employment generation in Mogadishu.

44 CHAPTER FIVE DISCUSSION OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction This chapter presents the discussion of the study guided by the study objectives. The discussion was done by exploring the research findings relative to what other researchers in the fields that pertain to the variables have confinned. The study was later concluded and appropriate recommendations accruing from the findings were made.

5.1 Discussion of the Findings 5.1.1 Economic Development within the Private Sector of Mogadishu, Somalia The results indicated that most of the investments in the transport sector in Mogadishu are privately owned. The buses, the commuter taxis, special hire etc are all private investments of individuals. These investments are a step forward to economic development of a nation. Sheffrin (2003) explains that the ease in the accessibility of transport means within the country can promote the growth of the private sector and provide enormous employment opportunities the citizens.

Furthermore, investments in the telecommunication companies in Mogadishu were also noted to be very high. These telecommunication companies have established ground for easy access to developmental information and coimection of Somalia to the rest of the world. Abdul (2014) argues that with the presence of telecommunication services, people are able to communicate easily and receive feedback immediately. Telecommunication communication and the media are currently among the highest contributors to the growth of Somalia’s GDP.

In addition to the above, the study further revealed that the education sector is also a big contributor to the economic development of Somalia. This is because a number of private institutions of higher learning and schools have been established. This is intended to fight the high illiteracy and poverty rates in the country. Hoehne (2010) explains that the higher

45 the literacy level of the citizens, the higher the chances of getting better jobs and improve the standard of living.

5.1.2 Employment Generation within the Private Sector of Mogadishu, Somalia

The private sector has been very instrumental in employment generation in Somalia. This is because they are involved in frequent employee recruitment hence providing job opportunities. Some companies have also gone a head to empower their employees through training, providing loans and savings schemes for their employees. According to Ogunrinola and Osabuohien (2010), when employees are well equipped with better skills through frequent training, they can provide better services and hence can get promotion to attain better jobs opportunities.

Furthermore, the private sector has been spearheading the development of a number of new businesses. This has been done through buying raw materials from the small local companies. The private sector is also instrumental in providing promotional opportunities to employees for managerial positions. Generally the private sector is the main job provider in Somalia at the moment. The provide sector contributes to more than 90% of the job opportunities in the country. According to UNDP (2012) survey, the private sector in Somalia is the biggest job creator and provider to the citizens in Somalia. There is therefore need for the government to provide ample business environment to promote the expansion of the private sector.

5.1.3 The Relationship Between Economic Development and Employment Generation in Mogadishu, Somalia

This study established a very strong, positive and significant correlation between economic development and employment generation within the private sector in Mogadishu, Somalia. This study is inline with Walterskirchen’ s (1999) where economic growth had a close link with employment and unemployment among European Union Countries. This generally implies that if the government provides adequate environment for the private sector to strive, employment generation can be realized hence eliminating poverty among the

46 community since most of the people will be working in the private sector and they can afford basic life necessities such as food, shelter, medical and clothing.

5.2 Conclusion

The study results indicated a high level of economic development in Mogadishu. This was seen by the high level of investment in the transport sector, telecommunication and education sector. Somalia is still a young country recovering from decades of political instability caused by militia armed groups. Investment in these sectors is giving Mogadishu and Somalia as a whole a face lift so as to be able to compete with the rest of the world. Due these investments, the literacy level has increased, and access to information and communication is also now easier than before.

A lot of employment opportunities have also been generated as result of the private sector investments. New individuals have been recruited in these sectors hence changing their livelihoods and reducing poverty at least to some degree among the populace. It is also evidenced that new businesses have been promoted and developed within Mogadishu itself.

Furthermore, a significant relationship between economic development and employment generation was established, hence rejecting the null hypothesis and upholding an alternative hypothesis. This is an indication that economic development creates more job opportunities for the local population. It can therefore be argued that more economic development activities within the private sector will amount to increase in employment generation.

Economic development leads to improvements in many sectors of a nation. There are a variety of indicators that economist use to measure the level of economic development in a country. The indicators are: declining poverty rates, increasing literacy rates, declining infant morbidity and increasing life expectancy. Economic development has to be supported by the whole nation from economists, politicians, and also civilians. Thus it can be concluded that, economic development leads to the creation of more employment

47 opportunities in the sectors of education, telecommunication, transport, human development and environmental conservation. It equally implies an increase in the per capita income of every citizen.

5.3 Recommendations 5.3.1 The Nature of Economic Development in Mogadishu, Somalia There is need for the government to design policies that favor the participation of the private sector in promoting government programmes such as building modem road networks and improvement of communication with Somalia.

The private sector has established an environment for easy access of information through the internet, however this internet has not so much penetrated the rural areas due to security reasons. There is need for the government to provide security to private investors so that rural areas are also provided with services that promote economic development.

Several private tertiary and institutions of higher learning have been established in Mogadishu. There is need for the same services to be extended to other parts of Somalia to fight the high illiteracy rate in the region.

5.3.2 The Level of Employment Generation in Mogadishu, Somalia Small businesses within the private sector score low in many measures of job quality: stability, full-time status, wages, pension plans, and health insurance coverage. There is need for the government to regulate the private sector so to check on how much they pay their employees and how much they value the safety of their employees. This will help to ~ check the issues of over exploitation of employees, underpayment and abuse of employees’ labour rights.

Large multi-million private manufacturing companies should be encourage to buy their raw materials from small businesses so as to promote their developments and create more jobs for the local populace.

48 There is need for the private sector to increase the level of employee training through seminars, workshops, conferences, in-services etc so as to create the necessary skills expected of employees for better work quality and general organizational performance.

5.4 Areas for Further Studies There is need to carry out a study on the same topic in the whole of Somalia. This will help in giving a comprehensive finding that can be used for generalizing the effect of economic development on employment generation in Somalia.

There is need to measure the effect of government policies on the performance of the private sector.

There is need to establish the relationship between unemployment and literacy level of the local community in Somalia.

49 References

• Abdi, M.M. (2014). Unemployment in Somalia. Director general. Minister of labor and social affairs.

Abdirashid, M. D. (2015). Somalia’s Poor Transport Infrastructure [Op-Ed]. Accessed from: http://horseedmedia.net/201 S/O2/OS/somalias-poor-transport-infrastructure/.

Abdul, K.L. (2014). Telecom Firms Thrive in Somalia Despite War, Shattered Economy — The Wall Street Journal.

Abdulsamed, F. (2011). Somali Investment in the transport sector. Accessed from: https://www.chathamhouse.org/sites/files/chathamhouse/public/Researc}ijAfricaJbp 031 1_ abdulsamed.pdf

Buford, J. A., Jr., Bedeian, A. G., & Lindner, J. R. (1995). Management in Extension (3’~’ ed.). Columbus, Ohio: Ohio State University Extension.

Case, K. & Fair, R. (2007~. Principles ofEconomics. Upper Saddle River, NJ: Pearson Education. p. 54.

Cummings, W. K., & van Tonningen, L. R. (2003). Somalia Education Sector Assessment: With special attention to Northwest Zone.

Forbescustom.com (2012). Freeing Finance: If money makes the world go round, Dahabshiil CEO Abdirashid Duale makes sure it goes to the right people.

Ford, D., & Gadde, L.E. (2006). The Business Marketing Course. Chichester, John Wiley and Sons Ltd.

Hakansson, H., & Henjesand, L.. (2004). Introduction: rethinking marketing. Rethinking Marketing: developing a new understanding ofmarkets. Chichester, John Wiley and Sons Ltd: 1-12.

50 Hassan, M. (2010). “The Somali Conflict: Clan Rivalry or the Cabals of a Few?”, Horn ofAfrica Journal, Vol. No. XVI, No. 1-4, Dec. 2010, Pp. 163-170.

Hirschman, A. 0. (2011). The Rise and Decline of Development Economics. Essays in Trespassing: Economics to Politics to Beyond. pp. 1—24.

Hoehne, M. (2010). Diasporic Engagement in the Educational Sector in Post-conflict Somaliland: A contribution to peace building. University of Jyväskylä. http://www.heritage.org/index/country/somalia. 2015 index of economic freedom.

Istanbul conference on Somalia (2010). Draft discussion paper for Round Table “Transport infrastructure”.

Keynes, J. M. (2008). The General Theory ofEmployment, Interest and Money. Chapter 19: BN Publishing.

Kotler, P. and Keller K.L. (2006). “Marketing Management”. 12th edition, Pearson, Prentice Hall.

Leeson, P. T. (2007). Better off stateless: Somalia before and after government collapse. Journal of Comparative Economics, 35(4), 689-710.

Lindley, A. (2008). Transnational connections and education in the Somali context. Journal ofEastern African Studies, 2(3), 401-414.

Lovels, H. (2015). Telecom: Somali&s success industry. Accessed from: ~ 12 news letter-_Somaliajelecoms.pdf

Ogunrinola, 1.0., & Osabuohien, E.S.(2010). Globalisation and Employment Generation in Nigeria’s Manufacturing Sector (1990-2006). European Journal ofSocial Sciences: Vol.12, No.4, pp.581-593.

51 Sen, A. (2012). Development: Which Way Now? Economic Journal, Vol. 93 Issue 372. pp. 745—762.

Sheffrin, S. M. (2003). Economics: Princzples in action. Pearson Prentice Hall, Upper Saddle River, New Jersey. 47 lpgs.

The African Executive (2010). “Somalia: The Resilience of a People”. Africanexecutive.com.

Tidd, J., Bessant J., & Pavitt, K. (2005). Managing innovation: Integrating technological, market and organizational change. 3’~’ Edition. Haddington: Scotprint.

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52 World Bank (2014). “Somalia Socio-Economic Survey”, website: www.worldbank.org/Somalia.

53 APPENDICES APPENDIX I: TRANSMITTAL LETTER FOR THE RESPONDENTS

Dear Sir! Madam,

Greetings!

I am a Masters candidate of Development Studies of Kampala International University. Part of the requirements for the award is a dissertation. My study is entitled, economic development and employment generation in the private sector in Mogadishu, Somalia.

In this context, may I request you to participate in this study by answering the questionnaires. Kindly do not leave any option unanswered. Any data you will provide shall be for academic purposes only and no information of such kind shall be disclosed to others.

Thank you very much in advance.

Yours faithfully,

Isse Farah Hassan

54 APPENDIX II: INFORMED CONSENT

I am giving my consent to be part of the research study of Mr. Isse Farah Hassan that will focus on economic development and employment generation in the private sector in Mogadishu, Somalia.

I shall be assured of privacy, anonymity and confidentiality and that I will be given the option to refuse participation and right to withdraw my participation anytime.

I have been informed that the research is voluntary and that the results will be given to me if I ask for it.

Initials:______

Date

55 APPENDIX III: RESEARCH INSTRUMENTS

APPENDIX III A: QUESTIONNAIRES

Section A: Profile Characteristics of the Respondents

Please tick (~J) the appropriate option 1) Gender Male Female 2)Age 20-29 years 30-39 years 40-49 years Above 50 years 3) Level of education Certificate Diploma Degree Masters PhD 4) Type of Private Sector Transport Sector Telecommunication Sector Education Sector

56 SECTION B: THE NATURE OF ECONOMIC DEVELOPMENT IN MOGADISHU, SOMALIA

Instruction:

Using the scale provided below, please indicate in the available space the rating that best describes the nature of economic development in Mogadishu, Somalia. 5=strongly agree, 4=agree, 3=not sure, 2=disagree and 1=~strongly disagree.

# Economic development 5 4 3 2 1 A Investment in transport 1 The private sector has participated in the building of modern road networks in Mogadishu. 2 Most buses in Mogadishu are for private companies. 3 Most commuter taxis are owned by private companies. 4 Most of the special hire taxis at the Mogadishu international air port are privately owned. 5 The private sector has generally boosted the growth of the transport sector of Somalia. B Investment in telecommunication 1 There has been increase in the number of mobile phone subscribers in Mogadishu.

2 There is internet availability because of investment in — — telecommunication by the private sector.

3 Most telecommunication companies in Mogadishu are privately — — — — owned. 4 Telecommunication company contributes a lot to the GDP of Somalia.

5 Mobile telecommunication services are cheap in Somalia. — — — — —

6 There is easy access to information in Mogadishu. — — — — — Investment in Education

57 1 Literacy rates have increased in Mogadishu.

2 So many private primary and secondary schools have been opened in — — — — — Mogadishu.

3 There is easy access to educational services in Mogadishu. — — — — —

4 There are several privately created tertiary and institutions of higher — — — learning in Mogadishu.

5 Private education in Mogadishu is more affordable than the public — — — — education.

58 SECTION C: THE LEVEL OF EMPLOYMENT GENERATION WITHIN THE PRIVATE SECTOR IN MOGADISHU, SOMALIA

Instruction:

Using the scale provided below, please indicate in the available space the rating that best describes the level of employment generation within the private sector in Mogadishu, Somalia. 5=strongly agree, 4=ag~ee, 3not sure, 2~disagree and 1=strongly disagree.

# Employment Generation 5 4 3 2 11 A Recruitment of Workers 1 The private sector often provides a large number of employment opportunities from the outset. 2 The private sector recruits on merit not on technical know who. 3 The private sector recruits on a timely basis when need arises. 4 The private sector recruits workers to fill in its many branches. 5 The private sector is the largest employer in Somalia. B Development of New Businesses 1 The private sector is responsible for much of the nation’s recent job growth and product innovation. 2 The private sector purchases many of their inputs from other local businesses, thus increasing multiplier effects. 3 The private sector has more stable employment than the government sector.

4 The private sector provides greater opportunities for managerial and — professional employment.

5 Small businesses within the private sector score low in many — — — — measures ofjob quality: stability, full-time status, wages, pension plans, and health insurance coverage. C Increase in Income

1 The private sector is the best paying sector in Somalia. — — — —

59 2 The private sector gives employees financial incentives. — — — ——

3 The private sector provides entrepreneurial training to its employees — — — — —

4 The private sector promotes income generating activities for its — — — — — employees.

5 The private sector provides its employees with loans to do personal — — — businesses.

6 The private sector encourages its employees to join saving schemes. — — — — —

THE END

THANKS FOR YOUR TIME AND COOPERATION

60 APPENDIX Ill B: INTERVIEW GUIDE

1. Comment on the nature of economic development of Mogadishu? 2. What do you think about the contribution of the private sector in promoting economic development of Mogadishu? 3. What challenges do face as a private sector in Mogadishu? 4. Between the government and the private sector, which one do you think is the greatest contributor to employment opportunities in Mogadishu? 5. How easy is it to get ajob in the private sector in Mogadishu? 6. Are the Job applicants always qualified for the available jobs. 7. As multi-million cooperation, how do you endeavor to develop new businesses in Mogadishu?

61 APPENDIX IV: STUDY BUDGET

# QUANTITY PER UNIT AMOUNT 1 Stationary a) Printing 20 books (approx. 90 1001= per 180,0001= pages @) page b) Photocopy 242 questionnaires 100/= 24,2001= c) Scanning 20 papers 500/= 10,000/= d) Spiral binding 20 books 3,000/= 60,000/= e) Hard cover binding 6 books 10,000/= 60,000/= 2 Internet surfing 4 months (80 days) 5000/= per 400,000/= day 3 Transport 4 months (100 days) 3 000/= per 300,000/= day 4 Lunch 1 month (25 days) 5000/= per 75,0001= day 5 Data analysis Hire expert 100,000/= 6 Consultation on thesis 200,000/= fonnulation 7 Miscellaneous 100,000/= Total 1,609,200/=

62 APPENDIX V: STUDY TIME FRAME

# 2014 Dec Jan Feb March April May 1 Conceptual phase

— Chapter one 2 Design and planning phase Chapter 2-3 3 Empirical phase Data collection 4 Analytical phase Chapter 4-5 5 Viva hearing and final book binding 6 Graduation

63 APPENDIX VI: SAMPLE SIZE TABLE

TABLE 1 Tablefor Deteimining Sample Sizefrom a Given Population

N S N S N S 10 10 220 140 1200 291 15 14 230 144 1300 297 20 19 240 148 1400 302 25 24 250 152 1500 306 30 2.8 260 155 1600 310 35 32 270 159 1700 313 40 36 280 162 1800 317 45 40 290 165 1900 320 50 44 300 169 2000 322 55 48 320 175 2200 327 60 52 340 181 2400 331 65 56 360 186 2600 335 70 59 380 191 2800 338 75 63 400 196 3000 341 80 66 420 201 3500 346 85 70 440 205 4000 351 90 73 460 210 4500 354 95 76 480 214 5000 357 100 80 500 217 6000 361 110 86 550 226 7000 364 120 92 600 234 8000 367 130 97 650 242 9000 368 140 103 700 248 10000 370 150 108 750 254 15000 375 160 113 800 260 20000 377 170 118 850 265 30000 379 180 123 900 269 40000 380 190 127 950 274 50000 381 200 132 1000 278 75000 382 210 136 1100 285 1000000 384 Note.—N is population size. S is sample size

64