Chapter four

Discussion and analyzes

4.1 Introduction

The research methodologies employed to assess the effect of industrialization on economic

development in Somalia was presented in chapter three and the results of the study are presented
in this chapter. The results are presented in broad sections in line with the research question and
hypotheses of the study. The chapter is divided into three sections. First section discusses the
general date found from institution (Ministry of commerce and industry of Somalia and Somali
Chamber of commerce and industry), where second section will be deep deeper with the selected
industries in Mogadishu and section three provides a summary of the results of the study.

4.2 Institution results

During collecting date from institution we found small number of industrial sector are currently
working and contributing to the economy. The industrial sectors we found are eleven different
sectors namely: food and beverages; construction, building, mining metal & allied; Textiles,
mattress and apparel; plastic and rubber; paper and board; chemical and allied; pharmaceutical;
leather and foot wear; oil and gas; energy, electric and electronic; timber, wood and furniture.
These seven sectors contain one hundred thirty six industries in total and they contribute to the
economy in 2020 around $418M.

As per Ministry of commerce and industrial development, they classified the industries according
to the size, number of employee and the capital of the industry. As shown in the table 4.1, size of
industry can be micro, small, medium or large according their employee. If the industry have less
than five employee its micro (home industry) where if it have more employee than one hundred
employee it becomes large industry. Also the size of industry depends on capital, so that if the
industry have more than one hundred thousand it is large and if it have less capital than that it goes
all the way to micro if its capital is less than ten thousand dollars.
Table 4.1: Industry classification

Industry size No. of employee Industry capital

Micro (Home Industry) 1 to 5 $1,000 to 10,000
Small 6 to 50 $10,001 to 50,000
Medium 51 to 100 $50,000 to 100,000
Large 101 to more $100,001 to more

Year after year the number of industries established increases as the following figure illustrates.
Figure 4.1 shows the established industries from 2000 to 2021. The column char’s horizontal (x-
axis) are years which is given range of five years where vertical (y-axis) which is the number of
industries in that years. As the chart shows, the least number of industries are established from
2000 to 2005 where the highest number industries are established in between 2016 and 2021. The
number industries from 2000 to 2005 are about five industries where the number of industries in
between 2006 to 2010 are about fifteen industries and the there is a big difference which is almost
two times the number of industries established in 2000 to 2005. Also the number of industries
established from 2011 to 2015 is around thirty five industries which is around two times lower
than the industries established in between 2016 to 2021. From 2016 to 2021 is where the most
industries are established which is almost ninety industries and it’s about eighteen times bigger
than the number of industries established in between 2000 to 2005.

Established industries per 5 year

90
80
70
60
50
40
30
20
10
0
2000-2005 2006-2010 2011-2015 2016-2021
year

Figure 4.1: Increase number of industries in between 2000 to 2021.

The number of industries increased highly in 2019, 2020 and 2021 as illustrated in the flowing
table. Table 4.2 show the yearly number increased in every sector from 2019 to 2021. According
to this table, 2019 has the least increased percentage where 2021 has the most increased percentage
of industrial sector. The percentage increased in 2019 according to 2018 is about 11.4 percent (nine
industries increased) where the percentage increased in 2020 is around 17.7 percent (seventeen
industries increased). Also the percentage increased in 2021 is about 29.4 percent which is about
two times more the number of industries in 2020.

Table 4.2: Industrial sector increase from 2019 to 2021

No. Industry sector No. of No. of No. of industries
industries in industries in in 2021
2019 2020
1. Food and beverages 30 37 46

2. Chemical industries 20 26 27

3. Construction, building and 14 16 16

metal mining

4. Textiles, Mattress and Apparel 10 11 17

5. Plastic and rubber 3 3 10

6. Paper and board 0 1 7

7. Oil and gas 1 2 6

8. Leather and foot wear 1 1 2

9. Pharmaceutical 0 0 3

10. Timber, wood and furniture 0 0 1

11. Energy, electric and electronic 0 0 1

Total 79 96 136

Percentage increase in every year 11.4% 17.7% 29.4%

Industrial sectors increased according to chart shown in the flowing figure 4.2. The bar chart shown
below illustrates the number of industries increased in different sectors between the period of 2019,
2020 and 2021. In the flowing chart we make comparison between eleven industrial sectors
throughout three years period. Energy, electric and electronic have the least number of industries
in the three year period which is one industries in 2021 and no industries existed in 2019 and 2020,
where food and beverages sector have thirty industries in 2019, around thirty seven industries in
2021 and about forty six in 2021.

Food and beverages are the most industrial sector in number throughout the period where energy,
electric and electronic is the least industrial sector. Chemical industries is the second largest
industrial sector where it have around twenty industries in 2019, about twenty five industries in
2020 and about twenty seven industries in 2021. Construction, building and metal mining is the
third most industrial sector in the period where it have nearly fourteen industries in 2019 and
around sixteen industries in the other two years. The fourth largest industrial sector is textiles,
mattress and apparel where they have around ten industries in 2019, nearly twelve industries in
2020 and seventeen industries in 2021. The fifth most industrial sector is plastic and rubber
industries where they have almost three industries in 2019 and nearly equal number in 2020 and
ten industries in 2021. Oil and industrial sector is the sixth most industrial sector where it have one
industry in 2019, around two industry in 2020 and around six industries in 2021. The seventh most
industrial sector is paper and board industries where they have seven industries in 2021, one
industry in 2020 and zero industry in 2019. Pharmaceutical industries is the eighth largest
industrial sector where it have three industries in 2021 and zero industries in 2019 and 2020. The
ninth largest industrial sector is leather and foot-wear where they have one industry in 2019 and
2020 where it have two industries in 2021. The tenth industrial sector is energy, electric and
electronic industrial sector where it only exists in 2021 and it have only one industry. The last,
least and eleventh industrial sector is timber, wood and furniture industrial sector and it never
existed before 2021.

All in all, the industrial sector increases year after year and it jumped rabidly after 2019 through
out to 2021 and in the following years it can jump steadily.
 Industrial sector increase
0 5 10 15 20 25 30 35 40 45 50

food and Beverages

Chemical
Construction, building and metal mining
Textiles, mattress and apparel
Plastic and rubber
Oil and gas
leather and foot wear
paper and board
pharmaceutical
Timber, wood and furniture
Energy, electric and electronic

2019 2020 2021

Figure 4.2: industrial sectors increase in 2019, 2020 and 2021.

Table 4.3: industrial value added in 2020

No. Industrial sector No. of Produced amount Revenue Percentage
industries in Littre or Ton
1. Food 18 62 Ton $21M 5%

2. Beverages 19 130,556,880,960 L $95M 22.7%

3. Chemical industries 26 2,670,650 L $32M 7.64%

4. Construction, building 16 49 Ton $72M 17.2%

and metal mining
5. Textiles, Mattress and 11 15 Ton $93.5M 22.27%
Apparel
6. Plastic and rubber 3 21 Ton $41M 9.78%

7. Oil and gas 2 11 Ton $36M 8.6%

8. Leather and foot wear 1 16 Ton $28M 6.69%

Total 96 $418.5M 100%

Industrial sectors add or contribute to Somalia economy as show in the above table. Table 4.3
presents different import information such as revenue of the industries and amount produced about
the industries in 2020. In 2020 the number of industries was 96 industries which are divided into
eight different industrial sectors where all that industries produced a product of 174 Ton (total
amount produced from Food; Construction, building and metal mining; Textiles, Mattress and
Apparel; Plastic and rubber; Oil and gas; Leather and foot wear) and 130,559,551,610 Littre (total
amount of beverages and chemical industries). All that industries produced a revenue of $418.5M
to the Somalia economy.

Industrial sectors differ according to the amount of money they made and contributed to Somalia
economy. The most industrial sector which contributed most to the economy in 2020 is beverage
industrial sector (beverages is the most used and well-known industrial sector in Somalia) and their
contribution is $95M which is about 22.7% of the money added to the economy in 2020. The
second largest economic contributor are textiles, mattress and apparel where they contribute to the
economy around $94M. Construction, building and metal mining industries are the third most
contributor to the economy where they contributed around $75M. The fourth most economic
contributor industrial sector is plastic and rubber industries where they added a value of $41M.
The fifth largest industrial sector contributed to the economy are oil and gas where they contributed
amount of $36M. The sixth most industrial contributor to the economy are chemical industries
where they contributed to economy around $32M. The seventh economic contributor is leather
and foot-wear where they contributed around $28M. The last and least industrial contributor to
economy are food industries where they contributed the least amount of money which is $21M.

As clearly shown in the above table also we used to present the data as column chart. As illustrated
in figure 4.3, the sectors are arranged according to the value they produced and added to the
economy. The most amount of money is produced from beverage sector. The second most amount
is produced from textiles, mattress and apparel. Then plastic and rubber, oil and gas, chemical,
leather and foot-wear, and food respectively.
 $0M $20M $40M $60M $80M $100M

Beverages
Textiles, mattress and apparel
Construction, building and metal mining
Plastic and rubber
Oil and gas
Chemical
leather and foot wear
food

Added value

Figure 4.3: produced value added to the economy in 2020.

Table 4.4: Number of employee in every sector

No. Industrial Sector No. of percentage

Employee
1. Food and beverages 938 33.87%

2. Chemical industries 554 20.7%

3. Construction, building and metal mining 338 11.21%

4. Textiles, Mattress and Apparel 330 11.92%

5. Plastic and rubber 210 7.58%

6. Paper and board 155 5.6%

7. Oil and gas 114 4.12%

8. Leather and foot wear 44 1.56%

9. Pharmaceutical 43 1.55%

10. Timber, wood and furniture 25 0.9%

11. Energy, electric and electronic 18 0.65%

Total 2769 100%

Industries contribute to the economy by employment, job diversification and job availability. As
show in the above table 4.4, the industrial sector totally have two thousand seven hundred sixty
nine employee. Existed industries which have working employee for them are eleven industrial
sectors as the table presents. The industrial sector that have the most number of employee are food
and beverage industries where they have a total of nine hundred thirty eight employee which is
about 33.87% of the total employed personnel for industrial sectors. The second largest industrial
sector that have the second most employed number are chemical industries where they have five
hundred fifty four employee which makes that industrial sector have 20.1% of total employed
personnel for industrial sector. The third most is Textiles, mattress and apparel sector where they
have three hundred thirty employee which makes it have 11.92% of the total employed personnel
for industrial sector.

Plastic and rubber industrial sector is the fifth largest industrial sector where they have two hundred
and ten employee which makes them to have 7.58% of the total employee personnel working for
that industrial sector. The sixth industrial sector is paper and board industrial sector where they
have one hundred fifty fife employee which is 5.6% of the total employed personnel for industrial
sector. Oil and gas is the seventh most industrial sector where they have one hundred fourteen
employee which is about 4.12% of employment. Leather and foot-wear is the eighth most
employee worked industry where they have forty four personnel which makes them to have 1.56%
of the total employee personnel in all industrial sector.

Industrial sector which have the least employee are pharmaceutical; timber, wood and furniture
and energy, electric and electronic industries respectively. Pharmaceutical industrial sectors have
a total number of forty three employee which is about 1.55% of the total industrial sector employee.
The second industrial sector which have less employee as twenty fife personnel is timber, wood
and furniture industries where they have twenty fife employee which makes them to have 0.9% of
the total industrial employment. The least industrial sector according to the number of employee
is energy, electric and electronic industrial sector where they have eighteen employee which is
about 0.65% of the total industrial employment.
4.3 Industrial results

After we ended analyzing date from institution we started to deep dive into the research and we
chose some special industries -see appendix A- from food and beverage industrial sector -as they
are the most industrial sector which have the most employee and their date availability and
accessibility was possible- to make the results clearer and strong. To get results from industries we
prepared questionnaire which contains two versions which are English version and Somali version
-as show in the appendix B- because we were including technicians and labor who can’t understand
English very well. Also we were trying to get accurate results as much as possible. We visited 10
different industries with 10 different employees which makes a total of 100 persons and we
distributed questionnaire containing four sections with 22 different questions. In total, its 100
persons each asked 22 question which is total of 220 questions have being asked and our industrial
results relay on that answers.

In section A of the questionnaire we asked about the person characteristics of the plans.
Characteristics we asked in section A are position, sex/gender, age, marital status, education level,
experience and number of training. To represent the date we made every character its own chart
or table and we will show them accordingly.

First of all we started asking the position of the person and results are shown in below figure 4.4.
This chart has five columns which presents owner/founder, manager, engineer, technicians and
labor accordingly.

As show in figure 4.4, the most of industrial employees are labor where the least are engineers.
As the charts shows owners/founder are 10 person and that means every industry had its founder.
Also the result shows there were 10 managers which makes every industry had its own manager.
As the result shows, there is a little number of engineers working in the industrial sector especially
food and beverage industrial sector and they are approximately 4 engineers. So that means working
engineers in the industry are very little which show the weakness of our industries. At least every
industry must have one or more engineers. The result shows the working technicians in the visited
industries are approximately 12 technicians. The most working employees for food and beverage
industries are labor where they are making the most portion of the answers which is almost 64
persons.
 Positions
70

60

50

40

30

20

10

0
Owner/Founder Managers Engineers Technicians Labour

Figure 4.4: Distribution of plants employees by position

Table 4.5: Distribution of plants employees by sex

No. Sex Results Percentage

1. Male 98 98%

2. Female 2 2%

Total 100 100%

Table 4.6: Distribution of plants employees by age

No. Age Ranges Results Percentage
1. 15-25 8 8%
2. 26-35 42 42%
3. 36-45 31 31%
4. 46-55 12 12%
5. 56-More 7 7%
Total 100 100%
Table 4.5 shows the distribution of plants employees by sex. As table 4.5 shows, most industrial
employees are male where the data shows they are 98 persons out of the 100 industrial employee.
Where female industrial employee are 2 out of the 100 employee. So that the working number of
female is very low.

Table 4.6 shows distribution of plants employees by age. As shown in the table, the most working
employees for industries are in age range of 26-35 where the date shows they are 31 persons
ranging between 26 years to 35 years. The least rage of working employees are aged 56-More so
they are 7 employees aged between 56 years and to more. Results shows 8 working employees for
food and beverage industries are aged between ranges of 15-25 where age range 26-35 is the most
where the age range have 42 employees. Also age range 36-45 have 12 persons where 7 employees
are aged between 46 and 55.

Table 4.7 shows distribution of plants employees by marital status. As the table shows there was
100 asked so most and approximately 61 persons of asked industrial employee are married where
the industrial employee status is single where the result shows they are 16 persons. And also the
table shows the divorced industrial employee are 23 persons.

Table 4.7: Distribution of plants employees by marital status

No. Status Results Percentage

1. Single 16 16%

2. Married 61 61%

3. Divorced 23 23%

Total 100 100%

Table 4.8: Distribution of plants employees by educational level
No. Education level Results Percentage
1. Less than primary 47 47%
2. Primary 21 21%
3. Secondary 17 17%
4. University 13 12%
5. Graduate 2 2%
Total 100 100%

Table 4.9: Distribution of plants employees by experience

No. Experience Ranges Results Percentage
1. Less than 5 years 79 79%
2. More than 5 years 21 21%
Total 100 100%

Table 4.10: Distribution of plants employees by number training

No. Training ranges Results Percentage
1. 1-5 times 84 84%
2. 6-10 times 13 13%
3. 11-More times 3 3%
Total 100 100%

Table 4.11: Distribution of plants employees by duration of training

No. Training duration Results Percentage
1. Less than a week 53 53%
2. Two weeks 22 22%
3. Less than a month 13 13%
4. One month 9 9%
5. Two months 3 3%
6. Six month 0 0%
Total 100 100%
Table 4.8 shows distribution of plants employees by education level. As the table shows, we
categorized the education level into five different levels which are less than primary, primary,
secondary, university and graduate levels. After we asked plants employee we got date on table
4.8. As the data shows, less than primary level education have the most personnel where it is 47
employees. Employees who have education level of primary are 21 person where secondary
certified employees are 17 employees. Employees who have university level education are 13
employees. Plants employees who have graduated level of education are 2 employees which makes
the least education level. However, the education level of industries is very law according to the
date because most of their employee or 75%of their employee have secondary or less education
level which makes the industries weak. As the employee education level is higher it means the
industry can be stronger.
Table 4.9 shows distribution of plants employees by their experience. We categorized the
experience into less than five years of experience and more than five years of experience. As the
table show, most employees have experience less than five years which is 79 employees have less
than five years of experience where 21 employees have more than five years of experience. As the
industrial employees have more experience it make the production and performance of that
industry great.

Table 4.10 shows distribution of plants employees by number of training. We categorized the
number of training into three ranges which are 1-5 times, 6-10 times and 11-More times. 84
industrial employee have 1-5 times training which is almost 84 percent where 13 employees have
6-10 times training. Also 3 employees of the industries have 10 and more times training. So as the
date in the table shows the training of the employee is 1 to 5 times which is the most range.
However to train the industrial employee is best for the industry.

Table 4.11 shows distribution of plants employees by duration of the training. We categorized
training duration into less than a week, two weeks, less than a month, one month, two month and
six month. Less than a week training duration is which most industrial employee have where 53
employees have it. 22 employees have two weeks training where 13 employees have less than a
month training. Also 9 industrial employee have one month training where 3 employees have two
month training and there is 0 employees who have six months training.
In section B of the questionnaire, we based on research question one which is how the
industrialization effects directly on economic development of Somalia. Also we prepared 6 sub-
question which focused industrialization effects on economic development through employment,
job diversity, increases skills, income, high salaries, and knowledge with experience increase. So
the data is presented in table 4.12.

Table 4.12 show ways industrialization effect on economic development. 71 employees strongly
agrees that industrialization effect on economic development through employment where 14
agrees. 5 of them believes industrialization may effect or not effect the economic and they are
neutral. 7 employees disagrees and 3 strongly disagrees that industrialization effect on economic
development through employment.

Industrialization effect on economic development through job diversity. 83 persons strongly agree,
11 persons only agree, 5 persons are neutral, 1 person disagrees and there is no one who strongly
disagrees.

Industrialization effect on economic development through increase in skills. This suggestion have
strongly agreed by 90 persons, agreed by 7 persons, neutral by 2 persons, no one disagrees and
one person strongly disagrees.

Industrialization effect on economic development through income. This point have 97 persons who
strongly agrees, 3 agrees and there are no neutral, disagree or strongly disagree persons on this
point.

Industrialization effect on economic development through high salaries. This suggestion have
strongly agreed by 63 persons, agreed by 21 persons, neutral by 10 persons, disagreed by 5 persons
and strongly disagreed by 2 persons.

Industrialization effect on economic development through knowledge and experience. 57 persons

strongly agree this point, 35 persons only agree the point, 6 persons are neutral they neither agree
nor disagree the point, 1 person disagrees and there is only one who strongly disagrees the point.
 Table 4.12: ways industrialization effect on economic development

No. Industrialization Strongly Agree Neutral Disagree Strongly

effects economic agree disagree
through …

1. Employment 71 14 5 7 3

2. Job diversity 83 11 5 1 0

3. Increase in skills 90 7 2 0 1

4. Income 97 3 0 0 0

5. High salaries 63 21 10 4 2

6. Knowledge and 57 35 6 1 1
experience

Table 4.13: Industrialization challenges

No. Industrialization Strongly Agree Neutral Disagree Strongly

Challenges … agree disagree
1. Lack of natural 4 5 7 19 65
resources

2. Less capital and 47 34 17 1 1

investments
3. Bad infrastructure 93 5 2 0 0
4. Less energy with 80 14 2 2 2
high price

5. Lack of skilled 41 23 13 11 12
human resources
and technological
know-how

6. Political instability 47 39 12 2 0
7. Import competitions 29 37 21 7 5
 Import competitions

Political instability

Lack of skilled human resources and technological know-

how

Less energy with high price

Bad infrastructure

Less capital and investments

Lack of natural resources

0 10 20 30 40 50 60 70 80 90 100

Strongly disagree Disagree Neutral Agree Strongly agree

Figure 4.5: challenges of industrialization.

In Section C of the questionnaire, we based on research question two which is about problems and
challenges that holds Somalia from industrialization. So there are challenges we encountered in
this section to know more about the challenges that Somalia have. The challenges we asked about
are lack of resources, less capital and investment, bad infrastructure, less energy with high price,
luck of skilled human resources and technological know-how, political instability and import
competition challenges. This challenges and the results are shown in table 4.13 and figure 4.5.

Lack of resource is a challenge that holds Somalia from industrialization was the first and the result
-as shown in table 4.13 and figure 4.5- is strongly agreed by 4 employees, agreed by 4 employees,
neutral by 7 employees, disagreed by 19 employees and strongly disagreed by 65 employees.

Less capital and investment is a challenge that holds Somalia from industrialization. This
suggestion have strongly agreed by 47 employees, agreed by 34 employees, neutral by 17
employees, disagreed by 1 employee and strongly disagreed by only 1 employee.
Bad infrastructure is a challenge that holds Somalia from industrialization from Somalia. This
suggestion have strongly agreed by 93 employees, agreed by 5 employees, neutral by 2 employees
and zero employees disagrees and strongly disagrees.

Less energy and high price energy is a challenge that holds Somalia from industrialization. This
suggestion have strongly agreed by 80 employees, agreed by 14 employees, neutral by 2
employees, disagreed by 2 employees and strongly disagreed by only 2 employees.

Lack skilled human resources and technological know-how is a challenge that holds Somalia from
industrialization. This suggestion have strongly agreed by 41 employees, agreed by 23 employees,
neutral by 13 employees, disagreed by 11 employees and strongly disagreed by only 12 employees.

Political instability is a challenge that holds Somalia from industrialization. This suggestion have
strongly agreed by 47 employees, agreed by 39 employees, neutral by 12 employees, disagreed by
2 employees and strongly disagreed by zero employees.

Import competition is a challenge that holds Somalia from industrialization. This suggestion have
strongly agreed by 29 employees, agreed by 37 employees, neutral by 21 employees, disagreed by
7 employees and strongly disagreed by only 5 employees.
 0 5 10 15 20 25 30 35 40 45 50

All of them

Income and salary

Employment

Population

Knowledge and skills

Job diversity

None of the above

Figure 4.6:

No. To become industrialized it’s Results Percentage

needed…
1. Agricultural development 21 21%
2. Domestic processing of raw materials 9 9%

3. Domestic production of manufactured 6 6%

goods for the domestic market
4. Domestic production of manufactures 12 12%
good for exports

5. All of them 51 51%

6. None of the above 1 1%

Total 100 100%

Appendix A