By Mohamed Dubo - FDI expert, former Director of SOMINVEST
“Somalia’s investment story is changing; the challenge now is turning growing investor confidence into productive enterprises, jobs and lasting economic transformation.” Mohamed Dubo
At a time when global investment is becoming increasingly competitive and selective, Somalia’s rising investment flows offer something more significant than an encouraging statistic: they signal that international investors increasingly see Somalia not only for what it has endured, but for what it can become.
Rising foreign investment reflects growing confidence in Somalia’s economic potential and points to a new chapter in the country’s transformation, particularly as Somalia has developed its first transformational plan.
Foreign direct investment is more than capital. It is a vote of confidence in a country’s future. It brings finance, technology, skills, jobs, new markets and connections to the global economy. For Somalia, where economic transformation requires investment on a scale beyond what public resources alone can provide, attracting productive private capital is central to the country’s development.
The latest World Investment Report 2026 from UN Trade and Development (UNCTAD) offers encouraging evidence that Somalia’s investment story is changing.
Somalia’s inward foreign direct investment (FDI) inflows have risen consistently over the past five years, from $601 million in 2021 to $834 million in 2025 — an increase of nearly 39%. More significantly, the stock of foreign investment in the country increased from $4.3 billion to $7.2 billion, demonstrating that international investors are not only entering Somalia but building a growing and lasting presence in its economy.
The broader regional picture makes this trend even more significant. East Africa’s inward FDI stock increased from about $89.6 billion in 2021 to $134.5 billion in 2025, while Africa’s inward FDI stock rose from approximately $1.02 trillion to $1.45 trillion. Somalia’s investment stock has therefore expanded strongly within a rapidly developing regional investment landscape.
These numbers are not simply a measure of money entering the country. They reflect a broader transformation in Somalia’s economic environment.
Over recent years, Somalia has made important progress in strengthening its economic and institutional foundations. Debt relief has improved the country’s international financial position, while economic reforms have strengthened public financial management and created greater space for private-sector development.
The Somali government’s decision to place private-sector-led growth and investment at the heart of the country’s economic transformation agenda is a commendable one.
The investment framework has also evolved significantly. The enactment of the Somalia Investment Law 2025 marked an important milestone in creating a clearer and more predictable framework for investors. It provides a stronger foundation for investment protection and facilitation, as well as the development of priority sectors.
This matters because investment follows confidence, and confidence is built not through a single reform but through the accumulation of reforms across multiple sectors over time.
From Economic Potential to Investment#
Somalia’s economic fundamentals offer considerable room for further growth. Its strategic location along major international maritime routes creates opportunities in ports, logistics and trade. Its long coastline presents significant potential in fisheries and the wider blue economy.
Agriculture, livestock, energy, manufacturing, aviation, telecommunications, construction and digital services all offer opportunities for investors seeking new markets and sources of growth.
The country’s young population adds another important dimension. A growing workforce and expanding consumer market can provide the foundation for a more diversified and productive economy.
The opportunity now is to convert this potential into investment at greater scale. That requires moving from broad opportunities to bankable investment projects.
Investors need projects that are clearly structured, commercially viable and ready for financing. This means strengthening project preparation, improving investment information, facilitating access to land and infrastructure, and ensuring investors can navigate government processes efficiently and transparently.
This is where investment promotion increasingly becomes investment facilitation. The objective is not simply to convince investors that Somalia has opportunities. It is to make it easier for them to identify those opportunities, assess them, invest in them and expand once they are established.
More from Somalia
Infrastructure and Productive Investment#
The same principle applies to infrastructure. Investment and infrastructure reinforce each other.
Better transport lowers logistics costs. Reliable energy improves industrial competitiveness. Digital connectivity expands opportunities for technology and services. Modern ports can transform trade, while industrial and economic zones can bring infrastructure, investors and businesses together in productive clusters.
Every improvement in these areas increases the attractiveness of the wider economy.
Somalia therefore has an opportunity to use FDI not simply as a source of capital, but as an engine of structural economic transformation. The focus should increasingly be on investment that creates productive capacity.
This is how FDI becomes more than an inflow recorded in a statistical table. It becomes factories, businesses, infrastructure, skills, exports and livelihoods.
The encouraging figures from UNCTAD should consequently be viewed neither as an endpoint nor simply as a reason for celebration. They are evidence that Somalia’s investment proposition is gaining traction.
The message is clear: Somalia is increasingly part of the African investment conversation. The task now is to deepen that position.
That means continuing to strengthen the investment climate, implementing the country’s investment reforms, developing bankable projects, improving infrastructure, supporting domestic enterprises and building stronger connections between international investors and the Somali private sector.
It also means recognising that investment attraction is a long-term endeavour. The strongest investment destinations are not built overnight. They are built through consistent policy, credible institutions, effective facilitation and an economy in which investors can see both opportunity and a pathway to growth.
The Next Phase Is About Scale#
Somalia has already travelled a considerable distance. Five years of rising FDI inflows and a substantial increase in investment stock demonstrate that international capital is increasingly recognising the country’s potential.
The next phase is about scale: from hundreds of millions to billions; from investment commitments to productive enterprises; from potential to performance.
Somalia’s investment story is changing, and the opportunity now is to make the next chapter even bigger.
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Mohamed Dubo is an FDI expert, former Director of SOMINVEST. He can be reached via: @Mohamed_Dubo
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The opinions expressed in this article are those of the writer and do not necessarily reflect the views of Dawan Africa.