Somali Investment Forum: Keynote Address Shari Berenbach – President & CEO U.S. African Development Foundation

Somali Investment Forum:  Keynote Address

Shari Berenbach – President & CEO

U.S. African Development Foundation

  • Good morning everyone.  Particular thanks to:
    • Brian Phipps – Deputy Special Representative for Somalia
    • Manual Moses – Head East Africa, World Bank Group
    • Lee Sorensen & Alexandria Wise from Shuraako
    • Also, take this moment to introduce – Connie Newman and Jeff Gilleo from the US African Development Foundation who have been leading our work here in the Somali Region.  USADF supports youth vocational training and job placement in Somalia.
    • Most importantly, I want to thank each every delegate here who has joined us at this very important Somali Investment Forum.
  • The Future Belongs to You
    • The Title of my Talk this morning – and the most important message I want you to walk away from is:  THE FUTURE OF THE SOMALI PEOPLE BELONGS TO YOU.
    • That’s right – you thought you were just coming to a conference for a few days… meet a few investors… identify a few deals…but NO… the Opportunity and Challenge before us is much greater much more significant… and YOU… all of you who came here to this meeting today… YOU are the ones who will BRING A NEW FUTURE TO THE SOMALI PEOPLE.  YOU are the Change the Somali People are Waiting For.
    • I want you to take a moment, and look around and introduce yourself to one of your neighbors.  And if you are sitting with people you already know – reach to the row behind you or in front of you.
    • It’s important that we all get to know one another because we have a lot of work to do and we will need to do this together. THE FUTURE OF THE SOMALI PEOPLE BELONGS TO EACH AND EVERYONE OF YOU IN THIS ROOM TODAY.
    • The next important message here is that no one person in this room can create the future for all of the Somali People.  THIS IS SOMETHING THAT WE WILL TO DO TOGETHER. …
    •  And let me reassure you.  You who have come here today… together… you have what you need to create a BRIGHT FUTURE FOR THE SOMALI PEOPLE. IT WON’T NECESSARILY BE EASY – BUT I KNOW YOU WILL SUCCED.
    • Before I get into explaining why I am so confident that you will be successful, .. Let me tell you a bit of my personal story… why I was willing to do whatever it takes to join you for this historic meeting.
  • Shari Berenbach’s Personal Story
    • I first began my work in Africa as a young woman about 30 years ago.  I worked for a US NGO – that with support from USAID was setting up microfinance programs in Hargesia, Baidoa and other towns as well.
    • My organization worked in more than a dozen countries – but the Somali people were my favorite.  Each time I came to Mogadishu – it felt like I had come home.  I was so impressed with the tenacity and the entrepreneurial spirit – a ‘can-do’ spirit that reminded me of the US. And, of course, the Somali people are so warm and gracious.
    • It’s because of these experiences from 30 years ago, that when I was asked to kick off these meetings, I said that I would do whatever it takes to be here.

 

  • Three Important Trends
    • Fast forward 30 years – I am not as young as I used to be – but there are a lot of important new trends that helped to set the stage for a Bright Future for the Somali Region.
    • There are three trends in particular I will highlight:
      • Entrepreneurship and Enabling Ecosystems
      • The Development of the Impact Investing
      • Technological breakthroughs – Specifically the cell phone revolution – and renewable energy.
    • For all of these trends I want to emphasize one point:  SUCCESS ENABLES SUCCESS.  This is not a zero sum game – rather we will talk about a virtuous cycle – where one success creates the path to another success.
  • Entrepreneurship & Enabling Eco-systems
    • We’ve learned a lot about how to support and grow entrepreneurship – and how entrepreneurs can lead the way in the future.  Somalis of course are no strangers to entrepreneurship… But…couldn’t we be doing more to enable the success of each and every Somali entrepreneurs.
    • There is a growing awareness of the importance of an enabling Ecosystem that helps to foster Entrepreneurship – and not just entrepreneurship for the few – but entrepreneurship for the many.
    • Shuraako, who have invited us here talks a lot about the importance of the Enabling Ecosystem for Entrepreneurship.
    • They point out that to be successful entrepreneurs need:
    • Access to Markets
    • Business Support and Development Services
    • They need qualified Human Capital – both for management and for their workforce.
    • Businesses also need access to finance – and different kinds of finance for the different stages of business growth.
    • Next, there are cultural components that foster entrepreneurship and
    • Finally, there is a need for an Enabling Policy Environment – that we all need from a fair and efficient public sector.
  • Impact Investing
    • My second trend is the growth of the Impact Investing Field.  So, what is impact investing and what does it mean for the Somali people.
    • Very simply – Impact Investing is when an investor invests and is seeking BOTH a financial return and a social return. In some instances, an investor might be happy with a more modest return – in exchange for social impact.
    • BUT, not always.  There are some impact investments with robust investment returns AND social returns.  This is particularly true in an environment like the Somali peninsula that is so starved for capital.
  • Shari Berenbach’s Personal History with Impact Investing
    • It may not be apparent – but you are looking at one of the Founders of the Impact Investing Industry.  And how I helped to build the Impact Investment Industry is perhaps worth consideration here.
    • In l997 I was hired by the Calvert mutual fund company to run their Foundation.  Instead of a regular philanthropy, they asked me to build a financial product where investors could invest their capital – and we would then use the invested capital to lend to non-profits, to producer groups, to microfinance institutions – and other community development organizations in the US.
    • It took some time – but between 1997 and 2010, I grew Calvert Foundation to an Industry Leader managing a half billion US$ in assets.
    • So, how did this happen.  I recognized that to create a whole new way to think about investment – it wasn’t about any one organization – one financial intermediary.  But we need to reach scale… and to bring as many people into this new world as possible.
    • So, whenever I found anyone, doing anything like Impact Investing… I had five words… How Can I Help You?
    • So, Calvert Foundation created a whole side of our shop that made everything we knew how to do available to others – on a fee for service basis.
    • About 2007, Rockefeller Foundation – came up with the name Impact Investing – and brought many others to the table, and today Impact Investing is a multi-billion dollar approach to investing – spanning the globe.
  • How is this relevant to you?  In a couple of ways:
    • First – Investors who are coming to the Somali Region – may be looking for a financial return – but they are also looking to make a difference.  We all know that there are easier places to make money.
    • Second – Important to recognize, for each and everyone here – that we need to work together to help re-build the economy in the region.  An investment in one enterprise – creates the source of supply or the market outlet for another.
    • Markets build on one another – so we need to work together to build out the value chain that enables each other.  We call this a virtuous cycle.
    • And, we all know, the Somali diaspora – many of you here in this room – are true impact investors.  You want to make money with your investment – but you want to benefit the Somali people – you want to see peace and prosperity in the Somali region.
    • Final Trend:  Innovation
      • Next and final trend is to focus on Innovation – and this again is an area where the Somali people have excelled.
      • As you know, Somalis were early adopters of Cell Phone Technology – which has facilitated communication – connecting people together.
      • Equally important, however, is a new innovation around Renewable Off-Grid Energy.  It’s simply not going to be possible to build a competitive Somali region, with energy costing $1.0 per KwH.  This is where energy entreprenuers like Said who I interviewed last night comes in. The future in Somalia will not be a single grid to serve the whole peninsula – but a network of local energy entrepreneurs – distributing household solutions, mini-grids, micro-hydro, bio-gas and the like.
      • I have no doubt that Somali energy entrepreneurs will be up to the challenge to bring affordable, renewable energy.
      • And again, these energy entrepreneurs will enable other businesses to flourish.  One enterprise enabling another.
  • My Vision for the Future for the Somali People
    • How do these trends come together?  What does this mean for the Somali region?
    • My vision for the people of Somalia – and I believe it is a vision that I share with many of you… is a Somali region where:
      • There are opportunities for hundreds and thousands of SMEs – owned by men and women – employing youth and growing the economy from the ground up.
      • An environment where there are resources and information that all businesses need to flourish.
      • In my vision – the Somali region becomes a hub for the region – enabling its own growth and the growth of others.
  • As we build out this vision together – Few items of caution:
    • First, there has been a lot of talk about Commercial Banks and their importance.  It seems that there are likely to be a number of banks coming on the scene.  Banks are particularly important to link Somali enterprises to export markets – through letters of credits, etc.  But let’s remember, commercial banks typically don’t fund start-up enterprises in new sectors –  that is the kind of investing that is needed – and it’s the investing that YOU can do – that impact investors can do.
    • Next, the economists will all talk about the importance of ‘Direct Foreign Investment’ – and the institutional investor funds that are beginning to look at Africa. It’s premature to look to such investment at this time – and you don’t want to encourage investors until many broader issues are addressed.   I can’t emphasize enough, the best investment for Somalia – will come from the Somali’s themselves.  This will come from You!
  • Concluding Remarks
    • Finally, as we build out this vision together – we need to consider the important role of government to create a level playing field, to provide essential services – information – resources – health services – education.
    • There are efforts underway to support a new legal code that would enforce business rights.  All these steps are essential to enable business to flourish and for the vision to come to life.  As Somali business leaders – we need to work together to support a more vibrant and effective public sector.
  • The FUTURE OF THE SOMALI PEOPLE BEGINS WITH YOU.  IT’S YOUR TENACITY AND DETERMINATION THAT WILL MAKE THE DIFFERENCE.  IT’S YOUR IMPACT CAPITAL AND YOUR BELIEF IN THE SOMALI PEOPLE THAT WILL MAKE THE DIFFERENCE.  THE FUTURE OF THE SOMALI REGION CAN ONLY BE REALIZED BY ALL OF US WORKING TOGETHER TO CREATE THE SOMALI REGION WE WANT TO SEE.