Residents in the Somali coastal district of Hobyo are enjoying a lower cost of living since the importation by a local company of goods directly from the United Arab Emirates.
The goods sold in local shops have traditionally been transported by road from Mogadishu and Bosaso, more than 500 kilometres away, with costs inflated by taxes imposed by Puntland, Galmudug and Hirshabelle border authorities, and by Al-Shabab in the areas it controls.
Since January, locally owned company Baraarug has been importing food and fuel from the UAE into the small port of Hobyo, circumventing the many layers of taxation and making prices more affordable for local people.
“A half kilogram of rice cost between $20 to $30, but it is cheaper now, anyone can afford to buy it!” said Ali Adan Abdille, a casual labourer, who had been finding it hard to support his family of five. “Ships come in two or three times a month brining flour, rice sugar and even dates.”
Ali used to spend $100 a month buying half a bag each of rice, flour and sugar, but his family food bill has reduced to $40. He is using the savings to pay school fees for two of his children at Hobyo primary school.
There are around 500 mainly youth who have found a new job opportunity at the port, unloading the goods every time a ship arrives. Ali is among them, earning $100 a time. He said his family’s life has changed immensely with the additional income.
Bashir Mohamoud Awale, the director of Baraarug, said the company has hired 30 employees on contract. One challenge they face, though, is that the small port has no docking berth for ships.
“The cargo ships stop two kilometres out to sea. We use boats to carry the goods, meaning we have to pay double for unloading and sometimes items fall into the sea,” he said.
However, business is good overall and seems to be helping the local economy too.
“A barrel of fuel used to cost $140 but now it is down to $95. The cheap price of fuel has helped the residents’ big time, especially those who sell fish,” Bashir said.
Hobyo used to receive only four hours of electricity a day due to the high cost of fuel price. This meant fish sellers had to throw away the fish they did not sell as refrigeration was not possible.
Following the importation of cheaper fuel, a new electricity company opened up and is now supplying power 24 hours a day to residents.
Biyood Mohamed Mohamoud stopped selling fish in her shop in Hobyo two years ago after running into losses due to the power problems. Regular affordable electricity enabled her to return to selling fish earlier this year.
“I have been buying the fish off the boats and keeping them in a freezer for the past three months. Business is good for me now, initially I used to throw away the remaining fish, but that has changed now,” said Biyood.
With a monthly electricity bill of just $14, Biyood has been managing successfully to support her seven children on the $15 to $20 profit she is now making every week from the sale of fish.