Somaliland: Dahabshil Group vs. Sahel Communities

Last week, a group of elders representing the Sahel Communities ( Dan iyo Duco) raised objection the permit for Dahabshil to build a new cement plant  from scratch right next  to  the ruins of old Berbera cement factory . As I watched the video of the gathering of the elderly, the Sahel communities concerns about the new cement plant permit were: residents including their own elected local officials were completely cut-out the decision making process regarding the permit for the construction of the plant. The environmental and safety issues that could affect the well-being and the quality of life of the citizens and children in the region were not addressed. However, the most contentious of all was a permit that former Riyaale administration issued to a local group to rebuild the old factory if it is feasible or to build a new one.

Building a cement plant is not an easy venture. It is a capital-intensive business, which needs huge investment. Companies with access to a cheaper finance know how technology to make better cement more cheaply and using less power, and the experience to avoid environmental disasters, would have advantages in cement trade. For example, a typical cement plant with production capacity of 1.2 million tonne/yr,  might cost around $250-350 million, to build from scratch, plus unseen budget contingencies and additional cost overruns. Although refurbished plant is much cheaper, it is not as efficient as a new one.

In addition, the builder should have to own property that could support the size of a cement plant and the mill, and should have access or own limestone quarry and other raw materials such as Silica, and mineral rights to produce the primary aggregate needed for the cement.

Up to now, what the Dahabshil group got is only a presidential decree and a letter from a rogue government minister, granting them a permit to build a new cement plant.

Undoubtedly, Somaliland needs investment, growth, development, and jobs; however, awarding Dahabshil a license to build a cement factory is not to going create jobs or entice investment.  Because it would only  give  Dahabshil the rights to claim the sole ownership of the raw materials and the minerals that  are essential to produce cement– and then look for a foreign investor as joint venture,  maybe in China—for capital and machinery, to build the physical plant to produce anything, and sell it as  cement. There is a possibility this could happen, and we must stop it  before it is too late

With global recession, as well as slow demand of cement in Somaliland, I thought Cement trade is not a profitable business venture. Nevertheless, the Dahabshil group think of  cement as  a valuable commodity for wrong reasons. The total cement consumption for the whole Somaliland/Somalia was around 200,000.00 tonne for the last year. The average price of cement is around $85.00/tonne. For example, according to the suppliers of cement, it cost $20 a tonne to ship from Berbera to Hargeysa, a total distance of 180 km.

I do not think Somaliland could accommodate two cement factories in 100-km2 area. I really do not understand why Somaliland leaders are silent about this dispute.

Just because Dahabshil group contributed financially  to the presidential campaign of President Silanyo do not entitle them to be granted a very complex project such as building a new cement plant from scratch, with out making sure that Dahabshil group have enough equity to undertake the construction of the plant. We would also like to know–how much taxes Dahabshill paid for the last 5 years. The consent of Somaliland people, especially Sahel communities, should also be taken into consideration.

Sahel communities are simply asking for transparency, accountability, and what is the best interest for Somaliland. We should debate openly this important issue, which affects the health and safety of their people. They have rights to demand that.

If Somaliland were a country based on the rule of the law, the Sahel communities and their lawyers would have petitioned to a court of law in Berbera, to block the presidential order or decree granting Dahabshil for the permit. The case would have been called Dahabshil group vs. Sahel communities. A judge would have decided the case.

However, in reality, that is not the situation in Somaliland, the president and some of his corrupt ministers, who used to be former employees of Dahabshil are lobbying hard for Dahabshil to prevail at the expense of Sahel communities.

The Sahel Communities have demonstrated how a united group of people could protect their own environment and natural resources, when their own government sided with special interest groups. If Dahabshill, which has no experience, resources, or idea, what it takes to build a cement plant, is not voluntarily withdrawn his plan to acquire the natural resources of Somaliland. The only course of action is the president to either rescind his presidential decree or stop any permit issued by his ministers for the benefit of Dahabshil.

I would advise Dahabshil to concentrate on its tax-free core businesses —the money transfer and Telecom; to finish the half-built five-story building— that was erected seven years ago on the grounds of the former Headquarters of Somaliland police force, and to leave people’s natural resources for the development of Somaliland.

Ultimately, Somaliland has abundant resources to produce a good quality Portland cement, which could become our way of connecting global cement industry. Our President must put the interest of the nation ahead of that 1% of us, who are fighting controlling whatever chance to make money. We need smart and visionary leaders who are able to bring into our country global multinational companies such as France’s Lafarge, with technology and the finance to build environmentally friendly cement plant, which is willing joint venture with a public owned Somaliland cement corporation.

I believe private and public partnership is the best way to develop our cement industry. In addition, Somaliland people and their elders would expect our elected leader to do the right thing.

“Allah bless Somaliland”

“Long live Somaliland”

This Op-ed originally appeared in on March 13, 2012, and was written by Ali Mohamed. Contact him at