VZCZCXRO4116
RR RUEHDE RUEHROV RUEHTRO
DE RUEHNR #2129/01 2800934
ZNR UUUUU ZZH
R 070934Z OCT 09
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC 1258
INFO RUCNSOM/SOMALIA COLLECTIVE
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RHMFIUU/CJTF HOA

UNCLAS SECTION 01 OF 02 NAIROBI 002129 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/E 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV PINR SO
SUBJECT: SOMALIA - PRIVATE FINANCING FOR THE TFG 
 
¶1.  (SBU) Summary:  On October 1, AF/E,s Senior Somalia Desk 
Officer and the Djibouti Somalia Watcher met with Banque Pour 
le Commerce et l,Industrie ) Mer Rouge (Bank for Commerce 
and Industry ) Red Sea; BCIMR) CEO Ould Amar Yahya at the 
Djibouti main office.  BCIMR is the only international bank 
currently operating in Somalia, with a branch in Hargeisa. 
Yahya noted that the Hargeisa branch has been so successful 
that BCIMR is in talks with the TFG to open additional 
branches in Somalia wherever and whenever the security 
situations permits.  He also offered suggestions on providing 
a baseline budgetary level for the TFG through private 
financing.  End summary. 
 
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Somali Businesspeople are the Engine of Regional Growth 
--------------------------------------------- ---------- 
 
¶2.  (SBU) AF/E,s Senior Somalia Officer and the Djibouti 
Somalia Watcher discussed Somalia's economic outlook with 
BCIMR's Yahya on October 1.  Yahya presented an optimistic 
prediction for the future if security was achieved, noting 
that Somali businesspeople that deal in every imaginable 
commodity sold throughout the region are the foundation of 
BCIMR's deposit base. Somali qat (a leaf that produces a mild 
narcotic effect when chewed) livestock, sugar, pasta, edible 
oil and cement in particular have enjoyed particularly high 
profits in recent years; and are the backbone of the regional 
economy. A score of dealers in these commodities have current 
individual accounts worth more than $150 million each, and 
there are hundreds of other accounts in the seven to 
eight-figure range, Yahya said. And those are just the 
accounts for individual Somali businesspeople. When you add 
corporate, local and national government, NGO, international 
organization and individual accounts, Yahya said that BCIMR's 
projected growth for 2009 was in the process of being revised 
upward, despite the global economic crisis. As soon as the 
security situation permits, Yahya continued, BCIMR plans to 
provide financing for companies involved in Somalia 
infrastructure repair projects, such as the Berbera port 
renovation project proposed by the French-owned Bollore 
Africa Logistics Group. 
 
--------------------------------------------- --- 
Who Benefits From Somalia's Continuing Disarray? 
--------------------------------------------- --- 
 
¶3.  (SBU) At a time when local, regional and international 
actors are coalescing behind the TFG, friends of Somalia have 
to acknowledge who benefits from disarray in Somalia and 
discuss ways that they could reap similar benefits from a 
re-unified Somalia, Yahya said. Local and international 
businesspeople make astronomical profits (despite the risk) 
since they are relieved of the necessity of paying the normal 
costs of doing business in a stable society.  Front-line 
states receive income, as well as international assistance, 
that would go to a unified Somalia if it existed.  And, 
international organizations and NGOs that are created to work 
in Somalia expend the bulk of their resources on supporting 
ever-increasing staffs that work "on" Somalia in Nairobi, but 
with few in-country initiatives. 
 
-------------------------------- 
How to Privately Finance the TFG 
-------------------------------- 
 
¶4.  (SBU) Yahya believed that it would be possible for the 
Somali private sector to provide a baseline budget for the 
TFG. If the TFG would launch an appeal to Somali business 
people to contribute, say, one half of one percent of their 
yearly profits, the TFG would have a substantial financial 
base from which to work.  Funds could be distributed through 
and accounted for by the Price Waterhouse Coopers mechanism. 
The TFG might also provide each contributor with an incentive 
that would meet his needs. Once prospective international 
investors saw Somali businesspeople successfully investing in 
the rebuilding of their country, Yahya concluded, the full 
spectrum of expeditionary companies such as Petronas (already 
in Ethiopia) would rapidly follow. 
 
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BCIMR/Yahya Antecedents 
----------------------- 
 
¶5.  (SBU) BCIMR is a subsidiary of the French Group Bred 
Banque Populaire.  The group is present in 71 countries, 
using well-known names such as NATIXIS, COFACE and Banque 
 
NAIROBI 00002129  002 OF 002 
 
 
Populaire.  It is the largest bank in the Horn of Africa, 
with 60 - 70 percent of deposits and 51 percent of the loans 
distributed. During its fifty years in Djibouti, BCIMR has 
been a key facilitator of regional economic development, in 
particular in Ethiopia, Somalia, Yemen, and Eritrea.  Its 
headquarters is in Djibouti City. The Hargeisa branch opened 
in February 2009, and was the first to be opened by an 
international bank in Somaliland. 
 
¶6.  (SBU) Ould Amar Yahya is a French national of Mauritanian 
descent.  In addition to being the CEO of BCIMR, he is the 
President of the Djibouti Professional Banking Association. 
A senior French banking official, Yahya was the director of 
the Commission des Operations de Bourse (French Stock 
exchange) market surveillance department before he was 
dismissed in 2000 for suspected insider trading.  He was 
quickly rehabilitated and picked up by Bred.  When Bred 
bought BNP-Paribas, interest in BCIMR early in 2007, Yahya 
was made CEO. 
 
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Comment 
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¶7. (SBU) There now seems to be local, regional and 
international will to support the TFG in its quest to "take 
back" Somalia. As a result, policymakers and implementers 
must include discussions on how to put Somalis in the 
forefront of any durable solution and ensure that proposals 
for such a solution feature concrete suggestions on how those 
who have benefited from a generation of disorder could reap 
even more benefit from a Djibouti Process designed to produce 
stability. 
HOZA