In Somalia, no government meant better cell phone service

In Somalia, no government meant better cell phone service
Special Operations Forces deployments in 33 African countries in 2016. (Map credit: The Intercept)

Anarchy is bad, but a totalitarian government is much worse. That seems to be the lesson of Somalia, a balkanized country torn by civil strife. Warlords, clans, and mini-states vie for control. The strife makes the country poorer, but not as poor as it would be if it had a totalitarian central government. The economy is growing at about 3 percent per year. And the lack of central government regulation has given it unusually good cell phone service and a relatively good financial payments system. As StrategyPage says:

Somalia has the best cell phone service in Africa and that has had an enormous impact on the economy, politics and counterterrorism efforts. Because cell phone operations began in Somalia before a national government could establish control over most of the country that service developed without much government interference. Thus local clans or warlords had the resources and authority to allow entrepreneurs to establish cell phone service. By 2005 the major local cell phone operations agreed to an interconnectivity deal that was the beginning of national cell phone service. There were still several major suppliers of cell phone services and they competed on price and new services.

By 2012…Somalia had the most advanced, affordable and full-featured cell phone service in Africa. It handled banking as well as communications…by 2004 three cell phone companies competed to provide service ($10 a month for free local calls, 50 cents a minute for international calls and 50 cents an hour to get on the Internet.) Each new cell phone transmitter installed required that the local clan chief or warlord get a payment. Everyone recognized the value of the new phone service, after having gone without for years after the old government-run landline phone company was looted and destroyed. As a result, phone company equipment really is protected by the clans and warlords, who do not want to lose their dial tone. The new phone service is cheaper and more reliable than the old government-owned landline phone network. This is because there is competition, no government bureaucracy and no taxes (other than the necessary bribes and security payments)… Cell phone service became one of the things nearly all Somalis would fight for and has been a major reason for the GDP growth despite rampant corruption and lawlessness.

Liam Bissainthe

Liam Bissainthe

Liam Bissainthe is a real estate investor and recovering attorney.