Weak Eid spending hurts business community

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Mogadishu – Eid consumer spending has been the worst in years according to traders interviewed by UM in Mogadishu. Traders have argued that a combination of factors came together to lead many of them to losses.

Traders agreed that road closures, fear of insecurity and an uncertain political climate made consumer spending weak.

“By the 15th day of Ramadan almost all merchandise used to be sold or I know how much I had to reduce but this year I have made a big loss,” said Nur Mohamed, a clothes seller. “Fear of insecurity is just one issue but people also do not want to spend too much because they are not sure about the future.”

“Never have things been so bad for my business because I am still selling Eid stock at a loss now. Really upset this year because I am now in debt with suppliers,” said Halima Abdullahi, another clothes trader. “People were even careful to spend on their children. They did nor want to buy individual items but sets of clothes which are much cheaper if they bought anything. Where families used to spend about $100 a child, this year it was less than $50.”

All interviewed which included hoteliers, restaurants owners and street traders agreed that fear of insecurity and a lack of confidence about the political future of Somalia has hurt spending and crashed consumer confidence.

“The negative politics in Somalia and the Federal government’s many crisis has made people scared of spending. Many are thinking will we get paid salaries if election begins,” said Suleiman Abdikarim, a business adviser. “Civil servants are saving and companies are not spending because they don’t know if they will get paid.”

“This year I had Eid at home with Family and tried to spend as little as possible because I am not sure how long we will get paid. If elections come we know salaries can stop, said a senior civil servant who did not want to be named. “The last government did not pay us for 9 months. We remember this.”

Many interviewed agreed that spending on essential items will continue but discretionary spending will weaken as people spend only on what they need.

“Things are so economically and politically bad that people are trying to save remittances from family members abroad,” said a shop owner who did not want to be named. “I have families who pay me at the end of the month when they get their support from families abroad and even they are cutting back.”

All interviewed agreed that the Federal government and Federal Member states should fix their disagreements, roads should be open across Mogadishu and government should spread its spending to allow smaller companies to benefit.

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