By Rowan Philip
In April, the Wall Street Journal reported the seemingly astounding fact that American businessmen had invested in a seaside resort in war-torn Somalia.
With interests in security force training and real estate in post-conflict societies, Michael Stock revealed that his company, Bancroft Global Investment, poured $25 million into various Somali business startups. One business, a 212-room resort called International Campus, comes complete with its own armored bunker and trauma center.
Similar “frontline entrepreneurship” in Africa’s post-conflict zones has emerged as the driving force for economic recovery in at least three countries in the past decade.
Like Stock, some were forced to take financial and physical risk themselves.
While Rwanda’s civil war raged, Praveen Moman – who had grown up in Idi Amin’s Uganda – returned from exile in India to launch a high-end tourism business in one of Rwanda’s conflict zones.
Offering gorilla eco-tourism and luxury lodging, his Volcanoes Safaris outfit now attracts tourists from around the world including people like Chicago Mayor Rahm Emanuel and the president of Macy’s.
Most war zone entrepreneurs have sought the seemingly impossible – long-term loans. With little or no surviving collateral and the prospect that businesses could be seized at any moment at the point of a gun, this would appear insurmountable.
Despite the concern that renewed fighting might cause repayment defaults, a Dutch non-governmental organization, SPARK has arranged “soft loans” and training for war zone entrepreneurs in Burundi, Liberia and Rwanda.
According to a recent report by the U.S. Council on Foreign Relations, 70 percent of all businesses in Liberia started after the formal end of its brutal civil war in 2003.
Despite the war having diminished per capita gross domestic product by 90 percent, Liberia’s economy has since grown an average of 12 percent per year. The report highlighted the business of one Liberian man, George Howard, who lost almost everything in the war except his life and a broken Caterpillar front-end loader.
Like many war survivors, Howard – seeking to repair the equipment and tackle the rubble on Monrovia’s streets – applied for a post-conflict loan from the Liberian Enterprise Development Finance Corporation. The terms included training and allowed long-term repayment.
In 2012, Howard won a $1 million waste management contract from World Bank.