It was formed from the previously separate colony of Italian Somalia, enlarged by the Ogaden region of the conquered Ethiopian Empire following the Second Italo-Ethiopian War.

The Italian authorities in 1937 began construction of a paved highway from Mogadishu to Addis Ababa, which was completed in 1940.

[3] Additionally, there was a project to connect Mogadishu with the Addis Ababa-Djibouti railway, and another to start the construction of an airport on the outskirts of the city.

The colony in the late 1930s was one of the most developed in all Africa in terms of the standard of living of the colonists and of the local inhabitants, mainly in the urban areas like the capital and Genale & Villaggio Duca degli Abruzzi.

By 1940, the Villaggio Duca degli Abruzzi (called also "Villabruzzi"; currently Jowhar) had a population of 12,000 people, of whom nearly 3,000 were Italian Somalis, and enjoyed a notable level of development with a small manufacturing area with agricultural industries (sugar mills, etc.).