A former minister in Somalia whose hotel was damaged in a bomb attack by the Islamist group al Shabaab says he is rebuilding and expanding, in an unusual show of business confidence in a country where violence is a daily challenge.

The car bomb in August blew out the windows of the beachfront Elite Hotel in Mogadishu and partially destroyed its perimeter wall. Attackers then stormed the building, setting off grenades and shooting their way through rooms and staircases.

"I have to invest in reconstruction. To stop reconstruction for fear of what may happen in future means to give up business," hotel owner and former finance minister Mohamed Abdullahi Nur, 38, told Reuters.

Al Shabaab, which is allied with al Qaeda, has been fighting to topple the Somali government for more than ten years. The group wants to establish its own rule based on a strict interpretation of Islamic law.

The militants have frequently targeted hotels, restaurants and cafes in Mogadishu, which are patronised by the political and security elite.

Nur told Reuters he had spent hundreds of thousands of dollars on reconstructing and repairing the hotel that cost him $2 million to build.

Just a month after the attack, well-heeled customers were back in the five-story hotel, enjoying seafood and cappuccino, and taking in views of the ocean while beachgoers swam and speedboats cruised by.

Nur plans to add another 120 deluxe rooms at a cost of $8 million dollars.

"I am alive and healthy, I am determined to reinvest and reconstruct even if it might be bombed again," he said.