Somaliland: Rising Berbera Port into a regional maritime hub in the Horn of Africa

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Dubai Port World (DP World) has won a 30 years concession with 10 years [automatic] extension to develop and manage the Berbera Port of the Republic of Somaliland.

 

In September 2016, DP World entered the agreement with the government of Somaliland and at a stake of 65% for the $442 million US dollars they pledged to invest in the port. Initially, Somaliland was to retain 35% of the deal where DP World agreed to upgrade Berbera Port into an international standard. “The investment will include a first phase of a 400 metre quay and 250,000 square metre yard extension, and gantry cranes and reach stackers to handle containers and cargo.” Reported DP World via a press statement published online.

Berbera Port is located at a very strategic location at the Swiss Canal. It is a class A port that has been in operation for centuries but was only utilized in the early 1970s. There were many interests from many international port developers who pursued concessional agreement similar to the one entered with DP World. The government of Somaliland picked DP World to partner with in developing and managing Berbera Port. DP World Group Chairman and CEO Sultan Ahmed Bin Suleiman said in a statement published on the company’s website, “Our vision for Berbera is to make it a regional maritime hub in the Horn of Africa and its development will encourage growth for the region’s economy. It’s also a boost for local prosperity – jobs for the people of Somaliland and future generations. We look forward to bringing our global experience here and to help develop the Berbera Corridor, which is key to encouraging regional economic activity.”

Berbera Port is a gateway to the millions of other East Africans who inhabit in landlocked Ethiopia, South Sudan and even further beyond. DP World, being an international ports pioneering company, foreseen the opportunity to invest in Berbera Port to reach millions of clienteles far beyond. It is this opportunity that they pursued a partnership with Ethiopia to close in a successful deal.

On March 1st this year, Ethiopia attained 19% of the 30 years concession of Berbera Port and agreed to develop the Berbera Corridor; a motorway connecting Berbera to Ethiopia. Bin Suleiman, indorsing Ethiopia’s partnership in this deal, said, “I am so excited about the prospects of working with Ethiopia government; having the government of Ethiopia as a partner will enable DP World to support the government [Somaliland] in achieving its impressive development plans”. The Foreign Minister of the Republic of Somaliland, Dr. Saad Ali Shire, echoed Bin Suleiman’s statement and confirmed that this deal “will address some of the problems facing Somaliland concerning the employment and investment”.

The Republic of Somaliland was an independent state for 28 years now. Although it hasn’t gained an international recognition, it nevertheless functions as a de facto state complete with its passport, currency, armies, and democratically elected president within international borders drawn prior to the decolonization era.

The news of Ethiopia as a major shareholder in Berbera Port for the 30 years concession angered Federal Government of Somalia (FGS) headed by Mohamed Farmajo, who came to power in 2016. The FGS, who controls very few parts of Somalia due to the country’s mired security issue where different groups such as the notorious Al Shabab and the AU forces supporting the FGS army combat for control, has recently released a press statement read out by its Prime Minister, Mr. Khayre. Mr. Khayre stated that his government opposes the tripartite agreement between Somaliland, DP World and Ethiopia claiming the territory is within the FGS’s jurisdiction and therefore the deal is illegal since DP World deals wasn’t endorsed by the FGS. Later, Somalia’s parliament issued a decree banning DB World from operating in what they claim “only the Federal Government of Somalia can engage in international deals.” And that the Somalia parliament “banned this company [DP World] from operating in Somalia” as they accuse of it “internationally violated the sovereignty of Somalia.”

Both Somaliland and the DP World were quick to respond to such hasty statement by the FGS and its parliament, which ironically has no legitimacy or influence over the Republic of Somaliland or anywhere other than parts of Mogadishu.

Somaliland’s Foreign Affairs and International Cooperation’s Minister, Dr. Saad Ali Shire, reaffirmed that “the deal was bilateral one and initially between DP world and Somaliland. Both have the right to sell their shares if the other side agrees and Ethiopia was allowed to join under that those basis.”

On 8th March, the President of the Republic of Somaliland, Mr. Muse Behi Abdi, while talking at an event celebrating the International Women’s Day, strongly condemned Somalia’s FGS’s invasion to Somaliland’s independence, where he stated that Somalia “declared war and we acknowledged it.”

On the other hand, DP World also countered Somalia’s claims and empty threats; Bin Suleiman, while talking to UAE’s Dubai’s TV channel, said “we are not concerned with what the FGS is saying. Somaliland is a government that has been independent for 28 years now. It is a peaceful country that is democratic. Our project has been approved by Somaliland’s parliament. And the FGS cannot change anything about this.”

Such strong exchanges over the Berbera Port deal led to create much more animosity between Somalia and Somaliland, where relations were sour before. Somaliland confirmed to have postponed the scheduled ‘Talks’ between Somaliland and Somalia that were meant to take place in Djibouti next month. Tensions rose even higher after Doha, who has shown signs of dissension over the tripartite agreement of DP World, Somaliland and Ethiopia, is claimed to have summoned the FGS President, Mr. Mohamed Farmajo, for an inadvertent meeting in Doha. Details of the meeting its agenda is yet to be disclosed by either partie.

President Muse Behi Abdi concluded few weeks long heated exchanges between Somaliland and Somalia regarding the tripartite agreement between Somaliland, DP World and Ethiopia by telling the media in a press release this week in Dubai that  Somalia’s decree to ‘ban DP World’ from operating in both Somalia and Somaliland a ‘joke’. President Behi expressed his delight in partnering with DP World and the United Arab Emirates for many areas including ‘security, trade, and cultural’. Emphasizing the two countries’; Somaliland and Emirates ‘long and historical relations’, President Behi confirmed ‘both our countries [Somaliland and Emirates] are ready’ for further collaborations.

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