In brief
- On 20 March 2018, Goobjoog News reported that Ethiopia acquired a 19% share in DP World's 30-year deal to develop and manage Berbera Port.
- The report details the strategic drivers, including Ethiopia's search for alternatives to Djibouti and UAE military interests.
- It does not establish what has happened since the publication date; no updates on port development or regional power shifts are provided.
On 20 March 2018, Goobjoog News reported that Ethiopia acquired a 19% share in DP World's 30-year deal to develop and manage Berbera Port, in the Somaliland region of Somalia. The article, originally published on The Conversation and written by Brendon J. Cannon and Ash Rossiter of Khalifa University, analyzed how the Ethiopia-backed port was changing power dynamics in the Horn of Africa.
According to the report, when Eritrea gained independence from Ethiopia in 1993, Ethiopia became landlocked and dependent on neighbours, especially Djibouti. Goobjoog News reports that the port of Djibouti accounts for 95% of Ethiopia's imports and exports. To reduce that dependence, Ethiopia sought partners to refurbish and develop other regional ports: Port Sudan in Sudan, Berbera, and Mombasa in Kenya.
The article states that in May 2016, DP World signed an agreement to develop and manage Berbera Port for 30 years. Ethiopia ensured its presence in the running of the port by acquiring a 19% share in the deal. The report does not state the cost or payment status of that share.
The Berbera deal includes investments in Somaliland's fisheries, transportation and hospitality industry, according to the report. It also says the UAE will establish a military installation in Berbera. The base is intended to help the UAE tighten its blockade against Yemen and stop weapons being smuggled from Iran.
The report notes that Somaliland is described as a de-facto independent state since 1991 that is not internationally recognised. Somalia Federal Government ministers publicly challenged Somaliland's right to enter official agreements with any country.
The article says there has been popular anger in Somaliland over the port deal, and over inter-clan and sub-clan rivalry over land, particularly in the Berbera area. It adds that Somaliland's former president Ahmed Mohamed Mohamoud "Silanyo" and his family reportedly benefited personally from the port deal.
The analysis states that Ethiopia's ambitions for Berbera were hampered because Somaliland is not internationally recognised and Ethiopia lacked the resources to invest and build a port. However, Ethiopia had been trying for years to interest Abu Dhabi and Dubai in the port. Factors assisting Ethiopia's latest push included a shift in the UAE's military focus in Yemen and Ethiopian assurances of more trade and some financing to upgrade the port.
The report says that as Ethiopia begins to move increasing amounts of goods and services on Somaliland's new highway to the refurbished port of Berbera, Hargeisa may begin to question key aspects of the port deal. It also suggests the deal may entrench the de-facto Balkanization of Somalia and increase prospects of Ethiopia becoming regional hegemon.
What the report does not establish is what happened after 20 March 2018. It provides no updates on Berbera Port development, Ethiopia's share, or regional dynamics since the publication date. It does not confirm whether the UAE military installation was built, whether the investments materialized, or whether Ethiopia's use of the corridor increased as anticipated.
Frequently asked questions
What are the comparative advantages of Berbera over Djibouti and Mombasa?
The report does not provide a detailed comparative analysis of port advantages beyond noting Ethiopia's search for alternatives to Djibouti's dominance and its interest in Port Sudan, Berbera, and Mombasa.
How will Ethiopia's trade flows change?
The report states that Ethiopia has been moving increasing amounts of goods and services on Somaliland's new highway to the refurbished port of Berbera, but it provides no volumes or dates.
What is the impact on Somaliland's sovereignty claims?
The report says the deal means Somaliland has partially broken the glass ceiling of international recognition by entering substantive deals with viable business partners and states, and it notes Somalia Federal Government ministers publicly challenged Somaliland's right to enter agreements.