Photo: Berbera Port, Somaliland, May 202, iStock
Authors: Ayan Yusuf and Abdikadir Ismail, Institute for Peace and Conflict Studies, University of Hargeisa, Somaliland
Berbera is the main port city of the Republic of Somaliland. Straddling the geopolitically relevant Red Sea and the Gulf of Aden, the port is a site of both national and international power plays. Over the centuries, the port has attracted the interest of competing powers, including the Ottoman Empire, Egypt, Great Britain, the USSR, the United States, and more recently the United Arab Emirates. The city of Berbera hosts several key businesses and infrastructural nodes, including the Berbera cement factory, Berbera oil reservoirs, and one of the longest airstrips in Africa. Despite the competition among international and sub-national powers for control of the seaport, the city’s major infrastructures remain underdeveloped. Many citizens do not have access to energy grids, and electricity is unaffordable for many. Major roads in the city are not paved and lack proper rainwater drainage, regularly causing flooding. The road networks connecting Berbera, Hargeisa, and Burao remain in poor conditions.
A new phase of infrastructural development has started when the Government of Somaliland leased the port to an Emirati company, Dubai Ports World (DP World) in 2016. The 30-year concession agreement involves the expansion and modernization of the port, installing new equipment and technologies to better serve trade between different countries in the Horn of Africa region. The port development includes the construction of a 250 km asphalt concrete road connecting Berbera to the Ethiopia-Somaliland border town of Tog Wajale.
Statebuilding and the port
Revenue generation could be listed as one of the major stepping stones for (re-)building a state from the ashes of violent conflict. For Somaliland, a country established in 1991 after a two-year civil war, successful revenue mobilization is crucial for both peace- and statebuilding (Nasir, 2014). Handling and usage fees, as well as customs, extracted at ports and airports, are among the major sources of revenue for many countries in the Global South. Among the first steps of the post-war government of Somaliland was, therefore, to place the port under the full control of the government – a step that required the violent disempowerment of Berbera’s dominant clan militias (Isa Musse clan). The Somaliland government took control of the port after it defeated the clan militia in 1992, a move that brought Somaliland to the brink of another civil war. While there are other ‘natural’ and smaller ports (jetties), Berbera became the major if not the sole source of the country’s revenue generation and has, therefore, played a crucial role in the survival of the nascent and internationally not recognized state.
Berbera Port is the leading port in Africa for the trade of livestock, sheep, goats, and camels. Livestock forms a cornerstone of Somaliland’s economy and is among its major exports. An estimated 3.5 million animals are yearly exported from Somaliland to the Gulf States. The COVID-19 pandemic, and especially the cancellation of the Hajj, dramatically decreased these exports to 1.3 million heads in 2020. This fall in livestock exports not only harms the already fragile economy but also causes significant revenue losses (Somaliland Ministry of Finance Development, 2020). In 2020, Somaliland earned from livestock exports around $171 million (Somaliland Ministry of Finance Development, 2021), compared to $250-300 million in the years before.[1] From the perspective of Somaliland, improving the maritime trade capacity is the major objective of the Berbera corridor development. This corridor, among other infrastructural projects, will allow the country to serve as an intermediary linking the fast-growing but landlocked Ethiopian economy with overseas trade partners. Additionally, the country aims to stimulate economic development along the corridor (Ayan, 2020).
Somaliland has nationalized its ports and airports in 1994 and established the Somaliland Port Authority (SPA) in the same year, 1994. The Berbera Port Authority (BPA) is part of the SPA which is controlled by the office of the President. The President, therefore, also controls the flow of revenues from the port, which regularly raises questions and leads to public criticism. Before leasing the operations of the port to DP World, BPA was responsible for developing the port infrastructure, procuring services for its own needs, and deciding on matters of employment. In Somaliland, political power is shared on the basis of clan affiliation, which also structured the nomination of the port management (World Bank, 2018). Berbera Port is, therefore, also embedded in clan structures, and Berbera clans play a role when decisions with strategic impact are made. At the very least, clan representatives are informed of these decisions and have the space to officially voice their views (Ayan, 2020).
Concession to DP World and recent developments
One of the major agendas of Somaliland’s successive governments was to modernize the Berbera Port to contribute to the growth of the economy, enhance the state’s revenue base, demonstrate the country’s independence , and gain international recognition. A couple of companies expressed their interest to develop the port and started talks with the Somaliland government, among them Bolloré Logistics. The government favoured DP World and signed a 30-year concession agreement with an automatic 10-year extension for the development and management of a multi-purpose port at Berbera.[2] The development is expected to significantly enhance and modernize the handling capacity of the port. It includes the construction of container yards, warehouses, cooling depots, and the introduction of modern technologies to facilitate the handling of cargo. To date, DP World has already invested in world-class cranes[3] and completed the first 400-meter expansion of the quay. Beyond the port, the construction of the so-called Berbera Corridor is underway.
The Berbera Corridor comprises a 250 km asphalt-concrete surface road connecting Berbera to the commercial town of Tog Wajale on the border between Somaliland and Ethiopia. It is funded by the Abu Dhabi Fund for Development. The government of the United Kingdom contributed $23 million to construct the 22.5 km two-lane single carriage Hargeisa Bypass, which allows transport from Berbera to move around Hargeisa, Somaliland’s capital city. Due to their growing interest in Somaliland, the UK government recently announced further investments in three major ports in Africa, including Berbera Port. These investments are expected to further boost international trade and create employment opportunities in Somaliland.[4]
Public Perception of the Port Developments
The reason for the selection of DP World and details of the concession was not made public, and the secrecy around the port development has given rise to widespread speculations about the intention of the Emirates and the future of the port. Ethiopia has a keen interest in developing the port to reduce its dependency on Djibouti and has allegedly facilitated the concession with DP World (Stepputat and Warsame 2019, 4). It has acquired a 19% share of the port from DP World in 2018 (Berg & Jos, 2018). DP World now holds the major share of 51%, Ethiopia 19% and the Somaliland government 30%.[5] This has initiated speculations about the strength of Somaliland’s sovereignty and thus about its ability to govern the country independent from external influence. Public speculations, widespread critique, and many unanswered questions and rumours about the involvement of outside powers have accompanied the port development. The speedy construction success, however, may initiate a change of public opinion. Already many photos that document and illustrate this progress are circulating online and are published and discussed on social media. The development of the Berbera Corridor and the inauguration of the first phase of the port expansion on 24 June 2021 were widely celebrated.
Public concern was also raised regarding the Emirates’ ‘real’ interest in Somaliland, and especially after plans to build a military base to facilitate the Saudi-led military intervention in Yemen, became public. The stationing of UAE forces in Berbera was interpreted as a security threat to Somaliland (Brendon, 2017). The critique against the establishment of this military base was raised within the government, by opposition parties, and by Ethiopia.[6] The UAE invested approximately US$90 million into this base (Zach, 2019), but later decided to abandon it. Instead, the Somaliland government declared its plan to turn the military base into a civilian airport.[7]
To summarize, the Berbera port and corridor development are expected to significantly impact and transform the national and regional economy, strengthen trade relations between Somaliland and Ethiopia, and to closer connect countries in Eastern Africa with each other and the outside world. The PIIP research project will investigate the impact of the port and corridor development on the sovereignty of Somaliland and its influence on the political trajectory of the young country and its citizens.
References
Ahmed, Warsame M. & Stepputat, Finn (2019). Berbera Port: Geopolitics and State-making in Somaliland. Rift Valley Institute Briefing Paper.
Ali, Nasir M. (2014). Building State Capacity in a Post-Conflict Situation: The Case of Somaliland, American International Journal of Contemporary Research Vol. 4 (1), pp. 157–170.
Ayan Rashid (2020). Effects of Berbera Corridor on Trade and Security in the Horn of Africa: the Case of Somaliland and Ethiopia, Somaliland Peace and Development Journal, Volume 4, pp. 1–10.
Berg, Willem van den & Meester, Jos (2018).
Ports & Power: the Securitisation of Port Politics. The Hague: Clingendael Institute.
Cannon, Brendon J. (2017). Ethiopia, Berbera Port, and the Shifting Balance of Power in the Horn of Africa, Rising Powers Quarterly, Volume 2, Issue 4, (2017), pp. 7–29.
Somaliland Ministry of Finance Development (2020). Economic Performance Bulletin, Issue 3/2020. Hargeisa: Ministry of Finance Development.
Somaliland Ministry of Finance Development (2021). Trade Statistical Bulletin 2020. Hargeisa: Ministry of Finance Development.
The World Bank Group (2018). Port Development and Competition in East and Southern Africa: Prospects and Challenges, Volume 2: Country and Port Fact Sheets and Projections. Washington, DC: The World Bank Group.
Vertin, Zach (2019). Red Sea Rivalries: The Gulf, the Horn, & the New Geopolitics of the Red Sea. Doha: Brookings Doha Center.
[1] Somalia will lose $500 million in 2021 year as its livestock misses out on Hajj to Saudi Arabia. Available at https://qz.com/africa/1885939/somalias-goats-sheep-wont-be-on-hajj-to-saudi-arabia-on-covid/. Accessed November 2021.
[2] Somaliland Ports Authority (2016). DP World wins 30-year concession for port of Berbera in Somaliland. Available at https://www.berberaseaport.net/dp-world/. Accessed May 2021.
[3] On March 25, 2020, Liebherr Container Cranes to supply eight rubber tyre gantry (RTG) cranes to DP World. Available at https://www.liebherr.com/en/int/latest-news/news-press-releases/detail/liebherr-container-cranes-to-supply-eight-rubber-tyre-gantry-(rtg)-cranes-to-dp-world-press.html. Accessed June 2021.
[4] CDC Group (2021). The Impact in Ethiopia. Available at https://www.cdcgroup.com/en/story/port-of-berbera/. Accessed October 2021.
[5] Seleshie, Loza (2020). Will Somaliland’s Berbera port be a threat to Djibouti’s? Available at https://www.theafricareport.com/54136/will-somalilands-berbera-port-be-a-threat-to-djiboutis/. Accessed December 2021.
[6] When the news of the military base in Berbera appeared in the news outlets, Ethiopia expressed grave concerns about the base. The Government of Somaliland assured Ethiopian that the base will not be used against the national interest and security of Ethiopia.
[7] Reuters (2019). Somaliland UAE military base to be turned into a civilian airport. Available at https://www.reuters.com/article/us-somalia-emirates-idUSKBN1W00FI. Accessed June 2021.