Berbera Port Offers More Efficient Port Option for Ethiopia

By Yidnekachew A. Mekonnen*

ADDIS ABABA – The Somaliland port, Berbera, might be located at a hotspot for the East African region but the area had been underutilized for years considering its potential to serve as a hub for the region.  

The internationally well-accomplished company, DP world has set out to make the Berbera port the go-to choice for east African customers. Elevating the port’s capabilities to suit the needs of landlocked countries within the region while contributing to Somaliland’s annual income as well as economic status. 

Starting from 2017, DP World has been working tirelessly to regain and revamp Berbera’s status as an international trade center. The company managed to acquire a 30‐year concession with an automatic 10‐year extension to develop a state-of-the-art logistics platform and free zone with a capacity of harboring 2 million TEU in the container terminal. 

DP world delivers these services through an interconnected global network of 128 business units in 60 countries across six continents, with a significant presence both in high-growth and mature markets. 

On top of making Somaliland one of the top regional giants in trade and logistics corridors, DP world’s project has created over 2,750 permanent and casual positions for Somaliland nationals in addition to directly contributing to the country’s economy. 

DP World has gone above and beyond to positively contribute to the lives of the local community that it has invested $6 million in sustainable projects that built centers for education, health, water, and mosques in an attempt to make the country hospitable and welcoming.  

One of the biggest benefits for the region is creating an alternate more efficient port for the region’s most populous country, Ethiopia. DP World is taking part in the construction of the Berbera to Addis Corridor which easily connects the two countries through Hargeisa, for smoother trade activity. The Somaliland port which is in closer proximity to Ethiopia will serve as a more efficient route than the Djibouti line Ethiopia currently uses. 

The Berbera Corridor Road upgrade project was being funded by the Abu Dhabi Fund for Development (ADFD) and the UK’s Department for International Development (DFID), and the Hargeisa Bypass Road funded by UK Aid. 

The project is on the cusp of completion; having been set to be finished in quarter four, 2021, and quarter three 2022, respectively. The road will link to the existing modern highway on the Ethiopian side and position Berbera as a direct, fast, and efficient trade route for Ethiopian transit cargo.

“We believe that Ethiopia needs multiple gateways of trade, 95 % of Ethiopian cargo is made through Djibouti and if we were to look at Berbera 5 years ago it did not have the capacity to support the needs of Ethiopia. But today we have the capacity to support 500,000 TEU, meaning we can be an alternative port for the country,” said Supachai Wattanaveerachai the CEO of DP World Berbera. 

Keeping the opportunity the port holds for the land-locked Ethiopia in mind, DP world hosted a group of Ethiopian journalists at the port to further elaborate on the potential it has to become a key maritime gateway for the country. DP world highlighted the Berbera special economic zone (BSEZ), which is modeled on DP world’s Jebel Ali free zone and aims to attract investments while encouraging trade that would position Berbera as a gateway port for the region. 

The economic zone, strategically located, is linked to the port and will serve as a center of trade with the aim to attract investments. It targets a range of industries, including warehousing, logistics, traders, manufacturers, and other related sectors.

The port, with a capacity of 500,000 TEU, was officially opened for use in 2021.

Since its launch, DP World has made major amendments that add to the quality and capability of the port. The new terminal was officially opened by His Excellency Muse Bihi Abdi, President of Somaliland, and Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World, at a special event attended by over 200 guests, including a government delegation from Ethiopia, led by their Excellencies Ahmed Shide, Minister of Finance and Dagmawit Moges, Minister of Transport. 

The event also included a symbolic ground-breaking for the new Berbera Economic Zone, the first phase of which was under construction back then. 

The author of the article, Yidnekachew A. Mekonnen*, is a Macroeconomic Modeling and forecasting expert.

Featured image caption: Berbera Port’s new container terminal, inaugurated on 24 June 2021, has a capacity of 500,000 TEUs a year 

Editor’s note: The article reflects the authors’ opinion only, and not necessarily the views of the editorial opinion of EM News.