Ethiopia loses 19% stake in a key Port in Somalia

FILE: DP World Group Chairman and CEO Sultan Ahmed bin Sulayem and government officials from Ethiopia and the Republic of Somaliland at the agreement signing.

MOGADISHU, Somalia - Ethiopia has lost 19 percent of its stake in the Port of Berbera which is Somaliland, a breakaway region in northern Somalia, just months after the country reduced imports and exports through the Port of Djibouti, a key entry to the landlocked nation.

Last month, it emerged that Ethiopia had significantly started focusing on Berbera and the Port of Sudan, following the hiking of rates by Djibouti. This, financial analysts said, dealt a blow to the people and the economy of Djibouti, a tiny nation within the Red Sea.

Reports by The EastAfrican suggest that Ethiopia failed to comply with some requirements outlined in the ownership deal according to the government of Somaliland. The Port of Berbera which is being done by the DP-World has attracted a lot of stakeholders.

The latest twist effectively ends the agreement reached in 2017 involving Ethiopia, Somaliland, and DP World, the construction company which has been doing the port. Recently, a delegation by the US Senate visited the Berbera Port to check on progress.

Somaliland Finance Minister Saad Ali Shire said, “Ethiopia failed to meet the conditions needs to acquire the stakes before the deadline. So it has no stake now, but it needs to note that ownership does not matter.”

The minister insisted that the financial requirement for the construction of the Port was violated by Addis Ababa. Ethiopia is currently doing a road that connects Somaliland and Addis Ababa to ease the movement of goods from the Port of Berbera.

For decades, the Port of Djibouti controlled the economy of the Horn of Africa before the emergence of the Port of Sudan, Berbera, and Mogadishu. Djibouti has significantly lost foreign income due to Ethiopia's decision to reduce dependency.

The two governments partnered with the DP World and the government of the United Arab Emirates to rebuild the port of Berbera, which plays a critical role in the maritime connections between the Horn of Africa and the Middle East, The EastAfrican further reports.

Berbera is set to open the economy of the Somaliland state which is persistently fighting for international recognition just decades after breaking ties with Somalia. The new Somali President Hassan Sheikh insists that he will commence talks with Hargeisa.

GAROWE ONLINE