How Somaliland, Ethiopia set to benefit from controversial port deal

MOGADISHU, Somalia - Although it has caused ripples in the Horn of Africa, the recent treaty between Ethiopia and Somaliland was designed in a way that would strategically benefit both parties politically and economically, and perhaps change the politics of the region.

While most analysts have focused much on Ethiopia’s plans to establish a military base within Somalia and while Somaliland is set for first-ever international recognition, the game can be very complex and could potentially trigger war in the Horn of Africa.

With Somaliland set to be recognised, Ethiopia never publicly mentioned this fact which was acknowledged by Muse Bihi Abdi, the man behind the pen. However, Addis Ababa hinted at Somaliland becoming a major stakeholder in Ethiopia’s giant public companies.

In a briefing, Redwan Hussien, National Security Advisor to PM Abiy Ahmed, stated that stakes would be given to Somaliland from Ethio Telecom or Ethiopian Airlines, yet he did not mention recognizing Somaliland in his explanation.

But besides the military base, Ethiopia has been fighting to have access to Red Sea waters given the exorbitant rates charged in the Port of Djibouti. Initially, several political pundits believed Ethiopia would invade Eritrea, a region that seceded in 1993 before becoming a sovereign state, cutting Eritrea from the sea.

In a viewpoint article published in October, Abdirashid Ibrahim, Director-General of the Ministry of Trade and Tourism of Somaliland, presented a thorough analysis of the potential benefits of Berbera Port to Ethiopia's economy.

Stressing its direct and efficient transportation route, Ibrahim suggested that the port could significantly reduce shipping times and costs for Ethiopian traders, Addis Standard reports.

The article further advocated for the development of the Berbera Corridor, including road expansions from the port to the Ethiopian border, as essential for expanding trade opportunities. Anticipated improvements in port infrastructure, such as expanded container terminals and increased handling capacity, aim to accommodate the growing volume of trade.

Ibrahim also highlighted the potential establishment of a Special Economic Zone (SEZ) near Berbera Port to attract investments in manufacturing and processing sectors, leveraging the port's logistical advantages. In both cases, the two sides would immensely benefit if the deal stands.

Somalia has rejected the deal while stressing that it violates the territorial integrity and sovereignty of the country. Although Somalia has recalled the ambassador following the incident for "consultation", Ethiopia has remained reasonably mum but it has confirmed the deal.

GAROWE ONLINE