Berbera Port-China deal – change in the Horn?

Somaliland media sources and other rumours, including on Twitter, have suggested (12 Aug) that a deal on Somaliland’s Berbera port is imminent with China and Ethiopia. According to Somaliland media, Somaliland President Ahmed M. Silanyo, leading a high-level ministerial delegation, is in Beijing for his first China visit. Ethiopian officials are rumoured to be en-route to China for the announcement. This recent story on Somaliland media gives more details.
Berbera Port sits in a very strategic location on the Red Sea and plans to become a major port in the region for Somaliland, Ethiopia, South Sudan and Somalia. It could offer effective competition to Djibouti. last week reported presidential spokesman Abdullahi M. Dahir said the visit will focus on foreign investment, trade and development: “The aim of our trip is to seek foreign direct investment (FDI) projects from China in the fields of energy, mineral exploration and Agriculture. We are also going to seek assistance from China to implement water projects and other key infrastructures including transportation requirements (airports and roads).” The report added that the President was due to stop over in Addis Ababa for key talks with Ethiopian officials over a number of topics including the “Berbera corridor”, security and trade.
In March the same news source reported that the Somaliland Government plans to privatize the port and was holding discussions with Chinese firms. The Somaliland Foreign Minister, Dr Mohamed Abdullahi Omar had visited Beijing, China, after a visit via Addis Ababa over the port and other key areas, including security, and has apparently made several visits to China. The report says: “Both governments are pushing for foreign firm to invest in the port. According to sources close to the Government a number of firms expressed interest including the Hong Kong based, Hutchison Port Holdings (HPH), France’s Bolloré Africa Logistics and Holland-based, APM Terminals.” The latest report suggests that “Somaliland might lease the port to the global port operator and Hong Kong-based Hutchison Port Holdings (HPH) who might team up with another Hong Kong-based firm, PetroTrans Company Ltd, an oil and gas exploring giant which already won concession to explore oil in Ethiopia’s Ogaden region. The Chinese company plans to build gas transport infrastructure and processing facilities in Berbera where it will export.”
In February The Reporter newspaper in Ethiopia reported that Samson Wondimu, corporate communications head with the Ethiopian Roads Authority, said the Ethiopian and Somaliland governments were trying to secure the funds from the EU that would be used to rehabilitate the 245 kilometre long Togochale (boarder town)-Berbera road. Some 50 kms from the Ethiopian border, the road is rough and the asphalt road begins near the capital city, Hargeisa and goes up to Berbera.
The ageing asphalt road from Hargeissa to the port is in a very poor condition and it needs urgent rehabilitation. Berbera is an alternative gateway to Ethiopia and currently is said to be mostly used for food aid. But the Ethiopian Government plans to import parts of the country’s import via Berbera. The port also needs to be developed and it needs a substantial amount of investment.
According to Somaliland press, the first phase of the project, already approved by the EU, will be to conduct a study on how to develop the Berbera Corridor, a 850 km road. This could connected to a North-South (Cairo-Gaborone) highway. The news reported: “The second phase will be finding a reliable contractor for the job and investors. At the moment, its at the second phase and both Ethiopia and Somaliland have been in talks with a Chinese firm in Addis Ababa that is already constructing roads and highways in Ethiopia.” Mr Samson said the Ethiopian Government was finalizing work on the Jijiga-Togochale 67 km. road construction project launched 3 years ago with local construction firm, Akir Construction, due to finish soon.
Somaliland has been operating peacefully and democratically as a self-declared separate state since May 1991 and has been pushing for international recognition ever since. One key obstacle could be the African Union’s failure to take an African lead in opening this debate.
Kuwait reportedly recently gave Somaliland $10 mln to develop the airports.

6 Responses to “Berbera Port-China deal – change in the Horn?”

  1. Mark T Jones

    Recent commercial negotiations connected with the Horn of Africa elucidate much of what is happening elsehwhere in the continent. For years now China has actively courted the countries of Africa through the Forum on China-Africa Co-operation and via the China-Africa Development Fund, such initiatives have won China many friends, considerable commercial advantage and allies at the UN. Whilst much of this activity has been trade and investment orientated there has been another aspect to the bilateral agreements that has invariably been overlooked and this relates to Taiwan. African nations who enter into trade agreements with China are required to accept Beijing’s line on Taiwan, in effect China is garnering considerable international suppport which it can draw upon at a later date as and when required. Yet for all the confidence and success of such activity China still has certain anxieties and these relate to its Asiatic rival – India. One of the reasons that China is so anxious to have influence in Somaliland is to secure Berbera as part of a “string of pearls” – strategic bases that help secure China’s supply lines oli and minerals from Africa and the Middle East.

    India, rather belatedly, has woken up to what is going on and has begun its own Africa charm offensive. Following on from the 2nd India- Africa Forum summit in Addis Ababa Prime Minister Manmohan Singh visited Tanzania where amongst other issues he is believed to have discusses the possibility of India developing a military presence in East Africa. India like its rival is now distributing largess as well as offering educational scholarships in order to buy additional influence with Africa’s elite.

    The new scramble for Africa raises some serious questions both about commercial and geo-political concerns:

    1) Why is it that there seems so little will to tackle the Mogadishu Question?

    2) When will Somaliland finally be officially recognized by the international community?

    3) What will the US and to a lesser extent France make of China’s quest to gain a strategic ‘foothold’ on the Horn of Africa?

    4) When will China and India become signatories to the Rotterdam Rules(

    5) Why does Britain contine to squander the potential for commercial advantage it has in the region?

    One thing is for certain, and that is the Horn of Africa will warrant greater interest and analysis in the months and years to come.

  2. Tom Minney

    Hi Mark, thanks for the background, it is an interesting story. I wrote about infrastructure for the Ethiopian investment conference (London June, booklet is here) and China and India both seem keen to finance and build the ambitious railway plans. Rapid change in Somaliland could bring some big shifts in the region, which needs development in the sense of well-planned and sustainable regional economic planning, not just relief although that it is urgently needed too. It would also be interesting which powers will encourage some African action on recognition.

  3. Soyan Guled

    The development of the so-called ‘Berbera Coridor’ is long overdue. Landlocked Ethiopia’s complete dependence on Djibouti always carried strategic risks for this growing African giant. The Berbera corridor, which is envisaged to include a railroad to Diredewa, Ethiopia second largest city, will go through the northern part of the vast, underdevelped and restive Ogaden region bringing much needed jobs and infrastructire to the country’s most backward region. Addis also hopes this develpoment will undermine the rebellion currently raging in parts of this gas and oil bearing arid region.

    The fact it is the Chinese says a great deal about the increasing risk-aversion of Western companies which can only lead to their ultimate weakening in Africa and eslwhere. Somaliland is a natural ally and natural sphere of influence for Britain not China so it should’ve been British investors and infrastructure firms taking a lead on this. Not one of them have shown the slightest interest despite the huge potential in tapping into the resources of not only the Ethiopian hinterland but into South Sudan and even the Congo Basin. The French company Bollore Logistics took a half-hearted look at Berbera Project and then meekly pulled out.

    Western companies lose another region of Africa to the rampant Chinese.

  4. Tom Minney

    Hi Soyan, thanks for the useful comment. The Chinese (and Indians) are offering competition and I agree that it is a mistake for UK and European countries to be allowing themselves to be sidelined when Africa is at such a turning point. It is good that African leaderships have opportunities to play different powers off against each other, I hope the results will be to the benefit of future generations of our continent.

  5. Elaa

    Hehe It seems a game, any ways We Africans needed to take care of the things!!!

  6. Tom Minney

    You are right, as mentioned earlier. Africans have opportunities from the increasing rivalry, not just East-West but also China-India. How well can they play them to their advantage? I think the game is more like snooker than soccer.