Arab interests, Ethiopia-Somalia feud play out in Berbera port deal

People load a cargo ship at the Port of Berbera in Somaliland on December 5, 2015. PHOTO | AFP 

In Summary

• Controversial deal between UAE's DP World and Ethiopia has opened old wounds of the decades-long discord between Somalia and Somaliland, in a major diplomatic stand-off that has sucked in several Arab countries.
• Somalia argues that Somaliland cannot enter such international contracts with other countries as the responsibility to sign such agreements remains to the Federal Government of Somalia, but Somaliland said that it is a sovereign state that can enter into independent agreements.
• Somalia refuses to recognise the 1991claim of autonomy by Somaliland.

By VICTOR KIPROP
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Ethiopia’s latest attempt to overcome its geographical and economic disadvantage as a landlocked
country by acquiring a stake in the Somaliland port of Berbera earlier this month has re-ignited a long-standing rivalry between the Federal Republic of Somalia and the self-declared autonomous region of Somaliland over the latter’s determination to separate from Somalia.

Sources privy to the matter say that the controversial deal which was signed on March 1 has opened old wounds of the decades-long discord between the two countries, in a major diplomatic stand-off that has sucked in several Arab countries.

Sharmarke Jama, principal consultant at UAE-based consultancy Clear Horn Ltd and a former Somaliland trade and economic adviser, said that Mogadishu’s resistance to the deal could be linked to the involvement of Ethiopia, which has traditionally conflicted with Somalia for over six decades.

“Somalia feels betrayed by Somaliland,” said Mr Jama.

Through the tripartite agreement, Ethiopia acquired a 19 per cent stake in the Berbera port for $80 million, while UAE logistics firm DP World and the Republic of Somaliland retained 51 per cent and 30 per cent stakes respectively.

Somalia opposed the deal involving Ethiopia, declaring it null and void on the grounds that it breached international standards and violates the sovereignty of Somalia, a stance that Somaliland and DP World have dismissed.

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This week, the dispute exacerbated with Somalia’s Upper and Lower Houses voting in a Bill declaring the deal defective and banning DP World from Somalia. The Somaliland parliament responded by voting unanimously to approve the deal.

The EastAfrican has learnt that the deal is yet to be formally approved, as the concession agreement, including the new shareholding, is yet to be tabled before the Somaliland parliament.

DP World has been running the port since May 2016, when it took a 65 per cent stake after it won a 30-year concession billed at $442 million for the development and management of a multi-purpose Port of Berbera.

Somalia argues that Somaliland cannot enter such international contracts with other countries as the responsibility to sign such agreements remains to the Federal Government of Somalia, but Somaliland said that it is a sovereign state that can enter into independent agreements.

Addis-Berbera Corridor

“If Somaliland didn’t have a compelling legal argument for claiming sole ownership of Berbera Port — Ethiopia and the UAE wouldn’t have conducted business with Somaliland,” said Robleh Mohamud Ragh, the former communications aide to Somaliland’s fourth president Ahmed Mohamed Silanyo who signed the original agreement with DP in 2016.

Sources say, the dispute has already spread beyond Somalia’s borders as the two parties seek support in and outside Africa.

According to local media reports, Somaliland’s President Muse Bihi Abdi flew to the United Arab Emirates last week Tuesday, while Somalia President Mohamed Abdulahi Farmajo is expected in Qatar next week in what sources say are moves to strengthen ties with Arab allies.

“Arab world interests and politics definitely have role in this situation and that’s why all the leaders are rushing there amid this dispute. In fact, the plane the Somaliland President used to UAE was chartered by the UAE,” a source told The EastAfrican on condition of anonymity said.

“Somalia is siding with Qatar while Somaliland stays with the UAE.”

Landlocked Ethiopia which exported $1.71 billion and imported and $19.1 billion worth of goods in 2016 is banking on the port to secure an additional logistical gateway for its expanding import and export trade.

“Ethiopia has been a friend to Somaliland. The two have several bilateral trade and transit agreements including the $300 million Addis Ababa-Berbera Corridor financed by the UAE which is set for completion three years and the green field economic free zone,” Jama said.

Ethiopian Airlines, Ethiopia’s national carrier has two daily flights to Somaliland’s capital of Hargeisa and the country plans to add electricity to its vegetables, cement and khat exports to Somaliland once it completes the construction of its construction $4.7 billion, 74,000 million cubic meters, Grand Ethiopian Renaissance Dam.

Somaliland has declared itself and autonomous region since 1991, after the collapse Somalia’s central government and has been fighting to officially separate from Somalia for close to three decades without much success.

In 2001 referendum and 97.1 per cent of the two-thirds of eligible voters who took part voted for its separation, from Somalia which has been heavily objected by Somalia.

“Although, it is not internationally recognised, Somaliland is technically an independent country with its own army, constitution, elected leaders and currency,” Mr Jama said.

The lack of international recognition has made it impossible for Somaliland to have access to loans from the World Bank, the International Monetary Fund and other international financial institutions.