The Berbera Port expansion is cutting costs, boosting regional trade, and adding millions to Somaliland’s economy, according to a new independent evaluation of the DP World–BII investment
BERBERA, Somaliland — On the sunbaked Gulf of Aden coastline, towering container cranes and newly dredged quays at Berbera Port tell a larger story about how infrastructure investment can alter the economic trajectory of a frontier market.
Once constrained by shallow waters, limited capacity, and slow vessel turnaround, Berbera Port has emerged as a competitive regional gateway following a multi-year expansion led by DP World Berbera in partnership with the Government of Somaliland. Backed by a minority investment from British International Investment (BII) in early 2022, the project is now delivering measurable economic, trade, and environmental gains, according to a newly released independent evaluation.
The port’s transformation, analysts say, underscores how targeted investment in logistics infrastructure can reduce costs for local businesses, expand market access, and strengthen regional trade resilience—particularly in politically complex and underserved regions.
A Strategic Gateway on a Critical Trade Route
Situated along one of the world’s busiest maritime corridors, Berbera Port has long been viewed as a strategic alternative trade outlet for landlocked Ethiopia, which relies heavily on Djibouti for access to global markets. The port’s expansion is part of the broader BII–DP World Africa Gateway partnership, an initiative aimed at strengthening African trade links through modern ports and inland logistics corridors.
An evaluation conducted by Itad and Steward Redqueen examined how the Berbera expansion has affected port performance, regional trade flows, and Somaliland’s domestic economy. Drawing on trade data, operational metrics, and stakeholder interviews, the study provides one of the most detailed assessments to date of infrastructure-led economic change in Somaliland.
Capacity and Efficiency Gains
The findings point to a dramatic shift in Berbera’s operational profile.
Container throughput capacity has more than tripled, rising from 150,000 to 500,000 twenty-foot equivalent units (TEUs). New quay length, deeper draught waters, and modern cargo-handling equipment now allow the port to receive larger vessels that previously bypassed Somaliland altogether.
Efficiency gains have been equally striking. Average vessel turnaround times fell from 64 hours in 2018 to just 25 hours by 2024, placing Berbera within the competitive range of more established regional ports.
“These improvements have repositioned Berbera as a credible alternative in the region,” the evaluation notes, with container traffic increasing sharply since the expansion.
As a result, Berbera’s share of regional container trade rose from 9 percent in 2017 to 14 percent in 2024, reflecting a shift in shipping patterns across the Horn of Africa.
Lower Costs, Wider Reach
Beyond port gates, the impact is being felt across supply chains.
Economic modelling cited in the report shows that Berbera now offers cost-competitive access to parts of eastern Ethiopia and Somaliland that were previously underserved, particularly areas beyond the effective reach of the Addis Ababa–Djibouti railway.
For importers and exporters, those efficiencies translate into tangible savings. Transport cost reductions were estimated at $8.4 million in 2024, with net savings of $6.9 million after accounting for new users drawn to the port.
The gains extend to the environment as well. Reduced congestion, shorter shipping times, and more efficient logistics are cutting carbon emissions by an estimated 7,651 tons annually, according to the study.
Jobs and Growth in a Frontier Economy
The expansion’s economic footprint within Somaliland is significant.
In 2024 alone, the upgraded port and the adjacent Berbera Economic Zone supported approximately 2,490 jobs and contributed $45.1 million in value added to the economy. Of that total, 921 jobs and $16.7 million were directly attributable to the port expansion itself—equivalent to an additional 0.4 percent of Somaliland’s gross domestic product.
For a small and largely unrecognized economy, analysts say, such gains are material.
Still, the evaluation cautions that the project’s full impact has yet to be realized. Current trade volumes do not yet require the port’s full capacity, in part because of ongoing disruptions linked to the Red Sea crisis, which has reshaped global shipping routes.
Lessons for Infrastructure Investment
The Berbera case offers broader lessons for development finance and frontier-market investment, the report argues. Key factors behind the project’s success include partnership with an experienced global port operator, the integration of complementary investments such as the Berbera Economic Zone, and workforce policies aimed at inclusion and skills development.
At the same time, the authors acknowledge the study’s limitations. It does not fully capture downstream effects such as improvements in living standards from cheaper imports, broader benefits to Somaliland-based producers, or macroeconomic spillovers into neighboring Ethiopia. Nor does it assess the impact of non-containerized cargo.
As a result, the port’s total contribution to economic growth is likely understated.
The evaluation was commissioned by the United Kingdom’s Foreign, Commonwealth and Development Office under the FCDO–BII Evaluation and Learning Programme and forms part of a wider review of infrastructure investments across Africa.
For Somaliland, Berbera’s cranes and quays represent more than upgraded logistics. They signal how strategic infrastructure—when paired with long-term capital and capable operators—can reshape trade routes, reduce costs, and anchor economic transformation in one of the world’s most overlooked markets.
Evaluating the impact of BII’s investment in ports in Somaliland Insights from DP World Berbera |
 |
