Ethiopia’s growing use of Somaliland’s Berbera Port marks a strategic shift away from Djibouti, redrawing trade routes, regional power and economic integration in the Horn of Africa
Berbera, Somaliland — For decades, Ethiopia’s economy has run through a single, narrow artery: the Port of Djibouti. More than 90 percent of Africa’s second-most populous nation’s imports and exports still pass through that corridor, making the country acutely vulnerable to congestion, price shocks and geopolitical leverage.
Now, a shift long discussed in policy circles but slow to materialize is gaining momentum. Four hundred kilometers east, along the Gulf of Aden, the expanding port of Berbera is emerging as Ethiopia’s most credible alternative — and with it, a potential reordering of trade, power and economic geography in the Horn of Africa.
A high-level Ethiopian trade delegation’s visit to Berbera this week underscored the point. Officials toured port facilities operated by global logistics firm DP World, met with Somaliland authorities, and discussed expanding cargo volumes along the Berbera Corridor. The visit was not ceremonial. It reflected a calculated move to reduce Ethiopia’s dependence on a single maritime gateway and reclaim strategic leverage over its own trade.
“The combination of immediate sea access, enhanced security and the long-term strategic advantage of partnering with a stable, functional entity aligns closely with Ethiopia’s core national interests,” wrote researcher Samiya Mohammed in a recent analysis for Horn Review.
Breaking a Single-Corridor Vulnerability
Ethiopia’s landlocked status has long imposed a steep economic penalty. A policy brief from the country’s Institute of Foreign Affairs estimates that Ethiopia’s economic growth is reduced by as much as 20 to 30 percent annually compared with coastal states, largely because of high transit costs and logistical inefficiencies.
Those costs have risen dramatically. According to industry estimates, Ethiopia’s daily expense for moving goods through Djibouti has climbed from roughly $500,000 in the early 2000s to more than $5 million today. Reliance on a single corridor has also left the country exposed to bottlenecks, labor disputes and diplomatic pressure.
“The existence of an alternative corridor enhances Ethiopia’s bargaining power and reduces systemic risk,” said a regional logistics expert familiar with Horn of Africa trade flows. “It also creates competitive pressure that improves efficiency across the board.”
Berbera offers exactly that leverage. Since DP World took over management and expansion of the port in 2017, capacity has more than tripled — from 150,000 to 500,000 twenty-foot equivalent units (TEUs). Ethiopian officials increasingly view the port not as a backup option, but as a structural component of national trade strategy.
“Diversifying access to the sea is not a luxury for Ethiopia — it is a strategic necessity,” said Keninsa Lemi, secretary-general of Ethiopia’s Federal Chamber of Commerce, during the delegation’s visit. “Berbera provides an efficient, competitive and secure corridor that strengthens Ethiopia’s long-term trade resilience.”
A Modern Port on a Global Shipping Artery
Berbera’s appeal is rooted not only in geopolitics, but in performance. Once a modest regional facility, the port has been transformed into a modern, deep-water terminal capable of handling larger vessels and faster throughput.
DP World officials say vessel productivity has increased by more than 300 percent since the expansion began. Average ship turnaround times have fallen from 64 hours in 2018 to about 25 hours in 2024 — a critical metric for shipping lines operating on tight schedules.
A new direct shipping route now connects Berbera to Jebel Ali, one of the world’s busiest ports, every nine days, integrating Somaliland into major east-west trade lanes. Inland, investments supported by TradeMark Africa have upgraded road infrastructure linking Berbera to Ethiopia, cutting transit times along the corridor by more than a third.
A 2024 study commissioned by British International Investment estimated that transport cost reductions linked to the port’s expansion reached $8.4 million in a single year.
“Geography still matters in global trade,” said an official at the Somaliland Ports Authority. “Berbera’s position on the Gulf of Aden is not just advantageous — it is transformational.”
Beyond Containers: Building an Economic Ecosystem
Crucially, Berbera’s development is not confined to the port itself. Adjacent to the terminal, the Berbera Economic Free Zone is designed to anchor a broader industrial and logistics ecosystem, supporting manufacturing, processing and value-added trade.
For Ethiopia, whose exports remain heavily concentrated in primary commodities, the zone offers a pathway to diversify production closer to maritime routes. It also aligns with Addis Ababa’s long-standing goal of moving beyond transit dependence toward participation in regional production networks.
“This is about creating an ecosystem, not just moving containers,” said Mohamed Hasan Saleban, Somaliland’s director general at the Ministry of Finance and Economic Development. “The free zone allows regional partners, including Ethiopia, to add value locally, create jobs and build industrial capacity.”
The economic spillovers are already visible in Somaliland. In 2024, the port and free zone supported an estimated 2,490 jobs and generated more than $45 million in value added to the local economy, according to project assessments.
Navigating a Fraught Political Landscape
Ethiopia’s growing embrace of Berbera is unfolding against a complex political backdrop. In January 2024, Addis Ababa signed a memorandum of understanding with Somaliland — a move Mogadishu condemned as a violation of Somalia’s sovereignty.
Somalia’s federal government has since sought to recalibrate relations with Ethiopia, offering renewed diplomatic engagement in what analysts see as an attempt to counter Somaliland’s rising strategic relevance. Ethiopia now faces a delicate balancing act: maintaining ties with an internationally recognized but fragile state, while deepening cooperation with a stable, de facto authority that controls a functioning port.
For Ethiopian policymakers, the calculation appears increasingly pragmatic. The immediate, tangible gains from Berbera — lower costs, greater control and improved resilience — stand in contrast to diplomatic assurances that have yet to translate into concrete alternatives.
A Shift With Regional Consequences
The recent Ethiopian delegation, led by senior chamber of commerce officials and joined by regional business leaders, focused squarely on trade volumes, investment and logistics — not symbolism. Their visit reflects how economic imperatives are driving policy decisions in the Horn of Africa more forcefully than rhetoric.
As DP World’s CEO for the Horn of Africa, Supachai Wattanaveerachai, said of the new shipping route, development at Berbera “is already stimulating trade and industry” and strengthening the port’s role “as a gateway for East Africa’s future growth and prosperity.”
For Ethiopia, access to Berbera is no longer a contingency plan. It is a strategic lever — one that promises to unlock constrained growth, secure supply chains and reshape the balance of economic power in a volatile region.
The transformation unfolding along Somaliland’s coastline may appear quiet. Its implications for the Horn of Africa are anything but.
