The Ethiopian Herald, a state-owned newspaper, noted in its December 12, 2024 editorial, “Ethiopia and Somaliland: Strengthening Economic Cooperation,” the growing economic partnership between Ethiopia and Somaliland, especially with the recent opening of the Ethiopian Transit Clearinghouse at Berbera Port. This clearinghouse is designed to improve cargo logistics and trade efficiency between the two nations.
The newspaper emphasizes the importance of regional economic integration, which can enhance trade, investment, and living standards while creating a larger market for goods and services. However, this integration is a gradual process that requires addressing the interests of both countries over time.
Ethiopia, with a large population and a rapidly growing economy, needs better access to maritime facilities to support its trade. Somaliland’s port facilities can play a crucial role in this regard. The successful launch of the clearinghouse is seen as a positive step toward stronger economic ties, serving as a model for regional integration.
Despite existing challenges, both countries are committed to overcoming obstacles and reaping the benefits of their partnership. The newspaper concludes that enhancing economic cooperation between Ethiopia and Somaliland is a significant step toward broader regional integration, and addressing remaining policy and infrastructure issues is essential for realizing the full potential of this collaboration. This partnership can set an example for other countries in the Horn of Africa.
The full editorial piece is as follows:
Ethiopia and Somaliland: Strengthening Economic Cooperation
It has been almost a year since Ethiopia and Somaliland signed a Memorandum of Understanding (MoU) for sea access. While pursuing this, the two sides have also intensified their economic cooperation, especially in the field of port services that plays an integral role in their economy.
Recently, Somaliland has inaugurated the Ethiopian Transit Clearinghouse at Berbera Port. The new clearinghouse is tasked with managing the transportation of cargo unloaded at Berbera Port to various destinations across Ethiopia, thereby streamlining logistics and enhancing trade efficiency between the two nations.
Regional economic integration is a vital step to give economic leverage to the member countries. Such regional integration can lead to substantial economic gains, such as increased trade and investment, an improved standard of living, and reduced dependence on imports. Furthermore, regional integration can improve market efficiency and create a larger market for the production and sale of goods and services.
However, the economic integration of the member countries does not come at one time or overnight. It is a step-by-step journey that embraces the genuine interests and benefits of the people of the two countries with a view to realize it in the long run. Therefore, the member countries should take measures step by step until they reach to the level of exploiting all the available opportunities.
As such, the countries of the Horn of Africa have a big opportunity to gain economic leverage from economic integration. Yet, so far integration has been under challenge due to various reasons despite the countries having the interest.
Despite all these Ethiopia and Somaliland have been working on upscaling their economic ties. Ethiopia is a country of more than 120 million people, which makes it among the most populated both in Africa and the world. Coupled with its large and rapidly growing economy, it needs to increase its access to modern, high-capacity maritime facilities to accommodate its rapidly growing import and export trade.
Somaliland also owns important port facilities that can serve not only the country but also its neighbors. These port facilities can give economic benefit to the country by integrating its ties with Ethiopia, which is highly in need of port services.
The successful opening of the clearinghouse is a good start for even stronger economic and trade relations that can be a good example for other regional integrations. The smooth operation of the clearing house and the forthcoming strong transaction is likely to be a part and parcel of the efforts underway at the continental level to create a free trade area.
The commitment observed in both Ethiopia and Somaliland to carry on the project of opening the clearinghouse facility deserves due appreciation. It is clear that the journey thus far was not a bed of roses. It won’t be either in the future. However, the burning needs of the economies of the two sides and the interests of the two peoples are much higher than any challenge that stands in its face.
The two sides need to continue working on remaining policy and infrastructural issues until the people start to reap the economic and social benefits of the facilities and leave their fingerprints to inspire many other integrations across the region and the continent.
In sum, the economic cooperation between Ethiopia and Somaliland marks a significant step towards regional integration that promises to yield substantial benefits for both nations. As they navigate the challenges ahead, it is crucial for both sides to address remaining policy and infrastructural issues to fully realize the potential of their partnership. By fostering stronger ties and enhancing trade efficiency, Ethiopia and Somaliland can set a powerful example for other countries in the Horn of Africa, paving the way for broader economic collaboration across the continent.
