Still In Limbo, Somaliland Banking On Berbera

Berbera Port is now on the brink of a major expansion that could transform and return it to a regional transportation hub, and also help fund Somaliland’s nation-building dreams.

By James Jeffrey

Hargeisa, Somaliland – Crossing African borders by land can be an intimidating process (it’s proving an increasingly intimidating process nowadays in Europe and the US also, even in airports).But crossing from Ethiopia to Somaliland at the ramshackle border town of Tog-Wochale is a surreally pleasant experience.

Immigration officials on the Somaliland side leave aside the tough cross-examination routine, greeting you with big smiles and friendly chit chat as they whack an entry stamp on the Somaliland visa in your passport.

They’re always happy to see a foreigner’s visit providing recognition of their country that technically still doesn’t exist in the eyes of the rest of the political world, despite having proclaimed its independence from Somalia in 1991, following a civil war that killed about 50,000 in the region.

A British protectorate from 1886 until 1960 and unifying with what was then Italian Somaliland to create modern Somalia, Somaliland had got used to going on its own since that 1991 declaration, and today exhibits many of the trappings of a functioning state: its own currency, a functioning bureaucracy, trained police and military, law and order on the streets. Furthermore, since 2003 Somaliland has held a series of democratic elections resulting in orderly transfers of power.

Somaliland’s resolve is most clearly demonstrated in the capital, Hargeisa, formerly war-torn rubble in 1991 at the end of the civil war, its population living in refugee camps in neighboring Ethiopia. An event that lives on in infamy saw the jets of military dictator Mohammed Siyad Barre’s regime take off from the airport and circle back to bomb the city.

But visitors to today’s sun-blasted city of 800,000 people encounter a mishmash of impassioned traditional local markets cheek by jowl with diaspora-funded modern glass-fronted office blocks and malls, Wi-Fi-enabled cafes and air-conditioned gyms, all suffused with typical Somali energy and dynamism.

“We are doing all the right things that the West preaches about but we continue to get nothing for it,” says Osman Abdillahi Sahardeed, minister for the Ministry of Information, Culture and National Guidance. “This is a resilient country that depends on each other—we’re not after a handout but a hand up.”

Increasing levels of exasperation within Somaliland’s government and among the populace are hardly surprising. Somaliland’s apparent success story against the odds remains highly vulnerable. Its economy is perilously fragile. Non-statehood deprives it of direct large-scale international support and access to the likes of the World Bank and International Monetary Fund (I.M.F.).

As a result, the government has a tiny budget of about 250 million dollars, with about 60 percent spent on police and security forces to maintain what the country views as one of its greatest assets and reasons for recognition: continuing peace and stability. Also, it relies heavily on the support of local clan elders—it is hard for any government to prove its legitimacy when essential services need the help of international humanitarian organizations, local NGOs and the private sector.

Indeed, Somaliland survives to a large extent on money sent by its diaspora—estimated to range from $400 million to at least double that annually—and by selling prodigious quantities of livestock to Arab countries.

All the while, poverty remains widespread and swathes of men on streets sipping sweet Somali tea and chewing the stimulating plant khat throughout the day testify to chronic unemployment rates.

“About 70 percent of the population are younger than 30, and they have no future without recognition,” says Jama Musse, a former mathematics professor who left Italy to return to Somaliland to run the Red Sea Cultural Foundation center, which offers cultural and artistic opportunities for Hargeisa’s youth. “The world can’t close its eyes—it should deal with Somaliland.”

For now, Somaliland’s peace holds admirably well.

“If you look at the happiness of Somalilanders and the challenges they are facing it does not match,” says Khadar Hussein, operational director of the Hargeisa office of Transparency Solutions, a UK-based consultancy focused on civil society capacity building in Somaliland and Somalia. “They are happy because of their values and religion.”

But others speak of the risks of encroaching Wahhabism, a far more fundamental version of Islam compared to Somaliland’s conservative though relatively moderate religiousness, and a particular concern in a volatile part of the world.

“Young men are a ready-made pool of rudderless youth from which militant extremists with an agenda can recruit,” says Rakiya Omaar, a lawyer and Chair of Horizon Institute, a Somaliland consultancy firm helping communities transition from underdevelopment to stability.

Almost everyone acknowledges the country’s present means of sustainment—heavily reliant on the private sector and diaspora—must diversity. Somaliland needs greater income to develop and survive.

For many, the key to Somaliland’s much needed economic renaissance lies in tapping into the far stronger economy next door: Ethiopia, Africa’s second-most populous country and its fastest-growing economy, according to the I.M.F.

Crucial to achieving this is Berbera, a name conjuring images of tropical quays and fiery sunsets. Once an ancient nexus of maritime trade, Berbera has long been eclipsed by Djibouti’s ports to the north. But Berbera Port is now on the brink of a major expansion that could transform and return it to a regional transportation hub, and also help fund Somaliland’s nation-building dreams.

In May 2016, Dubai-based DP World was awarded the concession to manage and expand Berbera for 30 years, a project valued at about 442 million dollars, including expanding the port and refurbishing the 268-kilometer route from the port to the border with Ethiopia.

Landlocked Ethiopia has long been looking to diversify its access to the sea, an issue of immense strategic anxiety. Currently, 90 percent of its trade goes through Djibouti, a tiny country with an expanding network of ports that scoops at least 1 billion dollars in port fees from Ethiopia every year.

Somaliland would like about 30 percent of that trade through Berbera, and Ethiopia is more than happy with that, allocating such a proportion in its latest Growth and Transformation Plan that sets economic policy until 2020.

Ethiopia and Somaliland had already signed a Memorandum Of Understanding (MOU) covering trade, security, health and education in 2014, before in March 2016 signing a trade agreement on using Berbera Port. And Ethiopia could just be the start.

“It would be a gateway to Africa, not just Ethiopia,” says Sharmarke Jama, a trade and economic adviser for the Somaliland government during negotiations on the port concession. “The multiplying benefits for Somaliland’s economy could be endless.”

Somaliland officials hope increased trade at the port will enable greater self-sufficiency to develop the country, while also chipping away at the international community’s resistance over recognition.

“As our economic interests align with the region and we become more economically integrated, that can only help with recognition,” Sharmarke says.

Perhaps. The political odds are stacked against Somaliland due to concerns that recognizing Somaliland would undermine decades of international efforts to patch up Somalia, and open a Pandora ’s Box of separatist claims in the region and further afield around Africa.

But greater self-sufficiency would undoubtedly result from a resurgent Berbera, and without this crucial infrastructure revival, Somaliland’s economic potential will remain untapped, trapping its people in endless cycles of dependence, leaving those idle youth on street corners.

On April 13, 2016, up to 500 migrants died after a boat capsized crossing the Mediterranean. Most media reported that a large portion of those who died were from Somalia. But in Hargeisa following the tragedy, locals noted how many of those who died were more specifically Somalilanders.

“Why are they leaving? Unemployment” says Abdillahi Duhe, former Foreign Minister of Somaliland and now a consultant in the Ethiopian capital, Addis Ababa. “Now is a very important time: we’ve passed the stage of recovery, we have peace—but many hindrances remain.”