While Houthi attacks in the Red Sea pose a clear and present danger to the vital trade artery and the rising port congestion in the region throws another spanner in the works, Africa needs another trade hub. Could Somaliland's port city of Berbera be the answer?
Analysts and officials see it as a feasible alternative to current trading hubs in Africa such as Djibouti, and say the port city is a buffer against regional and global supply chain disruptions.
Recent investments from the UK and the UAE’s DP World are reflective of that view. With mounting security concerns and congestion forcing longer docking waiting time in other regional ports, the flow of investments to Berbera is rising. DP World, one of the top global port operators in the world, alone has invested more than $400 million in Berbera’s expansion since 2017.
The port is located near the Bab Al Mandeb strait, which connects the Red Sea to the Gulf of Aden and is a choke point for global shipping. Nearly 10 per cent of global trade, including a significant share of oil and container traffic between Europe and Asia, passes through this corridor.
The significance of this part of the region cannot be understated, as it accounts for up to 12 per cent of global oil transported by sea, according to data from the International Chamber of Shipping.
However, Berbera currently accounts for only about 0.06 per cent of global container traffic, so it has handling capacity to offer more to shipping lines, the engine of global trade.
Ethiopia’s new trade lifeline
With the rise in investments, Berbera has started to relieve some pressure in the strait. It has also given landlocked Ethiopia a second maritime gateway, reducing its dependence on Djibouti and providing the country with an alternative trade route to skirt disruptions in the Red Sea.
Last year, Somaliland signed an agreement to lease a 20km stretch of coastline to its neighbour, a move that caused a diplomatic row and prompted Somalia to summon the Ethiopian ambassador in protest. Mogadishu does not recognise the breakaway Somaliland, which seceded amid a civil war in 1991.
“The vision of the Somaliland government and DP World is to make Berbera a regional marine trade and industrial hub,” Supachai Wattanaveerachai, chief executive for DP World’s Horn of Africa operations, told a Somaliland-UAE investment conference in June.
“We know Ethiopians need multiple gateways to connect to world trade and for us, with Somaliland, we need to provide services.”
Ethiopia currently relies on Djibouti for about 90 per cent of its maritime trade, paying more than $1.5 billion a year in port and transit fees alone.
Berbera could slash this cost by up to 30 per cent, according to analysts.
Dean Mikkelsen, an independent maritime and logistics analyst, said Berbera is “increasingly seen as a viable option to Djibouti, particularly amid the instability” in the Red Sea.
“Its position near Bab Al Mandeb enables direct access to one of the world’s busiest shipping corridors, while remaining just out of the immediate range of Houthi attacks,” he told The National.
With its structural challenges, expensive pricing and geopolitical concentration Berbera is a better option than Djibouti in terms of trade resilience, “even with Somaliland’s uncertain political status”, Mr Mikkelsen said.
“Djibouti’s geopolitical congestion is a result of the fact that many foreign countries operate military bases from the US, China, France, Japan, Italy and Saudi Arabia and that it is located near conflict-scarred areas such as Yemen – a complex geopolitical environment that can impede the safe flow of goods and add operational risk.
Djibouti, he said, still matters, but it certainly suffers from crowding. The country's overdependence on Chinese debt to fuel growth also makes it vulnerable to sudden shifts in economic fortunes, he explained.
“Berbera’s growth under DP World has brought new deepwater berths and better container capacity, offering shippers a credible alternative that reduces exposure to geopolitical risks. Ironically, it is Djibouti’s own limits that are pushing the change along.”
Rise in western backing and security concerns
Somaliland is also deepening its strategic defence co-operation with the US, which bodes well for its prospects of growth.
“This includes collaborations with US Africa Command to enhance security in the vital shipping lanes of the Gulf of Aden,” Mr Mikkelsen said.
“Somaliland has publicly offered to host an American military base, reinforcing its position as a stable and co-operative partner in the region.”
Quoting data from British International Investment Projects, he said by 2035, the Port of Berbera will enable trade equivalent to about 27 per cent of Somaliland's gross domestic product and 8 per cent of Ethiopia's GDP.
The development of Berbera port is becoming “increasingly important” in the regional trade perspective, Saeed Al Zari, group vice president for government affairs at DP World, told The National.
DP World is already working on bringing new infrastructure to Somaliland, including edible oil tanks in Berbera, a move that has led to the opening of the International Finance and Food Company's edible oil plant and the soon-to-be-launched Essa Al Ghurair plant, he said.
The future plans aim to improve “the quality of edible oil available in the region, reducing the price of this essential commodity and now supplying both Ethiopia and Puntland”, he said.
A rise with limits
However, Berbera’s emergence is not without limits. Somaliland’s lack of international recognition presents legal ambiguity and curbs access to funding. But investors appear to be warming to the region.
“A big investment has already been made in Somaliland,” said Abdirahman Hassan Nur, Somaliland’s Minister of Trade and Tourism. “DP World is an example. I believe many other investors are already in the pipeline.”
Mr Wattanaveerachai said that when DP World took over the port, it could handle less than 100,000, but the capacity has risen to 500,000.
“Today, we have transformed the Berbera port, not just in capacity but in efficiency. All run by locals – Somaliland people,” he said.
The vision of Somaliland is to develop Berbera as a hub of economic development where companies can open offices without being physically located in Berbera, he added.
The UAE-Somaliland investment conference in June brought together regional stakeholders including Dubai Chambers and Al Marzooqi Group of Companies. The aim was to attract more investment and highlight Berbera’s potential.
“Despite the lack of international recognition, Somaliland has demonstrated the ability to manage critical infrastructure and ensure a level of operational stability. The Somaliland Port Authority, as the governing authority of Somaliland ports, manages the interaction with the security forces responsible for security in Berbera,” Mr Al Zari said.
“Berbera is revolutionising the logistics network in the Horn of Africa and reducing the cost of importation for some of the poorest people in the world.”
Analysts urge caution
Carl Sykes, group managing director of Neptune P2P Group, however, cautioned against hopes of Berbera attaining total regional dominance.
“Berbera port is emerging as a viable alternative to Djibouti, but it remains modest in scale at under 500,000 twenty-foot equivalent unit annually, compared to Djibouti’s multimillion-TEU capacity,” he told The National.
“While Berbera has made impressive gains in efficiency and cargo growth, it lacks the regional security guarantees enjoyed by Djibouti, which is protected by multiple international military bases.”
He said Berbera had the potential to serve as a modest buffer in regional supply chains but said its affect on global supply chain shocks was “likely to remain limited given its relatively small scale, emerging infrastructure and geopolitical sensitivities”.
Mr Mikkelsen, however, argued that the second phase of Berbera Port’s expansion will begin once 75 per cent of current capacity is utilised, with plans to boost throughput to 2 million TEUs annually, following DP World’s completion of the first phase that increased capacity to 500,000 TEUs.
“Djibouti’s restraints are forcing the push for alternatives. Berbera’s location and continual improvements are meeting this need,” he said.
“At a time when supply chain resilience is a global imperative, Berbera is well-placed to be a powerful trade facilitator between Africa and the Middle East.”
In addition, international recognition of the region or a stable deal with Somalia would allow Berbera to realise its full potential as a central hub for regional trade, he said.
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
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Match info
Deccan Gladiators 87-8
Asif Khan 25, Dwayne Bravo 2-16
Maratha Arabians 89-2
Chadwick Walton 51 not out
Arabians won the final by eight wickets
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
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Which honey takes your fancy?
Al Ghaf Honey
The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year
Sidr Honey
The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest
Samar Honey
The Samar tree trunk, leaves and blossom contains Barm which is the secret of healing. You can enjoy the best types of honey from this tree every year in May and June. It is an historical witness to the life of the Emirati nation which represents the harsh desert and mountain environments
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
Global Fungi Facts
• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Andor
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War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
THE BIO
Age: 30
Favourite book: The Power of Habit
Favourite quote: "The world is full of good people, if you cannot find one, be one"
Favourite exercise: The snatch
Favourite colour: Blue
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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A list of the animal rescue organisations in the UAE
COMPANY%20PROFILE
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Company Profile
Company name: OneOrder
Started: October 2021
Founders: Tamer Amer and Karim Maurice
Based: Cairo, Egypt
Industry: technology, logistics
Investors: A15 and self-funded
Veil (Object Lessons)
Rafia Zakaria
Bloomsbury Academic
Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.
- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.
Sheikh Zayed's poem
When it is unveiled at Abu Dhabi Art, the Standing Tall exhibition will appear as an interplay of poetry and art. The 100 scarves are 100 fragments surrounding five, figurative, female sculptures, and both sculptures and scarves are hand-embroidered by a group of refugee women artisans, who used the Palestinian cross-stitch embroidery art of tatreez. Fragments of Sheikh Zayed’s poem Your Love is Ruling My Heart, written in Arabic as a love poem to his nation, are embroidered onto both the sculptures and the scarves. Here is the English translation.
Your love is ruling over my heart
Your love is ruling over my heart, even a mountain can’t bear all of it
Woe for my heart of such a love, if it befell it and made it its home
You came on me like a gleaming sun, you are the cure for my soul of its sickness
Be lenient on me, oh tender one, and have mercy on who because of you is in ruins
You are like the Ajeed Al-reem [leader of the gazelle herd] for my country, the source of all of its knowledge
You waddle even when you stand still, with feet white like the blooming of the dates of the palm
Oh, who wishes to deprive me of sleep, the night has ended and I still have not seen you
You are the cure for my sickness and my support, you dried my throat up let me go and damp it
Help me, oh children of mine, for in his love my life will pass me by.
Results
1. Lewis Hamilton (Mercedes) 1hr 32mins 03.897sec
2. Max Verstappen (Red Bull-Honda) at 0.745s
3. Valtteri Bottas (Mercedes) 37.383s
4. Lando Norris (McLaren) 46.466s
5.Sergio Perez (Red Bull-Honda) 52.047s
6. Charles Leclerc (Ferrari) 59.090s
7. Daniel Ricciardo (McLaren) 1:06.004
8. Carlos Sainz Jr (Ferrari) 1:07.100
9. Yuki Tsunoda (AlphaTauri-Honda) 1:25.692
10. Lance Stroll (Aston Martin-Mercedes) 1:26.713,
THE SPECS
2020 Toyota Corolla Hybrid LE
Engine: 1.8 litre combined with 16-volt electric motors
Transmission: Automatic with manual shifting mode
Power: 121hp
Torque: 142Nm
Price: Dh95,900
Leap of Faith
Michael J Mazarr
Public Affairs
Dh67
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More from Rashmee Roshan Lall
Dhadak
Director: Shashank Khaitan
Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana
Stars: 3
THE%20SPECS
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Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 258hp from 5,000-6,500rpm
Torque: 400Nm from 1,550-4,000rpm
Transmission: Eight-speed auto
Fuel consumption: 6.1L/100km
Price: from Dh362,500
On sale: now
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Trolls World Tour
Directed by: Walt Dohrn, David Smith
Starring: Anna Kendrick, Justin Timberlake
Rating: 4 stars
The specs
Engine: 2.4-litre 4-cylinder
Transmission: CVT auto
Power: 181bhp
Torque: 244Nm
Price: Dh122,900
Heather, the Totality
Matthew Weiner,
Canongate
Zayed Sustainability Prize
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
Red Sparrow
Dir: Francis Lawrence
Starring: Jennifer Lawrence, Joel Egerton, Charlotte Rampling, Jeremy Irons
Three stars
First Person
Richard Flanagan
Chatto & Windus
Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
UAE currency: the story behind the money in your pockets
Famous left-handers
- Marie Curie
- Jimi Hendrix
- Leonardo Di Vinci
- David Bowie
- Paul McCartney
- Albert Einstein
- Jack the Ripper
- Barack Obama
- Helen Keller
- Joan of Arc
Company%C2%A0profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EHayvn%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EChristopher%20Flinos%2C%20Ahmed%20Ismail%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EAbu%20Dhabi%2C%20UAE%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3Efinancial%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3Eundisclosed%3Cbr%3E%3Cstrong%3ESize%3A%3C%2Fstrong%3E%2044%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3Eseries%20B%20in%20the%20second%20half%20of%202023%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EHilbert%20Capital%2C%20Red%20Acre%20Ventures%3C%2Fp%3E%0A
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
