Key Points

• International investment in Somaliland’s strategically located Berbera port may turn it into a new logistical gateway to East Africa and boost economic development in the self-declared republic.
• Berbera port has played a key role in the formation of the breakaway Republic of Somaliland. The recent deals to upgrade the port, made with the governments of the United Arab Emirates and Ethiopia, and the logistics giant Dubai Ports World, could bring Somaliland closer to international recognition.
• While improvements to port infrastructure and processes are already evident, necessary upgrades to the transport corridor between the Somaliland coast and Ethiopia are still pending, as are important decisions on the governance structures around the port and corridor. These delays may hinder the transformative potential of the new port for Somaliland and the wider region.
• The new port regime in Berbera offers risk as well as reward. The developments will likely transform the political economy of Berbera, but by doing so they may upend the delicate political settlement that has underpinned Somaliland’s stability since the 1990s.
• To mitigate these risks, DP World and the Government of Somaliland should ensure that the developments in Berbera create jobs and economic opportunities beyond the port itself, particularly in Somaliland’s most disadvantaged regions.
• As well as these domestic risks, deepened relations between Somaliland and UAE risk drawing Somaliland into the volatile geopolitics of the Gulf states as they increasingly pursue their interests in the Horn of Africa.