UAE and Ethiopia sign $1bn deal on construction of road to Somaliland's Berbera Port


ADDIS ABABA, ETHIOPIA - The United Arab Emirates [UAE] and the federal republic of Ethiopia may have shifted their attention to Somaliland, a breakaway region of Somalia, following the latest deal that would see the construction of a major road linking Addis Ababa and Berbera.

DP-World, a Dubai-based freight operator, and Ethiopia's Ministry of Transport signed a deal that would see the construction of the road that links Ethiopia and Berbera, a move that could significantly affect Djibouti, where Ethiopia has been using for imports and exports of her products.

Under the plan, DP-World and partners will invest up to $1bn for the next ten years to develop the supply chain infrastructure, the company said in a statement, Thursday. This will include dry ports, silos, warehouses, container yards, cool and cold chain depots, freight forwarding, and clearing activities, the company said.

Present during the signing of the agreement was Dagmawit Moges, Ethiopia’s Minister of Transport, and Sultan Bin Sulayem, DP World's chairman and chief executive.

“We believe that developing the Berbera corridor into one of the major trade and logistics corridors will unlock huge economic benefits for Ethiopia and support its ambitious development plans,” Mr. Bin Sulayem said.

“It will create new jobs, attract new businesses and investment along the corridor, as well as diversify and strengthen the country’s access to international trade by having a direct, seamless and efficient link between Ethiopia and Berbera Port.”

Global trade is set to improve after a rebound in the second half of last year due to pent-up demand for consumer durables from advanced economies, the International Monetary Fund said last month.

Trade is forecast to expand 8.4 percent this year and 6.5 percent next year after shrinking 8.5 percent in 2020, according to the Washington-based lender's estimates.

DP World's agreement with the Ethiopian government proposes that the two entities establish a joint venture logistics company to carry out logistics operations from origin to destination.

DP World will offer export services from the origin in Ethiopia to Berbera Port. It will also provide import services from the port of loading to the delivery of shipments, the statement said.

The Port of Berbera has been under construction for years now and last week, Somaliland President Muse Bihi Abdi visited the project, hailing UAE for continued support to develop the region. Ethiopia, which is a landlocked nation, has been largely dependent on the Port of Djibouti.

Somaliland located in northern Somalia is fighting for international recognition and has often asked partners to invest in the region due to the peace and stability witnessed over years.


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