Hargeisa — Somaliland is intensifying efforts to attract Gulf state capital into its flagship Berbera Port development, with government officials conducting a series of high-level diplomatic outreach visits to the United Arab Emirates and Saudi Arabia as the corridor project moves into a pivotal new phase of infrastructure expansion.
Senior officials from the Somaliland Ministry of Finance and the Ministry of Ports and Marine Transport traveled to Abu Dhabi and Riyadh this month, holding meetings with sovereign wealth fund representatives and private logistics companies, according to government sources in Hargeisa. The visits signal a deliberate push by President Abdirahman Irro’s administration to diversify the financing base for Berbera Port and the Berbera Corridor beyond its current partnership with DP World, the Dubai-based port operator that has managed and developed the facility under a long-term concession agreement since 2017.
Officials indicated during the Abu Dhabi meetings that Somaliland is seeking fresh capital for the second and third phases of port expansion, which are intended to dramatically increase container throughput capacity and develop dedicated bulk cargo and livestock export terminals. The livestock terminal is considered especially strategic, given that the Gulf states collectively represent the dominant destination for Somaliland’s live animal exports — a trade corridor worth hundreds of millions of dollars annually and central to the livelihoods of millions of pastoralist families across the country.
A Corridor Gaining Regional Momentum
The renewed investment push comes as the Berbera Corridor — the road and logistics route linking Berbera on the Gulf of Aden to the Ethiopian interior — has gained renewed attention following the landmark memorandum of understanding signed between Somaliland and Ethiopia in early 2024. That agreement, which drew significant international attention and controversy, outlined potential Ethiopian access to Berbera’s port facilities and opened broader discussions about naval and commercial cooperation between the two parties.
Although implementation of the MoU has proceeded more slowly than initially anticipated, partly due to diplomatic sensitivities with Somalia and shifting political calculations in Addis Ababa, trade flows through the Berbera Corridor have continued to grow. Ethiopian trucking companies have increased their use of the route as an alternative to the congested Port of Djibouti, and logistics industry observers note that transit volumes recorded at Berbera have risen measurably over the past twelve months.
Somaliland’s government has framed the current Gulf outreach as an effort to position Berbera as the primary commercial gateway for landlocked Ethiopia — a market of well over 120 million people — and to attract investment that would accelerate the corridor’s capacity to handle that traffic at scale. Officials are reportedly presenting Gulf investors with projections showing that even a modest shift of Ethiopian import and export volumes away from Djibouti toward Berbera would generate substantial revenue for a port operating at expanded capacity.
Djibouti Factor Looms Large
The competition with Djibouti for Ethiopian transit trade remains a defining feature of the region’s commercial landscape. Djibouti currently handles the overwhelming majority of Ethiopia’s external trade, a dependency that Addis Ababa has itself described as a strategic vulnerability and one it has sought to reduce through diversification across multiple corridors, including Berbera, the Lamu corridor in Kenya, and the Eritrean port of Massawa.
Gulf investors appear to be weighing the competitive dynamics carefully. Sources familiar with the Abu Dhabi discussions said that the Somaliland delegation was asked pointed questions about the legal framework governing foreign investment, the stability of the DP World concession arrangement, and the status of Somaliland’s broader international recognition — an issue that continues to complicate certain categories of cross-border financial transactions and sovereign guarantees.
Government officials reportedly acknowledged these concerns directly, pointing to the functioning institutional environment in Hargeisa, the track record of the DP World partnership, and the recent democratic presidential transition as evidence of political stability that distinguishes Somaliland from other investment destinations in the sub-region.
Domestic Economic Pressures Add Urgency
The investment drive is also shaped by pressing domestic economic realities. Somaliland’s public finances remain under significant strain, with government revenues heavily dependent on port and customs receipts. Expanding Berbera’s throughput capacity would directly increase those revenues, providing the administration with greater fiscal room to invest in public services and infrastructure.
Business community representatives in Hargeisa have broadly welcomed the government’s Gulf outreach, though some private sector voices have urged the administration to simultaneously accelerate improvements to the road network and customs processing systems along the corridor, arguing that physical port capacity will mean little if the inland logistics chain remains a bottleneck.
The government has indicated that corridor road upgrades, partly financed through earlier international development grants, are continuing, and that streamlining border procedures with Ethiopia remains a priority agenda item in ongoing bilateral technical discussions.
How quickly Gulf capital can be mobilized — and on what terms — will go a long way toward determining whether Berbera fulfills its potential as the Horn of Africa’s next major commercial hub.
