Ministry of Transport of Ethiopia and DP World sign MoU for the development of the Ethiopian side of the Berbera Corridor
Addis Ababa/Dubai,
06 May 2021
Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World
We strongly 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.
Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World
MoU paves way for formal discussions on potentials to develop the corridor to unlock economic benefits
DP World and its partners envisage investing up to US$1bn in developing supply chain infrastructure along the corridor
DP World, a leading global provider of end to end logistics solutions, and the Ministry of Transport, have signed a Memorandum of Understanding (MoU) with the aim of developing the Ethiopian side of the road linking Ethiopia to Berbera into one of the major trade and logistics corridors of the Country’s international trade routes.
The MoU, which was signed in Addis Ababa today by Her Excellency, Dagmawit Moges, Ethiopia’s Minister of Transport, and Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, follows a decision by the two parties to explore the potentials for developing logistics infrastructure and the provision of end to end logistics services along the corridor to unlock major economic benefits for Ethiopia.
In terms of the MoU, it is proposed that the Parties would establish a joint venture logistics company to perform logistic operations from origin to destination. It is intended that for export, DP World will offer services from origin in Ethiopia up to Berbera Port, while for imports, it will offer from the port of loading to the delivery of shipments in one of the dry ports in the hinterlands or the final destination of the consignees.
DP World and its partners envisage investing up to US$1bn over the next ten years in developing the supply chain infrastructure along the corridor. This will include dry ports, silos, warehouses, container yards, cool and cold chain depots, freight forwarding and clearing activities. The infrastructure investment will be in parallel with the implementation of the latest IT infrastructure and technology to ensure the efficient functioning of the corridor, and smooth, secure and transparent transfer of cargo throughout the entire transportation journey.
The MoU also envisages that the Ministry of Transport will see to it that a review and resolution of regulatory obstacles facing the Ethiopian side of the Berbera Corridor are exercised with a view to ensuring competitive arrangements for logistics companies so that they could be able to use the Corridor on a common user basis.
Speaking at the signing, H.E. Dagmawit Moges, Ethiopia’s Minister of Transport, said: “As we kick off the journey towards prosperity, aiming at unlocking Ethiopia's development potentials designed to propel the country into becoming an African beacon of prosperity, the transformation of the logistics industry is expected to play the leading catalytic role. Ethiopia aims to diversify its port access facilities and services to improve its trade corridor access routes; utilizing the Berbera corridor will surely have a potential to make Ethiopia a front runner in logistics operations, boosting the competitive advantage of delivering our products to the world market. The development of this Corridor will not only meet with the growing demand of Ethiopian’s international trade, but it would also enhance our Nation’s capacity in utilizing our existing major corridor both in terms of volume of trade and efficiency.”
Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, said: “As a leading global provider of trade and logistics solutions, we strongly 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. 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.”
The road infrastructure that will connect Berbera Port to Wajaale at the border with Ethiopia, funded by the Abu Dhabi Fund for Development and the UK’s Department for International Development, is expected to be completed by the end of 2021. The road will link to the existing modern highway on the Ethiopian side and will further position Berbera as one of the key trade gateways in the region and will be one of the fastest and most efficient routes for Ethiopian transit cargo.
DP World has committed to investing up to US$442 million to develop and expand Berbera port, with the first phase nearly completed. Further work is already underway on expansion of the quay to 1000 metres which will increase capacity to two million TEUs, operated by 10 quay cranes.
DP World is going big in Berbera. I thought they were filling up only the water between the STS crane area and container yard of the new 400m terminal. But it looks like they are also filling up the area behind the old General purpose terminal.
Here are two satellite images:
Dec 2020
Mar 2021
“DP World and its partners plan to invest up to $1 billion over the next 10 years to develop supply chain infrastructure along the corridor, the company said in a statement on Thursday. This will include dry ports, silos, warehouses, container yards, cool and cold chain depots, freight forwarding and clearing activities, the company said.”
“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.”
This will be a huge win for Berbera Port which is set to be launched this month.
Traders in Doolow and Belethawa in Gedo region have opted to source for food commodities from Berbera port via Ethiopia instead of Mogadishu due to increased
checkpoints and high taxation along Mogadishu - Belethawa trade Corridor. This has led to increased lead-time from 7 to10 days. (WFP)
Here is the full PDF version. Notice the Somaliland section is written by a pessimist who is even worried about Afar-Issa issue.
Interesting that everything in Somaliland is calculated in Somaliland Shillings but things in Somalia are calculated in dollars.
Not only pessimist but biased. Here is the next instalment.
The cross border trade between Somalia and Ethiopia
through Beletweyne town is normal and goods are
moving smoothly from both sides.
Supply of food items from upstream markets to
downstream markets is ongoing smoothly throughout Puntland.
Cross border between Ethiopia and Somaliland is ongoing… ???
Literally everything increased in Puntland.
• Vegetable prices are increasing in some markets compared to last week. For instance, in Bossaso lettuce and pepper increased by 8% compared to last week. In addition, tomatoes and potatoes increased slightly (<5%) per Kg.
• Camel milk prices are increasing throughout Puntland due to low supply resulting from seasonality. For instance, the prices increased by 10% to 20% compared to last week. In addition, goat milk prices also increased by 8% compared to last week ($1.3 to 1.4)
• Fuel prices remained stable in many markets compared to last week except in Bossaso where diesel prices increased by 9% per litre compared to last week.
• Local cereals (white sorghum and maize) prices increased significantly in last two weeks. For instance, white Sorghum increased from 35,000 So SH to 40,000 So SH (14%), also white maize increased by 19% compared to last week per Kg due to low supply from Southern regions.
Literally all their metrics bar 1 decreased or stabilised in Somaliland.
Prices of fruits and vegetables remain the same
Prices of fruits and vegetables remain the same compared to last week except garlic that increased from 11,000 to 12,000 per Kg. Onions, potatoes, tomatoes and carrots remained the same at 6,700 SL SH, 4,800 SL SH, 9,000 SL SH and 5,000 SL SH per Kg. In addition, in Hargeisa and Gebiley a medium sized watermelon remained at 35,000 SL SH. per piece due to increased production locally.
In Hargeisa, prices of white maize and red sorghum remain the same as last week. However, white sorghum prices slightly decreased by –4% per Kg due to the improvement of the local supply and also from Ethiopia.
In Erigavo, traders have opted to use Berbera as a source market due to limited supply of commodities from Bosasso due to monsoon winds. However, Somaliland authority has imposed new taxes between Bosasso and Erigavo corridor.
Traders from BeletHawo, Doolow and Luuq have switched to Berbera port since the route from Mogadishu is expensive due to taxation along the road by both Government and insurgents (A.S). In addition, prices of rice and sugar have decreased in Doolow, BeletHawo and Luuq by -4% to -6% per 25 Kg bag.
How is this relevant for Somaliland and why is it only mentioned for Somaliland:
“Cross border between Ethiopia and Somaliland is ongoing, and supply of Khat is normal”
This guy is highly biased, where did he got these numbers from and who is he?
• Local cereals (white sorghum and maize) prices increased significantly in last two weeks. For instance, white Sorghum increased from 35,000 So SH to 40,000 So SH (14%), also white maize increased by 19% compared to last week per Kg due to low supply from Southern regions.
No body buys anything with Somalia’s shillings. Just shows they are out of touch with reality.
Is it that nobody in Puntland accepts Somali Shilling at all?
If that is the case what do the danyarta that don’t have access to US Dollar do?