Excerpts
COMMODITY FLOWS AND SHIFTING TRADE BETWEEN BERBERA AND BOSSASO
Other than geography, traders shift between Berbera and Bossaso ports—increasingly favouring Berbera—due to institutional, security and infrastructural factors. While lower import tariffs and closer genealogical ties might be thought to benefit Bossaso over Berbera, traders and transporters report that ‘weakening security’ and a ‘fragile administration’ in Bosaso port and the road between Tukaraq and Garowe have offset these potential benefits.
A senior official from Puntland’s Ministry of Finance emphasized that logistical factors, such as Berbera port’s increasing capacity to handle container-ized imports, and lower transportation costs for international shipments, were the main reason why some commodity imports have shifted from Bossaso to Berbera port. This was confirmed in the Rift Valley Institute’s recent report—Bosaso and the Gulf of Aden: Changing dynamics of a land-sea network—which found that ‘modernization and invest-ment, including in containerization, at the Berbera port means that Berbera is partially integrated in global shipping routes, with container vessels making routine stops at the port of Berbera’.
The general manager of a major trading company in Lasanod explained this change:
Since 2018, 75 per cent of the commodities we trade come from Berbera. Before this, 80 per cent of the commodities came from Bossaso. This shift had been caused by weakening security in Bossaso port and the road between Tukaraq and Garowe… Due to the recent developments in the port of Berbera, both infra-structure and administration, and less fees on the Somaliland side of the corridor, many companies from Puntland have shifted their operation to Berbera.
A senior customs officer in Lasanod confirmed that since 2018 Lasanod’s trade with Puntland has decreased from around eight to two trucks on average per day. However, a senior officer from Puntland’s Ministry of Finance was sceptical that this was caused by increased insecurity. Instead, he argued that a mix of political and economic factors had caused the shift. These include Somaliland’s consolidation of control over Lasanod and Berbera’s increasing capacity to handle containerization and lower sea transport costs. DP World’s investment in Berbera port is expected to further contribute to this trend.
While fuel, building materials, and food staples have mainly shifted to Berbera, Bossaso still supplies more bagaash bundles of consumer goods. The shift of commodities such as fuel and clothes to Somaliland has been influenced by quality controls. For fuel, Somaliland operates quality checks in Berbera, while for clothes, imports from Berbera and Mogadishu are seen as being of a higher quality than from Bossaso. Other commodities, such as building materials and food staples (rice, wheat flour), have been influenced by major importers in Berbera who can supply larger quantities.
Other factors that influence where commodities are obtained from is the presence of local production factories. For example, wheat flour, still water, and soft drinks are brought to Lasanod from Somaliland, which hosts factories such as the SBI (Somaliland Beverages Industry), Coca-Cola production plant in Hargeisa, and the national flour mill company in Berbera.
Some commodities, in particular fruits and vegetables, are trucked in from South-central Somalia to Lasanod and the rest of Somaliland—avoiding the tarmac road that connects Lasanod to Galkayo via Garowe. The road between Garowe and Galkayo is in bad condition, but trucks deliberately avoid Puntland customs duties, fees and checkpoints. They instead use informal routes in the Haud–the plains stretching southwards into the Ethiopian borderlands. On the Somaliland side, trucks carrying fruits and vegetables to Burao and Hargeisa avoid the well-maintained tarmac road to bypass numerous customs points.
Taxes
Traders pointed out that districts on the Puntland side collect fees that are higher than the figures given by the Puntland official. The general manager of a trading company mentioned a total of USD 240 for the district development tax.6 Traders also reported that new checkpoints, some of them ad hoc, had recently been created between Garowe and east of Tukaraq, collecting the checkpoint opening fee known as bir qaad. The proliferation of these new and unpredictable fees in recent years has led to a sentiment among road users that harassment by Puntland district and checkpoint authorities is on the rise. A driver offered the following explanation:
Most of the Somaliland checkpoints in the east are manned by the military who are more disciplined and provide good security and patrolling. On the Puntland side, the officers at the Puntland checkpoints are police who are less disciplined. For example, the driver could run into or unintentionally cut a new checkpoint’s rope (xadhig) that did not exist in the previous trip, those manning the checkpoint would shoot…I remember at least two such incidents between east of Tukaraq and Garowe.
Some of those interviewed reported that Puntland checkpoints and district authorities do not apply uniform tax rates. Police checkpoint officers ask for money at will and tell drivers who resist paying to park their trucks, which effectively forces them—partic-ularly when they are carrying perishable commodities—to pay. Puntland checkpoint officers thus leverage their authority to extract revenues from drivers and traders. The employee of a construction company highlighted the absence of transparent customs policies on the Puntland side of the Lasanod trade corridor:
We supply electronic material from Bossaso. Sometimes it happens that we receive the wrong order. Once we try to return the commodities back to Bossaso. Puntland authorities levy [levied] customs duties and other fees on the returned commodities.
The senior official from Puntland’s Ministry of Finance confirmed that checkpoint offi-cers on the Puntland side are tough and collect higher checkpoint opening fees than their counterparts in Somaliland.
On top of the unloading, security and garbage collection fees, transporters pay a small ‘road use’ (wado maris) fee to checkpoint officers. Commenting on the wado maris fee, a former driver who used to operate on both the Berbera-Lasanod and Bosasso-La-sanod corridors said: ‘On the Somaliland side, there is less harassment by authorities, no new checkpoints and fee[s] demanded by the checkpoint officers are small. Bossaso–Lasanod road is the opposite’.
Between Berbera and Lasanod there are around 10 checkpoints and a packed medium size 8-tonne truck pays USD 30 in total to all checkpoints.