Somaliland: Grabbing the Ethiopian Lion by the Tail with Help of Bollore

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President Silanyo and PM Desalegn of Ethiopia during after meeting in Addis Ababa on 11th Jan 2014

By: Geleh Ali Marshall

Somalilandsun – Somaliland is cleverly inducing a third party –Bollore Africa Logistics to facilitate and bring into fruition the elusive

Berbera Corridor that holds so much economic promise for this young nation irrespective to its inability to partake in or to become a party to an international agreement. Bolloré Africa Logistics is well suited to harness and fulfill Somaliland’s aspirations due to its political influence coupled with its shear capacity, comparative-advantage and expertise.

Once implemented the Berbera-Corridor will connect Somaliland with the emerging 90 plus million nation of Ethiopia that has been one of the fasts growing economies in the world and better yet that has managed to sustain its growth. President Ahmed Mohammed Mohamoud Silanyo of Somaliland has pertinaciously toiled for Berbera Port and its corridor to Ethiopia to be fully agreed on by the nexus of parties involved, the Somaliland president has visited both capitals Addis Ababa and Paris within this single month retaining to this matter.

There is already a feasibility study of port Berbera’s capacity and the road networks connecting Somaliland with Ethiopia underway and it is being carried out by a German company Gauff that was selected by IGAD and funded by the EU. Port Berbera will be instrumental in creating trade relations to the already political relations and cultural relations that both countries enjoy. Already the benefits to Port Berbera is that it has a shorter road distance to Addis Ababa than compared to both port Mombasa of Kenya and Port Sudan of Sudan. The road linking Port Berbera and Addis Ababa is 930 kilometers in length, with 240 kilometers of it within Somaliland and remaining 690 kilometers in Ethiopia.

There is no denying it, the last decade has been the Renaissance of the African lion-Ethiopia, the second most populous country in Africa with a population of over 90 million and GDP of over 100 billion exhibited an extraordinary growth rate for a non-oil producing country. Ethiopia might have been known for been largest exporter of coffee and having the most efficient and profitable airline on the continent, but Ethiopia will soon have the highest skyscraper and will be the biggest power exporter in Africa thanks to its economic transformation, where in the last decade Ethiopia was one of the fastest growing economies in the world.

Somaliland is trying to grab this lion by the tail and hoping that it will have the multiplier effect that beyond just revenues provides jobs, stimulates investment, spurs long term-growth and mitigates the constraints from the lack of recognition that have put bilateral assistance and capital markets beyond its reach. Somaliland is ready and aiming to capitalize on the landlocked nation of over 90 million by leveraging its Berbera Port as the corridor to which Ethiopia will cater its emerging market to the rest of the world.

The impasse to the Berbera port has been Somaliland’s inability to partake in and to become a party to an international agreement since it is not officially recognized by the rest of the world, which limited or eliminated the renowned financial institutions and insurance companies willing to ensure if not at premium certainly the cargo’s travelling through Somaliland or ships docking on Berbera port.

However Somaliland’s strategic maneuver to include a large multinational conglomerate likes that of Bolloré Africa Logistics which has the sway and capacity along with Ethiopia to back and guarantee the presumed liabilities associated doing business in an unsovereign nation situated in a conflict- predisposed zone of world dominated by terrorism and piracy. Certainly Somaliland values Bollore’s political connections and technical know-how and presumes that Bolloré Africa Logistics is capable of making this venture a success.

The clear-cut objectives of President Ahmed M.M. Silanyo’s administration have been the promotion of political, social and economic interests of Somaliland and thus his grandiose development-plan and Somaliland’s economic prosperity lies with the free flow of people, services and goods between the Berbera-Corridor. Berbera corridor has been identified as a project that can transform Somaliland and irrespective of its political quandary Somaliland is encouraged by its proximity to Ethiopia and is geared up to benefit from it. Somaliland wants to be a recipient of the Ethiopian electric surplus that many in the East African countries are about to become beneficiaries to. The World Bank and the African development bank have funded what is called the “Eastern Electricity Highway project” that will soon light up 5 African countries that include Tanzania, Uganda, Rwanda, Kenya, Burundi and that is on top of Djibouti and South Sudan who are already receiving electricity from Ethiopia. Somaliland certainly wants to benefit from the Ethiopian electricity surplus, but first the Berbera –Corridor has to be implemented and it has to become a success.

Somaliland is not waiting for Ethiopia to hold its hand or anyone else to dictate any top-down solutions, Somaliland has subsisted within its frugal means since its inception without any substantial assistance from the international community. Somaliland is led by a president with an economic background who has taken a holistic approach with strategic alternatives for fostering economic growth by making development a national priority. To maximize the impact of the president’s economic agenda, the president laid the groundwork and transformed the government sector first and his administration did not rest on Somaliland’s internal-strengths and laurels of peace and security but they have rather enhanced the capacity of Somaliland’s public sector by honing in on and streamlining government services.

Once the government reforms where concluded with the president transitioned onto economic development and in a quest to realize Somaliland’s development aspirations, Somaliland has created an enabling and conducive business environment that started with the creation of a whole new government branch to the ministry of Commerce solely to attract foreign Investment. This new branch has published an Investment -Guide and an internet portal that aims to attract foreign direct investment in Somaliland by enticing would be investors with incentives and tax-abatements. It has also created a “One Stop-Shop” that does away with the counterproductive requirements and bureaucratic controls that hindered investments in the past. Somaliland has instituted a viable economic plan called The National Development Plan (NDP) and has also created Somaliland Development Fund (SDF) that is in line with Somaliland’s developmental ambitions. Somaliland’s NGO act ensures that aid and humanitarian agencies along with development partners concerning the New Deal to be in lockstep with Somaliland’s developmental priorities. The current National Development Plan of 2012 to 2016 is based on five pillars that is guided by urgent issues concerning developments in key areas that are set the on the steady path for the long term vision of Somaliland in 2030. President Ahmed M.M. Silanyo’s administration’s untiring concerted development effort has taken the concrete actions that will bring such vision to reality by enhancing the simple Pastoral economy of Somaliland.

The expedited improvement of Somaliland’s public sector can be credited to caliber of competent ministers that have laid a new foundation for Somaliland’s transformation. For the first time in Somaliland’s history the national forecasted budget was brought to the parliament on a timely manner and it was the largest in the country’s history $152 Million. With its meager scare resources the government has invested in the long term human capital of Somaliland by freeing primary education and ensuring Somaliland future cadre are literate and in 2013 Somaliland undertook a country wide census in order for to government comprehend demographic outline of the nation to better meet social needs of its citizens.

The Ethiopian transformation could be contributed to the vision and insistence of late Meles Zenawi who is considered the father of Ethiopia’s economic miracle and driver of its momentous achievements. Meles Zenawi affirmatively chose to adhere to the economic growth model of Asian Tiger and rejected the neo-liberal and deregulation growth model prescribed by the so called Washington consensus that consists of the World Bank, US Treasury and the IMF, In addition to the political pressure he was under at the onset from the world trade organization that insisted Meles liberalize the telecom and banking and the national Airline. Meles prudently placed Ethiopian state owned institutions at center of development, which they are playing a big role in even in their current 5 year economic plan 2011-2015. The Ethiopian government had concrete plans and competent institutions that is why its economy prospered and fared well, Plans like the Growth and transformation plan” and steering institutions like Public Enterprise Supervising Agency (PESA). Ethiopia has used its state owned institutions like the Ethiopian commercial bank to support national priorities and act as an anchor for strategic development.

In Somaliland’s case it has placed it self well to benefit enormously from this mutually beneficial port Berebera project. With its limited resources and capability Somaliland has done everything within its sphere to rebuild its physical and human capital infrastructure. Somaliland’s current economic phase holistically seeks to incorporate public private partnership (PPP) with the backing of it’s the civil sector. Somaliland has impressively financed the maintenance and construction of its roads through levies, windfall tax and with the assistance of willing public who see the Ceerigabo road as a national calling. Somaliland has had great achievements such the free primary education, the doubling of public pay, ushering new political parties, in addition to numerous other government endeavors that included Military Ranks.

It is my hope that if the Berbera-Corridor is agreed upon it will have the multiplier effect that Somaliland is in dire need of, and if given the opportunity Somaliland will certainly grab this resilient Ethiopian lion by the tail to create jobs, stimulate investment, and spurs long term-growth for Somaliland.

Bienvenue Au Somaliland!

Geleh Ali Marshall

Geleh@hotmail.com

Hargeisa Somaliland

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