All great infrastructure projects start with one brick.
The start of the Berbera Corridor construction build was inaugrated in a ground breaking ceremony yesterday that was attended by President Musa Bihi as well as an Ethiopian delegation led by Mustafa Mohamed Omer, Deputy Chief Administrator of Somali regional state and representatives from the UAE. The ceremony did come across as an illustrious event with a lot of senior government signatories attending the event alongside the President.
We’ve written extensively about the DP World Berbera deal which is the biggest FDI project in Somaliland’s history. The “Berbera Corridor” refers to the road linking Berbera and mainland Ethiopia and especially the commercial capital, Addis Ababa. This road has a total length of 937km with 241km based in Somaliland and a further 696km based in Ethiopia.
In our analysis we wrote that a fully functioning transit road between Berbera and Ethiopia could have substantial multiplier effects for Somaliland and increase revenues for Berbera Port ten-fold. Ethiopia’s large and very young population coupled with the development of the Berbera Corridor means that Berbera Port can serve as a gateway to regional trade in East Africa for generations to come. So it is exciting times that the first brick has now been laid…
Work will officially begin on March 15th and continue for about two years. The corridor will include 7 bridges and a road connecting Berbera & Wajaale at the border where Ethiopian government will continue the work leading to Addis Ababa.
To end, we’d say that the macro economics of the Berbera Corridor are well publicised. However, we hope that there are planned initiatives to mobilise local communities and the all important micro businesses. For example, local communities on the route of the road should be encouraged to start planning micro businesses to benefit from the forthcoming trade/traffic – typical businesses that come to mind are convenience stores, cafes and the obvious petrol stations. What we don’t want is the established business groups to simply come in and dominate. The appropriate government entities should be running workshops/training and quite possibly offering capital loans to the strongest business plans from local communities.
All in all things are looking good and we’ll continue to report on this and other business developments in Somaliland. Don’t forget to follow us on Twitter/Facebook!