Port deal: Somalia sets terms for Ethiopia, no land lease

[Deeq A.]

Mogadishu, Somalia – In a move to clarify recent discussions, the Somali government has unveiled details of a potential commercial port agreement with neighboring Ethiopia.

If finalized, this agreement would allow Ethiopia to utilize a Somali port much like it currently relies on Djibouti for its trade. Importantly, Somalia has firmly dismissed any notion of granting a land lease to Addis Ababa.

While the specific port remains to be determined, Somali officials have narrowed down the possibilities to several locations along the country’s extensive Indian Ocean coastline.

“The port we’re discussing for Ethiopia’s use will be situated along the Indian Ocean, definitively excluding the Gulf of Aden and any ports within Somaliland, such as Saylac,” explained State Minister for Foreign Affairs, Ambassador Ali Balcad.

He pointed to a broad area stretching from Garacad down to Kismayo, a region dotted with around seven ports, all of which require significant investment and upgrades.

Who pays for the port?

A key point of clarification: Ethiopia won’t be footing the bill for the port’s development. Instead, Somalia plans to partner with international investors to finance the project.

“We will build the port ourselves, with the support of external investors. Ethiopia will have no direct financial role in its construction,” Balcad stated.

“However, identifying a location that aligns with their market needs and logistical requirements will be a central part of our technical discussions.”

He emphasized the potential for this deal to unlock substantial investment opportunities. “By reaching an agreement with Ethiopia, we can attract the funding needed to develop major port facilities.

And even more crucial than the port itself are the connecting road networks. In today’s global economy, investment in infrastructure that links countries is a top priority,” he added.

Balcad revealed that various companies and nations have already expressed significant interest. “When investors see a market beyond Somalia’s borders requiring a well-connected port and road system, they recognize a valuable opportunity,” he said.

Agreement timeline and next steps

Somalia and Ethiopia aim to finalize the port agreement by June, following a series of talks in Ankara, Addis Ababa, and Mogadishu. While the broad strokes of the agreement are known—it’s a commercial deal—the finer details are still under wraps.

“We anticipate concluding the negotiations after four more rounds of meetings scheduled for June. These discussions will determine the specific port location and the necessary investment framework,” Balcad confirmed.

These upcoming meetings will ultimately decide how Ethiopia gains access to a Somali port for its trade. The Somali government will reiterate its unwavering stance against any territorial concessions to Addis Ababa.

Securing reliable port access is a strategic imperative for landlocked Ethiopia. Currently, the country relies heavily on Djibouti. This potential agreement with Somalia highlights the shifting geopolitical landscape of the Horn of Africa.

The coastal stretch from Garacad to Kismayo holds significant economic potential. With the right investment, the ports in this area, including Hobyo and Barawe, could become vital hubs for regional trade. These locations have seen varying levels of infrastructure development throughout recent history.

While the relationship between Ethiopia and Somalia has experienced its ups and downs, this port agreement represents a chance for greater economic cooperation. The deal can potentially boost trade for Ethiopia and spur economic activity in Somalia.