A newly opened terminal at Berbera port in Somaliland has set the stage for stiff competition in maritime trade, especially for goods destined to Ethiopia, as Kenya eyes a larger market share with recently launched Lamu port in a business dominated by Djibouti.
Somaliland, along with the Dubai-based giant port operator, DP World, which is developing and expanding Berbera port, officially inaugurated the new terminal on Thursday last week.
Currently, 95 percent of the goods destined to landlocked Ethiopia pass through Djibouti. However, Kenya, through the Lamu Port South Sudan-Ethiopia Transport project, sought to tap that market.
A high-power delegation from Ethiopia that attended the inauguration of the Berbera port is an indication that Addis Ababa is keen on using the new facility.
The delegation comprised Ethiopian Finance minister Ahmed Shide and his Transport counterpart Dagmawit Moges.
During the inauguration of the new terminal, Somaliland President Muse Bihi Abdi said the port would serve the landlocked countries, especially Ethiopia.
"With the new terminal, along with the second phase of expansion and economic zone along the Berbera corridor, we are now firmly positioned to further develop and grow our economy through increased trade, attracting foreign direct investment and creating jobs," said President Abdi.
Kenya aims to wrestle out Djibouti as a key entry point for Ethiopian goods. To achieve this, Nairobi sent a delegation to Ethiopia to sell the port of Lamu ahead of its commissioning in May.
According to Somaliland and DP World officials, Berbera's newly built terminal will increase the port's container capacity to 500,000 twenty-foot equivalent units (TEUs) annually from the current 150,000 TEUs.
With the completion of phase one, DP World is due to commence the second phase expansion of the Berbera port.
The completion of the second phase expansion is expected to boost the port's accommodation capacity to two million TEUs annually.
DP World is an Emirati multinational logistics company based in Dubai, United Arab Emirates. It specialises in cargo logistics, port terminal operations, maritime services and free trade zones.
Kenya’s authorities say the Moyale One-Stop Border Post (OSBP) remains operational despite the ongoing political upheavals in Ethiopia that have seen the country announce a state of emergency. A customs official in Kenya’s northern region said the border point with Ethiopia has not been officially closed and that business is going on as usual.
A backlog of ships waiting to offload goods at the key ports around the world is threatening to disrupt the supply chain in East Africa ahead of the Christmas festivities. East Africa relies on imports from China as its largest source market for the bloc’s imports, followed by India and the United Arab Emirates.
African ports are facing a challenge in handling a new generation of ultra-large container vessels due to lack of sufficient infrastructure and shallow berths that hinder bigger ships from calling to these harbours.