A tale of two ports: The battle between Djibouti and Somaliland’s Berbera to become the Horn of Africa’s international shipping hub

President Guelleh of Djibouti has sought to allay fears that neighboring Somaliland’s $442 million revamping of its key port of Berbera will knock the Port de Djibouti off its perch as the key international shipping hub for the Horn of Africa (Godfrey Ivudria, 2020).

While maritime economists expect Djibouti to retain its pole position, and regard much of the current African Port ‘investment overdrive’ as a ‘concern’ (Brian Gicheru Kinyua, 2020), the president’s direct attack on Berbera highlights an uncertainty surrounding the sustainability of the Port de Djibouti itself. Berbera, expected to be a ‘catalyst for growth’ for Somaliland (Atam Sandhu, 2020), is just down the coast from Djibouti and so shares its ‘strategic’ location sitting astride several global shipping lanes (MENAFN, 2020).

Djibouti’s unique advantage then partly relies on it being the ‘gateway’ to Ethiopia, handling around 95% of trade for the landlocked state (Aaron Maasho, 2018), but a 2016 Port agreement between Somaliland and Ethiopia will see this reduced to only 30% when Berbera is completed, and in a further blow at least 30% of the previous 95% will be moved through Berbera instead (Godfrey Ivudria, 2020).

This comes at a time when there are growing concerns about Djibouti’s debt levels. The IMF classifies the port as at ‘high risk of debt distress’, similar to the Sri Lankan Port of Hambantota, which China took direct control of after lack of repayment (MENAFN, 2020). Djibouti currently owes China the equivalent of 72% of its GDP (Port Strategy, 2020), with China owning 23.5% of Djibouti Port (Andreu Sola-Martin, 2020). It is concerning to see the port in similar straits as its Sri Lankan counterpart, as Djibouti economically is almost solely reliant on its port and shipping (Brian Gicheru Kinyua, 2020), the loss of its control, or indeed its favoured maritime hub status is something it can ill afford.