Prime Minister Abiy Ahmed’s recurrent demands for a Red Sea outlet for Ethiopia are a reminder of just how sensitive the issue of maritime access to the Horn of Africa remains.

By signing a memorandum with the president of the self-proclaimed Republic of Somaliland Muse Bihi Abdi on 1 January, he put the issue squarely at the top of the heap of major diplomatic challenges facing the sub-region.

He has stirred up the region’s rivalries over the only two existing deep-water ports on the African coast of the Gulf of Aden – Djibouti and Berbera.

Djibouti: Nearly 10 times more traffic

Only a few hundred kilometres apart, the two neighbours have never really been competitors. The docks of Djibouti only came into being at the very end of the 19th century, to meet the needs of French colonialists, while the old quays of Berbera had already been serving Somali shepherds.

The British protectorate only strengthened the commercial role of the former capital of Somaliland, its port serving as a hub between the Ethiopian hinterland and the distant India route, before the Somali civil war simultaneously destroyed its port facilities and dreams of grandeur.

Three decades later, Berbera is still one of Africa’s busiest ports for exporting livestock to the Arabian Peninsula, handling several million animals each year, while at the same time Djibouti and its terminals have established themselves as an essential stopover on the maritime highway between Asia and Europe.

At first glance, the two rivals are “not in the same league”, according to one Djiboutian shipping operator we spoke to. This is particularly true when it comes to container traffic, with Djibouti handling annual volumes almost 10 times greater than Berbera, reflecting its use by Ethiopia, which has relied upon the tiny republic’s terminals for more than 90% of its traffic ever since Eritrea’s official independence in 1993.

All of which should give Somaliland’s authorities some ideas. At the start of the 20th century, the British had proposed building a railway line from Berbera to double the capacity of the Djibouti-Ethiopia line opened a few years earlier, only to be rebuffed by the French.

As the Ethiopian juggernaut looks to increase its maritime access, Berbera has a golden opportunity to drive a wedge into Djibouti’s near monopoly of the past 30 years, if only to boost financial revenues from a port that is easily the Somaliland government’s main source of income.

DP World, Berbera’s powerful ally

To achieve its goal and eventually present itself as “an alternative to Djibouti”, according to Somaliland Port Authority Director Saïd Hassan Abdilahi, Berbera has a major ally in the presence of DP World on its quays.

Driven out in 2018 from the Doraleh terminal, which it had inaugurated 10 years earlier in the Djibouti harbour, in 2016 the Dubai-based operator became interested in the Somaliland port, which was then as run-down as it was cramped.

As it had previously done with neighbouring Djibouti – its trade dispute is still pending at the London Court of Arbitration – DP World has invested just over $400m to build a brand-new container terminal that meets the latest requirements imposed by the global shipping industry.

Since 2021, Berbera has the resources to match its new-found ambitions, with a 400-metre quay equipped with three gantry cranes and a 17-metre draught to accommodate the latest generation of ships.

At the time, DP World Chairman Sultan Ahmed Bin Sulayem told the authorities gathered for its inauguration that the port was “ideal for providing a viable and efficient option for Ethiopian goods in transit”.

A second phase is already under way to increase the terminal’s capacity to two million TEUs (20-foot equivalent units) per year, while a 1,200-ha free zone opened its doors in 2023 along the refurbished road leading to the capital, Hargeisa.

Port Authority Director Abdilahi says this will help further the objective of “eventually capturing 30% of Ethiopian freight”, as Ethiopia confirmed through Foreign Affairs Ministry adviser Abdulaziz Ahmed Adem on 19 April that it “remains firmly attached to the memorandum of understanding signed with Somaliland”.

Hargeisa can count on the unfailing support of the Emiratis, since in addition to DP World’s plans, the food group IFFCO has plans to build a vegetable oil bottling plant in the Berbera Economic Zone (BEZ), while the Abu Dhabi Fund for Development (ADFD) has already planned to invest in the renovation of Somaliland’s 250 km on the future 1,000-kilometre corridor linking the port to Addis Ababa.

Djibouti port modernisation

While Berbera has been preparing its arsenal for the coming port battle, Djibouti has been methodically pursuing its vast terminal development plan, launched nearly 10 years ago at a cost of billions of dollars with the help of its Chinese partners.

The old port is preparing to definitively turn its back on its traditional maritime activities and transform itself into a financial centre, with its traffic transferring to new quays built outside the city.

After the container terminal launched in 2005, the bay of Doraleh, to the north of the capital, opened its doors in 2017 to a multi-purpose terminal. In the next year, the first phase of the Djibouti International Free Trade Zone (DIFTZ) was completed. The DIFTZ plans to eventually stretch over 4,800 ha.

In 2017, the Djibouti port authorities also inaugurated a terminal in Tadjourah to receive Ethiopian potassium carbonate, as well as another in Ghoubet, specialising in salt exports.

Djibouti’s ports were finally linked by rail to Addis Ababa, following the modernisation and electrification of the railway line in 2016, thanks to Chinese investment of $3.4bn.

In all, Djibouti’s various ports offer almost 3km of quays, all with a draught of between 16 and 20m and capable of handling more than 2 million TEUs a year, as well as 15m tonnes of general cargo and more than 5 million m³ of hydrocarbons.

In the meantime, a new free zone, this time for industrial purposes, is due to be built in Damerjog, to the south of Djibouti City, in 2035. With an investment of over $1bn, the 30-m2 zone will include a new multi-purpose port with a container terminal, an additional oil depot with its own refinery, and a ship repair yard.

Diversification at Djibouti port

Having made substantial efforts in terms of equipment, the Port of Djibouti has been seeking to improve and diversify its services to ships in recent years. The arrival of the region’s first floating dock is part of this drive, as is the development of bunkering activities and the introduction of the Djibouti Port Community System (DPCS), which enables all port services to be provided online to an increasingly busy and demanding customer base of shipowners.

“We are 20 years ahead of our regional competitors,” says Djibouti Ports & Free Zones Authority (DPFZA) Chairman Aboubaker Omar Hadi. This is particularly true when it comes to legal procedures, as Djibouti has long had transit agreements and customs approvals that Berbera is still negotiating with Ethiopia.

“There isn’t really a contest today,” says our Djibouti shipping agent, a user of both ports. Ethiopian traffic has fallen in recent months, as a result of high military spending combined with a lack of foreign currency, all of which are taking their toll on Addis Ababa’s import volumes.

In this void, the port of Djibouti has endeavoured to successfully develop its transhipment activities. After having accounted for up to 80% of port traffic, Ethiopia now represents only 30% of all activity recorded at Djibouti’s terminals.

“Everyone is looking elsewhere. The Ethiopians are looking to diversify their maritime outlets, and the port of Djibouti is looking to diversify its users. Nothing could be more normal,” says the DPFZA’s Hadi.

For him, just like for many others, the Ethiopian market and its 120 million consumers need more than a single port in any case.

“Djibouti is for the centre of the country and the capital; Berbera for the southern provinces; the Eritrean ports of Assab or Massawa for those in the north,” says the Djiboutian shipping agent, “provided that the volume of goods justifies it, which is not the case today.”