Turkish company Metag Holding signed an agreement on 7 October to collaborate with the Somali Hobyo Investment Company (HICO) on the development of the Hobyo Port and Free Zone, easing pressure on ports in Mogadishu and Bosaso.

“Once this seaport is completed, it will not only address this local need but will also create a vital business corridor linking Somalia to landlocked Ethiopia, its closest strategic partner,” said Ahmed Khadar, an economics lecturer at Somalia University in Mogadishu.

As Mohamed Ali Warsameh, CEO of HICO, told The Africa Report: “This port is strategically important.”

Metag Holding will be responsible for the construction of the seaport and will retain a 30% stake while shares in the seaport will be available for investors, said Ahmed Abdi Kariye, the president of Galmudug State in Somalia, who was present at the signing ceremony. The project has secured an initial budget of $70m for its first phase.

The project connects the port to other regions and countries by road and it is hoped it will increase trade, especially with neighbouring Ethiopia.

Despite current tensions between Somalia and Ethiopia, the seaport could also offer Ethiopia an alternative trade route, reducing its dependence on Djibouti, said Mohamed Husein Gaas, the director of the Raad Peace Research Institute.

“If managed effectively, this could transform the region’s trade dynamics, linking Ethiopia more closely with the Indian Ocean and boosting economic interdependence across the Horn of Africa. However, realising this vision will require careful navigation of the existing political tensions between Somalia and Ethiopia,” he said.

The construction of Hobyo seaport coincides with the Somali government’s recent discovery of 50 billion barrels of oil reserves in Galmudug, where Hobyo is situated. The first ship from Turkiye, designated for oil assessment and exploration, is scheduled to arrive on the Somali coast on 19 October.

“Turkiye’s interest in oil exploration in Somalia reflects a calculated strategy to expand its influence in Africa while securing vital energy resources,” said Gaas.

“Somalia, with its largely untapped oil reserves, presents an opportunity for Turkiye to gain a foothold in the energy market, diversify its supply, and strengthen economic ties with a country of growing strategic importance. This pursuit not only secures potential future energy independence for Turkiye but also positions it as a key player in Somalia’s economic development,” he said.

But given insecurity onshore, exploration will be limited offshore, says Dr. Abdiqafar Farah, a former national security adviser to the late Somali President Abdullahi Yusuf Ahmed and a security expert who now leads AMNIFORM, a security think tank. “This approach allows for the support of international fleets that navigate the ocean, which is part of the broader efforts to ensure security during exploration.”

Deals with the Qataris

A $170m deal with Qatar to develop the Hobyo seaport in Somalia fell through in 2019. This agreement aimed to build up the port but also raise Qatar’s profile and influence within the country and counter the influence of its Gulf neighbours in the region.

However, according to Abdisalan, Turkiye has taken a more pragmatic, business-oriented approach, which is why its efforts have proved more successful compared to Qatar’s geopolitically driven attempts.

“Turkish efforts are consistently business-oriented, which is why they have been more successful than Qatar’s previous attempts, which focused more on politics. As a result, Turkish initiatives are now finally taking shape,” Abdisalan said.

But the Hobyo seaport deal follows two others that took place earlier his year: a maritime and defence agreement in February and an oil and gas cooperation agreement in March, increasing Turkiye’s influence in the Horn of Africa.

“While Qatar previously attempted to construct this port, that effort faltered due to internal political obstacles in Somalia and shifting geopolitical alliances,” Gaas said.

“From a geopolitical perspective, Turkiye’s move may be viewed with concern by the UAE and Saudi Arabia, as both have invested heavily in expanding their influence in the Horn. Turkiye’s involvement in Somalia, especially through significant infrastructure projects, threatens to disrupt their established influence in the region,” he said.