DP World and Somaliland's new economic zone in Berbera to serve as regional trade hub

The first phase of the zone was launched after the opening of the container terminal at Berbera Port in June 2021

Sultan bin Sulayem, group chairman and chief executive of DP World, speaks at the inauguration of the new Berbera Economic Zone. Photo: DP World.

Global ports operator DP World and the Somaliland government have opened the new Berbera Economic Zone which, along with Berbera Port, is expected to develop the area into a major trade hub serving the Horn of Africa.

The first phase of the economic zone was inaugurated after the opening of the container terminal at Berbera Port in June 2021, DP World said in a statement on Friday.

“The dynamics of global trade are changing, and there is a growing need for trade infrastructure, such as economic zones, with easy and fast access to international shipping. These will bring companies closer to their customers, improve their logistics and allow them to expand into new markets,” said Sultan bin Sulayem, group chairman and chief executive of DP World.

“The integration of Berbera port with the new economic zone is a great example of this.”

The Dubai-based ports operator has been significantly expanding its footprint in Africa as it looks to tap into lucrative trade routes there. DP World has existing investments in Egypt, Algeria, Djibouti, Rwanda, Somaliland, Mozambique and Senegal, according to its website.

The new economic zone aims to attract investment and create jobs for Somaliland with business-friendly incentives. It operates under a new Special Economic Zone Law, Special Economic Zone Companies Law and offers fiscal and non-fiscal incentives.

It also features a one-stop shop for registration and licensing requirements, offices, warehousing and serviced land plots.

DP World said Berbera is well placed to become a regional trade hub, given its strategic location along one of the world's busiest sea routes and access to the hinterland in the region, including Ethiopia.

The Berbera Economic Zone is located 15km from the port along the Berbera to Wajaale road — the Berbera Corridor — that connects to Addis Ababa in Ethiopia.

The integrated maritime, logistics and industrial hub will serve the Horn of Africa, a region with a population of more than 140 million.

Somaliland's President Muse Bihi Abdi said: “After the inauguration of the container terminal at Berbera Port, and now with the economic zone open for business, we are taking a major leap forward in realising our vision to establish Berbera as an integrated, regional trade gateway, which will be a key driver of economic growth, achieved through increased trade flows, foreign investment and job creation.”

DP World has also signed an agreement with IFFCO, a UAE-based food company, to develop a 300,000-square-foot edible oil packing plant in the economic zone, while a dozen more companies operating across various sectors have already registered, according to the statement.

The master plan for the economic zone covers more than 1,200 hectares and will be expanded over time as demand grows, DP World said.

With the first phase now open, it will offer serviced land plots for the construction of company facilities, 10,000 square metres of pre-built warehouses, build-to-suit facilities, open yard storage, a common user warehouse that DP World will operate to handle customers’ cargo, and office space.

Berbera Port is a multipurpose port with infrastructure including bulk and break-bulk handling facilities, liquid cargo handling capability and a new container terminal. It has the capacity to handle 500,000 20-foot equivalent units (TEUs) a year.

After expansion, Berbera Port is expected to handle trade equivalent to approximately 27 per cent of Somaliland’s gross domestic product and 75 per cent of regional trade by 2035, the statement said.

The economic zone is expected to make trade easier for businesses in the region, benefiting exporters, importers and processors of livestock, agricultural and perishable goods, textiles and construction materials, DP World said.