Investment in the Berbera port and the Berbera corridor is part of a wider USD $1.7 billion partnership that will help address stark imbalance in global trade, accelerate Africa’s trade potential, and improve the economic prospects of millions of people
- The Berbera port development is first major foreign direct investment in Somaliland
- Additional trade equivalent to 6% of Somaliland’s GDP by 2035 is expected to be enabled by the ongoing expansion; by 2035, the trade facilitated by the port is expected to support 53,000 jobs in Somaliland and improve access to staple goods for over a quarter of the population
- The partnership between DP World and CDC will also invest in logistics facilities in the wider Berbera corridor, such as the Special Economic Zone being built outside the town of Berbera
SOMALILAND – 12 October 2021 – DP World, a world leader in global supply chain solutions, and CDC Group, the UK’s development finance institution and impact investor are entering a long-term partnership to multiply the capacity of the Port of Berbera and improve surrounding logistics facilities to create a regional trading hub. This will provide a vital economic boost to Somaliland and support growth in the broader Horn of Africa region.
The investment is part of a wider US$1.7 billion partnership to accelerate Africa’s trade potential and improve the economic prospects of millions of people, starting in the ports of Berbera, Dakar and Sokhna. CDC is committing $700 million and DP World $1 billion.
Africa has a sixth of the world’s population, but accounts for just 4 per cent of global containerised shipping volumes[i]. Ports are vital to the long-term prosperity and wellbeing of people. But many ports and logistics facilities in Africa remain constrained, lacking capacity to meet the needs of local economies.
This long-term partnership will help change that. It will address the stark imbalance in global trade through supporting the modernisation and expansion of ports and inland logistics in Africa.
In Somaliland, Berbera port is a cornerstone of the economy and by 2035 is expected to facilitate trade equivalent to nearly 27 per cent of GDP and 75 per cent of total trade, supporting indirectly 53,000 jobs in Somaliland.
The major investment in the port and surrounding logistics will increase the availability and affordability of goods for over a quarter of the population, with the greatest benefit felt by people who are dependent on imported staple food items. Millions of people who live in the wider region will enjoy similar benefits. Berbera port also plays a key role in enabling humanitarian aid to enter the region, reaching close to 2 million refugees and internally displaced populations.
The port will also provide a gateway to international markets for Somaliland businesses and entrepreneurs, as well as supporting the growth of nascent export industries stymied today by logistics inefficiency. A variety of sectors are expected to benefit from the expansion, including exporters of livestock, agricultural and perishable goods, textiles and construction materials.
The port is the first major foreign direct investment (FDI) and the first international non-mineral concession known in Somaliland. The partnership will also invest in a number of associated logistics projects that will further bolster trade capacity, including the Special Economic Zone outside the town of Berbera.
Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said: “DP World views Africa as a long-term growth market and the opportunity landscape remains significant. This partnership with CDC offers us greater flexibility to accelerate and capitalise on these opportunities, and will enable us to increase our investment in ports and logistics infrastructure across Africa. The partnership will create transformational opportunities for millions of people over the next decade.”
Nick O’Donohoe, Chief Executive Officer, CDC Group, said: “Stable and flourishing economies are built on reliable access to global and intra-continental trade. Africa’s full potential is limited by inadequate ports and trade bottlenecks, putting the brakes on economic growth in some of the world’s fastest growing economies and undermining social resilience in the least developed parts of the world. This platform will help entrepreneurs and businesses accelerate growth with access to reliable trade routes and it will help African consumers benefit from the improved reliability and reduced cost of vital goods and food staples.
We are proud to support DP World to do even more in Africa, charting a stronger course for African trade around the world.”
Richard Charlton, Investment Director, CDC Group, said: “The ongoing upgrades to trade infrastructure in the Berbera corridor are expected to significantly enhance economic opportunities for businesses in Somaliland, as well as improve the quality of life for Somalilanders by increasing availability and reducing the cost of vital imported goods. It is our hope that CDC’s investment will help demonstrate investability and serve as a catalyst for further private sector FDI in the region. This will foster economic growth in Somaliland and the wider Berbera corridor, creating economic opportunities for local populations.”
NOTE TO EDITORS:
About DP World
We are the leading provider of worldwide smart end-to-end supply chain logistics, enabling the flow of trade across the globe. Our comprehensive range of products and services covers every link of the integrated supply chain – from maritime and inland terminals to marine services and industrial parks as well as technology-driven customer solutions.
We deliver these services through an interconnected global network of 181 business units in 64 countries across six continents, with a significant presence both in high-growth and mature markets. Wherever we operate, we integrate sustainability and responsible corporate citizenship into our activities, striving for a positive contribution to the economies and communities where we live and work.
Our dedicated, diverse and professional team of more than 56,000 employees from 140 nationalities are committed to delivering unrivalled value to our customers and partners. We do this by focusing on mutually beneficial relationships – with governments, shippers, traders, and other stakeholders along the global supply chain – relationships built on a foundation of mutual trust and enduring partnership.
We think ahead, anticipate change and deploy industry-leading technology to broaden our vision of more efficient, transparent and resilient world trade. We achieve this by leveraging disruptive innovation to create the smartest and most effective logistics solutions, while ensuring a positive and sustainable impact on economies, societies and our planet.
About CDC Group
- CDC Group is the UK’s impact investor with over 70 years of experience of successfully supporting the sustainable, long-term growth of businesses in South Asia and Africa.
- CDC has a long track record in building infrastructure partnerships in Africa; Globeleq, one of Africa’s largest Independent Power Producers; Vodacom/Safaricom for The Global Partnership in Ethiopia; AKFED IPS the power platform in Africa.
- The company is a leading player in the fight against climate change and has committed more than $1 bn of climate finance over the last four years. CDC is also a founding member of the 2X challenge which has raised $10bn to empower women’s economic development.
- The company has investments in over 1000 businesses in emerging economies and total assets of $9.3bn. In 2020, CDC committed over of $1.5bn to businesses in Africa and Asia, and aims to invest up to $1.75bn in 2021 – with a focus on driving inclusive growth, job creation and supporting economic recovery from COVID-19.
- CDC is funded by the UK government and is a champion of the UN’s Sustainable Development Goals. All proceeds from CDC’s investments are reinvested to improve the lives of millions of people in Africa and South Asia.
- CDC’s expertise makes it an ideal partner for private investors looking to devote capital to making a measurable environmental and social impact in countries most in need of investment.
Muhumed Muhumed (aka Khadar)| Political and Communications Officer | British Office Hargeisa |