Djibouti, Somalia’s decision could hurt investment in Africa – DP World

Horn of Africa

Dubai state-owned port operator, DP World, said on Thursday that Djibouti and Somalia’s decisions to seize control of its terminal projects could hurt African efforts to attract investment.

The firm’s Chairman, Sultan Ahmed bin Sulayem, told a news conference in Dubai that the port operator was currently facing twin political challenges in Africa.

Bin Sulayem alleged that Djibouti abruptly ended its contract to run the Doraleh Container Terminal last month and Somalia’s parliament also voted this week to ban the company.

He said the Djibouti move was illegal, adding that the company had begun proceedings before the London Court of International Arbitration, which had earlier cleared the company of all charges of misconduct over the concession.

“Africa needs infrastructure investments and if countries can change their law (to take assets), then this is going to basically make it more difficult to attract investment,”  Bin Sulayem said.

DP World, which reported 14.9 percent rise in 2017 profit to $1.18 billion profit, said that it would invest $1.4 billion across its global portfolio, including Berbera in Somaliland.

It is developing a port in Berbera in partnership with the governments of Somaliland and Ethiopia.

It is also developing a green field free trade zone in the breakaway region.

Bin Sulayem said he was not concerned by the vote in Somalia’s parliament to ban DP World from the country, which the parliament said nullified their Somaliland contract.

According to source, Somalia’s Lower House of Parliament on Monday rejected the Berbera port deal entered into by semi-autonomous Somaliland, Ethiopia and DP World.

The Lower House had voted to reject the deal through a landslide with 168 of the 170 lawmakers nullifying all agreements between DP World and Somaliland.

DP World had reached agreements with Somaliland over the Berbera and Bosaso ports, but with the Monday vote – both deals are “null and void.”

If the Upper House reaches a similar decision, the President will sign it into law.

Somaliland located in the north of Somalia declared unilateral independence from Somalia on May 18, 1991.

It has been under pressure to hold talks with Somalia which have so far been futile.

The region can boast of an army, its own currency and legal system.

The territory has been experiencing stability and economic prosperity and has been influential in the fight against piracy and terrorism in the Horn of Africa.

The 26 years of diplomatic isolation has made it difficult for Somaliland to have access to loans from the World Bank and the International Monetary Fund.

Europe, the Middle East and Africa accounted for about 42 percent of the cargo DP World handled in 2017.

Amaka E. Nliam