Eritrea may provide an alternative trade route for the region instead of Djibouti
The Red Sea state of Eritrea may play a key role in DP World Ltd’s plans in the Horn of Africa, where a dozen ports could be needed to service the region, Chief Executive Officer Sultan Ahmad Bin Sulayem said.
Developing more ports in the Horn, including one it’s already building at Berbera in Somaliland, will help boost trade flows to Dubai, Bin Sulayem said in an interview.
Eritrea’s strategic location near the Bab el-Mandeb Strait, a key shipping lane used by oil tankers and other cargo vessels en route to the Suez Canal, makes it an attractive investment destination for logistics companies. It’s also a gateway to other nations in the region, the CEO said.
“Eritrea is going to have a major role,” Bin Sulayem said. “We believe that the way we should look at the Horn of Africa is not at Eritrea alone, but add to the equation South Sudan, other parts of Sudan, and Eritrea’s needs, and then the Ethiopian population.”
The Dubai-based harbour operator has been carrying out assessments throughout the region, Bin Sulayem said. He declined to specify how many harbours is targeting of the 10 to 12 it estimates the region requires.
Eritrea is normalising its foreign relations after signing a historic peace deal in July with neighbouring Ethiopia, Africa’s second-most populous nation with 105 million people. The two countries fought a border war two decades ago that claimed as many as 100,000 lives.
DP World will consider what the government’s plans are at the port city of Assab and “will be there like everybody else” if asked to invest, Bin Sulayem said. Eritrean Information Minister Yemane Gebremeskel said he couldn’t comment on whether the ports of Assab and Massawa will be opened for tender.
Eritrea may provide an alternative trade route for the region instead of Djibouti, where DP World is in a legal dispute with the government after it nationalised the Doraleh Container Terminal last month. That followed a UK tribunal ruling that Djibouti’s cancellation in February of DP World’s contract to run DCT was unlawful.
Elsewhere in the region, DP World is interested in helping develop Kenya’s Mombasa port, and in helping Ethiopia establish a logistics facility, he said. Somaliland hosts a United Arab Emirates military facility at Berbera, though Bin Sulayem said the base won’t have a bearing on its investment plans.
“Whatever the UAE does is to improve trade relations because that is our bread and butter,” Bin Sulayem said. “There is no political agenda of the UAE in Africa. Our agenda is trade.”
(First published on Bloomberg)
