Investment in the expansion of Berbera Port is delivering tangible economic, trade, and environmental benefits for Somaliland, strengthening the territory’s role as a regional logistics gateway and reducing costs for businesses across the Horn of Africa, according to a new independent evaluation.
This insightful assessment, commissioned by British International Investment (BII) and conducted by Itad and Steward Redqueen, evaluates the impact of a multi-year modernization of Berbera Port. This transformation is a collaborative effort led by DP World in partnership with the Government of Somaliland, highlighting significant advancements in the region’s infrastructural landscape.
Situated on the Gulf of Aden, Berbera holds a strategic location along one of the world’s busiest shipping lanes. Historically, it has been recognized as a potentially vital trade corridor for landlocked Ethiopia. The evaluation underscores how targeted investments in port infrastructure have not only upgraded Berbera’s capacity but also its performance, enabling it to compete effectively with other established regional ports.
The data reveals a remarkable increase in container handling capacity at Berbera, which has more than tripled from 150,000 to 500,000 twenty-foot equivalent units (TEUs). This substantial growth has been facilitated by the introduction of new quay infrastructure, enhancements to draught depth, and the adoption of modern cargo-handling equipment, all of which allow the port to accommodate larger vessels and increased traffic volumes.
Moreover, operational efficiency has seen striking improvements. Average vessel turnaround times have plummeted from 64 hours in 2018 to around 25 hours in 2024. This notable reduction not only benefits shipping lines but also cargo owners, significantly lowering costs associated with maritime logistics. According to the evaluation report, these operational improvements have repositioned Berbera as a vital regional competitor, leading to an increase in container traffic through the port.
As a result of these enhancements, Berbera’s share of regional container trade has steadily climbed, reaching 14% in 2024, up from 9% in 2017. Sophisticated modeling within the evaluation suggests that the port now offers cost-competitive access to areas of eastern Ethiopia and Somaliland that were previously underserved, particularly regions lying beyond the traditionally congested Addis Ababa–Djibouti transport corridor.
The economic and societal benefits stemming from these efficiency gains are substantial. Transport cost reductions for importers and exporters utilizing Berbera were estimated to be around $8.4 million in 2024. When adjusted for the influx of new users attracted by the port’s expansion, this figure remains impressive at approximately $6.9 million. On an environmental front, improved logistics and shorter vessel waiting times have led to a notable reduction in carbon emissions, estimated at around 7,651 tonnes annually.
The upgraded port and the adjacent Berbera Economic Zone have also made a considerable contribution to Somaliland’s economy. In 2024, they supported nearly 2,490 jobs and added an impressive $45.1 million to the economy. Notably, around 921 jobs and $16.7 million of that economic output can be directly attributed to the port expansion, which constitutes roughly 0.4% of Somaliland’s gross domestic product.
While the initial results of the investment are promising, the study notes that the full impact has yet to be realized. Current trade volumes have not yet reached the port’s full capacity, and external factors such as disruptions linked to the Red Sea crisis have also influenced shipping patterns. Furthermore, some benefits, including the effects of reduced import costs on living standards and broader economic spillovers into neighboring Ethiopia, are not fully captured in the analysis.
In spite of these considerations, the evaluation firmly concludes that well-structured infrastructure investment in underserved frontier markets, particularly when facilitated by experienced global operators and bolstered by complementary logistics ecosystems, can unlock substantial trade, economic, and environmental gains.