Ethiopian Freight Forwarders and Shipping Agents Association

EFFSAA Weekly Newsletter Vol. 02 No. 097

Ethiopia Signs Agreement with Somaliland Paving Way to Sea Access

Ethiopia has taken the first legal steps on a path that could one day enable the landlocked country to gain access to the sea, its government says.

It has signed what is known as a memorandum of understanding (MoU) with the self-declared republic of Somaliland to use one of its ports.

The details of Monday’s agreement with Somaliland have not been made public but a statement from Mr Abiy’s office said it would “pave the way to realise the aspiration of Ethiopia to secure access to the sea”. Talks leading up to the MoU have focused on the Somaliland port of Berbera.

An MoU is not legally binding, though it is seen as a statement of intent and can lead to a treaty imposing obligations on those parties who have signed.

In 2018 Ethiopia and Somaliland signed a deal that should have led to Addis Ababa owning a 19% stake of the port of Berbera, with the Emirati logistics company DP World holding a 51% share.

But this fell through in 2022 as “Ethiopia failed to meet the conditions needed to acquire the stake before the deadline”, the authorities in Somaliland reportedly said at the time.

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IGAD Warns of Ethiopia-Somaliland Deal’s ‘Regional Implications’

The Intergovernmental Authority on Development (IGAD) has expressed “deep concern” about a Memorandum of Understanding (MoU) signed earlier this week between the Ethiopian and Somaliland governments.

A statement from IGAD Executive Secretary Workneh Gebeyehu (PhD) released today says the organization is “monitoring the situation and recognizes the potential implications for regional stability.”

Ethiopia lease a 20 kilometer stretch on the Somaliland coast for a port facility and military base. The lease is to last 50 years, according to the MoU.

In exchange, Ethiopia would recognize the sovereignty of the Republic of Somaliland, an internationally unrecognized state that broke away from Somalia proper and unilaterally declared independence in 1991.

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Ethiopia and Somaliland to Provide a Sea Outlet On a Leasing Basis

Ethiopian Shipping and Logistics (ESL), the continent’s lone deep sea vessel operator, welcomes the current agreement between Ethiopia and Somaliland to provide a sea outlet on a leasing basis.

Berisso Amallo, CEO of ESL, stated that the arrangement will benefit his company’s operations because the country will have a port.

When we operate on own port and terminal we will have massive reduction on operational cost,” he went on to say. He also stated that the company is preparing to carry out a project on the new territory that Ethiopia would secure in Somaliland, and that “we are also working to increase owned vessel and errect facility in the area.”

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Maersk Pauses All Red Sea Transits

Danish carrier Maersk, the world’s second largest container carrier, has decided to pause all transits through the Red Sea/Gulf of Aden till further notice. Maersk Hangzhou was attacked multiple times by Houthis in the Red Sea last week, and the U.S. Navy had shot down three small boats killing all rebels on the boats.

“An investigation into the incident is ongoing and we will continue to pause all cargo movement through the area while we further assess the constantly evolving situation,” says an official statement from Maersk. “In cases where it makes most sense for our customers, vessels will be rerouted and continue their journey around the Cape of Good Hope. This decision has been taken to assure the safety of our seafarers and cargo on our vessels, which is our utmost priority.”

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