Somali government rules against DP World

The Government of Somalia has declared that all contracts with DP World are “null and void” following controversy surrounding the country’s Port of Berbera.

Nearly all 170 members of the Somali parliament voted in favour of the motion, declaring that a recent agreement to sell a 19% stake in the Berbera facility to land-locked Ethiopia was “contrary to the constitution of Somalia”.

Berbera sits within Somaliland, a self-declared republic but an area that is internationally recognised as a part of Somalia. The agreement on March 1, 2018, to sell the stake in the Berbera facility was made between DP World, the Ethiopian government and Somaliland government, but not the Somali government.

Speaking before the vote, Somalia’s president, Mohamed Abdullahi Farmajo, said: “Whoever wishes to engage investment in Somalia should seek the permission from the legal institutions of the government. Somalia’s foreign policy is based on neutralism and mutual respect.

“I am warning companies and countries not to cross the line and put to question the sovereignty of Somalia”.

At the time of writing, DP World had not commented on the parliamentary vote.

The Somali government last week appealed to the Arab League over the actions of DP World, which is owned by the United Arab Emirates’ government.

In response, the Arab League said: “The control of the borders of the land, its airspace and the sea are the responsibility of the federal government of Somalia, and the Arab League warns against interfering with Somalia in any kind.”

The government of Somaliland approved the Port of Berbera concession in August 2016, granting DP World a 65% stake in the facility.

Following the new agreement, DP World has a 51% stake in the facility, Somaliland has a 30% stake, and Ethiopia has a 19% stake.

As part of the deal the Ethiopian government agreed to invest in infrastructure to develop the Berbera Corridor, which would connect the port to the inland country.