Investments in Somaliland’s Berbera port are delivering tangible benefits
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.
The assessment, commissioned by British International Investment (BII) and conducted by Itad and Steward Redqueen, examines the impact of a multi-year modernisation of Berbera Port led by DP World in partnership with the Government of Somaliland.
British International Investment joined the project as a minority investor in early 2022 through its Africa Gateway partnership with DP World.
Located on the Gulf of Aden, Berbera occupies a strategic position along one of the world’s busiest shipping lanes and has long been viewed as a potential alternative trade corridor for landlocked Ethiopia. The evaluation finds that targeted investment in port infrastructure has significantly upgraded Berbera’s capacity and performance, enabling it to compete more effectively with established regional ports.
Container handling capacity at Berbera has more than tripled, increasing from 150,000 to 500,000 twenty-foot equivalent units (TEUs). This expansion has been supported by new quay infrastructure, deeper draught and modern cargo-handling equipment, allowing the port to accommodate larger vessels and higher volumes of traffic.
Operational efficiency has also improved sharply. Average vessel turnaround times fell from 64 hours in 2018 to around 25 hours in 2024, a reduction that has helped lower costs for shipping lines and cargo owners. According to the report, these improvements have repositioned Berbera as a credible regional competitor and contributed to rising container traffic through the port.
As a result, Berbera’s share of regional container trade has increased steadily, reaching 14% in 2024, up from 9% in 2017. Modelling cited in the evaluation suggests the port now offers cost-competitive access to parts of eastern Ethiopia and Somaliland that were previously underserved, particularly areas beyond the Addis Ababa–Djibouti transport corridor.
Business and societal impact
The efficiency gains are translating into meaningful savings for businesses. Transport cost reductions for importers and exporters using Berbera were estimated at $8.4 million in 2024, or $6.9 million after adjusting for new users attracted by the expanded port. Environmental benefits have also emerged, with improved logistics and shorter vessel waiting times cutting carbon emissions by an estimated 7,651 tonnes a year.
Beyond trade flows, the evaluation highlights a material contribution to Somaliland’s economy. In 2024, the upgraded port and the adjacent Berbera Economic Zone supported around 2,490 jobs and added $45.1 million in value to the economy. Of this, 921 jobs and $16.7 million in economic output were directly attributable to the port expansion, equivalent to roughly 0.4% of Somaliland’s gross domestic product.
More to come
The study notes that the full impact of the investment has yet to be realised, with current trade volumes not yet requiring the port’s full capacity. External factors, including disruptions linked to the Red Sea crisis, have also affected shipping patterns.
In addition, some benefits – such as the impact of cheaper imports on living standards and wider spillovers into neighbouring Ethiopia – are not fully captured in the analysis.
Nonetheless, the evaluation concludes that well-structured infrastructure investment in underserved frontier markets, when combined with experienced global operators and complementary logistics ecosystems, can unlock substantial trade, economic and environmental gains.
