It has been almost a year since Ethiopia and Somaliland signed a Memorandum of Understanding (MoU) for sea access. While pursuing this, the two sides have also intensified their economic cooperation especially in the field of port services that plays an integral role in their economy.
Recently, Somaliland has inaugurated the Ethiopian Transit Clearinghouse at Berbera Port. The new clearinghouse is tasked with managing the transportation of cargo unloaded at Berbera Port to various destinations across Ethiopia, thereby streamlining logistics and enhancing trade efficiency between the two nations.
Regional economic integration is a vital step to give economic leverage to the member countries. Such regional integration can lead to substantial economic gains, such as increased trade and investment, improved standard of living, and reduced dependence on imports. Furthermore, the regional integration can improve market efficiency and create a larger market for the production and sale of goods and services.
However, the economic integration of the member countries does not come at one time or overnight. It is a step by step journey that embraces the genuine interests and benefits of the people of the two countries with a view to realize it in the long run. Therefore, the member countries should take measures step by step until they reach to the level of exploiting all the available opportunities.
As such the countries of the Horn of Africa have a big opportunity to gain economic leverage from economic integration. Yet, so far integration has been under challenge due to various reasons despite the countries having the interest.
Despite all these Ethiopia and Somaliland have been working on up scaling their economic ties. Ethiopia is a country of more than 120 million people which makes it among the most populated both in Africa and the world. Coupled with its large and rapidly growing economy it needs to increase its access to modern, high capacity maritime facility to accommodate its rapidly growing import and export trade.
Somaliland also owns important port facilities that can serve not only the country but also its neighbors. These port facilities can give economic benefit to the country by integrating its ties with Ethiopia which is highly in need of the port services.
The successful opening of the clearinghouse is a good start for even stronger economic and trade relations that can be good example for other regional integrations. The smooth operation of the clearing house and the forthcoming strong transaction is likely to be a part and parcel of the efforts underway at continental level to create a free trade area.
The commitment observed in both Ethiopia and Somaliland to carry on the project of opening the clearinghouse facility deserves due appreciation. It is clear that the journey thus far was not a bed of roses. It won’t be either in the future. However, the burning needs of the economies of the two sides and the interest of the two peoples are much higher than any challenge that stands in its face.
The two sides need to continue working remaining policy and infrastructural issues until the people start to reap the economic and social benefits of the facilities and leave their finger prints to inspire much other integration across the region and the continent.
In Sum, the economic cooperation between Ethiopia and Somaliland marks a significant step towards regional integration that promises to yield substantial benefits for both nations. As they navigate the challenges ahead, it is crucial for both sides to address remaining policy and infrastructural issues to fully realize the potential of their partnership. By fostering stronger ties and enhancing trade efficiency, Ethiopia and Somaliland can set a powerful example for other countries in the Horn of Africa, paving the way for broader economic collaboration across the continent.
The Ethiopian Herald December 12/2024
