Somaliland: Pact with Ethiopia to Enhance Economic interdependence


MoU signed in Hargeisa Establishes “Ministerial Commission” to Further Bi-Lateral Relations between the two countries

President Silanyo (6th L) poses with both Ethiopian and Spmaliland officials after Bi-lateral discussi0ns at the presidency in Hargeisa on 13th Nov 014

Somalilandsun – A strong desire of the governments and peoples of Ethiopia and Somaliland to further strengthen the overall friendly relations being tied up with geographical proximity, historical interdependence and shared culture exists and is under consolidation and more importantly strengthening.
This is per a Memorandum of Understanding-MoU signed between the two governments following the visit to Somaliland by a high level delegation from Ethiopia.
Below is a press statement released by the Trade office at the Ethiopian Consulate in Hargeisa detailing full details of the delegations activities in Somaliland and poignant facts of the MoU.

A high level Ethiopian delegation concludes Working visit in Somaliland with a signed MoU

A high level Ethiopian delegation comprising of ministers, deputy ministers, director generals and other senior government officials concluded recently a visit in Somaliland where members of the delegation held several discussions with Somaliland officials on the status of existing trade, investment and infrastructure cooperation and ways of further consolidating them. The delegation also made site visits to see the status of the Berbera port, the roads linking Ethiopia to parts of Somaliland including Berbera as well as the capabilities if Somaliland fuel storage facilities. The two sides have concluded this round of discussion by signing an MoU (Memorandum of Understanding) and naming a fourteen member joint “Ministerial Commission” which comprises seven ministers from each side.

The Ethiopian delegation with officials from the hosting government of somaliland at Berbewra port

Both sides have also agreed to establish “Joint Coordination Committee”. The visit followed from the strong desire of the governments and peoples of Ethiopia and Somaliland to further strengthen the overall friendly relations being tied up with geographical proximity, historical interdependence and shared culture.
Included in the Ethiopian delegation were the Minister of Finance and Economic Development, H.E Ato Sufian Ahmed, the Minister of Transport , H.E Ato Workneh Gebeyehu, State Minister of MoFED H.E. Ahmed Shide, Brigadier General Berhe Tesfaye, Consul General of Ethiopia in Somaliland, H.E. Ato Ahmed Tussa, Director, Maritime and logistics services, Dr. Getachew Betru, Director General, National Railway Corporation, Amb. Solomon Abebe, Director General, African Affairs, Ministry of Foreign Affairs, Ato Kokeb Misrak, Director, Bilateral Cooperation, MoFED, Ato Wassihum Abate, Director, Legal Service, MoFED, Ato Bekele Negussie, Deputy Director General Ethiopian Road Authority and Ato Takele Getaneh, a business counselor of the Consulate General.
In a state dinner at the Presidential palace, Somaliland President Ahmed Mohamed Mahmud Silanyo who said “Ethiopia has been and will be a good friend of Somaliland and have a very close relationship” also promised “not only to maintain prevalent existing relations but to strengthen them in the future”. Ethiopia’s Minister of Finance and Economic Development Ato Sufian Ahmed who led the Ethiopian delegation on his part appreciated Somaliland’s track record of “political stability and security” which will help Somaliland to become a “secured destination for international business”. Somaliland Foreign Minister and International Cooperation on his part appreciated the visit and the signed MoU followed by a nominated a joint technical committee which will commence operation on 8th December. Ethiopia’s Consul General Brigadier General Berhe Tesfaye who noted that the visit by the high level Ethiopian delegation which follows from his office’s continued effort in convincing the high level Ethiopian officials for the technical level economic and security sector negotiations to be reinforced by high level discussions also underlined the importance of giving significance to the move and exercise maximum commitment to the implementation of tasks outlined in the MoU.

Somaliland officials brief EThiopian team at the Berbera fuel depot
Up on conclusion of the visit, the Ethiopian delegation which has expressed its satisfaction on the growing trade and investment relations also appreciated development efforts being made by the Somaliland Government of expanding the capacities of its ports and fuel storage facilities, as well as the maintenance works on roads linking the two sides and all the way to Berbera port. It also noted the Ethiopian Government’s desire to use the ports full current pottential more than ever before and underlines the importance to work together to realize a breakthrough expansion of the ports and the full development of corridors and signed a Memorandum of understanding with clear objectives, identified areas of cooperation and implementation mechanisms.
The MoU was signed with the objectives to develop and expand a framework of cooperation and partnership in trade, investment and infrastructure development between the two sides based on the principles of equality, mutual benefit, mutual understanding, respect and trust. These include full cooperation, including through experience sharing, in infrastructure development and utilization such as road and railway interconnectivity, hydropower interconnection and renewable energy, airports and air cargo services, study and utilization of Somaliland ports including Berbera as well as infrastructure maintenance and management. Also included were the need to further strengthening the growing trade and investment relations by addressing any existing minor or major obstacles as well as the need to develop a plan which will help to reach at an agreement which will codify the range of tax free and preferential tariffs that will be allocated to goods originating from both sides or re-exported by them in order to achieve greater equality of trade relations.
In this regard, both sides underlined the importance of support actions to achieve those goals including by creating and facilitating businessBrigadier Gen Berhe Tesfaye the Ethiopian consul general is credit with enhancing Ethio-SL bilateral relations promotion events such as industrial exhibitions, trade fairs, seminars and symposia to private sectors of both sides and support for trade and investment promotion activities; encouraging the cooperation between the two sides’ relevant institutions including the chambers of commerce for experience sharing, training and information exchange on regional and global goods and services as well as to jointly identify additional possible areas of trade and investment potentials which could generate trade flows between the two sides and to third parties.
With an MoU signed at Ambassador Hotel in Hargeisa, the two sides have established a 14 member “Joint Ministerial Commission” consisting of seven ministers from each side and tasked to hold meetings bi-annually, or as the parties may agree, to discuss on strategic issues outlined in the MoU and pass decisions and directions for implementation. To this end, both sides have agreed to establish a “Joint Coordination Committee (JCC)” which will meet periodically to coordinate and monitor the implementation of the projects and terms agreed in the MoU; prepare and implement a work program and place it for consideration before the Ministerial Commission for approval as well as prepare quarterly progress reports to the Commission.
During a preparatory discussion held at Mansoor Hotel with the Somaliland Minister of Foreign Affairs, Brigadier General Berhe Tesfay briefed the Foreign Minister of Ethiopian Government’s readiness to put in place a negotiated approach and sign a comprehensive agreement at the higher level which will help to jointly seek international financers which could provide funds to be utilized to develop the ports and the common corridors along with the necessary road interconnectivities which could ensure an ease to the services. This has so far been not too far from being realized if both sides could renew their commitment with equal pace.

Somaliland Foreign minister M Behi Younis and-Ethiopian-fInance-Minister-Ato Sufian Ahmed exchange signed MoU at Ambassador hotel Hargeisa

So far the commitment being seen from both sides is encouraging as technical committees from Ethiopia and Somaliland held several rounds of discussions with a view to sign a mutually beneficial comprehensive economic cooperation agreement which will help to enhance trade and investment flows, create affordable power and road interconnectivity, peace and stability and economic and social interdependence which would pave a way to regional integration as outlined in the IGAD and AU regional integration plans. The visit by the high level Ethiopian delegation was an indication of the mutual desire to complement the technical level negotiations with the highest possible levels of discussions so that the whole process could be expedited.
A number of feasibility studies made by several independent bodies have shown that developing the Berbera port and the Ethio-Somaliland common corridors will enhance the economic interdependence of the peoples and Governments of Ethiopia and Somaliland and contribute a lot in realizing IGAD’s initiative of integrating the Horn of Africa region. IGAD’s integration plan, among many other things, puts significant importance on the need of diversifying options for affordable port and transport services which would accommodate the present and future volumes of import and export goods of the rapidly booming economies of the member countries. And Ethiopia is among the advocates of the need to realizing IGAD’s integration plan as it has in a number of occasions repeatedly expressed its readiness to use its 30% of its total port traffic through Berbera if up to the standard and affordable developments could be undertaken by any feasible means.

Senior Ethiopian officials at the Somaliland presidency in Hargeisa

This, as a number of Ethiopian officials said, will help to create a win-win economic and social interdependence between the peoples of Ethiopia and Somaliland without affecting Ethiopia’s well established interdependence with Djibouti. Such a notion comes from the verifiable belief of the Ethiopian Government as it is working to double its GDP every seven to eight years and put the nation among the middle income economies by 2025 and that this necessitates the proliferation of extra port services which will affordably accommodate with an ease the huge import and export demands of the economic blow.