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First Transit Office Opens In Somaliland
Addis Ababa, Ethiopia, April 2006 – The first transit, forwarding and customs clearance agent, Ethio-Somland Trading Plc has been opened by Ethiopian and Somaliland nationals to service Ethiopian goods that come through the Port of Berbera.
The Republic of Somaliland, which has not been given recognition as a state by world governments, is now home to the first-ever commercial company opened by Ethiopian and Somaliland citizens, according to the head of the Somaliland Commercial Office in Ethiopia.
Established by Farhan Haj Mohammed and Abdillahi Gamadid from Somaliland, and Al-Staz Plc from Ethiopia, the company has a capital of three million Birr. It received its trade licence from the government of Somaliland.
Al-Staz Plc, established in 2004, imports vehicles and spare parts into Ethiopia. The company is also active in the transport sector.
Keder Awel, owner and General Manager of Al-Staz said that he drove the entire 945Km route to the Port of Berbera to reassure himself that the route and the road conditions were safe. Having done that, he said, he then made the decision to establish Ethio-Somland.
“Ever since the Ethiopian government announced that it would consider Berbera as an alternate port to Djibouti, I thought to myself that there is something to be done here,” he said.
Although, there is little serious activity going on in the area at the moment, he said he was optimistic the situation would change over time and that there would be plenty of business to go around.
Ethiopia signed an agreement with the self-proclaimed government of Somaliland in May 2005 after using Djibouti as its sole port since 1998. The first shipment of Ethiopian goods of 500 containers for the Ethiopian Electric Power Corporation arrived at the Port of Berbera in October 2005 at the same time as 10 used cars of a businessman who resides in Dire Dawa. Although the shipments have arrived at the port, none have been brought inland.
“I don’t think Ethiopian business men have heard all the full advantages of using the Port of Berbera. Furthermore, if they took the time to find out, I am sure they would understand that Somaliland is a nation of peace,” said the Chief Executive Officer of Ethio-Somland, Farhan. He added that businessmen in Somaliland, as well as the Ethiopian government should make more effort to sell the country and the port to Ethiopian businessmen.
The agreement reached in May 2005, when Getachew Belay, former minister of Revenues, traveled with a delegation to meet Somaliland officials, stipulates that the port handling fee for 20ft containers is 160 dollars while 40ft containers cost 200 dollars. The same size containers in Djibouti would cost 275 and 556 dollars respectively.
“These prices are low by the standards of any port,” said Farhan who added that goods that come into the port could stay there free of storage fees. “This has special advantages for Ethiopian businessmen”.
The Ethiopian Ministry of Foreign Affairs has appointed Ambassador Wubshet Demmise, former director of the Diaspora Affairs Directorate, to head the Somaliland Commercial Zone Office for Ethiopia in Somaliland.
The Ambassador said that he would be moving to the capital Hargeysa next week and explained that “emphasis would be given to strengthen the relationship between the two nations and to allow for the use of the port to be smooth for Ethiopian businesses and businessmen”.
A source at the Ethiopian Shipping Lines (ESL) told Fortune that the company brings shipments up to the Port of Aden and then has them transferred to smaller vessels that can be accommodated by the Port of Berbera. At least two ships will come in through the Port every one or two months to help ease the congestion that has occurred at the Port of Djibouti over the last two months, he said.
“There is also a plan to bring fertilizer through the Port of Berbera” said the ESL source, adding that it would be important for the port to be able to handle that type of traffic and all the transit work.
The Head of the Somaliland Commercial Office in Ethiopia, Yusuf Jamac told Fortune that the government of the state would give a trade licence to any Ethiopian that wanted to come and work in Somaliland.
Although Ethio-Somland has opened its offices in Hargeysa, it will use the Al-Staz offices for its base in Addis Ababa, according to the CEO.