Challenges lie ahead for Somalia-Ethiopia port pact

Subject

Outlook for Somalia-Ethiopia port development plan

Significance

Ethiopia and Somalia in June announced plans jointly to develop four Somali ports as part of a wider bilateral agreement to enhance political and economic cooperation. The agreement reflects Ethiopia's regional push to warm relations with its neighbours, diversify port access and secure its economic future. The Federal Government of Somalia (FGS) hopes to harness the economic potential of one of its greatest natural assets: its ports.

Impacts

• Jihadist group al-Shabaab will claim the deal is part of foreign efforts to usurp Somali resources.
• With Ethiopia on board as a stronger economic partner, Somalia may be able to attract a wider array of potential investors.
• Investment prospects may prompt jockeying among clan interest groups.