Somalia sells off more state assets to Ethiopia

Mogadishu – The Ethiopian President Abiy Ahmed, made a surprise visit to Mogadishu on Saturday where he met with the Somali President, Mohamed Abdullahi Mohamed ‘Farmaajo’.

PM Abiy proposed to the Federal Government of Somalia, that Ethiopia invests money in ports and infrastructure across the country.

A statement from the meeting said:  “In an effort to attract and retain foreign investment to the two countries and the Horn of Africa Region, the leaders agreed on the joint investment in four key sea ports between the two countries, and the construction of the main road networks and arteries that would link Somalia to mainland Ethiopia,”

The two parties also identified the first stages of development as being the formation of a technical team to plan and execute the projects.

The exact ports that Ethiopia plan on developing have not been made public, however, it is likely that they will acquire ports all along the coastline of Somalia. 

Presently, landlocked Ethiopia does 90% of its maritime trade through the central port of Djibouti.  If Ethiopia can hedge this monopoly away from Djibouti by carving out alternative routes, then it would bring down the cost of doing business in the lucrative Ethiopian import/export market. 

Last May, Ethiopia along with the UAE, purchased a 70% stake of Berberra Port in Somaliland. The President of Somalia, heavily rebuked Ethiopia and made a huge commotion about the deal.  MPs in Somalia said that the Berberra agreement had violated the Provisional Constitution as well as the sovereignty of Somalia.

However,  Ethiopia bought favor with President Farmaajo this Saturday, when it offered to invest in other areas of Somalia too. This surprise visit to Somalia was successful for the Ethiopian PM, as his proposals were accepted with little resistance.

Foreign investment is a key element in nation building, however, Ethiopia clearly has the upper-hand in this arrangement. The Federal Government of Somalia are seemingly ready to bend and shift their diplomatic beliefs at the first sign of foreign cash.

 

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