Somaliland wants to be a trading hub. Here are the problems

..and the potential.

Somaliland, a semi-desert territory on the coast of the Gulf of Aden, has set its sights on becoming a regional trading hub for the Horn of Africa. Though not internationally recognised, Somaliland’s "autonomous" status has insulated it from the turmoil that has subsumed Somali for the past two decades. It has a functioning political system, government institutions, its own currency and relatively low levels of political violence.

At the heart of its economic potential is the port of Berbera, used as an import and export hub by landlocked Ethiopia. Its two airports have undergone a USD 10 million Kuwaiti funded makeover which Somaliland hopes will be the start of efforts to develop its infrastructure, creating the potential for it to augment its position as an alternative trade corridor to Djibouti for Ethiopia.

Ethiopia’s USD 43bn economy, while largely closed to the outside world, is growing by 7 per cent a year and the country is keen to develop coffee and leather manufacturing exports.

The need for enhanced infrastructure in the region is demonstrated by persistent bottlenecks at ports in Mombasa, Dar es Salaam and Djibouti. The appalling condition of the Mombasa road linking the port with the rest of Kenya and the countries of the interior exacerbates the backlog.

Ethiopia’s over reliance on one trade corridor through Djibouti leaves the country vulnerable to fluctuations in its relationship with its trade partner, thereby compromising its ability to effectively manage the political economy of trade logistics. The World Bank has encouraged Addis Ababa to develop transport routes through Somaliland to diversify its options and improve its negotiating position with transit corridors.

Infrastructure development will provide a boost to Somaliland’s fledgling natural resources sector. Sharing the similar geology to the oil rich Gulf states, Somaliland and neighbouring Puntland, offer attractive prospecting opportunities for oil & gas companies. Canadian-listed Africa Oil Corp and Anglo-Turkish oil company Genel Energy, have signed contracts with the semi-autonomous governments and are exploring in the region.

In a situation similar to the standoff between Baghdad and Kirkuk, the activities of international oil companies have sparked controversy over which authorities have the right to issue exploration licences. Following the presidential election in Somalia in 2012, Somalia authorities are reasserting their claim that the issuing of such licences falls solely within the remit of the federal government.

The Somali constitution gives considerable autonomy to regional governments to enter into commercial contracts for oil deals, while a petroleum law, not yet adopted by parliament is being invoked by federal officials in Mogadishu to claim that the central government can distribute natural resources contracts.

The seeds of this controversy dates back to the 1991 overthrow of a dictator that plunged Somalia into two decades of violent turmoil, first at the hands of clan warlords and then Islamist militants, creating a political vacuum in which two semi-autonomous regions - Puntland and Somaliland – emerged in northern Somalia.

Multinational oil companies with licences to explore Somalia prior to 1991 have since seen Somaliland and Puntland grant their own licences for the same blocks. At present the federal government is too weak to press its claim and is unlikely to remain so into the medium term. Any concerted effort to force Somaliland and Puntland to rescind contracts has the potential to provoke violent clashes between armed groups and the security forces in the territories.

Activity by a range of investors in infrastructure development and oil & gas exploration is indicative of the potential to be unlocked in even the most challenging territories. With appropriate insurance coverages providing balance sheet protection against the challenges posed by unpredictable government action and the threat of political violence, opportunities abound for the intrepid investor.

Photograph: Getty Images

JLT Head of Credit & Political Risk Advisory

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To heal Britain’s cracks, it’s time for us northern graduates in London to return home

Isn’t it time for people like me, who’ve had privileges and experiences not open to everyone, to start heading back to our local communities, rather than reinforcing London’s suffocating dominance?

I’m from Warrington. The least cultured town in the UK. My town.

I moved to London almost exactly five years ago. Not because I particularly wanted to. Not because I wanted to depart the raucous northern town that I still call home. Because it was my only choice, really. I’d done my stint in the call centres and had some fun. But that couldn’t, surely, be my lot?

After university, I’d already started feeling a little weird and out of place back in Wazza. There were fewer and fewer people who didn’t look at me like I’d just fallen off a futuristic space flight that’d given me a different accent and lofty ideals.

Of course, that’s because most people like me had already skipped town without looking back and were all in the capital trying to strike beyond the ordinary.

The young, the cities, the metropolitan elite are still reeling after last week’s vote and wondering how people, half of our people, have got it so horribly wrong. We’re different, divided, done for.  

One thing I’ve clung onto while I’ve been in London is the fact that I’m from Warrington and proud. It might not be a cultured town, but it’s my town.

But I wasn’t proud of the outcome of the EU referendum that saw my town vote 54.3 per cent to 45.7 per cent to leave.

To be fair, even in my new “home” borough of Hackney, east London, the place with the third-largest Remain vote, one in five people voted for Brexit.

Yes, in one of London’s hottest and most international neighbourhoods, there are quite a lot of people who don’t feel like they’re being taken along to the discotheque.

Perversely, it was the poorest places in the UK that voted in largest numbers to leave the EU – that’s the same EU that provides big chunks of funding to try to save those local economies from ruin.

In many ways, of course, I understand the feelings of those people back in the place I still sometimes think of as home.

Compared to many suffering places in the UK, Warrington is a “boom town” and was one of the only places that grew during the last recession.

It’s a hub for telecoms and logistics companies, because, ironically, its good transport links make it an easy place to leave.

But there are many people who aren’t “living the dream” and, like anywhere else, they aren’t immune from the newspaper headlines that penetrate our brains with stories of strivers and scroungers.

Warrington is one of the whitest places in the UK, and I’m sure, to many locals, that means those immigrants are only a few towns away. There’s already a Polski sklep or two. And a few foreign taxi drivers. Those enterprising bastards.

We have never seriously addressed the economic imbalance in our economy. The gaping north-south divide. The post-industrial problem that politicians in Westminster have handily ignored, allowing the gap to be filled by those who find it quick and easy to blame immigrants.

When schemes like HS2, which is plotted to smash right through the place I grew up, are pushed against all of the evidence, instead of a much-needed, intercity Leeds to Liverpool investment to replace the two-carriage hourly service, it’s like positively sticking two fingers up to the north.

But I am also a big problem. People like me, who get educated and quickly head off to London when things aren’t going our way. We invested in ourselves, sometimes at state expense, and never really thought about putting that back into the places where we grew up.

There weren’t the right opportunities back home and that still stands. But, rather than doing something about that, people like me lazily joined the gravy train for London and now we’re surprised we feel more kinship with a 20-something from Norway than we do with someone who we used to knock on for when we should have been at school.

That’s not to suggest that our experiences in the capital – or mine at least – haven’t made us a thousand, million times better. 

I’ve met people who’ve lived lives I would never have known and I’m a profoundly better person for having the chance to meet people who aren’t just like me. But to take that view back home is increasingly like translating a message to someone from an entirely different world.

“You know, it’s only because you live in a country like this that a woman like you is allowed to even say things like that,” assured one of my dad’s friends down at the British Legion after we’d had a beer, and an argument or two.

Too right, pal. We live in what we all like to think is an open and tolerant and progressive society. And you’re now saying I shouldn’t use that right to call you out for your ignorance?

We’re both Warringtonians, English, British and European but I can increasingly find more agreement with a woman from Senegal who’s working in tech than I can with you.

It’s absolutely no secret that London has drained brains from the rest of the country, and even the rest of the world, to power its knowledge economy.

It’s a special place, but we have to see that there are many people clamouring for jobs they are far too qualified for, with no hope of saving for a home of their own, at the expense of the places they call home.

It’s been suggested in the past that London becomes its own city-state, now Londoners are petitioning to leave the UK.

But isn’t it time for people like me, who’ve had privileges and experiences not open to everyone, to start heading back to our local communities, rather than reinforcing London’s suffocating dominance?

We can expect local governments to do more with less, but when will we accept we need people power back in places like Warrington if we want to change the story to one of hope?

If this sounds like a patronising plan to parachute the north London intelligentsia into northern communities to ensure they don’t make the same mistake twice... Get fucked, as they say in Warrington.

It was Warrington that raised me. It’s time I gave something back.

Kirsty Styles is editor of the New Statesman's B2B tech site, NS Tech.