Can UAE Investment Turn the Berbera Corridor Into Ethiopia’s Alternative Trade Gateway?
The UAE helped build a modern port at Berbera. The harder task is persuading cargo to use it.
Somaliland’s relationship with the United Arab Emirates has already transformed Berbera’s physical infrastructure. Yet the corridor connecting the port to Ethiopia remains commercially underused, showing that modern cranes and improved roads do not automatically create a competitive trade route.
The UAE can help unlock the corridor—but it cannot accomplish that alone. The decisive choices now belong to Somaliland, Ethiopia, logistics companies and the institutions controlling cross-border trade.
The port is no longer the principal problem
DP World committed as much as $442 million to developing Berbera Port. Its first-phase container terminal has an annual capacity of 500,000 twenty-foot equivalent units, with a proposed second phase capable of raising capacity to two million.
The UAE has also financed supporting infrastructure. The Abu Dhabi Fund for Development says an AED262 million allocation supported rehabilitation of the Berbera–Hargeisa highway as part of a wider AED330 million UAE grant.
In October 2025, DP World introduced a direct Jebel Ali–Berbera shipping service, giving Somaliland a faster connection with Dubai’s logistics network and offering onward access toward Ethiopia.
These investments have removed several historic constraints. Berbera now possesses a functioning port, an economic zone and much-improved road connectivity. The missing ingredient is sufficient cargo.
Ethiopia has not shifted at scale
Ethiopia remains overwhelmingly dependent on Djibouti. Figures attributed to Ethiopia’s Ministry of Transport and Logistics indicate that Djibouti handled 96.71 percent of Ethiopian cargo during the 2025–26 fiscal year, while Berbera accounted for only 2.74 percent.
That disparity is not simply the result of port performance. Ethiopia already has established customs systems, freight operators, warehouses, rail connections and long-term commercial relationships along the Djibouti route.
For Berbera to compete, traders require a binding transit framework covering customs guarantees, cargo insurance, truck permits, taxation, dispute resolution and the treatment of sealed containers. Border delays at Tog Wajaale could erase any time saved at the port.
The corridor also needs return freight. Trucks that deliver imports to Ethiopia but return empty will charge higher prices. Somaliland must therefore develop exports and processing industries—livestock products, fish, salt, agricultural goods and eventually manufactured products—that can move in the opposite direction.
What Abu Dhabi can contribute
The UAE’s strongest contribution would be to connect the corridor’s separate components. It could support trade finance, cargo guarantees, bonded warehouses, cold-chain facilities, digital customs systems and an inland logistics terminal on the Ethiopian side.
Abu Dhabi could also bring Somaliland and Ethiopia together with DP World under a formal corridor-management framework. Such a body should publish transit times, border-clearance performance, cargo volumes and fees. Without measurable standards, commercial decisions will remain vulnerable to political promises.
Somaliland must protect its own interests through transparent concessions, predictable taxation and safeguards ensuring that Berbera produces local employment rather than functioning merely as a foreign-controlled transit platform.
WARYATV Assessment
The UAE has already made Berbera commercially credible. It has not yet made the wider corridor commercially competitive.
Unlocking its potential requires a transition from construction to coordination: a Somaliland–Ethiopia transit agreement, efficient border clearance, affordable trucking, trade finance and reliable return cargo.
If President Irro’s UAE visit produces progress in these areas, it could prove more valuable than another announcement of port expansion. Berbera does not primarily need another vision. It needs cargo moving predictably from ship to market—and back again.
