When most investors look at frontier markets, they do so from a distance – placing small bets through funds managed by others.
At DP World, as a leading global logistics provider, our strategy tells a very different story: making long-term infrastructure investments over decades, and in ways that transform economies and shift patterns of trade.
In this way, we have connected small businesses in remote areas to global markets, transformed ports with modern infrastructure, and used overland routes to extend the benefits of trade.
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It is some of my most interesting work, requiring effective partnerships, consistent teamwork, and deep expertise amid complexity – as well as vision and boldness.
I want to bring it to life by taking you to a fascinating place with a remarkable future: Berbera.
A port town with international potential
Located on the Horn of Africa’s coastline, the Port of Berbera in Somaliland overlooks the Gulf of Aden, positioned as a vital junction for trade.
To the northwest are the Red Sea and the Suez Canal – the gateway to the Mediterranean.
To the east lie the ports of the Middle East, including our Jebel Ali hub in Dubai, and those across Asia, including India’s vast port infrastructure and hubs across the Asia Pacific and China.
While to the south are African ports, set to play a growing role as south-south trade develops, and as the continent grows both exports and imports.
All will play to Somaliland’s strengths: stability with consistent commitment to growth, a young and ambitious population, and economic prospects, including significant minerals potential.
However, what’s most exciting for Berbera is its potential to serve not just Somaliland, but increasingly, Ethiopia – one of Africa’s fastest-growing and largest economies, with a population of 135 million people that vastly exceeds Somaliland’s six million.
Unlocking the landlocked
Ethiopia has no coastline and has been reliant on the Port of Djibouti, which handles around 90% of its trade.
This creates a significant opportunity for Berbera. Its overland route to Ethiopia is of similar length, and by offering an alternative with outstanding port efficiency, it can increase speed, resilience and capacity for Ethiopia and the Horn of Africa more broadly – especially as trade grows.
Our own findings indicate that Ethiopia will need access to multiple ports to support its rapid economic growth, with the Berbera Corridor being the obvious additional gateway.
We were therefore delighted in 2016 when the government awarded us a 30-year concession to operate and upgrade the port, with an automatic 10-year extension if performance conditions are met.
Within this agreement, we have committed to investing up to $442 million to develop the port and create a special economic zone covering 1,200 hectares, with room for further expansion, as well as tax and customs policies to support manufacturing and develop Berbera as a regional hub.
To support local communities, we have also invested in areas including education, healthcare and water infrastructure.
Working with partners
Unsurprisingly, we were not alone in seeing Berbera’s potential, and our role was just one of several concerted investments encouraged by Somaliland’s government.
The Abu Dhabi Fund for Development and UK Aid, the development agencies of the UAE and UK governments, announced grants for redeveloping the road from Ethiopia to Berbera. British International Investment (BII), the UK government’s development finance institution, invested alongside us in the port and special economic zone.
In addition, the United Nations Development Programme (UNDP) also played a significant role in improving governance in Berbera and the region more broadly.
A port transformed
Today, the town feels very different from when we started work in 2017.
There is an optimism in the air and the bustle of trade, which always makes me smile. We have extended the total quay length from 650 meters to over a kilometre and installed cranes that can handle some of the largest vessels.
Annual capacity has risen fivefold to 500,000 containers a year, and while in 2017 it took four days to unload an 800-container ship, it now takes just 10 hours.
Berbera’s thriving economy
The economic benefits have been substantial. We employ around 1,300 permanent staff at Berbera, with 98% local employment, plus another 2,000 to 3,000 in non-permanent roles
There are people at Berbera who have become so skilled in their field that we send them to locations elsewhere to advise.
Broader benefits are showing in the local economy. The UNDP recently reported that by 2024, Berbera’s local government revenue had soared to $14m from $1.5m in 2012, allowing increased spending on schools, healthcare and other services.
Meanwhile, trade developments continue apace. Recently, we announced a new direct shipping route from Berbera to our Jebel Ali port in Dubai, one of the world’s largest and a major international hub. It joins direct services to Mundra Port in India, Jeddah and King Abdullah in Saudi Arabia, and Salalah in Oman.
Principles for frontier markets
Of course, investments on this scale require a range of factors to come together, as well as an understanding of local considerations. We know this from our work in Somaliland, as well as in other African countries.
But I often find it helpful to return to the guiding principles that form the ethos of our business – shaping how we approach strategy and how we invest and contribute to where we operate. Here are three:
But I often find it useful to have some guiding principles. They help us assess opportunities, and guide us as developments unfold. Here are three:
- Where others see problems, look for opportunities. It’s remarkable how widely held perceptions blind people to opportunity. Somaliland is a good example. It has a small population and very real poverty. However, it defies outdated stereotypes and is on a positive trajectory in terms of economic growth.
- Build ecosystems, not just ports. A port with a special economic zone and overland routes is far more valuable than a port alone – an approach we’ve used successfully in Dubai. Investing in broader infrastructure and using our network to drive trade can be especially effective in frontier markets. In Berbera, we worked with UAE companies to develop a cooking oil packaging plant in the special economic zone and an oil import terminal at the port. Berbera now exports oil to Ethiopia and Somalia, as well as serving the local market, while bulk oil imports have helped lower prices for consumers.
- If you build it, they will come. This phrase captures a mindset that underpinned our success in Dubai, and our subsequent growth elsewhere. When making pioneering infrastructure investments, we primarily assess the potential rather than immediate demand and are willing and able to take a genuinely longterm view. This approach enables us to align with national economic priorities, stimulate demand over time, and view short-term disruptions in context. It’s an approach that distinguishes us from other investors and has paid off repeatedly over time.
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Primed for a bright future
I have written about Africa’s potential, both to increase exports, including manufactured goods, and to grow imports that contribute
to economic development, strengthen trade, and reflect rising prosperity.
Across the continent, we’re investing for the long term – in ports, logistics, and partnerships that extend the benefits of trade. Berbera illustrates all these points, and as its momentum increases, the opportunities will only grow.
