Mohamoud Walaaleye
The Republic of Somaliland, recognized only by Israel as a sovereign state, is actively pursuing greater integration into global markets to drive economic growth and development. This ambition is vividly illustrated by major infrastructure projects and private sector initiatives, as highlighted in a recent Financial Times report by correspondent William Wallis following his visit to Hargeisa.
At the heart of Somaliland’s economic aspirations lies the Port of Berbera, a strategic deep-water facility on the Gulf of Aden. Modernized with a $450 million investment from Dubai-based DP World, the port is undergoing significant expansion. Currently operating at around 25% of its capacity since becoming fully operational in 2021, Berbera is poised for rapid growth. DP World has committed to doubling the port’s size once it reaches 75% utilization, aiming to elevate its role as a vital commercial and logistics center for the region. Officials describe it as preparing to serve as a key supply chain hub amid busy global shipping lanes.
The port’s development complements broader efforts to overcome longstanding challenges. Somaliland reclaimed its independence in 1991 following the collapse of the Somali state, marking 35 years of self-governance without substantial international aid. Home to approximately 6.2 million people, the territory has rebuilt itself remarkably, generating over 93% of government revenue domestically, according to the Ministry of Foreign Affairs.
Economic constraints persist, however, due to limited access to international financial systems. Livestock exports to the Gulf account for about 70% of the economy, while diaspora remittances contribute roughly one-third to the country’s $4.28 billion GDP, per Ministry of Finance data.
A landmark diplomatic breakthrough came late last year when Israel became the first—and so far only—UN member state to formally recognize Somaliland’s independence on December 26, 2025. This move has ignited national optimism and hopes for expanded cooperation in agriculture, banking, and technology. Somaliland’s leaders anticipate that Israel’s recognition could encourage other nations to follow, bolstered by the territory’s legal argument: it gained independence from Britain in 1960 before a short-lived, unratified union with Somalia.
Private enterprise reflects this resilience. On the outskirts of Hargeisa stands Somaliland Beverage Industries’ Coca-Cola bottling plant, established in 2012 with an initial $17 million investment. Founder Ahmed Osman Guelleh (also referred to as Ahmed Osman Guelle) has expanded operations to include milk and flour production, investing up to £35 million from family businesses without external loans. Despite operating challenges—such as the absence of robust international insurance and major global banks—Guelle secured a formal “recognition letter” from Coca-Cola, underscoring Somaliland’s status as a functioning state.
Guelle’s primary motivation is job creation for the country’s youthful population. Similarly, Ismail Ahmed, founder of WorldRemit, notes that while small remittances flow easily, larger corporate transfers remain difficult.
As Berbera continues its transformation—handling growing vessel traffic and targeting expanded capacity—the port symbolizes Somaliland’s determination to overcome isolation. With strategic location, domestic revenue strength, and emerging diplomatic ties, Somaliland is positioning itself as an emerging economic player in the Horn of Africa, even as it navigates the complexities of limited global recognition.