HABA – Horn of Africa Business Association

The interconnected nature of most of the HABA countries means that for all the political and occasionally military grandstanding the realities are such that the nations are heavily reliant on their neighbours. Meetings in Juba last week saw representatives of Africa’s newest nation meeting with a high level delegation from Djibouti and Ethiopia with a view to discussing a technical framework for the construction of South Sudan oil pipelines through the two countries. With oil from South Sudan making up over 98 % of the country’s budget it cannot afford to allow tensions with its northern neighbour. Such projects do not come cheap and it should come of little surprise that the South Sudanese President, Salva Kiir was eager to elicit financial support from the Chinese during his recent visit to Beijing. Sudan during the 1990s placed considerable emphasis on the construction of the Greater Nile Oil Pipeline, a pipeline that began in the Heglig Oil Field in southern Kordofan, a region that has seen an upsurge in violence and animosity in recent weeks. This particular pipeline speaks volumes of the scope for international investment and co-operation; with the construction company – the Greater Nile Petroleum Operating Company (GNPOC) being operated by the China National Petroleum Corporation (CNPC), with the following companies/organisations holding differing states:

China National Petroleum Corporation – http://www.cnpc.com.cn/en/ (40%)

Petronas Carigali Overseas of Malaysia – http://www.petronas.com.my (30%)

ONGC Videsh of India – http://www.ongcvidesh.com (25%)

Sudapet (Sudan National Petroleum Corporation) – http://www.sudapet.sd/ (5%)

 Co-operation of this nature provides a useful example of what will be needed across the region if the HABA countries are to optimise its’ portfolio of assets.

An important part of engagement in the HABA region is an earnest attempt to gain as thorough understanding of the actual situation on the ground. The minds of casual observers are invariably coloured by what little features in the media or by long standing stereotypes. Whilst heat still remains in regional tensions such as those between Ethiopia and Eritrea or Sudan and South Sudan some dismiss an entire region as commercially non-viable whilst at the same time having little or no knowledge of regional dynamics, developments and potential. Issues such as maritime piracy are often cited as reason enough to steer well clear. Such piracy is a global phenomenon, as much a feature of the waters off South America, parts of the Caribbean, West Africa and the South China Sea, yet it is worth noting that according to the International Maritime Bureau (http://www.icc-ccs.org/icc/imb) such attacks declined by 28% in the first quarter of 2012 (a global total of 102 incidents having been recorded). Somalia, a country that in media’s mindset at least has become near synonymous with maritime piracy and vessel hijacking, has also seen an even more dramatic reduction of such incidents with attacks having been reduced by over 50% in the first three months of this year. With risk being an important element part of all business decisions, what is still in short supply with regard to the HABA region is current and reliable data. HABA in its constant quest to address the knowledge deficit believes that it is vital that all of the regional nations establish means of collecting and collating information such as is done by the Uganda Bureau of Statistics (http://www.ubos.org/) as well as a concerted regional campaign to develop long term human capacity building programmes.

It is believed that an aspiration of John Garang, one of the architects of South Sudan’s independence, was to see the country’s capital moved from its current location in Juba to a new location in the geographic centre of the country. Presidential order Number 17 signed by President Salva Kiir has given such a move added impetus, with the relocation of the capital city to Ramciel, some 240 km north west of Juba, a very real prospect. The South Korean Land & Housing Corporation is currently carrying out a mapping process to assess the suitability of the new location as well as any risk from seismic activity. A new international airport is planned at Tali at Central Equatoria (one of the ten states of South Sudan) and providing the tense situation with South Sudan’s north neighbour does not deteriorate further, there is every likelihood that Ramciel’s new status will become a reality before too long.

For details on Government of South Sudan tenders visit: http://www.goss.org/

With a mainland coastland of some 715 miles (1151 km) length and with 350 islands off the mainland Eritrea counts the fishing industry as one of its mainstays. The waters of the Red Sea are highly productive, supporting substantial populations of marine species, including around 1,000 known species of fish. There are numerous commercially valuable species, which include: high value reef fish, especially snappers and groupers; large pelagic fish, including mackerels, tunas and related species; small pelagic fish especially sardine and anchovy, seasonally abundant and close to the shore; as well as crustaceans, including lobster, crab and shrimp. The Ministry of Marine Resources (which has its head office in Massawa) recognizes the importance of encouraging both artisanal fishing as well as large scale commercial fishing. Both the quality and quantity of fish along with regional and international demand make Eritrea a particularly attractive prospect. Opportunities also exist for those interested in canning anchovies, sardines and tuna. There is also considerable scope for companies interested in cold storage and packing facilities, foam and plastic box production, fish transportation, boat construction and maintenance, shrimp farming and various fishing port facilities both on the mainland as well as on several of Eritrea’s many islands.

With increased economic activity throughout the Horn and East Africa the regions’ ports are more important than ever. Mombassa and Dar es Salaam are at full capacity, Djibouti is undergoing further expansion, which leaves Berbera Port the only other viable entry/exit point until the Lamu development is completed. Berbera Port sits in a very strategic location on the Red Sea and looks set to become a major port in the region for Somaliland, Ethiopia, Somalia and South Sudan. Somaliland’s government has signaled its eagerness to attract Foreign Direct Investment (FDI) projects and views the upgrading and expansion of the port as integral to the development of the Berbera Corridor. In recent years a number of companies including France’s Bolloré Africa Logistics, the Hong Kong based, Hutchison Port Holdings (HPH), and Holland-based, APM Terminals have expressed an interest in playing a role in the Port of Berbera. With the green light having been given for privation already bids are being placed with Somaliland’s National Tender Board with regard to securing the rights to manage the Berbera petroleum storage facility. Companies such as Hass Petroleum, Jet Oil and Red Sea Petroleum have already thrown their hat into the ring. The likelihood is that further interest will follow and before too long Berbera will be in a position to offer effective competition to Djibouti.

For further information visit:

http://www.berberaseaport.net/

http://www.somalilandlaw.com/territorial_sea_and_waters.htm