BERBERA: The soporific seaside town of Berbera is slowly changing as it takes on a major role on the Red Sea shipping route, allowing breakaway Somaliland to dream of prosperity and even recognition.
At the Berbera port, dozens of containers are stacked on a sun-scorched platform and a few cranes creakily transfer sacks of sorghum and other goods from a rusting cargo ship.
The facilities are far from modern, but Somaliland hopes its position on one of the world’s busiest shipping routes will turn the state into a job-creating dynamo — and encourage international recognition 27-years after it split from Somalia.
Somaliland’s ambitions were boosted in March when it struck a deal giving Dubai port giant DP World a 51-percent stake in the port and Ethiopia 19 percent.
DP World said it plans to invest $442 million to modernize the port, with a first extension of 400 square meters (4,300 square feet) to begin in October that is expected to take 24 months.
“The benefit we expect from the development of the port is jobs. We expect to get many foreign investors to ... generate employment and income for us,” said Saad Ali Shire, the Somaliland minister of foreign affairs.
He said the port has long been the main source of revenue for the government of the breakaway state.
Nevertheless the arrival of DP World has been a “cultural shock” for those used to the slow pace of business at the port, admits Said Hassan Abdullahi, director general of the port authority.
“There has been a big change ... in terms of volume of containers. Since they took over we got more customers,” he said.
The deal has seen the number of containers transiting through Berbera double to 100,000 twenty-foot-equivalent units (TEUs), a standard measurement in shipping.
Abdullahi predicts that the investment will cause throughput to increase fivefold — a figure that will bring Berbera closer to the capacity of nearby Djibouti’s ultra-modern ports which handle around 980,000 TEU per year.
The development will be a boon not only to Somaliland but also its landlocked neighbor Ethiopia — a fast-growing economy with a population of 100 million people that is eyeing new ports across the region to export its goods.
Cut off from the coast since former province Eritrea won independence in 1993, prompting a violent border conflict, Ethiopia funnels 95 percent of its trade through Djibouti.
But now a breakneck peace process with Eritrea has also opened up new trade routes through its ports of Massawa and Assab, which with the developments in Berbera could reshape trade in the Horn of Africa region.
Somaliland, which avoided the anarchy and chaos Somalia has experienced over the past three decades, “is well positioned to have a more influential role when it comes to economic and trade issues,” said Ahmed Soliman, a researcher at the London-based Chatham House think-tank.
However the DP World deal has angered Somalia, which does not recognize Somaliland’s independence and declared it unconstitutional. Shire said the deal had affected ongoing talks between Mogadishu and Hargeisa, which had been expected to resume in March.
He said DP World had showed trust in Somaliland, expressing hope this could inspire confidence in the state and lead to formal recognition.
“I think it will be recognized at the end of the day, because we have a legal right, a historic right, a moral right to be recognized,” said Shire.
DP World’s presence in Berbera is also a sign of the increasing engagement of the UAE in the Horn of Africa, which has become key to its strategic interests over the past three years, said Soliman.
Somaliland has given the UAE a 25-year concession to build a military base in Berbera that it could use in the war it is waging alongside Saudi Arabia against the Iranian-backed Houthi rebels in Yemen.
“The war in Yemen ... was a key driver of engagement across the Horn of Africa,” said Soliman.
Somaliland now finds itself in the middle of a struggle for influence in the region which also includes major players like Turkey and its ally Qatar — which is embroiled in a bitter spat with its Gulf neighbors.
In June 2017 the UAE, Saudi Arabia, Bahrain and Egypt broke off diplomatic ties with Qatar, accusing it of backing terrorism, which Doha denies.
Some in Somaliland worry about the price they may have to pay for their links with the UAE, but Shire brushes aside their concerns.
“Of course, carrying foreign forces on your soil always carries a risk,” he said. “(But) we believe that the benefits are more than the risks.”
Somaliland eyes key Red Sea trade role with Berbera port
Somaliland eyes key Red Sea trade role with Berbera port
- DP World plans to invest $442 million in strategic port
- Somaliland deal could also benefit Ethiopia
Closing bell: Saudi main index slips to close at 12,217
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 67.36 points, or 0.55 percent, to close at 12,217.05.
The total trading turnover of the benchmark index was SR5.33 billion ($1.42 billion), as 78 of the stocks advanced while 147 retreated.
On the other hand, the Kingdom’s parallel market Nomu rose 109.49 points, or 0.40 percent, to close at 27,195.93. This comes as 30 of the stocks advanced while as many as 27 retreated.
Meanwhile, the MSCI Tadawul Index slipped 7.05 points, or 0.46 percent, to close at 1,530.49.
The best-performing stock of the day was Saudia Dairy and Foodstuff Co. The company’s share price surged 9.97 percent to SR386.20.
Other top performers include Saudi Chemical Co. as well as Al-Jouf Agricultural Development Co.
The worst performer was Thimar Development Holding Co. whose share price dropped by 9.94 percent to SR14.14.
Other subdued performers included Tanmiah Food Co. and Walaa Cooperative Insurance Co.
On the announcements front, Etihad Etisalat Co., also known as Mobily, released its interim financial results for the period ending on March 31.
According to a Tadawul statement, the company’s net profit hit SR638 million in the first quarter of 2024, reflecting a 37.2 percent surge compared to the same quarter last year.
The increase was mainly driven by a rise in gross profits and a jump in earnings before interest, tax, depreciation, and amortization. While operating expenses also increased, financial charges, zakat, and income tax decreased.
Moreover, the Tanmiah Food Co. also announced its interim financial results for the first three months of 2024.
A bourse filing revealed that the firm’s net profit reached SR21 million by the period ending on March 31, unchanged in comparison to the corresponding period in 2023.
Furthermore, Elm Co. announced its interim financial results for the year’s first quarter.
According to a Tadawul statement, the company’s net profits climbed 7.1 percent to reach SR345 million in the first three months of 2024 compared to the same period a year earlier.
This increase is primarily attributed to higher revenue, operating expenses, and income from Murabaha deposits.
Allianz Saudi Fransi Cooperative Insurance Co. also announced its interim financial results for the period ending on March 31.
A bourse filing revealed that the firm’s net profit stood at SR9.98 million at the end of the first quarter of 2024, up 4.01 percent when compared to the same quarter a year ago.
The increase in net profit after zakat and income tax for the current quarter compared to the same quarter of previous years is primarily due to an 86 percent rise in net investment income.
In addition, the United International Transportation Co., or Budget Saudi, announced its interim financial results for the first three months of 2024.
According to a Tadawul statement, the company’s net profit hit SR69.7 million in the first quarter of 2024, reflecting a 0.565 percent surge compared to the same quarter last year.
The surge in net profits is mainly attributed to steady growth in both long-term and short-term rental revenues.
Saudi Electricity Co. also announced its interim financial results for the period ending on March 31.
A bourse filing revealed that the firm’s net profit stood at SR897 million at the end of the first quarter of 2024, up 86.8 percent compared to the same quarter a year ago.
The surge in net profit for the current quarter compared to the corresponding quarter of the previous year is primarily attributed to increased revenue requirements, new earnings from development projects, and higher revenue from Dawiyat Co., among other factors.
Meanwhile, United Electronics Co., or eXtra, has announced that its shareholders approved the election of board members for the upcoming three-year term beginning May 13.
Saudi Arabia’s date sector sees 13.7% export growth in Q1, 2024
RIYADH: Saudi Arabia’s palm and dates sector is experiencing significant growth, with exports increasing by 13.7 percent in the first quarter of 2024 compared to the same period last year.
This food division is regarded as a significant contributor to diversifying income sources and boosting the gross domestic product, as the Kingdom has ambitions to establish its dates as the premier choice globally.
The National Center for Palm and Dates has recently revealed a significant increase in value across various countries during the period, reaching SR644 million ($171.7 million), compared to SR566 million in the first quarter of 2023.
In 2023, the value reported by NCPD increased by 14 percent, reaching SR1.462 billion, compared to SR1.280 billion in 2022. By the end of 2023, the number of countries importing Saudi dates had reached 119.
In an interview with Arab News in March, Mohammed Al-Nuwairan, CEO of NCPD, emphasized that Saudi Arabia’s export portfolio extends beyond dates, encompassing derivatives like molasses, pastes, and others. This diversification enhances the sector’s export presence beyond the Kingdom’s borders.
“East Asian countries are receiving attention from Saudi exports of dates, especially to Singapore, situated in the heart of countries targeted for exporting dates and their derivatives, such as Indonesia, Malaysia, and also China in particular. What supports this is the high demand for Saudi dates, which possess high nutritional values and production quality,” he said at that time.
The total value of date and date by-product exports has surged by 152.5 percent since 2016, rising from SR579 million in 2016 to SR1.462 billion in 2023, marking a compound annual growth rate of 12.3 percent.
According to the Saudi Press Agency, date exports to several countries, including Austria, Norway, and Argentina, as well as Brazil, Portugal, Germany and Canada, exceeded 100 percent.
According to the Saudi Press Agency, date exports to several countries, including Austria, Norway, and Argentina, as well as Brazil, Portugal, Germany, and Canada, exceeded 100 percent.
Additionally, the value of Saudi date exports increased to Morocco by 69 percent, Indonesia by 61 percent, and South Korea by 41 percent. Exports to the UK, the US, and Malaysia rose by 33 percent, 29 percent, and 16 percent, respectively.
Saudi NHC teams up with Chinese firm to construct 20k residential units
RIYADH: Residential supply is set to improve as the Saudi National Housing Co. and China Machinery Engineering Corp. signed a deal to build 20,000 units in the Kingdom.
In a recent agreement signed in Beijing, the two companies joined forces to address housing needs more effectively by constructing apartments in suburban and residential areas within the Kingdom, directly benefiting individuals and families, the Saudi Press Agency reported.
The deal was signed during the official visit of the Minister of Municipal and Rural Affairs and Housing and the Chairman of the Housing Program Committee, Majid Al-Hogail, to China as part of the broader efforts to contribute to achieving the targets of the Housing Program — one of the Kingdom’s Vision 2030 programs.
This initiative aims to partner with leading global companies and attract international investments in the real estate sector.
At the signing ceremony, CEO Mohammed Al-Buty represented NHC.
The company emphasized that this agreement complements its qualitative projects with major global construction companies, SPA reported.
It added that this initiative would be implemented in various areas within the suburbs and urban communities under NHC, distinguished by integrated facilities and services, including health, education, commercial, and public services.
NHC, one of the largest real estate firms in the Middle East, aims to develop housing communities and improve living spaces in the Kingdom by creating nine integrated residential suburbs and delivering 300,000 units by the end of 2025.
The company plans to implement integrated urban projects according to the highest standards at affordable prices, as well as enhance the sustainability of residential projects in various regions in Saudi Arabia.
This comes as the Kingdom aims to elevate services for citizens and unify all efforts across sectors to achieve the targets of the Housing Program in line with the nation’s Vision 2030. This is part of its efforts to increase the homeownership rate for Saudi families to 70 percent.
Last week, NHC signed a deal with China’s CITIC Construction Group to establish an industrial city and logistic zones for building materials. The undertaking will comprise 12 factories aimed at securing supply chains for the Saudi firm’s housing projects.
In a statement, the NHC said the agreement with the Chinese construction group is part of its efforts to secure supply chains for its housing initiatives and ensure their timely completion and high quality.
The Saudi company said the deal entails the construction of 12 factories specializing in building materials, harnessing Chinese expertise, and an uplift in business standards by local factories.
It added that the agreement also aims to draw top-tier service providers across various company sectors, its subsidiaries, and other projects.
GCC prioritizes economic diversification for sustainable growth, says official
RIYADH: The Gulf Cooperation Council aims to reduce reliance on oil revenues by implementing a comprehensive vision for economic diversification, as emphasized by its Secretary-General, Jasem Al-Budaiwi.
During the Gulf Creatives Conference, organized by the Diwan at Harvard University in Cambridge, Massachusetts, Al-Budaiwi outlined a vision that embraces diverse sectoral reforms. These initiatives are aimed at strengthening economic resilience and attracting foreign investments, the Saudi Press Agency reported.
He noted GCC countries have positioned themselves as competitive digital hubs on the global map, supported by their favorable geographic location and young population.
“The strategic location, coupled with robust infrastructure, paves the way for the council member states to attract international partnerships that support their long-term development goals,” Al-Budaiwi said.
He added: “This dynamic approach is vital for sustaining economic growth and ensuring the resilience of Gulf economies in the face of global economic fluctuations and regional challenges.”
Additionally, Al-Budaiwi emphasized the numbers and data supporting these plans and showcased the advancements made by GCC nations, including the establishment of the Customs Union, the GCC Common Market, and the Unified Economic Agreement. He cited Saudi Arabia’s NEOM project as an example of urban development initiatives within GCC nations.
He explained that smart cities are designed to reduce waste, enhance energy efficiency, and streamline urban management by leveraging artificial intelligence and the Internet of Things.
He continued by stating that this further underscores the GCC nations’ commitment to technologically advanced and environmentally friendly urban design, as well as the increased emphasis on cybersecurity to mitigate growing risks and maintain confidence in the digital economy.
Moreover, Al-Budaiwi emphasized the transition from oil-dependent to diversified economies and expressed satisfaction with the outstanding economic and integration achievements of the GCC countries.
In February, he held a series of meetings in Riyadh with foreign ambassadors to Saudi Arabia.
Al-Budaiwi met with the South Korean Ambassador to Saudi Arabia, Choi Byung Hyuk, at the general secretariat headquarters in Riyadh.
During the meeting, the secretary-general discussed the developments in the free trade agreement between the GCC countries and South Korea, which was signed in December 2023.
Both sides expressed their desire to enhance cooperation between nations and increase focus on mutual interests such as education, health, investment, and pharmaceuticals.
The meeting also reviewed relations between the GCC and South Korea, emphasizing the importance of enhancing strategic dialogue through the areas of cooperation outlined in the joint action plan.
Expat remittances from Saudi Arabia hit $3.2bn in March
- The upswing is the highest since June 2022, SAMA data shows
RIYADH: Remittances by expatriates in Saudi Arabia grew 28 percent in March as compared to the preceding month to reach SR11.96 billion ($3.2 billion), the highest since 2022, official data showed.
The launching of new development projects in the Kingdom has led to an increase in the expatriate population, as they actively contribute to the growth of business activities. This, in turn, may have influenced their remittance patterns.
This growth in remittances is also exemplified by the Regional Headquarters Program, which has successfully attracted over 200 companies from across the globe to obtain licenses to set up their regional bases in Saudi Arabia.
These entities are driven by the prospect of securing lucrative government contracts. Additionally, the ongoing structural reforms to enhance foreign direct investment have further stimulated business growth in the Kingdom.
Alongside regulatory reform, Saudi Arabia has undergone modernization in its legal governance and enforcement practices such as digitization of employment contracts, virtual court hearings, and provision of online government services. These initiatives are integral components of a broader set of reforms aimed at positioning the Kingdom as one of the leading nations in terms of ease of doing business.
However, on a quarterly basis, there was a 0.34 percent decrease in expat remittances compared to the same period last year. This trend can be attributed to Saudi Arabia’s evolving economic landscape, particularly the implementation of financial sector reforms, which are increasingly enticing residents to invest a portion of their earnings within the Kingdom.
In February of this year, a report by Jadwa Investment noted that workers’ remittances were unexpectedly low despite the influx of expatriates.
This phenomenon according to their report may suggest that some expatriates opted to capitalize on the high savings rates in the Kingdom instead of remitting funds home.
The Saudi Central Bank, also known as SAMA, has raised key policy rates multiple times in 2022 and 2023, given that the Saudi currency is pegged to the dollar. This move aligns with the actions taken by the US Federal Reserve, which has been gradually increasing interest rates as part of its strategy to address inflationary pressures.
Conversely, remittances from Saudis saw a 9 percent monthly increase, totaling SR5.11 billion, yet experienced a quarterly decline of 0.53 percent.
The occurrence of Ramadan in March this year likely influenced the increase in Saudi remittances for this month. During this holy month, individuals often engage in increased charity, support their families, and fulfill religious obligations, such as zakat.
