Somaliland: Foreign Minister Essa Kayd bets on oil

By The Africa Report, in Addis Ababa

Posted on Friday, 17 February 2023 19:00, updated on Monday, 20 February 2023 10:38
Somaliland Foreign Minister Essa Keyd sits down with The Africa Report on the sidelines of the 2023 African Union. (Somaliland Ministry of Foreign Affairs)

Somaliland is betting on oil after the discovery of "abundant" reserves was confirmed last month, the self-declared republic’s Foreign Minister tells The Africa Report on the sidelines of the African Union (AU) summit.

Essa Kayd has been one of the busier diplomats at this week’s gathering. His territory is not a member of the AU, so he is unable to attend its official sessions. But that has not stopped him from bouncing between Addis Ababa’s hotels and working the phones as he makes the case for his country’s sovereignty, after more than three decades of de facto independence.

As part of this diplomatic push, Kayd has been promoting the newly confirmed oil reserves in meetings with his counterparts. They were discovered by Genel, a British company, that hopes to get “over two billion barrels” of crude from the two blocks it has been granted a license to explore. The total number of barrels is yet to be confirmed but is likely to be far higher.

It will boost our chances (of recognition) a great deal because we’ll be a country who is not in need anymore, but a country who can get into more bilateral engagements with other countries.

Kayd says the discovery is “very important” for Somaliland, not only because of its potential to spur economic development. He argues that it will also deepen Somaliland’s economic ties with its neighbours and the wider international community, something that will bring recognition “sooner or later”.

“It will boost our chances (of recognition) a great deal because we’ll be a country who is not in need anymore, but a country who can get into more bilateral engagements with other countries,” says Kayd. He adds this will give Somaliland “more credibility in the world.”

Taiwanese firm CPC Corporation has also been handed a license to dig for oil by Somaliland. Taiwan is regarded as a breakaway territory by China and has long offered support to Somaliland, whose sovereignty is not recognised by any foreign power.

Somaliland expects production to start at some point this year, but Kayd says they haven’t confirmed the month it plans to start.

Mogadishu tensions

This week Kayd has met with delegations from countries including Algeria, Côte d’Ivoire, and Estwanini as he seeks to overcome this status quo. However, he insists Somaliland will continue to exploit “our natural resources” whether “we’re recognised or not”.

The oil discovery has heightened tensions with Mogadishu, which claims Somaliland as part of its territory. In December, Somalia’s oil ministry called Genel’s oil exploration in the area “illegal” and said it “categorically rejects” the company’s “claim to own petroleum rights in Somalia’s northern regions”. Kayd is dismissive of this position. “It will not stop us from exploiting,” he says. “It might even encourage us.”

Somaliland’s diplomatic charm offensive when making its case for sovereignty rests on several prongs. One is economic integration. As part of this strategy, it invited Emirati firm DP World to build a $400m container port at Berbera, located strategically on the Red Sea. The intention is to offer its landlocked neighbour, Ethiopia, an alternative route for its imports and exports, which are currently funnelled through Djibouti.

Berbera’s port was inaugurated in June 2021 and it contains an economic free zone modelled on the one at Dubai’s Jebel Ali, the biggest port in the Middle East. The oil discovery is just as important, if not more, Kayd says: “We’re explaining to those who do not know that we have a lot of resources that could be beneficial to African countries.”

Another prong is showcasing the country’s democratic values and relative stability. While Al-Shabaab’s Islamist insurgency has rendered large swathes of Somalia ungovernable, Somaliland has been successful in keeping the jihadists at bay.

Kayd says the diplomats he met this week have been “very impressed that such a small country is able to hold elections.”

A question of recognition

However, there are concerns that Somaliland’s democratic culture is slipping. In September, the territory postponed presidential elections pencilled in for November. The month before, several European countries condemned its “excessive use of force” when dealing with demonstrators who were demanding the elections be held. At least five people were killed and 100 more were injured.

This month more than 80 people were killed in clashes in the disputed town of Las Anod, which is controlled by Somaliland. The violence started a day after local leaders issued a statement saying they did not recognise Somaliland’s authority, with a doctor telling Bloomberg that “indiscriminate” shelling by government forces resulted in civilian casualties.

The clashes have fuelled criticisms that Somaliland is quick to quash dissidents who oppose its push for official statehood. Kayd claims that the violence was instigated by Al-Shabaab from neighbouring Somalia, who he says are trying to create a “stronghold” in Las Anod, in order to infiltrate the rest of Somaliland.

Such incidents do not help Somaliland’s case.

Global recognition?

Meanwhile western partners say they will not recognise Somaliland until African states do so first. Yet African states are hesitant, fearing that recognising Somaliland will embolden separatist movements across the continent.

As a result, Somaliland’s application to join the AU has languished since 2006, when it was first submitted, even though an AU fact-finding mission observed in 2005 that “Somaliland’s search for recognition is historically unique and self-justified in African political history.”

Kayd insists that Somaliland’s case is “different” to that of separatists in countries such as Cameroon. He emphasises that Somaliland enjoyed a short spell of post-colonial independence before entering a “voluntary union” with Somalia in 1960, which it “chose to leave” as Somalia tipped into warlordism and chaos in the 1990s.

Recognising Somaliland’s independence is “not going to open a Pandora’s box in Africa,” he says.

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