* Battered port is a main source of government revenue
* Mogadishu still relies heavily on aid
* U.S. raid on Somalia highlights Islamist threat
* As traffic at port rises, graft claims dog operations
By Drazen Jorgic and Abdi Sheikh
MOGADISHU, Oct 10 The dock workers at
Mogadishu's port have to carry cargo on their backs to clear
berths for the ships waiting out at sea.
The dilapidated facility has no functioning cranes and the
vessels must use their own gear to unload once they make it in.
Yet the port is one of the Somali government's main sources
of revenue, despite minimal investment over the years.
"It's the biggest asset the Somali government has," said
Abdirashid Hashi, a former cabinet minister.
The sorry state of affairs shows the challenges Somalia
faces as it tries to rebuild crumbling institutions and
stabilise a nation under threat from an Islamist insurgency.
Government efforts to improve the port go to the heart of
its desire to ease its reliance on foreign aid and generate more
revenues to finance a security force capable of beating back al
"The more resources we have, the more institutions can
function, and we can actually fight al Shabaab and the Islamist
threat ourselves," Abdirahman Omar Osman, an adviser to the
Somali presidency, told Reuters.
That threat was made clear again last month by the al
Shabaab attack on a mall in Nairobi, Kenya, an incident which
bore out international fears that chaotic Somalia provides a
launch pad for militant Islam.
Foreign governments and agencies have poured in aid to help
rebuild Somalia after 20 years of war, while security still
largely depends on African peacekeeping troops who drove al
Shabaab from the capital two years ago.
Donors want to see the federal government start to impose
order with its own soldiers and introduce a new regime of
financial management that will wean it off the donations.
The U.N. Monitoring Group on Somalia said in a report in
July that the central bank received about $2.7 million each
month from the port, but the monitors estimate at least a third
of all revenue is unaccounted for.
The government has questionned some of the report's
findings, saying they have "no basis in fact" but Osman conceded
there are concerns with processing of port revenues.
Osman said income from the port in August was the highest in
20 years, heading towards $5 million. But that still finances
only a modest part of the government's budget that is meant to
run security forces, pay civil service salaries, and fund other
institutions across a nation of 10 million people.
Diplomats estimate total aid to Somalia, which includes
substantial military assistance, at "several hundred million
The governments' budget is $84 million, of which about $54
million is forecast to come from domestic sources and the
remainder in external assistance. Spending is put at $114
million, leaving a $30 million deficit.
The EU reckons in a rough calculation that Somalia will need
about $1 billion per year over the next three years to hit key
Development of the port, which employs about 4,000
administrators, porters and customs officials, has been slow.
Containers are stacked up at the docks. The slow unloading
process adds to crowding at the trade gateway for Somalia's
shaky economic revival.
"Ships use their lifts but it takes a week to unload," said
Ali Moalim Mohamed, the customs office manager. "Most of goods
are brought in without containers, this also wastes time."
One of the biggest problems is largely hidden from view.
Corruption blights the port operations, like much of the
official workings in Somalia, which was torn apart by feuding
warlords and then ruled by Islamist militants.
The U.N. report said at least a third of port revenues were
"Some clan-based business interests and militia groups have
acquired a sense of entitlement, seeing the port as their
property, rather than a national asset," Matthew Bryden, a
director of Sahan Research think-tank.
Tussles for control can escalate beyond the boardroom. When
former President Sherif Sheikh Ahmed ordered out then port
director Abdi Jinow in 2010, a militia stepped in to block the
move, leading to a standoff with African troops.
The government says it is tackling the corruption problem.
Port customs manager Mohamed said systems were in place to
stop backhanders and ensure funds reached the central bank.
"Traders cannot move unless they show us the bank payment
receipt," he said.
But port workers tell of underhand ways to cut duties on
imports, in a nation where the federal government has limited
control beyond the capital, al Shabaab control swathes of the
countryside, and some regions barely recognise the government.
"It serves some people well to keep Somalia and the port the
way it so it's very difficult to bring about change," said
Hashi, who is now deputy director of the Mogadishu-based
Heritage Institute for Policy Studies.
Still, the government is working to bring in outside help.
Presidential adviser Osman said it was in talks with foreign
firms, including Dubai Port World, to manage the harbour.
Turkish entities were also interested.
United Arab Emirates-based shipping firm Simatech began
container shipments in February, a first for the facility. On
its maiden journey from Dubai's Jebel Ali, a ship carried 535
TEUs (20-foot equivalent units).
But the need for ships to use their own cranes to unload
reduces how much they can carry. They often have to moor at sea
for days awaiting a berth.
"We never know if we are going to get berths on arrival,
what kind of priorities they have for container vessels or
general small vessels," said Noaman Akram, Simatech's Somalia
manager. "It's difficult."
In reality, the government still relies heavily on aid to
pay salaries and depends on the African soldiers for security.
"The idea of tax payments is to create employment, security
and establish public roads, schools and hospitals, but we never
get a single one of these," said Ismail Nur, a trader importing
rice and pasta at the port.
"It is just a waste of money."