Farmaajo & Kheire’s reckless decision to join COMESA & AFCTA

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Majority of Somalis know the conundrum and the cost of more than three Million US Dollars to reverse 2009 Memorandum of Understanding “MEMO” between  Somalia and Kenya maritime delamination case “to grant each other no-objection in respect of submission on the outer limits of the continental shelf Beyond 200 Nautical miles to commission on the limits of the continental shelf” later turn out the memo, was not only to grant between the two countries to submit their applications to Commission on Continental Shelf but also maritime border delamination between the two countries, despite vast majority of Somalis were against taking Kenya to International Court of Justice (ICJ) ,the former Somalia president Hon Hassan Sheikh Mohamud single-handedly took the case to ICJ as one of Somali legal team Lawrence Martin at FoleyHoag LLP law firm said:

“All credit goes to the President of Somalia, Hassan Sheikh Mohamud, for making the tough decision to bring this case to the ICJ. There were doubters along the way but the President’s wisdom has been fully vindicated,” 

Foreign Affairs Minister Ahmed Awad signed the AFCFTA agreement in Kigali, Rwanda 21 March 2018

Former Somali President asked the court to “Establish single maritime boundary between Somalia and Kenya in the Indian Ocean delimiting the territorial sea, exclusive economic zone (“EEZ”) and continental shelf, including the continental shelf beyond 200 nautical miles” so former President’s thought was, once for all, Somalia to have a permanent maritime border with Kenya, but sadly, despite Kenya’s loss the first case of its rejection of the jurisdiction of the ICJ still not convinced to give up the case (All companies that had agreements to drill the disputed areas with Kenya will claim breach of contracts, Millions of dollars that Kenya couldn’t afford to pay, also Kenya’s government and its legal team refused to hand-over all drilling including seismic data documents and agreement with the companies). [su_pullquote align=”right”]SOMALIA’S TRADE DELUSION: FARMAAJO AND KHEIRE’S FORTRESS MENTALITY![/su_pullquote]

But Kenya and its legal team faces formidable hurdles to cross, court’s well established precedent, Kenya needs to come up with compelling of evidence against general rule of equidistant line particularly “Special Circumstances and Historical Title” are almost impossible, Kenyans are fully aware of this but hoping a loophole in UNCLOS  or  miracle to occur, as they failed their argument of  statute of ICJ’s 1945 particularly article 36 paragraph 2, Part XV-Settlement of dispute (Article 282) and Article 287.

Kenya not only infringed on Somalia’s sovereignty but majority of Somalis see Kenya as dishonest neighbour.

Just think of what that two pages (Excluding the signature and front page) of the Memo caused to Somalia, Further to that, in May 2016 Somaliland (self-declared state, internationally considered to be an autonomous region of Somalia) signed a 30-year agreement with automatic 10 year extension with DP World to develop and manage Berbera Port, north Somalia, at a cost of $442 million, (a company owned by the government of Dubai in the United Arab Emirates via holding company that control direct by Sheikh Mohammed Bin Rashid Al Maktoum the ruler of Dubai and also Vice President and Prime Minister of the United Arab Emirates) many Somalis consider as a daylight robbery.

When DP World took over Berbera Port, signed by Hargeysa politicians, UAE knew Somaliland’s weakness, as they have been seeking independent from the rest of Somalia, for Somaliland

politicians this was an opportunity to show the government of Somalia they can engage and make contracts , sadly, they over-sighted the risk they were in, on the other-hand, cleverly, UAE did not engage direct with Somaliland as this will be treated as International Treaty, so UAE will not have problem with International Law particularly UN Security Council Resolutions “Reaffirming its respect for the sovereignty, territorial integrity, political independence, and unity of Somalia, including Somalia’s sovereign rights in accordance with international law, with respect to offshore natural resources, including fisheries” UAE used DP World (as a company) to enter agreement with Somaliland (as State within Somalia and not as an independent country).

What even intriguing is, Ethiopia has 19% stake in Berbera port, alongside DP World which holds 51% and only 30% Somaliland, that makes both Ethiopia and UAE owns 70% of the Berbera port while the owner of Somali people owns only 30%, this must be the deal of the century!, also there is strong rumours that not only Berbera at stake, also Bosaso, North-Eastern Somalia, Ethiopia and DP World have also unconfirmed stakes.

Despite both Somalia’s houses of Parliament approved legislation banned DP World conducting any business in Somalia territory, 28 senators out of 36 in favour of the legislation, 2 abstained and 6 rejected, similar to lower house of parliament 170 MPs, 168 voted in favour of the legislation, one rejected and one abstained, this bill is President Farmaajo’s desk to sign for many months now, for reasons that remains mysterious, despite this goes direct to Somalia’s National Interests.

International Communities that regularly claimed they are helping Somalia are silent, resolutions after resolutions from UN Security Council never mentioned this deals, even Financial Governance Committee which has four International Partners IMF, World Bank, African Development Bank and International Donors, FGC is more interesting to contain Islamist and Illiberal Turkey’s companies particular renegotiating Albayrak Turizm Inşaat Ticaret  A.Ş which manages Mogadishu Port instead containing secular and liberal UAE companies.

DP world’s controversy is not only to Somalia, February 2018, Djibouti seized Doraleh Port that DP World was running, Djibouti government accused “DP World of deliberately under-using the port in favour of other regional terminals, including Berbera, (Bebera and Doraleh are on Red Sea, separating between Gulf and Africa, where more than 30% of the world shipping cargo passes daily).

DP World took Djibouti to London Court of International Arbitration (LCIA), the LCIA, ruled DP World’s contract was “Valid and Binding”, but Djibouti insisting the deal is done, on the other hand, Djibouti Government offered as reported in the media half a billion US dollars to head off legal action (perhaps Djibouti is showing the world, particularly, would be investors, they honour contracts and agreements, perhaps Djibouti government did not follow Donald Trump’s ditched Iranian nuclear agreement deal)!

It’s easy politicians to sign a peace of papers, but few politicians can foresee contractual commitment and honouring its obligations, as Nigerian President Buhari found out when he took over the previous administration, Process & Industrial Development (P&ID) a company that found by two Irish men, President Buhari claimed no contract or obligation exist,  in 2010 P&ID signed a 20 years contract with Nigerian government to natural gas development refinery, but the project fell when Buhuri refused, but P&ID took the case to London Tribunal which confirmed Nigerian government owes P&ID almost $9 billion for breach of contract, loss of income for five years and interest occurred.

Nigerian could ignore London Tribunal’s decision, but when Nigerian minister Zainab Ahmed came to London and promote Nigerian’s $2.8bn Eurobond, she found out the damage that P&ID had caused.

With this historical facts in mind, another serious issues are looming upon Somalia and Somalis, most Somalis never heard of and worst, its Somali children’s future what current politicians are carelessly gambling, act of national self-harm with their lack of skills, pragmatic, ability to think rationally and analytically and most worries Farmaajo –Kheire’s brand of hubris.

Current Somalia government joined recklessly two important markets, Common Market for Eastern and Southern Africa (COMESA) and African Continental Free Trade Area (AFCFTA) without thoroughly discussion Somalia’s upper, lower houses of Parliament, Council of ministers, businesses and most importantly Somali public (apart from 14 November 2018 President Farmaajo invited handful of business man mostly runs their own small family businesses, he told them briefly “be prepare the new regional integration”) no one seems to understood if the president meant  tripartite agreement between Somalia, Ethiopia and Eritrea. Or AFCTA and COMESA, sadly, Somalia signed both treaties and soon enforceable throughout Somalia.

However, this paper is hoping is the starting point that Somalis to discuss its future, how they can limit and minimize the damage, however, it is not advocating protectionists and scaremongers, neither attempt to deep-delve pros and cons each articles including very important Free Movements Protocol or Kigali Protocol which Somalia also signed its first leg of the protocol is beyond the scope of this paper.

Furthermore, what this paper will do is to warn Somalis, while they are busy debating, if imposed Federalism is good for Somalia  and strong Central government is better , but little is known to Somalis, Somalia is already gave away almost unknowingly its sovereignty, where most of laws will be made far away from Somalia and few Somalis will disagree that COMESA, AFCFTA and Kigali Protocol membership involves giving up some, if it’s not all control over domestic affairs eventually losing fully Somali sovereignty.

Common Market for Eastern and Southern Africa (COMESA)

Secretary General at the Ministry of Trade and Consumption of Madagascar, Mr. Rafidy Josielle, led the negotiations. Somalia delegation was led by Mr. Ahmed Elmi Muhumud, Adviser to the Minister of Commerce and Industry, signed the final negotiations towards the admission of the State of Somalia to COMESA treaty.

Secretary General at the Ministry of Trade and Consumption of Madagascar, Mr. Rafidy Josielle, led the negotiations. Somalia delegation was led by Mr. Ahmed Elmi Muhumud, Adviser to the Minister of Commerce and Industry, signed the final negotiations towards the admission of the State of Somalia to COMESA treaty.

COMESA is a trade block that claims breaks down trade barriers across the continent, members of 21 countries, (Burundi, Comoros, D.R. Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe) the latest two members are Somalia 21st and Tunisia 20th Members joined Thursday, 19th July 2018.

COMESA claimed “Somalia was formerly a full member of the Preferential Trade Area for Eastern and Southern Africa (PTA), the predecessor to COMESA” this seems misleading, while its partial true Somalia joined PTA 1981, 30 September 1982 was rectified since then technically PTA ceased to exist as it became new organisation, COMESA was established 5 November 1993, in Kampala, Uganda, and then rectified in Lilongwe, Malawi, on 8 December 1994, clearly, above dates Somalia ceased to existed until 2000 interim or transitional till Arta, Djibouti, the world only recognised government headed by former President Hassan Sheikh Mohamud, so to claim Somalia is member of COMESA seems misleading, along the line there are many countries withdrawn COMESA, for example, 12 November 1997 Lesotho and Mozambique withdraw from COMESA so Tanzania 2 September 2001.

COMESA’s Press release   “In accordance with the obligations of the Member States under the COMESA Treaty, the Commission wishes to inform the general public that the provisions of the COMESA Competition Regulations of 2004, and its accompanying rules, shall be enforceable in the territories of the Republic of Tunisia and the Federal Republic of Somalia with immediate effect”

The Comesa treaty has 338 pages it advocating varieties of areas including establishing Free Trade Area, removal of all traffic and non-traffic Customs Union, free movements of capital and investments, Its strategy can be summarized:  ‘Economic prosperity through regional integration’

It has its institutions based all over African cities except Somalia (please see below table) and most of the data they quoted its websites and other places including UNCTAD are prediction rather actual figures.

ARTICLE 4 of the treaty:

Specific Undertakings:

In order to promote the achievement of the aims and objectives of the Common Market as set out in Article 3 of this Treaty and in accordance with the relevant provisions of this Treaty, the Member States shall:

  1. In the field of trade liberalisation and customs co-operation:

(a) Establish a customs union, abolish all non-tariff barriers to trade among

themselves; establish a common external tariff; co-operate in customs procedures and activities;  (b) adopt a common customs bond guarantee scheme; (c) simplify and harmonize their trade documents and procedures;

(d) establish conditions regulating the re-export of goods from third countries within the Common Market;

COMESA INSTITUTIONS & AGENCIES

InstitutionsHeadquarter
COMESA HeadquarterLusaka, Zambia
The COMESA Trade and Development BankNairobi, Kenya
The COMESA Competition Commission,Lilongwe, Malawi
The Regional Investment Agency (RIA),Cairo, Egypt
The Federation of National Associations of Women in Business,Lilongwe, Malawi
The COMESA Business Council,Lusaka, Zambia
The COMESA Clearing HouseZimbabwe
The Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA)Lusaka ,Zambia
The COMESA Re-Insurance Company (ZEP-RE)Nairobi, Kenya
Africa Leather and Leather Products InstituteAddis Abba, Ethiopia
The African Trade Insurance Agency (ATI),Nairobi, Kenya
COMESA BankBujumbura, Burundi

Source: Comesa

While no doubt regional integration will benefit some countries who have multinational corporations some of them well known in the continent and beyond, some countries like Somalia will not benefit at all, as there are companies that Somalia can’t compete, companies from South Africa, Egypt, Tunisia, Kenya and others, it’s also true Somalis have god given entrepreneurship talents, but those business man and women are very small most of them lacking investments and support of the Somali government, but it hard to see how Somalia will benefit being this COMESA market.

African Continental Free Trade Area (AFCFTA)

What President of Nigeria is talking about is African Continental Free Trade Area (AfCFTA) as its names suggest its trade agreement among 55 countries of African Union that has overlapping and complicated other Regional Economic Communities.

AFCFTA documents was signed at Kigali, Rwanda, 21 March 2018, signing is one of the two stages that require this process to become legal, after countries signed (There were 44 countries signed in Kigali, additional five countries signed 1st July 2018 at 31st Ordinary Session of the African Union Assembly in Mauritania (South Africa, Sierra Leone, Namibia, Burundi and Lesotho).

Somalia was one of the 44 countries that signed in Kigali, as the main photo in this paper shows Somalia Foreign Minister Ahmed Issa Awad signed for on behalf Somalia, at that time Somali Prime Minister Hassan Ali Kheire was in Kigali, there was another Protocol was signed its first leg at the same time Kigali Declaration (free movement of People and Goods which is not part of this paper).

22 countries needs to rectified AFCFTA to become binding and enforceable, that means only 22 countries need to take to their parliaments then deposit its instrument to the African Union, so far there are 10 countries rectified (Rwanda, Ghana, Niger, Chad, Kenya, eSwatini, Siera Leone, South Africa, Guinea and Uganda), Ethiopia PM already said his government will rectify as soon as possible, so Botswana are also rectifying it, only 10 countries remain to complete it, the chance are very high for next few weeks will be rectify before the deadline March 2019.

Article 23 Entry into Force:

  1. This Agreement and the Protocols on Trade in Goods, Trade in Services, and Protocol on Rules and Procedures on the Settlement of Disputes shall enter into force thirty (30) days after the deposit of the twenty second (22nd) instrument of ratification.
  2. The Protocols on Investment, Intellectual Property Rights, Competition Policy and any other Instrument within the scope of this Agreement deemed necessary, shall enter into force thirty (30) days after the deposit of the twenty second (22nd) instrument of ratification. Therefore, no need Somalia Parliament, Somali public, Legal and provisional trade experts, Villa Somalia seems made this important decisions on behalf of Somalia and Somalis without thoroughly discussed! Even if Somalia to withdraw there is very serious consequence as stipulating this article

Article 27 Withdrawal:

  1. After five (5) years from the date of entry into force in respect of a State Party, a State Party may withdraw from this Agreement by giving written notification to State Parties through the Depositary.
  2. Withdrawal shall be effective two (2) years after receipt of notification by the Depositary, or on  such later date as may be specified in the notification.
  3. Withdrawal shall not affect any pending rights and obligations of the withdrawing State Party Prior to the withdrawal

Conclusion:

In the context of everything else going on in the world, particularly, African countries facing raising debt, most of African governments debt expected to exceed 60% Gross Domestic Product (GDP), no doubt many will approach the International Monetary Fund for rescue, IMF adjustment loans, Washington team will take over the management of the economy in order to make sure that debts is repayable, so many African government is looking way out rather than increasing intra trade between the countries in the continent.

Many Somalis will raise concerns Somali government’s action for signing both treaties, while Somalia is now the worst instability post transitional government; Somali government now is in open conflict with regional leaders and Somalia Parliament, while International Communities are silent, despite the breach of regularly provisional constitution, including lack of free speech (many citizens are in fear to speak up), free press, free assembly, rule of law and justices, corruption is an epidemic.

Further to that, there is no Trade tariffs imposed to Somalia, particularly the immediate neighbour countries Ethiopia and Kenya, there is no Somali tracks or lorries are queuing the borders between the two immediate neighbours and there is evidence that customs of the two immediate neighbours are holding Somali goods crossing the borders and there is no goods to cross either let alone other African countries.

The first causality will be current Somali business man and women, as many large African banking, telecommunications and utilities firms will have full access to Somalia market, Somali government have no plan in place to minimize. Second causality will be goods made in China or elsewhere will end up Somalia as goods made in Africa of course with free custom and tariffs.

To quote what French President said recently “I demand access UK water for French fishermen as a price of future trade deals…” in contrast, Somalia’s market will be open free to all African companies and no foreseeable future to Somalia exports to Africa markets.

The five questions that Somali government and its official need to answer are:

  1. Why it has never been discussed and shared to Somalia’s house of parliaments?
  2. Why Somalia government signed both complicate treaties without advice an independently legal and trade experts.
  3. Why rush, while the country still in conflict and still unknown constitution and the model of government the country to take.
  4. What Somalia will gain?
  5.   Why there is no Statistics that refer goods and tariff that Somalia government is trying to gain?

If Srebrenica and Rwanda were the places that shamed a western world, AU will also be shamed AFCTA and COMESA for Somalia.

Maxamed Keynan – London
[email protected]
The author was born and bred in Mogadishu and has been living in London last 31 years.

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