Ethiopia is trying to reduce its dependence on Djibouti

By Amine Ater

Ethiopia is forced to find a new home port to break its addiction to Djibouti where pass 90% of Ethiopian trade flows
The Ethiopian Government is currently negotiating to buy shares in a joint venture involving DP World Ltd. This company is about to become a manager of a port of Somaliland. An operation that could stimulate the Ethiopian economy, which enjoys rapid growth, but who suffers from landlocked. The Ethiopian authorities have “agreed in principle” to join the round table of the port of Berbera.

Preserve Emiratis

These talks are designed to give a share of 19% in the capital of the port of Berbera in Addis Ababa. Located in Somaliland, a territory that is semi-autonomous from the Horn of Africa who aspires to become a State, the management of this port has been entrusted by the Somaliland authorities to operator emirati DP World, based in Dubai, who holds a 30-year concession to manage and develop the port facilities. For now the UAE operator and the Government of Somaliland are the majority shareholders of the DPW Berbera.
In case of success of the negotiations, the round table should be apportioned between Somaliland which holds 30% of the company, DP World, which has 51% and 19% for Addis Ababa. The port of Berbera is located on the Gulf of Aden, a waterway strategic which leads to the Red Sea and the Suez Canal. Somaliland also asserts the rental of a military airport that could be extended in a naval facility, near the port.
Multiply points of entry in Ethiopia

Access to the round table of the port is very strategic for Ethiopia, second nation in terms of demographics of the continent and whose economic policy aims to make the country a export-oriented manufacturing center. Besides, the IMF forecasts a growth of 7.5% for Ethiopia in 2017, which represents the pace the fastest on the continent after Ivory Coast. The interest in Addis Ababa to the port of Berbera is the installation being a terminal container.
A unit that will be dedicated to the traffic of containers as a transit centre for landlocked countries. This will allow Ethiopia to diversify their points of entry and exit of goods. As a reminder, more than 90% of trade in Ethiopia is currently going through Djibouti. Addis Ababa has even built a railroad connecting it to Djibouti, in order to reduce the loading time of 3 days to 12 hours. Amount of investment, for a $ 2.6 billion line that should carry 7.5 million metric tons of cargo per year by 2020.
Ethiopia also recently acquired the cargo ships, so as to strengthen the capacity of its maritime transport services. Also the authorities of Somaliland is planning to build a 260-km road linking the port to the Ethiopian border. The military base Emirati for its part represents a safe argument for the operation of the port of Berbera. The geographical proximity to the United Arab Emirates should also allow Ethiopian traders to import building materials at low cost.

Translated by Google translation

SOURCE:French Language Afrique .Latribune