August 20, 2017
Following this week’s Ethiopian prime minster, Hailemariam Dessalegn’s visit to Sudan, the two countries have inked an agreement that would enable Ethiopia to develop a port facility at the Port Sudan through which Ethiopia plans to handle half of its foreign trade volume.
According to Dessalegn Ambaw, Ethiopian Transport state minister, the idea of securing land has to do with constructing a port facility that would handle Ethiopia’s foreign trade mostly imports of goods. Port Sudan is the latest in the list of alternative port outlets that the Ethiopian government is looking to use in the region. Dessalegn declined to name the country opting it is too early to make it official, but he mentioned of another neighboring country currently in talks with Ethiopia for a possible deal to sell its port services to Ethiopia. The state minister also declined to verify the size of the land Ethiopia has secured in Sudan.
However, it is clearly known that Ethiopia has recently secured a stake at the Port of Berbera in Somaliland. It is to be recalled that the Dubai based, DP World, has secured a landmark lease agreement at Berbera lasting for 30 years. DP is set to invest USD 442 million to renovate the port assuming major managerial and control operations of the port. The government of Somaliland upholds a 35 percent control of the port management. This deal, though not officially affirmed, brings Ethiopia into play where the country is presumed to have secured access in the Red Sea port where some 19 percent of the port will be dedicated to Ethiopia’s cargo.
Furthermore, the government of Djibouti has been investing on a massive scale to construct additional port facilities which primarily targets Ethiopia’s imports. Apart from the long-serving Port of Djibouti, four additional ports are being constructed and up on completion all will be targeting the Ethiopian market. The expanding Ethiopian economy remains unquenched when it comes to port outlets and the government has been busy looking for more alternatives looking as far as Mombasa in Kenya.
Back in 2015, while drafting the national logistics strategy, Mekonnen Abera, director general of the Ethiopian Maritime Affairs Authority (EMFA), indicated that developing ports in other countries for the landlocked Ethiopia is one of the potentials to explore to ease its logistic congestion which is stifling Ethiopia’s foreign trade sector for years. Despite the fact that Ethiopia relies on the Port of Djibouti to handle some 95 percent of its foreign trade turnover, Mekonnen had noted that Somaliland and the Sudan could serve as good alternative outlets to the country. Mekonnen said that Berbera and Port Sudan are providing limited port use services to Ethiopia recently. There are trials shipments via Port Sudan where bulk of chemical fertilizers are among the commodities shipped through Port of Sudan.