The port of Djibouti already has an importance out of scale with the size of the small state in the Horn of Africa. Yet it now looks set to become even more important, following the signature of a 20-year door-to-door cargo transit agreement between the governments of Ethiopia and Djibouti in December.
The deal should establish Djibouti as Ethiopia's preferred port, following the latter's loss of its own ports as a result of the secession of Eritrea.
Addis Ababa had held talks with other governments and port authorities in the region over improving transport links to other ports. Port Sudan and Mombasa have both been considered as possible alternatives but, particularly given the distances involved, Djibouti always seemed like the most obvious option as Ethiopia's port of choice.
Under the deal, L'Association des Transistors de Djibouti will hold a monopoly on cargo clearing and forwarding at the port. Maritime Transit Services of Ethiopia (MTSE) is a member of the association. In addition, Ethiopian Shipping Lines (ESL) will have the right to select an inland transport operator under tender for the contract to import Ethiopian cargo. Cargo administration will be carried out by a single document valid in both countries in order to speed up processing.
The port of Djibouti, which lies 781km from Addis Ababa, is managed by Dubai-based DP World, which secured a 20-year concession to manage the facility in 2000 and also Djibouti Airport in July 2001.
The Gulf company is investing in additional cargo handling equipment and hopes to develop Djibouti as a transhipment port, while a thriving free zone is also emerging on the site. A 20-hectare dry port area has been set aside to cater specifically for Ethiopian traders. Port efficiency has greatly improved since 2000 and container productivity has doubled to 28 moves per hour, which is far superior to almost all other ports in Africa.
In order to boost capacity, DP World is already developing a second container terminal, 11km from the existing port. The...