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BusinessNew study to guide port diversification efforts

New study to guide port diversification efforts

Ethiopia plans to diversify link port alternatives with domestic economic corridors and global shipment routes based on a new technical study undertaken by the Ethiopian Maritime Authority.

The study looks at how to diversify, grow, and use other ports and corridors. It describes which corridor goes to which port, what kind of infrastructure it has, how it appears on Ethiopian and other countries’ borders, how the ports are tied to other countries, which Ethiopian centers are supplied by the corridors, and what items can be moved.

It is part of the port diversification process, which includes surveys of ports and corridors that Ethiopia can use based on their economic viability and how they can be used, said Yehualashet Jemere (Eng.), the Authority’s director general.

The study will be presented to the National Logistics Transformation Council for approval.

Ethiopia currently uses ports in Djibouti, Somaliland and Kenya. However, since Ethiopia is landlocked, the need for more ports has been growing.

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A report on the last three months of the current budget year showed 94.5 percent of Ethiopia’s imports passed through the Djibouti port; three percent was handled at Berbera, 1.5 percent at Tadjoura, and 0.87 percent at Moyale corridor.

Ethiopia plans to jointly develop ports with neighboring countries.

“The government has expressed interest in developing the Berbera port in collaboration with the Somaliland government and DP World,” Yehualashet said. However, Somaliland’s Ministry of Finance has previously stated that Ethiopia has missed out on the chance to buy the stake before the deadline set when the pledge was made.

The logistics cost is also a reason to diversify and expand ports as transportation costs from the port to the center of the country continue to mount.

“It doesn’t matter if the ports are good and the shipping companies don’t use the port,” Yehualashet said, adding that “using an alternative port like Assab will be undertaken after an agreement is reached between Ethiopia and Eritrea.”

Using alternative ports is important to safeguard national interests and increase the country’s export activity. It also gives the country room to maneuver in terms of decision-making and negotiating price.

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