Berbera Port: Widening access to Ethiopia’s growing import-export

Ethiopias recent venture to maximize the use of Port of Berbera, Somaliland is part of its endeavor to widen access to its growing import and export items, and will serve alongside other ports, says Ethiopian Maritime Affairs Authority.

Following its rapid economic growth and the subsequent increase of import-export items, Port of Djibouti is becoming congested and Ethiopia needs additional alternatives to handle the transaction, says Temesgen Yihunie, Logistics Coordination and Monitoring Director at the Authority.

After Ethiopia stopped using Eritrean ports in 1990s, Ethiopia’s import export is mainly dependent on Djibouti ports. But following the rapid economic development of the country in recent years, Ethiopia has planned to use additional ports of the neighboring countries: Sudan, Somalia and Kenya.

In the 1990s Ethiopia’s total import-export cargo was only 1.3 million metric tons, 90% of it ferrying through Eritrea ports and only 10% on Djibouti Ports but after Ethiopia stopped using Eritrea Ports, it totally shifted to Djibouti and still today most of Ethiopia’s import-export cargo is through it, Temesgen noted. But currently, the country’s total import-export freight has exceeded 16 million metric tons per annum, the director added.

For the smooth and safe use of ports, to create integrated economy with its neighbors’ and to participate on the development of ports, Ethiopia has set national logistics strategy, aiming at a give-and-take or win-win approach, Temesgen stated.
According to Temesgen still now around 97% of Ethiopia’s import-export cargo is ferrying through Djibouti ports while 2% and 1% through Port Sudan and Berbera port respectively.

Ethiopia planned its import-export loads 60% through Djibouti, 30% through Berbera and 10% through Port Sudan as its economy is increasing and the country planned to become middle income economy, Temesgen added.
Currently Ethiopia agreed with DP World on Berbera port and it acquires 19% stake, DP World hold 51% and Somaliland takes the remain 30% stakes, Temesgen states. This agreement is part of the national logistics strategy plan in addition to buying ports for use, Ethiopia set a plan to participate on the development and administration of ports, he told.

This 19% stake for Ethiopia has a big value in decision making, to participate on enacted regulations and tariffs set and to get a seat on the board which will be established by the three stakeholders regarding the service of the port, the director told.

The discussion to participate on Berbera port started before a year and Ethiopia used Berbera port since 2005, around 20 containers are ferrying monthly through and 100,000 to 130,000 tons of relief food was also imported through Berbera, he told.

Meles Alem, Spokesperson at the Ministry of Foreign Affairs of Ethiopia, on his side said that Ethiopia needed additional ports for its rapid economic development and the Berbera port is not new for Ethiopia as it used since 2005. The current agreement with DP World is only to buy service at the port and the agreement is going smoothly, he stated.
Ethiopia has been using Port Sudan since 2015 and it has a plan to participate on the infrastructural development of it, Temesgen stated. He further noted Ethiopia also has a plan to use Mombasa and Lamu ports of Kenya, in which the Lamu port is under construction.

According to Temesgen Port Sudan has set to use for the northern and northwestern part of the country, Berbera to the Southern and Southeastern part to Harar, Jigjiga and around, Lamu Port of Kenya to Moyale area while the central and Northeastern part of the country to use Djibouti ports.
Ethiopia’s starting to use ports other than Djibouti does not mean it decreases the amount of import-export cargo on Djibouti’s side because Ethiopia’s economy is rapidly year by year which needs access to additional marine outlets to link itself with international market, Temesgen stated.

The director told that before the starting of the first growth and transformation plan, which was set in 2010 for five years, Ethiopia’s import cargo was around 8.5 million metric tons and the export was around 600,000 metric tons per year.

But currently, the import freight has reached more than 13.5 million metric tons and the export reaches more than 1.8 million metric tons per year. On top of that currently, Ethiopia is busy building industrial parks like Hawassa, Adama, Kombolcha, Mekele and so on, its agricultural product is increasing, the investment flow is growing up. Ethiopia planned to become a middle income country and give attention to balance its import-export trade, to increase its export beyond the import trade. For Temesgen all these conditions require the country to have access more number of ports.

As a result, Temesgen reiterated that Ethiopia is seeking additional ports, not replacement for Djibouti Ports “Any condition, any situation and any port couldn’t substitute the service of Djibouti’s ports; Djibouti’s ports are incomparable with other ports for Ethiopia.” Temesgen said. “Our relation with Djibouti is exceptional, special, and unstoppable, Djibouti port is the heart of Ethiopia and the flow of cargo through Djibouti will continue without any change.” he said.

Regarding the relation between Ethiopia and DP World, Temesgen told that, Ethiopia’s relation with DP World to work jointly on ports is the first time and based on mutual interest. The issue between DP World and Djibouti on Doraleh Container Terminal was only their issue based on their bilateral agreement and due to the disagreement between the two, no implication happened on the service of the ports.

Negotiation to use Berbera port was launched before a year; there is no relation with Djibouti and DP World’s disagreement, the discussion reach to consensus now, the director stated.

Source:Ethiopian Herald