Ethiopia’s traffic via Djibouti ports further drops

In December 2021 the Ethiopian Federal Ministry of Transport announced that the volume of Ethiopia trade handled by the Djibouti ports is embarking on a decreasing trajectory since the second half of 2021, dropping to 83.9 percent. As a landlocked country, Ethiopia relies on its neighbours for chanelling its trade. Being an import-dependent country, its imports are more than 4 times bigger than its exports.

According to a report presented by the Ministry last week to the Ethiopian Parliament, the total volume of Ethiopian trade handled by the Djibouti ports has further dropped in the last months, with increasing portions of traffic that are being progressively shifted by Ethiopian importers to other ports.

The Ethiopian government launched a few years ago a port diversification strategy aimed at reducing its dependance on the Djibouti ports (that in the past used to handle over 95 percent of Ethiopia’s total trade), which has been mainly implemented through the acquisition of stakes in other ports (e.g. Berbera) or investments in logistics facilities (e.g. Lamu) in other ports in the region.

Even though Djibouti Port is the closes port for Ethiopia and one of top-ranked container ports in Africa (the World Bank recently published the Container Port Performance Index 2021 that ranks the Djibouti port among the most efficient in the world), its price is perceived by Ethiopian traders as higher than other ports located in neighbouring countries, like Port Sudan (Sudan) and Lamu (Kenya).

According to the Ministry of Transport, the redistribution to other ports of part of the trade previously channeled through Djibouti, has led to savings for Ethiopia of 2.3 billion birr (44,4 million USD), with a negative impact on the Djibouti’s national revenue, a large share of which deriving from port fees paid by Ethiopia.

An increasing share of this trade (5%) is being handled by the Berbera port, whose main utilizer is the World Food Program (WFP), even though at the moment containerized traffic is still not passing through this port, that mainly handles bulk cargo, while trade volumes in Moyale, at the border with Kenya, are growing modestly (0.02%).