Ethiopia to take stake in Port of Djibouti, its trade gateway -state media

[.279]

May 1 (Reuters) - Ethiopia will take a stake in the Port of Djibouti, its main gateway for trade, under a deal reached between the two countries, state media outlets said on Tuesday.

Djibouti had been seeking investors for its port since it terminated Dubai's state-owned DP World's concession to run the port two months ago, citing a failure to resolve a six-year contractual dispute.

The port is a key asset for Djibouti, a tiny state along the Red Sea whose location is of strategic value to countries such as the United States, China, Japan and former colonial power France, all of whom have military bases there.

The size of Addis Ababa's stake was unclear.

State-owned Ethiopian News Agency said the agreement, reached at the weekend during a visit by Ethiopia’s Prime Minister Abiy Ahmed to Djibouti, involved the joint development of facilities. In return, Djibouti would have the option of taking stakes in state-owned Ethiopian firms.

"A joint committee of ministers would meet to thrash out details," Ethiopian New Agency said.

The government had previously said that the port would remain "in the hands of our country" until it found new investors.

Djibouti handles roughly 95 percent of all inbound trade for landlocked Ethiopia, Africa's second most-populous nation and an economic power in East Africa

The deal with Djibouti follows Ethiopia's agreement to acquire a 19 percent stake in the Port of Berbera in the breakaway Somali region of Somaliland. DP World retains a 51 percent stake there, while the government holds the rest.

Ethiopian state companies that Djibouti may look to invest in following the bilateral agreement could include Ethiopian Electric Power and Ethio Telecom – one of Africa’s last remaining telecoms monopolies. (Reporting by Aaron Maasho; Editing by Omar Mohammed and Susan Fenton)

 

[.279]

It's over for berbera.

@draco @Factz

 

[World]

kkkkkk berbera failed before it even started

well done my ciise brothers

 

[.279]

kkkkkk berbera failed before it even started

well done my ciise brothers

Somaliland did nothing but let ethiopia get ownership in somali ports. I don't think this is a good thing but it is what it is. Berbera will stay dry forever.

 

[Cognitivedissonance]

Djbouti is the birth place of irirism infact irirism was first concocted in djbouti in order to turn the people of somalia against eachother so their ports can never compete with the port of Djibouti which is djbouti only source of income.

 

[Bohol]

Djibouti is greedy. They already have 95% of Ethiopia imports and won't allow Berbera to even have 2% with this move.

 

[Cognitivedissonance]

Somaliland did nothing but let ethiopia get ownership in somali ports. I don't think this is a good thing but it is what it is. Berbera will stay dry forever.

In sha Allah berbera will be doing even better than djbouti soon Allāh willing and it will be green and wealth will be bountiful more so than djbouti who’s a military base for the international community a receptacle

 

[.279]

Djbouti is the birth place of irirism infact irirism was first concocted in djbouti in order to turn the people of somalia against eachother so their ports can never compete with the port of Djibouti which is djbouti only source of income.

Are you stupid? We've been your right hand man through it all. Dumbass

In sha Allah berbera will be doing even better than djbouti soon Allāh willing and it will be green and wealth will be bountiful more so than djbouti who’s a military base for the international community a receptacle

This will never happen. Djibouti will not just be east africas greatest port but simply Africa's.

Djibouti is greedy. They already have 95% of Ethiopia imports and won't allow Berbera to even have 2% with this move.

We want it all

 

[LittleNileRiver]

This is why Puntland needs a port in Garacad. We're the only Somali region with coasts facing the Gulf of Aden and the Indian Ocean. Djibouti won't be able to compete with that.

 

[SomaliWadaniSoldier]

muuse biixi wont be sleeping good tonight

 

[DRACO]

It's over for berbera.

@draco @Factz

You suck at geo/politics bro

 

[SirLancelLord]

It's about Ethiopia having a stake in Djibouti Port. There's already an agreement in place since 2 years who m ago to divert 30% of Imports to Berbera.

I'm looking this competition between Somali capitals on who can be the best. Having seen both DJibouti & Hargeisa - I prefer Hargeisa its more livelier the km there's so much going on constantly only thing is no infrastructure which is all Hargeisa needs to do to be the best because business is there

 

[Huncho]

Ethiopian govt will still use Berbera.From what I have seen and heard from Ethiopians and some officials while I stayed there is that the Djoubiti port/road is congested.So once Berbera port is upgraded (which I doubt it will) they will go through with increasing the volume to 30%.They will also do the same with Port Sudan.

Either way Ethiopia is eating good


My grandfather has Ethiopian citizenship so I will try and get one once Ethiopia starts booming

 

[Huncho]

This is why Puntland needs a port in Garacad. We're the only Somali region with coasts facing the Gulf of Aden and the Indian Ocean. Djibouti won't be able to compete with that.

Too far away from Ethiopian population centers

 

[.279]

It's about Ethiopia having a stake in Djibouti Port. There's already an agreement in place since 2 years who m ago to divert 30% of Imports to Berbera.

I'm looking this competition between Somali capitals on who can be the best. Having seen both DJibouti & Hargeisa - I prefer Hargeisa its more livelier the km there's so much going on constantly only thing is no infrastructure which is all Hargeisa needs to do to be the best because business is there

Now that ethiopia has the same stake in doraleh as it does in berbera, there's no incentive to build the corridor. Are you gonna go from 30% ownership to 5? The ball is in your court lol.

There's a train from addis to djibouti while there's not even one proper road to berbera. You and i both know its not getting built.

Also the international free trade zone will be completed soon which will create a few 100k jobs. You can't compete.

 

[Cumar]

Now that ethiopia has the same stake in doraleh as it does in berbera, there's no incentive to build the corridor. Are you gonna go from 30% ownership to 5? The ball is in your court lol.

There's a train from addis to djibouti while there's not even one proper road to berbera. You and i both know its not getting built.

Also the international free trade zone will be completed soon which will create a few 100k jobs. You can't compete.

The Berbera-Wajaale road is already well under construction genius. There's no need to blatantly lie.

 

[DRACO]

@Kingcobra Dp world is going to build Virgin Hyperloop Berbera-Addis#
Djibouti monopoly is over start diversifying like Saudi bro or yall will starve.
Easy money is over.

 

[CangeeroBear]

Ethiopia will use Berbera as they have a higher stake in Berbera.Furthermore it's better to diversify options so Djibouti has no power over Ethiopia.

 

[DRACO]

What the deal means for Ethiopia

As well as altering relations between Somaliland and Somalia, the DP World deal could also have important repercussions for Ethiopia. On 1 March, it was announced that the regional hegemon had acquired a 19% stake in the project. As part of this deal, Ethiopia is required to construct the “Berbera Corridor”, a $300 million road linking the port to the capital Addis Ababa.

Ethiopia’s close inclusion in the deal adds another country with which Somaliland is dealing with directly. With a population of over 100 million people, it also guarantees Berbera port a large and key commercial market. However, Ethiopia stands to benefit hugely from the port expansion too, economically and strategically, and has in fact been lobbying the rich UAE and other Gulf nations to invest in Berbera for years.

This reason for this is that, at the moment, 95% of the land-locked country’s imports and exports flow through Djibouti. A modernised port in Somaliland would provide an alternative for Addis Ababa and loosen its heavy dependency on its small north-eastern neighbour. The Berbera corridor would also help Ethiopia open up its relatively underdeveloped eastern regions, particularly to the trade of livestock and agricultural goods. As a piece in The Conversation argues, the project also has potential geostrategic value to Addis in keeping Eritrea isolated and consolidating its own control over the region.
What the deal means for Djibouti

As well as Mogadishu, the party with the most to lose from the DP World deal is Djibouti, which has come to rely on Ethiopia’s custom as much as Ethiopia relies on Djibouti’s access to the sea. Having profited hugely from this relationship over the years, Djibouti now stands to see hundreds of millions of dollars in customs revenue diverted once its near monopoly on routes in and out of Ethiopia comes to an end.

Djibouti is clearly frustrated that the ever-expanding DP World is seeking to develop ports both in Djibouti and Somaliland. It had in fact already been quarrelling recently with the company, which was awarded a 50-year concession to run its Doraleh Container Terminal in 2006. In 2014, the government lodged claims that the UAE state-owned company had made illegal payments to secure the contract. This February, a London court dismissed the charges, prompting Djibouti to terminate the deal unilaterally in what the UAE called an “arbitrary” and “illegal” move.

Scheduled to start construction this year, the Berbera port deal clearly has both its winners and losers. In an often unpredictable and adversarial region, this one development could see wide-ranging political and economic dynamics start to shift.

 

[Cumar]

The fact that Djibouti had to resort to selling onwership stake in their only strategic asset just to compete with an unrecognized country.