Africa’s fastest growing economy and second most populous country, Ethiopia is hoping to increase its profile as it stakes a claim to a part of Djibouti’s port. This was revealed during a visit of the new Ethiopian prime minister Abiy Ahmed with Djibouti’s President Ismail Omar Guelleh. It was also Abiy Ahmed’s first official trip out of Ethiopia, since he was sworn in as Ethiopian Prime Minister this year.
Ethiopia’s claims to Djibouti’s port include a joint development of the port with Djibouti, though the size of Ethiopia’s stake in the port is still unclear. In exchange, Djibouti will receive shares in some of Ethiopia’s state owned firms. “A joint committee of ministers would meet to thrash out details,” Ethiopian News Agency reported.
This deal also follows Ethiopia’s decision to acquire 19 percent of the stake of the port Berbera in neighboring breakaway state Somaliland, suggesting that there is a bigger plan for Ethiopia to leverage on seaports that are close to its borders.
Ethiopia is Africa’s fastest growing economy, and one of the biggest economies in East Africa. A series of investments from China in the past few years has made its infrastructures some of the best in Africa. However, it is a landlocked country, and Djibouti’s port handles almost 95 percent of all trade headed for Ethiopia.
And ever since the breakaway of Eritrea from Ethiopia, Djibouti has become more important to trade for Ethiopia, with Africa’s second largest population. A railway line between Ethiopia and Djibouti, paid for and built by China, has also aided the movement of people and goods between both countries.
Djibouti has also become a strategic military base for countries like France, USA, China, despite it being a small country with a population of less than 1 million people. Its geographical location, and peaceful environment, compared to other African countries in its region have been touted as some of the reasons why it plays such an important role in the Horn of Africa.
The port of Djibouti is also important globally, owing to the fact that it is located critically at a juncture linking the Far East, Europe and the Persian Gulf. That route is also one of the busiest shipping routes in the world.
Reports say the state companies Ethiopia could give Djibouti shares in, could include Ethiopian Electric Power, the state electricity company, and Ethio Telecom, the state’s telecom company.