Even though top officials or head of governments of Djibouti and Ethiopia frequently travel to both countries and continuously meet, Ethiopian head of government had not paid an official visit to Djibouti until last week’s Prime Minister Hailemariam Desalegn’s visit.
At the end of the past week, a high delegation lead by Prime Minister Hailemariam Desalegn visited Djibouti, Ethiopia’s key economic partner and a major outlet for Ethiopia’s international trade.
Ethiopia, the second populated country in Africa, and the number one highly populated, landlocked country in the world, has been using Djibouti’s ports for the past 17 years since the Ethio-Eritrea war broke out in 1998.
To meet the growing demand from its neighboringcountry, Djibouti had undertaken several port expansions and the construction of new ports that made the small Horn country of less than one million population, one of the major port hubs in the continent fitted with modern facilities.
Several companies of western origins are also investing on new logistics and related facilities. The four exclusive and multi-purpose ports that are currently under construction in different parts of Djiboutian sea lines are examples of the rising logistics investments. The construction of other two new airports that targeted to boost the airfreight and tourism have also commenced officially weeks ago.
The tie between Ethiopian and Djiboutian population, who share similar ethnics of the Afar and Somali descents, is deep-seated, and their relation is now more deepened in different spheres.
For instance, within three years, Djibouti will be using potable water from coming via a pipeline from Adi Gala, in Ethiopia Somali region. Djiboutian have always consumed Ethiopian fruits and vegetables that were transported via the 98 years old railway that has now ceased operation giving way for the newest modern railway project commenced in 2012.
During his latest official visit the Ethiopian prime minister said that the relationship between citizens of the two countries is historical and strong.
“In a broader sense, we are as if we are joined in our roots and by some geographic, historical as well as demographic duty-bound to tread along the path of history together,” he said in his speech at the Djibouti National Assembly (Parliament) on February 8, 2015.
On the economic line, Hailemariam signed several protocols and bilateral agreements mainly of economic nature with President Ismaïl Omar Guelleh and other officials. The two countries’ officials had extended discussions that emphasized on the move toward the full economic integration between the two countries. “The two countries have strong infrastructure integration that shall facilitate the overall economic integration,” Ambassador Suleiman Dedefo, Ethiopian Ambassador in Djibouti, told Capital.
After the signing of a number of agreements, the two Heads of governments have attended a joint press conference on the first day of the official visit, Saturday February 7.
President Ismaïl Omar Guelleh said that the relation between the two countries is booming starting from few years back. “We have taken a decision to be an example of the integration in the region and then in Africa,” President Ismaïl Guelleh said. “For political integration of our continent, we are resolved to be one of the forerunning example; we can integrate and we can share the resources we have, the infrastructures we have in common, and scientific researches,” Guelleh said at the press conference.
Mohammed Idriss Farah, Ambassador of Djibouti in Ethiopia, said that the bilateral commission of the two countries held discussions on several issues.
“We have signed agreements, but the problem was their implementation. Now, we are working hard for the realization of the integration and the commission will also meet every month on ministerial level,” Ambassador Farah told Ethiopian press crew who traveled to Djibouti. Farah said that he is delighted on the growing relation of the two countries, which is flourishing during his ambassadorial assignment in Ethiopia. Ambassador Farah was assigned four years ago, and his Ethiopian counterpart also started a four and half years term at a similar time. Ever since, the relationship between the two countries is showing significant change. Ambassador Farah said that Djibouti will serve Ethiopian investors equally as Djiboutian citizens if they wish to invest in his country.
Some of the major agreements that were signed include an additional 75 mw electric power supply to Djibouti. Currently, the country gets 50mw electric power from Ethiopia. The additional electrification project will cost USD two billion.
Alemayehu Tegenu, Minister of Water, Irrigation and Energy, and Ali Yacoub Mahamoud, Djibouti’s Minister of Energy in charge of Natural Resources Department, has also signed an agreement to supply electric power for the new railway project.
They have requested to get significant electric power for the railway operation inside Djibouti and we have agreed to supply the power from Semera, capital of Afar region,” Alemayehu told Capital.
Construction of fuel carrier pipelines from Awash in Ethiopia to Djibouti port, and natural gas carrying pipes from Kalub to Djibouti is the other area collaboration will be geared at. A cooperation signed in the mining sector is one of the transformative decisions that the two countries have reached. Exploration and joint development of mines is envisioned under the mining cooperation pact.
Transport and logistics
According to Aboubaker Omar Hadi, Chairman of Djibouti Ports and Free Zones Authority (DPFZA), the content of the agreements in trade, ports and transport issues encompasses facilitation of cross-border movement of goods and people.
These agreements allow a smooth movement of goods and services in the corridor under the multi-modal bill of lading, Aboubaker told Ethiopian journalist. Workneh Gebeyehu, Ethiopian Minister of Transport said that he signed an agreement with his counterpart Moussa Ahmed Hassan, Minister of Infrastructure and Transport, to commence public transport service between the two countries.
“Djiboutian and Ethiopian transport companies will commence public transportation between the two countries,” he has declared.
Even though Ethiopia has a plan to commence public transport with its neighboring countries, it does not have any public transport that links the nation with countries in the region at the moment.
The current agreement is the first step to connect the two horn region countries by road transport. The history of connection of the two countries by terrain transport goes back to the days of the Ethio-Djibouti railway formation.
The new railway line that is being constructed is anticipated to be finalize in the coming October, according to the Workneh.
He said, the two countries have agreed to undertake immigration, security check and customs operations jointly along the border when the new railway becomes functional.
Currently, the two countries are connected via a highway at Galafi, a North-western location from the capital of Djibouti, and the railway would link Ethiopia a Southern part of Djibouti.
CGC Overseas Construction Group builds an asphalt road 220Km log from Dire Dawa to Dewallewith3.99billion birr. Djibouti is about to commence constructing its portion.
“The Adama-Awash express way work commences in the coming year. Currently, we are assessing the finance,” Workneh said.
In terms of customs clearance and logistics, the two countries counter parts has met and agreed on several issues.
In addition, Ethiopian Revenue and Customs Authority Head Beker Shale held a negotiation with the customs commissioner of Djibouti.“An issue that was raised by the two customs authorities made it clear that we need more procedures to follow the movements of goods. Revenue collection was dominant issues and customs officials of both countries are worried as to how to follow the fast movement of goods acrossborders,” Aboubaker said. So a commission was established to address the concerns of both sides. Officials from the two customs, Djiboutian port authority, and the Ethiopian Maritime Authority are represented in the commission. “Recommendations regarding the list of documents required for the movement of goods under the multimodal bill of lading should be formulated in three months,” Aboubaker elaborated.
According to Beker, the previous customs trend delayed clearance of goods from Djibouti contributing to price increases. “We have now agreed to develop simplified format to expand the IT system to accelerate goods movement,” he said.
Djiboutian authorities used to request invoices and details of the imported items that are imported by Ethiopian business people Beker said. Freight clearing agents were asked to produce the documents just for information and data purpose, thus invoices can be presented after the goods are transported to Ethiopia.“I hope we will have the first customs union, which is basic to expand the business and boarder trade activities.”
Ahmed Tusa, General Director of the Ethiopian Shipping and Logistics Services Enterprise (ESLSE), told Capital that the two sides agreed to exchange the information on electronic data system.
The number of Ethiopian vessels that dock at Djibouti currently reached 15 including the two oil vessels out sourced by other operators.
“We have been claiming that the Port Authority exempt anchorage fee that we have been paying though the fee is very small,” Ahmed said. Djibouti accepted Ethiopia’s demand and announced lifting of the levy right away.