High-level government representatives from Ethiopia and Djibouti have been traveling back and forth between the two countries over the last few weeks

Due to a boundary dispute with its former territory, Eritrea, landlocked Ethiopia moved its international trade from Eritrea to Djibouti in the late 1990s, which led to an expansion of Ethiopia and Djibouti’s relationship.

At the moment, Djibouti and Ethiopia have the most exemplary economic integration on the continent because of their connections to the railway, water, energy, and numerous road networks.

Experts noted that while some topics are rarely brought up between the countries, they sparked attention.

One of these is the recent announcement made by Djibouti Ports Corridor Road (DPCR), a body that was founded under the Djibouti Ports and Free Zones Authority (DPFZA) a few years ago with the goal of modernizing the logistics roads corridor.

According to DPCR, there have been concerns raised by the Ethiopian side regarding the acceptance of Ethiopian currency as legal tender within its (Djibouti) corridor.

The Ethiopian currency has been in use in Djibouti for decades. According to DPCR’s announcement posted on its page on June 11 and later annulled, there have been multiple devaluations of the Ethiopian currency, “and strong indications suggest devaluation is imminent.”

“The Ethiopian currency is not accepted as legal tender within our corridor,” it added.

According to reliable sources who spoke with Capital about the situation said the Ethiopian diplomatic mission in Djibouti, led by Berhanu Tsegaye, asked pertinent Djibouti government officials for clarification.

They advised the diplomatic mission that the announcement was inaccurate and that the head of DPCR had been placed under administrative measures, according to Capital sources.

On June 13, two days after the DPCR announcement, Mahmoud Ali Youssouf, Djibouti’s Minister for Foreign Affairs and International Cooperation, arrived with a message for Prime Minister Abiy Ahmed from President Ismail Omar Guelleh.

“Such exchanges serve as vital channels for dialogue and cooperation, fostering mutual understanding and collaboration on bilateral and regional matters of shared interest,” the Prime Minister noted on his social page after his meeting with the Djiboutian top diplomat.

Mahmoud, one of the senior diplomats in the region, has declared his intention to run for the position of Chairperson of the African Union Commission, which would be chosen early next year.

Likewise, on Monday, June 24, an Ethiopian high-level delegation headed by Minister of Foreign Affairs Taye Atske-Selassie (Amb) went to Djibouti on an official visit. During his three-day visit, Taye informed RTD, the state-owned media of Djibouti, that he discussed a number of bilateral and regionally significant topics with the country’s President and Minister of Foreign Affairs and International Cooperation.

Taye toured a number of port facilities on his first visit to Djibouti after being appointed Minister of Foreign Affairs.

He also met Aboubaker Omar Hadi, the Chairman of DPFZA, an organization that has direct control over the majority of Djibouti’s logistics and associated important economic sectors.

In connection with the 47th Independence Day celebration, a delegation headed by Adem Farah, the Vice President of the ruling Prosperity Party, traveled to Djibouti on Thursday, June 27.

The delegation included Ahmed Shide, the Finance Minister, who has a strong relation with Djiboutian officials, Berhanu Jula (Field Marshal), the Chief of Staff of the Ethiopian National Defense Force, and Shimelis Abdisa, the President of the Oromia region.

The CEO of Ethiopian Shipping and Logistics, Berisso Amallo, reportedly accompanied the delegation on Friday, June 28.

Sources claim that the group held many conversations with Djiboutian authorities while it was there until yesterday.

There are concerns in the economic and national interest between the two countries, according to those who closely monitor their relationship and the logistics industry.

According to insiders, there are some unanticipated problems with customs, payment, and other connected concerns. “The road condition in Djibouti is one of the issues,” they added, referring to Ethiopia and Ethiopian clients, who use Djibouti ports for the majority of their imports.

The other area that the two nations are expected to achieve with new agreements is the non-vessel operating common carriers (NVOCC) agreement, according to sources.

ESL, the only multimodal operator, was the only NVOCC in Djibouti according to the agreement reached in 2006.

However, three Ethiopian companies, notably Cosmos Multimodal Operation, which is partially controlled by Geda Transport, the regional enterprise for Oromia administration, have recently received licenses from Ethiopia to operate as NVOCC multimodal operators.

However, DPFZA disclosed a couple of months ago that NVOCCs, with the exception of ESL, are not allowed to function as multimodal operators in Djibouti.

According to sources, the Djibouti administration has been implementing new processes in recent months, using previous agreements inked between the two countries as support.

Sources stated that Djibouti would be displeased with Ethiopia’s attempt to diversify its port diversifications.

On the other hand, Djibouti’s government has formally revealed that the nation, which has a variety of sophisticated port facilities and is poised to add more, is prepared for completion. Djibouti now runs four ports, one of which is located in Tadjoura.

In addition to the shared electric railway system between the two countries, the two countries are also connected by three road networks. Ethiopia is keen to use the Berbera Port in Somaliland, and it has started importing fertilizers through Lamu, a recently opened port in Kenya. Ethiopian shipments via Mombasa, Kenya, are increasing due to the security situation in the Red Sea.

The biannual bilateral conference, anticipated to be led by senior diplomats from the two countries, is scheduled to take place in Djibouti in July 2024. According to sources, the recent travels between officials of the two countries may also benefit this conference.