Mereja Forum

[Zmeselo]

Djibouti looks to Ethiopia to gauge its economic future

President Guelleh’s controversial fifth term is more likely to be tested by regional than domestic challenges.

03 MAY 2021

BY SELAM TADESSE DEMISSIE

https://issafrica.org/iss-today/djibout ... mic-future

Djibouti’s President Ismaïl Omar Guelleh, who has been in power for 22 years, won a fifth term in office by a landslide 98% of votes. The country’s political opposition criticised the 9 April election process for lacking https://www.aljazeera.com/news/2021/4/1 ... fifth-term transparency and fairness.

Guelleh’s new term isn’t likely to face significant challenges internally. And the international community shows little interest in Djibouti’s lack of democratisation. The political opposition is weak due to a repressive https://www.aljazeera.com/news/2021/4/8 ... m-in-polls state, and so can’t constructively take issue with the government. Freedom of the press as a platform for alternative public views and criticism of authorities is also lacking.

However it won’t be plain sailing for Guelleh. His leadership may face economic constraints due to recent regional shifts, particularly related to its key financial partner – Ethiopia. These developments could worsen internal socio-economic grievances.

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Guelleh’s leadership faces economic constraints due to shifts relating to its key partner, Ethiopia

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Djibouti’s economy and 85% of its gross domestic product rely on the service sector, which includes port, logistics and related services. This sector revolves around the country’s strategic location as a Red Sea transit point on the world’s busiest shipping lanes connecting Europe, the Middle East and Asia. Its geopolitical location coupled with the global war on terror and piracy in the waters off Somalia’s coast have also made Djibouti a desirable location for foreign military bases.

But this could all be disrupted by changes in the economy of its biggest customer – Ethiopia. Djibouti has provided the principal maritime harbour for imports and exports to and from landlocked Ethiopia since 1999.


Djibouti’s strategic regional location

A country of 112 million people, Ethiopia relies on Djibouti’s port and transport-related infrastructure for 95% of its maritime trade. According to the World Bank, in 2013 85% of Djibouti’s port activities derived from Ethiopia’s import and export transactions. Not much has changed since, with Ethiopia contributing substantially to Djibouti’s overall economic growth.

Any disruption in Ethiopia’s economy will hurt Djibouti. At the same time, Djibouti’s stability is critical to Ethiopia’s economic well-being, indicating the interdependence of the two Horn of Africa countries, both economically and regarding security. Given their ties, two regional developments could damage Djibouti’s economy if they slow down financial contact with Ethiopia.

The first potential problem is political instability in Ethiopia. Beyond the adverse effects of COVID-19 on Ethiopia’s trade in 2020, the political disruption associated with recent social unrest will weaken https://country.eiu.com/ethiopia its economy, at least in the short term.

Extensive ethnic-based violence https://www.aljazeera.com/news/2021/4/1 ... n-ethiopia across the country, and the subsequent destruction of business properties and internal displacement, means the government will struggle to implement its 10-year development plan https://ethiopianmonitor.com/2020/06/11 ... ment-plan/ that guarantees private sector-led growth. In this uncertain economic environment, risks are raised and investments will likely reduce.

The upheaval related to the recent Tigray conflict https://www.aljazeera.com/news/2020/11/ ... -500-words also puts pressure on Ethiopia’s economy. If the instability in the northern part of the country persists, business uncertainty will rise, and trade and transactions will suffer. Overall, the crisis will negatively impact economic growth through less foreign direct investment, tourism and exports.

This will, in turn, dampen Djibouti’s economic prospects in the short term. According to the International Monetary Fund, Djibouti experienced a 1% slowdown in economic performance in 2020 but is predicted to grow by 6% in the coming years. However, this forecast is based on Ethiopia’s rapid expansion in trade and private investment – which now seems unlikely. Concerns about the effects on Djibouti’s economy are shared https://www.bloomberg.com/news/articles ... ic-rebound by the country’s Finance Minister Ilyas Dawaleh.

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Ethiopia relies on Djibouti’s port and transport infrastructure for 95% of its maritime trade

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The second regional development that could affect Djibouti relates to Ethiopia’s policy of diversifying its port connections. https://www.capitalethiopia.com/opinion ... a-forward/ Ethiopia is aware of the danger of relying on one outlet, as exemplified in the 1990s when it went to war with its neighbour Eritrea – then Ethiopia’s main route to the sea. This 1998–2000 war led to Djibouti emerging as Ethiopia’s primary outlet for its trade.

The Ethiopian government has bought a 19% stake in Berbera Port in Somaliland to diversify its maritime outlets. Developments are also underway to use the Ports of Massawa and Assab in Eritrea. And Ethiopia has expressed interest in Port Sudan in Sudan.

Ethiopia’s rapprochement with Eritrea and the opportunity to use the latter’s harbours could help Ethiopia diversify its sea outlets. The construction of the Melodoni-Manda-Bure road project, which connects Ethiopia with Eritrea’s port of Assab and serves as an alternative route to Ethiopia’s foreign market, officially started in January.

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Djibouti has a major advantage over its regional port competitors but Ethiopia is seeking alternatives

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Berbera Port in Somaliland is another option. In March 2018, Dubai Ports World, Somaliland’s administration and Ethiopia signed an agreement for shared port management, with Ethiopia having a 19% share. The port is under development and expansion, with a road https://issafrica.org/iss-today/abiy-he ... the-ground being constructed between the port and Ethiopia.

Djibouti currently retains a significant infrastructural advantage over its potential port competitors in the region. But its port services have become expensive over the years and may lead to Ethiopia seeking alternative options. This could impact Djibouti’s economic performance in the medium to longer terms.

Instability in Ethiopia, coupled with its diversification of port outlets, could undermine Djibouti’s economic prospects during Guelleh’s fifth term. With a high https://www.lloydsbanktrade.com/en/mark ... ti/economy unemployment rate and cost of living, further financial pressures could pave the way for socio-economic grievances. Djibouti’s new administration will need to consider these threats to avert instability in the country.

Selam Tadesse Demissie, Research Officer, Horn of Africa Security Analysis, ISS Addis Ababa

In South Africa, Daily Maverick https://www.dailymaverick.co.za/ has exclusive rights to re-publish ISS Today articles. For media based outside South Africa and queries about our re-publishing policy, email us: [email protected]

[AbyssiniaLady]

Thanks to the internet everyone's a business analysts and expert on everything these days, Djibouti's economy doesn’t depend on Ethiopia.

Ethiopia’s rapprochement with Eritrea and the opportunity to use the latter’s harbours could help Ethiopia diversify its sea outlets. The construction of the Melodoni-Manda-Bure road project, which connects Ethiopia with Eritrea’s port of Assab and serves as an alternative route to Ethiopia’s foreign market, officially started in January.

We keep hearing about Massawa and Assab but unfortunately Ethiopia is not going to use Eritrean ports anytime soon, Assab and Massawa ports maybe ready for business but the support infrastructure is not yet ready to handle Ethiopia's imports and exports, they are very old, too small and the sea water is too shallow for modern container ships that regularly carries Ethiopia's major goods, Both ports need to be deep enough to allow large container ships to enter and exit without touching the seabed, The good for nothing Eritrean regime needs to build new port infrastructure that can handle bigger ships and more trade if it wants Ethiopia to use Assab and Massawa ports instead of feeling envious.

Currently, all the containers destined for Eritrea by large ships have to be transshipped at Djibouti port or Jebel Ali Port Dubai, results in additional port fees and delays.

[Fiyameta]

Thanks to the internet everyone's a business analysts and expert on everything these days, Djibouti's economy doesn’t depend on Ethiopia.

Ethiopia’s rapprochement with Eritrea and the opportunity to use the latter’s harbours could help Ethiopia diversify its sea outlets. The construction of the Melodoni-Manda-Bure road project, which connects Ethiopia with Eritrea’s port of Assab and serves as an alternative route to Ethiopia’s foreign market, officially started in January.

We keep hearing about Massawa and Assab but unfortunately Ethiopia is not going to use Eritrean ports anytime soon, Assab and Massawa ports maybe ready for business but the support infrastructure is not yet ready to handle Ethiopia's imports and exports, they are very old, too small and the sea water is too shallow for modern container ships that regularly carries Ethiopia's major goods, Both ports need to be deep enough to allow large container ships to enter and exit without touching the seabed, The good for nothing Eritrean regime needs to build new port infrastructure that can handle bigger ships and more trade if it wants Ethiopia to use Assab and Massawa ports instead of feeling envious.

Currently, all the containers destined for Eritrea by large ships have to be transshipped at Djibouti port or Jebel Ali Port Dubai, results in additional port fees and delays.

YOUR AGAME'S INFERIORITY COMPLEX IS AN INCURABLE DISEASE THAT CONSUMES ITS HOST FROM INSIDE OUT.

[AbyssiniaLady]

Asian Ports Dominate Global Container Port Performance Index

PRESS RELEASE May 5, 2021

World Bank and IHS Markit report highlights large efficiency gaps between world’s key container ports.

LONDON, May 5, 2021—Asian container ports are the most efficient in the world, dominating the Top 50 spots according to the new global Container Port Performance Index (CPPI) launched by the World Bank and IHS Markit. The report scored ports against different metrics, making the efficiency ranking comparable around the globe by assessing and standardizing for different ship sizes and container moves per call. The CPPI is intended to identify gaps and opportunities for improvement that will benefit stakeholders from shipping lines to national governments to consumers.


Regional disparities

East Asian ports dominate the CPPI, led by Yokohama in Japan ahead of King Abdullah Port in Saudi Arabia and Qingdao in China. Algeciras in Spain is the highest ranked European port, in 10th place. Colombo in Sri Lanka is the top-ranked port in South Asia at 17th place and Mexico’s Lazaro Cardenas leads the Americas at 25th. Canada’s Halifax is the only other North American port in the Top 50. Djibouti, in 61st place, is the top-ranked African port.

The whole article
https://www.worldbank.org/en/news/press ... ance-index

[Aba]

Where does Singapoor look to? That is the question

[Zmeselo]

It's ok! We'll make a deal with the Afar killil of Ethiopia, to transport their potassium out!

Thanks to the internet everyone's a business analysts and expert on everything these days, Djibouti's economy doesn’t depend on Ethiopia.

Ethiopia’s rapprochement with Eritrea and the opportunity to use the latter’s harbours could help Ethiopia diversify its sea outlets. The construction of the Melodoni-Manda-Bure road project, which connects Ethiopia with Eritrea’s port of Assab and serves as an alternative route to Ethiopia’s foreign market, officially started in January.

We keep hearing about Massawa and Assab but unfortunately Ethiopia is not going to use Eritrean ports anytime soon, Assab and Massawa ports maybe ready for business but the support infrastructure is not yet ready to handle Ethiopia's imports and exports, they are very old, too small and the sea water is too shallow for modern container ships that regularly carries Ethiopia's major goods, Both ports need to be deep enough to allow large container ships to enter and exit without touching the seabed, The good for nothing Eritrean regime needs to build new port infrastructure that can handle bigger ships and more trade if it wants Ethiopia to use Assab and Massawa ports instead of feeling envious.

Currently, all the containers destined for Eritrea by large ships have to be transshipped at Djibouti port or Jebel Ali Port Dubai, results in additional port fees and delays.

[Fiyameta]

Aside to their inherent inferiority complex, what I find most funny about the terrorist agame's twisted mind is that, they tend to glorify Djibouti's dictatorial and tribal-based regime, and amplify its perceived "economic success", all in an effort to give themselves a pat on the back for spending $1.4 billion dollars a year to use the barren country's port services, which they think will make us Eritreans feel "jealous" HAHAHAHAHAHAHA

SEE HOW THE SELF RELIANT, HIGH IQ ERITREA MADE THE LOW IQ AGAME PAY HER HALF A BILLION DOLLARS A YEAR FOR DECADES

• 
  The port of Djibouti is leased to the UAE under a 30 year contract.
  
  Fees collected from Djibouti's port services go directly to the UAE while Djibouti's ruling family gets 5% in royalty fee. That's it!
  
  The UAE used to charge the TPLF $1.6 BILLION dollars a year to use Djibouti's port services, mainly to import food aid and some household items to furnish homes owned by agame thieves in Bole and Mekelle.
  
  The UAE, in pursuit of its strategy to ensure safe passage for its oil tankers crossing the Red Sea en route to Europe, it reached an agreement with Eritrea to park its naval and air force fleet at the Assab port (aka watering hole for camels) with parking fees totaling HALF A BILLION DOLLARS a year!!!
  
  This means that, almost half of the $1.6 billion the UAE collected from the agame went directly to Eritrea as Parking Fees.
  
  In other words, for many years Eritrea was making the TPLF pay her HALF A BILLION DOLLARS a year indirectly without having the agame set their feet at the Eritrean port of Assab and infect its pristine waters. And while this was taking place, the TPLF lacked the mental tools necessary to fully understand what was happening, for most of the money used to pay TPLF's port fees came in the form of foreign aid from countries that imposed sanctions on Eritrea, supposedly to hurt its economy. But guess who was laughing all the way to the bank?
  
  IQ matters!

[Aba]

Here is a brilliant idea: sacrifice the youth in exchange for looting opportunities for household utensils and donkeys. Genius.

Please wait, video is loading...

[AbyssiniaLady]

President Isaias Afwerki's ex-wife Fiyameta Afwerki is living in a fantasy world after her divorce.

In February 2018, Djibouti ended its long-running partnership with DP World for the operation of Doraleh Container Terminal (DCT), a joint venture that opened in 2008. The government of Djibouti agreed with DP World in 2006 for a 30-year concession agreement to operate the terminal.

DP World owned only 33.34% of Djibouti Doraleh Container Terminal.

[Fiyameta]

The low IQ inferior agame were indirectly making a Half a Billion Dollars payment to Eritrea every year and they had no idea what was happening. The UAE collected the payments and basically endorsed the checks payable to Eritrea. We were profiting from agame's ignorance. If that is considered animal cruelty, we are guilty as charged. HAHAHAHAHA