Unveiling the Blue Economy

Ethiopia’s Sea Access Opens Doors to New Opportunities for the Horn

Ethiopia’s landlockedness has hindered its trade due to high transport costs. Reliance on Djibouti for port access has made Ethiopia vulnerable to port fee fluctuations and trade route disruptions. Ethiopia has actively pursued port diversification strategies, signing agreements with Kenya and Somalia to develop new ports, to reduce reliance on Djibouti and lower transportation costs.

Direct seaport access would significantly reduce transportation costs for essential imports, making them more affordable and stimulating economic activity. Seaport access would facilitate efficient exports of agricultural products, expanding Ethiopia’s export base and generating foreign exchange earnings. It fosters economic diversification by enabling new industries, creating employment opportunities, attracting foreign investment, and stimulating economic growth.

Ethiopia’s pursuit of seaport access can strengthen regional cooperation and integration, promoting mutual economic benefits, enhancing regional trade, and fostering a more stable and prosperous Horn of Africa. Seaports would allow Ethiopia to trade with a broader range of countries, reducing reliance on key trading partners and making the economy less vulnerable to market shocks.

Seaports play a vital role in food security by allowing easy imports to meet emergency needs. Congestion at the port of Djibouti hindered seamless deliveries of fertilizer last year. Seaports serve as gateways for cultural exchange and tourism, exposing local communities to new ideas and generating revenue through tourism.

Seaports play a crucial role in maritime security by providing a platform for surveillance and monitoring, collaborating with coast guards and navies to detect illegal activities. Seaports serve as critical disaster preparedness and response hubs, providing a staging ground for emergency supplies and personnel.

Seaports assist law enforcement agencies in combating crime by sharing intelligence, conducting inspections, and cooperating with investigations. Seaports provide navies with strategic access to international waters and the ability to project power, serving as bases for naval operations, resupply points for ships, and embarkation points for troops and equipment. They also support maritime security operations, such as anti-piracy patrols and counter-terrorism missions, deterring hostile activities and protecting national interests.

Ethiopia is pursuing direct seaport access, offering its coastal neighbours an exchange on its strategic assets, such as a stake in Ethiopian Airlines or fertile arable land. Experts say building a state-of-the-art seaport would take less than five kilometres of coastal land.

However, ceding territory would be a significant concession that would likely trigger resistance from nationalist groups in the coastal neighbouring states. They might fear such attempts would spur sovereignty, political, and economic concerns. The coastal countries would worry that giving away a part of their coastal territory to Ethiopia would harm their economies as countries such as Djibouti already get billions of USD yearly from port services.

Despite these challenges, there are things Ethiopia can do to increase its chances of convincing its neighbours. Building mutually beneficial relationships with its coastal neighbours based on trust and respect would help ease tensions.  Investing in infrastructure is also a step in the right direction. Ethiopia should offer luring economic incentives to its neighbours in exchange for access to the sea.  Investing in infrastructure is also a step in the right direction. Ethiopia should offer economic incentives to neighbours in exchange for sea access, such as sharing port fee revenue or providing financial assistance for development projects, which Ethiopia has already proposed. Promoting regional integration and emphasizing continental initiatives like the African Continental Free Trade Agreement can help achieve these goals. EBR

12th Year • Nov 16 – December 15 2023 • No. 123