For over three decades now Ethiopia is a landlocked country facing several economic disadvantages caused by the unfortunate loss of two ports which resulted from the independence of Eretria from Ethiopia on May 24, 1993. The author of this article wishes to first dwell upon the economic disadvantages that the nation has faced for more than 30 years and continue with the alternative ports Ethiopia is to access.
Being landlocked implies that Ethiopia lacks direct access to sea routes which the nation used to enjoy for thousands of years. Relying on neighboring countries for access to maritime trade was indeed painstking. This dependence on transit countries can increase transportation costs, transit times, and risks associated with disruptions in trade routes or political instability in transit countries. For Ethiopia Djibouti was the only port which handled the country’s export import transactions.
Landlocked countries often incur higher transportation costs for imports and exports due to the need to transport goods over longer distances via multiple modes of transportation, including roads, railways, and pipelines. These additional costs had continued to reduce the competitiveness of Ethiopian products in international markets and hinder export-led growth.
For several decades Ethiopia has remained more vulnerable to trade barriers, bur bureaucratic delays, and customs procedures imposed by transit countries. Border delays, tariffs, and non-tariff barriers can increase transaction costs and create uncertainties for traders, inhibiting cross-border trade and investment flows.
Without direct access to seaports, Ethiopia relies on neighboring countries’ ports for its import and export activities. This dependence on external ports can constrain Ethiopia’s ability to negotiate favorable terms for port access, port services, and transit fees, potentially leading to higher costs and logistical challenges for Ethiopian traders and businesses.
Landlocked countries like Ethiopia often face challenges related to inadequate transport infrastructure, including roads, railways, and customs facilities. Poor infrastructure and connectivity can hinder the efficient movement of goods and people, impeding economic growth, regional integration, and development efforts.
The landlocked status of Ethiopia has to a certain extent deterred foreign investors from establishing manufacturing facilities or distribution centers in Ethiopia due to concerns about logistics, transportation costs, and supply chain disruptions. Limited access to international markets and higher operational costs can make landlocked countries less attractive destinations for foreign direct investment.
Given the fragile and volatile political, military and economic situation in the Horn of Africa, Ethiopia continued to face the risk of economic isolation if they lack efficient transportation networks and trade linkages with neighboring countries and global markets. Limited connectivity can hinder economic diversification, technological innovation, and participation in global value chains, constraining long-term economic development prospects.
Access to multiple ports provides Ethiopian exporters with greater flexibility in choosing export destinations and accessing diverse markets. This can help expand Ethiopia’s export base, increase export revenues, and promote trade diversification across different sectors.
The development of the corridor fosters closer economic cooperation and integration among countries in the Horn of Africa region. Collaborative efforts to improve infrastructure, trade facilitation, and regulatory frameworks can create a conducive environment for investment, trade, and economic development across borders.
This particular corridor enhances Ethiopia’s maritime security by providing alternative port options and reducing reliance on a single port. This can mitigate risks associated with maritime piracy, political instability, and congestion at key ports, ensuring smoother and more secure maritime trade operations.
Despite these challenges, Ethiopia has been implementing various strategies to mitigate the economic disadvantages of its landlocked status, including investing in transport infrastructure, strengthening regional cooperation, and pursuing trade facilitation measures to improve connectivity and trade competitiveness.
Overall, the Lamu-Djibouti and Berbera Port corridor presents significant economic opportunities for Ethiopia, ranging from trade diversification and cost savings to industrial development and regional integration. By leveraging these advantages and investing in the necessary infrastructure and policy frameworks, Ethiopia can harness the full potential of the corridor to drive sustainable economic growth and prosperity.
Ethiopia will soon end her era of land-locked status and strive and thrive in the world economic competition using her resources for the betterment of the lives of her citizens but still there is more to be done.
Editor’s Note: The views entertained in this article do not necessarily reflect the stance of The Ethiopian Herald
BY SOLOMON DIBABA
THE ETHIOPIAN HERALD THURSDAY 9 MAY 2024
