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Ethiopia fuel squeeze and Djibouti's continued economic importance

Ethiopia fuel squeeze and Djibouti's continued economic importance


For a populous nation as Ethiopia – on record as Africa’s second biggest only behind Nigeria, imports are as important to its economic growth as are the goods it also exports – chief amongst them, coffee.

Ethiopia is, however, landlocked with five neighbours who have access to the sea – Sudan, Kenya, Djibouti, Somalia and Eritrea.

As things stand now, Djibouti handles roughly 95 percent of all inbound trade for Ethiopia, a nation of 105 million and an economic power in East Africa.

One of the first significant steps Prime Minister Abiy Ahmed took when he assumed the premiership in April 2018 was to acquire stakes in ports in neighbouring countries.

His trips to Kenya and Sudan saw the respective government report of port deals with the Lamu and Port of Sudan respectively. Then came the peace deal with Eritrea in July 2018.

The normalization of all relations between the two former enemies also brought to the fore the economic impact of the July 9 peace deal which gives Ethiopia access to Eritrean ports.

At the time it questioned how long Djibouti’s ports will be to Ethiopia when especially the Eritrean route becomes active. Many economic watchers said it will take some time for the dependence on Djibouti to ease.

That reality shot to the fore earlier this week when the Ethiopian capital Addis Ababa almost run out of fuel because a road connecting Ethiopia and Djibouti had been blocked – blocked by protesters.

A Reuters report notes that the blockade which happened in the northeastern Afar region had been resolved. Protesters’ action had beyond affecting the roads also affected operations of the Ethio-Djibouti rail, local media reports noted.

The blockade of the highway linking the two neighbours followed the latest deadly clashes between ethnic Afars and Issa Somalis, who are a minority in the area, which broke out in December. Locals say dozens have been killed.

Afar elders said the attacks were an attempt to tear areas inhabited by Issas away from the region. An Afar rebel group said the attacks were supported by ethnic Somalis from Djibouti and Somalia.

Protesters were demonstrating against violence and a government order for local militias to pull out from disputed areas and be replaced by federal soldiers.

“The region’s leadership, local elders held discussions that resulted in a solution and the end of the blockade,” federal police spokesman Jeylan Abdi told reporters. A witness in the area confirmed the measure.

The resolution means that Addis Ababa’s fuel supply will return to normalcy as would the import and export of essential supplies via the sea route.

Djibouti, the Horn of Africa’s smallest, nation will thus maintain its economic importance to the most populous nation – at least for the time being as other sea routes are developed.

A fact that underscores a recent tripartite measure by Somalia, Ethiopia and Eritrea to hasten the prospect of economic integration and human development efforts. Watchers say it is only a matter of time before Djibouti especially is invited on board.

PM Abiy has since last year undertaken so many hitherto unbelievable reforms across the social strata but the government admits that insecurity is a viable threat to the reform agenda.

The country has been gripped by ethnic violence since last year, which resulted in the displacement of nearly 3 million people. The most hit region being Oromia.

Critics of the Prime Minister say his political reforms have allowed dormant ethnic rivalries to resurface in Africa’s second most populous nation. This year is seen as equally important as it leads into 2020 when polls are expected to be held.

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