Over 300 million population residing in the Horn of Africa region (HoA) could benefit as Ethiopia secures access to the sea, says a political analyst.
The quest for owning a port for Ethiopia has topped political agendas beyond the HoA region. Once, Ethiopia had owned extensive coastal territory and vast access of ports in the Red Sea with its naval force. But, due to several unfortunate internal and external circumstances they became lost opportunities.
In this regard, there are credible reasons for Ethiopia to put forth and press hard for the ultimate goal.
Lawrence Freeman, a political-economic analyst for Africa with thirty years of experience, suggests “Ethiopia needs a reliable seaport and a navy!”
In his article, Freeman dictates, “Ethiopia’s economic case for reliable and cost-effective seaport access is strong. Foreign trade currently amounts to 24% of GDP, and needs to grow by orders of magnitude. With an annual output of US$127bn, Ethiopia is already Eastern Africa’s biggest economy (Kenya is second at US$113b), but with lots of low-hanging opportunities for even bigger trade-driven output.”
Taking its biggest economy, being the second largest population in Africa and for it is nearest to the Red Sea, Ethiopia should build a reliable navy and seaport in order to ensure its economic growth.
One has to bear in mind that, Djibouti’s cut stay of cargo days from 45 to 8 days, which is expensive relative to neighbors, coupled with lack of enough storage space among other factors are currently the motivation behind Ethiopia’s aggressive port claim and diversification initiative which initiated many experts to state their reflection.
Freeman indicates, Ethiopia has significant leverage over Djibouti as it is Djibouti’s leading revenue generator, ahead of the naval base leases by China, France, the United States, Saudi Arabia, Italy, and Japan.
Ethiopian trade reportedly generates more than US$1b each year for the Djiboutian economy. Rents from foreign military bases estimated to be at least US$120m per year.
In his article “Ethiopia Access to Seaports Benefits All People of East Africa” Freeman stated “over the last decade Ethiopia has quintupled its industrial output and is quickly catching up with its regional neighbors. If these trends are to continue and if Ethiopia is to attract both domestic and foreign investments into its manufacturing sector, the state must guarantee investors that they will be able to access global markets at reasonable prices. The same goes for investments in the agricultural sector, which still has a commanding share of exports. Agriculture accounts for nearly 38% of GDP (including 50% of manufacturing production), 80% of employment, and about 90% of forex earnings.”