Ethiopia seeks economic union with neighbours

The regional tour by the Ethiopian prime minister that took Dr. Abiy Ahmed to Djibouti, Sudan and Kenya demonstrated the extent of the country’s thirst for access to sea water.

The chief of staff in the Ethiopian prime minister’s office, Fitsun Arega explained that Abiy’s visits to Ethiopia’s neighbours were geared towards creating a meaningful economic union.

‘‘Djibouti, Ethiopia, Kenya and Sudan will now work towards a true economic union with joint investments and ownership of projects because our people’s shared prosperity and security depends on it,’‘ said Fitsun told The EastAfrican newspaper.

Ethiopia signs more port deals

Abiy made his first foreign trip as prime minister to Djibouti where he met president Omar Guelleh and the two leaders reached a deal for Ethiopia to take a stake in the Port of Djibouti.

The port currently handles up to 95% of inbound trade for landlocked Ethiopia. The desire to cut reliance on this port, reduce congestion and cut costs is thought to be the reason behind this move to invest in the region’s ports, roads, railways and aviation projects.

Djibouti had been seeking investors for its port since it terminated Dubai’s state-owned DP World’s concession to run the port two months ago, citing a failure to resolve a six-year contractual dispute.

Ethiopia would give Djibouti the option of taking stakes in state owned Ethiopian firms including the lucrative Ethiopian Airlines.

The deal with Djibouti followed Ethiopia’s agreement to acquire a 19 percent stake in the Port of Berbera in the breakaway Somali region of Somaliland.

Port Sudan and the Ethiopian Dam

Abiy then headed to Sudan where he and president Omar Hassan al Bashir agreed a deal that will allow Ethiopia to have a stake in Port Sudan.

“The leaders of both countries agreed to develop Port Sudan together,” said Meles Alem, spokesman of Ethiopia’s Foreign Ministry.

The two leaders also agreed to develop the border town of Assosa including building a new railway line to facilitate movement of goods and people between the two countries.

Sudan also announced that it would back Ethiopia’s construction of a $4billion dam on the Nile, which when completed will be Africa’s largest hydropower station.

Reviving the Lamu Port deal in Kenya

From Sudan, Abiy went to Kenya at the invitation of president Uhuru Kenyatta. Abiy revived a deal with the East African nation over Lamu port, where it will set up a logistics facility.

“The Kenyan side will facilitate the formal acquisition of land at the Lamu port to be given to the Ethiopian government,” read a joint statement after the state visit.

Ethiopia and Kenya who enjoy an elevated bilateral relations status will work on joint projects including railways and roads including developing the border town of Moyale into a joint city and economic zone.

The two countries also agreed to finalise the Ethiopia-Kenya interconnection transmission line, and to jointly supervise and inspect the Lamu-Garissa-Isiolo-Moyale and Moyale-Hawassa-Addis Ababa road networks.

The longest port Ethiopia could easily benefit from is that of neighbouring Eritrea but a diplomatic row has meant that relations between the two remain strained since Eritrea gained independence in the early 90s after a long armed struggle.

Abiy in his inauguration speech pledged to improve relations between the two countries, in another indication that economic benefits would take priority over geopolitics