Executive Intelligence Review

FROM EIR DAILY ALERT


Eritrea’s Ports Are Ready To Handle Ethiopia’s Exports and Imports

Aug. 1, 2018 (EIRNS)—Economic integration between Ethiopia and Eritrea is moving quickly, only a few weeks after the normalization of relations between the two former enemies. Eritrea’s two major ports, Port Massawa in the north of the country and Port Assab in the south, announced they have completed preliminary refurbishment and are ready to handle Ethiopia’s import and export cargoes. Before the two countries went to war in 1998, the two ports were the main ports for Ethiopia. For the last 20 years the ports have become almost inactive, handling cargo for a country of only 5 million people that had been under sanctions.

Up until now Ethiopia, landlocked since 1998, with a population of more 100 million people—the second largest on the continent—has been fully dependent on Djibouti. Although a new Chinese-built railway connects Djibouti to Addis Ababa, the Red Sea/Gulf of Aden port is already crowded, hosting the ships of the various navies that patrol the Gulf of Aden and Arabian Sea, including the U.S. and Chinese navies. Djibouti also hosts a free trade and industrial zone which shares the port.

The Eritrean port of Massawa is ideal for handling cargo for northern Ethiopia, where there are new industrial zones being developed, as well as mineral and agricultural resources. An Ethiopian business delegation led by former Prime Minister Hailemariam Desalegn, that went to Eritrea on the first flight to Asmara in two decades, visited the Massawa port.

In the south, Assab Port had been the principal port for Ethiopia and had gone through some development in the years prior to the 1998 war, but had declined since. It also hosts an oil refinery which has remained idle for years.

Addis Ababa University Public Policy Prof. Dr. Costantinos Berhutesfa told the Ethiopian Herald, that Assab can reduce the costs of transporting cargo. He explained that with Ethiopia’s tremendous potash resources in the Danakil Depression, the Assab Port is ideal for its exports and for establishing a potash-processing plant.

Assistant Professor of Development Economics, Dr. Teshome Adugna, told the Herald:

“High transportation cost is one the major setbacks of Ethiopia’s export trade and re-accessing Assab is instrumental in reducing the unit cost of products in the view to penetrate global markets.”

Pointing to the unused refinery, he said Assab would proffer the opportunity to Ethiopia to export processed oil to world market at better prices, once the refinery were renovated.

The only railway in Eritrea is an antique colonial line built more than 100 years ago that runs between Massawa and Asmara, the country’s capital. It still uses the original steam engines and cars. Obviously new railway will have to be developed between the two countries.

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