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Djibouti opens three ports in two months

THE opening of three new ports over the past two months is bolstering Djibouti’s efforts to increase its share of transit and trans-shipment traffic in East Africa.

In May the $590 million Doraleh Multipurpose Port was officially inaugurated on schedule after two years of construction, following major expansion works by the China State Construction Engineering Corporation. The upgraded port, which was backed by the Djibouti Ports and Free Zone Authority (DPFZA) and state-owned China Merchants Port Holding, has a total annual capacity of 8.8 million tonnes, spanning 690 ha with 15 berths, each of which is 1.2 km in length.

The following month saw the opening of the $90 million Tadjourah Port. Located in the Gulf of Tadjourah, the 30 hectares (ha) port includes a facility for handling 200 tonnes per hour of potash – a key Ethiopian export. The port’s other facilities include two linear quays of about 435 metres long and a 190-metre roll-on/roll-off terminal.
Aboubaker Omar Hadi, chairman of the DPFZA, told the media that longer term, the port would have the capacity to handle 35 percent of all goods heading for Ethiopia. ‘This makes Tadjourah not only significant for Djibouti but the wider region,’ he said in June.

Just one week after the Tadjourah facility became operational, the country also formally opened the $64 million Goubet Port. Built by China Harbour Engineering Company, the mineral port will enable Djibouti to export salt and gypsum deposits from Lake Assal. Djibouti is targeting exports of 6m tonnes of salt annually from the port, which is located some 40 km south of the Gulf of Goubet and has the capacity to berth vessels of 100,000 deadweight tonnage.
The next phase of Djibouti’s port project pipeline involves the construction of the $640 million, 645-ha Doraleh International Container Terminal, which is expected to be operational by 2020 and will be run by the Port of Djibouti and China Merchants Port Holdings.

Djibouti’s location provides easy access to many of Africa’s fastest-growing frontier markets – including 95 million-person Ethiopia, which relies on Djibouti for more than nine-tenths of its external trade – and has been one of the primary factors underpinning China’s interest in its transport infrastructure.

The country also lies on the route of about 60 percent of global maritime traffic, – including major shipping lanes between Europe, the Middle East and Asia – and at a critical junction on the Maritime Silk Road, the sea segment of China’s ambitious, multibillion-dollar transport corridor project.

As a result, China has been investing heavily in Djibouti. In addition to helping finance and build the recently opened port facilities, plans also include creating new warehouse and office space alongside the Djibouti Free Trade Zone. China Merchants Port Holdings is set to lead construction on the $7bn, 10-year project, having signed a 2015 agreement with the DPFZA.

The infrastructure spending has borne fruit. The country jumped 20 places in the World Bank’s Logistics Performance Index between 2014 and 2016, for example, moving up from 154th position to 134. Capital investment in Djibouti’s ports was also listed as a key driver of the economy this year in the government’s budget, in which it predicted a GDP growth rate of 7 percent – up from 6.5 percent last year.

However, competition for maritime traffic from other regional players is on the rise, particularly as Ethiopia – with a GDP growth rate of around 8 percent as of 2016, according to the IMF – looks to increase its access to the sea. In April, for example, it secured 19 percent access and usage rights at Somaliland’s Berbera Port in northern Somalia.
Nearby Kenya and Tanzania are also both investing billions into upgrading and inaugurating new ports, with the objective of expanding their share of transit and trans-shipment trade to regional markets.

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