Ethiopia signs agreements for Red Sea access.
Sudan and Ethiopia have agreed that Ethiopia should invest in the development and administration of Port Sudan, Sudan’s principal port on the Red Sea.
The agreement, made at the beginning of May, comes shortly after Ethiopia signed a deal with Djibouti to invest in Port Doraleh about 5 kms north west of port Djibouti.
Djibouti is looking for investors since it acrimoniously terminated its 30-year concession with Dubai’s DP World, one of the region’s largest port operators, to operate Port Doraleh. China, which already has a naval berth in Doraleh, is also looking at the possibility of investing in the facility.
About 70 per cent of Ethiopian trade goes through Djibouti’s ports. This is likely to increase following the inauguration in January 2018 of the new standard gauge Addis Ababa-Djibouti railway.
But Ethiopia is anxious to decrease its reliance on Djibouti and is also looking at other ports in the region. Berbera in Somaliland is also ripe for investment and has the advantage of being Ethiopia's nearest outlet to the Red Sea. Berbera is managed by DP World and is therefore destined to become more important since the Dubai company has been turned out of Djibouti. At the beginning of March Dubai, Ethiopia and Somaliland signed an agreement for the development of the port.
Access to the Red Sea has been a vital part of Ethiopian foreign policy since it became landlocked after Eritrean independence in 1993. Isolating Eritrea is also part of Ethiopian foreign policy, hence agreements with its surrounding countries.
Ethiopian investment in the ports of Sudan and Berbera is also seen as a way to undermine Djibouti’s dominance of Red Sea ports.