TRANSPORT & LOGISTICS
Photo: Adobe Stock
Photo: Adobe Stock
Gateway to Northeast Africa
The Port of Djibouti has attracted large investment and is strategically located at the crossroads of one of the world’s busiest shipping routes, linking Europe, the Far East, the Horn of Africa and the Persian Gulf
Northeast Africa encompasses the African countries situated around the Red Sea. The region is located between North Africa and East Africa, and mainly encompasses the Horn of Africa (Djibouti, Eritrea, Ethiopia and Somalia) and the Sudans (Sudan and South Sudan). The combined population of Djibouti, Ethiopia, Eritrea, Somalia and the Sudans is almost 200M people, which accounts for 15% of the continent’s total population. Geographically, these easternmost African countries are strategically located. However, while the economies of Djibouti and Ethiopia are progressing well, Eritrea, Somalia and the Sudans are among the 10 poorest countries in Africa. Road infrastructure and rail networks are also poorly developed, which makes logistics and transport costs expensive and unattractive for private investment. In addition, constant armed conflicts and civil wars in this region have resulted in instability, creating a risky environment for trade and foreign investors. Among these five countries, Djibouti has attracted large port investment, especially from China and the United Arab Emirates (UAE). The Port of Djibouti, located in Djibouti’s capital – Djibouti City www.ofimagazine.com
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The Northeast African nations of Djibouti, Eritrea, Ethiopia, Somalia and Sudan are strategically located as inland gateways but poor road and rail infrastructure, armed conflicts and economic constraints have held back development Fatima Zaharah – is strategically located at the crossroads of one of the world’s busiest shipping routes, linking Europe, the Far East, the Horn of Africa and the Persian Gulf. Investments have also facilitated other infrastructure developments in railways and roads, connecting Djibouti Port to Addis Ababa in Ethiopia. This port has become a trade gateway to land-locked Ethiopia. The services sector is the main GDP contributor in these five countries and accounted for 30-70% of total GDP. Agriculture is the source of livelihood and income for 80% of these populations but the sector is poorly developed, relying heavily on rain but with seasonal drought affecting the progress of farming. Only Somalia is dependent on agriculture as its main source of income, and the sector contributes more than 60% to the economy, with livestock export the main
source of the country’s foreign exchange revenue. In Ethiopia, agriculture contributes 38.5% to the country’s GDP, with coffee exports as the main source of export earnings. Other agricultural products that earn foreign exchange include oilseeds, dried pulses, hide and skin, as well as live animals. The flower industry is also becoming a source of foreign revenue.
Consumption and imports
Djibouti, Ethiopia, Eritrea and Somalia and the Sudans are home to 200M people and their consumption of oils and fats per capita is between 5–9 kg, with total consumption of at least 1.2M tonnes. Ethiopia is the market leader for oils and fats due to its sizeable consumer market. Its 115M population consumes around 500,000 tonnes/year of oils and fats, a relatively low volume as per capita u OFI – FEBRUARY 2022
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