New Business Ethiopia
Thursday July 30, 2020
The Governments of Ethiopia, Kenya, Rwanda and Djibouti are advised to co-manage Djibouti Port operations to address the logistics challenges importers and exporters from Ethiopia are facing at the moment.
The advice is made by Gizeshwork Tessema, the founder and CEO of Gize PLC, one of the leading logistics company in Ethiopia. Referring to the recent study by the German development agency – GIZ – she urged the government of the two countries to setup a joint coordination desk, which addresses issues such as Ethiopian track drivers and logistics companies are currently facing.
Because the management of Port of Djibouti are not fully aware of the challenges Ethiopian transistors are facing at the port, doing business for the companies like Gize PLC has been a nightmare. She stated that if the two countries closely work and co-manage the operations at the Port, most of the problems companies in engaged in the logistics sector could have been resolved.Gizeshwork Tessema also suggested that experienced logistics companies in Ethiopia can also provide necessary trainings for Djiboutian employees to address some of the human resource gaps in handling efficiently their operations. Reports show that Djibouti has been investing on development of ports to serve mainly its 110 million population neighboring landlocked country – Ethiopia.
In an exclusive interview with NewBusinessEthiopia.com Gizeshwork also indicated that access to foreign currency often required by transistors in advance (before invoice) has also been the major challenge companies like Gize PLC are facing. She stated that such issues can also be resolved when the political leadership of the two countries work together.
Until 1998 Ethiopia was using the Assab Port of Eritrea. Meanwhile, following the war between Eritrea and Ethiopia from 1998 to 2000, the latter is forced to fully rely on Djibouti Port for its external trade. Some experts say that Ethiopia pays Djibouti about $2 billion per year for the port services.
As a result, Djibouti has hugely invested in specialized ports such as, for handling containers, liquid and containerized products to serve the growing market of Ethiopia and even serve other land locked countries through Ethiopia such as South Sudan. Using mainly the Djibouti Port, Ethiopia imports on average around $16 billion worth goods and exports around $3 billion every year.