Djibouti's economy hit hard by war in Ethiopia

Geo-Politics Africa
1


Tuesday November 23, 2021

The government of Djibouti says the year-long war in neighbouring Ethiopia has had a drastic impact on its economy.

Over 90% of Ethiopia’s goods pass through the port of Djibouti and both nations have invested billions of dollars to build a trade corridor including a rail link.

Djibouti’s Finance Minister, Ilyas Moussa Dawaleh, told the BBC that due to the conflict trade had reduced to about 20% of what it was. He said the country had lost $1.7bn (£1.3bn).

Tigrayan rebels have recently been trying to seize towns in the Afar region - a move that appears to be an effort to cut off Ethiopia’s vital trade link with Djibouti.

2

By my estimate (which could be wrong), that would mean they were making roughly 2 billion on the corridor when the trade was normal. The Berbera corridor will also continue to eat into their share too as it reaches completion. Either way they will soon feel the pain of not diversifying their economy when the going was good.