In a significant milestone for regional trade, Ethiopia received its inaugural shipment of fertilizer through Kenya’s Lamu Port on Monday. The vessel, MV Abbey II, owned by the Ethiopian Shipping Line, docked at the port with an impressive cargo of 60,000 tons of fertilizer. This shipment marks the largest amount of fertilizer ever to arrive in Kenya on a single ship, according to the Managing Director of the Kenya Ports Authority (KPA).
The decision by the Ethiopian government to utilize Lamu Port comes after years of negotiations with Kenya and amidst escalating tensions in the Red Sea between Yemeni Houthi fighters and Western/American forces. These geopolitical challenges have prompted Ethiopia to explore alternative trade routes to secure its import and export activities.
Lamu Port, a key component of Kenya’s infrastructure expansion efforts, has been steadily increasing its capacity and throughput. In 2022, the port handled 6,539 metric tons of cargo, a figure that jumped to 37,576 metric tons in 2023. Container traffic has also seen a significant rise, with twenty-foot equivalent units (TEUs) increasing from 382 in 2022 to 1,779 in 2023, highlighting a remarkable growth trajectory.
The use of Lamu Port by Ethiopia is part of a broader strategic initiative under the LAPSSET (Lamu Port-South Sudan-Ethiopia-Transport) Corridor, an ambitious regional flagship project agreed upon by Ethiopia, Kenya, and South Sudan in 2016. The LAPSSET Corridor aims to establish robust transport and logistics infrastructure to enhance connectivity between these Eastern African nations. By linking a population of 160 million people across the three countries, the project is poised to significantly boost economic integration and development in the region.
Kenya has actively encouraged Ethiopia to use Lamu Port by offering a range of incentives designed to reduce overall shipping costs. These incentives include waived port fees and extended free storage periods at Lamu, making the port a more attractive option for Ethiopian traders.
The historical reliance of landlocked Ethiopia on Djibouti’s ports has been a critical aspect of its trade strategy. However, recent developments indicate a shift towards diversifying port usage. Last year, Ethiopian Prime Minister Abiy Ahmed asserted Ethiopia’s natural right to access the sea, a statement that was met with rejection from Eritrea, Somalia, and Djibouti. Despite this, Ethiopia has continued to strengthen its logistical links with Djibouti, recently taking over the management of the Ethiopia-Djibouti railway with support from China.
In January of this year, Ethiopia signed a controversial Memorandum of Understanding (MoU) with Somaliland to establish a naval base and utilize the Berbera port. This MoU, which reportedly includes elements of recognizing Somaliland’s autonomy, faced strong opposition from Somalia. The political complexities surrounding this agreement have slowed its implementation, but Ethiopian officials have consistently emphasized the importance of diversifying their port options to reduce dependency on Djibouti.
The strategic use of Lamu Port is a significant step in this diversification effort. It not only provides Ethiopia with an alternative trade route but also strengthens economic ties between Ethiopia and Kenya. The successful handling of such a large fertilizer shipment sets a precedent for future trade activities through Lamu, positioning the port as a viable hub for regional commerce.
Ethiopia’s move towards utilizing Lamu Port is part of a broader strategy to enhance its maritime access and reduce logistical bottlenecks. This shift is particularly crucial given the ongoing geopolitical tensions and the need for secure and reliable trade routes. By leveraging Kenya’s expanding port infrastructure, Ethiopia aims to bolster its economic resilience and ensure the uninterrupted flow of essential imports like fertilizer, which is vital for its agricultural sector.
The LAPSSET Corridor, once fully operational, will further solidify this strategic partnership, providing a comprehensive transport network that benefits not only Ethiopia but also its regional neighbors. The corridor’s potential to facilitate the seamless movement of goods and people will drive economic growth and integration, contributing to the stability and prosperity of the entire region.
In conclusion, Ethiopia’s first use of Kenyan Lamu Port for a major fertilizer shipment represents a significant development in regional trade dynamics. It underscores Ethiopia’s proactive approach to securing alternative trade routes amid geopolitical uncertainties and highlights the growing importance of Lamu Port in East Africa’s economic landscape. As the LAPSSET Corridor progresses and regional cooperation deepens, the benefits of such strategic initiatives will become increasingly evident, fostering a more interconnected and resilient Eastern Africa.