A logistics authority called the Djibouti Corridor Authority (DCA) and a One Stop Border Post development project will be developed jointly by Djibouti, Ethiopia, South Sudan and Sudan. The authority will aim to accelerate economic activity in the region and facilitate the transit of goods and passengers between the four countries.
Customs officers located at the borders of member states are also to improve customs transit procedures and the implementation of joint customs controls. Additionally, the DCA will enable mutually advantageous business partnership between member states. The cost effective system deployed by the authority will encourage the implementation of ongoing bilateral projects. The DCA is forecast to be in operation by the end 2015.
The move towards further integration was the brainchild of the Common Market for Eastern and Southern Africa (COMESA), which also drafted the regulations that will govern the DCA. The idea behind the agreement was the development of the Djibouti transit corridor in order to benefit all member nations. The formation of the sub-regional authority has the potential to provide an efficient and active transportation route for the movement of goods by land and sea between the four countries.
The agreement between these four countries and its eventual implementation has the potential to expand trade and open up economic potential for currently underserved and remote areas. When functional, the DCA has the prospective to change the face of logistics, maritime and road transport in the region and transform the way business is conducted. It also offers the possibility of reducing hostilities within and between countries. For example, the fact that South Sudan and Sudan have signed an agreement on cross border trade is good news in and of itself. Relatedly, a viable trade corridor reaching from Juba through Gambela and Addis Ababa in Ethiopia and onward to Djibouti as well as the reverse route has the potential to be a game changer within South Sudan. Geopolitically, South Sudan’s current conflict stems partially from its isolation and lack of trade options. While the conflict is more complicated than this, the fact remains that if the DCA is implemented and functions as envisioned – and that is a big if – it may have a calming effect on South Sudan. Offering Juba the option to ship goods and material via countries other than Kenya such as Ethiopia and Sudan should also provide further room for development and bring much needed capital into South Sudan.
The DCA would be an alternative transport and trade route to that envisioned by the more southerly Lamu Port-Southern Sudan-Ethiopia Transport (LAPSSET) Corridor. As the name suggests LAPSSET is a massive transport and infrastructure project that will eventually connect Kenya with South Sudan and the wider East Africa region with its terminus at the Port of Lamu, which is currently under construction. The DCA would also offer alternative shipping points to Mombasa, by utilizing Djibouti Port and Port Sudan. Interestingly, a reduction in shipping costs may also be likely for ships utilizing these more northerly ports. This is due to the fact that calls made at the Port of Djibouti on shipments coming via the Suez Channel will modify transit time, reduce the risk of piracy and therefore greatly reduce insurance costs attached to the same shipments.
Draft regulation for the DCA was proposed by delegates from the four countries in late June 2015 in Addis Ababa. The draft document states that member countries should grant each other the right of transit in order to facilitate the movement of goods throughout the region. In particular, the draft document makes it clear that the DCA is envisioned as an efficient and cost effective trade route that will serve as an alternative route for member countries and will be available to imports and exports from corridor member states. Ministers from the four countries also approved a work program and funding mechanism for the DCA to be signed by September 2015. Both Djibouti and Ethiopia are interested in hosting a proposed DCA secretariat.
Amidst all the good news a note of caution is in order. Another similar organization, the Northern Corridor Transit and Transport Coordination Authority (NCTTCA), was established in 1985 in eastern and central Africa by five countries: Burundi, Democratic Republic of Congo (DRC), Kenya, Rwanda and Uganda. However, given implementation problems and continued trouble in DRC, other organizations such as the East Africa Community (EAC) have been formed since then that have superseded the moribund NCTTCA in order to integrate trade and the movement of goods and peoples in eastern Africa. For this and other reasons, questions about the efficacy and viability of the DCA remain.
South Sudan and Sudan present the biggest problems given high levels of insecurity in both countries and the lack of government control in certain regions. Yet both Sudan and South Sudan would also potentially be the DCA’s biggest beneficiaries should the authority actually be implemented.
What is not in question is Ethiopia’s desire to develop its own trade and commercial potential in the country’s west and southwest. The government in Addis Ababa likely views the DCA as a necessary step toward development of these regions and may shoulder many of the costs associated with the authority. Additionally, Addis Ababa may cajole member countries who lag behind in the implementation phases, though how much pressure can be exerted on South Sudan is anyone’s guess. Regardless, the DCA represents symbolic potential and may prove to be as important to the region as the planned LAPSSET corridor, another massive infrastructure and trade project that is still in the implementation phases.