Addis Fortune (Addis Ababa)
Tamrat G. Giorgis
14 July 2008
The reaction from the Ethiopian government was prompt, revealing the gravity of the matter; Girma Birru, minister of Trade and Industry, left for Djibouti last Wednesday, July 9, in order to persuade Djiboutian authorities to reconsider the tariff adjustment announced last week by DP World-Djibouti. He stayed there for a night, and met Ismael Omar Guelleh, president of Djibouti.
DP World, a management company in charge of running the port's operation, said last week it will apply new set of tariff rates in all services at the Port, beginning mid-August 2008. in effect, this will have an increase of 15pc on container handling and stevedoring, as well as reduce the free storage period from 15 to eight days, two of the most critical areas for Ethiopia's import and export businesses.
The port's management has attributed the increase on various forms of port dues to a soaring cost on fuel, increased by 350pc, and headline inflation of 19.2pc in Djibouti, as well as additional investment in acquiring equipment.
Authorities here were not happy because they felt Djibouti failed on its promises of communicating its intention to adjust tariffs two months in advance.
"I didn't expect them issue announcement for distribution here and in Djibouti," said a senior negotiator for the Ethiopian government. "They ought to send us the adjusted prices, together with a covering letter inviting us for discussion."
It was this sort of discussion held between Minister Girma and President Guelleh last week. The President has assured Girma that his government would not let the new tariff applied on Ethiopia before agreements are reached on adjusted prices, reliable sources disclosed to Fortune.
A trade delegation will soon travel to Djibouti to negotiate the proposed increase on tariffs, after a technical committee under the auspices of the Ministry of Trade and Industry (MoTI), formed two weeks ago, finalize its impact assessment. The committee comprises members from four federal agencies: the Ministry, Customs Authority, Maritime Transit Enterprise (MTS) and the Ethiopian Shipping Lines (ESL).
"We have got a pretty good idea about how much additional burden this would put on our economy," said a member of this committee.
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