Thriving textile industry in Ethiopia promises good things – including for Hapag-Lloyd

To date, Africa has never really played much of a role in global trade. But that’s changing in some countries – and one of them currently stands far ahead of the pack. Ethiopian Prime Minister Abiy Ahmed, who has been in office for several months, has already radically transformed his country at a breath-taking pace. The recently signed peace treaty with Eritrea will stabilise the entire region politically and thereby also economically. For Maneesh Goel, Director of Sales & Marketing in Hapag-Lloyd’s Red Sea & Pakistan Area, Ethiopia is already today a politically stable country again. And, Goel says, the new prime minister “is opening the doors now to new business opportunities.” The country has much to offer. With economic growth of 7.6 percent, Ethiopia is already the undisputed leader in East Africa.

Yet another benefit of the peace treaty with Eritrea is that Ethiopian importers and exporters will soon be able to use its northern neighbour’s seaport of Assab again. By the end of the 1990s, Ethiopia was transacting about two-thirds of its total foreign trade through Assab. In fact, disputes regarding the use of the port were one of the main reasons the two countries went to war. Exports could soon become much easier and cheaper, as the port lies on the most important trade route between Europe and Asia.

Hapag-Lloyd, Goel notes, is also interested in “becoming more active in this region – including in Eritrea”. However, not much is going on yet in Assab. But Maersk and Singapore-based PIL ships sailing are already making regular calls at the Port of Massawa in Eritrea.

So far, most imports and exports have travelled on the 750-kilometre railway line built by the Chinese between Addis Ababa and the small state of Djibouti, which had positioned itself as a transhipment centre for the Suez Canal route for all Ethiopian foreign trade. Hapag-Lloyd calls at the port twice a week as part of its Indian Ocean 2 (IO2) and Red Sea Feeder (RS5) services. In addition to Dubai-based Hakan Agro, the group of companies owned by Belayneh Kindie is one of the largest customers. The former professional officer is one of Ethiopia’s most famous and wealthiest businessmen. His is a story of rags to riches. Kindie got his start exporting butter and honey in the early 1990s. Today, his group of companies is building refineries, he holds equity stakes in several private banks, and he is involved in agriculture on a massive scale. The businessman sees the still very restrictive foreign exchange regulations in his country as a major obstacle to growth and one that could scare off investors.