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[Source: NUSACC's U.S.-Arab Trade Outlook 2013]
This strategically located country in the Horn of Africa has long provided critical transit services at the crossroads of the busiest shipping routes between Europe, the Far East and the Arabian Gulf. Burgeoning traffic from the Port of Djibouti’s biggest client – landlocked Ethiopia – has launched plans to build a new cargo port on the other side of the straits of Tadjoura. Capital will be provided by the Arab Fund, the Kuwait Fund, and the Saudi Arabia Fund, as well as from the African Investment Bank. Eighty-five percent of the Djibouti Container Terminal’s traffic is handled for Ethiopia.
Currently, Ethiopia Railway Corporation’s single, century-old 423-mile line connects the Ethiopian capital of Addis Ababa with the port in Djibouti City. Ethiopia and the Export and Import Bank of China agreed to set aside $336 million each year in their 2011-2015 budgets in order to add 3,000 miles of additional rail lines. This will link eight new regions of Ethiopia to Djibouti’s ports.
Dubai Ports International has held a 20-year lease for the Port of Djibouti since the year 2000. Ethiopia has paid port fees of more than $700 million per year since 2008.
The United States and Djibouti have signed bilateral aid agreements covering health, education, democracy and good governance. Additional support from the U.S. Agency for International Development (USAID) to reduce malnutrition increased the package to a total of $11 million.
“These agreements are a testimony to the positive changes taking place in Djibouti,” noted U.S. Ambassador James Swan. “The improved health and education indicators being tallied in this country are a direct result of the effective partnership between the Government of the United States and the Republic of Djibouti, and between the citizens of these two great nations. I look forward to seeing continued progress in the coming year.”
The U.S. military currently has 1,800 personnel stationed at Camp Lemonnier outside the capital. This presence is likely to grow. U.S.-based PAE Government Services recently won a $10 million contract for facility construction in Djibouti from the U.S. Navy.
U.S. Africa Command (AFRICOM) headquarters focuses on war prevention in 53 African countries. AFRICOM is currently based in Germany, but Djibouti is emerging as one of the most important host nations for U.S. security initiatives in the region.