Plans for the establishment of a Management Authority for the Ethio-Djibouti corridor seem to become more concrete

An Ethiopian delegation led by the Ethiopian Maritime Authority held on 8 June 2023 a meeting with the Djibouti Ports & Free Zones Authority to advance plans for the establishment of the Ethio-Djibouti Corridor Management Authority along the road that connects Addis Ababa to Djibouti via the border post of Galafi. On 22 November 2021, the Ministers of Transport of Ethiopia and Djibouti signed an agreement for establishing a Corridor Management Authority (CMA) to oversee and coordinate operations and identify bottlenecks along the Ethio-Djibouti corridor.

The proposal of establishing such authority was made for the first time by UNCTAD in a workshop held from 2 to 3 November 2016 in Djibouti, where delegates from the two countries, on a proposal from UNCTAD, agreed to launch an exercise aimed at examining best practices in terms of establishing a Corridor Management Authority and make recommendations on what model should be followed for the Ethio-Djibouti corridor. This was followed by the publication, in 2018, of a report where UNCTAD provided some insights regarding the mandate, composition, and sources of financing of such an agency.

In 2022 TradeMark East Africa (now TradeMark Africa) tried to turn this project into reality, as a part of a program aimed at improving the coordination of activities and trade along the Djibouti-Addis Ababa corridor funded by the European Union with a 30-million-euro grant. Within such a program, a proposal was elaborated on the steps to be taken to establish and operationalize such an authority. However since then, the two countries have not managed yet to reach an agreement on where the Secretariat of the CMA will be established, despite the establishment by the two countries in May 2023 of a Joint Technical Committee to develop the institutional arrangements that will guide its operations and a roadmap for its creation.

Another aspect that remains unsolved is the financial sustainability of the CMA.

As noted by the African Development Bank in the Sustainable Market Access for African Road Transport (SMART) report, as the operation and management of CMAs are particularly costly, the survival of such authorities can be jeopardized in those corridors connecting only a few countries (like in the case of the Ethio-Djibouti corridor, that only connects two States). In fact, also when established with the initial support of international financial institutions or donors, adequate funding options need to be allocated for guaranteeing their survival over the medium-long term, the report notes. The funding options of CMAs generally include contributions by Governments (a solution that in Africa, in most cases, is not feasible, due to the limited financial budget resources of African States) or usage fees or traffic-based fees (e.g., tonnage levies) to be charged on corridor users using the different sections of the corridor. The last solution, however, if implemented by only two countries, can make particularly expensive the use of the corridor, with the risk that truck drivers will opt for other, less expensive, routes to avoid the payment of these charges.