Djibouti-Ethiopia Corridor: A Gateway to Ethiopia’s trade and beyond

Despite its plentiful banana supply, Ethiopia struggles to sell its produce abroad. The country produced more than 1 million tonnes of bananas in 2019, with some regions now reporting harvests of nearly 1.6 million tonnes in just five months. Yet, over five years, the country earned only $38 million from banana and avocado exports, compared with a $16.7 billion global banana trade in 2025.

Sjoerd H. Visser, an Africa trade & transport corridors expert, shared that production quality is certainly one of the key challenges, followed by inadequate cold-chain infrastructure. “One way to resolve the cold transport issue is to use the Ethiopian-Djibouti Railway (EDR) (rail) reefer wagons to transport the fresh bananas towards the Port of Djibouti,” he added.

At present, the Port of Djibouti handles all goods entering Ethiopia, making the corridor critical and, for now, the country’s primary gateway to global trade, according to Pramod Bagalwadi, CEO East Africa, DHL Global Forwarding.

According to data from the Ministry of Transport and Logistics, Ethiopia transported over 17.57 million metric tonnes of import and export cargo during the 2025/26 fiscal year. Imports stood at 15.93 million metric tonnes, while exports totalled 1.64 million metric tonnes. The Port of Djibouti handled 15.34 million tonnes, or 97% of all cargo moving via maritime routes serving Ethiopia.

Fitsum Abadi Gebrehawaria, Managing Director of Cargo, Kenya Airways, said, “The UAE and Saudi Arabia have become increasingly important trading and logistics partners for East Africa, serving both as destination markets and global transhipment hubs. We are seeing stronger two-way flows, with imports into East Africa and exports of perishables, flowers, fruits, vegetables, seafood and other high-value products moving into Gulf markets.” He added that the Djibouti-Ethiopia trade corridor is one of the most significant links between the MENA region and the African continent, particularly Ethiopia and beyond.

Closer integration between African and Gulf supply chains is opening new opportunities for airlines and logistics providers, shared Abadi.

Bagalwadi said, “We are seeing cargo volumes from the MENA region to Ethiopia increase steadily, particularly following the liberalisation of the economy, and we expect this growth to continue. With volumes increasing, managing efficiency across the existing infrastructure will certainly become more challenging. Additional capacity is therefore needed across both port infrastructure and road connectivity to support future growth.”

“We are seeing cargo volumes from the MENA region to Ethiopia increase steadily, particularly following the liberalisation of the economy, and we expect this growth to continue.”

Pramod Bagalwadi, DHL Global Forwarding

Since Ethiopia is landlocked, shipments arriving through the Port of Djibouti rely on multimodal transport to reach their final destinations within the country and also beyond. Even though the Djibouti–Ethiopia corridor is predominantly a maritime and surface transport corridor, air cargo plays a critical complementary role for high-value, time-sensitive, and perishable shipments.

Abadi said, “Air freight supports sectors such as pharmaceuticals, e-commerce, perishables, electronics and urgent industrial spares where speed, reliability and market access are essential. Kenya Airways is also one of the carriers serving Djibouti and regional cargo flows, strengthening the corridor's global connectivity.”

Ethiopia is currently facing a major infrastructure challenge, particularly with its road network, affecting the movement of cars, trucks and other commercial vehicles, leading to frequent vehicle damage, higher operating costs and, in some cases, serious accidents, according to Dawit Woubishet, Chairperson, Airfreight Institute (AFI), International Federation of Freight Forwarders Associations (FIATA).

Woubishet added that, however, the Ethiopian government has initiated road maintenance and rehabilitation projects, with work now underway to repair damaged sections and improve road conditions. These efforts are expected to make transportation safer and more efficient and support smoother movement of cargo across the country. Another reason he mentioned is the customs procedures. Ethiopia has to deal with two separate customs systems, its own and that of the neighbouring country.

“Sometimes, containers arrive through feeder vessels because the larger mainline vessels do not call at the port directly.”

Dawit Woubishet, AFI, FIATA

Earlier this year, Ethiopia and Djibouti agreed on a joint roadmap to operationalise the Galafi One-Stop Border Post (OSBP), marking a key step in efforts to improve border management and trade facilitation along the Ethiopia-Djibouti Corridor. Located along Djibouti’s National Road 1, which connects to Ethiopia’s A1 highway, Galafi is a critical link between the Port of Djibouti and Ethiopia.

The initiative is expected to eliminate duplication, reduce border clearance times, and improve the predictability of cargo movements. According to the Overseas Development Institute, One-Stop Border Posts across East Africa have reduced border crossing times by 62% to 87%.

Container availability is another challenge that disrupts exports. “Sometimes, containers arrive through feeder vessels because the larger mainline vessels do not call at the port directly. As a result, we have to rely on feeder services to move cargo to the main shipping routes. However, feeder vessels have limited capacity, which can create a significant constraint, particularly when demand increases. This can lead to capacity shortages and delays in moving export cargo,” shared Woubishet.

The European Commission's available data highlight the total trade that passed through Djibouti in 2025. It shows a total trade value of €8.88 billion, comprising €4.21 billion in imports and €4.67 billion in exports. Among Gulf suppliers, the UAE was the third-largest source of imports, valued at €518 million (12.3%), followed by Saudi Arabia as the fifth-largest at €333 million (7.9%).

However, Djibouti’s export trade was overwhelmingly concentrated on Ethiopia, which accounted for €4.04 billion, or 86.4% of Djibouti’s total exports, followed by the UAE at €132 million (2.8%) as the third-largest.

Despite significant infrastructure investments, supply chains still face challenges related to customs coordination, cargo visibility, multimodal integration, cold-chain consistency, and end-to-end predictability.

“The UAE and Saudi Arabia have become increasingly important trading and logistics partners for East Africa, serving both as destination markets and global transhipment hubs.”

Fitsum Abadi Gebrehawaria, Kenya Airways

“Kenya Airways Cargo provides connectivity through Nairobi (JKIA), linking the Horn of Africa to over 40 African destinations and international markets, and can serve as a regional redistribution platform connecting cargo originating from Djibouti and Ethiopia to destinations across East, Central, Southern and West Africa through Nairobi,” said Abadi.

As the Djibouti-Ethiopia trade corridor continues to underpin Ethiopia’s access to global markets, strengthening its road, rail, maritime and air connections will be critical. Improving cold-chain reliability, customs coordination and multimodal integration could help the corridor support higher-value exports and unlock Ethiopia’s wider agricultural trade potential.