Ethiopia and Djibouti Move to Link Key Ports to Railway

Ethiopia and Djibouti

Ethiopia and Djibouti have agreed to connect several of Djibouti’s most important ports directly to the Ethio-Djibouti Railway by late 2026, a move officials hope will make trade faster, cheaper and more reliable for a country that depends heavily on its neighbor’s coastline. The decision, reached during a joint railway commission meeting in Djibouti earlier this month, marks a renewed effort to strengthen the rail corridor that serves as Ethiopia’s primary gateway to global markets.

For Ethiopia, which has no direct access to the sea, the railway is more than just infrastructure. It is the country’s economic lifeline, carrying imports such as fuel and fertilizer and supporting exports that sustain its growing economy. Officials from both nations agreed to accelerate plans to extend rail connections to the Doraleh Multipurpose Port and an oil terminal operated by Horizon Djibouti Terminals Limited. At present, only one container terminal at Doraleh is directly connected to the rail network, leaving other facilities reliant on trucks to move cargo.

The push for stronger rail links gained urgency following a recent visit by Ethiopia’s prime minister, Abiy Ahmed, who emphasized the efficiency and cost savings that rail transport can offer. Ethiopian officials are particularly focused on improving the flow of essential imports, such as fertilizer, which plays a crucial role in supporting the country’s agricultural sector. Shifting more cargo from road to rail is expected to reduce transport costs and ease pressure on crowded highways.

The agreement also includes plans to connect the railway to the emerging Damerjog port complex, located south of Djibouti City. The site, which includes a liquid bulk terminal designed to handle fuel shipments, is expected to play an increasingly important role as Ethiopia’s energy needs continue to grow. Ethiopian officials have expressed interest in using the facility to expand storage capacity and ensure a more stable fuel supply. Currently, hundreds of trucks transport fuel daily from existing depots in Djibouti to Ethiopia, a system that has become strained as demand rises.

To support the expansion, the railway operator plans to build a 17-kilometer extension linking the Damerjog terminal to the existing rail line, allowing fuel to be transported directly into Ethiopia. The project is estimated to cost about $90 million and would significantly improve efficiency by reducing the need for truck transport.

The broader effort reflects a shared interest between Ethiopia and Djibouti in strengthening their economic partnership. Djibouti’s ports handle the vast majority of Ethiopia’s international trade, making reliable transport connections essential for both countries. By expanding rail access to additional ports and industrial zones, officials hope to create a more seamless logistics system capable of supporting rising trade volumes.

For Ethiopia, the railway represents a long-term investment in economic stability and independence. By improving access to fuel, fertilizer and global markets, the expanded network is expected to reduce costs, improve supply chains and reinforce the corridor’s role as the backbone of the country’s trade. For Djibouti, the project strengthens its position as one of Africa’s most important shipping hubs, a role that continues to grow as regional economies expand and infrastructure improves.