Landlocked Ethiopia is set to build an office in Lamu, giving the clearest indication yet of its intention to shift some of its logistics undertakings to the Kenyan coast.
The Kenyan government has committed to set aside some land to enable Ethiopia set up the logistics facility.
“The Kenyan side will facilitate the formal acquisition of land in Lamu Port given to the Ethiopian government,” states a joint communique issued after bilateral talks between President Uhuru Kenyatta and Prime Minister Abiy Ahmed Ali on Monday.
“The Ethiopian side reiterated its commitment to develop the land for logistics facilitation.”
At the moment, Ethiopia has mainly relies on the Port of Djibouti for sea link to the rest of the world after the 1992 independence of Eritrea cut its Red Sea connection and rendered it landlocked.
Unlike Kenya whose territorial Indian Ocean waters cover about 128,015 square kilometres but does not have a single merchant ship, Ethiopia has more than a dozen state-run seagoing vessels.
Its drive to shift part of its sea-based transport to Kenya implies that a corridor running from Addis Ababa to Lamu must equally be developed urgently. That will allow its traders to move exports to Lamu and ship imports back by trucks and trains.
On Monday, the two leaders committed to the development of Lamu Port-South Sudan-Ethiopia Transport corridor (Lapsset) including road network between Isiolo, Moyale through to Addis Ababa as well as the railway from Addis Ababa to Nairobi.
“Both sides agreed to jointly supervise and inspect the Lamu-Garissa-Isiolo-Moyale and Moyale-Hawassa-Addis Ababa road networks,” states the communique.
The leaders committed to expand the border town of Moyale into a joint city to boost socio-economic integration. The Joint Moyale City will host a special economic zone, the two leaders said.