CMA CGM has penned letters of intent to establish a new joint venture with Ethiopian company MACCFA and to manage Ethiopia’s Modjo Dry Port.
The deals were signed during a visit by French president Emmanuel Macron to Ethiopia and Djibouti this week, with CMA CGM’s chief executive Rodolphe Saade being part of the French entourage.
The new areas of cooperation are made possible following recent decision by the Ethiopian government to liberalise its logistics sector.
“Following the government’s decision to open the sector for foreign investors, we have been discussing with the French CMA CGM about the possible venture. We signed the memorandum of understanding that will allow us to sell 49% of our share to CMA CGM,” Mulugeta Assefa, CEO of MACCFA Freight Logistics, was reported as saying.
He added that the new venture will allow MACCFA to tap on the experience and expertise of CMA CGM so as to address some of the challenges the logistics sector of Ethiopia is currently facing.
The venture will be critical in terms of modernising and improving the trade logistics and economic performance of Ethiopia. Global logistics performance reports show that Ethiopia’s logistics sector has not been doing well as compared to its peers such as the smaller landlocked country of Rwanda.
CMA CGM has also entered into a partnership agreement with Ethiopian Shipping and Logistics Services Enterprise for the management of the Modjo Dry Port.
Modjo Dry Port, Ethiopia’s first dry port development which started on a small-scale at end-2009, currently handles 80% of the country’s import-export market along the Ethiopia-Djibouti trade corridor.
While Modjo Dry Port is a single-user dry port that focuses on customs clearance, the future plan is to upgrade it to a multi-user, multi-purpose facility.