Ethiopia’s future transport outlook


Ethiopia plans to build five additional corridors in the coming ten years. Based on the ten years perspective plan, the transport sector has six strategies, 22 sub strategies goals and 98 interventions for the logistics sector.
For the implantation of the strategy, the Council of Ministers’ have formed a National Logistics Council that is chaired by MoT and includes Minister of Trade and Industry, Ministry of Revenue, Ministry of Agriculture, Ministry of Finance, National Bank of Ethiopia, Customs Commission, Investment Commission and representative of the private sector logistics actors.
As one of the target area, the Council is looking at an alternative port service in order increase the overall logistics service efficiency, Dagmawit Moges, Ministry of Transport told Capital, elaborating that in the coming ten years the ministry has planned to build about 5 port corridors.
“By increasing number of alternative ports and corridors it could be a simpler way in addressing the issues all over the country,” the transport minister emphasized.
Recently, the country has started to use port Berbera as another alternative corridor to the Djibouti port which accounted for 99 percent of flow of goods in and out of the country which declined to 92 percent when using Berbera, highlighted Dagmawit foretelling that there are certain activities on the works to start using Port Sudan in addition.
Besides building corridors the government is considering several interventions which will be included in the logistics strategy including management of port which will be determined by the ten year transport plan.
Dagmawit expounded that the ten year development plan on the transport sector will be crucial for other economic development as well since logistics is interlinked with economic development.
The transport sector development has included diversified sub sectors in different investment. To attain the goals, government under its transport sector policy revision has decided to open up the highly closed logistics and other transport sub-sector in different schemes including; joint venture, public private partnership and full investment.
On May 6,2021 the Ministry of Transport have signed the first Memorandum of Understanding (MoU) in on the logistic service with DP world to determine the potentials for developing logistics infrastructure and the provision of end to end logistics services along the corridor to unlock major economic benefits for Ethiopia.
The transport sector development in general is expected to consume 3.2 trillion birr or USD 75 billion in the coming decade, while the sector that is mostly preserved for public and domestic investors will expand its playground to foreign investors in different schemes.
From the 3.2 trillion birr, 69.55 billion birr will be covered by the money collected from the service provided by the sector and the rest will be financed by the government budget, which is about 2.2 trillion birr, loans of 582 billion birr and foreign aids of 164.5 billion birr. The intervention of the private sector including foreign investors has also been considered as a major source of investment in the sector.
Similarly, a further increase of the number of dry ports from 8 to 11 in 2030 is expected. Similar developments such as building cargo vehicles terminals to increase the number from 1 to 23 and 4 new one stop borders to increase the number are in the works.