From: Biniam Tekle (biniamt@dehai.org)
Date: Wed Dec 16 2009 - 09:29:41 EST
“The estimated total transit costs have been consuming over 16 per cent of
Ethiopia’s foreign trade value which is about $2 million per day, which
literally bleeds the economy,” the study said.
http://www.businessdailyafrica.com/-/539444/823098/-/view/printVersion/-/m1qdfrz/-/index.html
Ethiopia to reap from Kenya’s transport corridor
Transport from Moyale to Isiolo is hampered by bad roads and inadequate
vehicles and this has hampered trade between the two nations. Photo/FILE
By Githua Kihara
Posted Wednesday, December 16 2009 at 00:00
Ethiopia’s economy is set to receive a huge boost from the construction of
the World Bank funded second transport corridor.
The African Development Bank (AfDB) last week agreed to lend Kenya Sh12.5
billion for tarmacking 123 kilometres between Marsabit and Turbi, along the
highway to Moyale town which borders Ethiopia.
The Ethiopian government has already tarmacked the road from Addis Ababa to
Moyale to connect with the one to be constructed by the Kenyan government.
The construction will be good news to the Ethiopia government, which is
currently incurring huge costs by importing through Djibouti port according
to a recent study.
The loan will be used to tarmac 123 kilometres between Marsabit and Turbi,
along the highway to Moyale town which borders Ethiopia.
The fund will also be used to construct one-stop border post at Moyale
including equipping it with security outposts.
Lack of good roads connecting Kenya and Ethiopia has hampered trade between
the two nations, especially the use of Mombasa port as an alternative for
the Ethiopian sea trade.
Ethiopia’s dependence on imported goods has shifted 98 per cent of its
traffic to Djibouti port which is about 85 per cent of the whole port’s
traffic.
A recent study by the African Trade Policy Centre (ATPC) indicated that
exorbitant charges incurred by Ethiopia at the Port of Djibouti, have seen
the landlocked eastern African country’s economy hit the doldrums.
The high charges involved, reduced free time for imported cargo and
inadequacy of storage facilities are some of factors that have ballooned
Ethiopia’s total logistics cost for its import and export of commodities,
the study said.
When the study was concluded last month, the port had over 600,000 tons of
cargo on the ground or in the holds of ships which was creating congestion
and hampering transit operations and costing the country large sums of
money.
“The estimated total transit costs have been consuming over 16 per cent of
Ethiopia’s foreign trade value which is about $2 million per day, which
literally bleeds the economy,” the study said.
The Economic Commission for Africa, (ECA), has already announced its
intention to undertake a feasibility study on behalf of the Ethiopian Dry
Ports Services Enterprise, for establishment of more dry ports as one of the
measures to reduce the cost.
Dry ports will hasten the time required to clear the cargo since goods will
be transported to the dry port, where customs clearance will take place,
rather than undergoing customs procedures at the seaport which is leading to
delays and high costs.
“The construction of new dry ports as well as the expansion of the two
existing dry ports in Mojo and Samera could be envisaged in the near
future,” the commission said.
However, the long term solution to the Ethiopia transport problems lies in
the construction of the second port in Lamu, which is expected to commence
next year and be completed by 2015.
Firms that pre-qualified to carry out feasibility studies on the
construction of the second transport corridor submitted their proposals last
month to the Ministry of Transport.
The ministry requested for the proposals on the development of the Lamu port
and Lamu- Southern Sudan- Ethiopia Transport Corridor (LAPSSET).
Ethiopia has a population of over 80 millions and Southern Sudan, also to be
served by the Lamu port, has a population of 12 millions.
Kenya has close to 40 million people while Uganda, which is currently
relying on Mombasa port, has roughly 24 millions people.
Taken together, the four countries have a population which is over 150
million.
Developmental infrastructure
At a rough growth rate of 3 per cent, according to Dr Mutule Kilonzo, the
lead government consultant on the second transport corridor, population in
the four countries will rise to over 300 millions in 30-40 years.
The developmental infrastructure that is put in place presently should have
the capacity to serve such a huge market in the years to come and Mombasa
port, Mutule said, cannot sufficiently deal with this demand.
He added that Ethiopia has in the past challenged Kenya to open up a road
linkage through the Moyale border town.
Indeed, Ethiopia did complete the building of a good tarmac road from Addis
Ababa to Moyale quite a while ago and studies for the establishment of a
standard gauge railway line are complete.
The new corridor will also connect Ethiopia and Southern Sudan to Mombasa
port.
>From Lamu, the corridor will pass through Bura to Garissa where a branch
will go to Nairobi to join the existing Northern Corridor that is served by
the Mombasa port.
Southern Sudan
The other branch from Garissa will go to Archer’s post-Marsabit-Moyale at
the Ethiopian border where the corridor will join that being constructed by
the Ethiopia authorities.
Ethiopia is similarly searching for a way to link up with Southern Sudan,
according to Mutule.
But, in view of the difficult terrain on the borders of the two countries,
that linkage is best made through Kenya.
The two will be linked through Moyale - Marsabit - Archer post - Maralal -
Lodwar - Lokichoggio then Juba.
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