DOMESTIC CONNECTIVITY IN ETHIOPIA

As Ethiopia rebuilds Addis Ababa and embarks on the build of newer cities like Hawassa, it leaves untackled the overhanging issue that is horrendous domestic connectivity, one that is crucial to rebuilds and builds of newer cities as well. Domestic connectivity is undeniably a vital component with regard to intra-country trade facilitation, city-decongestion, development, among others. It is also undisputedly a key piece in the facilitation of trade-bloc efficacy. Thus, it is vital to broach the aforestated issue and devise ways of grappling with it. In this piece, I’ll do just that.

One of the main (if not the main) contributors to the horrendous connectivity, that one currently encounters in Ethiopia, is the lethal combination of high regulation and low privatisation, properly glimpsed with the Ethiopian Airlines monopolisation of domestic flights, near-exclusive state operation of the road transportation within the country, near-exclusive Ethiopian Shipping and Logistics Services Enterprise (ESLSE) handling of cargo shipping and logistics. The aforestated combination suppresses supply, inflates prices, and contributes toward the unviability of some domestic routes. Infrastructure gaps as well play a key role with regard to the aforestated issue. Despite the road network increment over the last 15 years, only approximately 14% are paved, and approximately 27% are in viable condition—fostering rapid deterioration, rural isolation, and seasonal cut-offs. The internal rebel activity and subsequent security issues are also heavy contributors toward the issue under discussion. The occasional rebel-affiliated abductions and route disruptions within the Oromia and Amhara regions contribute toward road travel unreliability and priceyness. As well as horrible inter-ministry synergy that leads to delays, geographical constraints which include highland-terrain regions lengthening routes, and model imbalance which encompasses an over-reliance on roads breeding fragility.

Within Ethiopia, horrible domestic connectivity, by isolating rural markets, is facilitating significant post-harvest losses, low productivity, and crippling agriculture. The aforestated issue is also facilitating the increasing congestion of Addis Ababa, and the logistics drag it induces subtracts an approximate 2% GDP growth annually. It also deters FDI, hinders tourism and services. Regionally-speaking, it contributes toward higher regional trade costs and lags in integration, among others.

Granted, Ethiopia has undertaken and is currently undertaking major steps to solve this shortcoming, including the acceleration of (and budget prioritisation of) RSDP Phase 6—which was initially planned for 2021-2030, with new expressways, rural links, and urban upgrades like the Chaka project. As well as the sole domestic flight operator, Ethiopian Airlines, aiming to reach 27 destinations, plans for four new airports, and the 2026 Bishoftu International Airport groundbreaking. There are also ongoing operational upgrades to the electrified Addis-Djibouti railway, and ongoing northward expansions (Awash–Weldiya) of the Addis-Djibouti railway, along with planned and ongoing smaller expansions to the aforementioned railway—like the ongoing privately-financed 3km connection to the AMG Industrial Park and the planned 17km extension to the Damerjog Industrial Park.

Supplementary to the above initiatives, I’d like to suggest strategies to grapple with the issue under discussion: The highest ROI would be attained from accelerated and targeted privatisation, which would include an accelerated restructuring of domestic aviation to include the private (both foreign and local carriers)—involving an offer of fifth freedom rights domestically. It would also include opening up ESLE and rail to private concessions; Accelerate the paving of roads, and since a significant number of roads is in an unviable condition, ring-fence approximately 27% of the budget for maintenance immediately. Use private performance-based contractors, re-task ERA as asset manager (as opposed to builder), and mandate climate-resistant standards; Execute multi-modal corridor integration with security overlay, which would include linking the existing Addis-Djibouti railway to the new air hubs, linking all the above to road feeders into secure “economic corridors”. Digitise logistics platforms, for instance truck tracking and cold chain, to decrease the current 40-day clearance; Prioritise “all-weathering” rural feeder roads and deployment of drone logistic services (especially in highland areas); Establish a single transport coordination unit under MoTL that would have official managerial duties over sub-sectors, conclude SOE monopolies and reduce the amount of regulation in the sector.