Addis-Djibouti road upgrade to boost Ethiopia’s international trade

The International Development Association, part of the World Bank Group, has loaned Ethiopia $730m to improve road conditions between Addis Ababa and Djibouti, in another sign of Ethiopia’s determination to become more competitive on global markets.

The World Bank announced last week that the Addis-Djibouti Corridor “will get a significant upgrade thanks to the newly approved Horn of Africa Initiative’s Regional Economic Corridor Project.” The project is geared at unlocking greater volumes of international trade, and therefore economic growth, by improving regional connectivity and logistics efficiency.

This is a significant infrastructure project for Ethiopia as the Addis-Djibouti Corridor is the country’s access point to the Indian Ocean, through which Ethiopia can access global shipping and international trade. Over 95% of Ethiopia’s import-export trade by volume passes through this route.

However, certain parts of the road are in poor condition and unsuitable for heavier truck traffic, forcing users to take a much longer route that adds almost 150km to the journey and therefore incurs increased fuel and labour costs for business.

Source: African Business