The African Development Bank’s Board of Directors has approved a $1.2 million grant to Ethiopia’s government to finance a feasibility study into a standard-gauge railway (SGR) link between Ethiopia and neighbouring Sudan.
This grant from the African Development Fund, the Group’s concessional-rate lending arm, covers 35% of the total cost of the study, estimated at $3.4 million.
The remaining funding will be provided by the NEPAD Infrastructure Project Preparation Facility (NEPAD-IPPF) in the form of a $2-million grant, and by a contribution of $100,000 each from the two countries involved. The financing was approved in January.
The two-year comprehensive feasibility study into the rail project between Ethiopia and Sudan will assess its technical, economic, environmental and social viability, and alternative financing arrangements, including a public-private partnership (PPP).
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The railway line will link Addis Ababa in Ethiopia to Khartoum in Sudan, with an extension to Port Sudan on the Red Sea. The route, agreed by both governments, stretches some 1,522 kilometers from Addis Ababa to Port Sudan.
With over 100 million people, Ethiopia is easily the most populous landlocked country on earth. When Eritrea seceded in 1993, Ethiopia lost access to its coastline, impeding its economic growth and limiting the nation’s ambitions of becoming a regional hegemon.
No coastline meant no direct access to ports, hindering Ethiopia’s efforts to achieve middle-income status via export-oriented industrialization.
After the lose of access to the sea, Ethiopia was forced to rely on neighbouring Djibouti for most of its trade, 95% of Ethiopia’s imports and exports pass through Djibouti which is a country of less than one million, strategically located on the Horn of Africa.
Fig 1: Horn of Africa (source)
Under Abiy Ahmed, Ethiopia’s Prime Minister since April 2018, there has been a considerate drive to ease the danger of dependence on their small neighbour. The recognition of this danger may have started earlier, but it was brought to a new level after Djibouti temporarily refused to release cargo bound for Ethiopia because of delays in payment transfers in 2013.
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Abiy signed a peace agreement with his Eritrean counterpart on July 17, bringing a formal end to the 1998-2000 Eritrean-Ethiopian War and potentially opening Eritrea’s ports on the Red Sea to Ethiopian exports.
By also pursuing deals with ports in Sudan and Somaliland, Ethiopia is making it clear that the first priority in its quest to become a regional power is establishing direct control over its access to the Red Sea and Gulf of Aden.
However, earlier before Abiy’s premiership, in 2012, Kenya and Ethiopia agreed to jointly develop a 32-berth port at Lamu, a quiet town nestled on an island right off the coast of Kenya.
In May 2018, Abiy and former Sudanese President Omar al-Bashir agreed to jointly develop and administer Port Sudan in order to increase Ethiopian cargo traffic through the facility. In the near future, Ethiopia envisions shipping around 30% of its imports and exports through Berbera and 10% via Port Sudan.
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The 1,522 kilometers railway line that will link Addis Ababa and Khartoum, and onward to Port Sudan, will in no doubt advance the strategic push by Ethiopia to secure a corridor to the sea, thereby enhancing its foreign trade.
Other than the access to sea, the project will undoubtedly impact the lives of over 100 million people living in Ethiopia and over 40 million inhabitants of Sudan, as well as those further afield, as the route will be connected to the Horn of Africa transport network.
According to a press statement by the African Development Bank seen Investogist, the proposed study is aligned with the Bank’s Country Strategy Paper 2016-2020 for Ethiopia, which was informed by the country’s Growth and Transformation Plan (GTP-II) and the priorities of the upcoming Ten Year Perspective Plan 2021-2030.
The bank said that it is also consistent with the long-term development goals of the Sudanese Government, described in its national 25-year strategy (2007-2031). And that it is in full accordance with the Bank’s Ten-Year Strategy 2013-2022 and the operational priority of infrastructure development.
Four of the Bank’s High 5 strategic priorities is said to be addressed by this project: Integrate Africa, Feed Africa, Industrialize Africa, and Improve the Quality of Life for the People of Africa.
Written by;
Nnamdi M.
