ADDIS ABABA – Centre of Excellence International Consult (CEIC) study has revealed challenges and huge economic prospects of the new Addis Ababa – Djibouti railway corridor and the Chinese investments work in Ethiopia.
A well-organized railway network carries a full congregation of economic benefits. This implies rail transportation has a positive impact on the level of port activities as well, the study indicated.
CEO of the consultancy firm Gedion G/Jalata said that successful mixing of rail and development requires appropriate assessments about trade and thus trusts on rational, cross-sectorial planning and Ethiopia’s recent experiences of realizing aspirations.
‘‘The government is trying to address the challenges that currently delay the expected concert of the Addis-Djibouti railway infrastructure construction and it will secure the real value of the project, Sino-Ethiopia evolving partnership along Addis Ababa–Djibouti railway economic belt shoed as getting from the half years report,’’ he said.
The Ethio-Djibouti corridor links Ethiopia to the Port of Djibouti and it is the major gateway for the country that 90 percent of Ethiopia’s imports and exports transit through this route, as to him.
The study added that maintaining flexibility, simplicity, and practical policy actions would further utilize the potential of the route.
“The experience shows the railways can attract substantial private sector investment with due there are some common elements of successful experiences that Ethiopian can learn from parallel. For example, the government should create a Policy and Legal environment that protects the interests of different types of key actors in this sector,” Gedion pointed out.
He further elaborated that the key actors distinguish the risks to the railway, because of the countries legal regulatory framework, the governance corporate work, and management control of the railway, strong focus state-owned infrastructure of it, Ethio-Djibouti Railway Corporation, and policy inconsistency and implementation gap.
This provides limited environment protection and creates uncertainties for private actors of investment. The resource-based lines would be particularly alarmed with traffic defeating and the border with the rest of the network, as Gedion approached.
The Ethiopian government can mitigate these risks by creating a legal framework for railways that is clear, in the objective, reliable, compensatory and neutral between public and private suppliers of similar goods or services he stated.
As to him, rail transport has made varying marks of impact on the development of the country where they exist and any different studies described rail transport as historically the most powerful single initiators of the economic beginning, being the main force in the widening of markets is a prerequisite to expanding the export sector.
“This sector plays a significant role in the improvement and overall growth of any economy. This is often considered as the wheels of financial activity due to this playing a crucial role in providing the safeguard upon which production and distribution in the market system,” Gedion insisted.
The CEO underlines that the presence of railway unlocks regions and rural areas with the surroundings by facilitating agricultural development as well as the growth of small and large-scale industries in the country.
The improvement of this sector generally attracts domestic, commercial, educational and recreational clearances and developments around the corridor. Due to the role the corridor performs in the growth and development process, railway transport is seen as the processer around whom an integrated national transportation system is built in the country as a whole,” he concluded.
The Ethiopian Herald January 12, 2020
BY MUSSA MUHAMMED
