Building a Shared Future: Chinese-funded Ethiopia-Djibouti railway line boosts trade
Updated 08:44, 08-Sep-2018
Ethiopia has officially launched commercial operations on the Ethiopia-Djibouti Railway. The facility -- which was constructed with the assistance of China -- will carry passengers and cargo between Addis Ababa and Djibouti, Ethiopia's main foreign trading port. As CGTN's Coletta Wanjohi reports, traders are already welcoming the lower costs offered by rail transport.
The 752 km Ethiopia-Djibouti railway is the first modern electrified railway line in East Africa. It was constructed with a total investment of $4bn. The Ethiopian sections cost $3.4bn, 70% of which was provided by China's Exim Bank and 30% by the Ethiopian government. As Ethiopia now renders it open for business, traders are looking forward to a direct link with the Djibouti port.
ENDALKACHEW SIME, SECRETARY GENERAL, ETHIOPIAN CHAMBER OF COMMERCE "If you remove the variables, the fast growing domestic demand with the price frictions that the market is facing. If you factor out these specific variables from the contribution of the railway, in contributing to the price reduction, contribution to the market, it is very significant."
Ethiopia relies on the Djibouti port for more than 90% of its imports and exports. A journey that used to take the traders 3 days has been reduced to less than one. The cost of transporting cargo is USD 0.051 per ton for a kilometer distance.
MEKONNEN GETACHEW - PROJECT MANAGER "There are different freights, all 1171 cargo wagons are different some of them are for fuel, fluid transportation, some of theme are maybe wheat, some of the wagons are flat for the containers, everything will be transported by the different wagons."
Beyond just transportation, the government hopes the project will boost its manufacturing sector, and plans to set up 14 new growth corridors along the railway.
ENDALKACHEW SIME, SECRETARY GENERAL, ETHIOPIAN CHAMBER OF COMMERCE "These growth corridors which are incorporated in the plan of the integrated parks have considered the Addis Djibouti railway connectivity as its strength or opportunity that should be exploited. So the overall economic activities that you see in this economy are directly or indirectly with an efficient logistics for cross border trade."
Economists say that this coupled with other government measures like the devaluation of the currency in 2017, will trigger development.
JAMES WAKIAGA, ECONOMIC ADVISOR, UN DEVELOPMENT PROGRAMME ETHIOPIA "The investment which they are doing in the area of infrastructure development which is important in the area of crowding in investment which is also critical to create job opportunities, decent jobs for the people and the youth in particular who are graduating from universities and colleges and tertiary institutions who need to be employed."
And a dedicated power dam is used to generate the energy needed to run the electric system efficiently.
COLETTA WANJOHI, ADDIS ABABA, ETHIOPIA "Ethiopia is also keen that this new link will also help the country benefit from a technology transfer. And so, Chinese experts are involved in training locals on different operation skills, so these locals are able to take over the operation in the future. Coletta Wanjohi CGTN, Addis Ababa, Ethiopia.