The new US$4B electrified railway from Djibouti to Addis Ababa is more than 90% complete, and is scheduled to begin running early next year. The 750 km standard gauge line replaces the old 1m gauge line. The fate of the old line is unknown, but it will presumably be decommissioned. Freight trains take two days to travel from Djibouti to the Ethiopian capital, so most cargo is currently carried by road. However, the new line will have a transport time of just 10 hours, and so the two governments
The railway is yet another Chinese-led infrastructure project in Africa. It is being built by China Railway Group and the China Civil Engineering Construction Corporation, while Chinese banks have provided funding. Despite the promotion of Mombasa as an alternative and plans to develop a new port at Lamu, more than 90% of Ethiopia’s trade passes through the port of Djibouti.
Vague plans have been proposed to extend the line across the heart of Africa, from Addis Ababa through South Sudan and then to Cameroon, ending either in Douala or Kribi, but this seems unlikely for the foreseeable future, not least because of the dire security situation in South Sudan and the Central African Republic.
Djibouti will also benefit from the development of the new Djibouti Free Trade Zone by China Merchants Holding. It will be built in phases over the next 10 years, at a projected total cost of US$7B. In addition, the Turkish government has announced plans to set up a manufacturing and processing zone at the port, to make use of the new line.
The government of Ethiopia maintains a firm grip on many parts of the national economy, and there is no competition in some sectors. Nevertheless, the economy grew by 10.2% last year, and the population is expected to exceed 100M by the end of 2018, so the potential for greater trade volumes is huge.
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This complete item is approximately 300 words in length, and appeared in the October 2015 issue of WorldCargo News, on page 14. To access this issue download the PDF here.
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