Ethiopia gains $150m from World Bank to improve logistics sector

The project will focus on improving Ethiopia’s Modjo Dry Port, which handles 95 percent of the landlocked country’s trade.

   The World Bank’s executive board on Friday approved a new $150 million project to increase the efficiency of trade logistics in land-locked Ethiopia.
   The project will focus on improving Modjo Dry Port, which handles 95 percent of Ethiopia’s trade, but is a major bottleneck on the Ethiopia-Djibouti trade corridor.
   The port is located in central Ethiopia, 38 miles southeast of Ethiopia’s capital, Addis Ababa.
   Modjo Dry Port is Ethiopia’s first dry port development and started on a small scale at the end of 2009, relieving the congested Djibouti, according to Port Consultants Rotterdam.
   World Bank said the vision for Modjo is to evolve from being a single-user dry port that focuses on customs clearance, to becoming a multi-user, multi-purpose facility.
   “Higher-than-average trade costs are undermining Ethiopia’s international competitiveness,” said Klaus Tilmes, director in the World Bank Group’s Trade & Competitiveness Global Practice. “By enhancing the performance of the Ethio-Djibouti corridor through improvements in the range and quality of logistics services at Modjo Dry Port, and reducing burdensome regulations in customs, trade finance and trade facilitation, the government will be able to reap the benefits of trade that help to drive growth and reduce poverty.”
   Also on Friday, the World Bank’s board of directors approved a $50 million International Development Association credit for the National Quality Infrastructure (NQI) Project, aimed at boosting the competitiveness of Ethiopian industries.
   World Bank said the credit will support the Ethiopian government’s efforts in establishing the country’s standardization practice, metrology, accreditation, and conformity assessment services – inspection, testing and certification.
   World Bank noted that a well-functioning NQI will enhance firms’ competitiveness and opportunities for expansion into new export markets; and will encourage investors to upgrade their products and quality of services to meet market requirements imposed by trading partners, consumers and regulatory authorities.
   The project will focus on three value chains that are key to the government’s industrial policy to increase its export base, including: leather and leather products, textiles and garments, and agro-processed goods.