Both in-country and cross-border transportation infrastructure represent a major challenge for Ethiopia. Improvements in the mass transit sector are needed to facilitate national and foreign trade. On top of substantial external funding, Ethiopia itself has spent over USD $50 billion on infrastructure since 1990. Infrastructure contributed 0.6 percentage points to Ethiopia’s annual per capita GDP growth over the last decade. Addis Ababa is also home to Ethiopian Airlines, one of the most reputable and fast growing airlines in the world. Raising the country’s infrastructure endowment level to that of the region’s middle-income countries could lift annual growth by an additional 3 percentage points.
The Ethiopian government expects to complete several road and railway projects between 2011 and 2014, and is already planning up to 5,000 kilometers of rail installations in the coming decade. These investments include a light rail system in Addis Ababa and a cross-country passenger/cargo network connecting Ethiopia to the neighboring country ports of Djibouti, Port Sudan, and Mombasa. There is a directive for new public transportation systems to be driven by electricity, in particular, hydropower.
In April 2010, an Italian-Chinese manufacturer invested $600,000 to create an electric car manufacturing facility in Ethiopia. Recently, the Ministry of Transport announced regional public transportation agreements with the neighboring countries of Djibouti, Kenya and Sudan. Agreements with South Sudan and Somaliland are in progress. With Ethiopia’s growing population, regional influence and expanding infrastructure investments, the transportation sector represents significant opportunities for local technology component suppliers including those involved in design, manufacturing, maintenance and service of, for example, public and mass transportation, alternate fuel and electric vehicles, urban planning and infrastructure, and bio-diesel/ethanol.