The road that opens a $950million volume of trade
|The Addis-Mombasa -Nairobi Road Map|
The two governments have jointly secured a UD$360 million loan from the African Development Bank, AfDB, for the Construction of a 320KM road linking the two countries. This is the third phase of a series of projects to upgrade to Bitumen standard sections of the 1003 KM road linking
Ethiopia to Kenya’s port city of . Mombasa
The road, expected to be completed in 2017, will pave the way to a US$1bn million a year market. Trade between
Kenya and , neighbouring countries without road link, is pretty low. Data available shows that the volume of trade between the two countries stood at US$61.5 million in 2009. This was a “significant” growth from US$51 million three years earlier. The construction of the road is expected to double Ethiopia ’s Exports to the COMESA block from US$522 million in 2009 to $900million by 2017. The value of Ethiopia ’s exports to the same bloc is expected to rise by a similar margin, that is, by $500m over the same period, says the bank’s Evaluation Report. Kenya
The volume of trade has been slow due to lack of a reliable road link between the two countries. Now, with the construction of the last 320 KM stretch, trade between the two countries is expected to pick up tempo from 2017 onwards when this section will be completed.
The second cause for optimism is
’s population size. Its population was estimated at 85 million in 2010. Coupled with an economic growth rate in the upwards of 10 percent, it is a mouthwatering market for Kenyan manufacturers who are expected to export $200m worth by 2015. Ethiopia
On the other hand, the Kenyan economy is the largest in East Africa Common Market bloc. It is the largest market for the goods produced in its neighbouring countries. It is, therefore, a potential destination for Ethiopian exports.
Apart from opening up the markets, the link is expected to lower the cost of doing business for
. A landlocked country, this road will link Ethiopia Ethiopia with the Kenyan Port of . It will shave off some 10 hours of travel time between Mombasa Nairobi and , the Ethiopian Capital. It will also cut down the cost of running vehicles between the two countries from US$0.40 per kilometre to US$0.34 by 2016 Addis Ababa
The completion of the
Mombasa-Nairobi- Addis Ababa road will increase the quantity of Ethiopian Freight using the to two million tons in 2016 and to 2.5 million tons in 2018. This road also links Mombasa Port Ethiopia to whose construction begins in March 2012. This is killing two birds with one stone for Lamu Port Ethiopia for the Mombasa-Nairobi-Addis Ababa road connects the Lamu -Southern Sudan-Ethiopia Transport Corridor (LAPSSET) at Isiolo in . Kenya
At the micro-level, the road will open a large segment of previously marginalized areas in both countries to land to exploitation. Inter-country highways attract spur economic activity in the towns along its route. The
Mombasa – highway has, for instance, spurred huge economic activity in towns along its path, some of which operate for 24 hours serving the needs of the travelers. This result fits very well with AfDB’s goal of reducing poverty through the growth of small-scale businesses and integration of Bujumbura Africa.
Recently, the President of the Bank, Dr. Donald Kaberuka lamented that lack of inter-country cooperation, rather than funding, was often the main barrier to the development of critical regional infrastructure projects in
Africa. This, he said, had a negative impact on the growth of the intra-African trade.
This is the same reason why
Kenya and remained separated by wasteland for decades. Ethiopia
Although the debt was applied for jointly, each country will still service its debt to AfDB.