Ethiopia ' s infrastructure: a continental perspective, Vol. 1 of 1

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Ethiopia's infrastructure: a continental perspective

Author:	Foster, Vivien; Morella, Elvira;	Collection Title:	Policy Research working paper ; no. WPS 5595
Country:	Ethiopia;	Date Stored:	2011/03/17
Document Date:	2011/03/01	Document Type:	Policy Research Working Paper
Language:	English	Region:	Africa
Report Number:	WPS5595	SubTopics:	Transport Economics Policy & Planning; Town Water Supply and Sanitation; Banks & Banking Reform; Infrastructure Economics; Public Sector Economics
Volume No:	1 of 1

Summary: Infrastructure contributed 0.6 percentage points to Ethiopia's annual per capita GDP growth over the last decade. Raising the country's infrastructure endowment to that of the region's middle-income countries could add an additional 3 percentage points to infrastructure's contribution to growth. Ethiopia's infrastructure successes include developing Ethiopia Airlines, a leading regional carrier; upgrading its network of trunk roads; and rapidly expanding access to water and sanitation.The country's greatest infrastructure challenge lies in the power sector, where a further 8,700 megawatts of generating plant are needed over the next decade, implying a doubling of current capacity. The transport sector faces the challenges of low levels of rural accessibility and inadequate road maintenance. Ethiopiaﾒs ICT sector currently suffers from a poor institutional and regulatory framework. Addressing Ethiopia's infrastructure deficit will require a sustained annual expenditure of $5.1 billion over the next decade. The power sector alone requires $3.3 billion annually, with $1 billion needed to facilitate regional power trading. That level of spending represents 40 percent of the country's GDP and a tripling of the $1.3 billion spent annually in the mid-2000s. As of 2006, there was an annual funding gap of $3.5 billion. Improving road maintenance, removing inefficiencies in power (notably underpricing), and privatizing ICT services could shrink the gap. But Ethiopia needs a significant increase in its already proportionally high infrastructure funding and careful handling of public and private investments if it is to reach its infrastructure targets within a reasonable time.


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