Ethiopia's Infrastructure: A Continental Perspective

37 Pages Posted: 20 Apr 2016

See all articles by Vivien Foster

Vivien Foster

World Bank

Elvira Morella

affiliation not provided to SSRN

Date Written: March 1, 2011

Abstract

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?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.

Keywords: Transport Economics Policy & Planning, Infrastructure Economics, Public Sector Economics, Banks & Banking Reform, Town Water Supply and Sanitation

Suggested Citation

Foster, Vivien and Morella, Elvira, Ethiopia's Infrastructure: A Continental Perspective (March 1, 2011). World Bank Policy Research Working Paper No. 5595. Available at SSRN: https://ssrn.com/abstract=1792253

Vivien Foster (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Elvira Morella

affiliation not provided to SSRN ( email )

No Address Available

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