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New railway opens up Ethiopia’s building sector

A 752 km, electrified railway linking the Ethiopian capital Addis Ababa to the Port of Djibouti on the Red Sea was officially completed on 9 January – a link that will make exporting to fast-growing Ethiopia a great deal easier.
The potential of Ethiopia’s fast-growing economy for international companies, especially in the building and construction sectors, is undoubted. But logistics – actually getting products to the country quickly – has been a main stumbling block. With the completion of the railway, the first electrified link in the region, a large part of the transportation question has been taken care of.


The new railway will transform international trade in Ethiopia. Providing a maximum speed of 120 km/h for cargo trains, the link cuts transport times on the route from three days to just 12 hours. With 90% of Ethiopia’s international trade passing through Djiboutian ports, this is a vital step to opening up Ethiopia’s economy further to firms looking to do business there.


So what does this mean for the building sector? There has been mighty growth in Ethiopian construction over the past decade – after growing 37% in 2014, the sector in general now enjoys a market value of around $6 billion. But this growth has been reined in by infrastructure bottlenecks, so this transformation of Ethiopia’s main import route comes at a good time.


There is another reason why the railway will make such a difference to construction in Ethiopia – the sector is heavily reliant on imports. National producers only supply staples like sand, gravel and cement, and everything else comes in from foreign suppliers, including the finishing materials demanded by Ethiopia’s growing middle class.


Looking to find out more about Ethiopia’s construction sector? Ethiopia’s Construction Industry: Transforming a Nation is a 36-page guide to everything you need to know about supplying and doing business in the Ethiopian construction and interiors industries – including sector rundown, exporter guides, expert reviews, and doing business scores. The report is available for free on Buildingshows.com – download it here.


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Ilyas Idigov

International Sales Manager - Build Sectors

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