Market Assessment

The Management of Commercial Road Transport in Ethiopia, Ethiopian PSD Hub, 2009

    This study, prepared for the Ethiopia PSD Hub, reviews the markets for urban public transport, international road freight transport (particularly the Djibouti corridor), intercity public transport and intercity freight transport in Ethiopia.

    Following the introduction, Chapter Two gives a detailed overview of the Ethiopia’s transport sector, including its road, rail, air cargo, port and shipping infrastructure, as well as the types of multimodal transport services on offer.

    Chapter Three examines the road freight sector in more detail. Topics include current and predicted volumes of import and export traffic; operations; maintenance and planning facilities; terminals; warehousing; vehicle productivity and costs; road user costs; freight tariffs. The table on page 60 offers a set of options to improve efficiency and social outcomes for the freight industry in urban areas.

    Chapter Four examines the market for road passenger transport. It considers issues such as access, affordability and quality of service; capacity utilisation; vehicle productivity and costs; regulations governing market entry; support facilities, tariffs and fares.

    Chapter Five outlines the roles of the various institutions which regulate road transport. It also details the structure of ownership in the road freight market, where associations of independent truckers are by far the largest players, followed by five large commercial firms, some of which are currently state-owned. Chapter Six gives an overview of the regulations themselves, and include sections of key legislative and regulatory issues facing the road transport sector.

    Chapter Seven provides information on key credit, insurance and management issues facing road transport operators. Chapter Eight details other constraints to improved performance in the sector. Chapter Nine focuses on the recommendations for the road transport sector in the National Transport Master Plan Study, compiled by consultants in 2008. Chapter Ten provides a large number of recommendations to improve Ethiopia's road transport sector.

    Here are a few examples of interesting facts drawn from the publication:

    • Most African cities have 30-60 bus seats per thousand residents. In Addis Ababa, there are no more than 10 seats per thousand. The average number of large-bus seats in the city from the sample conducted for this study is just 6 per thousand. Performance data suggests that buses in Addis Ababa typically run at 150% of their rated passenger capacity. Three in four passengers interviewed rated overloading as their primary concern.

    • There may be commercial potential for bagasse, a by-product of sugar production in Ethiopia, to be used to produce ethanol. This could perhaps substitute for 20% of Ethiopian petroleum fuel without requiring expensive vehicle modifications.

    • The market in long-distance public transport may be partially liberalised in the years following this study, with Ethiopia's Transport Authority subcontracting or franchising some routes. The study’s findings encourage this trend.

    Summary of results
    The study proposes a total of 95 recommendations. Most of these refer to legislative changes and public sector reform measures which the authors believe would raise the productivity of, and investment in, road transport in Ethiopia. The study does not specify which of these recommendations are likely to require donor support to implement, but does detail which national actors or organisations are best placed to lead action on each recommendation. The report also specifies indicators to track progress on its recommendations, and suggests how these indicators might be tracked. Furthermore, the report suggests timeframes for each of its recommendations.