In a bid to improve road travel between Addis Ababa and Djibouti, the International Development Association (IDA) will lend Ethiopia US $720mn to develop necessary infrastructure.

The financial package aims to improve the flow of goods and people between Addis and Djibouti, Ethiopia’s main outlet to the Indian Ocean and world markets. Around 95% of Ethiopia’s external trade is said to use the Djibouti corridor. The IDA is the division of the World Bank that deals with very impoverished countries.

The World Bank notes that the initiative will be “a catalyst for commerce, assisting businesses to trim their overheads and strengthen linkages to regional and global value chains”.

“This project is important to support our commitment to fostering inclusive growth and regional integration, as we are now fully focused on sustaining the growth and reaping the peace dividends,” stated Ahmed Shide, Ethiopia’s Finance Minister.

The project will see a 150km dirt road between Mieso and Dire Dawa become a four-lane highway. At present, trucks are unable to use this road and must use a different route on the A10. The project also includes: logistics facilities, freight truck terminals, and secondary roads to connect towns and villages to the main corridor.

Boutheina Guermazi, a World Bank Director for regional integration, added that the programme was “one of the priority operations that we are supporting in the Horn to help connect hinterland to ports and markets, and to increase opportunities for regional trade”.