Kenya-Ethiopia road link wins US$55.5m upgrade

NAIROBI, Dec 14 (Reuters) – A trade route linking Kenya’s coast to Addis Ababa, capital of landlocked Ethiopia, is to be upgraded with $55.5 million of grants and loans from the African Development Fund (ADF), bank officials said on Tuesday.

The poor state of the road is hampering trade growth between Kenya and its Horn of Africa neighbour, as well as with Uganda, Tanzania, Eritrea and Djibouti, said Chawki Chahed from the African Development Bank, which administers the Fund.

“The ADF has approved a loan agreement of U.S.$51.6 million and a grant agreement of U.S.$3.9 million to finance the Mombasa-Nairobi-Addis Ababa road corridor development project,” Chahed said. The ADF, financed mostly by Western donors, is the soft loan arm of the African Development Bank (AFDB.UL).

“The road is carrying considerable volume of heavy traffic and its standard is inadequate when compared to its designation not only as the main road connecting Kenya and Ethiopia, but also as a Trans-African Highway.

“This condition represents a major physical barrier for trade and regional integration.”

Engineers from Kenya’s Roads and Public Works ministry and the Ethiopian Roads Agency plan to begin repairs in January 2005. The work is to last until mid-2009.

Trade between East Africa and the Horn could rise fivefold when the upgrades are finished, according to ADF estimates.

“At project completion, trade between the two regions is estimated to grow from U.S.$35 million to U.S.$175 million, a 500 percent increase, which would boost significantly the domestic trade within the Common Market for Eastern and Southern Africa (Comesa),” Chahed said.

Landlocked Ethiopia would also benefit from another route to the sea at Kenya’s Mombasa. Its main alternative port in neighbouring Eritrea is unavailable. The Ethiopia-Eritrea border is closed due to a dispute between the two countries over the frontier, and Ethiopian goods now must go via Djibouti or the Somali enclave of Somaliland.