Trade Facilitation

Description

Ethiopia is a land locked country and most trading is done through Djibouti (90 per cent) and through the airport at Addis Ababa (5 per cent) (OECD 2011). According to the World Banks Logistics Performance Index (LPI) (2012) which measures trade logistics efficiency, Ethiopia was ranked 141st out of 155 countries and all scores are below the averages of the Sub-Saharan Africa region. A recent World Bank study assesses that Ethiopia’s key logistics bottlenecks are related to complex border clearance and inland transportation. For instance, inspection is frequent and highly susceptible to rent seeking, which is handled by more than one agency that causes delays. According to the World Bank Doing Business Report (2013), exporting and importing one standard container of goods takes 44 days each in Ethiopia, while the countries in the same region takes 31 days to import and 38 to export days on average. This is also supported by the OECD Trade Facilitation Indicators (2013) which state that Ethiopia’s performance in harmonisation and simplification of documents, automation and streamlining of procedures are below the regional average (OECD 2013). Although the improvement of Ethiopia’s trade facilitation is at a slower pace, its major step is the introduction of the Multimodal Transport System (MTS), which is defined as “the usage of multiple modes of transportation for the delivery of goods in a single contract with a carrier for it to assume all responsibilities for the transportation of cargo between two countries” (World Bank 2013). However, challenges remain, such as monopolistic privileges by the Ethiopian Shipping and Logistics Services Enterprise (ESLSE), which hamper market-oriented implementation.

Logistics Performance Index (LPI): Country Comparison
Logistics Performance Index – Evolution