2019

The Ethio - Eritrea Shipping Canal

Project

Initial consultation Draft.

Dawit Alemu Embibel

Dawit Alemu Consultancy
1/1/2019
 Table of Contents
Summary....................................................................................................................................... 2

Land Acquisition..................................................................................................................... 9

Problem Statement ................................................................................................................. 10

Project objectives .................................................................................................................... 15

Project activities ....................................................................................................................... 18

Research ................................................................................................................................ 18

Recruitment of the project team .................................................................................... 19

Procurement ......................................................................................................................... 19

Construction .......................................................................................................................... 20

Maintenance ........................................................................................................................ 20

Advocacy .............................................................................................................................. 20

Partnerships............................................................................................................................ 21

This will be formed with .................................................................................................. 21

Evaluation .................................................................................................................................. 21

Process evaluation .............................................................................................................. 21

Outcome Evaluation .......................................................................................................... 21

Future Funding .......................................................................................................................... 21

Proposed time frame .............................................................................................................. 22

Estimated Proposed budget ................................................................................................ 23

Euthopia GDP growth (Annual %)....................................................................................... 24

References ................................................................................................................................. 25

1
Summary
Canals, man-made waterways that allow boats and ships to pass from one water
body to another, have contributed significantly to the facilitation of trade
between countries all over the world. Different countries have traded in a range
of goods, including electronics, cars, clothing, spices, and much more.1 Canals
complement the contribution of water bodies, such as oceans, seas, and rivers to
world transportation. This facilitates efficiency in domestic and cross border trade
around the globe. Currently, water facilitates ship transportation of over 90
percent of raw and manufactured products sold globally. 2

Canals are constructed by creating shorter, faster ways through the land. In
addition to enabling water transport within and outside landlocked countries
(sovereign states that do not have territory connected to the World Ocean and
are completely surrounded by other nations), canals shorten shipping distances,
save time, and significant amounts in transportation costs. Cumulatively, these
serve to increase efficiencies in global trade value chains.3 Some of the world’s
major canals include the Panama Canal and the Suez Canal.

The Panama Canal, for instance, links the Atlantic Ocean through the Caribbean
Sea to the Pacific Ocean. It serves over 144 trade routes globally. This 48 miles
(77km) stretch of waterway enables ships to take roughly 6 to 8 hours along the
canal, thus reducing the shipping distance between the East and the US East
Coast by approximately 3,000 miles (4828km). Further, it provides an additional
benefit by evading the erratic weather patterns experienced between Cape
Horn and South America.

2
The Suez Canal, located in Egypt, connects the Mediterranean Sea to the Red
Sea, one of the world’s most popular shipping routes. This Canal has reduced
shipping distances between Europe and South Asia by approximately 4,300 miles
(7,000km). The 193km-canal enables ships to travel this distance without having
to go around Africa.

3
 Fig 1: An aerial view of Suez Canal Egypt

The Kiel Canal is located at the root of the Jutland Peninsula near the
border between Germany and Denmark. It is formally called the North Sea-Baltic
Sea Canal (Nord-Ostsee Kanal) and is ranked among the world's three
major canals with the Suez and Panama Canals.7 Feb 2006

Project description

The proposed Ethio - Eritrea shipping canal will link Ethiopia’s Lake Afrera with the
red sea, a body of water that lies between Arabia and Africa and forms part of
the Global Ocean (an interconnected system of Earth's oceanic waters, covering
361,132,000 square kilometers, 70.8% of the Earth's surface). A highly saline lake,
Lake Afrera is Located in Afar Region Administrative Zone 2. It is one of the lakes
of the Danakil Depression with a surface area of 100 km2. The lake was chosen
because of strategic location and its potential for expansion to accommodate

4
larger ship without the need to build locks. As well its location in the Danakil
Depression makes it one of the best tourist attraction sites.

The case for Ethiopia

Ethiopia became landlocked in the 19th century, following two major historical
events. One of them was the independence of Eritrea in 1991, which led Ethiopia
to lose express access to the Red Sea’s ports of Mitsiwa and Aseb. Another factor
was the 1885 Berlin conference, which awarded the Democratic Republic of the
Congo, a narrow piece of borderland cutting through Angola, leading to Ethiopia
to lose access to the sea.

Consequently, Ethiopia’s sole access to the sea was mainly through the Ethiopian
National Railway Network, and road transport linked Ethiopia's capital of Addis
Ababa with Djibouti and its Port of Doraleh and different dry ports throughout the
country.

Notably, the passing of over 95 percent of Ethiopia's trade through Djibouti

increased activity at the Port of Doraleh, accounting for 70 percent of the port’s
activity. This caused overcrowding and over use of Djibouti–Addis Ababa railway,
which became the sole transportation system for Ethiopia, together with poorly
run road transportation system.

since the Eritrean independence in 1991, Ethiopia is experiencing numerous

economic, political and social challenges arising from its landlocked state,
resulting in poverty and zero-sum gain from external trade due to massive revenue
loss in port charges and transportation cost . The problem has reached a point
where the country’s efforts to achieve its future economic political goals could
be jeopardized. The author Research shows that building a canal that opens up
the country access to the sea will fasten the country’s economic growth and solve
all outstanding political and social issues created by the Eritrean independence.

5
The absence of sea transport is curtailing transport, economic and political
integration between Ethiopia and other countries and overburdening the existing
transport systems. There are inadequate knowledge and funding for the
development and implementation of alternative transport systems. The project
address questions to overcoming transport challenges within Ethiopia as well as
with other countries outside it.

Tourism remains a key player in Ethiopia’s economy, contributing approximately

9.4 percent (in 2018). As such, stimulating its growth remains a key government
priority. For instance, the government continues to preserve and develop tourist
sites; it has recently relaxed tourism, customs, and visa-related regulations and
provided tax holidays in a bid to encourage investments in hotel and tour
services.4 Opening up Ethiopia to the sea will provide alternative transportation to
tourists, expand opportunities for sea voyages, encourage investment, and
consequently boost the government’s efforts to increase revenue earnings from
this sector.

The project’s objectives include opportunity it brings to both Ethiopia and Eritrea
in terms of economic, social and economic stability.

As part of the government’s long-term plan to create an effective rail network

Ethiopia have invested heavily on the rail way to revive it use and help ease
pressure on the road cargo transportation, efforts that culminated in the building
of a new electrified railway in its place in 2016. With speeds of 75 miles per hour,
the railway which moves both cargo and passenger trains has significantly

4
https://knoema.com/atlas/Ethiopia/topics/Tourism/Travel-and-Tourism-Total-Contribution-to-GDP/Contribution-of-travel-and-tourism-to-GDP-percent-of-GDP

6
reduced transit travel time between Djibouti and Addis Ababa, but this effort by
itself will not be enough to serve future demand for its fast growing economy

The Addis Ababa–Djibouti Railway, is a new standard gauge international railway,

inaugurated in 2018, and serves as the backbone of the new Ethiopian National
Railway Network. However, Ethiopia’s increasing external trade continues to
burden the fragile rail system, which is unable to transport bulky goods that were
previously transported through the ports of Mitsiwa and Aseb. In order to prolong
the life of the rail system and prevent its imminent collapse, as happened in the
past, there is an urgent need to revive the country’s sea transport system.

This is has become urgent in light of the country’s increasingly vibrant external
trade, which has continued to grow since the late 2007 s. The country has
continued to put in place measures to spur growth in different sectors ranging
from education, health and agriculture, industries, and trade, with progress in
some areas. For instance, reforms in the education sector which now offers free
primary and tertiary education in Ethiopia has significantly increased school
enrollment for its population, 50 percent of which comprises people under the
age of 18.

Future challenges

Ethiopia, the most populous country, has continued to witness population growth.
The United Nations reports Ethiopia's population to be 115 million in 2020 and is
expected to surpass 200 million by the end of 2049, arising from its 2.7 percent
annual population growth. This increment, coupled with increased output from
educational institutes, has led to a high unemployment rate, which was estimated
at 1.8 percent in 2018. (United Nations).This population has necessitated that the
country creates 14 million jobs annually by 2025. (World Africa)

7
The country’s economy is predominantly agricultural, which contributes 34.8
percent of the country’s gross domestic product (GDP), which was estimated at
$3.23 billion in 2017. Faye, McArthur, &Thomas (2007).

The major agricultural activities include livestock, cash crop, and subsistence
farming. Its most common cash crops include wheat, barley, oats, sorghum,
maize, millet, and pulses (such as chickpeas, peas, beans, and lentils). (The World
Fact Book).

Ethiopia primarily exports oilseeds, beeswax, sugarcane, khat, and coffee to

different countries within and outside Africa. 23.3 of these are exported to Sudan,
10.2 percent to Switzerland, 8.1 percent to China, 6.6 percent to Somalia, 6.2
percent to the Netherlands, 4.7 percent to the United States, 4.7 percent to
Germany, and 4.6 percent to Saudi Arabia. Subsistence farming is mostly
practiced by smallholders in small farms of between 3 and 6 acres. Ethiopia’s
livestock output is comparatively higher than those of its counterparts in Africa.
This presents its more livestock export potential to the neighboring African
countries. However, being landlocked, the country has not been able to
maximize its income from external export markets. (The World Fact Book) The
county also engages in small scale mining of mineral resources, mostly gold,
tantalum, niobium, soda ash, petroleum, natural gas, and rock salt. Specifically,
gold is mined at Kibre Mengist in the south, platinum inYubdoto, the west,
tantalum in south-central Ethiopia, while rock salt is extracted from the Denakil
Plain. The country also practices small scale quarrying of building materials such
as marble. Although this sector contributes less than 1 percent of the country’s
GDP, adjustments in government policies, as well as improvements in transport
systems, can potentially lead to large scale mining of these and other natural
resources. The ability to create jobs and feed its growing population depends it
easy access to the sea and shipping facility.

8
The country imports machinery and aircraft, metal and metal products, electrical
materials, petroleum products, motor vehicles, chemicals, and fertilizers from
China, accounting for 24.1 percent of its imports, Saudi Arabia, India percent,
Kuwait, and France at 5.2 percent. The resulting value of Ethiopia’s imports was
valued at 15.59 billion in 2017.

As Ethiopia is strategically located in east Africa, with close proximity to the

crossroads of the European, Eastern, Horn of African, and the Persian Gulf ship
routes, one of the busiest in the world. If well harnessed, the Canal and its port in
Ethiopia can be an important refueling and transshipment center as well as being
the principal maritime outlet for regional imports and exports. (International
Finance Corporation).

Land Acquisition
Requisite access land through Eritrea will be acquired through an intensive
negotiation and agreement with Eritrea. Different options should be layout for
Eritrea to choose. As it’s for its survival Ethiopia needs to be ready to offer any
thing that convince Eritrea to allow the project.

Few of the option can be as follow.

Land swap (arising from Eritrea’s need for fertile land), land lease, equal
partnership and revenue sharing between the two countries; or as will be
appropriately proposed by Eritrea. , for instance, apply ship charges to any ship
that passes through the Canal. In the case of a land swap, Ethiopia may offer
Eritrea a resource of its choice including electricity, freshwater (this will be
instrumental in dealing with its present water shortage which is projected to
worsen in future in Eritrea), agricultural land (which can act as Eritrean state farm),
direct foreign currency revenue from the canal or job opportunities for its citizens
in the construction process and future operations.

9
Problem Statement
Economic

An analysis of Ethiopia’s annual revenue reveals that the country loses 95 percent
of its revenue from external trade, on port charges, about 14 percent of its annual
budget estimated at 13.79 billion. (International Finance Corporation). This arises
from the country’s landlocked status, which continues to pose a challenge to its
access to global markets. These losses come in the form of port payment to
Ethiopia’s neighboring country of Djibouti whose port of Doraleh handles
Ethiopia’s exports and imports. A spot check on statistics at Doraleh port reveals
that Ethiopia’s external trade accounts for 70 percent of the port’s activities.
Records of Ethiopia’s expenses reveal that the country paid to Djibouti port fees
of between 1.5 and 2 billion dollars in 2018. This ranks higher than the country’s
expenditure on crucial sectors such as health, on which 1.4 billion dollars was
spent.

Transformation into industrial economies has been a major source of jobs for most
of these developed economies. Indeed, job creation remains a priority for
Ethiopia, which had a high unemployment rate of 1.8 percent in 2018, a figure
which is projected to rise in light of population increase. (United Nations). The
(World Africa) reports indicate that Ethiopia needs to create 14 million jobs
annually by 2025 in order to deal with the problem of unemployment.

Accordingly, the proposed Ethio - Eritrea shipping canal will provide job
opportunities to both Ethiopian and Eritrean nationals. It will also open up
Ethiopia’s sea transport; this will attract investment along the sea route, which will
attract both local and foreign investment. In addition, the project will spur the
processing and semi processing of some of the raw materials and equipment
required for the construction of the Canal. This will also contribute to the country’s
transformation from an agricultural to an industrial economy.

10
In spite of Ethiopia’s development efforts, its debt ratio (its national debt in relation
to its Gross Domestic Product) has continued to rise; for instance, it rose from 54.46
percent in 2015 to 61.04 percent in 2018 (static.com).The higher the debt-to-GDP
ratio, the less likely the country will pay back its debt, and the higher its risk of
default. A study by the World Bank found that if the debt-to-GDP ratio of a
country exceeds 77% for an extended period of time, it slows economic growth
and reduces its likelihood of repaying the debt. This creates an urgent need to
build the proposed Ethio - Eritrea shipping canal, which will spur Ethiopia’s
economic growth.

A landlocked country usually faces problems including paying high amounts of

money on transit and customs charges, border fees, temporary road licenses,
foreign vehicle permits, toll charges, foreign commercial licenses, and prevailing
insecurity situations. For this to continue, the country has to have a cordial
relationship with its neighbor, which offers it access to the sea. As such, any
conflict cripples the dependent country’s water transport, its external trade, and
a significant amount of its economic activities.

Construction of the Canal removes the above risks from Ethiopia, which is
currently building a naval force to deal with insecurity arising from piracy, which
continues to pose a threat to its shipping activities, trade, and economic growth.
Therefore, this Canal will offer it access to sea route, and a good operating
ground and reduced costs of managing its naval force.

Further research on development trajectories reveals that one way in which these
countries have achieved efficient global trade routes is through the building of
canals, man-made waterways that allow boats and ships to pass from one water
body to another. (The International Finance Corporation).Water facilitates ship
transportation of over 90 percent of raw and manufactured products sold
globally. (The World Factbook). Canals shorten shipping distances, save time,
and significant amounts in transportation costs.

11
Political

A country that has its own port gets high political advantage arising from reduced
regional disputes like the 1998 territorial dispute between Ethiopia and Eritrea.
Research on global development trajectories reveals that most developed
landlocked countries like Austria, Andorra, Belarus, Czech Republic, Slovakia,
Macedonia, Moldova, Switzerland have attained their development status by
reducing the financial, social, political and environmental problems that arise
from their landlocked status. (The World Fact Book) these include the
development of efficient trade routes (which have effectively reduced
transportation costs), increased freedom of trade, and foreign trade, hence
transforming them into industrial economies. On the other hand, a landlocked
status and overdependence on neighbors’ infrastructure have been cited to be
cause border wars. For instance, the Paraguayan War may have arisen from
Paraguay's lack of direct access to the oceans. Accordingly, the Canal will
cushion Ethiopia from potential conflicts that may be caused as a result of being
landlocked. (Faye, McArthur, &Thomas (2007).

This contributes to a need for a sea route in Ethiopia to enable its benefits from
the above-named development trajectories. And will help ease the tension and
future conflict between the two countries. The project also will help Ethiopia
become a formidable regional force with its own naval farce at the port of afraas.
The Ethio-Eritrea shipping canal will link Ethiopia to the global ocean through a
canal that links Ethiopia to its African neighbors and the rest of the world using
existing shipping routes; and enable the country to deal with the region security
such as terrorism and piracy actively with other global partners.

12
 Fig 2: Ethiopian Lake Afrera

Environmental

Climate change, a change in global or regional climate patterns, attributed to

increased levels of atmospheric carbon dioxide produced by the use of fossil
fuels, continues to cause economic losses arising from floods, droughts, diseases,
and other calamities arising from drastic changes in usual weather patterns.(The
United Nations Framework Convention on Climate Change).

Reduced shipping distances will reduce time, costs, and emissions (of
greenhouses gases, mostly carbon dioxide and methane, which contribute to
global warming). Like other countries in the region, climate change continues to
impact Ethiopia’s agriculture, livestock, water, and human health as it is heavily
dependent from diesel driven heavy vehicles for its goods transportation.

The country has recently communicated its Intended Nationally Determined

Contribution (INDC) to the United Nations Framework Convention on Climate
Change (UNFCCC), to reduce its greenhouse gas emissions from 150 mega tons
of carbon dioxide equivalent (Mt CO2e) in 2010 to 145 MtCO2e by 2030. This

13
commitment is also embodied in its Proposed National Action Plan, a blueprint
which it will use to achieve this. As such, the reduction of green housed emissions
due to reduced shipping distanced due to the Canal help Ethiopia to achieve its
goals in this regard.

Figure 1 Reduction in emission levels to be achieved with Ethiopia’s commitment

Fig 3: Ethiopia’s proposed climate action plan

Source: Source: https://bit.ly/1Jvef5J

One important consequence of being the landlocked absence of water

transport in Ethiopia. (Faye, McArthur, &Thomas (2007). As a result of this, the
country’s alternative transport system remains railway and road, which continues
to face pressure arising from overuse and faces imminent challenge
overcrowding The Ethio-Eritrea shipping canal will prevent this imminent Canal by
easing off transportation burden from the existing rail and road transport.

14
Funding legal issue

Its construction will take account of the broader social, political and economic
context surrounding trans-boundary water transport practices in accordance
with the United Nations Convention on the Law of the Sea which governs the use
of global waters, the latest development being giving landlocked countries a
right of access to and from the sea without taxation of traffic through transit states.
56

The canal will build on the country’s existing strengths; exploit development
opportunities while combating its looming threats to avoid its weaknesses. The
project will be done in collaboration with the Ethiopian and Eritrean government,
as well as the local and international partners that value-efficient transportation
and efficient trade systems for the region political and economic sustainability.
Project will be funded by public-private partnership including international private
investors and the sale of public bonds (open to Ethiopian and Eritrean nationals).
Which will be out lined in detail in the feasibility study.

Project objectives
Given the project’s goal of increasing the country’s GDP, it is unlikely that
demonstrable results will be possible in the first two years. This period will be
marked with construction, recruitment, quality assurance, and advocacy and
training activities.

To assess the extent to which the proposed project provides a solution to the
problems highlighted above, it will be necessary to set quantifiable objectives
that can be measured. The following are the project objectives:

5
UN Report Archived 2011-09-28 at the Wayback Machine
6 https://www.un.org/Depts/los/convention_agreements/texts/unclos/part10.htm

15
 i) To increase Ethiopia’s GDP by 10 percent during the third year of the
project.

At the initial phase, it is estimated that the country will realize 80 percent savings
on shipping costs to Djibouti, accounting for 14 percent of its current GDP.
(International Finance Corporation). It is anticipated that access to red sea will
increase external trade generate revenue in the form of tourism, fishing, and other
related industries.

ii) To reduce transportation costs by 50 percent during the third year of the
project increasing efficiency in import and export activities.

It is estimated that the Ethio- Eritrea shipping canal will reduce shipping distances
by over five times. (International Waterway Governance). This will lead to a
reduction in transportation costs by the third year.

iii) To increase employment by 10 percent by the third year of the project.

The project will create jobs for locals in constructaction, professionals, and non-
skilled workers within the shipping value chain. This will help the country deal with
the challenge of joblessness and spark development.

iv) To reduce greenhouse gas emissions by 20 percent in the project’s third

year.

This will arise from the reduced transportation distances arising from the use of the
Canal. Develop tourist sites; it has recently relaxed tourism, customs, and visa-
related regulations and provided tax holidays in a bid to encourage investments
in hotel and tour services.7 Opening up Ethiopia to the sea will provide alternative
transportation to tourists, expand opportunities for sea voyages, encourage

7
https://knoema.com/atlas/Ethiopia/topics/Tourism/Travel-and-Tourism-Total-Contribution-to-GDP/Contribution-of-travel-and-tourism-to-GDP-percent-of-GDP

16
investment, and consequently boost the government’s efforts to increase
revenue earnings from this sector.

Figure 5 location and wated way Lake Afrera in Ethiopia

Source: https://en.googlemaps.com/Lake_Afrera

This will provide Ethiopia access to affordable, sustainable, and effective water
transport. The new Canal is poised to turn Ethiopia into a regional hub for the Red
Sea, Indian Ocean, Europe, Africa, and Asia, like her neighboring country of
Djibouti. The new Canal will fill the earlier stated gaps in Ethiopia’s transport

17
system, financial systems, create employment, and expand the country’s
economic activities.8

Project activities
The project construction process will entail different but related activities,
including:

Research
The onset of the project will be marked by an additional feasibility study.
For instance, it will explore the best inland route between Ethiopia and
Eritrea, or if there is any other potential route will be explored in detail.
The most efficient construction materials and tools that will suit the existing
topographical conditions.

Fig 6: A picture showing alternative routes

8
"WHOI Calculates Volume and Depth of World's Oceans". Ocean Power Magazine. Archived from the original on July 13, 2012. Retrieved February 28, 2012

18
Recruitment of the project team
This will entail recruitment and putting together the project team. The project
initial activity will be managed by the Ethiopian government its partners such as
World Bank and other relevant bodies, which will set up an independent body to
manage it’s execute. This will reduce potential risks of political interference and
corruption from government departments and authority.

Construction will be undertaken by well recognized international company, a

who has specialized in infrastructural investment, construction,.

Other individual professionals from both Ethiopia and Eritrea will be recruited
through a competitive bidding process to form part of the team. They may
include engineers, values and other unskilled laborers.

Procurement
This entails the purchase of machinery and construction material such as stones,
concrete, wood, and water. These materials will be utilized for the actualization
of the project and it will be used to track and determine the needed mediums to
substantiate the plan.

Fig 7: A graphical illustration of the land connection between Ethiopia and Eritrea

19
Construction
This will involve creating an access route between Ethiopia and Eritrea. The route
will pass through the eastern plateau wall in Eritrea, which runs parallel to the Red
Sea from Ras Kadar (18° N) to Annesley Bay (15° N). The project will take
advantage of a break in the wall, which occurs at 9° N through which the Awash
River (3,281 ft. below the level of the mountains) flows eastward. It will turn south
into Ethiopia and follow the line of 40° E for approximately 600 km from where it
will link to lake Afrera and ultimately to the global ocean.

Construction will entail building a series of dams (underground rivers or barriers

that stop the flow of water) and locks (tools used for raising and lowering boats
and ships across varied water levels). In instances where the Canal is not at sea
level, water may be brought from sources such as rivers or springs. Alternatively,
water can be stored in reservoirs (A river or pond created using a dam or lock; or
an enlarged natural or artificial lake used to store water), which will be built.

Maintenance
This will entail ensuring that water level equals that of the sea access all seasons.
Any wear and tear will be fixed as necessary. In addition, the water routes will be
trailed regularly for its security and will be aided immediately if problems occur.

Advocacy
At the onset of the project, stakeholders within the transport value chain (in
Ethiopia and beyond) will be sensitized on the existence of the new Canal, its
usage, its connection points as well as its destinations. The advocacy efforts will
emphasize the future stability and peaceful co-existence within the region. It will
also highlight the regional and international economic, political, and social
benefits of the project, all-important in achieving its goodwill. Ethiopians in all walk
of life need to advocate the ‘’’’’’’’’’’’’’’’’’’’’’’

20
Partnerships
This will be formed with local authorities, other maritime bodies, and other players
within the global sea transport systems. Local investors and citizens from Ethiopia
and Eritrea will be encouraged to buy bonds in order to participate, own and
benefit more from the project

Evaluation
To determine whether project objectives are being met, a team of independent
people will evaluate the project. The project will be assessed based on:

Process evaluation
This will determine the extent to which the project is of high quality and meets
stipulated safety standards and regulations. Itis established that these standards
are not being met; the project director will be informed so that he can ensure that
the necessary changes are made.

Outcome Evaluation
It is important to determine whether the project will actually increase Ethiopia’s
GDP and increase jobs. To determine this growth, the current incremental
increase in GDP will be tracked as recorded by the country’s department of
finance.

Future Funding
Although most of the costs involve procurement of machinery, equipment and
actual construction, there is a need to plan for future funding of certain
components of the project. These include costs on maintenance on the Canal.

The Canal will sustain itself since money levied from ships using the Canal will be
used for maintenance and other operational costs.

21
Proposed time frame
Component/Activity Major milestones 1st 2nd
year year
Construction  Putting together the construction X X
team, setting up structural,
logistical, and administrative units.
 Procurement
 Securing of necessary contracts
 Actual construction.

Maintenance  Monitoring for structural faults and X X

rectifying to ensure that the Canal
is in perfect shape and operating
optimally as planned

Advocacy &  Sensitizing/informing stakeholders X

partnerships building in the transportation and trade
value chains (within and outside
Ethiopia) about the new Canal.
 Cementing and maintaining
existing trans-border relations to X X

ensure smooth operation and

optimum benefit from the Canal

22
Estimated Proposed budget
Budget line Yr 1, ($) Yr2 ($)

People and time (salaries)

Lead architect 200,000,000 100,000,000
Project architects (15) 100,000,000 100,000,000
Metals 1,000,000,000 1,000,000,000
Ballast, concrete and other consumables 1,000,000,000 1,000,000,000

Administration costs 500,000,000 500,000,000

Communication services (telephone, 150,000,000 150,000,000
email, internet)
Capital/equipment
Tractors (5) 500,000,000 500,000,000
Branding 70,000,000 30,000,000
Monitoring 150,000,000 150,000,000
Evaluation 50,000,000 20,000,000
Audit 20,000,000 10,000,000
Miscellaneous 100,000,000 100,000,000
TOTALS 10,000,000,000

23
 Ethiopia: National debt from 2017 to 2020
(In Billion U.S. Dollars)

57.03

51.02

34.6 43.97

2017 2018 2019 2020

Source: https://www.statista.com/statistics/531575/national-debt-of-ethiopia/

Euthopia GDP growth (Annual %)

(2015-2018)

6.81
2018

2017
9.504

2016
9.433

2015
10.392

Source: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG

24
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February 2019

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