A newly submitted report to Ethiopia’s Ministry of Transport has laid out plans for an ambitious reform of the country’s railway system, aiming to introduce private sector participation and create a dedicated regulatory body. The goal is to inject competition into the Ethiopian Railways Corporation (ERC), which is currently state-run, and to improve the sector’s overall efficiency.
This report is part of a broader reform program supported by the International Monetary Fund (IMF) and proposes a $2.6 billion investment to modernize the railway infrastructure. One of the central recommendations is the establishment of an independent regulatory authority, which would be responsible for issuing licenses, managing the entry of private operators, and overseeing the expansion of the railway network.
The reform strategy was prepared by a task force that includes key figures from Ethiopia’s transportation and logistics sectors. Among them are Mengist Hailemariam, an adviser to the Ethiopian Maritime Authority, and Sileshi Kassa, deputy director of the ERC.
Ethiopia’s rail sector, which operates the critical Addis Ababa-Djibouti corridor, has faced challenges like poor maintenance and underutilization. The proposed changes are designed to boost efficiency, increase freight transport capacity, and enhance passenger services. Private companies are expected to play a key role in the construction of new lines, as well as the operation of freight and passenger services.
The legal framework needed for the liberalization process is expected to be in place by 2026, paving the way for private competition and investments aimed at revitalizing Ethiopia’s rail system.
