INCORPORATING COLD CHAIN
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OFFICIAL PUBLICATION
Feasibility study on cold chain capacity in Ethiopia
WFLO was contracted by ARCH Cold Chain Solutions East Africa Fund to perform a feasibility study on cold chain capacity in Ethiopia in 2020 .
In partnering with LixCap , WFLO was able to assess the market potential for TCL services and provide information to support the early-stage feasibility of the project . This assessment directly informed the design of a TCL facility to ensure it will provide locally appropriate solutions for long-term commercial viability , as well as job creation and other positive social and economic impacts . With the completion of the study , ARCH has a roadmap to attract and catalyse commercially viable and sustainable TCL operations in Ethiopia .
Ethiopia is highly agricultural – with 70 % of its population living in rural areas – and in desperate need of cold chain development to exploit export markets .
It has become the largest economy in the East Africa region and the third in sub-Saharan Africa , with the second largest population . With a market friendly government , it is sometimes referred to as the ‘ China ’ of Africa – though China isn ’ t overly represented in the economy .
Ethiopian Prime Minister Abiy Ahmed recently described Ethiopia ’ s macro economy as resilient and continuing to register growth amid various bottlenecks resulting from man-made and natural challenges including the bloody conflict in the Tigray region , the Ukraine-Russia crisis , the Covid-19 pandemic and drought .
The premier said that the economic growth trajectory has impressed even global economists . During the concluded Ethiopian fiscal year , the gross domestic product ( GDP ) of the nation witnessed 6.4 % growth and the nation plans to achieve 7.5 % growth this year . Ethiopia ’ s economy reached USD126.7-billion at the end of the 2022 fiscal year , and per capita income USD1 212 – making it one of the poorest countries in the world . Over the past 15 years , Ethiopia ’ s economy has been among the fastest growing in the world ( at an average of 9.5 % a year ) and it aims to reach lower-middle-income status by 2025 .
“ The Ethiopian economy rose to 1st in East Africa and 3rd in Sub-Saharan Africa ,” the prime minister said citing a World Bank report . The nation ’ s challenges have prompted a culture of hard work in the nation , and among the sectors that showed growth , Abiy mentioned agriculture which is playing a leading role in national economic development .
Agriculture has seen 6.1 % growth , he said , citing the productivity in wheat farming as a driving force for the results . Furthermore , the nation has planted 4.7 billion new coffee seedlings to increase the coffee production of the country , he said , noting that this fiscal year Ethiopia planned to produce 20 % more coffee than the previous year . Ethiopia is also working to export fruits to the international market as it has been able to register encouraging results in the sector .
Recently , the Horn of Africa nation announced that it was making preparations
Erik Hathaway . jpg
By Eamonn Ryan
Ethiopia is highly agricultural – with 70 % of its population living in rural areas – and in desperate need of cold chain development to exploit export markets .
to export wheat to the international market starting this year . Despite the announced economic growth , the country ’ s more than 115 million citizens are experiencing the highest inflation in a decade , foreign exchange restrictions and mounting debt amid reports of massive government spending on the Tigray war effort .
A World Bank report says that among other factors , growth was led by capital accumulation , in particular through public infrastructure investments . The consistently high economic growth over the last decade resulted in positive trends in poverty reduction in both urban and rural areas . The share of the population living below the national poverty line decreased from 30 % in 2011 to 24 % in 2016 and human development indicators improved as well . However , gains are modest when compared to other countries that saw fast growth , and inequality has increased in recent years . Furthermore , conflicts in various parts of Ethiopia risk undermining the economic and social development progress the country has achieved in recent years .
The government has launched a 10-Year Development Plan , based on a 2019 Home- Grown Economic Reform Agenda , which will run from 2020 / 21 to 2029 / 30 . The plan aims to sustain the growth achieved under the Growth and Transformation Plans of the previous decade , while facilitating the shift towards a more private-sector-driven economy . It also aims to foster efficiency and introduce competition in key growthenabling sectors ( energy , logistics and telecom ), improve the business climate and address macroeconomic imbalances .
DEVELOPMENT CHALLENGES The report says : “ Ethiopia ’ s main challenges are continuing its positive economic development on a sustainable basis and accelerating poverty reduction — both of which require significant progress in job creation , as well as improved governance , to ensure that growth is equitable across society . Large-scale donor support will continue to provide a vital contribution in the near term to finance the cost of pro-poor programs . Key challenges are related to :
“ The incidence of conflict has increased , particularly in the north since November 2020 [ until a ceasefire in November 2022 ], having a substantial impact on lives , livelihoods , and infrastructure .
“ Like the rest of the world , Ethiopia has been experiencing the unprecedented social and economic impact of the Covid-19 pandemic . While exports and foreign direct investment rebounded in 2020 / 21 and jobs have been recovering , some lasting scars are likely to remain . Urban employment levels have not recovered fully , some households and firms continue to report income losses and poverty is estimated to have increased .
“ The 2022 drought was the worst in 40 years , severely affecting millions in southern and eastern parts of the country . Overall , more than 20 million persons face severe food insecurity in 2022 .
“ Ethiopia ’ s Human Capital Index is at a low 0.38 ( 2020 ), which means that a child born in Ethiopia today will be 38 % as productive when s / he grows up as s / he could be if s / he enjoyed complete education and full health . This is lower than the average for the sub-Saharan Africa region but slightly higher than the average for low-income countries . Learning poverty stands at 90 % and 37 % of children under five years of age are stunted .
“ Ethiopia has a fledgling private sector , whose growth and job-creation abilities have been hindered by constraints in the business climate and competitiveness . The country ’ s growing workforce ( with roughly two million persons reaching working age per year ) puts pressure on absorption capacity of the labour market and necessitates improving current jobs , while creating sufficient new jobs .” CLA
COLD LINK AFRICA • June 2023 www . coldlinkafrica . co . za 5