Addis Ababa Gets $300M Road Safety Loan From World Bank

Addis Ababa Gets $300M Road Safety Loan From World Bank


Ethiopia is one of the worst countries in Africa for road fatalities, not because it has so many vehicles (the ratio of vehicles to people is much higher than Africa’s average) but partly because there are few traffic lights or sidewalks, making conditions deadly for drivers and pedestrians.

The World Bank on Friday approved a $300 million International Development Association (IDA) loan to add traffic lights and sidewalks on selected streets in Addis Ababa and secure a database for driver and vehicle licensing compliance throughout Ethiopia.

World Bank is an international financial institution that provides loans to developing countries for capital programs. International Development Association loans are given interest free or at low interest rates to help the world’s poorest countries, the Washington, D.C.-based World Bank said in a press release. The money is meant to boost economic growth, reduce poverty, and improve poor people’s lives.

Across Africa, there are 44 vehicles for every 1,000 inhabitants against a global average of 180:1000. In Ethiopia, there are 2 vehicles per 1,000 people, according to a recent Deloitte report.

Global vehicle manufacturers like Ford look at those numbers and see nothing but potential.

Ethiopia has astonishing potential, according to Jeff Nemeth, head of Ford sub-Saharan Africa, BusinessdayLive reported. It has the world’s second-highest vehicle-to-population ratio, Africa’s second-largest population — 94 million — and ninth-largest GDP — $63 billion.

So if Ethiopia’s GDP is so high, why is World Bank lending it money at low or no interest?

Despite Ethiopia’s much-hyped economic growth, its people are still among the poorest in the world.

Ethiopia came in at No. 167 out of 187 countries ranked for gross domestic product per capita by the International Monetary Fund. Ethiopian GDP per capita was $1,801 in 2015 compared with $6,108 in Nigeria and $55,805 in the U.S.

Addis Ababa gets $300M road safety loan

Ethiopia’s economy grew as much as 10 percent annually from 2003 to 2014, but not for everyone, JacobinMag reported:

On the one hand, the government has undertaken huge infrastructure projects, like the construction of the two largest dams in Africa (funded in part by foreign investment). On the other, it sells locally owned land to large multinational corporations at low prices and exiles or imprisons journalists critical of the deals.

Sheet-metal shantytowns compete with the new high rises in Addis Ababa, and many residents, seemingly untouched by the rapid economic growth, still suffer from polio and leprosy. A recent United Nations report on human development ranked Ethiopia 173rd out of 186 nations.

The World Bank said road safety is a major challenge in Ethiopia, where 64 people per 10,000 vehicles die on the roads each year, making it the eighth worst country in Africa. The poor bear a disproportionate burden of these road injuries, World Bank said.

About 65 percent of Addis Ababa roads lack pedestrian walkways. The number of vehicles operating in Addis Ababa is low compared to other cities that size but congestion is getting worse.

“Expanding the current traffic signal and control systems and providing pedestrians amenities and modernizing vehicle and driver licensing systems will improve road safety,” said Carolyn Turk, World Bank Country Director for Ethiopia, in a prepared statement.

The World Bank says its International Development Association is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Annual commitments have averaged about $19 billion over the last three years, with about 50 percent going to Africa.