Chinese Transportation Projects in Ethiopia

The Diplomat published on 26 January 2019 an analysis titled "Revisiting Chinese Transportation Projects in Ethiopia" by Istvan Tarrosy, Hungarian Academy of Sciences, and Zoltan Voros, University of Pecs.

The authors revisited the Chinese financed and built light rail system in Addis Ababa and the railway between Addis Ababa and Djibouti. They questioned how Ethiopia can make either project profitable and asked what happens if Ethiopia fails to repay the loans provided by China. Neither the light railway nor the Addis Ababa-Djibouti railway will be able to generate the desired income, although the railway may help increase trade as the freight trains come on line. China has already extended the debt repayment period from 10 to 30 years, probably because Ethiopia failed to start paying back the loans. The authors concluded that the debt is a worrisome issue for Ethiopia.