Is the decision to build railway line between Mekele and Djibouti a rational decision?
February 14, 2014
You can’t take the trains to Bo anymore!
by Ephrem Madebo
The diamond rich West African nation of Sierra Leone lost the fight to the encroaching British imperial forces and became a British colony in 1896. As Soon as the Brits set their foot on the soils of Freetown, they started roaming the interior of Serra Leone looking for wealth to be looted and exported to the United Kingdom. The nation of Sierra Leone was rich and there was much to be looted by the Brits, so much so that they quickly started building a railway from the capital Freetown to the interior. Though the motive of the British for building the railway to the south was to rule Sierra Leone, by 1967 when the late Siaka Stevens won a close election and came to power, the railway was playing a crucial role in Sierra Leone’s economy transporting coffee, cocoa, and diamonds. Siaka Stevens was a Lumba, from the north, but the farmers who grew coffee and cocoa were Mende from the south, and the railway was Mendeland’s outlet to the world.
In the 1967 election that brought Siaka Stevens to power, the Mendeland voted hugely for the opposition Sierra Leone People’s party (SLPP). When Siaka Stevens came to power, he was more interested in holding power than promoting Mendeland’s export economy. He thought what was good for the Mende was good for SLPP, and bad for Siaka Stevens. Hence, he pulled up the railway line to Mendeland and sold off the track. By doing so, Siaka Stevens crippled one of the most vibrant sectors of Sierra Leone’s economy. To Siaka Stevens, Lumba was Sierra Leone and Siera Leone was Lumba.
Why am I telling you a railway history of a West African nation? Well, it happens that right at this moment history is repeating itself in East Africa, not exactly the same history, but very similar. Just like the 1967 Sierra Leone was ruled by an ethno-centered rat, present day Ethiopia is ruled by similar ethno-centered rats that literally fought for seventeen years to loot and belittle Ethiopia. In the last three to four weeks, one of the most whispered buzzes in the Ethiopian traditional and social media circles was the $ 1.4 billion loan secured for the Harro Market railway project that stretches from Awash to Weldia. The estimated cost of the project is $3.2 billion ($1.7 billion from Awash to Weldia and $1.5 billion from Weldia to Mekele). Why is this news a buzz or a concern to many Ethiopians? Well, to some the concern is simply why the train is going to Makele. To some, the concern is the train should not go anywhere but to Mekele (these are happy campers), yet to some the concern is why and how is Mekele selected for this massive project? Why not the Coffee rich Sidama, the resourceful Oromia, or the Grain belts of Gojam?
To me, the concern is none of the above, or the naked “why” and “how” questions are not my cup of tea. My concern is – why and how is Mekle given priority to this very expensive (3.2 billion US) railway project? Does building a $3.2 billion railway line from Mekele to Djibouti give economic sense (especially when the current geographical resource distribution of Ethiopia is taken into account)? Is this an economic decision? All in all, why and how is Tigray given a priority for this massive railway project while the lion’s share of Ethiopia’s natural resources (potential and realized) are far from Tigray? I’m pretty sure that almost all Ethiopians outside the hard core TPLF rats wish to see a network of railways that connect all corners of Ethiopia. In fact, to most Ethiopians, where the railways are built is insignificant as long as the location choice is a rational economic decision, or even a political decision to curb regional economic inequalities.
Transport has affected economic development from the beginning of human civilization. Efficient transport is a critical component of economic development, globally and nationally. Transportation investments link factors of production together in a web of relationships between producers and consumers. Hence, it goes without saying that our country Ethiopia needs transportation, not just transportation, but a transportation revolution. Ethiopia’s current and future development efforts will not be complete without a web of transport networks that connect producers and consumers at the local, regional and national level. The essence of this article is not to emphasize on the role railways play in economic development, it is not to start a public discussion on the importance of rail transport to our country either.
The essence of this article is simple and crystal clear. As we have seen in the opening paragraphs, the regime in Ethiopia has secured a 3.2 billion US dollar loan to build a railway line between the Port of Tajura in Djibouti and Mekele, the capital of Tigray Regional State. The question raised in this article is not why the Regional State of Tigray gets a $ 3.2 billion railway project because I unreservedly believe that Tigray needs railway lines. The key question raised in this article is – what is the decision making process that the Ethiopian regime used to give Tigray this multi-billion dollar project? Given the same time, economic conditions and regional resources distribution, would a democratically elected government in Ethiopia award the $3.2 billion railway project to Tigray? Why in the hell am I asking these questions? Am I suspicious of nepotism or parochialism? You guessed it right, yes I am! The TPLF regime that ruled Ethiopia for the last 22 years has time and again showed me that in everything it does, it favors its power base [which is Tigray].
Ethiopia is a nation that has one of the least railway lines in the world. In fact, we would have been the only nation with no railway line had it not been to the far sighted Emperor Menelik who built the only railway line of the nation a century ago. These sour and hard to swallow facts tell us that every region in Ethiopia needs a railway system. But, Ethiopia does not have the capital, the technical skill nor the organizational capability to build railways for all of its regions. Therefore, heavy investment projects, such as transportation and hydropower investment projects, as important as they are, they cannot be allocated or awarded to every region of the country at the same time.
Given the limited quantity of saving or investment funds in most developing countries, the question of where and how to allocate investment funds has perennially been a hard question to answer. In fact, the answer becomes even harder when the countries in question are divided along ethnic, religious and linguistic lines. I have no problem if the federal government in Ethiopia uses discretionary polices to redistribute infrastructure investments from one region to another. However, such actions should not be random actions. There should always be economic or political motivations behind such actions.
So what was the motivation of the TPLF regime when it allocated a 3.2 billion dollar railway project to its power base of Tigray? Was it political, economic, curbing regional inequalities, or parochialism? Well, I really don’t know the correct answer, but I know for sure that the answer is not “none of the above”, it is not all of the above either. I can say with absolute certainty that the decision to build railway line between Djibouti and Mekele is not an economic decision. If it was an economic decision that meant to benefit Ethiopia as a nation, then the 3.2 billion dollar project should have been allocated somewhere else where the project’s economic rate of return (aka internal rate of return) is the highest.
The facilitation of long distance transport of bulky goods that are not easily transported through motor vehicles is one of the advantages of railways. Current and past economic maps of Ethiopia clearly show that Tigray is not the nation’s source of bulk agricultural exports, and of course, Tigray is not a typical source of industrial raw materials. So why did the TPLF regime make Tigray the destination of a multibillion dollar railway project?
Obviously, in developing countries sometimes key investment decisions are made for the sole purpose of curbing regional economic/income disparities. But, there is no reason what so ever to believe that this is the case in the decision of the TPLF regime to award Tigray a 3.2 billion dollar railway project. Because there are regions in Ethiopia that are visibly less developed than Tigray. These are regions forgotten by all successive regimes including the current regime. I say this because to me, allowing people to sing & dance is different than letting people be free to lead their life.
The increasing constraints of financing transport infrastructure projects forces governments at regional and national level to critically evaluate alternatives before allocating investment funds for infrastructure projects. Among many things, this includes project evaluation techniques. The TPLF regime should not be an exception to this rule. In fact, faced with acute financial constraints, and as a nation that boasts to have built a just and equal federal structure, Ethiopia must be extra vigilant and must use project appraisal evaluation methods to allocate its resources in a way that maximizes their net return to the nation.
I strongly believe that this important economic rationale was bulldozed or was not honored when the TPLF regime allocated the 3.2 billion US dollar massive railway project to Tigray. So again, the question here is not why the project was awarded to Tigray, but how it was awarded. Let’s not forget that 3.2 billion dollar (57.6 billion birr in current exchange rate) is a huge burden on current and future generation Ethiopian tax payers. One can assume that the Harro Market railway project and the positive spillovers of the project will eventually pay for the project. Well, maybe yes – maybe not, and the key question is not whether the project pays for itself or not. The relevant question here is – what if the 3.2 billion dollar was used in another place for another or similar project, or simply what if the 3.2 billion dollar was used in a more efficient way? The answer is straight forward, in this case, the project not only pays for itself, but it can generate capital for more projects in a much shorter time than the Harro Market Project.
Tigray is the cradle of Ethiopian civilization, and it’s home to the original black Christian Church. Tigray is home of ancient worrior kings, emperors, maritime merchants, monks and popes, and big time composers like Saint Yared who wrote soothing music notes centuries before the world knew about Mozart and the Bach brothers. The marriage of Ethiopia and Tigray is natural and inseparable because everytime we go back in time and trace the state of Ethiopia we always end up in Tigray. But, this article is not about Tigray, it is about Ethiopia that includes Tigray. What is good for Ethiopia is always good for Tigray, and of course what is good for Tigray is also good for the rest of Ethiopia as long as it is acted upon with good heart and impartiality.
Two of the three maps embedded in this article show the geographical resource distribution of Ethiopia. These maps are produced by the Ethiopian mapping agency in cooperation with foreign mapping agencies. These maps carry invaluable information for federal and state governments in Ethiopia, private investors, aid organiation, international development agencies and foreign and domestic finanacial instituions. For example, the Ethiopian government can use these maps for developing agicultural, industrial, and infrastructure polcy initiatives. The maps clearly show where the concentration of the nations’s manufacturing industries and agricultural belts are. Had the TPLF regime visited these maps before it made decision on the 3.2 billion dollar railway project, it would have made an informed decision that benfits the entire nation.
Among many other things, transport infrastructure facilites like railways are built to connect the following sites (in a triangular scheme): raw material centers, manufacturing centers and market/consumer centers. I don’t know what the future holds, but as of now, Tigray looks like more of a net consumer to me in this triangular relationship. So if Tigray is not the source of raw material to the nation’s manufacturing sector, if it is not the grain belt of the nation, and if it does not produce the nation’s export commodities, then why is it awarded a 3:2 billion dollar railway project?
One of the responsibilities of governments is to build strong transportation network that facilitates inter-regional trade and fosters national economic development. Since balanced economic development is one of the goals of central governments, the federal government in Ethiopia has no business of favoring any particular region. Its investment decisions at the federal level must follow proper investment fund allocation criteria. Whenever the federal government falls short of the established project evaluation criteria and makes parochial or questionable investment decisions, the Ethiopian tax payers have the right to question if their money is used in the most efficient way. This article is written on the behalf of all Ethiopian tax payers who get killed or end up in Kality if they ask such questions.
posted by Daniel tesfaye