Private Sector Role Critical to Improve Logistics System in Ethiopia: WB Specialist

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July 06, 2021 (ENA) Enhanced private sector role is necessary to improve the logistics system of Ethiopia, World Bank Lead Private Sector Specialist Charles Kunaka said.

Ethiopia’s Logistics Performance Report 2020: A Self-assessment based on World Bank’s ILPI was launched today.

The specialist Charles Kunaka told ENA that significant reforms undertaken by the Government of Ethiopia, including the opening up of the logistics sector to Foreign Direct Investment and private sector competition, require more continuous improvement and enhanced role of the private sector.

There are important messages that come from this report, including a lot of investment in transport and logistics infrastructure over the past two decades and the government’s reform on the logistics system, he observed.

“Over the past two years, there have been a lot of significant reforms on the part of the government by opening up the logistics system to Foreign Direct Investment and to competition and so on,” Kunaka pointed out.

Logistics system, however, is a continuous process and the government and the private sector have roles to improve the logistics system.

The dimensions of the Logistics Performance Index (LPI) such as customs, infrastructure and quality of services are led by the government or the public sector. But there are also parts of the LPI such as logistics quality, international shipment and timeliness that are perhaps dominated by the private sector, he elaborated.  

“So the private sector has an important role to play to continue to improve the performance of the system. The private sector should also step up its game. As you saw in the numbers, the private sector numbers are between 2 and 3 whereas in the best performing economies in the world, the quality of the logistics service has a much higher score than that. So there is a gap that needs to be filled,” Kunaka stressed.

According to him, the World Bank is already preparing for the next global LPI assessment “and we are hoping that Ethiopia will be included in that next assessment.”

World Bank’s international LPI is a summary indicator of logistics sector performance, combining data on the six core performance components into a single aggregate measure.

Customs, infrastructure, international shipment, logistics quality and competence, tracking and tracing, timeliness are the key dimensions to benchmark countries performance.

Transport Minister Dagmawit Moges said on her part the country report has helped to identify gaps in the logistics system and to measure the performance to improve the logistics system.

The National Logistics Strategy in place has to be implemented appropriately to improve Ethiopia’s rank of 126 by the World Bank’s LPI report in 2016 to 40 by 2030, she added.

“If we implement the strategy appropriately,” the minister said “for sure the chance to achieve our plan is wide-ranging and we are on the right track.”

The strategy approved by Council of Ministers has identified 98 interventions to improve bottlenecks of the logistics system.