🚚 Better Truck Next Time!

Welcome to the 57th edition of ፍራንክ Digest!

Your weekly brief on all things Finance and Investing. Quick, enjoyable reads for busy professionals in 5 minutes or less.

Here’s what’s coming your way:

• 🚢 Ethiopia’s Logistical Delays Are Costing More Than Just Time

• 🏘️ Rental Prices: 4 Walls Don’t Make a Right

• 🗝️ The Key Takeaways

Thanks for reading!

The Arteries That Move Ethiopia’s Economy

Economy

In the world of logistics, time is money.

For Ethiopia, the clock is ticking ⏱️

The phrase "Better luck next time" might as well take a logistical twist. Because if you’re a business waiting for inventory, equipment, or whatever it may be, the odds are high your truck is stuck somewhere between Djibouti, Modjo, a traffic jam, and a customs queue that moves slower than a turtle on a lunch break.

Unfortunately for us consumers and businesses alike, it's a reflection of the country's entrenched transportation and customs challenges despite some notable progress.

Here’s more.

🚧 The Modjo Dry Port: A Bottleneck in the Supply Chain

Ethiopia has built seven inland ports across the country, including Kality, Mekelle and Dire Dawa. Cue the “elelelele”s!

The mother of all of them is the one in Modjo.

This dry port about 70km from Addis handles over 80% of Ethiopia's incoming trade, making its inefficiencies a national concern.

Here’s what’s been happening lately:

• The wait time at Modjo has gotten so long that businesses might as well plan around it like it’s a time zone.

• Transport costs have gone up as freight companies pass on their own inefficiencies—and fuel price hikes—to importers and exporters.

• Critical supplies, from medical equipment to industrial machinery, get stuck

The Modjo Dry Port, intended as the heart of Ethiopia's logistics network, has become a holding zone.

The majority of containers have to pass through this dry port for import customs clearance. A study revealed that 66% of respondents experienced delivery delays, and 88% rated staff safety as unsatisfactory. Alarmingly, 86% of total transport time is consumed at this facility, exacerbating overall delays.

🛣️ Infrastructure: Ambitious Plans, Persistent Gaps

Ethiopia has invested heavily in road infrastructure, boasting 144,024 kilometers of all-weather roads as of FY 2019/20. However, this accounts for only about 41% of the required network. According to the government’s 10-year transport perspective plan, it plans to invest 3.0 trillion birr in the next ten years on things like: