News Finance deficit chokes off road maintenance efforts
October 28, 2023
No new procurement in the past four years
Officials in charge of overseeing road projects in Ethiopia cited ‘severe financial constraints’ as a major factor responsible for subpar road construction and maintenance performance, in their report to the Parliament last Wednesday, October 25, 2023.
According to the officials, lack of funds from financers and dwindling disbursement of the already allotted budget have crippled the Ethiopian Roads Administration (ERA), with foreign currency shortages “chronically affecting” the procurement of inputs.
The officials told members of the parliament that, owing to financial constraints, the Roads Administration has been unable to make any new procurement during the last four years in a row, thus had to rely only on existing stock for input materials for road projects.
“The asphalt stock of the Administration is now almost zero. As a result, periodic and regular road maintenance is being done by using gravel, instead of asphalt,” Wondimu Seta (Engineer)- State Minister of Urban and Infrastructure said. “The gravel would wear out soon and would require additional maintenance.”
Noting the enormity of the problem, State Minister Wondimu and director general of ERA Mohamed Abdurahman (Engineer) – called for intervention of the House towards a proper solution to address the problem.
The officials forwarded their concerns to the house that a lack of periodic and regular maintenance on the roads would worsen their conditions and they would eventually need major maintenance that would demand significant amount of money.
Bitumen and cement were among the inputs that were scarce to find for maintenance work. The last few years’ experience shows slightly better improvements in the maintenance of other projects, but large road maintenance projects faced huge problems, the Director General claimed.
During the fiscal year that ended in June 2021, the Administration managed to get only 4.6 percent of its demand for bitumen, and for the year that ended in June 2022, they managed to get only one percent of what they were waiting for, Mohamed told the MPs.
Last fiscal year showed improvement, with 17 percent of their demand for bitumen being met.
Cement supply for the road sector is also besieged. In the past few years alone, the Administration was being supplied with about 10 percent of the cement required, on average.
“Besides efforts to use local input resources, we are finalizing a successful international bidding process so that we can have enough supplies in the coming months,” Mohamed said.
“We are working with the National Bank of Ethiopia and the Ministry of Finance to finish the bulk supplying processes through different mechanisms, such as suppliers’ credit,” he added.
With regard to the capital budget, the largest source of finance for road projects—about 16.6 billion birr that was supposed to be disbursed last year—was transferred to this year. For the first quarter of the current fiscal year, a whopping 9.5 billion birr fresh budget was planned. However, only 2.8 billion birr has been disbursed in the past three months.
“There is a serious problem with the budget,” Wondimu said. “The Administration is doing its best, but government intervention is clearly required.”