Ethiopia’s fast-growing manufacturing sector is running into a familiar constraint: logistics. As industrial output expands, manufacturers are increasingly facing delays in the import of raw materials, with ships queuing at ports and disrupting production schedules.

The challenge came into focus at the 4th Invest in Ethiopia Forum held in Addis Ababa, where industry players said demand for inputs has risen faster than the country’s trade and transport systems can handle. For manufacturers relying on imported raw materials, the result has been longer waiting times, higher costs and pressure on production timelines.

Alex Song, chief executive officer of Gobez Electric Manufacturing PLC, said the logistics bottleneck has become one of the biggest obstacles for manufacturers, despite strong investment in new energy and industrial projects.

“The challenges we are facing recently are mainly related to logistics,” he said during the forum. “For example, one can mention the queues at the port. There are so many ships. Our ship is also in line because our consumption of raw materials is very high.”

The delays are especially costly for large-scale producers operating under just-in-time production models, where raw materials must arrive on schedule to keep factories running efficiently. When shipments are held up in the Red Sea or at the Port of Djibouti, factories face interruptions that can ripple through the entire production chain.

The problem is particularly acute in Ethiopia’s new energy sector, which depends heavily on imported spare parts and specialized inputs. As the government expands special economic zones and industrial parks, demand for steel, chemicals and electronic components has increased sharply, adding further strain to already stretched supply routes.

Government efforts to ease the burden, including one-stop service arrangements that bring customs, banking and investment services into industrial parks, have improved administrative efficiency. But investors say external pressures such as fuel price volatility and weaknesses in regional trade corridors continue to limit how far these reforms can go.

The bottlenecks also have implications for employment. Zhang Huarong, founder of Huajian Special Group, said Ethiopia’s ambition to create jobs for millions of young people will depend not only on investment policy but also on the speed at which goods can move through the system.

Despite the frustrations, many manufacturers say the congestion reflects a broader success: demand is rising because the economy is growing. Several described the situation as a “good problem” to have, arguing that the challenge now is to match industrial ambition with stronger supply-chain capacity.

Some companies are trying to adapt by sourcing more inputs locally and developing their own logistics solutions. Others are prioritizing cargo flights or shifting toward electric vehicles powered by solar energy to reduce dependence on fuel and improve reliability.

Alex said the difficulties are also pushing firms to innovate and adapt. “If you can understand the culture you can gradually turn challenges into opportunities,” he said.

In the steep and remote hills of West Abaya, where reaching a health facility has long meant hours of walking over rough terrain, a new digital tool is beginning to reshape the delivery of primary healthcare. For communities in the Daga Birbir cluster, an ordinary fever or a child’s cough once meant a painful journey to the nearest health post, often with a sick patient carried on a traditional stretcher known as a kareza. For health workers stationed at these posts, the challenge was not only the burden of distance but also the limits of the system itself.

At Laywetarga Kebele health post, Health Extension Worker Fikre Bargo has spent 11 years serving one of Ethiopia’s most isolated communities. For much of that time, she says, her work was defined by frustration and helplessness. Patients would arrive exhausted after a four-hour trek, only for her to refer them to a higher-level facility because she lacked quick access to specialist advice. The emotional weight of turning people away was, in her words, one of the hardest parts of the job.

“I used to pray I hadn’t chosen this profession,” Fikre said, recalling the years when paper-based guidelines, limited training support and long distances to health centers made it difficult to manage even moderately complex cases. “Patients travel four hours through difficult terrain to reach us. By the time they arrive, they are exhausted and weak. Because I lacked the confidence to provide immediate expert support or treat complex cases, I would send them back to the Daga Birbir health center.”

That experience is now changing through a new artificial intelligence tool called Health Assist, developed for Ethiopia’s Health Extension Program through a collaboration between the Ministry of Health and Last Mile Health. The system gives health extension workers direct access to clinical guidance through their smartphones, offering a kind of digital specialist support to frontline providers in remote areas.

Instead of leafing through manual pages or waiting for phone consultations, workers can now describe symptoms through audio input and receive answers based on national medical guidelines in a matter of minutes. For Fikre, that shift has been more than technical; it has changed the way she sees her own profession.

“I use the audio feature because it’s fast,” she said. “I tell the patient, ‘There is a professional better than me, let me consult them and tell you the answer.’ When the phone returns the correct medical procedure, the patient’s eyes light up with joy; they believe the government has brought the hospital right to their doorstep.”

The technology is part of a broader effort to modernize Ethiopia’s frontline health services and reduce the long-standing referral burden that has shaped rural care for decades. In many parts of the country, health extension workers are the first point of contact for patients, but when they face cases beyond their training, the only option has often been referral. That system can mean more travel, more expense and more suffering for patients who are already weak or in pain.

Aynet Adelow, another health extension worker, said the old model was deeply discouraging. She described the difficulty of telling a patient who had already travelled for hours that they needed to continue to another facility, often after she had spent time searching through the “Chart Booklet,” the printed medical manual used by frontline workers.

“In the past, I would refer patients even when I could have handled the case,” she said. “I knew I had the potential, but I struggled with confidence and getting quick verification. Time would be wasted while the patient sat there and I flipped through the booklet. They would get angry, thinking I was doing my own personal work. It was very sad.”

The arrival of AI support has begun to change that dynamic. According to Last Mile Health, the Health Assist system has been piloted in seven regions and 15 districts, making it one of the country’s first attempts to use AI as a workplace assistant for health extension workers. The idea is to strengthen decision-making at the lowest level of the health system, while keeping care as close to the community as possible.

In the first two months of the pilot alone, the system recorded 18,000 calls for support. Last Mile Health says this translated into about 6,000 patients receiving treatment closer to home rather than being sent onward to higher facilities. For a rural health system under pressure, those numbers suggest significant demand for the service and its potential to ease congestion at health centers.

Dr. Ruth Diriba, senior program manager at Last Mile Health, said the tool was introduced cautiously because of the risks that come with using artificial intelligence in healthcare. Safety, she stressed, was built into the system from the start. The app was not launched immediately. Instead, it underwent about 18 months of review by Ministry of Health experts and senior physicians before being deployed more widely.

“We didn’t put the app into service immediately,” she said. “It was reviewed by Ministry of Health experts and senior physicians for a year and a half. Initially, we ensured human oversight by having workers access the support through call agents before using it directly.”

That layered approach reflects the broader concern around AI in medicine: trust. A machine can process information quickly, but its usefulness depends on accuracy, supervision and whether frontline workers can rely on it in real-world settings. Last Mile Health says the system is designed to match responses against national clinical guidelines, with human oversight still playing a central role in the early stages of deployment.

The impact is already visible in everyday patient care. Aynet recalled the case of a mother who had been suffering for a year due to complications from a family planning injection. After receiving advice and medication support through the AI-enabled system, the woman recovered. Months later, when she returned with her child and reported that she was feeling normal again, Aynet said the experience was deeply rewarding.

Another benefit has come in malaria management, particularly in remote areas where cases are common and decisions must be made quickly. Health workers say the system has helped them determine dosage and treatment with more confidence, especially in cases where they once hesitated or had to escalate unnecessarily.

Still, the digital revolution in rural healthcare remains constrained by basic infrastructure. Many health posts continue to lack electricity, and mobile network coverage is inconsistent. Health workers say the system can only function if there is data, and in some remote locations the absence of power and connectivity can limit its usefulness.

“If there is no data, it doesn’t work; it just sits there blank,” Aynet said. “Mothers bring sick children at night. Malaria doesn’t wait. We treat them using candles or flashlights. If we had solar power, this AI could help our people 24 hours a day.”

Officials argue that these challenges are part of a larger national transformation. Gemechis Melkamu, digital health lead at the Ministry of Health, said the project aligns with the government’s Digital Ethiopia 2030 strategy, which seeks to expand access to digital public services and improve equity in service delivery.

“Our goal is to align with the national digital economy vision,” Gemechis said. “AI helps us maintain medical service standards. We are ensuring that a patient in the center of Addis Ababa and a patient in rural West Abaya receive the same quality of care.”

For Fikre, the change is not only about better service, but about professional dignity. After more than a decade of work, she says the new system has given her confidence and a renewed sense of purpose. What once felt like a job filled with uncertainty now feels like a profession backed by knowledge and support.

“I have served for 11 years, but I became a true health professional only this year,” she said. “Now I feel complete. Instead of seeing a mother travel four hours with a referral paper, seeing her leave happily with her medicine gives me peace.”

Djibouti City, Djibouti

Fuel shortage in Ethiopia is disrupting truck flows and slowing cargo movement from Djibouti’s ports, officials reported. In response, the Ethio-Djibouti Railway (EDR) has announced that it is actively working to meet the rising demand.

The fuel disruption, linked to a sudden outbreak of conflict at the Strait of Hormuz, has hindered trucks from refueling quickly and maintaining regular operations. Long queues have been observed throughout Ethiopia, including in the capital, Addis Ababa.

Port officials at Djibouti’s Doraleh Multipurpose Port (DMP) noted a significant decline in the number of trucks arriving from Ethiopia to collect cargo due to the shortage, causing scheduled cargo transport to be delayed for days.

Despite this slowdown, officials emphasized that there is no congestion at the port, which has ample storage capacity. The facility spans 192 hectares and includes a dedicated yard within the Free Zone.

“Our berths are operating at full capacity, with up to five vessels simultaneously loading or unloading cargo. Therefore, we are experiencing no congestion at the anchorage,” DMP officials told Capital. They added that only seven vessels are currently waiting to dock at one of Djibouti’s deep-sea ports.

DMP features a silo with an 85,000-ton capacity for grain and another 185,000-ton silo for fertilizer, along with a large warehouse for bagged cargo. The port’s bulk terminal has three quays dedicated to handling wheat, fertilizer, and other commodities.

Officials indicated that due to the truck slowdown, strategic commodities such as fertilizer are being transported primarily via the EDR railway. Although the EDR line does not yet connect directly to DMP, trucks cover the initial 800 meters to transport cargo to central Ethiopia.

Brikti Solomon, EDR’s Operations Head in Djibouti, stated that customer demand for cargo handling—particularly for machinery and containerized imports—is steadily increasing. “Incoming machinery cargo at DMP is on the rise, and we are managing the transport,” she said.

She further explained that the joint railway company, operated by both nations, is coordinating closely with the ports. “Due to the fuel shortage in Ethiopia, we are committed to serving the market by transporting cargo on time at fair rates,” Brikti informed media at Nagad, the main railway station in Djibouti, located 21 kilometers southwest of the capital.

For bulk cargo, the electric railway primarily transports fertilizer, wheat, and barley using box wagons. Currently, EDR dispatches up to five trains daily to Endode, Mojo, and Adama stations.

The railway operator has also reduced turnaround time by 28 percent, now taking 52 hours instead of three days to accelerate operations and handling. “This year, operational tonnage will double, and we will also utilize idle wagons to transport consignments like billets and rebar,” Brikti added.

“Regarding locomotive operations, we are now at full capacity. Due to the truck shortage in Ethiopia, we are also providing last-mile service with our trucks,” she said.

On Monday, Aboubakar Omar Hadi, chairman of the Djibouti Ports and Free Zones Authority (DPFZA), stated that as the major agricultural season approaches, cargo shipments to Ethiopia remain a priority.

In related developments, the Ethio-Djibouti Railway (EDR), a bilateral venture owned by Ethiopia and Djibouti, has introduced special open-top gondola wagons into its cargo operations to help address capacity gaps exacerbated by Ethiopia’s ongoing fuel shortage.

In a letter addressed to the Customs Commission and dated April 8, EDR Chief Executive Officer (CEO) Takele Uma disclosed that the railway is now utilizing gondola wagons—designated as types CW3 and CW4—to strengthen freight movement.

In the letter, the CEO noted that, unlike conventional rolling stock, these wagons are open at the top and cannot be sealed for transportation.

Due to this design limitation, the letter requests the commission’s authorization to transport certain cargoes using green seals, as well as goods of exclusive public interest, on these specialized wagons. “The commission was requested to transport cargoes with green seals and exclusively public interest goods on these unique wagons,” the correspondence states.

The letter also highlights a significant increase in demand for containerized freight. “Based on this, we have determined that transporting 40-foot containers on top of the gondola cargoes is the best solution,” the CEO wrote.

To streamline logistics, EDR has requested that the Customs Commission grant advance passes for such consignments—particularly government shipments—allowing them to bypass Dewale Station.

Under the proposed arrangement, inspections would take place at the final destination instead. The letter also includes a list of the side numbers for 24 gondola wagons dedicated to the new railway shipment service.