News Update

Ethiopia becomes first country in the world to ban petrol & diesel car imports

Ethiopia has made history by becoming the first country in the world to prohibit the import of petrol and diesel cars. The Ethiopian Ministry of Transport and Logistics recently declared that only electric vehicles (EVs) would be permitted entry into the country. This groundbreaking decision, aimed at conserving foreign exchange resources, is part of Ethiopia’s larger plan for sustainable development, known as the Transport Master Plan.

Alemu Sime, the Minister of Transport and Logistics, unveiled Ethiopia’s ambitious Logistics Master Plan, focusing on the implementation of “Green Transport” solutions. During a presentation to the Urban Development and Transport Standing Committee in the Ethiopian Parliament, Sime emphasized that automobiles, unless electric, would be barred from entering the country. This move aligns with Ethiopia’s commitment to reducing its carbon footprint and promoting environmentally friendly transportation alternatives.

While the ban on internal combustion engine (ICE) vehicles is a significant stride towards sustainability, challenges persist. Electric cars remain expensive globally, rendering them financially inaccessible for a considerable portion of Ethiopia’s population. The affordability gap raises questions about the practicality of the ban and its potential impact on the daily lives of Ethiopian citizens who rely on more affordable transportation options.

Sime assured that the government is actively working to address these challenges by establishing charging stations for electric cars. However, key details, such as the permanency of the ban and its implications on vehicles already in transit, remain unclear. The decision also raises concerns for major automakers, such as Hyundai, Isuzu, Volkswagen, and others, which have local assembly plants in Ethiopia, producing both ICE and electric vehicles.

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Ethiopia’s move to limit petrol and diesel car imports is expected to have a global impact. With local assembly plants of major automakers operating in the country, the ban may disrupt their production processes and affect their market share. This decision is also likely to impact Indian automakers exporting cars to Ethiopia, presenting a challenge to the automotive industry’s status quo in the African nation.

Despite the challenges, Ethiopia has been actively promoting electric vehicle adoption in recent years. The government’s 10-year plan includes importing at least 4,800 electric buses and 1.48 lakh electric cars by 2022. Additionally, incentives such as reduced value-added tax (VAT), surtax, and excise tax for EVs demonstrate Ethiopia’s commitment to accelerating the transition to electric mobility.

Ethiopia’s emphasis on green development is further evident in its substantial investments in energy infrastructure. The nation is home to Africa’s largest hydroelectric power plant, the Grand Ethiopian Renaissance Dam (GERD). Once fully operational, the GERD is expected to generate 6,000 megawatts, contributing significantly to the country’s energy needs and supporting the electric vehicle ecosystem.

As Ethiopia pioneers the ban on petrol and diesel car imports, uncertainties linger regarding its applicability to the sale and purchase of second-hand cars. With the ban’s potential to boost the second-hand car market, the government has not provided clarity on its stance in this regard. Furthermore, a timeline for when the ban will come into effect remains undisclosed.

Ethiopia’s bold step to ban petrol and diesel car imports marks a significant milestone in the global pursuit of sustainable transportation. While challenges persist in making electric vehicles accessible to the wider population, the government’s commitment to green development and the ongoing investments in energy infrastructure position Ethiopia as a trailblazer in the transition to a cleaner and more sustainable automotive future. The world will be closely watching the outcomes and implications of this pioneering move by Ethiopia.

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Ibrahim Ismail

A passionate and highly skilled individual who has seamlessly blended the worlds of statistics, technology, and finance.

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