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A delegation of 14 major Chinese companies visiting Ethiopia
Addis Ababa: May 13, 2015 – The Chinese business delegation, which is on a business opportunity exploration visit in Ethiopia, affirmed its commitment to invest in the manufacturing sector in Ethiopia.
President Mulatu welcomed the delegation, headed by Liyu Shinwa, Chairman of the South-South Cooperation, at the National Palace yesterday. President Mulatu underscored the role of Chinese investors in transforming Ethiopia into an industrial hub.
He called on members of the delegation to invest in textile and other manufacturing sectors in Ethiopia. Mulatu underlined that Ethiopia is registering the fastest economic growth rate in Africa, has an abundant labor force, generates enough power and enjoys peace and security, making it an ideal destination for investments.
The Chinese delegation expressed its readiness to invest an initial capital of half a billion U.S. dollars on an industrial park which will rest on 500 hectares of land. The project will create 50,000 permanent and temporary jobs in Ethiopia. The delegates also noted their investments would boost mutual benefits of both countries.
Once operational, the companies will manufacture products worth 1 billion USD annually, expanding the country’s tax revenues.
The head of the delegation stated that Chinese investment is contributing to Ethiopia’s development.
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Ethiopia to begin exporting renewable energy to neighbouring nations by 2018
Addis Ababa: May 13, 2015 – The move will also limit increases in climate-changing emissions.
The Eastern African Power Pool (EAPP) initiative aims to create or expand clean energy transmission lines among about a dozen countries in the region.
As part of the plan, Ethiopia would take on a bigger role as a regional power exporter.
At the moment, Ethiopia exports power to parts of Kenya, Sudan and Djibouti but it has signed deals to send power to Tanzania, Rwanda, South Sudan and Yemen as well.
The new $1.8 billion Gilgel Gibe 3 dam on the Omo River is set to begin power production as early as June.
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Ethiopia welcomes Turkish investors in energy sector
Ethiopia has entered a Memorandum of Understanding with four Turkish firms in a bid to see them undertake power generation projects to boost the energy sector in the country. The MOU was signed in Turkey when a delegation from Ethiopia visited the country.This is according to Ethiopia Electric Power. Azeb Asnake, Chief Executive Officer of Ethiopia Electric Power, has said that negotiations with the companies would start soon to see materialization of the projects.
In an Ethio-Turkish Business to Business meeting at Sheraton Addis last week, Azeb said Turkish businesses had been familiarized with energy sector targets for Ethiopia in the next five years. Members of Istanbul Electrical, Electronics, Machinery and ICT Exporters Association are some of the 24 Turkish firms that attended the meeting.
Azeb revealed they were encouraging Turkish firms to invest in energy sector projects that generate 500MW of power and above, although the minimal limit was set at t 300 MW.
“Interested companies in megaprojects are already making contacts and if deals are to be stricken, the government would buy energy generated by these companies. Currently, the tariffs are being worked out,” Azeb said.
Ethiopia is looking to generate power for domestic use and regional sale according to presentations made at the recent 7th Africa Cementrade Summit; which took place on 14-15 April 2015 in Ethiopia. Azeb also revealed that transmission power lines in Ethiopia were suffering massive losses “beyond the acceptable level”. Although he did not disclose the loss percentage, some studies have shown that it reached beyond 20 percent in 2008.
He said the government would replace old transmission lines and sub stations to deal with the losses. In addition to undertaking massive power projects; Grand Ethiopian Renaissance project, Gibe III, Gebba River dam, and Genale Dawa hydropower project– which will generate 250MW – is also nearing completion.
The country energy sector is seing an addition of 2268MW of power. Last year, Ethiopia issued a US$1bn sovereign bond to fund megaprojects, among them energy and other infrastructure projects. It also announced setting up of US$20bn for energy projects.
http://constructionreviewonline.com/2015/05/ethiopia-welcomes-turkish-investors-in-energy-sector/
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CBE Awards 16.4m Br for Supply of 2,000 POS Machines to SS Communications
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In the past nine months of the fiscal year 2014/15, the Bank’s POS machines have facilitated 228,903 transactions worth 553 million Br.
The Commercial Bank of Ethiopia (CBE) has awarded a 16.4 million Br bid for the provision of 2,000 Point of Sale (POS) machines to a local IT vendor SS Communications.
The tender for the supply of the POS machines was floated in February 2015 and opened on March 10, 2015 in the presence of all bidders, according to Ephrem Mekonnen, communications director at the Bank.
A previous bid for the supply and installation of the POS machines was cancelled, because the companies that responded to the tender were unqualified. Seven companies had responded to the first bid in August 2014.
Out of the 25 companies that bought the bid document from the Bank, only four presented an offer for the supply and installation of the POS machines.
The offering companies were SSC, M2M, Tracon Trading and TPS Ltd and only two passed the technical evaluation to proceed to the second level, which is financial evaluation.
CBE, a bank that already had 10,000 POS machines at the time of reporting its nine month performance, had also previously awarded SSC the tender for supply and installation of 4,000 POS machines for 39 million Br through a bid announced in October 2013 and opened in July 2014.
In the past nine months of the fiscal year 2014/15, the Bank’s POS machines had facilitated 228,903 transactions worth 553 million Br. The bank also has 654,641 active electronic cards. The performance also shows that the bank’s total assets reached 276.3 billion Br, while the income of the Bank was 16 billion Br with the profit before tax reaching nine billion Br.
“Our experience on the machines shows that they are gaining popularity and the major aim of having these machines is to create a cashless society,” said Ephrem.
The current POS machines are to be installed in four months, meeting the target for the fiscal year of installing 2,000 POS machines.
M2M, the second company that had passed to the financial evaluation with SSC, had offered 19.4 million Br for the supply of the machines, which was three million Birr higher than that of SSC’s offer.
CBE, which is pioneer in the bringing and installation of Automatic Teller Machines (ATM) and POS machines to the country, currently has 10,000 POS machines and 627 ATM’s. In the first nine months of this fiscal year, transactions using the ATM machines totaled 11.1 million amounting 10 billion Br. In addition to the expansion of its electronic equipment, the Bank is also expanding the number of its branches, now at 939 with 107 branches added in the nine month reporting period.
The POS machines that are to be installed are from Verifon (VX), which is the same brand as the previous 4,000 POS machines supplied to the Bank by SSC.
“[The Machines] comply with the latest global security standards, and take advantage of the latest connectivity options from GPRS, CDMA, and Wi-Fi to IP and Bluetooth-enabled devices,” states the website of SSC in the section that identifies the partners of the company.
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Ethiopia, Rwanda seek closer trade ties in leather industry
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Local entrepreneurs in the leather industry are seeking to strengthen partnership with Ethiopia to boost exports.
Ten Ethiopian companies from the leather industry are in the country to foster trade ties with their Rwandan counterparts.
The visit comes days after the two countries signed partnership agreement to promote trade and economic relations.
The investors are currently exploring different investment opportunities and markets for leather products in Rwanda, Gerald Mukubu, the acting chief executive officer Private Sector Federation (PSF), said.
“They will also meet with market players in Rwanda’s leather industry for business to business meeting and discuss mechanisms on how to share information, experience and how they can partner to promote trade between the two countries,” Mukubu said.
Abdissa Adulwa, the Ethiopian Leather Industries Association secretary general, said they are trying to strengthen trade linkages and promote exports in the sector between the two countries.
“We have been in Uganda and we expect to go to Tanzania for the same mission; we would however like to take advantage of the recently signed memorandum of understanding between the two countries to promote trade ties,” Adulwa told Business Times.
He encouraged Rwandan investors to take advantage of the Common Market for Eastern and Southern Africa (COMESA) and increase trade between partner states. We may also want to establish our companies here through joint partnerships if all goes according to plan, Adulwa revealed.
According to Hodari Ruremesha, the leather processing entrepreneur, there is need to boost capacity and skills for local investors in the leather industry.
“This is when we will be able to benefit from this partnership with our Ethiopian counterparts. They have advanced in leather tanning and processing, and for us to be able to play a catch up game, capacity building is a priority.”
Currently Rwanda and Ethiopia are trying to establish a framework for co-operation and the implementation of a sustainable strategy on a variety of areas of common interest including the leather business.
Geoffrey Kamanzi, PSF’s head of trade facilitation and negotiations, says this will help put in place mechanisms to foster trade and help address bottle necks that hinder business between the two countries.
Government last year launched a leather processing factory in Kabarore Sector, Gatsibo District, and Eastern Province.
Star Leather Products Company (SLPC) which manufactures shoes, belts, jackets and other leather products is the first of its kind in the country.
http://www.newtimes.co.rw/section/article/2015-05-12/188714/
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MIDROC strikes a gold mine, to invest 8 billion birr
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Metekel Gold Mine, a third mine site MIDROC Ethiopia Technology Group possesses, is confirmed to be viable through a feasibility study and it will be developed with an investment of 4.2 billion birr. The gold mine located in Benishangul Gumuz Regional State has the capacity to produce 2,300 kilo grams of gold per year.
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According to Dr. Arega Yirdaw, CEO of MIDROC Ethiopia, the mine will have a life span of 15 years and during that time it is expected to bring in 27 billion birr revenue from sales of the precious metal.
“We will start excavation in 2018, this kind of large processing plant will take at least three years to go functional because, among other things, it is located in a remote area,” said Arega.
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The project has already hooked the interest of foreign financers but the mining company is yet to utilize that interest. “Of course, when this kind of project is announced, lot of interests stream from the financial sector. But, currently we are not looking for financing. Maybe we will do it on our own when we reach that point, or maybe, we will look for partners,” Arega told Capital.
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The gold mine plant that will have a complete laboratory, earth moving machinery and equipment is expected to be erected within three years. The Metekel Gold Mine will be creating employment opportunities for 650 people and will be bringing in 420 million birr for the government through tax, among other things.
The 4.2 billion birr investment on the mine by MIDROC is part of an 8 billion birr company-wide expansion project that includes ELFORA’s Forage Production project that will be taking up an investment of 1.6 billion birr, a dairy and meat production project taking up an investment of 1.1 billion birr as well as an expansion of ELFORA’s poultry meat and egg production that will be taking an investment of 870 million birr.
The expansion will open up new jobs for additional 3,000 people and it will be completed in five years. The government will receive 880 million birr in tax from all of the expansion projects.
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The owner and Chairman of MIDROC Ethiopia Technology Group Sheikh Mohammed Hussein Ali Al-Amoudi announced the group’s investment plans. During the announcement event held at Sheraton Addis Hotel on Thursday May 7, Al-Amoudi said that each company under MIDROC Ethiopia Technology Group has laid out a five year plan and these will be announced at the right moment to the public. “The feasibility study on the Metekel mine has taken 10 years and a lot of money, but in the end the result of all that was very good. Our country is very resource-rich and has a lot of potential. We are also working on a large scale agriculture project in the Benishangul Gumuz Region,” Al-Amoudi said. He also stated that Metekel Gold Mine could be the biggest gold mine in Africa.
Furthermore, Al-Amoudi called on the local media to support MIDROC’s projects and disprove negative claims circulated by foreign media regarding the operations of the group.
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Ministry Issues First Licence for Mining Survey of Kaolin Sites to Chinese Company
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Kaolin, also known as Chinese clay is an unexploited resource and the CCCC has first dibs in surveying, requiring a different licence for exploration rights and yet another for extraction.
China Communications Construction Company Ltd (CCCC)
Ministry of Mines (MoM) has given a first of its kind mining survey licence for kaolin to China Communications Construction Company Ltd (CCCC) in the Southern Regional State at Hosaena.
Kaolin, informally known as China clay, is a white, soft, plastic clay mineral which is used for paper filling and coating, ceramics paint, plastic rubber, raw material for agricultural fertilizers and pharmaceuticals. The mineral is found in Amhara, Oromia and Southern regional states, mainly in Debretabor, Hosaena and Hadiya areas.
The licence given to the company now is for surveying the areas. After that, the company will be issued another licence for exploration rights in a specified area of land for three to 10 years, based on the degree of the deposit. Then comes the exploitation licence for 10 to 20 years, says Ethiopia Bedacha, Public Relations & Communications deputy director.
To-date CCCC is the first company to get a licence for kaolin, with most other companies inclining towards gold exploration.
Less familiarity with the mine type and its benefits, few studies on the geological location and deposit of the mine as well as inadequate promotion are the reasons for the absence of exploration in this type of mineral, Ethiopia said. The construction boom and urbanisation in the country requires further special ceramic items and necessitated local production from the mine, he added.
The involvement of investors in the kaolin sector will preserve the quantity of imported minerals and enable the utilisation of the mines in the country, Tolosa Shagi, minister of MoM told Fortune.
The Geological Survey of Ethiopia conducted in 2011 found opportunities for kaolin resource development, from a total reserve of 960,062tn, with pure kaolin amounting to 291,355tn.
Between 1974 and 1991, private investment was not allowed in the mining sector of the country. Private investment in the sector was allowed after that and a new mining income tax proclamation was issued in June 1993.
The licensed company, CCCC, is a giant Chinese state owned company engaged in the construction and design of roads and transportation infrastructure. In Ethiopia, the company has been involved in the construction of roads and other infrastructure for around 15 years. The Addis Abeba-Adama Expressway, Africa Avenue and Bole Airport expansion, as well as its recent 1.6 billion dollar contract for the ongoing Mekelle-Woldya railway are among the projects it has been awarded in Ethiopia so far.
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An Ethiopian delegation confers with members of Moroccan business community
Addis Ababa: May 12, 2015 – Ethiopia’s Minister of Finance and Economic Development, Sufian Ahmed, briefed members of the business community on business opportunities, priorities and benefits of investing in Ethiopia. Minister Sufian stressed that the Government of Ethiopia prioritized agriculture development and infrastructure improvement as key for the structural transformation of the Ethiopian economy.
He explained the country’s development vision and the policies and strategies that have been implemented to encourage economic expansion. He said the engagement of Moroccan investors would contribute to further consolidation of the political relations between the two countries and underlined that participation in manufacturing, agriculture and tourism, for example, would unlock greater returns for investors.
Dr Tedros also stressed the need to deepen business-to-business, people-to-people and government-to- government ties to boost all-round cooperation between Ethiopia and Morocco. Dr Tedros emphasized that Moroccan investors could use the Ministry of Foreign Affairs of Ethiopia as an entry port to participate in Ethiopia’s investment and trade landscape. Dr Tedros also suggested the value of organizing an Ethio-Morocco Business Forum to explore business and investment opportunities.
Members of the private sector shared their experience and future plans for various business and investment fields including housing, hospitality, industry and banking.
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Ethanol: towards a viable alternative for domestic cooking in Ethiopia
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This discussion brief is based on findings from an SEI workshop and interviews with sector experts.
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The brief outlines the need and demand for ethanol as an alternative, clean, safe and reliable option in the household energy mix in Ethiopia, particularly in urban areas, and how progress on ethanol for household cooking can support Ethiopia’s growth and development goals.
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The workshop brought together 35 stakeholders from government, civil society, and the private sector, to reach a better understanding of the challenges and opportunities for operationalizing ethanol as a household cooking fuel, with particular focus on enabling private sector involvement, which is viewed as critical for progress.
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Insights from the workshop support the findings of a study carried out by the Strategic Climate Institutions Programme (SCIP) on the prospects for micro-ethanol in Ethiopia.
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Finally, the brief sets out which policies and measures could help drive the development of the sector.
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Download the brief (985KB)
http://www.sei-international.org/publications?pid=2746
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Ethiopian Launches Non-stop Flights from Addis to Sao Paulo
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Addis Ababa, 13 May 2015 – Sao Paulo
Ethiopian Airlines, the largest airline in Africa, is pleased to announce that it has started serving Sao Paulo, a city in the fifth continent in its route network, with a non-stop flight from Addis Ababa since April 25, 2015.
According to a press release from Ethiopian Airlines, Ethiopian tri-weekly flights to Brazil are operated using the ultra-modern Boeing 787 from the major hub in Addis Ababa. The start of this non-stop service to Sao Paulo reduces transit stops for customers traveling from the rest of Ethiopian destinations.
Brazil is the largest national economy in South America and the eight in the world. Brazil has a diversified economy including agriculture, industry, and a wide range of services such as ecotourism, leisure and cultural tourism.
Sao Paulo is the biggest city in the country and has significant cultural, economic and political influence both nationally and internationally. The city is home to several important monuments, parks and museums.
“We are very pleased to be able to enhance the quality of our product and improve our competitive edge. The non-stop flight secures increased connectivity and reduced transit time for our customers. The new non-stop Addis Ababa – Sao Paulo flights will provide efficient connections for customers from almost all of our destinations in the other four continents we serve.”Said CEO Tewolde Gebremariam.
Passengers to and from Sao Paulo will enjoy maximum connectivity to destinations in Ethiopian world-wide route network in Africa, Middle East, Asia and Europe. The new non-stop flight will enhance travel on the China – Africa – Brazil trade lane.
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Largest Woven Bag Factory to Begin Production in May at 520m Birr Capital
A new Chinese company, Shaoxing Li Enterprise, is to inaugurate in May a woven polypropylene bag factory, said to be the largest in Ethiopia so far, with a capital of 520 million Br and a designed production capacity of 27,000tn a year.
The factory is located on a 16-hectare plot of land in Amhara Regional State in North Shewa around Hagere Maryam, 64Km from Addis Abeba. The company got its licence in September 2011.
Named after its owner, the company will initially produce 7,000tn a year using polypropylene and polyethylene as raw materials all fully imported from the Middle East. The products include ordinary sacks, jumbo bags as well as hand-bags and shopping bags. Shaoxing Li has been in production for 10 years in China and Vietnam.
Once it starts production, the factory will be the biggest large-scale woven bag factory in the country, Yonas Abate (Eng.) Plastic & Rubber Industry Development Institute director at the Ministry of Industry (MOI) told Fortune.
Currently, there are 13 similar factories in Ethiopia with a combined annual output of 15,000tn, Yonas said. Among the 13, the largest two, Oxford Plc and Inova Plc, have production capacities of 8,100tn and 8,000tn of bags annually, but actually manage to produce only six thousand tonnes between them. The problem, according to Yonas, is power shortage. The two factories are engaged in indirect export, supplying their products to the World Food Programme (WFP), which uses them for packaging deliveries to other African countries.
The increase in agricultural production, the sugar and cement factories scheduled to be launched in the short-term, and the Yayu fertilizer factory, will create increasing demand for polypropylene bags, said Yonas.
Already the Chinese company, here because of Ethiopia’s relative peace and cheap labour, has begun to complain.
“Power interruptions and unavailability of network are becoming a difficulty for the factory,” said Rongrong Lin, deputy general manager of the enterprise.
The prominent challenge in the sector, which is hindering the factories from producing at their total designed capacity, Yonas said, is electricity supply and interruptions, as the sector needs a high power supply. The second problem is foreign currency shortage and excessive delays in getting access to it for the import of raw materials. The absence of trained manpower in plastics technology is also a problem, he added.
Shaoxing Li Enterprise needs 10 megawatts to operate at its full designed production capacity. It has already been given access to two megawatts of power, with the MoI having requested two more for it, Yonas explained.
Technological transfer, foreign currency reserve and employment opportunities will be the positive impacts of the new factory.
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Mitsebri-Shire and Dima-Fiyel Wuha concrete Asphalet Roads inaugurated
Addis Ababa: May 11, 2015 – The 155 km roads were constructed at a cost of 1.7 billion Birr by local contructors, Ethiopian Road Construction Authority and Gemsu Beyene Construction Company. The projects highlight the increasing efficiency of local contractors to shoulder major responsibilities, the Minister noted.
Similarly a road project estimated at 1 billion Birr between Mitsebri and Zarima is expected to be completed in June.
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Centre Strives to Overcome Nationwide Shortage of Breeder Seed
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The Holetta Agricultural Research Centre ( HARC) is striving tirelessly to overcome nationwide shortage of breeder seeds of bread wheat, malt-barley, bean and other crops making use of latest technologies. This was noted during a recent field visit to the Centre by a crew of journalists.
The Centre Director Dr. Aster Yohannes on the occasion told the journalists that HARC has been providing various quality breeder seeds to the Ethiopian Seed Enterprise and carrying out seed multiplication more than two times in a year using irrigation.
“Moreover, the Centre is putting relentless efforts in making use of biotechnology and research-based seed production in a bid to meet the wide ranging national demand of select seeds,” she added.
As to the so far encountered challenges of the Centre in relation to its routine activities, Dr. Aster pointed out that insufficient number of human power in the field of agro-ecology and others, spending longer period of time to adopt new technologies, loss of soil fertility, the high vulnerability of some seeds to certain pests and crop diseases, emerging of infectious diseases of crops and the like.
Senior researcher of animal breeding and former coordinator of crop research project at the Centre Dr. Berhane Lakew on his part noted quality breeder seed and pre-basic seed are being produced at the Centre passing through international standards for seed production. He went on saying that the produced seeds would be sent to Ethiopian Seed Enterprise for certification, multiplication and distribution to the farmers at large.
Stating the national goal of realizing agriculture-led industry, he said that the Centre is doing its best in maximizing agricultural productivity of the nation via introducing and adopting new technologies as well as producing breeder seeds that are crucial for the booming agro industries in the country.
It was learnt that Holetta Research Centre was established in 1966. It is now under the Ethiopian Institute of Agricultural Research. The Centre is responsible for conducting research in the central highland of West Shoa, South West Shoa, North Shoa and Gurage Zones. It has around 500 workers.
http://allafrica.com/stories/201505111818.html
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Nation set to cover over 12 million hectares of land with seeds
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Addis Ababa, 12 May 2015 –
- The Ministry of Agriculture (MoA) said activities are underway to cover over 12 million hectares of land with various seeds in the 2007/8 Ethiopian harvest season.
- MoA Public Relations Senior Expert, Kebede Lakew, told WIC today that concerted efforts are underway to cover 12.6 hectares of land with sorghum, maize and the main food crop seeds.
- He said capacity building training was given by senior experts to fill skill gaps of the main actors in the sector, such as farmers, pastoralists and semi pastoralists.
- In order to increase productivity of farmers, 2.5 million metric tons of fertilizer and 3.6 million quintals of select seed are being distributed to farmers, he said.
- Some 269 million quintals of agricultural outputs were raked in the 2006/7 harvest season and the output is expected to increase in 2007/8 production season, Kebede said.
- Agricultural productivity in the 2006/7 harvest season increased by 31.9 per cent compared to the 2002/3 season, thereby, showing a 7.87 per cent annual growth during the Growth and Transformation Plan (GTP) period
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Interview: Africa to benefit from cooperation with China on industrialization: scholar
ADDIS ABABA, May 11 (Xinhua) —
China’s cooperation with Africa on industrialization development in African countries will have multifaceted benefits to the continent, noted a renowned Ethiopian scholar during a recent interview with Xinhua.
Stating that industry is a very important component of any developmental growth, the scholar hailed China’s cooperation and support to Africa in the industrial development of the continent as an important step towards addressing poverty and boosting economies.
Costantinos BT Costantinos, Chairman of Ethiopian Infrastructure & Tunneling Company, and Professor of Public Policy at the Addis Ababa University, said African countries could learn a lot from China’s success story of addressing poverty and the country’s move to achieve a middle-income status.
With its solid industrial capacity, China is now keen to relocate its capacity and invest on industrialization in foreign markets elsewhere in the world, especially in Africa, a continent where many countries have just embarked upon industrial development to build their economies and create more jobs for citizens.
China’s investment on industrialization in Africa can benefit countries on the African continent in enhancing local capacity through improved local skills and technology as well as in tremendous reduction of cost per output, noted Costantinos.
“China now has excess industrial capacity and therefore the move from Chinese companies supported by their government and the Exim Bank is an important initiative to bring production to Africa, ” said Costantinos.
“This has several advantages, one to enhance local capacity in the industrial development, which means Africa will benefit from this. The second thing, the labor that is hired in these industrial outfits will be getting higher skills. And thirdly, the cost per output will be minimized tremendously, where local raw materials will be developed, and also local technological development will take place,” he said.
China’s technology and management know-how for industrial development is very important to develop the sector and undertake massive industrialization in Africa, he remarked.
“This will be important for Africa because what we lack in Africa is a kind of human capital that is necessary to drive industrial and agricultural growth; and the second thing is the management knowhow that is necessary to be able to undertake such massive industrialization. So, I think it is an important initiative.”
“There are several examples that I can quote in many African countries where China’s move in terms of infrastructural development, industrial development have had positive impacts. Again the capacity of Africans to be able to learn from this process, to be able to replace the Chinese in terms doing things by themselves is an important move,” he said.
Stating that the world is interlinked now under globalization, the scholar highlighted the benefits for African countries while cooperating with China in industrial development.
He hailed China’s investments in developing mega infrastructure projects and industrial capacity in African countries.
Costantinos said Chinese investment in industrialization and other mega projects in Africa will benefit the continent and the local people in a sustainable way.
“We shouldn’t be afraid of China coming into Africa because everybody now talks about China invading Africa; that is the myth that we need to fight because what the Chinese are doing here is, building bridges, building roads, building railways, building dams, and enhancing industrial capacity,” he said.
“One of the worst things in terms of foreign direct investment is investing only in areas where it gets quick money,” he said. “But, when we invest in building industrial capacity, that industry will be there forever in that particular country, that industry will be able to raise the profile of labor within in that country. And that industry will spin off other industries that can be started by the local private sector.”
Recalling the experience of Africa in the past and that the colonizers did not have the will to build industrial capacity on the continent, Costantinos said, “But, when China comes and builds industrial capacity, it is building our capacity to grow into the 21st century, into technology, into the information age. And also to be able to produce much of what we need in our countries for ourselves.”
He also stated that China plays an important role in the industrialization of Africa by helping value addition to raw material of the continent, for which he mentioned China’s investment in Ethiopia’s leather sector.
“Transforming hides and skins into jackets and into shoes is one of the most important added values you can put on your products. So, China is building one of the biggest leather processing factories now in Ethiopia; which means Ethiopia will be exporting shoes instead of raw leather; Ethiopia will be exporting jackets made of leather instead of raw material.”
“So, for me, this is a very important move; and African governments have to prepare themselves with the necessary capital, political will and the most important thing is policy. If you don’ t have good policy and there is no way even the Chinese industrialization initiative will succeed,” he noted.
http://www.shanghaidaily.com/article/article_xinhua.aspx?id=281438
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As Ethiopia works towards becoming a middle income country, can it tackle growing inequality?
LSE alumnus Bashir Ali reflects on the contrast between the economic miracle and growing inequality in Ethiopia.
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Late last summer having handed in my graduate thesis, I boarded an Ethiopian Airlines Dreamliner Boeing 787 from Heathrow, planning to stay in Addis Ababa in transit for a few days. I was excited to visit one of the oldest nations in the world with its emperors tracing their roots back to the Queen of Sheba and King Solomon. Halfway through the flight, although sleep deprived and suffering from an incessant fear of flying, it dawned on me just how proud the Ethiopian Airlines cabin crew was of their roots. The pilots proudly and unapologetically gave every flight announcement in Amharic and the hostesses all wore the traditional, white Ethiopian dress.
This brief insight was a harbinger of things to come, a window into a historic country, a culture defined by its past while grappling with its desire to cross the Rubicon, to modernise. This experience of the old and the new dovetailing came to life again as the Dreamliner made its dawn descent into the modern, Bole International Airport. The misty Addis Ababa morning opened up before us and shared its secrets, row upon row of ceramic, red-hued roofs, sprawling highways and corporate skyscrapers shadowed by the ancient and indomitable Ethiopian highlands in the background.
I took a taxi from the airport, through downtown Addis Ababa which was exceedingly busy and it struck me then; this was a city defined by urgency, a distinct restlessness. An urgency borne out of Ethiopia’s raging desire to become a middle income country by 2025 and with its annual double-digit GDP economic growth, an objective it can meet. Moreover, many are surprised to learn that Ethiopia has consistently had one of the fastest rates of GDP economic growth in the past 10 years, higher than both China and India. A miracle considering this was a country at the mercy of conflict and famine just 25 years ago and at the centre of worldwide attention, characterised by patronising pop songs asking if “they knew it was Christmas”.
Yet, on this leafy August afternoon, there were construction works every 100 yards, cranes littered the skyline and the Chinese-funded Ethiopian Metro in the final stage of construction at that time, snaked through the city, signifying Ethiopia’s promise, its ambition. An ambition defined by its ideology of “state-led capitalism” as espoused by the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) 23 years ago. This ideology was crafted by its late and authoritative Prime Minister Meles Zenawi, the architect of modern Ethiopia and the West’s former darling of Africa, as proven by his controversial role in their proxy “War on Terror” wherein his troops invaded Somalia and committed abuses in 2006-07.
In Addis Ababa, it is next to impossible to avoid his cold glare, mainly because his portrait can be found on billboards, public buildings, buses and even in quaint coffee kiosks on the city’s side roads. This enduring legacy was fostered during his student years of exile with the Marxist-Leninist Tigrayan People’s Liberation Front and Eritrean People’s Liberation Front, the latter fighting their own guerrilla, secessionist war with the brutal Derg regime at the time. Following their victory in 1991, the EPRDF set in motion far-reaching economic reforms aiming to transform this stagnant, famine-stricken nation into a “developmental state” and an African powerhouse while maintaining a brutal, iron grip on power.
The irony of this Machiavellian trade-off has not been lost on observers, a trade-off where Ethiopians expect a better future in exchange for their tactic submission and conformity. Speaking to people in Addis’ coffee houses, it became clear how proud many were of this bold, new Ethiopia as exemplified by Ethiopian Airlines’ fleet of Dreamliners or the monumental, Grand Renaissance Dam project which aims to power all of Ethiopia and East Africa. Yet, scratch the surface enough and it becomes apparent how this is a country suffering growing pains, with a population dissatisfied with such a detached, harsh government.
Some may say this is summed up by the quintessential question of how much liberty a people should forfeit in exchange for prosperity. Yet even in Addis Ababa, this so-called prosperity is a subjective concept in a city of chronic inequality, where you will see a Mercedes parked next to a mule cart or a five star hotel with homeless, hungry children sleeping against its 20-feet-high walls. Inequality is not the only ticking time-bomb threatening Ethiopia’s brave, new world, there is also the pressing issue of youth unemployment in a country where 70% of the 90 million inhabitants are under 25. The unemployment rate among the young is staggeringly high and these disenfranchised young people were easy to spot throughout Addis Ababa, hanging out aimlessly in the malls or groups of young men playing football under the highway overpasses.
Sadly for them, like most African capitals, Ethiopia’s capital is blighted by elitism, where aged men from the diaspora in suits and brand new 4x4s prosper with their Western-educated offspring benefiting exclusively from this trickle down privilege. It goes without saying that for Ethiopia to truly benefit from its formidable economic growth, it will have to achieve considerable levels of human development for its populace and above all its future generations.
As the Ethiopian Airlines flight took off en route to my final destination, de facto Somaliland, I looked down on Addis Ababa, this city, this country of antiquity, of many contradictions and of burning potential.
Bashir Ali is a researcher at the Somali Economic Forum (SEF) and a writer interested in economic development and labour markets in East Africa. He holds a BSc in Economics from SOAS University and an MSc in Public Policy & Administration from the London School of Economics & Political Science (LSE). He can be reached by his email: b.ali1@lse.ac.uk or bashiralimsc@gmail.com.
The views expressed in this post are those of the author and in no way reflect those of the Africa at LSE blog or the London School of Economics and Political Science.
Filed under: Ag Related, Economy, ethiopia, Infrastructure Developments, News Round-up, Opinion Tagged: Addis Ababa, Agriculture, Business, East Africa, Economic growth, Ethiopia, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1
