Give China a chance: Part Four …’Ethiopia, the China of Africa’


ETHIOPIA may be the topmost African nation in making full use of China’s skills and services.
Her approach is ambitious but very strategic.
Ethiopia is one of the biggest African nations, particularly in terms of population size.
It is second only to Nigeria and comprises almost 100 million people.
The need for industry to serve the market and provide the population with employment opportunities is understandably high.
Partnering with China means receiving guidance from a more experienced high-population density nation.
China is the world’s number one in terms of population size and is no stranger to the problems Ethiopia faces.
For example, traffic congestion, public transport shortages and unemployment, among others.
The Ethiopian Government has thus partnered China in a way that is unparalleled anywhere else in Africa.
Many are already calling Ethiopia ‘the China of Africa.’
This is because Ethiopia has set out to open what is currently the largest industrial park in Africa.
It is located in Hawasa, about 140 km from the capital city of Addis Ababa.
Costing about US$500 million and expected to generate billions annually, the industrial park covers 1,3 million square metres.
It has over 50 shades that have factories which cover over 300 000 square metres of that land.
The project was carried out by the Ethiopian Government in collaboration with China Communications Construction Company.
This was done with the objective of creating a manufacturing hub to raise forex and employ citizens.
It is part of the Government’s special economic zone initiative and the industrial park, constructed in 2017, is but a prototype of nine others scheduled to be built.
But let us scratch below the surface and objectively analyse the Ethiopian model of development.
There are almost 20 already recognised international companies from the US, Spain, France, India, Belgium and China, among others already manufacturing their products in Ethiopia.
They have moved or expanded their ventures from Asia because in Ethiopia electric power is less costly, there is an abundant and inexpensive labour resource and the Government systems pertaining to trade are not bureaucratic.
This shows that the investors in these industrial parks are almost entirely foreign. But why not partake of indigenisation and nationalisation?
After all, Ethiopia was once a socialist state that frowned upon capitalistic globalism. The reason is, although Ethiopia’s economy has made the fastest leaps in Africa in the last decade, it is still an agro-based, poor and mostly rural country.
The adult population has less than a 50 percent literacy rate in any language.
This means it will take decades before Ethiopia can reap the fruits of modern digitisation; which cannot happen when a people can’t read what is on their electronic devices.
Ethiopia also lacks sufficient electric power supply to effectively run and maintain the technology and infrastructure that has been set up by China.
The need for forex has also led to many compromises being made that come at the expense of the government and locals. For example; within the industrial park is a one-stop service centre for foreign investors to carry out their banking and visa procurement.
This is to encourage foreign direct investment which will give Ethiopia import power.
While projects such as the Ethiopia Renaissance Dam are wholly government-funded, many of the large-scale projects are funded by China and ought to be paid for in foreign currency.
Ethiopia still imports much more than it exports and the need for foreign currency has led them to contemplate selling some of its priced stock from companies like Ethiopia Telecom and Ethiopian Airways.
This open market feat is not Chinese in essence, but Western and has been used in places like Vietnam and Thailand to minimise labour costs for European and American-owned factories.
China was no exception to this scheme, but as a nation that is renowned for great inventions like the compass, gun powder, paper and the printing press, China quickly established her own factories to produce goods for export.
China became a competitor instead of a mere cheap labour resource for the West as was initially intended.
Another development Ethiopia is proud of is a tram or light railway system in Addis Ababa.
The city centre has over four million people and the public transport, which, like Zimbabwe, was mostly in the form of commuter omnibuses, was not enough.
With the help of Chinese funding, building and shipping the trains, Ethiopia has significantly eased transport shortages.
Two light rail lines intersect the city with a total of 40 stops along them.
Ticket prices are much lower than those of commuter omnibuses.
Initially, there were supposed to be 41 cars on the train. However, only 13 or so are running as most were removed for servicing within a year of installation.
The trains and facilities are made in China and hundreds of drivers and technicians from companies like Shenzhen Subway are present to train locals on how to operate and maintain the equipment.
Functioning below capacity means the trains arrive slower than scheduled and less frequently to each stop. This has caused constant overcrowding.
However, the time taken to get to a destination is fixed and this allows for better planning.
During rush hour, the train tracks cannot be congested and that is another advantage.
People can now commute till relatively late hours because of the late closing time of the tram system.
This is already changing the mindset of many Ethiopians and the way they work.
Even in Chinese cities like Shanghai, subway trains are often overcrowded, particularly during peak times.
Thus, the light rail system of Ethiopia cannot be called a failure.
Its success can only be fully realised after the city is remodelled to suit the new light rail system.
Even now, over 120 000 people are transported a day, and this is at below full capacity. Ethiopia is landlocked, with Djibouti neighbouring it to the east and playing the same role as Mozambique to Zimbabwe.
About 95 percent of goods traded by Ethiopia pass through Djibouti and this accounts for 70 percent of activity at the port.
The Ethiopian and Djibouti governments contracted the Chinese to construct a railway line from Addis Ababa to a port city of Djibouti called Doraleh.
It is a standard gauge international railway line stretching for 759 km.
It was built and will be operated by China Railway Group Ltd and China Civil Engineering Construction Corp until 2023.
Operations will then be handed over to the Ethio-Djibouti Standard Gauge Rail Transport S.C. in 2024.
It became functional in January 2018.
Eritrea is another neighbour to Ethiopia with whom there has been long-term enmity which has recently ended owing to peace agreements at presidential levels.
It is speculated that Ethiopia will consider opening a second route to the port via Eritrea and, if so, China will undoubtedly participate in the funding and construction of the project.


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