Ethiopia Takes Cue From China

Ethiopia Takes Cue From China
Ethiopia has invested heavily in infrastructure

AFRICANGLOBE – The feverish pace at which construction is taking place in Addis Ababa is aimed at aligning the city’s infrastructure to the rate of growth of the country’s economy.

A report on South Africa’s Daily Maverick acknowledges that “over the last decade, Ethiopia has emerged as one of the fastest-growing countries in Africa”.

As cliché as it may sound, the expression “looking like a construction site” is arguably the most accurate description of Addis Ababa.

The Ethiopian capital, long considered Africa’s political capital, is going through a rapid phase of modernisation. Sites of older dilapidated buildings being bulldozed into heaps of rubble and promptly being replaced by seven or more storeys of concrete and brick are not uncommon.

Besides buildings, transport infrastructure is also being overhauled in the Ethiopian capital.

In fact, Addis Ababa’s $475 million metro rail has drawn to completion barely three years since construction began in 2012.

The metro rail, which is expected to carry 60 000 passengers a day, is the first of its kind in Africa outside of South Africa.

Meanwhile, Kenya, Ethiopia’s close neighbour, is still stuck in the planning stage of its own metro rail even as Nairobi loses $520,000 daily in lost productivity due to traffic jams.

The feverish pace at which construction is taking place in Addis Ababa is aimed at aligning the city’s infrastructure to the rate of growth of the country’s economy. A report on South Africa’s Daily maverick acknowledges that “over the last decade, Ethiopia has emerged as one of the fastest growing – perhaps the fastest growing economy in Africa.” Its number of millionaires has also expanded commensurately.

But Ethiopia is not like other African economies. Whereas Africa’s recent boom derives from mineral resources, Ethiopia’s growth has been primarily driven by manufacturing, agriculture and transport. This has led some to draw parallels between Ethiopia’s journey and China’s success narrative.

Ethiopia’s economic journey, particularly its success in manufacturing, brings into focus the similarities between the African nation and China.

Like China, Ethiopia has a huge population, at least when compared to other African countries.

There are approximately 94 million people in Ethiopia, making it the second most populous country in Africa after Nigeria.

Ethiopia also has a very young population – 44 percent of its population is under 15 and 73 percent under 30.

A huge working population, coupled with heavy government control that limits unionisation, has made labour very affordable in Ethiopia. Just like China, the Ethiopian government maintains heavy control on the economy, including the labour market.

With a similar demographic profile and policy framework to China, Ethiopia’s manufacturing sector has been able to clock strong growth in the past years.

Mr. Zhang Huarong, the chairman of Chinese shoe manufacturer Huajian said that “Ethiopia is exactly like China 30 years ago.”

Huarong, whose company has set shop in Ethiopia with a workforce of 3,500, was speaking to global business news agency, Bloomberg.

Perhaps the rest of Africa can take a cue from Ethiopia, and to a greater extent, China. While this does not necessarily imply upending the prevailing model of democracy across Africa, certain modifications can be made to give the state greater latitude in mega projects that, without heavy state control, would be stalled by court cases and politics.