China Has Embraced Africa’s Development; The US Has Not

Courtesy of Global Research

January 16, 2020

China Has Embraced Africa’s Development; The US Has Not.

By Lawrence Freeman

It is as clear as day and night, the difference between China’s approach to Africa and that of the United States. There is no equivalence. Historically, China has viewed African nations as part of the developing sector from which China emerged.  This has contributed to China’s distinct attitude to partnering with African nations in promoting economic growth. Over the last two decades especially, the ties between China and Africa have grown stronger, with Africa’s East Coast materializing as an integral part of China’s Belt and Road Initiative.

The US has not always dismissed the importance of contributing to Africa’s growth. President John Kennedy, following in the footsteps of President Franklin Roosevelt, was a strong opponent of colonial subjugation of Africa. President Kennedy, as US Senator advocated Africa’s liberation movement, and as US President supported President Kwame Nkrumah’s plans to construct the hydro-electric dam and bauxite smelting complex on Ghana’s Volta River. By the end of the 1960s the US had lost its optimism and vision for the world, adopting in its place, a British inspired cynical “geo-political” doctrine.

Geo-politics divides the world into two categories; winners and losers in a zero sum game. Today’s unfounded attacks against China’s involvement in Africa, alleging that China is deliberately entrapping nations into debt and stealing their natural resources flows from this perverted world view. Chinese President, Xi Jinping promotes a different philosophy; it’s called “win-win.”

Building, Not Extracting

Unlike British Imperialist Cecil Rhodes, and degenerates like King Leopold II, China is not raping Africa for its resources. Since Royal Dutch Shell discovered oil in southern Nigeria in 1956, the West has focused its investment chiefly in oil and gas-i.e. hydrocarbon extractive industries. China in recent decades has become the leading nation in financing and building infrastructure in Africa.  It is well known that investment in extractive industries do not expand the economy nor provide a large amount of jobs. However, it does yield large streams of revenue.  China has chosen a different business mode; one more beneficial to the African people.

According to McKinsey consulting company’s publication, Dance of the lions and the dragons, released in June 2017, China in 2015 financed $21 billion worth of infrastructure projects in Africa. That is three times the combined total of France, Japan, Germany, and India. US financing of infrastructure in Africa was too minimal to even mention. Detailed in the same document, China’s export and import trade with Africa is quantified as $188 billion in 2015, compared to the US at $53 billion. Deloitte’s 2017 Africa Construction Trends, further documents China’s role in expanding Africa’s infrastructure. As of June 2017, China was only second to African governments in funding large infrastructure projects, 15.5% and 27.1% respectively. The US was listed at 3%, the UK and France at 2%. When it comes to who actually builds these projects the figures are more shocking; China constructed over one quarter or 28.1% of these projects, the US 3.3%, and the UK 2.3%.

Infrastructure Is Essential

Infrastructure is critical for every economy to expand, grow and develop. Africa’s deplorable lack of infrastructure is literally killing its people. There is no more crucial single element of economy that must be addressed for African nations to develop. Infrastructure adds value to the entire economy by augmenting the productive capability of every farmer and worker. More capital intense economies will be affected by technologically advanced infrastructure platforms.

The history of humankind demonstrates that progress of civilizations emanates from the realization of scientific discoveries transmitted through more efficacious technologies. Infrastructure reflecting more advanced machinery is a primary means of transferring technology (science) to the economic production process.

There is nothing wrong with African nations using their resources for collateral or payment of loans for infrastructure. Wealth is not the monetary value of natural resources extracted from the earth. Economic wealth is understood to be that which contributes to the increase of the power of society to provide the material wellbeing of its citizens and their posterity. Infrastructure performs that function.

China’s contribution to building new railroads in Africa, replacing century old British and French antiquated rail lines, and constructing new hydro-electric dams, and ports, is precisely what African nations need to develop.  China is providing indispensable assistance; the US and Europe are not. An experienced former US ambassador to Africa told me bluntly; the US stopped investing in infrastructure in Africa in the early 1970s. Sadly, today, the US continues to repeatedly proclaim, “we don’t build infrastructure.”

 

Debt-Trap or Claptrap?

In her latest paper, A critical look at Chinese ‘debt-trap’ diplomacy: the rise of a meme, Deborah Brautigam, China-Africa scholar and Director of the China-Africa Research Initiative-(CARI) at SAIS*, puts a nail in the coffin regarding false accusations of China deliberately entrapping African nations through debt.

She writes: “…for over a decade Western politicians and pundits have warned that China is a rogue donor with regard to its finance, is a new colonialist, and a predatory and pernicious lender that snares vulnerable states in a debt trap leveraging its loans in order to have its way with weak victims.”

Brautigam responds to these allegations by asking: “However, does evidence exist for this kind of debt leverage?” Then she answers: “It [SAIS database] has information on about more than 1000 loans and, so far, in Africa, we have not seen any examples where we would say the Chinese deliberatively entangled another country in debt, and then used that debt to extract unfair or strategic advantages of some kind in Africa, including ‘asset seizures’.” (emphasis added)

With the population of 55 African nations projected to reach 2.4 billion in the next three decades, the continent needs trillions of dollars in new infrastructure. Presently, the US is more concerned in countering China in Africa, than developing Africa. Many African leaders are hopeful the US will establish a more robust economic relationship with their nations. As has been the case with previous administrations, the lack of vision, and adherence to “geo-politics” is preventing the US from engaging with Africa in a win-win relationship. This can and should change.   

*Johns Hopkins School of Advanced International Studies

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

 

Progress on Transaqua-to Save Lake Chad-Good News for Africa

Transaqua is a transformative agro-industrial water project that would refurbish the shrinking Lake Chad to its 1963 size of 25,000 square kilometers. Transaqua envisions transferring water from the super wet Congo Riven Basin to the super dry Lake Chad Basin via a 2,4000 kilometer canal connecting to the Chari River. This would produce an economic renaissance of the entire region, thus affecting many nations, and in truth, the whole African continent.

January 12, 2020

The news reported below on the renewed commitment by the Italian government to fund a feasibility study for Transaqua, an inter-basin water project to reverse the shrinking of Lake chad, is good news for all of Africa. Italy has made available 1.5 million Euros ($1.8 million dollars) for the feasibility study. The Italian government has signed a Memorandum of Understanding with the Lake Chad Basin Commission-(LCBC) regarding this study. It is now up to the LCBC to formulate the contract procedure and award the contract to begin the long overdue analysis of the viability of Transaqua. It is in the interest of all African nation, especially those the Lake Chad Basin to encourage the LCBC to move forward.  The failure to act on Transaqua decades ago, when it was first proposed, has been costly; more costly then than the multi-billion dollar price tag of the project itself. The destruction of North-East Nigeria and the tens of thousands of lives lost, could have been prevented if Transaqua had been built. We cannot afford to wait; the LCBC should take appropriate action.

According to E.I.R., the New Budget Law in Italy Provides Funding for Feasibility Study on Transaqua. Following an amendment introduced by Sen.Toni Iwobi of the Lega Party, the Italian government included in its 2021 budget bill, the funding of a feasibility study for the Transaqua water transfer project in Africa. The bill was passed in the Senate on Dec. 16, 2019. Although the allocation of €1.5 million had already been pledged by the Italian government in a 2018 joint memorandum with the Italy and the Lake Chad Basin Commission (LCBC), procedures have been blocked under the current pro-malthusian Environment Minister.

The amendment, which was endorsed by the head of the Lega in the Senate, Massimiliano Romeo, states: “To implement Art. 6 of the Memorandum signed by the [Italian] Ministry for Environment, Sea and Territory Protection and by the Lake Chad Basin Commission, the feasibility study for the ‘Transaqua Project’ is co-financed with EU1.5 million for the year 2021 through the Fund for Extraordinary Interventions aimed at relaunching dialogue and cooperation with African countries and other countries of primary importance for migratory movements.”

Making the commitment to Transaqua a state law in Italy represents a definite qualitative improvement over the simple memorandum of understanding, even if the date of 2021 does not reflect the urgency of the matter.

Senator Iwobi has proudly publicized the development on his website and Facebook page, including a video in which he shows the location of Lake Chad and why the Transaqua project is so important. Shortly after his election in March 2018, EIR had contacted the senator, who is of Nigerian origin, to brief him on the project, which he immediately endorsed, saying “those who are against this project are against Africa.”

Transaqua is not merely a water-transfer scheme, but an integrated water, transport, hydroelectric and agro-industrial infrastructure project which, as African scholars have correctly judged, will provide the engine for the recovery of the entire economy of the Central African region. The Schiller Institute and EIR have campaigned internationally for its implementation, together with the Italian engineering company Bonifica which developed it in the 1970s under the leadership of Eng. Marcello Vichi.

Thanks to their efforts, combined with the impact of China’s Belt and Road policy in Africa, the LCBC member countries adopted it at a February 2018 International Conference on Lake Chad in Abuja, Nigeria. Nigeria’s President, Muhammadu Buhari, enthusiastically  supports Transaqua, and is campaigning for a donors’ conference to raise $50 billion to build the infrastructure.

For full background on Transaqua read my interview from June 2019, following he successful Abuja conference to Save Lake Chad.

Interview With Lawrence Freeman: The Tim e is Now For TRANSAQUA-to Save Lake Chad and Transform Africa

China Investing in Africa’s Future, Why Isn’t the US?

January 5, 2019

In the article below you can read about China’s strategic investment in making Djibouti’s port a major port in Africa and the Middle East. The West can criticize as much as it likes, but China, not the US and Europe, is building vitally needed infrastructure in Africa. Without infrastructure Africa will not develop and progress. U.S policy known as  “Prosper Africa” is cynical joke.

NEWS

In strategic Djibouti, a microcosm of China’s growing foothold in Africa

By Max Bearak
December 30, 2019

Excerpts:

DJIBOUTI — Above ground in this tiny but strategically located country, signs of China’s presence are everywhere.

Chinese entities have financed and built Africa’s biggest port, a railway to Ethiopia and the country’s first overseas naval base here. Under the sea, they are building a cable that will transmit data across a region that spans from Kenya to Yemen. The cable will connect to an Internet hub housing servers mostly run by China’s state-owned telecom companies.

Beijing’s extensive investments in Djibouti are a microcosm of how China has rapidly gained a strategic foothold across the continent. Western countries, including Africa’s former colonizers, for decades have used hefty aid packages to leverage trade and security deals, but Chinese-financed projects have brought huge infrastructural development in less than a generation.

The construction is fueled mostly by lending from China’s state-run banks. Spindles of Chinese-paved roads have unfurled across the continent, along with huge bridges, new airports, dams and power plants as part of Chinese President Xi Jinping’s 152-country Belt and Road Initiative.

Overall, Chinese companies have invested twice as much money between 2014 and 2018 in African countries as American companies, spending $72.2 billion, according to an analysis by Ernst & Young.

“The Chinese are thinking far into the long-term in Djibouti and Africa in general,” said David Shinn, a former U.S. ambassador to Ethiopia who was also the State Department’s desk officer for Djibouti as far back as the late 1960s. “Djibouti is one node in an economic chain that stretches across the northern rim of the Indian Ocean, from ports in Cambodia to Sri Lanka to Pakistan. They have a grand, strategic plan. We don’t.”

In Djibouti, that strategic plan is all the more evident because of the country’s location at the entrance to the Red Sea, where about 10 percent of oil exports and 20 percent of commercial goods pass through the narrow strait right off Djibouti’s coast on their way to and from the Suez Canal.

That location has made it a crucial way-point for undersea cables, which transmit data between continents. China’s investment in Internet infrastructure here comes as the region surrounding Djibouti is just starting to come online, including some places that are entirely reliant on Djibouti as a transit point for data transmission…

“Yes, our debt to China is 71% of our GDP, but we needed that infrastructure,” Mahamoud Ali Youssouf, Djibouti’s foreign affairs minister, said in a phone interview on the sidelines of a meeting in New York earlier this month, where Djibouti was pushing to gain a non permanent seat on the United Nations Security Council.

“It was quite natural that we raise our partnership with China. Neither Europe nor America were ready to build the infrastructure we needed. We’re projecting our country into the future and looking after the well-being of our people. Even the United States has trillions of dollars in debt to China, you know,” Youssouf said.

The most significant investment China has made in Djibouti is Doraleh Port, Africa’s biggest and deepest. As with Internet through the data center, a full 90 percent of landlocked Ethiopia’s imports now transit Djibouti, giving the minuscule country, with a population of less than a million, leverage over its gigantic, 100-million-strong neighbor.

Read the full article

In the Next Decade, Nuclear Power for Africa Is A Necessity, Not An Option

Image credit: IAEA

12/28/2019

In the next decade, beginning on January 1, 2020, African nations must pursue nuclear energy. This is necessary to provide energy to the continent, which is suffering from a huge deficit in electricity, but nuclear technology has many additional benefits to African economies.  This includes creating large amounts of potable water. With nuclear power plants along the Mediterranean and Red Sea, the equivalent of a “second Nile River” from desalination through nuclear powered desalination would transform the nations of the Nile Basin. Constructing Small Modular Nuclear Reactors-SMRs (see below) in every African nation would be a important first step towards ending poverty and industrializing the continent.  Let me bluntly state: without abundant, low cost energy, Africa will not develop, and its people will suffer. Energizing Africa is not an option, it is a life and death necessity!

{Sustainable Times} published a valuable article on December 23, 2019: Can Nuclear Unlock Africa’s Development?

Excerpts:

“Combining renewables with nuclear power, however, makes the task of powering Africa’s growing economies more viable – not to mention the other useful and often overlooked aspects that nuclear can contribute to development. Although South Africa is the only country on the continent currently operating a nuclear power plant, the technology is being increasingly considered by African leaders. For example, works are set to begin on a new 4.8GW plant in El Dabaa Egypt next year, which is being developed by Russia’s Rosatom.

“Other countries including Ethiopia, Zambia, Nigeria and Ghana also have memorandums of understanding with Rosatom that pave the way for nuclear development. South Korea are also looking to invest in the continent’s energy industry, while Chinese nuclear firms have entered into agreements with Kenya, Sudan and Uganda. Energy is a key driver for development. In Ghana, for example, nuclear is seen as the obvious way to provide reliable energy for bauxite refineries which would increase jobs and export capacity.

Technology beyond electricity

“But nuclear technology provides more than just energy: many advanced nuclear designs produce high-temperature process heat for uses in desalination plants, chemical production and even district heating systems. These subsidiary features would allow nuclear technology to benefit society beyond the generation of electricity – and potentially accelerating its deployment.

“Nuclear technologies are already being used in agriculture, for example, where isotopes and radiation techniques are harnessed to combat pests and diseases or to increase livestock and crop production. For instance, farmers in Benin have increased their maize yields by 50 percent, while simultaneously reducing the amount of fertiliser used by 70 percent, thanks to the deployment of nuclear-derived nitrogen-fixation methods – the same techniques that are allowing Maasai farmers in Kenya to double vegetable crop yields with half the irrigation of traditional methods.

“By contrast, nuclear desalination could use the excess heat from new reactor designs like Small Modular Nuclear Reactors (SMRs) to produce thermal and electrical energy without emitting greenhouse gases, which then transforms seawater into freshwater. While capital costs for nuclear plants are initially high, fuel costs are low and stable: a doubling in the price of uranium would result in only a five percent increase in the total cost of energy generation. In contrast, an equivalent increase in oil would cause freshwater production costs to surge by 70 percent.”

 Read: Can Nuclear Unlock Africa’s Development?

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Progress for Small Modular Reactors

December 13, 2019—There’s some real good news for the U.S. economy today.  NuScale, an Oregon company that is developing a small modular nuclear reactor (SMR), has passed the next stage of review by the Nuclear Regulatory Commission.

Progress for Small Nuclear Reactors

Cross-section of NuScale small modular reactor (world nuclear news)

As this blog has reported before, the mass development of nuclear power is a critical component to bringing the productivity of the U.S. economy out of the doldrums, and thus bringing us into a new era of prosperity.  High-speed rail, modernized water systems, the space program, and many other components of an economic recovery program depend upon generating huge amounts of electricity that are way beyond our current capacity.  Nuclear represents a leap in productivity that will allow us to get there, as well as a step on the way to the development of thermonuclear fusion.

NuScale’s design for an SMR has now gone through four phases of review. It still has to go through stages 5 and 6. According to the company’s press release, the Oregon-based company is partnering with the U.S. Department of Energy, as well as other companies. It has received support from Congress.

As I outlined in a post approximately one year ago, the promise of SMRs lies not only in their safety design, but in the fact that the United States still has the industrial capacity to produce them assembly-line fashion. Over the past 40 years, the heavy industrial capability for producing a standard-sized nuclear reactor (measured in hundreds of megawatts or over 1000) has been dismantled. But a small reactor of 12 to 50 megawatts could be produced in assembly-line fashion, and provide a flexible means of providing power outside major urban areas, including hard-to-reach regions.

The United States is not the only country working on SMRs, and some in the industry are seeking to motivate investment in NuScale on the basis of “beating the competition.”  Such peaceful competition has a huge positive payoff for the human race, and can only be encouraged. Thus NuScale’s progress with the NRC is most welcome news.

The NuScale press release can be read in full here.

Chinese ‘debt-trap’ Propaganda Exposed-Time to End Ignorance & Prejudice Against China in Africa

(Courtesy of Quartz Africa)

December 24, 2019

Deborah Brautigam, an expert on China-Africa relations, exposes the fraud of China’s debt-trap diplomacy in her report: A Critical look at Chinese ‘debt-trap diplomacy’ Brautigam, who is director of the Johns Hopkins Center for China-Africa Research Initiative, writes unequivocally that there is no evidence of an intentional effort  to trap African nations into owing debt to China. China is not manipulating African nations in an attempt to control their resources. Ironically this is what the Western institutions did to African nations  following their independence from colonialism. Whether out of ignorance and/or prejudice, Africans and Westerners have been repeating unfounded propaganda that China is the new colonizer of Africa. It is time to finally end this malicious mantra.

Excerpts:

“The Johns Hopkins School of Advanced International Studies curates a database on Chinese lending to Africa (Brautigam & Hwang, 2016). It has information on about more than 1000 loans and, so far, in Africa, we have not seen any examples where we would say the Chinese deliberately entangled another country in debt, and then used that debt to extract unfair or strategic advantages of some kind in Africa, including ‘asset seizures’. Angola, for example, has borrowed a huge amount from China. Of course, many of these loans are backed by Angola’s oil exports, but this is a commercial transaction. China is not getting huge strategic advantage in that relationship. Similarly, others have examined Chinese lending elsewhere in the world – some 3000 cases – and while some projects have been cancelled or renegotiated, none, aside from the single port in Sri Lanka, has been used to support the idea that the Chinese are seizing strategic assets when countries run into trouble with loan repayment (Kratz, Feng, & Wright, 2019).

The evidence so far, including the Sri Lankan case, shows that the drumbeat of alarm about Chinese banks’ funding of infrastructure across the BRI and beyond is overblown. In a study we conducted using our data on Chinese lending and African debt distress through 2017, China was a major player in only three low-income African countries that were considered by the IMF to be debt distressed or on the verge of debt distress (Eom, Brautigam, & Benabdallah, 2018). A similar country-by-country analysis that included use of our data shows that the Chinese are, by and large, not the major player in African debt distress (Jubilee Debt Campaign, 2018). Therefore, the role of China in African debt distress was limited when one remembers that there are 54 countries in Africa.”

Read: A Critical look at Chinese ‘debt-trap diplomacy’

Ethiopia Celebrates Launch of First Satellite-Science is the Driver of Economic Growth

Ethiopia Launches First Satellite into Space from China
Ethiopia’s satellite orbiting the earth. (courtesy of africanexponent.com)

December 22, 2019

Space exploration is an essential driver of economic growth. Mankind’s discovery of new physical principles of the universe leads to the creation of new technologies, which transform economies to higher levels of production of physical wealth.  It is science and assimilating new technologies like fission and fusion energy that are the  engines of real economic growth; not money or stock values. Exploration of space stimulates the mind and breeds optimism.  

“Ethiopia’s first satellite was sent into space on Friday, a landmark achievement for the ambitious country that also caps a banner year for Africa’s involvement in space.

“A Chinese Long March 4B rocket hoisted the first Ethiopian Remote Sensing Satellite (ETRSS-1) aloft from the Taiyuan space base in northern China.

“Scores of Ethiopian and Chinese officials and scientists gathered at the Entoto Observatory and Research Centre outside the capital, Addis Ababa, early Friday to watch a live broadcast.

“The 70-kilogramme (154-pound) satellite was developed by the Chinese Academy of Space Technology with the help of 21 Ethiopian scientists, according to the specialist website africanews.space…

“For us as a society, we are valuing this launch as something which lifts our national pride,” Paulos said.

“You know, this is a very poor country. Many in the younger generation don’t have big hopes of reaching space. But today we are giving this generation hope, helping this generation to think big and have self-esteem.”

Read: Ethiopia Celebrates Launch of First Satellite

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Nuclear Energy is Necessary for Africa’s Growth

Russia’s Rosatom already is building a $29 billion nuclear plant complex for Egypt, and the company is also helping Nigeria, Uganda, the Republic of Congo, and Rwanda establish nuclear facilities. The El Dabaa Nuclear Power Plant in Egypt will have four VVER-1200 reactors, or water-water energetic reactors, which are Russian-designed Generation III+ reactors. Russia is financing 85% of the project with a loan of about $25 billion to Egypt, and Egypt is paying the remaining 15% over a period of 13 years, wrote Darrell Proctor in Power on Dec. 2.

Africa’s only current operating nuclear power plant is the 1.8 GW Koeberg Nuclear Power Station, north of Cape Town, which is owned and operated by Eskom, South Africa’s power utility. The plant recently had its operational period extended for another 20 years from 2024 when it was originally supposed to be decommissioned.

African nations are trying to increase their power generation capacity on a continent that has long struggled to sustain reliable power. The International Energy Agency recently reported that 57% of Africa’s population still does not have easy access to electricity, and those with access to power deal with frequent power outages.

African nations desperately  need nuclear power for their survival. Without access to plentiful energy,  people will die and nations will not develop.

 

History Course: “Africa The Sleeping Giant” Amb. Arikana Chihombori Lectures Students On The Berlin Conference

Former African Union Ambassador, Arikana Chihombori-Quao, speaking to Lawrence Freeman’s class at Osher Lifelong Learning Institute in Montgomery County Maryland on the Berlin Conference. December 5, 2019

December 7, 2019

At the fifth week of my African history course (outlined below), 80 students heard Amb Chihombori-Quao discuss the effects of the Berlin Conference on the people of Africa today. This provocative presentation lead to many questions.   

“Africa: The Sleeping Giant” 6 week-12 hour course syllabus by Lawrence Freeman

The instructor’s intention is to provide the class with broad overview of the development of the African continent over millennia and centuries, coupled with insights to understand the present. The instructor believes that it is impossible to know current events in Africa today, beyond the misleading media headlines, without a full knowledge of Africa’s unique and at times tragic history.

Week 1–“Introduction”: In this class we discuss the great diversity of the continent. This includes its size, climates, geographical characteristics, deserts, rivers, lakes, and historical facts regarding Africa’s many nations, its economic condition.

Week 2–“Man Is Not a Monkey”: This class traces mankind’s emergence to what we call modern man-homo sapien sapien-over millions of years by examining the effects of man’s powers of reason, that did not evolve from the apes, and mankind’s exodus from the African continent.  We will then discuss a few of the early civilizations in East and West Africa, concluding with the great Bantu internal migration that transformed the continent.

Week 3–“Early African Civilizations-Slavery”: In this we class we continue examining early civilizations in Africa, iron making, and population growth. We will then leap ahead to the “discovery” of Africa by Europe and roots of slavery.

Week 4–“Slavery to Colonialism”: In this class we examine the seamless transition from slavery to colonialism, which in total encompasses 500 years, leading to destruction of the cultural and physical evolution of the African people.

Week 5–“European Empires Carve Up Africa”: This class focuses on the hideous Berlin Conference that divided up Africa in accord with Europe’s geopolitical Imperialist view of Africa and its people.

Week 6–“Africa’s Post Independence”: We leap ahead to the liberation of Africa from colonialism circa 1960. We discuss current and changing conditions in African nations, especially as the West abandons the continent and China supports Africa’s economic growth by building and funding infrastructure projects across Africa.

It Cannot Be Denied: China Helping Africa Realize Its Dream

Ethiopian Prime Minister Abiy Ahmed (L), Djiboutian President Ismail Omar Guelleh (C), and Sudanese President Omar al-Bashir (R) on Dec. 9, 2018, inaugurate a Chinese-contracted major road project as the Ethiopian government aspires to connect strategic towns in western Ethiopia. (Xinhua/Michael Tewelde)

November 28, 2019

China to help Africa realize “African dream” early: Chinese state councilor

Xinhua|-November 23, 2019  

China is willing to make every effort to help Africa get out of the “underdevelopment trap” and realize the “African dream” at an early date, Chinese State Councilor and Foreign Minister Wang Yi said here on Saturday.

Wang made the remarks while attending the Group of 20 (G20) Foreign Ministers’ Meeting in Nagoya, Japan.

According to him, lack of fund is the biggest challenge to Africa’s development, with an annual infrastructure investment gap of 100 billion U.S. dollars. China’s infrastructure projects in Africa generate more than 50 billion U.S. dollars in revenue every year, he said.

For example, the Mombasa-Nairobi Standard Gauge Railway has created nearly 50,000 local jobs, driving Kenya’s economic growth by about 1.5 percent, Wang said, adding that China-Africa cooperation is part of South-South cooperation and is mutual help between friends and brothers.

China attaches great importance to the debt issue, actively helps African countries improve their debt management capacity and provides necessary support when they encounter difficulties, Wang said. The two sides have made positive progress in jointly building the Belt and Road with high quality, he added.

The Belt and Road Initiative is highly compatible with the 2030 Agenda for Sustainable Development, the African Union’s Agenda 2063 and development strategies of African countries, forming a strong synergy for promoting common development, Wang said.

In order to better help Africa achieve sustainable development, it is necessary to focus on solving the three major development bottlenecks, namely lagging infrastructure, lack of talent and capital shortage, while solving the three livelihood issues of employment, food and clothing and health, he added.

In this regard, China will adhere to the principle of upholding justice while pursuing shared interests and the principle of sincerity, practical results, affinity and good faith, and work tirelessly to help Africa develop, Wang said.

China has helped Africa build more than 10,000 km of roads, over 6,000 km of railways and a large number of libraries, schools, hospitals and other livelihood facilities throughout the continent, greatly promoting local development, Wang said.

Meanwhile, more than half of the eight action plans and supporting financing announced at the Beijing Summit of Forum on China-Africa Cooperation last year have been implemented or seen concrete arrangements.

He called on developed countries to honor their commitments to Africa and provide tangible assistance in capital and technology among others. China is ready to work with all parties to give full play to respective advantages, jointly promote peace, stability and development in Africa and help African countries realize the “African dream” at an early date, he said.

Read: China Helps Africa To Realize African Dream

 

Yes, Chinese engagement is helping Africa’s industrialization

A worker at the Chinese-built Bole Lemi Industrial Park in Addis Ababa, capital of Ethiopia, April 6, 2017. (Xinhua/Michael Tewelde)

November 22, 2019

Chinese engagement helps Africa’s industrialization: ITC executive director

Speaking to Xinhua on Wednesday, November 20, Arancha Gonzalez, Executive Director of the International Trade Center-(ITC), empathized China’s growing engagement and interest in Africa’s existing and emerging potential was driving the continent’s industrialization.

“China has focused a lot of attention to the industrialization of the African continent,” the ITC Executive Director told Xinhua on the sidelines of the Africa Industrialization Day commemoration event, which was marked on Wednesday at the headquarters of the African Union (AU) Commission in the Ethiopian capital Addis Ababa.

“It (China) has focused a lot in manufacturing,” Gonzalez said, as she emphasized other emerging potential areas in the industry sector that are benefiting from and attracting Chinese engagement across Africa.

“First, I think now there is interesting opportunity that is coming in two other sectors, one is agro-processing, so helping Africa transform a lot of the raw materials, agricultural commodities that this continent produces into processed products.

The continental industrialization day was commemorated as part of the AU Commission’s flagship Africa Industrialization Week (AIW-2019), which is underway from November 18 to 22. The AIW-2019 also emphasized the crucial role of industrial parks and Special Economic Zones (SEZs)to drive Africa’s industrialization.
Continue Reading: Chinese engagement helps Africa’s industrialization

Ethiopia Launches New Economic Reform Agenda

November 21, 2019

Ethiopia Launches New Initiatives To Expand Its Economy

Lawrence Freeman

In the last decade, Ethiopia, the second most populated nation in Africa with over 100 million people, has become a leader in economic growth. This is the result of the leadership’s commitment to the continuation of the previous government’s developmental state model, which directed public credit to finance vital infrastructure projects. Now, under new leadership, innovative initiatives are being launched to sustain and expand Ethiopia’s progress.

On September 9, 2019, Prime Minister Abiy Ahmed unveiled his nation’s “Homegrown Economic Reform Agenda” (Homegrown Reform) at the United Nations Conference Center in Addis Ababa. Its primary goal is to expand the nation’s economic capabilities, and create employment opportunities for millions of unemployed youth. Addressing the audience, Prime Minister Abiy said: “The Reform Agenda is our pro-job, pro-growth, and pro-inclusivity pathway to prosperity.” To achieve these objectives, this new initiative proposes to entice private investment in the following sectors; agriculture, manufacturing, mining, tourism,  and Information and Communication Technology- (ICT). Key goals of the agenda’s macroeconomic reforms are, curbing inflation that is averaging over 15% in the last four years, increasing foreign currency, improving access to finance, and debt sustainability.

Home Grown Initiative

The Homegrown Reform Agenda is not meant to be a replacement for Ethiopia’s Growth Transformation Plans II (GTP II), which covers the period from 2014-2019.

Ethiopia, aims over the next three years, to attract $6 billion in new soft loans and $4 billion in debt reduction from multilateral and bilateral institutions to alleviate the country’s financial constraints. According Fitsum Arega, Ethiopia’s ambassador to the United States, “many industries are operating below capacity for lack of foreign currency to pay for imports.”

For Ethiopia to advance to the next stage of development certain imbalances and bottlenecks in the economy have to be corrected, which the Homegrown Agenda intends to accomplish through macro and fiscal reforms.  The number one constraint to growth cited by manufacturing firms, is the shortage of foreign exchange. Access to financing, inefficiency in government, and insufficient infrastructure are also leading constraints to doing business in Ethiopia.  In an effort to address these limitations, the Homegrown Reform intends to shift from relying exclusively on public sector investment, which has led to a rise in Ethiopia’s debt, to promoting private sector financing.

Another area of concern for the government is relying on inefficient state-owned firms. A case in point is the military-run industrial conglomerate METEC, which is being investigated for corruption and suspicion of misappropriating public funds.

To complement the new reforms, it is recommended that the government make additional efforts to; discipline public expenditures, attract remittances through legal channels, and end contraband.

Ethiopia On The Road of Progress

The following indicators of economic growth are reported in    A Homegrown Reform Agenda: Pathway to Prosperity power-point. From 2004 to 2015, Ethiopia succeeded in reducing the percentage of people living in poverty-$1.90 per day or less- from 39% to 24%. From 2004 to 2018 per capita income grew from $200 per day to over $800. During that same time frame, child mortality (under age 5) decreased from 123 to 55 per 1000 live births, and life expectancy increased from 56 years to 66.  And from 2005 to 2016 the percentage of the population with access to electricity rose from 14% to 43%–a 300% increase.

Ethiopia aspires to reach the status of a “lower middle income” nation by 2025. This is an ambitious goal that will require; raising yearly per capita income from its levels of $856 to $2,219, reducing poverty from 27.3 % of the population to 13.8%, and increasing access to electricity to 86% of its citizens. For Ethiopia to achieve its objective in the next five years, it needs to mechanize its agriculture sector to be more productive and less labor intensive, and increase manufactured exports five-fold.

Ethiopia’s Job Offensive

Simultaneously, Ethiopia’s leadership is tackling the critical issue of unemployment, especially for the growing number of college educated youth, who are seeking jobs and upward mobility. Ethiopia’s Jobs Creation Commission-(JCC) announced on October 30, a bold plan to create 14 million jobs by 2025, and a total of 20 million new jobs by 2030. This will provide employment opportunities for millions of new entrants into their labor force. The government intends to create 3 million jobs in the budget year that began this July.

In partnership with the JCC, Mastercard Foundation presented its Young Africa Works Initiative–committing $300 million to assist in this job creation program.  Their focus will be generating new employment opportunities in the ICT and Small Medium Enterprises-(SME) sectors. According to the JCC website: “The Young Africa Works in Ethiopia is an initiative that will enable 10 million young people to access dignified and fulfilling work by 2030…It was designed in partnership with the government, the private sector, academic institutions, and young people and; is currently aligned with the Ethiopian government’s plan to create new jobs to spur economic growth.”

Economics and the Nation State

Ethiopia’s economy has been growing at a faster rate than other sub-Saharan nations. However, its prolific university system is graduating more young people than Ethiopia’s economy can employ. Simply put: despite the progress that Ethiopia has accomplished in reducing poverty and building physical infrastructure; the economy is not growing at a level fast enough to accommodate its large and expanding population.

Frustration over the slower than desired rate of development is being expressed by various elements of society. Economic well-being is a substantial motivation that underlies the anger by ethnic movements at those in power. Ethnic groups believe it is necessary to have “their leaders” in charge, in order to ensure a bigger slice of the “economic pie.” People, who judge that they are being economically neglected or marginalized can become desperate, and thus susceptible to being manipulated and aroused to take action against their own government.

To avoid such instigated conflicts, the only real and lasting solution is to create a “bigger economic pie” that equally satisfies the needs of all people regardless of geographical region or ethnicity. It is the unique responsibility, nay obligation, of the nation state to provide for the “general welfare” of its people and their posterity, as beautifully articulated in the preamble to the US Constitution. The nation state transcends (not negates) regionalism, ethnicity, and religion. Its primary concern is the continued existence of a single sovereign Ethiopian nation with one integrated and unified people.

The government is responsible for ensuring that every Ethiopian has the  necessities of food and shelter, and the opportunity for a meaningful life for oneself and one’s progeny. Deliberating on the best pathway to achieve these goals is the responsibility of every citizen. It is in the self interest of all Ethiopians to collaborate in securing a prosperous future for their nation.

Lawrence Freeman is a Political-Economic Analyst for Africa with thirty years of experience in Africa promoting infrastructure development policies.