The excerpted portions below of President Trump’s address to the otherwise useless World Economic Forum in Davos, touch upon profound principles of culture, science, and political economy. The extremists in the mis-named environmentalist movement adhere to the Malthusian ideology; that an expanding human population would overwhelm the fixed resources of the planet. This false axiom of belief has been extended to the fraudulent notion that the growth of civilization itself will cause the destruction of our world. These extremists believe human beings are inherently evil, because of human nature’s inexorable devotion to progress.
President Trump’s reference to the construction of Brunelleschi’s Dome, that embodies the great Italian Renaissance, directly counters the pessimism that has infected large portions of Western culture. Our civilization has always progressed by realizing the fruits of creative labor. Through unique contributions by scientists and artists, society leaps forward and upward to new levels of evolution. The true underlying wellsprings of real-physical (non-monetary) economic growth are new scientific discoveries, and the capacity of society to apply them through advanced technologies. Our culture, if properly nurtured, should be a never ending font of discovery. Great creative artists stimulate our minds and souls, propelling society to new peaks of optimism and imagination.
One does not know, if President Trump is fully conscious of the implications of this exceptional portion of his presentation. However, we do know, that with his historical optimism, he challenged the prevailing anti-growth ideology espoused by the “green-billionaire” movement to halt the industrial development of our planet.
I will be writing more on this subject-follow my blog.
Excerpts from the concluding section of President Trump’s speech in Davos Switzerland, January 21, 2020
This is not a time for pessimism; this is a time for optimism. Fear and doubt is not a good thought process because this is a time for tremendous hope and joy and optimism and action.
But to embrace the possibilities of tomorrow, we must reject the perennial prophets of doom and their predictions of the apocalypse. They are the heirs of yesterday’s foolish fortune-tellers — and I have them and you have them, and we all have them, and they want to see us do badly, but we don’t let that happen. They predicted an overpopulation crisis in the 1960s, mass starvation in the ’70s, and an end of oil in the 1990s. These alarmists always demand the same thing: absolute power to dominate, transform, and control every aspect of our lives…
The great scientific breakthroughs of the 20th century — from penicillin, to high-yield wheat, to modern transportation, and breakthrough vaccines — have lifted living standards and saved billions of lives around the world. And we’re continuing to work on things that you’ll be hearing about in the near future that, even today, sitting here right now, you wouldn’t believe it’s possible that we have found the answers. You’ll be hearing about it. But we have found answers to things that people said would not be possible — certainly not in a very short period of time.
But the wonders of the last century will pale in comparison to what today’s young innovators will achieve because they are doing things that nobody thought even feasible to begin. We continue to embrace technology, not to shun it. When people are free to innovate, millions will live longer, happier, healthier lives.
For three years now, America has shown the world that the path to a prosperous future begins with putting workers first, choosing growth, and freeing entrepreneurs to bring their dreams to life.
For anyone who doubts what is possible in the future, we need only look at the towering achievements of the past. Only a few hundred miles from here are some of the great cities of Europe — teeming centers of commerce and culture. Each of them is full of reminders of what human drive and imagination can achieve.
Centuries ago, at the time of the Renaissance, skilled craftsmen and laborers looked upwards and built the structures that still touch the human heart. To this day, some of the greatest structures in the world have been built hundreds of years ago.
In Italy, the citizens once started construction on what would be a 140-year project, the Duomo of Florence. An incredible, incredible place. While the technology did not yet exist to complete their design, city fathers forged ahead anyway, certain that they would figure it out someday. These citizens of Florence did not accept limits to their high aspirations and so the Great Dome was finally built.
In France, another century-long project continues to hold such a grip on our hearts and our souls that, even 800 years after its construction, when the Cathedral of Notre Dame was engulfed in flames last year — such a sad sight to watch; unbelievable site, especially for those of us that considered it one of the great, great monuments and representing so many different things — the whole world grieved.
Though her sanctuary now stands scorched and charred — and a sight that’s hard to believe; when you got used to it, to look at it now, hard to believe. But we know that Notre Dame will be restored — will be restored magnificently. The great bells will once again ring out for all to hear, giving glory to God and filling millions with wonder and awe.
The Cathedrals of Europe teach us to pursue big dreams, daring adventures, and unbridled ambitions. They urge us to consider not only what we build today, but what we will endure long after we are gone. They testify to the power of ordinary people to realize extraordinary achievements when united by a grand and noble purpose. (emphasis added)
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
Ethiopia’s Prosperity Party: A Revolutionary Necessity
By Lawrence Freeman
January 8, 2020
Prime Minister Abiy Ahmed has embarked on a bold effort to transform the political terrain of Ethiopia while simultaneously launching new economic reforms. The creation of the new Ethiopian Prosperity Party (PP) replaces the Ethiopian People Revolutionary Democratic Front-(EPRDF), founded in 1988. Dissolving the reigning EPRDF and fashioning a new national party, or what some refer to as a Pan-Ethiopian party, is a courageous and daring move, essential for Ethiopia’s future. This emerging nation of over 105 million people, already a leader in economic development, is now embarking on a challenging path to create de novo a national party.
The EPRDF, which had governed Ethiopia since May 1991, was composed of four Regional States, plus the cities of Addis Ababa (the capital), and Dire Dawa. The four regional parties are: the Tigray People’s Liberation Front-(TPLF); the Oromo People’s Democratic Organization-(OPDO) (renamed early this year as Oromo Democratic Party-(ODP); the Amhara National Democratic Movement-(ANDM), (renamed early this year as Amhara Democratic Party-(ADP); and the Southern Ethiopian People’s Democratic Movement-(SEPDM), (a coalition of the 56 ethnic groups).
The EPRDF was fashioned to address Ethiopia’s earlier history of dictatorial and monarchical rule. The designers of the governing party believed that acknowledging ethnic identity, which was not recognized for centuries, would solve the tensions of that time. Recent conflicts in Ethiopia have shown this arrangement to be ineffective.
Of the four parties that comprised the EPRDF, only the TPLF has refused to join the new PP. Already the governing parties representing 5 regions, which were not members of the EPRDF, but were recognized as allies of the EPRDF have joined the PP in preparation for May 2020 elections. They are: 1) Afar National Democratic Party (ANDP); 2) Benishangul-Gumuz Democratic Party (BDP); 3) Somali Democratic Party (SDP); 4) Gambela People’s Democratic Movement (GPDM); and 5) Harari National League (HNL). The PP will be inclusive, intending to represent all communities, inviting Tigrayans, who live in and outside the region to join. The PP program will have Amharic as its working language as per the constitution. However, Afan Oromo, Tigrigna, Somali and Afar will also be the working languages of the new PP.
Prime Minister Abiy’s founding of the PP on December 1, just six months before Ethiopia’s national elections, is fraught with personal risks for the new Prime Minister. However, this endeavor is bursting with the potential to transform politics and social relations in Ethiopian society. Ethiopia has a splendid history thousands of years old, rich with a multiplicity of cultural backgrounds. The PP is intended to harmonize the diversity of the nation with a national non-ethnic based party.
Nationalism: Not Ethnic Nationalism
A sovereign nation-state is not a mosaic of diverse groups competing with each other for control of the government or pursuing administration posts to obtain economic and financial rewards. A sovereign nation should have a national identity and a mission orientation for its people; all its people, regardless of ethnic heritage. Contributing to the distinctive identity of Ethiopia was its military defeat of the Italian Empire in the battle of Adwa on March 1, 1896. Consequently, this victory, uniquely allowed Ethiopia to remain free from colonialism. Although this triumph occurred over one century ago, it is part of the psychological composition of the identity of all Ethiopians; whether they are conscious of its effects or not. Ethiopia’s decades’ long determination to develop from a disadvantaged nation to an aspiring lower middle-income nation with nascent light manufacturing industry is another feature of Ethiopia’s national identity.
Professed ethnonationalism errs in that it attempts to substitute the demands, often for legitimate needs, of one particular group above the interests of all the citizens. A nation-state cannot survive in a Hobbesian war of all against each other to obtain the most goodies for “my people.” Dare we forget the horrors of the ethnically driven tragic Biafran war in Nigeria from 1967-1970, and how geographic-ethnic distinctions have determined every unhealthy aspect of political and social life in Nigeria today?
Recriminations from the past are no excuse for actions today. Decisions concerning the best strategy for securing the future of Ethiopia must be based on how that policy will benefit the well-being of all citizens.
Medemer and Synergy
In his acceptance speech for the 2019 Nobel Peace Prize winner, Prime Minister Abiy spoke of the philosophy of the Medemer.
He said: “Medemer, an Amharic word, signifies synergy, convergence, and teamwork for a common destiny. Medemer is a homegrown idea that is reflected in our political, social, and economic life. I’d like to think of ‘Medemer’ as a social compact for Ethiopians to build a just, egalitarian, democratic, and humane society by pulling together our resources for our collective survival and prosperity…At its core, Medemer is a covenant of peace that seeks unity in our common humanity.” One could appropriately, add for the “common good” of humankind.
Our “common humanity” exists in all of us. We are all born in the image of the Creator. All human beings are universally related by our endowed powers of creative mentation, more commonly known as reason. What distinguishes all human beings from the animal species is our mental power to discover new scientific and cultural principles embedded in our universe. All of us homo sapiens, regardless of where we were born, or any physical characteristics, are substantially more alike than we are different. Therefore, our needs, desires, and aspirations in life are similar. All human beings not only share a common interest to enhance our lives, but we also share a desire for a better future for our posterity. There is no class of superior people, who have more rights than others due to privileges of birth, religion, or skin color. Each of us are placed here on earth to contribute to the common good of our common humanity using our individual talents.
If we accept synergy to mean cooperation and collaboration to achieve an enhanced effect, then let us act synergistically to ensure a prosperous Ethiopia that provides for all its citizens.
The Constitution and Sidama
Inherent problems of the 1995 Constitution of the Federal Democratic Republic of Ethiopia are evident in the November 2019 referendum conferring autonomy to Sidama. Ethiopia’s constitution stipulates that with this lawful vote, the people of Sidama, the fifth largest ethnic group, will become the tenth ethnic regional state. Eight of the existing nine regional states are governed by the dominant ethnic group of that geographical region. However, the Sidama people reside in Southern Nations, Nationalities, and People’s Region–(SNNPR), where many other small ethnic groups (around 56) also exist.
The Preamble of Ethiopia’s Constitution properly emphasizes the conception of a united nation with a common purpose and goal for all its people. It deliberates on “advancing our economic and social development,” “common interest….and the emergence of a common outlook,” and “to live as one economic community.” Article 14 resonates with the US Constitution, stating: “Every person has the inviolable right to life the security of person and liberty.” The same principle is echoed in Article 43 of the Constitution: The Right to Development. “The basic aim of development activities shall be to enhance the capacity of citizens for development and to meet their basic needs.”
The drawback to the Constitution begins in Article 8:Sovereignty of the People, where sovereign powers are divided up between “Nations, Nationalities and Peoples of Ethiopia.” This is an obvious compromise to ethnicity. In truth; there is only one Ethiopian people and only one Ethiopian nation. The divisions in Ethiopian society are made explicit in Article39: “Every Nation, Nationality and People in Ethiopia has an unconditional right to self-determination, including the right of secession……the right to a full measure of self-government…” This separation of Ethiopians into multiple groups, outlined in the Constitution, is the seed for the tensions gripping Ethiopia today.
In the aftermath of the Sidama referendum, Ethiopia potentially faces a conundrum. Will other ethnic minorities now choose to follow the same path as Sidama in calling for autonomy as delineated in the Constitution? It appears so. In addition to Sidama Zone*, which is now claiming to be the 10th state, there are other Zones in the Southern Region that want to follow the same route to statehood. To quote William Shakespeare, “there’s the rub.” Clearly the Ethiopian Constitution, despite the best intentions, has proven to be unsuccessful in governing this multi-ethnic nation.
The Challenging Course Ahead
The emergence of a national party such as the PP can commence the process of uniting the nation by moving away from a society where ethnic interests are placed above the welfare of the nation. Ultimately the problematic features of the Ethiopian Constitution will have to be revisited. Not to address this thorny issue will allow instigators to use ethnicity to disrupt what is most necessary for Ethiopia to move forward; a healthy process of dialogue and debate on the future of Ethiopia.
This discourse should include a discussion by the Ethiopian people on changing the structure of ethnic-based parties. For example, Ghana’s Constitution stipulates that “Every political party shall have a national character, and membership shall not be based on ethnic, religious, regional or other sectional divisions.” That no political party shall be formed “(a) on ethnic, gender, religion regional, professional or other sectional divisions; or (b) which uses words, slogans or symbols which could arouse ethnic, gender, religious, regional professional or other sectional divisions.”
The lack of vibrant Ethiopian nationalism creates a fertile environment for those who want to manipulate misplaced ethnic passions. The danger presents itself during times of social or economic stress, when the population’s frustrations can be channeled along ethnic fault lines, manipulating Ethiopians to act against their true self-interest: progress for the nation of Ethiopia. Opportunistic ringleaders will attempt to misdirect the population against each other via competing ethnicities, instead of uniting society behind a national policy. A policy of economic growth that includes a strategy to generate employment opportunities for the millions of youth preparing to enter the workforce is in the vital interests of all citizens.
Of course, it will take time for people to shed their desire to control policy making through ethnic-based parties. It is an existential moment for Ethiopia, and a national grounded PP is a needed first step. It should be understood, that a sovereign nation, whose national mission is to promote the general welfare of its people does not require the elimination of historical cultures. On the contrary, the uniqueness and beauty of each ethnic culture can be synergistically woven into an elevated national character that transcends ethnicity.
*Zone is the middle tire next to the regional state in the governing structure that is also formed under ethnic lines the Southern Nations, Nationalities, and People’s Region (SNNPR).
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
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.”
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.
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.
In the coming ten years the government of Ethiopia aims to facilitate the creation of twenty million jobs in different sectors.
By 2025 we strive to create 15 million jobs. And by 2030 we do our best to get to a point where we have 20 million jobs, “said Ephrem Tekle (PhD), Jobs Creation Commissioner of Ethiopia.
“The vision is to create 20 million jobs because there is this greater challenge of addressing the need of young people, which will require us to build the right set of skills,” he said.
Explaining on how the government plans to create the jobs, Dr. Ephram indicated that information technology including mobile technology is one of the sectors that is expected to generate many jobs for the growing number of you youth in Ethiopia.
He also stated that agriculture mainly irrigation based will be the major job creation area. Tourism, hospitality, miming and manufacturing sectors are also among the priority job creation areas identified by the Ethiopian government.
Currently two million youth in Ethiopia enter the job market every year meanwhile only half of them are getting jobs, according to the state agency report.
Some ten million youth are looking for job in Ethiopia, according to Dr. Ephrem, who spoke at the panel discussion on the sidelines of Fintech Africa Summit in Addis Ababa on Thursday.
In Ethiopia it is estimated that there are around 1.6 million civil servants (government employees) and some 1.9 million recruited by the private sector.
Ethiopia Launches New Initiatives To Expand Its Economy
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.
Below you will read about the success of the second segment of Kenya’s Standard Gauge Railroad, and President President Cyril Ramaphosa’s firm refutation of allegations that a number of countries in Africa are being led into a debt trap by China and Russia
November 2, 2019
Kenya’s SGR project, the most advanced in Sub-Saharan Africa, began in 2014, when the country began construction of a modern, standard gauge (1.435 meter) rail line from the port of Mombasa on the Indian Ocean, northwest to the nation’s capital of Nairobi, a distance of 450 km (275 mi). Opened in 2017, on Madaraka Day—Kenyan Independence Day, when the people took political control of their destiny from the British Empire on June 1, 1963— the rail line has been a huge success, cutting transport and delivery time significantly for both goods and people. Exceeding expectations, the railway transported two million passengers within its first 17 months; and in 2018, its first full year of operation, carried over 5 million tons of freight.
The Mombasa-Nairobi line was initiated in 2009 discussion between the China Road and Bridge Corporation and the Kenyan government, as reported by P.D. Lawson in the April 27, 2018 EIR. China’s Exim Bank extended credit for 90% of the project. By May 2016, initial track laying was completed in just over 1 year. Passenger service was opened May 31, 2017, eighteen months ahead of schedule. Freight services commenced in January 2018. Plans are now underway to electrify the segment from Mombasa to Nairobi, which will greatly lower operating costs.
Benefits of the new, faster technology now extend far beyond mere transport, where the railway has taken hundreds of trucks (and buses) off the notoriously congested highways, making them safer and more useable for the population.
With the increased capacity and speed of freight transport, Kenya’s exports to the East African Community (including neighboring states Uganda, Tanzania and South Sudan) have hit a three-year high in the first eight months of 2019. Not only have government earnings from domestically produced goods increased 6% compared to 2018, but Kenya’s domestic consumption of electricity—certainly not a nation known for its over consumption of this resource—has increased 3.2% in the first 8 months of 2019.
President Kenyatta has launched additional infrastructure projects, building on the Kenya Vision 2030 plan. In addition to the opening of SGR Section 2A on October 16, he has announced plans for construction of an inland container depot (ICD) at Naivasha (to store or transfer goods from rail to truck, or from SGR to the old meter gauge rail, MGR); a new 23 km expressway in Nairobi; and a water project in rural Kimuku (stemming from a natural spring accidentally discovered during construction of the rail line!). He wants to create a Special Economic Zone—to include the port of Mombasa—to further speed up freight delivery.
EIR magazine, Nov. 1, 2019: “Kenyan Standard Gauge Successful in Looking Beyond the Here and Now”
Russia-Africa Summit: African countries not being led into debt trap —South Africa’s Ramaphosa
President Cyril Ramaphosa on Monday refuted allegations that a number of countries in Africa are being led into a debt trap as they take up loans to fund a number of projects.
Ramaphosa said this during his weekly address from the Desk of the President in Cape Town, after returning from the Russia-Africa Summit held in Sochi last week.
“One need only look at initiatives such as the Forum on China-Africa Cooperation, which was last held in Beijing in 2018, to see that the focus is now on partnership for mutual benefit, on development, trade and investment cooperation and integration,” Ramaphosa said.
He lambasted remarks which label initiatives like the recent Russia-Africa Summit as an attempt by world powers to expand their geopolitical influence. African countries had taken part in the summit to discuss ways of how to increase trade and cooperation between Russia and Africa. He said the summit was a sign of the growing economic importance of Africa on the world stage.
“What we are witnessing is a dramatic re-balancing of the relationship between the world’s advanced economies and the African continent,” he said.
African countries have consistently affirmed that Africa no longer wants to be passive recipients of foreign aid, said Ramaphosa. The president said African countries are developing and their economies are increasingly in need of foreign direct investment.
“We are ever mindful of our colonial history, where the economies of Europe were able to industrialize and develop by extracting resources from Africa, all the while leaving the colonies underdeveloped,” said Ramaphosa.
Even now, African countries are still trying to stop the extraction of its resources, this time in the form of illicit financial flows through commercial transactions, tax evasion, transfer pricing and illegal activities that cost the continent more than 50 billion dollars a year, according to Ramaphosa. The age where “development” was imposed from outside without taking into account the material conditions and respective requirements of our countries is now past, the president said.
“China, Russia, Organisation for Economic Cooperation and Development countries and other large economies are eager to forge greater economic ties with African countries. “This is because they want to harness the current climate of reform, the deepening of good governance, macro-economic stability and the opening up of economies across the continent for mutual benefit,” the president said.
Nuclear power is essential to meet the needs of Africa’s huge energy deficit. However, it will do more for Africa. Nuclear energy not only has a higher energy flux density than hydro, coal, gas, inefficient solar, and silly wind mills, but it embodies a higher level of technology. This will enable African nations to raise the skill level of their workforce, as they learn to build an operate a more technologically advanced energy platform. More engineering schools and training centers will be required as African nations enter the age of civilian nuclear power. Thus, the nuclear energy industry will serve as a science driver for society, while creating higher levels of economic growth.
The Rwandan Cabinet has approved an agreement with Russia to advance the use of nuclear energy for “peaceful purposes,” a move that is expected to bolster relations between the two countries and advance the latter’s interests in the region.
This comes ahead of the first Russia-African Forum next week in the city of Sochi, which President Paul Kagame has confirmed attendance, accompanied by a delegation of senior government officials.
The nuclear power deal was first signed in Moscow last December and will see Russian scientists set up a Centre for Nuclear Science and Technology in Kigali.
The deal was boosted in May when a Russian government nuclear parastatal, Rosatom Global, reached an agreement to set up the nuclear plant by 2024—that the government says will help in the advancement of technology in agriculture, energy production and environment protection.
The Russia-Africa Economic Forum in Sochi will host a special panel discussion, “Contribution of Nuclear Technologies in the Development of Africa,” on October 23, with the participation of Alexey Likhachev, Director General of Rosatom-the State Nuclear Energy Corporation.
“Rosatom has been active in Africa for a long time. The creation and development of the nuclear industry in Africa will not only solve the problem of the energy crisis, but also change the standard of living, providing full access to public health services, increasing the level of education and food security. We see a great interest on the part of African countries in creating new ties for further technological development. Moreover, we are ready to discuss all possible options for cooperation on the continent. I am sure that Russian-African nuclear projects will have a great future,” said Likhachev on Oct. 15, in a preview of the Sochi event.
The forum in Sochi was also prepared by a conference in Nairobi last week that featured officials of Rosatom and over 150 energy and nuclear professionals from across the globe. Representatives from key African countries that are planning or already implementing their respective programs for developing peaceful nuclear technologies included Côte d’Ivoire, Egypt, Ethiopia, Ghana, Kenya, Niger, Nigeria, Rwanda, South Africa, Sudan, Tanzania, Tunisia, Uganda, and Zambia.
Speaking in Nairobi, Dmitry Shornikov, CEO of Rosatom Central and Southern Africa, emphasized the advantages of joining the atomic club through creating nuclear industries in newcomer countries, and gave an overview of projects with the maximum positive effect on industrial development, enhancing the quality of life and developing ‘knowledge economy’.
Russia’s Growing Involvement in African Nuclear Development
One of the questions of the Oct. 23-24 Russia-Africa Summit is the need for Africa to develop civilian nuclear power. Russia is at the front end of the strategy to equip Africa with nuclear power, reports Sébastien Périmony in his blog “Africa with the Eyes of the Future” in France. No fewer than eight African countries have already signed agreements with Russia’s nuclear power company, Rosatom: Sudan, Kenya, Uganda, Nigeria, Rwanda, Zambia, Zimbabwe, and Ghana.
“The stark reality is that Africa is in dire need of energy: 48 countries in Sub-Saharan Africa produce as much energy as the single country of Spain produces in Europe. That means that every other African has no access to electricity. According to the Global Energy Architecture Performance Index Report 2017, only five African countries have 100% electrification, all of them in North Africa: Algeria, Egypt, Libya, Tunisia, and Morocco. South Africa follows immediately after, with a rate of 85.40%. Then come Ghana, 64.06%; Senegal, 56.50%; Ivory Coast, 55.80; and Nigeria, 55.60%. Some francophone countries: World Bank Reports gives access to electricity as 16% for Niger, 9% for Chad, 14% for the Central African Republic, and 20% for Burkina Fasso.”
“The future of energy and base-load generation is in nuclear, and probably coal and liquefied natural gas. Kenya needs to push ahead with the nuclear agenda to meet the country’s energy needs,” said the managing director of Kenya Nuclear Electricity Board Collins Juma.
Mr Juma said that Kenya requires at least 18,000MW to become a middle-income and an industrialized nation. With the total installed capacity at 2,370MW, it will need to diversify its energy sources to reach that target.
Countries in East Africa are among those on the continent seeking to build nuclear power plants driven by the need to end power challenges, and accelerate industrial and economic growth.
Russia, China and South Korea have emerged as the key vendors of nuclear energy, offering to help in financing the deals.
The International Atomic Energy Agency (IAEA) has been at the forefront of the campaign to sell nuclear to Africa. Its deputy director-general Mikhail Chudakov told The EastAfrican that nuclear energy holds the key to industrial development.
“Africa needs to understand that solar and wind are good for home lighting [but not manufacturing],” he said.
But nuclear energy needs massive resources to build and operate, so state-owned companies like Russia’s Rosatom, China General Nuclear, China National Nuclear Corporation and Korea Electric Power Corporation are pushing various financing and construction models for the continent’s customers.
The companies have signed agreements and memoranda with African countries, ranging from research and development and human resources development to full reactor projects. Russia and China, in particular, have crafted packages providing state-backed loans, in the process altering the dynamics of nuclear markets.
In Egypt, for instance, Russia is providing 85 per cent of the funding for the 4,800MW plant currently under construction at a cost of $21 billion.
Ethiopia to Djibouti Railroad Successfully Growing Ethiopia’s Economy
The Chinese-African built railroad from Addis-Ababa to Djibouti has been a success, as I knew it would. Inaugurated in October 2016, it has allowed Ethiopia to effectively overcome being a landlocked nation. Railroads increase productivity, create growth, build cities, and establish new manufacturing-agricultural centers. Africa will be transformed-industrialized when it is able to generate hundreds of thousands of megawatts of electricity and build tens of thousands of kilometers of rail lines connecting major capitals, cities, and ports across the continent. Ethiopia has been a leader in economic growth by investing in vitally needed infrastructure, such as the Grand Ethiopian Renaissance Dam-GERD, to begin operation in late 2020.
Roundup: Ethiopia-Djibouti railway adds impetus to Ethiopia’s agricultural economy
ADDIS ABABA, Oct. 18 (Xinhua) — The Chinese-built Ethiopia-Djibouti railway has won acclaim for facilitating landlocked Ethiopia’s import-export necessities.
For the past more than one year, it has transported much-needed agricultural inputs to Ethiopia’s agriculture-dominated economy.
Tilahun Sarka, Director-General of Ethiopia-Djibouti Standard Gauge Railway Share Company (EDR), said in a recent interview with Xinhua that the 752 km-long Africa’s first transnational electrified railway is leveraging the smooth transportation of Ethiopia’s major import and export commodities, mainly fertilizer and wheat.
“The railway is showing major progress in terms of facilitating Ethiopia’s basic import-export activities as it significantly reduced both the travel cost and time from landlocked Ethiopia to ports in its neighboring Djibouti,” Sarka told Xinhua.
The Ethiopia-Djibouti railway commenced its commercial operations for both passenger and freight services in January last year, eventually connecting landlocked Ethiopia to ports in the Red Sea nation of Djibouti.
The EDR director underscored the railway’s achievements over the past one and a half years, with particular emphasis on easing the pressure in transporting the much-needed imported agricultural and food security inputs, mainly fertilizer and wheat, from ports in Djibouti all the way to the Lebu Railway Station on the outskirts of the Ethiopian capital Addis Ababa.
Figures from ERD show that the Ethiopia-Djibouti railway has been able to carry more than 70,000 tons of fertilizer from the Djibouti port to Ethiopia over the past few months, as the East African country embarked with its main harvesting season since May.
“Fertilizer is a very important commodity to Ethiopia’s socio-economic well-being,” Sarka said, adding “It is by far considered as a major imported priority item by the Ethiopian government.”
Ethiopia – Africa’s second populous nation with about 109 million total population, according to the World Bank’s latest report – is an agrarian economy.
The UN Food and Agriculture Organization (FAO), which described Ethiopia as “one of the top-performing economies in Sub-Saharan Africa with an average growth rate of 11 percent over the last seven years,” dubbed the agriculture sector as “the mainstay of the Ethiopian economy, and exports almost entirely relies on agricultural commodities.”
Sarka, who dubbed fertilizer as a “political cargo,” also said that “a failure to import the much-needed fertilizer would adversely affect Ethiopia’s overall security, as far as igniting public uproar against the Ethiopian government.
Sarka also emphasized the joint Ethiopian government and EDR’s future plan that envisaged “to significantly boost the railway’s share in the transportation of fertilizer to the country.”
“Both the Ethiopian government and EDR give particular emphasis to the smooth transportation of fertilizers from the Djibouti port to Ethiopia, as well as the export of other export-bound agricultural commodities from Addis Ababa and other parts of Ethiopia to the port,” Sarka said.
Ethiopia imported a total of about 1.3 million tons of fertilizer during the just-concluded Ethiopian 2018-2019 fiscal year, according to figures from the Ethiopian government.
Built by two Chinese companies, the first 320-km of the project from Sebeta to Mieso was carried out by the China Railway Group Limited (CREC), while the remaining 423-km from Mieso to Djibouti port section was built by the China Civil Engineering Construction Corporation (CCECC).
The Ethiopia-Djibouti railway is presently managed by a consortium of Chinese companies – CREC and CCECC – for a period of six years undertaking railway operation and maintenance management activities.
According to Sarka, the six-year contract was given to the two Chinese firms mainly due to the shortage of electrified railway operation and management experience in the two involved countries.