Industrialization of Ethiopia With Chinese Cooperation

Below are excerpts from a speech by Mr. Mehreteab Mulugeta Haile, Consul General of Ethiopia , reporting on the progress that Ethiopia has made to develop its nation, with its emphasis on infrastructure.

Ethiopia is one of the largest Least Developed Countries (LDCs) in Sub-Saharan Africa, with a population of about 100 million people. After suffering economic stagnation for decades, its economy began to grow in the mid-1990s after a new administration led by the Ethiopian People’s Revolutionary Democratic Front (EPRDF) took the helm of government.

For the last 15 years, Ethiopia has become one of the fastest growing economies in the world, with an average Gross Domestic Product (GDP) growth rate of about 11% per annum. To continue with this rapid economic growth, the Ethiopian Government rolled out in 2010, an ambitious five-year Growth and Transformation Plan (GTP). This plan aims to attain a lower-middle-income status by 2025. Currently the country is implementing the second Growth and Transformation Plan (GTP II), which is built on Sectoral Policies, Strategies  & Program and Lessons drawn from the first GTP and the post-2015 “sustainable development goals” (SDGs). It has also taken into account global and regional economic situations having direct or indirect bearing on the Ethiopian economy.

Expanding the manufacturing sector will focus on identifying new investment areas such as biotechnology, petrochemicals, electricity and electronics, information and communication technologies (hardware and software production industries).

In the infrastructure sector, the overall strategic direction is to ensure the creation of infrastructure that supports rapid economic growth and structural transformation. This direction will create mass employment opportunities, an institution having strong implementation capacity, ensure public participation and benefit, construct decentralized infrastructure development systems, solve financial constraints, ensure fairness and profitability, and ensure integrated planning of infrastructure development.

Within infrastructure overall, rural roads are given high focus to help reduce poverty by facilitating easy access of agricultural products, at low transportation cost, to the market, improving access to basic socioeconomic services, and strengthening rural-urban linkages.

If we take my country, Ethiopia, as an example of Chinese cooperation and involvement in Africa, we find that what has been said above is false. According to the Ethiopian Investment Commission, Chinese companies, with close to 379 projects that were either operational or under implementation in the 2012-2017 period, are on top of Ethiopia’s investment landscape, both in number and financial capital. Among these companies, 279 were operational with projects that are worth over 13.16 billion Ethiopian birr (over 572 million U.S. dollars) during the reported period, while the remaining 100 are under implementation.

In terms of employment creation, Chinese companies have created more than 28,300 jobs in various sectors in Ethiopia during the reported period, of which over 19,000 were created in Ethiopia’s manufacturing, as it is the leading sector in attracting companies from China. China brings not only investment, knowhow, and transfer of technology, but also skills and entrepreneurship.

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