Africa Requires Ethiopia Fill Its Dam
Lawrence Freeman
July 17, 2020
Ethiopia is entering a crucial period for the future of its nation, as we approach the second half of July. Ethiopia must use the forthcoming rainy season (July to September) to begin the partial filling of its Grand Ethiopian Renaissance Dam (GERD) being built on Ethiopia’s Blue Nile River. When fully completed, the GERD, Africa’s largest hydroelectric project is capable of producing over 6,000 megawatts (MW). This is not only a game changer for Ethiopia, but will contribute to transforming the Horn of Africa.
The Blue Nile, which joins the White Nile just north of Khartoum, Sudan, provides 86% of the water that becomes the Nile River. From there, the Nile flows north through the deserts of Sudan and Egypt before emptying into the Mediterranean Sea. Ethiopia has been involved in intense discussions with Sudan and Egypt, downstream from the dam, about the amount of water to be withdrawn from the Blue Nile to begin filling the GERD’s 76 billion cubic meter storage/reservoir. Egypt continuously attempts to forestall the filling of the dam, alleging that since it is dependent on the Nile, if the volume of the Nile is reduced, its citizens will suffer irreparable harm. For most of the last century Egypt has received the majority of the Nile River’s 84 billion cubic meters (bcm) of water.
Electricity for Development
The GERD, which is 75% finished was entirely funded by the Ethiopian people, is a $5 billion water infrastructure project initiated in 2011. Its purpose is to provide much needed electricity to power Ethiopia’s transition from an agrarian dominated economy to one that encompasses manufacturing and industry. In the years ahead, Ethiopia envisions become a light manufacturing hub for Africa, increasing manufacturing output, and manufacturing jobs by 440%.
The functioning of the GERD is not an option for this emerging nation of 110 million people, but a categorical necessity.
As a physical economist, who has studied Africa for decades, and knows the key drivers of economic growth, I can tell you that nothing is more vital for the survival of Africa, than the production of electricity. Without abundant and accessible electricity, poverty and disease will not be eliminated. Poverty is the number one enemy of Africa and is the cause of immense suffering for hundreds of millions of Africans.
Approximately 600 million Africans, almost half of the continent’s population, are not connected to a central energy grid. The overwhelming majority of them reside in sub-Saharan Africa (SSA). More than 65 million Ethiopians, 40-45% of the population, do not have access to electricity. While Ethiopia suffers from one of the lowest per capita levels of electrical energy consumption, Egypt’s population of 100 million has 100% access.
When completed, the GERD will increase Ethiopia’s power generation from its current level of 4,500 MW to close to 11,000 MW, which will make it the second largest energy producer in SAA, behind South Africa. Ethiopia has already entered into agreements to export its excess electricity to other nations in East Africa.
Ethiopia’s commitment to construct the GERD resonates with the same vision that compelled the nation to build the Addis-Ababa to Djibouti rail line; to expand their economy, eliminate poverty, and provide a meaningful future for their expanding young population.
While Ethiopia is blessed with several water systems, the Blue Nile provides between 70% of its surface water. Ethiopia suffers from water shortages, droughts, and food insecurity due to inadequate infrastructure and under development.
It is true that Egypt has one of the lowest water per capita consumption rates in the world at 570 cubic meters per year, well below the global average of 1,000. Ethiopia’s amount is a mere 125 cubic meters per capita, barely more than 20% of Egypt’s level.
However, the Ethiopia government has plainly stated that the intention of the GERD is not to provide water for irrigation or consumption. The motivation and sacrifice of the Ethiopian people in undertaking this mega infrastructure project is to provide electrical power for the purpose of developing their nation. Ethiopia intends on becoming a low-middle income nation. It can no longer allow its people to be without electricity, relegated to burning wood. Improving the lives of their citizens today and future generations is the objective of an operational GERD.
Sovereignty Versus Colonialism
The Blue Nile descends from Lake Tana, deep inside Ethiopia’s mountains, traveling through Ethiopia before entering Sudan. The GERD will capture Blue Nile waters about 40 meters before the Sudanese border. Ethiopia intends to fill the dam’s reservoir with 14.5 bcm of water over the first two years for testing. The withdrawing of this amount from the Blue Nile’s 49 bcm will not adversely affect downstream nations (Sudan, Egypt). In fact, the GERD will benefit these nations by regulating the flow of the Nile, preventing flooding, reducing silt, and decreasing evaporation.
Ethiopia has the wonderful distinction in Africa of having never been colonized. Unlike my beloved American July 4th, celebrating our independence from the British Empire, Ethiopia has no Independence Day. Instead, Ethiopia celebrates Adwa Day, March 1, 1896, when they defeated the Italian army on the battlefield in northern Ethiopia. Yet Ethiopia is fighting the remnants of British colonialism today in its determination to generate energy to free its people from the bondage of poverty.
Contrary to Egyptian claims, the negotiations between Ethiopia, Egypt, and Sudan are not about water sharing or water allocation. There have been two water allocation agreements regarding the Nile waters, that involved only Egypt and Sudan. Ethiopia was not a signatory nor participants to either accord, yet Egypt asserts historical rights over the Nile River, including Ethiopia’s Blue Nile. The most recent such agreement was in 1959, three years after Sudan’s independence from Britain, which recodified the 1929 British Imperialist agreement guaranteeing 55 bcm of Nile waters to Egypt and 18.5 bcm to Sudan. At the time of the 1929 Anglo-Egyptian Treaty, both Egypt and Sudan were colonies of Great Britain as stipulated by the 1899 Anglo-Egyptian Condominium. This treaty also “granted Egypt veto power over construction projects on the Nile or any of its tributaries in an effort to minimize any interference with the flow of water into the Nile.”
To maintain geo-political domination and control of trade along the eastern spine of Africa, Britain maintained authority over the Nile waters from Cairo down to Khartoum and beyond into southern Sudan.
Ethiopia, an independent nation was not subject to Britain’s edicts and retained sovereignty over the Blue Nile.
Thus, from whence does Egypt’s historical claim to dominance of the Nile originate.
In a statement signed by the Reverend Jesse Jackson, sent to the Honorable Congresswoman Karen Bass, Chair of the Black Caucus, dated May 19, 2020, Rev. Jackson reveals that Egypt’s “historical rights” over the Nile are derived from the British Queen.
He cites a letter dated May 7, 1929, from Mahmoud Pasha, Chairman of the Egyptian Council of Ministers, to the British requesting affirmation of Egypt’s “natural and historical” rights to the waters of the Nile. Lord Lloyd, Britain’s High Commissioner in Cairo, responded on behalf of the Queen:
“I would like to remind your Excellency [Mahmoud Pasha] that her Majesty’s Government in the United Kingdom has already recognized the natural and historical rights of Egypt to the waters of the Nile. I am entrusted with the responsibility of declaring that Her Majesty’s Government in the United Kingdom considers the observance of these rights as a fundamental principle of the policy of Great Britain.”
Rev. Jackson stresses in his letter, that Ethiopia should not be pressured “into signing a neo-colonial agreement will make Egypt a hegemon over the Nile River.”
U.S. Gets Involved
In September, Egyptian President Al-Sisi requested U.S. assistance in negotiating the operation of the GERD. President Trump asked Treasury Department to host a series of meetings in Washington DC, beginning in November 2019. Sudan, Ethiopia, and Egypt attended along with a representative of the World Bank, with Treasury Secretary Mnuchin, to act as an impartial observer, not a mediator. Ethiopia compromised by indicating they would extend the filling beyond 3 years, to 5-7 years and increased the amount of water to be released from 35 bcm to 40 bcm in seasons of healthy rain. With the negotiations failing to lead to a resolution, Ethiopia requested to postpone the February 27-28 meeting. The meeting proceeded without Ethiopia. Sudan and Egypt attending, but Egypt alone initialed an agreement prepared without Ethiopia’s input, which the Ethiopia Foreign Ministry characterized as “unacceptable and highly partisan.”
On February 28, 2020, an official statement from the US Treasury Department praised Egypt’s “readiness to sign the agreement,” and instructed Ethiopia that “final testing and filling should not take place without an agreement.” The next day, Ambassador Shinn (ret), former ambassador to Ethiopia, whose has spent decades in the State Department, questioned whether the U.S. was “putting its thumb on the scale in favor of Egypt.”
In a June 22, 2020 bipartisan letter addressed to Ambassador David Hale, Undersecretary of State for Political Affairs, seven former Assistant Secretaries of State for African Affairs, asked the U.S. to embrace neutrality regarding the GERD talks. They wrote:
“The U.S. position at this sensitive juncture will also have long term implications. It will either strengthen or seriously weaken our future relations with Ethiopia. While there is no question that resolution of the Nile issue will require flexibility and compromise on all sides, it is not politically viable for Prime Minister Abiy (or any Ethiopian politician) to indefinitely delay filling the GERD. However, the perception—rightly or wrongly—that the United States has sided with Egypt in the negotiations will limit our ability to support efforts aimed at reaching a settlement.”
Discussions Move to Africa
Egypt, not satisfied with the negotiating process, attempted to involve the United Nations in forcing an agreement on Ethiopia that violated its sovereignty over the GERD. On June 29, 2020, Egypt with the support of the U.S. brought the matter to the United Nations Security Council (UNSC). The UNSC is not the normal forum to settle such matters, but Egyptians were hoping to mobilize international pressure against Ethiopia. The UNSC has instead preferred to have the African Union (AU) resolve the issue of Ethiopia’s right to operate the GERD. On the previous Friday, June 26, the Extraordinary African Union Bureau of the Assembly of Heads of State and Government conducted a video-teleconference meeting on the Grand Ethiopian Renaissance Dam (GERD). Chairperson of the African Union Commission, Moussa Faki Mahamat noted that more than 90% of the issues between Egypt, Ethiopia, and Sudan had been resolved.
South African President, Cyril Ramaphosa, in his capacity as the Chairperson of the AU is committed to have “an African led process in the spirit of African solutions to African problems.”
In a June 23rd statement, the U.S. Congressional Caucus emphasized the pivotal role of the AU in these tripartite negotiations. They went on to discuss the importance of the GERD for Africa.
The GERD project will have a positive impact on all countries involved and help combat food security and lack of electricity and power, supply more fresh water to more people, and stabilize and grow the economies of the region.”
The Conference of Black Mayors, in a June 29th statement, expressed their support for the filling of the GERD
“Today, on behalf of global leaders throughout the African diaspora that hold the office of mayor, the Conference of Black Mayors released the following statement in support of the Grand Ethiopian Renaissance Dam (GERD) and the impact GERD would have on Conference of Black Mayors member cities…
“It is known that Ethiopia generates 86% of the Nile waters but has been unable to use this considerable natural resource effectively in the past. Now, following more than a decade of impressive economic growth, Ethiopia desires to utilize its naturally endowed resource for its nation’s critical growth and development. Countries throughout Africa are in dire need of electric power to enable and sustain their respective nations rise out of poverty. The creation of a sustainable energy source will create a national infrastructure that directly contributes to the wellbeing of citizens our mayors represents through our global mayors’ association…
“We strongly support a timely fill of the dam without further delays to avoid the economic impact on Ethiopia and neighboring countries.”
Ethiopia is desirous to cooperate with downstream nations, but it will not have its sovereignty violated by having the operation of the GERD jointly managed or contingent on the requirements of water for Egypt’s downstream High Aswan Dam.
Ethiopia should and will begin filling the GERD. It would be irresponsible not to use this year’s rainy season to begin filling the reservoir, with the dam already 75% constructed. Ethiopia’s leadership will not disappoint the aspirations of the Ethiopian people, who view the GERD as emblematic of their national identity, and a critical vehicle to raise their standard of living and secure a more prosperous future for their posterity.
Ethiopia’s use of the word Renaissance in describing its new dam is not metaphorical. When fully functional, the GERD will lead to a rejuvenation of Ethiopia’s economy and that of its neighboring nations.
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
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Ethiopia’s Medemer Philosophy
February 25, 2020
I had the pleasure to attend a fascinating and enlightening discussion on what Medemer means and why Prime Minister Abiy Ahmed has introduced this concept into Ethiopia today. The conversation was led by Ambassador Fitsum Arega, Ethiopian ambassador to the U. S. and included; Lencho Bati and Mamo Mihretu, both in the prime minister’s office in Addis Ababa, and Etana Dinka, Oberlin College.
Prime Minister Abiy has authored a book, Medemer, (Amharic) and simultaneously launched the new nationwide Prosperity Party, which is an application of his Medemer philosophy.
The panelists explained to the overflow audience at the United States Institute for Peace (USIP) in Washington, that the Medemer philosophy should guide both Ethiopia’s domestic and foreign policy. Medemer embodies the concept of national unity and the need for all to work for the common good; for Ethiopia’s prosperity, and its elimination of poverty. Amb. Arega said that Ethiopia cannot change the past, but Ethiopia needs new ideas that go beyond its highly charged ethnic politics. He spoke of the need for forgiveness in Ethiopian society, with no finger pointing, in order for Ethiopia to move forward. The idea of a shared-common humanity, embodied in Medemer, is the underpinning for establishing sound relationships with other nations.
Ethiopia is entering a challenging period, economically, politically, and socially. The nation is attempting to create an appropriate economic policy that will enable millions of educated youth to be absorbed into its workforce. The nation is also coming to terms with the limitations of almost thirty years of a federation of ethnic states. With national elections scheduled for August, Prime Minister Abiy’s non-ethnic based Prosperity Party is provoking a healthy discourse about Ethiopia’s identity.
All of these issues are relevant to the concept of Medemer, that was richly elaborated in the two-hour dialogue at USIP.
Watch: A Changing Ethiopia: Understanding Medemer
Read: Ethiopia’s Prosperity Party: A Revolutionary Necessity
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Ethiopia’s Prosperity Party: A Revolutionary Necessity
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
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Ethiopia To Create 20 Million Jobs
Ethiopia to create twenty million jobs
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.
For a full report on Ethiopia’s job creation plan as part of its new economic agenda read me post: Ethiopia Launches New Economic Reform Agenda
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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.
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Grand Renaissance Dam Essential for Africa’s Economic Growth
Lawrence K Freeman
October 14, 2019
Completion and operation of the Grand Ethiopian Renaissance Dam-(GERD) will profoundly affect not only the future of Ethiopia, but all of the Horn of Africa, and the entire African continent. It reflects the bold visionary thinking that characterizes Ethiopia’s unwavering determination to eradicate poverty in the second largest nation on the continent with 103 million people. Ethiopia has been a leader in economic growth for the last decade due to its unparalleled commitment to constructing new infrastructure projects. Although an emerging nation, Ethiopia with assistance from China, completed the Addis-Ababa to Djibouti railroad in October 2016. This is the first and only electrified rail line in sub-Saharan Africa- (SSA), reducing travel time from several days by truck to hours by rail, effectively freeing Ethiopia from the limitations of a landlocked nation via Djibouti’s port.
Ethiopia’s former Prime Minster, Meles Zenawi, who conceptualized the developmental state, proposed building a dam on the Blue Nile, laying the first foundation stone on April 2, 2011. Thus, initiating the construction of a massive hydroelectric dam on the Blue Nile that will be the largest in Africa. The GERD will be 175 meters tall, 1,800 meters wide, with a reservoir of 79 billion cubic meters-(BCM), more than twice the size of the Hoover Dam in the US. It will have the potential to generate upwards of 6,200 megawatts (MW) of electricity. Upon completion, Ethiopia will be the largest net exporter of electricity in Africa with transmission lines to its neighbors that include Sudan, South Sudan, and Kenya. Ethiopia will also become second only to South Africa in power generation in SSA, as it strives to achieve its interim goal of producing 15,000 MW. The GERD, self-financed by bonds sold to the Ethiopian people, is not only a source of tremendous pride, but an indispensable component of Ethiopia’s resolve to expand its manufacturing sector and become a “middle income” nation by 2025. A nation must have abundant and accessible electricity in order to power an industrialized economy. With more than 60% of its population deprived of access to electricity, and energy demands growing every year, Ethiopia wisely realized that utilizing the potential hydro-power of the Blue Nile to drive its economic growth was not an option; but a necessity.
Sovereignty Superior to Colonialism
Egypt is accusing Ethiopia of violating the 1959 agreement for utilization of water from the Nile River, which stipulated that 55.5 BCM of waters be allocated to Egypt, 18.5 BCM to Sudan and that no other nation could interfere with the flow of water in the Nile. There is no basis in law or physical topography for Ethiopia to adhere to this agreement for the following reasons:
- The 1959 water agreement is a rewrite of the British imperialist 1929 water treaty, when Egypt was a British colony that governed Sudan under the Anglo-Egyptian Condominium (1899-1956).
- The Blue Nile flowing from Lake Tana in the Ethiopian highlands that joins the White Nile in Khartoum, provides 85% of the Nile water as it travels north through Egypt to the Mediterranean Sea.
- Ethiopia, as an independent nation that was never colonialized, was not a signatory to either water agreement.
- Ethiopia has the sovereign right and obligation to utilize its natural resources, in this case water, to improve the living conditions of its people.
The Nile River, although the longest in the world at 6,650 kilometers, is not the most voluminous. Historically, the Nile was the only water way to cross the Sahara Desert from SSA. Today ten nations in Eastern and Central Africa are part of the Nile Basin with their total population approaching 500 million, whose present and future needs exceed the 84 BCM of Nile water. For development of the Nile Basin, it is urgently required that:
- a new approach to water management for the region, which supersedes the archaic colonial agreement.
- a new system for generating additional water. A crash program to create billions of cubic meters of fresh water through desalination is an obvious solution.
In essence, a “second Nile” must be created. Nuclear energy, utilizing its higher heat source, would be ideal for removing salt through evaporation, and, equally as important, supplying thousands of megawatts of power to energy-starved nations.
Shared Common Interest
The Declaration of Principles, signed in Khartoum on March 23, 2015 by the heads of state of Egypt, Sudan, and Ethiopia calls for cooperation among the three nations to resolve disputes concerning the GERD among themselves. The report states: “The Three Countries shall cooperate on the basis of sovereign equality, territorial integrity, mutual benefit and good faith in order to attain optimal utilization and adequate protection of the River.”
The shared vision of the Nile Basin should be to promote prosperity for all the nations involved. The common shared interest of the upstream and downstream nations is one and the same: to uplift millions of Africans out of poverty and present the expanding youth population with economic opportunities to obtain a meaningful and productive life that secures a future for their families.
Egypt’s foreign minister, Sameh Shourky warned Ethiopia: “Ethiopia’s moving forward with the operation and filling of the Renaissance Dam is unacceptable and a clear violation of the Declaration of Principles and will have negative consequences for stability in the region.” Within Egypt threats of military action have recently resurfaced, but such unwarranted aggression is highly unlikely, and would be roundly condemned by the international community.
According to Xinhua News, Egypt is looking for the United States to play an “international instrumental role,” a position presently not supported by the US State Department. Egypt’s attempt to bring in an outside party to mediate disputes concerning the Nile waters is in direct violation of the Declaration of Principles.
Exercising its sovereign rights, Ethiopia has already completed 60% of the construction of the GERD, and although there have been delays, it is expected to begin producing electricity by the end of 2020. Egypt has no choice but to accept this reality and continue to engage discussions regarding the management of the Nile. There are substantive legitimate issues respecting the effects of the GERD on Egypt, a downstream nation that is almost totally dependent on Nile water. However, Ethiopia’s sovereignty over the Blue Nile is inviolate. In 2018 the National Independent Scientific Research Group-(NISRG) was established to discuss the filling of the dam’s reservoir. The NISRG consisting of scientists from Sudan, Egypt, and Ethiopia, has met several times, and has reported to the Minister of Water Affairs of each nation.
How many years will it take to fill the GERD’s reservoir, and what will be the flow rate of the Nile at the Aswan Dam, are yet to be resolved. These are technical matters that scientists and engineers must continue to examine in an atmosphere of good will and good faith. Such cooperation is essential to promote the common interests of all nations for a prosperous Nile Basin.
Lawrence Freeman is a Political Economic Analyst for Africa with thirty years of experience in Africa promoting infrastructure development policies.
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Nation State vs Ethnicity in Africa
Mahmood Mamdani raises proactive questions on the role ethnicity in Africa and Ethiopia in particular. (See excerpts and article below).
Africa has been plagued to this day by two legacies from colonialism (British): 1) the intentional failure to build infrastructure; 2) the deliberate fostering of ethnicity. Historical literature is replete with evidence of the British creation of ethnic and/or native administrative units as a central feature of their divide and rule colonial policy. Lord Frederick Lugard, who authored the infamous “indirect rule” stratagem, implemented his scheme in Nigeria when he became the Govern General Nigeria in 1914, and ruled the North and South differently. Similarly, the British cultivated the North versus South conflict in Sudan with their separate Southern policy exemplified by their 1922 Passport and Ordinance Act. There are more examples available.
Accentuating ethnic, tribal, religious, and geographical distinctions is used as a means to thwart the creation of sovereign Nation States, particularly in Africa. A functioning Nation State is not founded on a collection of minorities, or even a majority. Instead, it is created on principles that define its responsibilities to provide for the general welfare of its citizens and their posterity, which must include nurturing the creative potential of each child. Nation States transcend differences within their populations by uniting all their people in a common mission, not only to develop their nation, but to contribute to the future of mankind as well.
Ethiopia uniquely evaded colonization with its 1896 military victory against the Italian army in Adwa, led by Menelik II. Yet as Mamdani points out, Ethiopian Federalism accommodates ethnicity, which is divisive today, and is being used to undermine the central-federal government. By following the core economic thesis of Meles Zenawi’s “Developmental State” Ethiopia has embarked on a bold campaign to transform their country through government directed investment in infrastructure, while protecting their economy from being invaded by foreign financial predators. As a result of Ethiopia’s relative success among African nations in performing this necessary Nation State function, it has become the “enemy” to those forces-internal and external-that oppose development of African nations. Not surprisingly in the last six months there have been renewed efforts to liberalize-deregulate Ethiopia’s financial system in an attempt to weaken its commitment to the “Developmental State” model.
Therefore, the suggestion of a new kind of non-ethnic federalism is a conception that could lead to strengthening the institution of the Nation State in Africa.
“Ethiopians used to think of themselves as Africans of a special kind, who were not colonized, but the country today resembles a quintessential African system, marked by ethnic mobilization for ethnic gains.
In most of Africa, ethnicity was politicized when the British turned the ethnic group into a unit of local administration, which they termed “indirect rule.” Every bit of the colony came to be defined as an ethnic homeland, where an ethnic authority enforced an ethnically defined customary law that conferred privileges on those deemed indigenous at the expense of non-indigenous minorities.
An interesting book worth reading by Mahmood Mamdani is: “Saviors and survivors.” It about Sudan and Darfur, but also discusses the creation of ethnic groups.
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Ethiopia‘s Optimistic, But Challenging Path Forward
Lawrence K Freeman
August 3, 2018
On June 28, thousands upon thousands of smiling Ethiopians poured into the Washington DC convention center to listen to their new Prime Minister, Abiy Ahmed. They began gathering in the morning hours before the noon starting time of the event. Standing for hours, on a line that snaked around the convention center, with the last of the crowd finally entering the hall at 3pm. I was fortunate to witness this joyous occasion. The entire ground floor hall of the convention center was filled, as far as the eye could see, by the Ethiopian community that came to celebrate the new leadership of their nation.
Only three days earlier on July 26, in Addis Ababa, Simegnew Bekele, the chief engineer of the Grand Ethiopian Renaissance Dam-GERD, was found murdered in his car. His assassination was followed by a large funeral at Meskel Square where he was mourned by tens of thousands. His body was taken to Holy Trinity Church where he was honored by being buried alongside Emperor Haile Selassie, and Prime Minister Meles Zenawi.
The juxtaposition of these events, an ocean apart, foretell the challenging course ahead for Ethiopia. A future brimming with optimism, but fraught with danger. There is more than symbolism involved.
Progress Under Attack
Engineer Bekele, in the minds of Ethiopians, embodied a true patriotic spirit, who led their nation forward. He will be remembered for his lasting commitment to develop Ethiopia into growing sovereign economy in the Horn of Africa. Before overseeing the construction of the GERD in 2011, he worked on the Gibe I and II dams. The completed Gibe III hydro-electric project generating 1,872 megawatts, has doubled Ethiopia’s power supply. When the construction of the GERD- 6,450 megawatts-is finished, Ethiopia will be the second largest producer of electricity in Sub-Sahara Africa behind South Africa. The multi billion-dollar GERD, is being built with help of China, but financed by Ethiopia. The GERD is on the Blue Nile close to the border of Sudan and will be the biggest dam in Africa at 1.8 kilometers wide and 155 meters high.
Ethiopia’s ambitions to create a modern-advanced economy and lift its 100 million people out of poverty is evident in its commitment to also expand its rail and road infrastructure. The operational Addis-Ababa to Djibouti electrified train (the first of its kind in Sub-Saharan Africa) will transport manufactured goods from Ethiopia’s industrial parks, to the port of Djibouti for export. Their Growth Transformation Plan II (2014-2019) emphasizes Ethiopia’s intention to expand its manufacturing sector by 25%.
It is Ethiopia’s unwavering devotion to progress to “eliminate poverty, not manage it” that is the real target of Simegnew Bekel’s assassination.
(Artist drawing of completed GERD, whose completion will allow Ethiopia to become an energy exporter)
Abiy’s Life Threatened
In a mere four months since assuming office in April of this year, the 42-year-old Prime Minster has created a fervor in the population, causing waves of unbridled excitement, not seen since the overthrow of the bloody Derg regime in 1991 by the Ethiopian People’s Revolutionary Democratic Front led by Meles Zinawi. In what is being called a revolution, Prime Minister Abiy has released thousands of political prisoners, reached out to all ethnic regions of the nation, and unexpectedly ended the state of war with Eritrea in a ceremony held in the Eritrean capital Asmara on July 8. By taking this giant step to normalize relations with its neighbor Eritrea after a generation of armed hostility, Prime Minster Abiy has now become a living symbol for peace and security in the Horn of Africa.
Let us not forget that a month before coming to the United States, Prime Minister Abiy escaped an assassination attempt when a grenade was thrown at a rally where he addressed millions of his fellow citizens. Although he was not harmed, over one hundred were wounded and two died from this attack on June 23, in Addis Ababa’s famous Meskel Square.
Steeped in the ideas of Meles Zenawi, Ethiopia, unique among African nations, has demonstrated an understanding of principles fundamental to economic growth. To wit: the necessity for the state to direct public credit into vital categories of infrastructure necessity for the economic security of a nation (dirigisme). The government not only has the right, but the obligation to intervene into the economy to foster “pro-growth” polices that benefit the general welfare of its people. Ethiopia’s relative success in this effort has produced enemies internally, regionally, and internationally, who oppose any progress towards achieving economic stability in the Horn of Africa. Economic independence by Africa nations challenges the dominance of financial predators, who still view Africa as a pawn on their “geo-political” chessboard.
Ethiopia Should Stay the Course
For many years there has been enormous pressure by the international financial community including the IMF to force Ethiopia to “liberalize” its economy by; decentralizing its economy, reducing regulations, allowing foreign investment in state-owned enterprises, and deregulating its banking system. Thus far Ethiopia has resisted, but under increasing duress, there are reports that some in the leadership of Ethiopia may be ready to open the floodgates to intrusions by international financiers, who are not interested in the welfare of the citizens.
Ethiopia, a poor country that suffered from a wrecked economy twenty-five years ago, has emerged as a leader on the Sub-Saharan continent. Ethiopia’s commitment to expanding its physical infrastructure has served the nation well, though it still faces serious impediments. Providing meaningful employment for the 500,000-young people, who are seeking to join the work force each year will remain a significant challenge. However, Ethiopia should not permit itself to be coerced into deviating from its thus far successful economic policy.
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“Can Ethiopia be Africa’s leading manufacturing hub?”
August 24, 2017=BBC
With Ethiopia having the second biggest population in Africa, it is under growing pressure to tackle unemployment. The BBC’s Alastair Leithead visited the country to find out how it is tackling the problem.
The factory workers sing Ethiopia’s national anthem in unison as one shift ends and another prepares to begin.
Outside, a fleet of passenger buses pulls into Hawassa Industrial Park, as thousands of textile workers – most of them women – switch places.
The new arrivals take up their stations behind sewing machines, ironing boards and cutting tables as the shirts and suits start taking shape.
The park, claimed to be the biggest in Africa, is 140 hectares (350 acres) of factories, with a water treatment plant and its own textile mill.
Six months after opening in southern Ethiopia, 10,000 people already work here, and at full capacity it is expected to provide 60,000 jobs.
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Letters to the Editor
Ethiopia’s bold infrastructure initiatives
The new Chinese-built electric locomotives and train line in Ethiopia. (Paul Schemm/For The Washington Post)
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Interview with Bereket Simon, Advisor to the Prime Minister
Lawrence Freeman
November 24 , 2014
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Interview With Bereket Simon: Ethiopia Adopts Rapid Development Approach
Addis Ababa
November 24, 2014
This is a philosophy which we have tried to learn from the world at large, and specifically also from the East Asian areas—actually from those countries that have shown a rapid development for the last 50-60 years. To a large extent, we have a similar philosophy in relation to the rapid development of the country, as well as a different approach to the democratization of the country. Our philosophy is that of the development of the democratic state, which was espoused by our late Prime Minister Meles Zenawi. We give much attention to role of the state as the leading institution for bringing about rapid development, the transformation critical for the creation of a large and very strong private sector, and government assistance in unleashing the productive potential for the public at large.