Why Ethiopia?

ChinAfrica - - Africa Report -

The In­ter­na­tional Mone­tary Fund (IMF) has es­ti­mated that Ethiopia would be the fifth fastest grow­ing econ­omy among the 189 IMF mem­ber coun­tries and re­gions in 2017. Ethiopia, aim­ing to achieve mid­dlein­come coun­try sta­tus over the com­ing decade, was among the first coun­tries in Africa to show in­ter­est in the China-ini­ti­ated Belt and Road Ini­tia­tive. The two coun­tries have de­vel­oped a close re­la­tion­ship over the years and co­op­er­ated in pol­i­tics, trade and econ­omy, cul­ture, ed­u­ca­tion, health and in­ter­na­tional affairs.

Sa­muel Halala, Di­rec­tor Gen­eral of Ethiopia’s Chem­i­cal and Con­struc­tion In­puts In­dus­try Devel­op­ment In­sti­tute, said the Belt and Road Ini­tia­tive has taken the two coun­tries’ re­la­tion­ship to a strate­gic part­ner­ship to de­velop trade, man­u­fac­tur­ing, ca­pac­ity build­ing, and tech­nol­ogy and knowl­edge trans­fer.

Ethiopia, he pointed out, has been fol­low­ing Chi­nese devel­op­ment strate­gies and poli­cies that have helped its man­u­fac­tur­ing in­dus­try grow. The trade week is, there­fore, not only an is­sue of trade but also an op­por­tu­nity for Chi­nese man­u­fac­tur­ers to show their level of qual­ity prod­ucts to Ethiopia and to Africa as a whole.

Ethiopia is work­ing to en­hance the share of the man­u­fac­tur­ing sec­tor in the econ­omy and gen­er­ate a global mar­ket. The Min­istry of In­dus­try wants the coun­try to be a leader in light man­u­fac­tur­ing, which re­quires pack­ag­ing ma­te­ri­als, chem­i­cal in­puts and other items and this is where Chi­nese man­u­fac­tur­ers can join in.

Halala said to in­crease the share of man­u­fac­tur­ing in its GDP, Ethiopia is de­vel­op­ing in­dus­trial parks in dif­fer­ent parts of the coun­try. That is a sec­tor where Chi­nese com­pa­nies, with their ex­pe­ri­ence of de­vel­op­ing in­dus­trial parks both at home and abroad, can con­trib­ute for mu­tual ben­e­fits.

Ac­cord­ing to the Ethiopian In­vest­ment Com­mis­sion, the coun­try has at­tracted in­vestors with projects worth 14.5 bil­lion Ethiopian birr ($623 mil­lion) where Chi­nese com­pa­nies are lead­ing in terms of cap­i­tal and in the man­u­fac­tur­ing in­dus­try, fol­lowed by In­dia and Turkey.

Be­tween Au­gust 2016 and Fe­bru­ary 2017, over 120 in­vest­ment projects be­came op­er­a­tional, out of which 45 had Chi­nese in­vest­ment, which was col­lec­tively worth more than 3 bil­lion Ethiopian birr ($128.9 mil­lion).

Woldu Ge­bre­mariam, an ex­porter with Tekhaf Trad­ing, an Ethiopian im­port and ex­port com­pany, said the com­pany has a fruit­ful trade part­ner­ship with China. It ex­ports sesame to China and im­ports trucks. “Now we are look­ing to ex­pand our agri­cul­tural com­mod­ity ex­ports. At the CTW, we found po­ten­tial part­ners from China,” he said.

How­ever, do­ing busi­ness with Ethiopia is no bed of roses, de­spite the po­ten­tial. Ac­cord­ing to Frank Wang, Sales Di­rec­tor of Chi­nese com­pany He­bei Five-star Metal Prod­ucts, the short­age of dol­lars is a big chal­lenge to do busi­ness with their Ethiopian part­ners. “We have been ex­port­ing our prod­ucts to Ethiopia for the past 12 years,” he said. “But in re­cent years, it has been tak­ing months for our Ethiopian part­ners to get dol­lars and pay for the im­ports.”

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