As part of advancing regional economic integration, the leaders of Ethiopia and Eritrea signed an agreement to establish joint special economic zones.
 
“The two countries will develop Joint Investment Projects, including the establishment of Joint Special Economic Zones,” twitted Yemane G. Meskel, Eritrean Minister of Information.
 
The agreement is signed in Jeddah, Saudi Arabia, on Sunday by Eritrean President Isaias Afwerki of Eritrea and Prime Minister Abiy Ahmed of Ethiopia, according to Mr. Yemane. The signing of the agreement was attended by the UN Secretary General Antonio Guterres and King Salman of Saudi Arabia.
 
The agreement has followed the Joint Declaration on Peace and Friendship the two countries have signed on July 9, 2018 in Asmara. Labeled, ‘Agreement on Peace, Friendship and Comprehensive Cooperation between Ethiopia and Eritrea,’ the deal signed in Saudi involves comprehensive cooperation in the political, security, defense, economic, trade, investment, cultural and social fields on the basis of complementarity and synergy.
 
The two countries will implement the Eritrea-Ethiopia Boundary Commission decision, while combating terrorism, trafficking in people, arms and drugs in accordance with international covenants and conventions, according to the agreement.
 
Appreciating the peace deal between the two East African countries, King Salman bin Abdulaziz of Saudi Arabia has awarded President Isaias and Prime Minister Abiy Saudi Arabia’s highest medal.
 
The Red Sea
In a related development President Isaias has also talked with King Salman bin Abdulaziz of Saudi Arabia about enhancement of bilateral cooperation and vital issues of development and security of the Red Sea maritime route.
 
Djibouti – Eritrea
After several years of border conflict, the leaders of Djibouti and Eritrea have met in Saudi Arabia. In a meeting in Jeddah, President Isaias Afwerki of Eritrea and President Ismail Omar Guelleh of Djibouti agreed to open a new chapter of cooperation & good neighborliness between the two sisterly countries, according to Mr. Yemane.
 
Business Insider
China has agreed to restructure some of Ethiopia’s loans, including a loan for a four billion dollars railway linking its capital Addis Ababa with neighbouring Djibouti, Ethiopia’s Prime Minister Abiy Ahmed said on Thursday.
 
“`During our stay, we had the opportunity to enact limited restructuring of some of our loans.
 
“In particular, the loan for the Addis Ababa-Djibouti railway which was meant to be paid over 10 years has now been extended to 30 years.
 
“Its maturity period has also been extended,” Ahmed told newsmen in the Ethiopian capital Addis Ababa, upon return from a summit in China.
 
President Xi Jinping announced 60 billion dollars in aid and loans for Africa on Monday while hosting more than 40 of the continent’s leaders in Beijing, saying that the money came with no expectation of anything in return.
 
Beijing pushed back on criticism that it was shackling poorer countries with heavy debt burdens they will struggle to pay back, portraying the Chinese government as a magnanimous one motivated only to share its experience of rapid industrialization.
 
“China’s investment in Africa does not come with any political conditions attached and will neither interfere in internal politics nor make demands that people feel are difficult to fulfill,” Xi said during a keynote address to the Forum on China-Africa Cooperation on Monday.
 
Zi said the money will be focused on infrastructure to help speed African countries’ development, not on “vanity projects.”
 
The package outlined by Xi also includes medical aid, environmental protection, agricultural training and assistance, and government scholarships and vocational training for more than 100,000 young Africans.
 
At the last forum, held in Johannesburg three years ago, Xi also pledged $60 billion in investment.
 
He said Monday that this money had already been granted or earmarked, so the latest announcement represented a second round of 60 billion dollars.
 
The program is part of Xi’s broader Belt and Road Initiative, an ambitious $120-billion-plus project that aims to link 65 countries in Europe, Asia and Africa — together accounting for almost two-thirds of the world’s population — through infrastructure projects and trade.
 
At a time when President Trump is engaged in trade fights with the United States’ neighbors and allies, the Chinese leader seems to relish the opportunity to appear as a popular international statesman and champion of the liberal economic order.
 
For two days in a row, every headline on the front page of the state-run People’s Daily started with the words “Xi Jinping,” as the president met with the leaders of Angola, Gabon, Mauritius, Senegal and elsewhere.
 
He also hosted Sudanese President Omar al-Bashir, who has been charged by the International Criminal Court with war crimes and crimes against humanity.
 
Analysts have raised concerns about African countries, many of which are subject to the whims of commodity markets, not being able to repay Chinese loans.
 
The three countries most vulnerable because of large debts owed to China are Djibouti, Congo and Zambia, say academics at the China Africa Research Initiative at Johns Hopkins University.
 
Zambia, which has a gross domestic product of 19.5 billion dollars, according to the World Bank, had taken about 6.4 billion dollars in loans from China, the researchers wrote in a briefing paper last month.
 
But Rwandan President Paul Kagame, who chairs the African Union, said that rather than viewing the investment as a “debt trap,” other countries should be asking why they’re not giving Africa as much assistance as China.
 
“We have benefited a lot from China’s support in our social and economic programs, and that has continued to strengthen the partnership between China and Rwanda,” Kagame told the People’s Daily.

Roses and champagne have been given to passengers on the first commercial flight between Ethiopia and Eritrea in 20 years.

Ethiopian Airlines said its "bird of peace" flew to Eritrea, after the end of the "state of war".

Passengers sang and danced in the aisles during the 60-minute flight. But they wept once they landed in Eritrea's capital Asmara, as they met relatives and friends for the first time since the 1998-2000 border war.

This led to the closure of air and road travel between the two nations.

Ethiopia's Prime Minister Abiy Ahmed has spearheaded a peace process with Eritrea since he took office in April. He signed a "peace and friendship" agreement with Eritrea's President Isaias Afwerki on 9 July, declaring that the "state of war" was over.

Map showing old versus new flight routes from Ethiopia to Eritrea

The deal was signed in Asmara, during the first visit by an Ethiopian head of state to the country in 20 years. Mr Isaias made a reciprocal visit to Ethiopia about a week later.

The two leaders agreed to restore diplomatic ties, and resume air and road travel.

Who was on the flight?

Former Ethiopian Prime Minister Hailemariam Desalegn was among the passengers on the historic flight. He told the BBC's Emmanuel Igunza that he was emotional about making the trip.

"It's a golden moment for the two countries and the two people," he said.

Family members separated by the war hugged and sobbed when they met in Asmara. Flight attendants had handed out roses and had served champagne to passengers in all classes during the flight.

The passengers included 33-year-old Izana Abraham, who was deported from Eritrea during the war because he was born in Ethiopia. 

"I'm super excited. You have no idea," Mr Izana was quoted by AFP news agency as saying.

"This is history in the making," he added.

More than 450 passengers were on board, Ethiopia's privately owned Addis Standard news site reported. Demand was so high that a second flight left within 15 minutes, AFP reported.

Why is this a big deal?

Eritrea seceded from Ethiopia in 1993. Five years later, their armies fought over disputed territory along their border. Some 80,000 people were killed in the conflict.

A UN-backed boundary commission ruled in 2002 that Ethiopia should cede the town of Badme to Eritrea. It refused, and the two countries remained in a state of "no war, no peace".

Mr Abiy has promised to hand over territory, but it is unclear when this will happen.

 

Source: BBC

This week Ethiopian Prime Minister, Abiy Ahmed visited neighbouring Eritrea, to be greeted by President Isaias Afwerki. The vast crowds that thronged the normally quiet streets of Eritrea’s capital, Asmara, were simply overjoyed.

They sang and they danced as Abiy’s car drove past. Few believed they would ever see such an extraordinarily rapid end to two decades of vituperation and hostility between their countries.

After talks the president and prime minister signed a declaration, ending 20 years of hostility and restoring diplomatic relations and normal ties between the countries.

The first indication that these historic events might be possible came on June 4. Abiy declared that he would accept the outcome of an international commission’s finding over a disputed border between the two countries. It was the border conflict of 1998-2000, and Ethiopia’s refusal to accept the commission’s ruling, that was behind two decades of armed confrontation. With this out of the way, everything began to fall into place.

The two countries are now formally at peace. Airlines will connect their capitals once more, Ethiopia will use Eritrea’s ports again – its natural outlet to the sea – and diplomatic relations will be resumed.

Perhaps most important of all, the border will be demarcated. This won’t be an easy task. Populations who thought themselves citizens of one country could find themselves in another. This could provoke strong reactions, unless both sides show flexibility and compassion.

For Eritrea there are real benefits - not only the revenues from Ethiopian trade through its ports, but also the potential of very substantial potash developments on the Ethiopia-Eritrea border that could be very lucrative.

For Ethiopia, there would be the end to Eritrean subversion, with rebel movements deprived of a rear base from which to attack the government in Addis Ababa. In return, there is every chance that Ethiopia will now push for an end to the UN arms embargo against the Eritrean government.

This breakthrough didn’t just happen. It has been months in the making.

The deal

Some of the first moves came quietly from religious groups. In September last year the World Council of Churches sent a team to see what common ground there was on both sides. Donald Yamamoto, Assistant Secretary of State for Africa, and one of America’s most experienced Africa hands, played a major role.

Diplomatic sources suggest he held talks in Washington at which both sides were represented. The Eritrean minister of foreign affairs, Osman Saleh, is said to have been present, accompanied by Yemane Gebreab, President Isaias’s long-standing adviser. They are said to have met the former Ethiopian prime minister, Hailemariam Desalegn, laying the groundwork for the deal. Yamamoto visited both Eritrea and Ethiopia in April.

Although next to nothing was announced following the visits, they are said to have been important in firming up the dialogue.

But achieving reconciliation after so many years took more than American diplomatic muscle.

Eritrea’s Arab allies also played a key role. Shortly after the Yamamoto visit, President Isaias paid a visit to Saudi Arabia. Ethiopia – aware of the trip – encouraged the Saudi crown prince to get the Eritrean president to pick up the phone and talk to him. President Isaias declined, but – as Abiy Ahmed later explained – he was “hopeful with Saudi and US help the issue will be resolved soon.”

So it was, but one other actor played a part: the UAE. Earlier this month President Isaias visited the Emirates. There are suggestions that large sums of money were offered to help Eritrea develop its economy and infrastructure.

Finally, behind the scenes, the UN and the African Union have been encouraging both sides to resolve their differences. This culminated in the UN Secretary General, Antonio Guterres, flying to Addis Ababa for a meeting on Monday – just hours after the joint declaration. Guterres told reporters that in his view the sanctions against Eritrea could soon be lifted since they would soon likely become “obsolete.”

It has been an impressive combined effort by the international community, who have for once acted in unison to try to resolve a regional issue that has festered for years.

Risks and dividends

For Isaias these developments also bring some element of risk. Peace would mean no longer having the excuse of a national security threat to postpone the implementation of basic freedoms. If the tens of thousands of conscripts, trapped in indefinite national service are allowed to go home, what jobs await them? When will the country have a working constitution, free elections, an independent media and judiciary? Many political prisoners have been jailed for years without trail. Will they now be released?

For Ethiopia, the dividends of peace would be a relaxation of tension along its northern border and an alternative route to the sea. Families on both sides of the border would be reunited and social life and religious ceremonies, many of which go back for centuries, could resume.

But the Tigrayan movement – the Tigray People’s Liberation Front (TPLF) - that was dominant force in Ethiopian politics until the election of Prime Minister Aiby in February, has been side-lined. It was their quarrel with the Eritrean government that led to the 1998–2000 border war.

The Eritrean authorities have rejoiced in their demise. “From this day forward, TPLF as a political entity is dead,” declared a semi-official website, describing the movement as a ‘zombie’ whose “soul has been bound in hell”. Such crowing is hardly appropriate if differences are to be resolved. The front is still a significant force in Ethiopia and could attempt to frustrate the peace deal.

These are just some of the problems that lie ahead. There is no guarantee that the whole edifice won’t collapse, as the complex details of the relationship are worked out. There are many issues that have to be resolved before relations between the two countries can be returned to normal. But with goodwill these can be overcome, ushering in a new era of peace and prosperity from which the entire region would benefit.

 

Martin Plaut, Senior Research Fellow, Horn of Africa and Southern Africa, Institute of Commonwealth Studies, School of Advanced Study

This article was originally published on The Conversation. Read the original article.

In Africa's battle for the skies, an east African carrier is stepping up its game in an effort to dominate the market. The state-owned Ethiopian Airlines, Africa's largest carrier by number of passengers, according to FlightGlobal, has taken stakes in a raft of carriers across Africa and opened routes to new destinations, like Manchester, UK.
 
The expansion is part of the airline's 2025 Vision to become the leading aviation group in Africa, and increase the share of the market occupied by African airlines.
 
"Twenty percent of the market is carried by African airlines and 80% of the market is carried by non-African airlines," said Tewolde Gebremariam, CEO of Ethiopian Airlines. "The market share has been declining for the last 20 years."
 
Taking off
 
Ethiopian Airlines is looking to fend off competition from South African Airways, the largest carrier by number of flights, according to FlightGlobal, EgyptAir, Royal Air Maroc and Kenya Airways.
 
Tewolde told CNN that Ethiopian Airlines are expanding into West Africa with Togolese airline ASKY Airlines. They're also doing business with Air Cote d'Ivoire, Congo Airways and have taken management of CEIBA International in Equatorial Guinea.
 
The airline has ambitious plans; Ethiopia is working with the Zambian government to relaunch their national carrier with a 45% stake, it also plans to establish a wholly-owned airline in Mozambique and has signed a contract to start an airline in Guinea. Ethiopian has also taken stakes in a Chadian airline.
"Typically, they're taking a minority stake or around 50%. They tend to go into these joint ventures with local partners," said Oliver Clark, senior reporter at FlightGlobal.
 
New routes
 
Ethiopian Airlines is launching new routes from Addis Ababa to Jakarta, Chicago and Geneva in the coming months. The airline is looking to make the Ethiopian capital a transport hub, connecting other African countries without long-haul capacity with continents around the world.
"It's trying to feed traffic from other African countries through Addis to then give them the connectivity to travel on to other continents, US, Europe and Asia in particular," Clark said.
 
In 2015, Africa accounted for only 3% of air passenger traffic, according to the International Civil Aviation Organization. The growth of African airlines worldwide will seek to expand the number of travelers.
 
South: CNN

To the west of Ethiopia near the Sudanese border lies a place called the Asosa zone. This may be the location of the oldest gold mine in the world. Dating back some 6,000 years, it provided a key source of gold to the ancient Egyptian empire, whose great wealth was famous throughout the known world. It may even have supplied the Queen of Sheba with her lavish gifts of gold when she visited King Solomon of Israel almost 3,000 years ago.

The excitement in this part of the world is more about the future, however. Some local inhabitants already make a living from prospecting, and several mining companies have been active in the area in recent years, too.

When Sheba met Sol. Wikimedia

But what comes next could be on a much bigger scale: I have just co-published with my colleague, Owen Morgan, new geological research that suggests that much more treasure might be buried under the surface of this east African country than was previously thought.

Treasure trail

The Asosa zone is made up of flatlands, rugged valleys, mountainous ridges, streams and rivers. It is densely vegetated by bamboo and incense trees, with remnants of tropical rainforests along the river valleys. The zone, which is part of Ethiopia’s Benishangul-Gumuz region, is spotted with archaeological sites containing clues to how people lived here thousands of years ago, together with ancient mining pits and trenches.

Local inhabitants have long taken advantage of these riches. They pan for gold in Asosa’s streams and also extract the precious metal directly from outcropping rocks.

Local inhabitants panning for gold. Owen Morgan

More substantial exploitation of the region’s riches dates back to the Italian invasion of the 1930s. The Italians explored the Welega gold district in West Welega, south-east of Asosa.

Haile Selassie, emperor of Ethiopia from 1930 to 1974, believed the country had the potential to become a global leader in gold. But when the revolutionary Derg government deposed him and the country plunged into civil war, gold mining disappeared off the agenda for a decade and a half. It took until the early 2000s before the government started awarding exploration licences.

Several mines are up and running, neither of them in Asosa. One is at Lega Dembi slightly to the east, owned by Saudi interests. The other, at Tigray in the north of the country, is owned by American mining giant Newmont, and just started production late last year.

More is already on the way: the beneficiary of the Italian efforts from the 1930s in Welega is the Tulu Kapi gold prospect, containing 48 tonnes of gold. This was most recently acquired in 2013 by Cyprus-based mining group KEFI Minerals (market value: roughly US$2.3 billion (£1.7 billion)).

As for Asosa, the Egyptian company ASCOM made a significant gold discovery in the zone in 2016. It published a maiden resource statement that claimed the presence of – curiously the same number – 48 tonnes of gold. Yet this only looks like the beginning.

Au-some potential?

The Asosa zone geology is characterised by various kinds of volcanic and sedimentary rocks that are more than 600 million-years-old. The region has been intensely deformed by geological forces, resulting in everything from kilometre-long faults to tiny cracks known as veins which are only centimetres in length.

Some of these veins contain quartz, and it is mainly here that the region’s gold accumulated between 615m and 650m years ago – along with silver and various other minerals. The gold came from molten materials deep within the Earth finding their way upwards during a process known as subduction, where tectonic forces drive oceanic crust beneath a continent. This is comparable to the reasons behind gold deposits in island arcs like some of the ones in Indonesia and Papua New Guinea.

Our field observations and panning suggest that gold should be generally abundant across the Asoza zone – both in quartz veins but also elsewhere in the schist and pegmatite rocks in which they are located. We also see signs of substantial graphite deposits, which are important for everything from touch-screen tablets to lithium-ion batteries.

There is undoubtedly much more world-class gold within this area than has already been discovered, pointing to a promising source of income for the government for years to come – much of the region remains unexplored, after all. It probably is no exaggeration to say that Ethiopia’s gold potential could rival South Africa’s, which would put it somewhere around the top five gold producing nations in the world.

View across the gold-bearing schist rocks of the Asosa zone, Benishangul-Gumuz. Owen Morgan

There are still some substantial challenges, however. Dealing with governmental red tape can be difficult. In an area like the Asosa zone there are dangerous wildlife to avoid, such as venimous snakes, baboons and even monkeys. The vegetation also becomes forbiddingly wild during wet seasons.

It is also important to strike up good working relationships with local inhabitants, showing the utmost respect to local cultures – it’s the ethical way to operate, and failing to do so can make life harder with the authorities in the capital. This includes the need to preserve the natural beauty of the region; gold mining already has a very bad international reputation for environmental damage.

With the right approach, however, western Ethiopia will be a literal gold mine that could bring economic benefit to the region. What the Queen of Sheba may have known 3,000 years ago, the modern world is finally rediscovering today.

 

Liam Bullock, Research Fellow, University of Aberdeen

This article was originally published on The Conversation. Read the original article.

The global tourism industry has huge economic importance. It contributes 10% of the world’s gross domestic product and 6% of exports. One billion people a year travel somewhere in the world.

Africa’s natural and cultural points of interest give the continent tremendous tourism potential. This shows in the numbers. In 2015, the sector generated USD$ 36 billion in Africa (7% of all exports in the region), up from USD$ 10 billion in 2000. Travel and tourism also directly supports 466,000 jobs. It’s expected that by 2030 the number of tourists will reach 134 million annually.

But African countries’ tourism industries are often constrained by a lack of infrastructure development, air connectivity and financing.

Ethiopia, in East Africa, is an example. The country has immense natural, cultural and historical attractions, but is a largely untapped tourism market. It suffers from a lack of infrastructure and the negative publicity the country received after the famine in the 1980s and various conflicts. It needs to make a big effort to market its potential and develop the measures to support the industry.

Ethiopia’s tourism sector showed a steady increase in the last decade. International tourist arrivals rose from 64,000 in 1990 to 680,000 in 2013 and are expected to reach 815,000 by 2024. This 2024 figure would mean a contribution of USD$2 billion to the country’s GDP. Over the next five years the sector is expected to create over a million jobs, or 3.6% of total employment.

Comfortable hotels play a vital role in attracting tourists. After the fall of the communist government 27 years ago, Ethiopia started privatising most of the state owned hotels and tourism establishments. To support this, the government adopted a policy that allows duty-free imports of hotel furniture, fixtures and equipment. It also provides for favourable loans to investors for the construction of new rated hotels.

But, while the hotel industry is growing, the number of available hotel rooms is still the lowest. In terms of room availability, Ethiopia is globally ranked 134 out of 140, compared to Kenya, Uganda and Tanzania at positions 122, 121 and 118 respectively. Furthermore, there are few hotels of an international standard, and many are old and unattractive. Infrastructure to support the hotels is lacking. There are no zoning policies to establish the areas where hotels should be constructed, or tourist activities to complement them when they are built.

Hotel performance

Until recently, Ethiopia did not have enough hotels recognised under international rankings or ratings – they generously awarded themselves their own stars. This made it hard for visitors to judge the quality of a hotel. This changed in 2015 when the Ethiopian government, with the help of World Tourism Organisation, started rating hotels in the country. Though participation in the grading process is mandatory, the graded hotels still haven’t undergone annual audits to ensure they’re keeping up with the standard they were awarded.

Ethiopia also only has six internationally branded and managed hotels. This is a very low figure bearing in mind that the average number of tourists per year is nearly 700,000 and these six hotels have a combined total of less than 1,500 rooms. By comparison, Nairobi in neighbouring Kenya already hosts most of the international hotel brands – and expects 13 more to open their doors over the next five years.

There are also only three five star hotels in Ethiopia and the majority of the “rated” hotels which guarantee a certain standard of service are situated in the capital, Addis Ababa. Other hotels, rated only by online travel agents based on the guests’ comments and with fewer than 100 rooms, are scattered throughout major towns. This is a problem because most of the tourist attractions are located in the countryside. There is also a scarcity of budget facilities, like youth hostels, to cater for budget travellers and backpackers.

Another major issue is the hotel structures. After the fall of the communist regime, from 1995, Ethiopia started privatising. Over 287 enterprises were transferred from the public to the private sector – out of which 34, or 11.8%, were hotels. The aim was to improve economic efficiency, stimulate the private sector and mobilise more foreign and domestic investment. However, the process has been weighed down with problems which include; corruption, loss of jobs and a lack of ownership and transparency. The state retains control of many of the most valuable assets in the sector. These are not well maintained, as they are about to be privatised. For example, Addis Ababa’s Hilton hotel, completed in 1987, now needs urgent refurbishment.

Finally, the hotel industry needs to be supported by tourism infrastructure. It needs physical facilities like car parks, sewerage and water works, transport projects and roads. These have to be based on zoning policies, to establish where the hotels should be built. With the exception of Addis Ababa, there are also hardly any offerings of recreational or entertainment activities like parks, concerts or cinemas. And there are logistical gaps like the lack of adequate ATM machines and foreign exchange bureaus outside Addis Ababa. This means visitors need to carry large amounts of cash in local currency, which is inconvenient and unsafe.

To spur tourism growth and development, Ethiopia must improve the hotel industry and the infrastructure that supports it. It will take the cooperation of all stakeholders – government, hotel professionals, hotel owners and hotel trade associations – to achieve a competitive and sustainable sector.

 

Orthodox Tefera, To fill, University of KwaZulu-Natal

This article was originally published on The Conversation. Read the original article.

Ethiopia’s youth has come under the spotlight recently for their role in a political protest that is seen to be threatening stability. But Ethiopia’s youth bulge doesn’t need to be a political problem. It can be converted to an economic muscle.

Over the past 12 years Ethiopia has been lauded as one of the fastest growing economies in the world with average Gross Domestic Product (GDP) growth of 10.8%. It has also seen a significant decline in poverty. In 2004 it had a poverty rate of 39% which had fallen to 23% by 2015.

But there’s a cloud hanging over the country. In 2016 it was hit by a drought that affected 10 million people. And a new drought has emerged again this year.

2016 also saw an outbreak of political protest. Although things are relatively calmer now, the state of emergency that was declared in October 2016 has been extended.

But Ethiopia still has a lot going for it, including a large youth population – over 70% of the country’s population is under 30 years of age. This could be turned to a massive advantage if backed by appropriate policies.

Ethiopia’s demographic profile mirrors China’s in the 1980s and of East Asian countries in the 1950s. The spectacular economic growth in East Asia in the second half of the 20th century is partly attributed to the demographic transition that supplied the economies with a young work force. The key to reaping this demographic dividend is, of course, that there are jobs for those joining the labour force.

While a young population can be a positive economic factor, it can also be a political risk in an economy that doesn’t create enough opportunities.

Until recently Ethiopia had avoided large scale political upheaval among young people. This was partly due to the government’s tight control of youth groups and surveillance of their activities. But recent unrest with youth at the helm signals huge problems, indicating that their livelihood and unemployment issues can no longer be suppressed or ignored. Addressing the problem head on is the smarter thing to do.

The problem

Every year more than a million young Ethiopian men and women join the labour market. But the economy produces far fewer new jobs and opportunities. This is partly due to the structural make up of the largely agrarian economy.

Over 80% of Ethiopians live in rural areas. While the agricultural sector in Ethiopia has declined significantly as a contributor to the economy in the past decade and now accounts for less than 50% of the national product, it still employs more than 70% of the labour force.

Historically, most people who were born in rural areas tended to settle there. But land scarcity and population growth, coupled with limited non-farm employment opportunities has started pushing young people into the urban areas.

There aren’t enough jobs for them there either. Official statistics show that 30% of 20 to 24 year-olds in urban areas are unemployed. Some studies suggest that the actual rate is as high as 50%.

National level labour surveys and other studies suggest that young people with secondary education or more are the ones missing out the most from the flourishing economy. Many – about 70% – join the labour market with little or no practical or specialised training past the general secondary education.

High aspirations and expectations

High levels of unemployment among educated young people is a troubling phenomenon. The country’s youth have increasingly higher aspirations and expectations due to the possibilities they see, given the country’s economic growth. They also have high expectations of what they believe they deserve as relatively educated people.

But not only are there no jobs, wages are often not high enough to support high living costs.

This gap between aspirations and economic reality is clearly becoming increasingly frustrating.

In focus groups of young people in different parts of southern Ethiopia we captured a deep sense of hopelessness and a fear that they would remain trapped in poverty.

For those living with their parents the main concern was that unemployment was “waiting for them” when they finished school. Many said that they previously thought that hard work at school was the way out of the life of poverty their parents had endured. Many were clearly itching to do something about their lives.

One sign of this pent up frustration is the surge in young people choosing to take the risk of irregular international migration even when they’ve been warned about the risks.

Way forward

Ethiopia’s youth bulge can be an engine for growth as international companies look to set up operations where they can access low wage labour. On top of that, an increase in the number of young people working would boost demand and investment in the country.

But to transform young people into an engine of growth requires improving access to employment.

The government should create an enabling environment for the private sector by improving the country’s dismal business environment.

At the same time, it should design effective employment programmes. It’s recent effort to increase job opportunities for unemployed young people is a step in the right direction. But policymakers, politicians and those implementing policies should resist the temptation to use access to jobs and employment as a political tool.

 

Sosina Bezu, Senior Researcher in Development Economics, Chr. Michelsen Institute

This article was originally published on The Conversation. Read the original article.

Ethiopia’s Water, Irrigation and Electricity Minister Sileshi Bekele said that his country will not stop constructing the Grand Ethiopian Renaissance Dam (GERD) despite Egypt’s protestations, the Ethiopian News Agency (ENA) reported.

During a press briefing on Saturday, the minister responded to a question on whether Ethiopia would stop building the dam due to Egypt’s current stance on its impact on downstream countries, saying, “the dam is 63 percent completed and it is being constructed around-the-clock”.

“On our part, we are constructing the dam according to the schedule, the quality and the standard that the dam of this size requires”, he added.

Egypt has criticized the construction of the dam on the basis that it would reduce its share of Nile water, which currently stands at 55.5 billion cubic meters per year in accordance with a 1959 treaty.

Ethiopia has been constructing the Rennaissance Dam since 2011 over the Blue Nile, one of Egypt’s major sources of freshwater, and is expected to be completed within the coming period. Sileshi said that Egypt and Sudan will benefit from the energy that the dam will generate and the fact that it will secure the countries’ water needs in case of future droughts.

“We have to take this dam as a real opportunity that provides lots of benefits for the three countries. We have carried out relevant and adequate studies on our side which prove that the dam does not bring any significant impact on downstream countries”, the minister further stated.

On his part, Ethiopia’s Foreign Ministry Spokesperson Meles Alem said Thursday that the construction of GERD is crucial for Ethiopia’s development, which has suffered from series of droughts over the years.

ENA quoted Meles as saying that the “zero sum game diplomacy” with respect to the dam is not useful to any country in the Nile Basin.

 

- Egypt Independent

As Ethiopia strives to become the manufacturing hub of Africa, more and more Chinese companies are showing an interest in investing in the east African country.

The latest Chinese company that will soon establish a presence in Ethiopia is the Wuxi No. 1 Cotton Mill, which is part of the Guolian Development Group and one of the largest textile manufacturers in China, according to the Ethiopian Investment Commission (EIC).

The company has signed an investment agreement with the Ethiopian government to establish an integrated textile industry in Ethiopia's second largest city Dire Dawa, some 446 km east of Ethiopia's capital Addis Ababa.

According to the EIC, Chinese companies, with close to 379 projects that were either operational or under implementation in 2012-2017 period, are on top of Ethiopia's investment landscape, both in number and financial capital. Among these companies, 279 were operational in Ethiopia with projects that worth over 13.16 billion Ethiopian birr (over $572 million) 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.

In a statement sent to Xinhua, the EIC indicated that the Wuxi No. 1 Cotton Mill and the Guolian Development Group will bring state-of-the art manufacturing technology, knowhow and excellence accumulated over a span of 100 years to Ethiopia.

Noting that the company currently has a weaving capacity of 26,000 tons of yarns and 30 million meters of gray fabrics yearly, the EIC expects Wuxi No. 1 Cotton Investment Company to play a big role in Ethiopia's ambition in putting its export industry in the map.

As part of the investment agreement, which was signed in Wuxi city in China on Nov 2 between the EIC and officials of the company, the Wuxi No. 1 Cotton Mill has agreed to invest in a large scale and integrated fabric mill and spinning plant in Dire Dawa, targeting the export market.

The Ethiopian government also envisages that high profile companies, such as Wuxi No.1 Cotton Mill which is said to be known for supplying leading global brands where 75 percent of its products are mainly exported to Europe, America, Japan, and Southeast Asia, will help push Ethiopia to be the leading player in Africa's apparel and textile manufacturing sector.

Abebe Abebayehu, Deputy Commissioner of the EIC, believes the arrival of such investors in the country will help Ethiopia realize its target.

"This investment would contribute immensely to our government's vision to build a sustainable, vertically integrated and export-oriented, apparel and textile manufacturing hub in Ethiopia. Indeed, our vision is to make Ethiopia the leading manufacturing hub in Africa," the statement quoted Abebayehu as saying.

According to the EIC, in addition to creating direct employment opportunities and boosting Ethiopia's foreign exchange reserves through exports, this investment is expected to create significant backward and forward linkages in the country's fast growing textile and garment industry.

In a bid to create better market opportunities for large scale cotton production in the country, the project plans to purchase raw materials such as cotton from local sources, it was noted.

 

- Xinhua News

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