Posts filed under ‘China’
Ethiopia and China sign $1 billion power deal
Ethiopia signed a contract Friday worth nearly $1 billion with a Chinese energy company to build two transmission lines linking the country’s largest dam to the country’s central power grid.
The Ethiopian Electric Power Corporation (EEPCo.) signed the deal with China Electric Power Equipment and Technology Company (CET) in the Ethiopian capital.
The three-year project, which will be fully funded by the Export-Import Bank of China, will start immediately.
EEPCo.’s CEO said the deal was a major step for Ethiopia’s energy sector.
“This is another milestone in (realising) Ethiopia’s development objective,” Miheret Debebe told reporters.
The two transmission lines, with a combined capacity of nearly 1000 kilovolts, will run over 700 kilometres to link the Grand Renaissance Dam to the main power grid near the country’s capital Addis Ababa.
Miheret urged CET to adhere to the timeline set out in the contract for the project’s completion, and admitted that securing funding for the large-scale project was a “challenge.”
As part of its ambitious Growth and Transformation Plan (GTP), Ethiopia is developing its energy production sector with the aim of exporting power to neighbouring countries.
With a capacity of 6,000 MW, the Renaissance Dam on the Nile River is the largest of Ethiopia’s dams, most of which are still under construction.
Hydropower is set to be the largest energy provider, but wind, geothermal and solar projects are also underway.
The country has the capacity to produce 45,000 MW of power, more than the total amount currently consumed in all of sub-Saharan Africa, according to official figures.
The GTP seeks to boost economic growth in order to transform Ethiopia into a carbon-neutral, middle income country by 2025.
China is a major player in the Horn of Africa nation, heavily invested in manufacturing, energy, and transport industries.
Copyright © 2013 AFP
Trade has recovered from the financial crisis
THE NUMBERS: World exports, 2011 -
Total: $22.6 trillion
Manufactures: $11.5 trillion
Energy: $3.0 trillion
Business services: $2.2 trillion
Travel/logistics services: $2.0 trillion
Agriculture: $1.7 trillion
Ores & other mining: $0.8 trillion
WHAT THEY MEAN:
Based on the figures above – from the WTO’s trade statistics report for 2011 – trade seems to have recovered from the crisis. The global economy of 2011, as measured by the International Monetary Fund, was $69 trillion. Thus $22.6 trillion in trade implies a ratio of trade to economic output of 32.5 percent. This is just above the pre-crisis share of 32.4 percent, and well above the 23.5 percent of world GDP as of the millennial year 2000.
By way of long-term context, the 20th-century low was about 5 percent during the Depression, and the pre-World War I peak was about 17 percent, though the comparison isn’t perfect since there are more countries now.A quick rundown of the past century’s trade history:
1911:17%
1936: 5%
1961: 8%
2001:23%
2008:32%
2009:26%
2011:32%
And by way of short-term observation, three countries account for about a quarter of all trade.China, with $2.08 trillion in goods and services exports, just shades the U.S.’ $2.06 trillion to be the world’s largest exporter.Germany is next at $1.73 trillion.By product, China easily leads in manufacturing, with $1.77 trillion in exports; the U.S. was just below $1 trillion.The U.S., however, faces few challengers as a services and agriculture exporter, in both cases managing more exports than the 2nd- and 3rd-ranking countries combined. Japan, France, and the U.K. rank fourth, fifth, and sixth.
The same three countries are the world’s biggest importers.Though the United States is still as the world’s top importer at $2.66 trillion, since the crisis China has been the fastest-growing importer, up by almost $700 billion (i.e. from $1.30 trillion in 2008 to $1.98 billion) while the U.S. import bill for 2011 was, by the WTO’s count, only $100 billion above the 2008 figure.Thus the U.S.’ share of the world’s imports has fallen from 13.2 percent to 11.9 percent; Germany is the third-largest importer at $1.54 trillion. Japan is fourth here too; the United Kingdom and France switch positions.
The WTO’s 2012 trade statistics report: http://www.wto.org/english/res_e/statis_e/its2012_e/its12_toc_e.htm
And the IMF’s economic database for countries, regions, and the world: http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/index.aspx
Ethiopia Sugar Signs $500 Million Deal With China’s CDC Bank
Ethiopia Sugar Corp. said it’s signed agreements with state-owned China Development Bank Corp. for $500 million in loans to build two refineries, part of a plan to boost output of the sweetener almost tenfold by 2025.
Ethiopia’s Finance Ministry and the state-run sugar company have signed memorandums of understanding with the Chinese lender for loans to build the plants in Ethiopia’s South Omo Zone, Sugar Corp. spokesman Yilma Tibebu said in an e-mailed response to questions on Sept. 24.
China Development Bank has advanced $123 million for a factory in the northeastern Afar region, he said. The factories will be built by the Ethiopian state-owned Metals and Engineering Corporation, an amalgam of former military companies. China Complant Group Inc. is also working on the Afar project, Yilma said.
Last year, Ethiopian Sugar started building 10 cane plantations and factories with the goal of making the sugar-importing Horn of Africa nation one of the world’s 10 biggest exporters of the sweetener by 2025.
The building program will cost “close to 100 billion Ethiopian birr ($5.5 billion),” with about half required in foreign currency, said Asfaw Dingamu, Ethiopian Sugar’s deputy director-general for the legal and communications department.
Seeking Loans
“We’re looking for loans,” he said a Sept. 22 interview in the capital, Addis Ababa. “We’re negotiating with Chinese banks.”
Ethiopian Sugar plans to provide about 40 percent of the money through sugar sales, with the rest of funding to be equally split between Ethiopian state banks and external lenders, he said.
Sugar Corp. generated 3 billion birr in profit from existing factories and sales of imported sugar in the year to July 7, Asfaw said. The government plans to increase production to 2.3 million metric tons of cane by 2025, and the country produced 265,000 tons last year, he said.
It spent 12 billion birr over the past two years on design work, irrigation infrastructure, roads and worker housing, he said. Ethiopian Sugar will need 100,000 workers to operate six plantations being set up in South Omo, Asfaw said.
A delayed sugar project at Tendaho in the Afar region will be producing at 30 percent capacity in January, Asfaw said. The factory is being built by India’s Overseas Infrastructure Alliance with a $394 million loan from the Export-Import Bank of India.
To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net
Ethiopia, China Communications in $1.5 Billion Rail Deal
Railway Systems
By William Davison
Ethiopia signed a $1.5 billion agreement with state-run China Communications Construction Co. to build a railway to carry potash from mines being developed in the nation’s northeast.
The 360-kilometer (224-mile) line will transport passengers and freight along a route to neighboring Djibouti’s Tadjourah port, which is being built. It should be completed by July 2015, Ethiopia’s Foreign Ministry said in a statement posted on its website yesterday.
CCCC (1800), a Chinese government-owned transportation infrastructure company, will be “mobilizing substantial resources to guarantee completion of the project,” the ministry said, citing the company’s vice president, Zhou Yongheng.
Ethiopia, sub-Saharan Africa’s second-most populous nation, is in the middle of a five-year plan to modernize and upgrade its infrastructure and industries. The government last year signed two agreements with Chinese companies to build a 4,744-kilometer (2,948-mile) rail network to Djibouti.
Landlocked Ethiopia lost its access to the sea after Eritrea voted for independence in 1993. The new rail line will run between the cities of Mekele and Hara Gebaya.
Canada’s Allana Potash Corp. (AAA), Sainik Potash Plc of India, Ethiopian Potash Corp. (FED) and Melbourne-based BHP Billiton Ltd. are all developing projects to extract potash, a fertilizer ingredient, in the Afar region.
Source: bloomberg
China brings jobs to Ethiopia but at what cost?
By James Melik
While Europe is struggling with recession, it is a very different story in Africa where the continent overall is expected to enjoy growth of 6% in 2012.
But there is concern that the fruits of economic expansion and foreign investment are not being evenly shared around.
One example of Chinese investment is a shoe factory just south of the Ethiopian capital Addis Ababa, on a huge industrial site known by locals as China Town.
Two production lines make 2,000 pairs of shoes every day for global brands, including Guess and Tommy Hilfiger.
Despite perks such as the factory having its own canteen and tennis courts, and the workers being supplied with their own uniform, the workers often receive a wage which is only a fifth of what a worker in an indigenous factory would receive.
Delivering skills
The shoe factory is run by the Huajian Group, whose vice president Helen Hai says that instead of receiving higher wages, the workers are trained in shoe-making skills.
“I took 86 Ethiopian graduates to China to teach them how to make shoes,” she says. She is adamant that after their training, workers can choose to remain or to work for other shoe factories.
“We offer tennis courts, uniforms, food – and in the future we will also offer free accommodation,” she says. “And we are also in the process of applying for a Fairtrade certificate as we definitely treat our workers fairly.”
She adds: “In the past China has given a lot of money to African countries, but now we want people here to have the capability to make goods themselves – that is why training is always the core in our strategy.”
Local sourcing
Shoe manufacturing has something of a tradition in Ethiopia, and another smaller factory is run by Bethlehem Tilahun Alemu.
“I wanted to show that it is possible for a local person to be globally successful,” she says, “And that is exactly what we have done.”
It is a powerful idea which has provided an example for many young women and men in Ethiopia.
Her Sole Rebels company employs 75 people, making the soles of shoes from recycled car tyres and the uppers from Ethiopian spun cotton.
“The culture of recycling has been in Ethiopia for a long time, and recycled tyres have long been used for shoes,” she notes.
She explains how it is her ethos to employ local people, and says that 99% of the shoes they produce are exported.
“This is a local grass-roots business that we built from scratch. We have a brand and authenticity,” she says.
She is also proud that her company is certified as Fairtrade.
“We pay our people four or five times what other people are paying,” she says, adding that she is not worried about her workers getting trained and then going to work for Chinese factories – because they will not get paid as much.
Local attraction
Helen Hai says the Huajian Group plans to invest $2bn (£1.3bn) in Ethiopia for a variety of reasons, including Ethiopia’s “good economic policy”.
Its competitive labour in the global market was also an attraction – compared with China, it is one-seventh cheaper to employ someone in Ethiopia.
The good supply of raw materials – leather for making shoes – and its good geographic location, allowing easy access to Europe and the rest of Africa, were also factors.
“We signed an understanding with the Africa Development Fund,” she says.
“We will jointly invest $2bn in the next 10 years – which will create job opportunities for 100,000 people.”
She maintains that the biggest challenge for investing in Ethiopia is that people are not familiar with doing international business, although she is confident that will change over time and her company is working closely with the government to solve that issue.
Investment encouraged
Long-time Africa campaigner Sir Bob Geldof says people should not worry about Chinese investment in Africa and rebuffs the idea of economic colonialism.
“China is not interested in that. Africans are not going to go through that kind of experience again, ever,” he says.
“Shut up, get down here, get on with it and it is mutually beneficial. You can talk about what sort of government works best, about values, about rights.
“Those things are being talked about. When they are ignored, there is no growth, just instability, war and hunger.”
He further maintains that democracy is not a prerequisite for growth.
“How do we know that? Look at Singapore or China. Business leaders there work with whatever government they have to – their job is to create business.”
