Some 35 km south of Addis Ababa, if you happen to drive or pass by the small town of Dukem during the rush hours of early morning and late afternoon, you will witness buses full of hundreds of Ethiopian workers approaching the gate of a huge compound. That is the Chinese run Eastern Industry Zone/park that houses over 30 enterprises, of which the overwhelming majority is Chinese owned manufacturing companies.
These enterprises, as part and result of the conducive environment facilitated by the Ethiopian government in line with its policy to attract more Foreign Direct Investment (FDI) in a bid to enhance the country’s economic growth, also create job opportunities for the busses full of skilled and unskilled Ethiopians. The total number, according to the Vice Director of the Zone Mr. Jiao Yongshun, reaches around 6000.
A 2015 report by the World Bank regarding the slow but growing Foreign Direct Investment (FDI) flow to sub-Saharan Africa in general and Ethiopia in particular emphasizes on the new partners/non-traditional investors. The pattern, according to the report, recognizes the job creation, specifically permanent employments being created in recent years by these partners such as China, India and Turkey among others. And the Chinese involvement in the economic field of the country has a very comprehensive engagement plan; set into three pillars – Trade, Investment and Project contracting.
According to some statistics, the total trade, both import and export amounts 3 billion dollars, making the country the largest trading partner to Ethiopia. Up to 2013, the statistics reveals that the investment reached 700 million USD. The year 2014 registered the inflow of around 50 million dollars. Project contracting, which is the biggest part of Chinese involvement, contracted projects worth more than 20 billion dollars.
There are around 200 Chinese companies actively operating in Ethiopia. The number shows significant discrepancy from one source to another due to methodological differences. In some cases, sources indicate the number reaches 800 companies.
According to the World Bank report Chinese investment in Africa is increasingly shifting towards the manufacturing sector, which is by far the biggest provider of permanent jobs, which even surpasses the agriculture sector, for the later is a seasonal and mostly temporary job. In line with this argument, there are signs indicating that, more and more efforts has been made to by both Chinese and Ethiopian governments to push towards the industrial investment enterprises and encouragements are for more Chinese investors to come to invest in Ethiopia in the manufacturing sector. This is also manifested in the government’s move in the past years that invested so much resource in the infrastructure. With more and more manufacturing capacity coming to Ethiopia, it will enable the transformation of the economy and to achieve the synergy together with the infrastructure that has been built over the years, and make the Ethiopia economy more sustainable and more balanced.
Ms. Xu HongJian is the Business Manager at the China State Construction Engineering Cooperation LTD. (CSCEC) in Ethiopia. The company started its operation in the country in 2009, building the state of the art African Union Commission (AUC) building, which took two and half years to finalize. For this particular construction, there were around 2000 workers involved, from which more than half were Ethiopian workers both skilled and unskilled. As they are venturing into the technical cooperation with the AUC, the company won the bid to build a new headquarters for Commercial Bank of Ethiopia in Addis Ababa at the cost of US$266.5m.
According to the Business manager, once the construction commences, their human resource needs will hike as it did during the AUC HQ construction. The hire includes engineers (structural, mechanical, civil and others with experience), also entry-level administration jobs and unskilled workers.
Discussing the human resource needs and requirements, Ms. Xu said, “What we have with the workers is collaboration at four levels; the first level of experts helping in the technical part, the second ones with the know how and understanding of the Ethiopian laws and procedures, so that handling that bit, third is fresh graduates who are eager to learn and enjoy doing it with Chinese companies and lastly the laborers, who are equally important in delivering the job”.
The creation of jobs doesn’t just stop at the wages and monthly earnings, but rather extends beyond. As Ms. Xu concluded “We have commitment, for not only create jobs for Ethiopians, but it is also our conviction to transfer the technical skills that we brought with ourselves.”
This year marks 45 years since the establishment of the Ethio-China diplomatic ties. Ever since, the economic cooperation, in particular since the turn of this century, is growing very fast. During his recent visit to China, the Ethiopian premier, Hailemariam Desalegn, visited different provinces, to discuss the issues of economic cooperation and explained the favorable conditions, policies and provisions for Chinese investors to direct their investments to Ethiopia. That compliments the ground work done already as also the Eastern Industry Zone Vice director Mr. Jiao described, the number of investors, wanting to come is growing than before some years, because of the existence of the industrial zone, among others.
The second Growth and Transformation Plan (GTPII) a follow up to GTPI, which achieved a great deal of stability, infrastructural and human development created a solid foundation for the future cooperation. The embassy also assures that many more countries, not only china will be interested to invest in Ethiopia, as there is better infrastructure, logistical developments and attractive situation in general.
Let more be attracted, and jobs be created for we need to grow sustainably.