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  • Ethio-Djibouti railway sets new model for China-Africa cooperation

    Chinese conductor Ding Jihua (R) trains the Ethiopian attendants at a railway station in suburban Addis Ababa, Ethiopia, Oct 1, 2016.[Photo/Xinhua]

    The railway, which links the Ethiopian capital Addis Ababa and the port of Djibouti in Djibouti, will officially open service on Wednesday as Africa's first electric railway. It is constructed by China Railway Group and China Civil Engineering Construction Corporation, a subsidiary of CRCC.

    Meng told Xinhua in an interview Tuesday that the project has set two successful models: introducing Chinese standards overseas to facilitate export of Chinese equipment and management; building railways to boost development of industrial parks, logistic centers and real estates along the route.

    The Ethiopia-Djibouti railway is the first railway built using a complete set of Chinese standards outside China, which Meng said is key to its success.

    Thanks to China's outstanding performance in building and managing railways, Chinese railway standards eventually helped Chinese firms win over the project in Ethiopia, which, like many other countries, once viewed Western standards as the orthodox.

    "After rounds of negotiations, The Ethiopian government came to realize that the Chinese standards are no inferior to Western ones, and more importantly, they best suit the country," Meng said.

    The option for Chinese standards facilitated the use of Chinese equipment, trains and materials in the construction. Working together, the Chinese firms ensured the railway's completion in just four years, despite the conclusion of Western experts who evaluated the project that for Ethiopia to have an electric railway was a mission impossible.

    The railway's construction has also seen Chinese investments channeling into the industrial parks and other development projects along the line, which will help create jobs and boost industries for Ethiopia, Meng added.


    In-Picture: Ethiopia-Djibouti railway inauguration

    The 3.4 billion US dollars built railway is a historical project which will take the relationship between the three countries into a new era, said Prime Minister Hailemariam at the ingural ceremony held at Lebu Station.

    The railway line will greatly reduce the travel time between the two countries and will contribute to the development of Ethiopia’s hinterland.

    Prime Minister Hailemariam Desalegn, President Ismail Omar Guelleh of Djibouti and Xu Shaoshi, Special Envoy of Chinese President Xi Jinping jointly inaugurated the Ethio-Djibouti railway today.

    This is an electrified system and environmentally friendly. This is what makes it different from other railway projects in Africa.

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  • Interview with Ethiopian Fashion Designer Abai Schulze

    There’s an odd sense of vertigo when you see a face you recognize in a glossy magazine. Still, I shouldn’t have been surprised to see Abai Schulze confidently gazing at me from the magazine rack. In an economics class full of the standard George Washington University overachievers, she stood out. Even then she spoke about her twin passions of fashion and improving life in Ethiopia, the country of her birth.

    That struck me as an odd pairing at the time. But not long after graduation, Schulze founded ZAAF, a premium leather goods and accessories collection handcrafted by artisans in Ethiopia. She’s one of a rising tide of African designers, such as Maki Oh from Nigeria, aAks from Ghana, among others.

    Schultze recently turned 28 but started the business when she was 25. ZAAF brought in revenue of $160k last year and has 15 full-time employees and an additional 5-7 part-time employees depending on the season. They are based in Addis Ababa, Ethiopia. However, I wanted to know more about Schulze’s company. How did the company work? What was it like for a young woman born in Ethiopia but raised in the U.S. to start a company that would help people in her home country as well as make a profit? And, was it all too good to be true? Here’s what she had to say:

    Leah Wald: What have you learned from building a company at the young age of 25?

    Abai Schulze [Founder and Creative Director at ZAAF]:It’s been an amazing rough and tumble adventure full of challenges. I’m lucky enough to have made mistakes that will serve me well for the future (where the stake will be greater) but in a context where missteps are not fatal for the endeavor. It’s also made it very clear that each and every entrepreneurial project I take on is very binary – I either go 120% or not at all. You shouldn’t be half-hearted about blazing a personal trail or endeavor.

    Wald: Economically, how do people view Ethiopia? What do find people typically associate with the country?

    Schulze: Unfortunately, the “Ethiopia” brand is stuck in the stereotypes of hunger and instability reaching back to events of the past. This brand needs to be updated to reflect the reality of the nation’s remarkable growth and its human and cultural capital. Ethiopia is now one of the strongest economic movers on the continent, applauded for significant development advances — particularly in its rural areas — and a very aggressive industrial policy around textiles and light manufacturing. A country of nearly 100 million with near consistent double-digit GDP growth can only reasonably perceived as a bold global contender.

    Read the full interview here

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  • KIA Motors signs agreement with Belayab Motors to set up car assembly plant

    Ethiopia’s vehicle assembly company Belayab Motors PLC has entered into an agreement with South Korean car manufacturer KIA Motors Corporation that will see the manufacturer assemble cars in Ethiopia even as it contemplates expanding such operations to the rest of Africa.

    "It is important to penetrate the African market. We are also looking at the prospects of opening similar plants in Algeria and other countries," Soon Nam Lee, President of Kia's Middle East and Africa said.

    Speaking at the agreement signing ceremony, Mr. Fekadu Girma, General Manager of Belayab Motors, expressed his excitement at the partnership. “Our company has been in the forefront building the automotive industry in Ethiopia since 2006. This agreement with Kia Motors is a testament to our unwavering efforts towards accelerating the growth of the local manufacturing industry.”

    Mr. Fekadu noted that Belayab’s commitment is evident to the success of the Ethiopia’s Growth and Transformation Plan (GTPII) by intensifying its investment and facilitate foreign direct investment (FDI) through its alliance with KIA Motors. “This potentially adds value to the Ethiopian Economy at a macro and micro level” said the Manager.

    The agreement will bring the global automotive brand to Ethiopia as the first car assembly plant in East Africa for Kia. Mr. Soonnam Lee, Kia Motor’s President of Middle East & Africa Regional Headquarters explained that Kia’s business partnership with Belayab will allow the company to expand production capacity to meet growing global demand. "As one of the most youthful and exciting brands in the world today, Kia offers some of the best-looking, high quality vehicles to its customers and we are excited to bring our products to Ethiopia with this partnership. Kia Motors’ agreement with Belayab is also partnership based on mutual understanding on the need for capacity building and knowledge transferring endeavors,” he said.

    The assembly facility will have the capacity to assemble 12 cars per day in a single shift; 240 cars per month. It is estimated that a total of 3000 KIA vehicles will be assembled each year. The 30,000 m2 assembly plant located in Adama expects to add 100 more employees who recently graduated from the technical college. The first Kia vehicle assembly is expected to be completed in January 2017.

    Ethiopia produces about 8,000 commercial and other vehicles a year for the home market, about a quarter of which are cars. Among those present include Chinese firms Lifan and Geely.

    Though a minnow in the continental market, the government wants to turn the industry into one of the biggest on the continent through incentives such as cheap labor and tax breaks.


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  • These are the '10 emerging markets of the future'

    A new report from BMI Research has identified the "10 emerging markets of the future" — the countries that are set to become new drivers of economic growth over the next 10 years.

    BMI estimates that these countries will cumulatively add $4.3 trillion to global GDP by 2025 — roughly the equivalent of Japan's current economy.

    In general, manufacturing and construction are the sectors that will drive the economies. BMI reports that new manufacturing hubs are set to emerge in Bangladesh, Myanmar, and Pakistan, and that these countries will see particularly strong growth in exporting manufacturing industries. And construction growth is going to be widespread throughout all the countries — partly to facilitate increases in urban populations and partly to help develop the manufacturing sector.

    On the other hand, extractive industries — like mining, oil, and gas — are going to play a far smaller role in driving growth than they have the past 15 years.

    While it might provide bright spots for some countries, the report states, "the ubiquitous commodity-driven growth model that was derailed by the 2012-2015 collapse in commodity prices is not coming back."

    Here are the 10 new emerging markets and the sectors that drive their growth:

    1. Bangladesh

    Primary sector: Agribusiness
    Key exports: Garments, agricultural products
    2015 GDP growth: 6.4%
    Unemployment rate: 4.9%
    Exchange rate: 77.42 Bangladeshi taka per US dollar

    "Bangladesh's export-oriented industrial sector already accounts for more than a quarter of GDP and will continue to develop as a global manufacturing hub in the coming years."

    2. Egypt

    Primary sector: Natural gas
    Key exports: Oil, fruits and vegetables, cotton
    2015 GDP growth: 4.2%
    Unemployment rate: 12.8%
    Exchange rate: 7.72 Egyptian pounds per dollar

    "We expect continued investment across the housing sector in Egypt, given the almost 1 million additional urban residents per year that we forecast over the next 10 years. There will be some investment in Egypt's large manufacturing export base in a continuation of recent investment in the autos and food sectors."

    3. Ethiopia

    Primary sector: Agribusiness
    Key exports: Coffee, oilseeds, vegetables, gold
    2015 GDP growth: 10.2%
    Unemployment rate: 16.8%
    Exchange rate: 21.55 Ethiopian birr per dollar

    "Construction to meet rapid urbanisation and ambitious state infrastructure targets will be the main driver of economic growth in Ethiopia ... Ethiopia's construction industry will record the highest growth in Sub-Saharan Africa, averaging real annual growth of 10.7% between 2016 and 2025."

    4. Indonesia

    Primary sector: Agribusiness
    Key exports: Mineral fuels, machinery parts
    2015 GDP growth: 4.8%
    Unemployment rate: 5.5%
    Exchange rate: 13,577.6 Indonesian rupiah per dollar

    "Growth in Indonesia will be far less commodities-centric than over the past decade, as the mining and oil and gas sectors will stagnate ... The government remains committed to developing a manufacturing-based export economy by boosting infrastructure spending and streamlining bureaucracy."

    5. Kenya

    Primary sector: N/A
    Key exports: Tea, horticultural products, coffee
    2015 GDP growth: 5.6%
    Unemployment rate: 40%
    Exchange rate: 99.73 Kenyan shillings per dollar

    "As Kenya imports almost all of its energy needs, lower average oil prices over the next decade compared to the previous decade will boost both Kenyan consumption and non-energy investment. Growth will be centered in ... infrastructure (including renewable energy), financial services and retail trade."

    6. Myanmar

    Primary sector: Mining
    Key exports: Natural gas, wood products
    2015 GDP growth: 7%
    Unemployment rate: 5%
    Exchange rate: 1,171.8 Burmese kyat per dollar

    "Investment will continue to pour into a range of industries as Myanmar reaps the benefits of substantial political reform enacted since 2010. We believe that the trends of economic liberalisation and political democratisation will remain in place and keep the economy on track for strong growth over the coming years."

    7. Nigeria

    Primary sector: N/A
    Key exports: Oil, cocoa
    2015 GDP growth: 2.7%
    Unemployment rate: 23.9%
    Exchange rate: 196.9 Nigerian naira per dollar

    "The significant growth that we forecast for Nigeria's economy will be principally driven by the secondary and tertiary sectors of the economy. Financial services are a bright spot due to the relatively low penetration of financial services in the country. Retail sales will grow strongly, though mostly in the low value goods segment due to the fact that essentials spending remaining at around three quarters of total household income."

    8. Pakistan

    Primary sector: Agribusiness, oil
    Key exports: Textiles, rice
    2015 GDP growth: 4.2%
    Unemployment rate: 6.5%
    Exchange rate: 101.45 Pakistani rupees per dollar

    "Pakistan will develop as a manufacturing hub over the coming years, with the textile and automotive sectors posting the fastest growth at the beginning of our forecast period. Domestic manufacturing investment will be boosted by the windfall from lower energy prices compared to the last decade, and improved domestic energy supply."

    9. Philippines

    Primary sector: N/A
    Key exports: Semiconductors and electronic products, transport equipment
    2015 GDP growth: 5.8%
    Unemployment rate: 6.3%
    Exchange rate: 45.503 Philippine pesos per dollar

    "Key sectors will include autos and construction. Robust private consumption and a booming construction sector will translate into growing demand for both passenger vehicles and commercial vehicles ... Ongoing economic and business environment reforms, such as an anti-corruption drive, have made the Philippines more conducive for investment."

    10. Vietnam

    Primary sector: Agribusiness, oil refining
    Key exports: Clothes, shoes, electronics
    2015 GDP growth: 6.7%
    Unemployment rate: 3%
    Exchange rate: 21,928 Vietnamese dong per dollar

    "We expect the manufacturing and construction sectors to outperform... thus helping to underpin growth in the broader industrial sector. These sectors will remain attractive to foreign investors, owing to relatively low labour costs [and] the government's gradual relaxation of foreign ownership restrictions rules."

    Data from the CIA World Factbook


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  • Ethiopia's Skyline

    The real estate sector is a major employer in Ethiopia, with numerous high-rise building and apartments coming up across Addis Ababa. Some projects are government-funded, while others are owned by private developers. And some of these are spectacular, such as the 6-hundred-apartment complex built by Chinese investors. CCTV's Girum Chala has this story.

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