Ethiopia’s infrastructure binge shows no signs of slowing down, with plans being made to build a $4 billion second international airport in the Addis Ababa area, one that could serve as many as 120 million passengers per year when it opens in about a decade’s time.
But a new report by risk analysts PGI Intelligence warns that the airport mega-project is at risk of delays due to challenges securing finance, while the huge costs entailed threaten to worsen foreign exchange shortages in the coming years.
The planned airport would make it Africa’s biggest airport by far, and even larger than London’s Heathrow, which handled 73.4 million passengers last year, with a capacity of 90 million.
Africa’s busiest airport is O.R. Tambo International Airport near Johannesburg, South Africa; about 18 million passengers passed through its terminals last year and ongoing expansion work will raise capacity to 28 million.
The planned giant airport in Ethiopia is set to be one of the country’s most ambitious projects, surpassed only by the $4.8 billion Grand Ethiopian Renaissance Dam and demonstrates the government’s ongoing commitment to state-led development through investment in huge infrastructure projects.
Already, Ethiopian Airlines is the only major African carrier that is reporting healthy profits, in the region of $175 million in 2014/15, while the other big three – South African Airways, Kenya Airways and Royal Air Maroc – are facing financial headwinds, bleeding cash badly and/ or reporting virtually no growth as reported earlier by Mail & Guardian Africa.
The project reflects the scale of Ethiopia’s economic ambitions and will form an important component in developing the country’s tourism and light manufacturing sectors, as well as putting Ethiopian Airlines in pole position to consolidate its market share and comprehensively overtake Nairobi as East Africa’s aviation hub.
Separate from Bole
The new project is separate from the ongoing $350 million expansion of the current Bole International Airport in Addis Ababa, illustrating the importance the government has attributed to planned aviation sector growth. The current airport expansion is set to increase capacity from 6 million passengers annually to 22 million by 2018.
The two developments combined aim to transform Addis Ababa into one of the largest aviation hubs in Africa, with the new airport consisting of four runways, several passenger terminals and an airport city on the outskirts of the capital.
But it also raises the question whether Ethiopia can command those kind of passenger numbers to make the investment worthwhile.
A decade ago, Bole handled fewer than a million passengers a year, by last year that had risen to 7 million. Passenger numbers are expected to continue increasing by about 10% a year – which means it could take more than two decades for the airport to reach full capacity.
But Ethiopia’s state-driven capitalist model aims to line up all the ducks in a neat row, looking to deliver passenger numbers not just through bolstering Ethiopian Airlines’ position as an aviation leader in Africa, but also through growth in tourism and light manufacturing sectors, as part of the country’s second Growth and Transformation Plan (GTP-II).
The GTP-II will cover the period 2015-2020, and is set to be launched officially in the next few weeks with the airport as its flagship project. It is also expected to include the $1.8 billion Gilgel Gibe 3 dam, a raft of geothermal, solar and wind projects, and a vast house building programme.
Tourism currently generates $2.9 billion for the economy and several international hotel chains have set up operations in the country in recent years; in August the culture and tourism ministry announced it planned to triple Ethiopia’s annual foreign visitors to 2.5 million by 2020.
Increases to freight capacity will likewise support the light manufacturing sector, for which the government has already attracted several global brands and Unilever, General Electric and GlaxoSmithKline are all planning investments that will supply international markets.
Ethiopia is targeting $1 billion of annual investment in industrial parks over the next decade to boost exports and make it Africa’s top manufacturer. The government may invest half of the $10 billion needed for zones across the country that will house textile, leather, agro-processing and other labour-intensive factories, a special advisor to Prime Minister Hailemariam Desalegn said in May.
But analysts are warning that Ethiopia’s mega-infrastructure binge will put enormous pressure on Ethiopia’s public finances, which are already strained following the first growth and infrastructure plan that expires this year (GTP I 2010-2015).
In September, the IMF reported Ethiopia’s public debt-to-GDP ratio was already at 50%, and GTP II would see this increase further.
Concerns around the sustainability of these debts could create challenges in securing finance for the new airport; without an immediate demand for its services, Ethiopian officials could struggle to secure finance from foreign lenders at concessional rates, the PGI Intelligence report states.
As with GTP I, both the new airport and GTP II are likely to depend heavily on domestic funds to finance projects. The absorption of funds by large infrastructure projects has created huge liquidity problems in Ethiopia over the past five years, resulting in delays to imports and difficulties for the private sector to access finance.
These restraints have been compounded by banking regulations that require banks to pay an additional 27% of each loan to private companies into state bonds that fund the government’s growth plans, a requirement that “frequently deters banks from lending to the private sector,” PGI Intelligence says.
With little sign the government is willing to ease restrictions on the banking sector, access to finance and liquidity will remain among the major barriers to success as the government presses ahead with its growth plans over the next five years, the analysts warn.
Not to be deterred, however, regional banks are all lurking on the streets of Addis Ababa, looking to set themselves up for even the crumbs of Ethiopia’s still very tightly regulated banking sector.
Foreign lenders are not allowed to own banks in Ethiopia, and the financial sector is dominated by the state-owned Commercial Bank of Ethiopia.
But last month, South Africa’s Standard Bank opened an office in Ethiopia, “to gain a foothold in one of Africa’s fastest growing economies”, it said in a statement, and this week, Kenya Commercial Bank (KCB) announced it had received a licence to open a representative office in Ethiopia.
Other banking institutions with representative offices in Addis Ababa include the European Investment Bank, Germany’s Commerzbank, pan-African lender Ecobank, Export-Import Bank of India, National Bank of Egypt and Bank of Africa.
Ethiopia has been named to be the World’s Best Tourism Destination for 2015. It was given the award by the the European Council on Tourism and Trade, who praised Ethiopia’s outstanding natural beauty, dramatic landscapes and ancient culture.
Thirty-one countries were considered for the illustrious award this year, with Ethiopia coming top of the pile. Ethiopia has nine UNESCO World Heritage sites, which were heralded by the commission and the aim is to boost tourist revenues to USD three billion this year – in 2013 revenues from tourism were at USD two billion. But instead of beach holidays and safaris, Ethiopia is promoting its imperial past, its natural beauty and its cultural heritage, one of which is Sidama’s New year, Fitche-Cambalala, writes Henok Reta.
Ethiopia has long been known for its cultural diversity. Words such as multi-lingual, multi-cultural and a typical heterogeneous society have been used by many to express these massive contrasts.
However, this time, the diversity includes the use of a different calendar. Visiting the land of the Southern Peoples, Nations and Nationalities at the present time would be an extraordinary experience for one who still wonders if Ethiopia uses a different calendar. Indeed, many have been surprised that the latest millennium celebration in Ethiopia took place nearly eight years after the rest of the world.
In Hawassa, seemingly attracting more massive numbers of local and foreign visitors than other bigger towns in the country, an ambitious plan is taking place–a plan that would probably make it an ideal tourist destination in East Africa due to its massive potential for tourism.
With a population of over 300,000 Hawassa is ever-working, ever-growing. The city is located 275km south of Addis Ababa, 180 km South of Ziway and 20 km south of Shashemene.
It is one of the fast growing cities in the country and can be considered to be model for many other towns all over the country. Since the current political administration took power almost 25 years ago, Hawassa has been named the capital of the Southern Nations, Nationalities and Peoples’ Regional State.
Founded more than 50 years ago, Hawassa typically distinguishes itself as a home for more than 45 tribes in the southern region, which does not happen in other regional capitals. In spite of previous tribal conflicts in the regional capital, particularly between the indigenous Sidama tribe and others, nowadays Hawassa remains a capital of diversity. It draws tens of thousands of people for annual festivals and rituals.
Nevertheless nothing is as dominant as Fitche-Cambalala, the Sidama people’s New Year. According to socio-cultural heritages handed down by forefathers through generations to descendants, Sidama New Year (Fitche) has been celebrated for more than 2000 years.
The basis for such unique local New Year’s Day determination and celebration is the Sidama calendar which was an outcome of unreserved and relentless innovative efforts of selected knowledgeable and highly respected group of people who were actively involved in a profound study of the solar system among which the moon, earth, sun and stars are included.
Starting from the ancient times up to the present day this selected group of people has been undertaking comprehensive study on characteristics including shape, color, volume, distance between each other, mobility, change of their position through time and related situations of the solar system.
To accomplish the very tasks of such unique phenomenon in the locality, they get out of their living house at midnight and assemble outside and observe situations of the moon and stars for several hours a day for at least four to six days per month. Most of the time they perform such tasks collectively and on some occasions they carry out their study individually.
When undertaking the investigation in groups each will present analyzed findings of what he has observed and thoroughly discussions on observations and findings will be conducted to arrive at plausible conclusion. If observations and related investigations are done individually, investigation findings will be presented on appointed time and place where general meeting of the group is held.
Basically, it marks the herald of spring at least by a month beforehand. According to Aklilu Adelo, chief of Sidama zonal administration, the New Year celebration is based on a traditional wisdom of astronomy. Ayantos, respected elders, are the people who declare the day on which the New Year falls on after having appraised the stars in their calm night sky. He explains that Fitche-Cambalala has long been the most exciting holiday, featuring dramatic rituals for the Sidama people.
“Now, we have embarked on a new era to celebrate it with festivities and gatherings,” he says.
The regional capital is decked out with the Sidama clothing, dance and culinary activities on this three-day long festivity while the countryside continues celebrating for more than a couple of weeks.
From the very day the ayantos announce the start of the New Year, millions of Sidama people commence preparations at home. Somewhat conforming with another popular holiday – Meskel – everything, including food making, is held months ahead across the region. False bananas, locally known as enset, are the most significant source of food. A variety of Sidama’s traditional foods are made from enset.
Dances and merrymaking, popular activities among Ethiopians, have, for some time, been an incredible identity amongst the peoples all over the country. The first day of the festival features an eve revelry.
The eve of the New Year is popularly called Fitaari. During this event households residing nearby gather in the house of this eldest father in the neighborhood to celebrate the event.
As mentioned above, preparations made by each household to celebrate New Year had commenced several months ago and kocho or preferably bulla is prepared and mixed with butter. It will be served with milk to those who gather for the feast to welcome the New Year. Similar events take place on that very special event in each household in the communities.
Thousands of young men tour the city, dancing, chanting and carrying out the rituals that used to be made by their forefathers. The eve revelry starts at the city’s grand monument named Suduma and ends at the city’s rift valley lake.
The next day, the ayantos, gather at Gudumale, a savanna venue, to announce through a series of rituals that the New Year has arrived. An intense look into the lamb cecum (a pouch considered the beginning of the large intestine) by elders is also a basic part of the rituals held at the Gudumale that determines what is good or evil.
“We are not performing witchcraft, but we have an ancient traditional wisdom of prediction from the stars above and the pouch below,” Elder Shumumale Aluda, says. Despite a stern approach many of the youth have towards this practice, he believes they will ensure that their rituals live on. “Look at them. They are eager and willing to learn from us. They are all happy and proud of what we do.”
In fact, this reality is made clearer as the city sees an influx of young men holding spears and sticks, and wearing animals skins like their fathers did.
“We love our culture. We want to show Sidama’s culture is the best amongst the many Ethiopian cultures,” Teshale Fugamo, 24, says.
Sidama’s New Year, which is primarily celebrated in the Southern Region, does not only promote the young men, but also has a spot for girls and young women to display their attractive looks as well. Hundreds of young women and girls put on their typical traditional outfits for the festivities.
“I really enjoy it. I’m extremely happy to be a part of it. That’s why I can’t miss it every year, even though I live in Addis Ababa,” Lemlem, in Miss Sidama pageant winner, says.
Born from a traditional protestant family, Lemlem sees nothing that contrasts with her belief.
“I understand what many of my friends think. They’re wrong. It’s just a practice regardless of belief,” she explains.
According to the Sidama Zone Culture and Tourism Bureau, the regional government, along with the Ministry of Culture and Tourism, are working hard to get United Nations Educational Scientific and Cultural Organization (UNESCO’s) recognition for its valuable preservation in the area of traditional rituals that can be used as a basis for science.
“We have a positive view with regard to its UNESCO registration. I hope it will be realized in a few years’ time,” Workneh Flate, the head of the bureau told The Reporter.
By Eric Mutei
At the end of a long day at work, the only thing you want to do is get home quickly. You’re exhausted from dealing with your boss, terrible colleagues or crazy clients. But traveling home is just another drawn out nightmare to endure, thanks to the woes of the transport sector. The only reliable and affordable means of transportation for a common city dweller in Addis Ababa is the state operated city buses. Apart from the long stretchy queues, these buses are overcrowded and groaning heavily under the weight of the city residents. Not to mention the endless traffic jams. This is the daily transit scenario in the streets of Addis Ababa.
The scene above was the common case of daily transit until the Addis Ababa Light Rail Transit (LRT) project launched in December 2011. The rail is a first in clean initiative in the horn of Africa to enhance public mobility. The light railway of Ethiopia is the first urban metro light rail scheme to be built in a sub-Saharan country outside of South Africa.
The Ethiopian Railways Corp. (ERC) began construction of the double track electrified light rail transit project in 2012. It stretches 23 kilometers covering the better part of the city, and is a welcome relief for the city residents. The light railway consists of two lines running for a total distance of 32km with underground and over ground sections, 39 stations, and two operators that are the Ethiopian Railways Corporation and Shenzhen Metro. The 41 three-section 70% low-floor light rail vehicles are designed to run in pairs at up to 70 km/h. All have tinted windows and rubber components specified to resist premature aging from the effects of strong sunlight at altitudes of 2400 m.
ERC intends to register the Addis Ababa Light Rail Transit project as a Clean Development Mechanism project. The rail project is one of the pillars of a green growth strategy in the transport chapter of Ethiopia’s Climate Resilient Green Economy (CRGE), to consolidate greenhouse gas emissions of the country at 2010 levels. The vision of this rail project was to see a modern railway infrastructure and service by an efficient railway company that supports Ethiopia’s endeavor in building a globally competitive economy that uses electricity and connects the country’s development centers and links with ports of neighboring countries.
The Climate-Resilient Green Economy (CRGE) strategy (PDF) lays down a plan for Ethiopia to develop a carbon neutral, green economy by 2025. According to the CRGE strategy report, under the BAU scenario, emissions from the transport sector will increase from 5 Mt CO2e in 2010 to 41 Mt CO2e in 2030. The development and implementation of a National Railway Network and the Light Rail Transit and supported projects (Transit Oriented Development) will result in significant GHG emission reductions of 9 Mt CO2e/year by 2030.
Building electrified railways lays the base for low carbon transport in Ethiopia and will assure clean transport tomorrow. Railroads can contribute towards severing Ethiopia’s economic growth from diesel fuelled trucks. Availability of reliable and clean transport is a precondition for Ethiopia’s development. Trains can make use of a domestic energy source, hydropower, and help fuel the economy in a green way. The clean character of the fuel without emission of greenhouse gasses and the durable economic structure without dependency on imported fuels is sustainable.
Years ago the air was cleaner, but with the drastic growth in population, more than 4 million, the number of 20 year or older vehicles and developmental projects, the air is polluted above the traffic gridlock. The light rail train as cleaner public transist gives a reprieve to the public, combined with the hope for more electric cars, it is expected to reduce the annual greenhouse gas emissions from the transport sector to less than 9 tonnes by 2030. It is an environmentally friendly venture aimed at combating the ever growing pollution in the city. It is not only convenient, providing transport for over 15,000 people per one direction and 60,000 in all four directions, but affordable for the residents. It is a milestone in helping Ethiopia sustain its growing economy, as Ethiopia is one of the fastest growing economies in the world.
The Light Rail Train has brought glimmers of hope to the common man. At the very least, one can get home easily at the end of the day without the crazy hassle of looking for and struggling in transit. The commuting city residents can breathe easier using clean transit as they take part in building their nation.
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