Ethiopia: Infrastructure success or demise?

By Tamrat Abomsa
November 2, 2013

 It was a recent trip that I made to Addis, triggered the production of this paper. Perhaps if you have traveled to Addis after several years, you might be puzzled by the infrastructure ‘boom’ in and around the city. Construction of new rail road, industrial facilities, highways/roads, dams, energy facilities and other economic development components are not hidden from the eyes of visitors. Having seen, it’s possible that you might be proud of the work that have been undertaken or criticized how purely planned and executed. Regardless of these two contradictory thoughts, I decided to air my view on the situation as it is crucial moment in the development history of the country.

Ethiopia is developing country, in urgent need of massive infrastructure for economic development to feed its population growing at alarming rate. However, the country can’t afford capital intensive mega infrastructures such as dams, airports and highways that are key to economic activities. So it has to partly depend on the foreign financing entities. The current infrastructures under construction or planned to be, are mostly financed by Chinese Communist government owned banks.

About $500 million USD cost of the Gilel Gibe III dam is financed by Industrial and Commercial Bank of China, the turbines and associated electrical equipment of the Grand Ethiopian Renascence Dam hydropower plants costing about $1.8 billion USD are reportedly financed by Chinese banks. Keep on going, the Chinese Import and Export (EXIM) Bank is to finance the stylish Meskel Square-Bole (Africa Avenue) road upgrading project. Other similar projects constructed or either planned in the country are going to be financed by Western banks or Chinese lenders. The question that puzzles most citizens is the surprise and the speed at which these projects emerge from ground without public knowledge. Most citizens don’t have idea when, why and how most developments comes to existence and question the quality. Vividly roads constructed in Addis are deteriorating within few years of service and left without maintenance because of luck of money or poor planning.

Successful regional infrastructure planning and implementation is not as easy and simple as seen on the streets of Ethiopia cities and townships. It requires years and years of proper planning effort that involves key stockholders and extensive analyses. Such required analyses are; cost/benefit, local economic implication, life time cost, social impact, future demand, environmental and ecological impact … etc. Above all, providing alternative analysis to justify why particulate project was chosen is a core element for the ‘success’ and ‘sustainability’ of any economic development. All these, along with other fundamental infrastructure planning and implementation approaches, have never been done or hidden from the general public. Projects financed by China Development Bank (CDB) and its descendent lenders such as EXIM Bank, has never be seen with such comprehensive planning analysis let alone in Ethiopia but in their homeland.

Looking at the execution of major projects, mostly they are undertaken by Chinese contractors. This means money that provided as loan goes back to China. The involvement of endemic private contractors and consultants are very limited. Since nobody has seen economic analysis report stating the benefit and impact of the project on the local community and the country at large, it is really difficult to assess and predict where the country is heading.

Centrally planned economic system, culturally doesn’t involve the end users or the ultimate burden bearers, the society. Regardless of critics or applaud from the society, it is planned at the top level by the government planners and decision makers and subsequently be simply implemented. The best example is Chinese Communist government. In contrary, decentralized democratic States, like Ethiopia, are in principle demand involvement of society in conception/implementation of economic development plan such as infrastructures. As argued by modern age political economist, decentralized economic development system has been the most efficient and sustainable system. The case of the United States and Euro Zones are living examples. It is terrific how these countries have developed infrastructure hundred years ago and still serving community with expected level of service without major rehabilitation. The key secrete is obviously, proper planning.

Therefore, I strongly argue that the current approach assumed by Ethiopian government will most likely lead to economic stagnation or even lead to failure. At the end of the game, the debt has to be paid back to lenders with heavy interest rate. The bearer of this debt is nobody but Ethiopians. As this moment in time, what is happening is very critical for us and future generation - proper planning is very important more than ever. One alternative will be to facilitate the engagement of many professionals who have fled the country in the process of current development. Tapping the brain of Ethiopian intellectuals who have tangible experience in a proven developed system is of a paramount. I am optimist that these intellectuals will assume ownership and dedication as it’s their mother land. With this, Ethiopians would have reached way far of an opportunity to see economic revolution with genuine growth not sham reports.

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