Donkeys have joined the list of animals that have become endangered no thanks to Chinese Traditional Medicine, and this has led to many countries in Africa adopting various means aimed at curbing the illegal and unbridled trading in Donkeys across the continent . Until recently, focus has been on animals such as tigers, rhinos and elephants all on the endangered species list due to their uses in different sorts of Chinese traditional medicines, but now, the industry’s demand for the humble donkey is drawing international scrutiny According to experts who have been tracking developments in this illegal trade, more than four-million donkey hides are boiled to make the 5,000 tonnes of ejiao, a gooey substance billed as ‘blood-enriching’ which is sold in China each year. With rising protectionism and calls for stringent measures to curb the Donkey poaching, Chinese farmers have resorted to breeding the animal locally to curb Africa imports.
A donkey
Donkey slaughter has surged across Africa as demand for ejiao has jumped tenfold to about 6,000 tons a year in China whose donkey population has plummeted to 4.5-million from 11-million in 1990 started sourcing for supplies elsewhere and Africa was the natural source. Once a luxury for the elite, ejiao — that comes as a tablet to dissolve in water or in anti-ageing cream — is now widely used by China’s wealthy middle class and diaspora. Prices have surged to more than $780/kg from about $30/kg in 2000, according to sources from the Chinese government.
China’s donkey population started dwindling as farmers who once relied on them as beast of burden either moved to more mechanized farming or left farming all together and migrated to the cities. This led to a drastic drop in their population while demand surged. To bridge that gap, Chinese companies dealing in donkey hides refocused on Africa where the donkey population is still on the rise in the last decade leading to what conservationists describe as unsustainable and indiscriminate trading on donkeys. This led to an outcry from many Africans putting pressures on governments to respond in curbing the donkey trading. This forced the company at the centre of the global trade in donkey skins to start work on ending reliance on imports within three years by boosting domestic breeding in China.
However, this development led to soaring prices for the hides creating an opening for criminals to start stealing donkeys in countries across East Africa, leading to governments in Kenya, Uganda, Tanzania, and Botswana to take measures aimed at stemming this tide. Reports say that of all the countries affected by this ugly development, Kenya is the most hit. Reports add that in the last three years, Kenya has become the epicentre of a fast-growing industry in Africa to supply donkey skins to China which are boiled to produce a gelatin called ejiao used in traditional medicine believed to stop ageing and boost libido. This led to the opening of four licensed donkey abattoirs since in the country where over a thousand donkeys are slaughtered and skinned daily. The Star Brilliant Donkey Export Abattoir first donkey abattoir to be opened in Kenya backed by Chinese investors opened in Naivasha opened in 2016, and within months its suppliers started buying hordes of donkeys across the area, leading to shortages and driving up prices. Then donkeys began to disappear as criminal gangs moved in.
However, this rising demand from China has led to a black market with gangs hired by skin-smuggling networks to steal donkeys, inciting anger in communities who depend on the animals for livelihoods, farming, or transport. More than 300,000 donkeys — 15% of Kenya’s donkey population — have been slaughtered for skin and meat export in less than three years, according to a June survey by the Kenya Agriculture and Livestock Research Organisation. And more than 4,000 donkeys were reported stolen more than the same period from April 2016 to December 2018 alone, government sources say.
According to local reports, most Kenyan families have been reporting of losing hundred of donkeys to thieves who steal and slaughter thousands of donkeys which are sold in the black markets by criminal networks supplying skins for Chinese buyers. To curb this, many communities have formed armed vigilantes who protect the donkeys and stave off the thieves. The report warned that donkeys were being slaughtered at a rate five times higher than their population was growing which could wipe out Kenya’s donkey population by as early as 2023.
This development has led activists to call on government to ban the trade in donkey skins and close down slaughterhouses, in line with similar action in more than a dozen other African nations, from Nigeria and Senegal to Burkina Faso and Mali. If nothing is done urgently, Africa’s donkey population might get to the level of extinction.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
Huawei has officially announced HarmonyOS, the operating system it was rumored to be developing to replace its reliance on Android. In China, the software will be known as Hongmeng.
The company says the operating system, a microkernel-based distributed OS, can be used in everything from smartphones to smart speakers, wearables, and in-vehicle systems to create a shared ecosystem across devices. The operating system will be released as an open-source platform worldwide to encourage adoption.
There’s been a lot of speculation about Huawei’s in-house operating system ever since Google suspended the company’s Android license back in May, following the US government’s decision to put Huawei on the Entity List. Huawei has made no secret of the fact that it’s been working on its own OS, but the extent to which it would be able to act as a substitute for Android is unclear.
Huawei Mobile
✔@HuaweiMobile
A modularized #HarmonyOS can be nested to adapt flexibly to any device to create a seamless cross-device experience. Developed via the distributed capability kit, it builds the foundation of a shared developer ecosystem #HDC2019
Huawei plans to launch HarmonyOS on “smart screen products” later this year, before expanding it to work on other devices, like wearables, over the next three years. Huawei doesn’t explicitly say what constitutes a “smart screen” device, but its subsidiary Honor is expected to bring the OS to a smart TV according to a report in Reuters. The initial focus for the operating system will be China before Huawei expands it to other markets.
In a press release, the CEO of Huawei’s consumer business group Richard Yu says that HarmonyOS is “completely different from Android and iOS” because of its ability to scale across different kinds of devices. “You can develop your apps once, then flexibly deploy them across a range of different devices,” the CEO said.
Previously, it’s been unclear whether HarmonyOS would be an operating system for smartphones or for internet-of-things devices. It now appears that it’s designed to power both, similar to Google’s experimental Fuchsia operating system, which is designed to run on various form-factors.
Huawei is yet to announce a device running the new operating system, but the company is expected to launch a successor to the Mate 20 Pro smartphone in the fourth quarter of this year.
It isn’t yet clear how much need Huawei will have for its own in-house operating system going forward. Since placing Huawei on the Entity List, the Trump administration has indicated that it’s willing to ease the restrictions on the company.
In July, senior officials said that the administration would grant licenses to deal with Huawei in instances where national security wouldn’t be impacted. However, yesterday Bloomberg reported that the White House is delaying its decision about issuing these licenses in the wake of China’s decision to halt purchases of US farming goods.
It’s yet another suggestion that the Huawei restrictions have as much to do with the US-China trade war as they do with protecting national security.
HarmonyOS now has an official name, but it still has some major hurdles to overcome. Huawei is expecting developers to recompile their apps for this new operating system, with the ability to code once and deploy across multiple devices with different screen layouts, interactions, and more.
Huawei says developers can compile a range of languages into machine code in a single environment, but it’s unclear exactly how easy that will be for developers. There are a lot of big promises here, but it’s going to be an even bigger challenge to build up an app ecosystem to rival both Android and Android Open Source Project (AOSP).
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Indeed Flutterwave is looking at China’s population of 1.4 billion here. It has just announced it is going into a landmark partnership with Chinese payment solution Alipay, which overtook PayPal as the world’s largest mobile payment platform in 2013, and is today the world’s number one mobile payment service organization and the second-largest mobile payment service organization in the world.
The Flutterwave/AliPay connection is probably the biggest thing to ever happen to African tech if we understand the full implication. China is in play guys. Over One BILLION users are in play. I have always said, don’t build for Africa…..alone! Victor Asemota✔@asemota, a social commentator.
Here Is The Deal
Payments is partnerships and we’re happy to announce that we have partnered with @Alipay to create even more avenues for our merchants to seamlessly receive payments from customers all over the world, Flutterwave noted on its Twitter handle
What this means is “ that all our merchants can accept or install Alipay as a payment type to accept payments from its billion users,” Flutterwave CEO Olugbenga Agboola said in an interview.
“There’s a lot of trade between Africa and China and this integration makes it easier for African merchants to accept Chinese customer payments,” he noted.
The partnership is crucial because Flutterwave will earn revenue from the partnership by charging its standard 3.8% on international transactions. Flutterwave currently has more than 60,000 merchants on its platform, according to Agboola.
There’s also a catch for Flutterwave, as being integrated with Alipay now gives all of its merchants access to more than 1 billion users on the Alibaba product.
“Alipay is available in addition to card, Barter, Mobile Money and other payment channels on the Rave checkout modal,” Flutterwave said in a statement.
“We’ve set out to provide the complete payment solution for Africans to thrive in the global economy. The complete payment solution would first require interconnectivity within Africa, then connectivity from Africa to the world,” says Flutterwave.
Flutterwave is a Lagos and San Francisco-based fintech startup. The Nigerian B2B payments platform allows African companies to send out payments to other firms around the world.
Access To Chinese And African Markets
This partnership with Alipay which has a large network in China will help Alibaba capture payments activities between Africa and China, whose volume has been put at USD 200 Bn.
“Because of that I was in China to do meetings with Jack Ma and the only ask I had from that trip is ‘I want to be the Africa payment infrastructure that plugs directly into Alipay,’ ” Agboola said.
Flutterwave has been able to connect African countries such as Nigeria, Kenya, South Africa, Ghana, Uganda and Rwanda with one another. This makes cross-border payments easy for several companies.
“So it was about time we connected Africa to the world. We started with the U.S already, but you can’t connect Africa to the world without China”. @Honcho_Honips
With this partnership, there is a high probability that you’ll be able to pay your Chinese import agents directly with your naira.
I know #WaverSZN sounds like an empty boast or just a fun term but to us, it means a lot. It’s about living our dreams. Our dreams of building out a platform that empowers everyday African merchants to meaningfully partake in global trade.
Alibaba founder Jack Ma has made several trips to the continent and this March announced the $1 million Africa Netpreneur Prize for African startups and founders. Chinese company Transsion — a top-seller of smartphones in Africa under its Tecno brand — operates an assembly facility in Ethiopia and announced its IPO this year.
Earlier this year, Flutterwave entered a collaboration with Visa, and the team-up launched GeBarter, a consumer payment product for Africa.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
New report shows the extent of China’s hidden power as the developing world’s creditor.
Over 50 developing countries’ Chinese debt accounts for on average 15 percent of their individual GDP.
New report shows that the majority of the world’s developing country’s debt to China is considered “hidden.”
China’s loans for poor countries are primarily for crucial infrastructure.
China’s overseas lending, which was virtually zero before the turn of the century — well, about $500 billion in 2000 — stands today, ostensibly, at around $5 trillion. Indeed, they are now the world’s largest creditor, being twice as large as both the World Bank and the International Monetary Fund, combined.
As much of what China does is under a veiled curtain of secrecy, it’s been difficult to track how all the money is flowing. A new comprehensive study though, by Sebastian Horn and Christoph Trebesch of the Kiel Institute for the World Economy, and Carmen Reinhart of Harvard University, has provided some new insights about China’s official credit lending empire. What did the researchers discover?
More than half of China’s lending to developing countries is what they term “hidden” money — loans that haven’t been reported to any of the international funds, such as the World Bank.
Indeed, economist and author of the report, Tresbesch, recently told Germany’s Spiegel in an interview following the release of the study’s findings, that compiling all of the information was like “a kind of economic archeology.” Their information came from numerous financial world databases, along with some documents provided courtesy of the CIA.
It’s no secret that China would like to keep this type of information occluded from the international scene. Opponents of China’s secretive lending practices fear that Beijing is engaging in predatory debt diplomacy and using their worldwide Belt and Road Initiative to create a new kind of economic colonialism over Africa and other parts of the developing world.
China’s creditor strategy for economic growth
China is in a state of further economic evolution. Long gone are the days of being the world’s impoverished manufacturer. With a thriving consumer market boosted at home, China is now flexing their influence over vast swathes of the world. One of their strategies is by becoming the world’s most involved lender to poor countries.
This can be problematic for a number of reasons. Countries that take this deal, end up grossly indebting themselves to China’s policies in a number of ways, both monetarily and culturally. An example on the extreme end of the spectrum is Djibouti, whose Chinese debt is equivalent to 70 percent of the country’s GDP. On average, the top 50 of China’s borrowers owe somewhere near 15 percent of their GDPs, which, still, on a global scale is quite a lot.
The authors also found that China has never officially disclosed any loans to Iran, Venezuela, or Zimbabwe, which on other records it’s been shown that China is a major creditor. The report speculates that one of the ways to avoid these international cross-border crediting claims is by the Chinese government disbursing loans straight to Chinese contractors rather than the developing governments themselves.
A great deal of these loans isn’t subject to credit rating agencies, because most of China’s foreign loans flow straight from their government. China’s lending practices take on another interesting dynamic, as the country is lending much more than just money: it is also helping build crucial infrastructure in these developing nations. In doing so, China exports a healthy dose of its culture and influence.
Growing influence in Africa
China’s investment in Africa takes the form of loans in exchange for infrastructure development. Oftentimes, Chinese companies and citizens reap the benefits and profits of these large projects. While many Africans welcome the much-needed investment into their countries, it’s not clear how much the continent is benefiting from this Chinese influence.
One major issue a lot of countries are facing is that almost the entirety of their country’s debt load comes from China. For example, of Kenya’s $50 billion in debt, more than 72 percent of it is from China. In Senegal, highways, industrial parks and other crucial developmental projects for a functioning country are all funded by large, risky Chinese loans. Again, much of this value goes back to China. They’re not doing this for humanitarian reasons. The Chinese expect capital and cultural return.
Tim Wegenast, who wrote a report about Chinese mining in Africa states:
“It’s more or less safe to say that Chinese companies employ less local labor than other companies because they bring over many Chinese workers, and when they develop local infrastructure, they provide countries with loans which are being used to pay for it, which is then constructed by Chinese companies and Chinese labor.”
A future of Chinese credit
According to The Economist, China’s lending prowess is more of a mixed bag. While many new loans from China were offloaded with debt relief by Western creditors after defaulting, China has in the past put forth some debt restructuring plans on 140 of their foreign loans. Although at other times, they’ve taken their collateral with ruthless abandon, for example when they seized the Hambantota Port in Sri Lanka.
Many Chinese loans have higher extended interest rates and short maturities, with heavy collateral that includes commodities, or even important strategic foreign infrastructure.
The authors of the report noted that China has started talking about being more transparent and sustainable on their loans in the future. But no clear evidence of this taking place has yet to materialize.
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Don’t expect China to throw in the towel yet in Africa, despite the huge bad debt it has incurred so far on the continent. A new fund which is targeted directly at businesses in Africa has been launched on the sidelines of the World Economic Forum (WEF) meeting, currently underway in Dalian, China. The fund is code-named Belt and Road Africa Fund.
For Whom Is The Fund Meant?
The key focus of the funds would be investments in infrastructure, technology, e-Commerce, artificial intelligence (AI) and the beneficiation of the resource industry in Africa.
“The discussions that we’ve had with Chinese businesspeople, state-owned enterprises and family offices, have resulted in the establishment of this fund,’’ says Sekunjalo chairperson Dr Iqbal Survé, head of the fund said. ‘‘Africa is ready to grow and is heading towards a $5 trillion economy. The Chinese have seen how China was able to grow from 1980 when China made up only 2 percent of the global gross domestic product (GDP) when compared to today, where China makes up 19 percent of the global GDP. This fund is a great boost for the development of Africa.’’
Contributors to the fund were not the Chinese government as has been the case, but several Chinese family offices and business people, who are expected to capitalize the fund with a billion dollars.
The fund, according to Surve, will serve as a bridge between African and Chinese businesses, thus strengthening, particularly, the co-operation between business sectors in China and Africa. In order words, the Belt and Road Africa Fund would be between African businesses and Chinese businesses.
2018: Locational distribution of Chinese investment in Africa
How African Businesses Can Be Part of The Fund
Once the Belt and Road Africa Business Council (which is the body that oversees the fund) headed by Surve is launched in September 2019, African businesses would start benefiting from the fund.
A targeted business should be in the:
infrastructure
technology
e-Commerce
artificial intelligence (AI)
the beneficiation of the resource industry sectors.
The Belt and Road Africa Business Council are targeting a membership of at least 1000 Chinese and African companies.
Dr. Survé said the fund will announce the format of these investments, at the launch in September.
The Belt and Road Initiative, as outlined by Chinese President Xi Jinping, is one of the most important developments of China and its contribution to the global economy.
2018: Sectoral distribution of Chinese investment in Africa
Launched in 2014, One Belt One Road, presented internationally as the Belt and Road Initiative, is China’s signature vision for reshaping its global engagements. It hopes to achieve the Communist Party of China’s (CPC’s) twin objectives of achieving national rejuvenation and the task of making China the largest and the most powerful country on earth.
The Belt and Road Initiative now spans three continents and touches 60 percent of the world’s population. The 65 or so countries that have so far signed on to the program (including approximately 20 from Africa) account for 30 percent of the world’s GDP and 75 percent of its energy reserves.
Some 50 Chinese state-owned companies are implementing 1,700 infrastructure projects around the world worth about $900 billion. One Belt One Road (OBOR) has been written into the state and ruling party constitutions as strategic priorities for China to attain Great Power status by the middle of the 21st century. All of China’s leaders have advanced this quest since the founding of the People’s Republic of China, but the pursuit has accelerated under President Xi Jinping.
The Silk Road Economic Belt establishes six land corridors connecting China’s interior to Central Asia and Europe. It includes railroads to Europe, oil and gas pipelines from the Caspian Sea to China, and a high-speed train network connecting Southeast Asia to China’s eastern seaboard.
The Maritime Silk Road establishes three “blue economic passages” knitted together through a chain of seaports from the South China Sea to Africa that also direct trade to and from China.
The end state of One Belt One Road is the building of a new global system of alternative economic, political, and security “interdependencies” with China at the center.
One Belt One Road also increases Beijing’s control of critical global supply chains and its ability to redirect the flow of international trade. Central to these efforts are moves to open new sea lines of communication and expand China’s strategic port access around the world. In 2017, Chinese state-owned companies announced plans to buy or secure majority stakes in nine overseas ports, all located in regions where China plans to develop new sea lanes. This is in addition to the 40 ports in Africa, Asia, and Europe in which Chinese state-owned firms hold stakes worth a combined $40 billion.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
China’s investment in Africa is reaching an all-time high. Businessmen from Ghana will now have reduced stress. This is because both countries have taken their trade relationship to a new level. Apart from Ghana’s Embassy office in Beijing, today, Ghana opened its Consulate General office in China ‘s commercial city of Guangzhou.
China’s City By GDP
A Look At The New Consulate Office
The Consulate General in Guangzhou is the first of its kind to be opened in Asia and the Far East, indicating the importance Ghana attaches to its relationship with China.
With the opening of the office, Ghana joins 65 other countries with the consulate in Guangzhou.
The Guangzhou Consulate-General of the Republic of Ghana, according to the Foreign Minister, has its Consular District covering the Guangdong, Fujian and Hainan Provinces and the Guangxi Zhuang Autonomous Region of China.
The new consulate office in Guangzhou in the Province of Guangdong has now been opened to the public and will provide consular services similar to the services provided by the Embassy office in Beijing.
“From today, the long journey these businessmen and women had to endure to go to Beijing for visas and other trade facilitation processes would be over since the Consulate-General is here to manage all these concerns,” the minister said.
“I believe this office is a good venue where business from Southern China and Ghanaian companies could meet. It is also to be used to promote a crucial agenda for foreign investments and international trade which face a fair amount of challenges,” Ghana’s Minister of Foreign Affairs and Regional Integration, Shirley Ayorkor Botchway said.
The Guangdong Province is the economic hub of China with a population of over 106 million.
Ms. Botchway explained that Ghana is opening the office to support Ghanaian and Chinese businesses, to provide them with expeditious consular services and facilitate trade and investment promotion between the two countries.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
The Chinese are never leaving Nigeria soon. Aside from the loans the Asian country is throwing into Nigeria, the President, China Chambers of Commerce in Nigeria, Mr Ye Shuijin has just said there are now more than 160 Chinese companies operating in Nigeria with more than 200, 000 Nigerian workers, and the quantum of investment in the Nigerian economy by these Chinese companies is now pegged at $20bn, representing about 5% of Nigeria’s current Gross Domestic Product (GDP).
This should constitute the 8th largest contributor to Nigeria’s GDP after Agriculture 21.65%; Trade 17.06%; Information & Communication 12.41%; Manufacturing 9.91%; Mining & Quarrying 9.67%; Oil 9.61%; Real Estate Services 5.63%.
Areas of Chinese Investment In Africa, 2018
More Chinese Loans, More Debt
The more investment, the more the loan. Nigerian Federal Government recently announced plans to borrow another loan from China of up to $1 billion. The credit facility which will be provided by the China-Exim Bankwill increase Nigeria’s escalating debt profile to N360 billion.
Nigerian Debt Management Office (DMO) record last year showed that over $73.2 billion were borrowed by the Nigerian government as at June 2018.
It doesn’t appear the loan is finishing soon. Mr. Ye Suijin said apart from national loans, Chinese companies in Nigeria are owed several sums of money for contracts already completed.
“The government still owe us for the Murtala Muhammed expressway project in Abuja which was completed in 2010. In 2015, we faced payment issues because of the recession, but what we did was to ensure the payment of our members of staff, not only CGC but all our chamber’s members. Many Chinese companies had to bring in money from China to pay their workers. The recession almost wiped off Chinese companies in Nigeria. At the end of 2016, the government commenced payment, but we still have many challenges,”he said.
The allegation is that the Chinese prisoners are often shipped into the country as expatriates while Nigerian Immigration Service (NIS) complete the remaining deal of allowing them free entry. The Chinese Chambers of Commerce President has since denied this report saying it was not possible to do such a thing, and that the Chinese embassy monitored the Chinese companies. However, there still remains some clouds about how many Chinese workers are really in Nigeria.
Chinese Ambassador to Nigeria, Zhou Pingjian, in a 2017 interview didn’t seem to know the exact number of Chinese in Nigeria.
‘‘We don’t have the registration system. According to our assessment, I think there are 40,000; some say there are 50,000 Chinese compatriots here. I got it from the news, even for the Spring Festival, that a lot of Chinese are going back home. And they stay in Guangzhou and other places in China, maybe some similar number of Nigerians are doing business in Chin,’’ he said.
As seen in Figure 4 above, Chinese investment has increased globally, and Africa is the third-largest destination for Chinese investment behind Asia and Europe
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Ethiopia has signed a deal with two Chinese companies –Tyson Group and Green Diamond– to invest a total of USD 2 billion for the purpose of processing Ethiopia’s bamboo and producing paper products for both local and export market.
How The Deal Is Going To Work
Tyson Group and Green Diamond would be processing bamboo in the Benishangul Gumz Region of Ethiopia, according to Abebe Abebayehu, Investment Commissioner of Ethiopia who helped seal the deal.
Once fully implemented, the investment of Tyson Group and Green Diamond is expected to create many job opportunities for residents of Benishangul Gumz, which has the lowest unemployment rate (of 6.3 percent) in the whole of Ethiopia.
Mr. Abebe, further revealed that the planned annual production capacity of the company will be one million tons of paper products.
Key Analysis of What This Deal Means For Ethiopia
With a GDP of $80.56, this deal is expected to add, at least 1.6% growth to Ethiopia’s economy, which is over 241 times less than that of the largest GDP in the world — US. As at 2017, the share of Ethiopia’s GDP contribution from agriculture was more than 34%.
Despite having estimated one million hectares of natural bamboo forest, (the largest in the African continent, mostly spread out in Ethiopia’s six regional states of Amhara, Benishangul-Gumaz, Gambella, Oromiya, Southern Nations Nationalities and Peoples’, and Tigrayis), only about three known companies are engaged in the development of products made out of bamboo — Bamboo Star Agro-forestry, ADAL Industry and African Bamboo.
Ethiopia spent about US$55.2 million on average, per year between 2005–2013 to import different processed wood products, including bamboo products. Expenses on the importation of this different processed wood products increased by 13% in each of these years.
China Is Strategically Positioning Itself in Africa
Apart from the bamboo processing deal, another Chinese company, CGOC, has agreed to open processing of cattle and sheep meat in Awash Febntale area of Ethiopia in a investment worth $215 million.
Another Chinese medical equipments manufacturing company has also agreed to come to Ethiopia, investing $75 million in a manufacturing plant in Kilinto Industrial Park in Addis Ababa.
Ethiopian TV also reported that another Chinese company has agreed to invest in printing industry in Ethiopia.
The largest part of the debt was for the construction of the $4bn Ethiopia-Djibouti railway. The Export-Import Bank of China backed the project with $3.3bn in loans.
A Chinese diplomat told the Financial Times in June 2018 that China is “way overextended” in Ethiopia. China’s main project insurer, China Export and Credit Insurance Corporation, known as Sinosure, also said it had lost more than $1bn on the Ethiopian-Djibouti railway.
Chinese firms also built and funded the $475m light railway in Addis Ababa, a $86m ring road and the East African country’s first six-lane highway.
In August 2018, Chinese paper Xinhua reported that Ethiopia had licensed 1,294 Chinese investments in the 2017/8 financial year out of a total of 5,217 investment projects. There are about 400 Chinese investment projects valued at more than $4bn already in full operation in Ethiopia. A good number of this are based within industrial parks and the real estate sector.
Prime Minister Abiy told parliament in February 2019 that his government has successfully renegotiated the repayment period for 60% of its external debt, which currently stands at over $26bn.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
