Ethiopia is welcoming the investors Kenya has frustrated

Ethiopia is the world’s fastest growing economy.

If you doubt that, watch CNN’s recent One Square Meter Report which highlighted this second-most populous nation in Africa whose economy has consistently grown by double digits over the past 10 years. 

Several industrial parks have been built and more are coming up. There are four operational industrial parks, three of which are privately owned. 

They include the Eastern Industrial Zone at Dukem, the Lebu Industrial Zone which is owned by Huajian Group, and Modjo Industrial Zone owned by George Shoe. A government-owned industrial park, Bole Lemi Industrial Zone is also coming up. 

Ethiopians are taking advantage of Africa’s population dividend to target investors moving out of China, and providing a soft landing for them in Ethiopia. 

Their flagship Ethiopia Industrial Park, which would put our Konza to shame, is coming up, connected to Addis with the ultra-modern Modjo-Hawassa Expressway.

Construction of the 700-acre Hawassa Industrial Park started last year. It will accommodate 35 factory sheds and 19 exhibition halls, food courts, dormitories, and other required facilities in the first phase. The country aims to become Africa’s hub for manufacturing.

AFRICA'S AGOA LEADER

Ethiopia has identified textile, agro-processing, leather, light electronic manufacturing and other labour intensive industries to absorb the massive number of youths who are unemployed. 

The Chinese have financed and built most of these industrial parks. Whenever they encounter African indiscipline, they instill the discipline themselves through rather harsh measures.

Consequently, Ethiopia is now Africa’s leading exporter of boots to US under the African Growth Opportunity Act (AGOA).

It is not just industrial parks they are building.  At the Africa Economic Commission for Africa experts meeting, Arkkebe Oqubay, Minister and Special Advisor to the Prime Minister, explained the source of their success. 

“We realised that of the 1 million university students, more than 80 per cent were in arts. We headed to Germany and sought cooperation in higher learning.  Today more than 80 per cent of the students are into science and technology,” he said. “We linked our learning institutions to industry.  We still have 400 German educationists transplanting their system into Ethiopia.”

In addition to more than 40 public universities, Ethiopia has also created and equipped several technical institutions.

The import of all this is that Ethiopia is not just offering highly educated cheap labour but also fast improving power supply, transport and other infrastructure.

While we are still celebrating the Thika Superhighway, they were building expressways into the country’s interior.  Ethiopia also built the first light rail system in East Africa and is now leveraging the technology transfer to build a rail network throughout the country and possibly into neighbouring countries.

In contrast, we have left it to the Chinese to complete our Standard Gauge Railway and stay on to provide maintenance services.

MINISTER 'ABRUPTLY TRAVELLED'

They are also likely to be invited to build future SGR extensions. Nobody is seriously concerned about Chinese technology transfer in Kenya.

The indiscipline and the lack of patriotism of our civil engineering firms, coupled with government inability or unwillingness to properly supervise them, means that the Chinese will be building public works in Kenya long after Ethiopians become really good at it. 

Who knows, in future the Ethiopians might even replace the Chinese as builders of Kenyan public works!

Investors in Ethiopia are happy that the government is taking the initiative and delivering on promises.  They are flocking in, and the many hotel brands that have mushroomed all over Addis Ababa are not disappointed. 

During the reception at the Radisson Blue, I meet a group of European investors and this is what they told me. Initially, their desire was to set up in Kenya and grow their business to other parts of Africa.

They travelled to Nairobi.  Through a local contact, they tried to set up an appointment with the Minister but after several days in Nairobi, the appointment never materialised.  

They went back to Europe, saying they would try to get a firm appointment before coming back to Kenya. Eventually, the appointment was set up and they travelled to Kenya. 

On reaching the Ministry, they were told that the Minister would not be in. He had abruptly travelled, without sending an apology to his guests.

A Director at the Ministry met with them and since he could not commit in anything, they achieved nothing.

But they had one last hope. That evening, they were to meet with a county Governor for dinner.  The Governor showed up late with his wife, giving excuses that they had had a long drive and the traffic was unbearable. 

SPEED OF ACTION

As they talked, the county Governor’s wife interrupted to tell the investors that she was setting up a children’s home and she would need Sh10 million donation to set off the project. 

By this time they had made up their mind that Kenya was not going to be the place to invest. They politely paid for the dinner and left without mentioning the reason why they wanted to talk to the Governor.

To their surprise, the Governor did not ask what the purpose of their meeting was. With their Kenyan link, they decided to give Ethiopia a try.

One phone call and an Ethiopian official on a Tuesday morning secured an appointment the next day, Wednesday. They travelled to Ethiopia and were met at the Airport.

To their amazement, they were driven to the prestigious Sheraton Hotel by a retinue of vehicles led by a police car with a siren.  In the evening, the Foreign Ministry had arranged a dinner with two other Ministers. 

During the dinner, they were asked what kind of investment they were interested in. After explaining what they wanted, they were told that the following morning they would meet with the Governor of Oromia.

After breakfast on Thursday, they were driven to Oromia. The Governor was waiting for them. They were promptly shown three sites where they could put up the investment.

By 1pm, they had signed up a memorandum of understanding. Slightly more than three months later, they are through with the initial infrastructure on the ground. 

With this speed of action, it does not surprise me why the Ethiopians are re-writing the story of economic transformation.

Kenyans may argue that they are a better democracy than Ethiopia, but that won’t stop a bloody revolution by dissatisfied, unemployed, hopeless youth who discover their leaders have grabbed everything including the entire Export Processing Zones.

FALLING THROUGH OUR FINGERS

Let us not just simplify corruption to mean stolen money.  We must expand the definition of corruption to also include impeding progress.

Corruption must be understood by all its synonyms which, as per the Merrian-Webster Dictionary include: “alteration, falsification, doctoring, manipulation, manipulating, fudging, adulteration, debasement, degradation, abuse, subversion, misrepresentation, misapplication, breakdown, decay, decomposition, festering, putrefaction, putrescence, rot, spoilage.”

Fellow Kenyans, this is not the Ethiopia of 30 years where gun-toting youths met you at Bole International Airport. This is a country of patriots who know exactly where they want to take their country – and are succeeding.

Ethiopian leaders are not shooting themselves in the foot. They are thinking about their poor people, not just about lining their pockets. They appear to understand that the fate of all Ethiopians is inextricably intertwined – the fate of leaders and the led.

Sadly, this does not appear to be the case in Kenya. Until we put our national interests ahead of our own selfishness, we may never get near where Ethiopia has reached.

Our preoccupation with land is our undoing. The pride that Kenya is the largest economy in the region is fading fast. It is not the size of the economy that matters but rather how many of our people are escaping poverty and are benefitting from this size.

We must create employment for our youth and avoid the nasty consequences of our inaction, which will likely follow if we do not act to avert the creeping discontent.

Far too many opportunities are falling through our fingers. These opportunities come along only but once.  We may never see them again.

ROOM FOR RISK-TAKING

We must foster good leadership devoid of threats, leverage our democracy to consult with the people, act within reasonable time and mind the national interest.

Above all, we must live by the rule of law. Selective justice, mob justice and failure to take personal responsibility for our actions, which happens to be the trademark of our culture, undermine the rule of law. 

We must create room for risk taking that is necessary to propel our country to greater heights.  Many Kenyans with or without leadership would die for their country but there must be political will to drive Kenya as a team.

Ethiopian leadership, through a combination of credibility born out of honest, patriotic, strategic leadership and high-handedness against dissenters, has galvanised the country with one specific objective – Prosperity.

The question we must ask ourselves, all of us, whether we are in government or the opposition, is: do ordinary Kenyans see us as honest people who are working for and minding their welfare or do they see as us all as competing, directionless monsters?

Do we really love Kenya? Do we love fellow Kenyans? Do our actions and utterances show this love for all Kenyans, regardless of ethnic origin? 

John F. Kennedy said, “Economic growth without social progress lets the great majority of people remain in poverty, while a privileged few reap the benefits of rising abundance.”

As we take stock of economic growth, let us also ensure there is social progress. The measure of success in this modern day is how inclusive our economic growth is.

The writer is an associate professor at the University of Nairobi’s Business School.Twitter: @bantigito