Boomtown – Can Ethiopia Become a Model for African Growth?
By Florence Beaugé
Once it was USA for Africa, now Ethiopia’s expats are returning to be part of a striving new middle class
ADDIS ABABA – It is a strange-looking capital. A gigantic open-air construction site, located at an altitude of 2,500 meters above sea level. Buildings, avenues, traffic circle: the whole city appears to be sprouting up from the ground, its landscape strewn with construction sites, wooden scaffoldings and trenches where women are working alongside men.
“Building Ethiopia” is the government’s motto, even if it is the Chinese leading the operations — and nevermind if right now, it is making life even harder for locals.
The country had long been a symbol of dire poverty and famine, particularly in 1984 and 1985, as “We Are The World” and other initiatives helped spread awareness about hunger.
But now, Ethiopia has one of the highest growth rates of the continent, between 8 and 10% of its annual gross domestic product. Although one Ethiopian in three still lives below the poverty line – with less than 60 cents a day – a bona fide middle class is emerging, mostly in cities.
Still, this cannot be compared to a Western conception of middle class, with its widely varying incomes and social trajectories. Instead, here the focus revolves around a common spirit: the fierce determination to fight poverty.
Mekonnen Tilahun is a 32-year-old accountant. He has never seen the sea, or walked on the sands of a beach. Only through his sister, who went to Djibouti once, does he know “how beautiful it is!”
But he lacks nothing in ambition, and changes employers every two years to move on to something better. In the past eight years, Tilahun’s income has multiplied five-fold. He still lives at home with his mother in order to save money.
If only he did not have to face his country’s steep inflation – 33% in 2011, 20% in 2012, 12% today – Mekonnen Tilahun would consider himself lucky. Maybe one day, if he manages to save enough money, he will get married. He will then have “two kids, no more!” he insists. In the meantime, he is working hard. His only luxury is to go to the gym three nights a week. His younger sister dreams about emigrating to the United States. Not him. “There is everything to be done here,” he says.
Hanna, one of his colleagues, came back to Ethiopia for the same reason, once she had completed her studies in France in 2012. “It struck me that in Europe, I would never be as important as I am here,” she says matter-of-factly. The sexism of her male compatriots, the strong social conservatism and the weight of religion irritate her, but she feels the country “is starting to open up to the world.”
It took Lily and Mimi Kassahoun a long time before they decided to return to their home country. The two sisters eventually came back to Addis Ababa at the end of 2011, heavy-hearted from leaving Canada, a newfound homeland where they had spent more than 20 years. “Our parents kept telling us: ‘Why don’t you come back to Ethiopia? Business is good here…’” Lily recalls.
So they decided to try their luck. Three months ago, all smiles and energy, Lily opened her restaurant “Oh Canada” in the Bole quarter. Clients are already lining up everyday for lunch and dinner. “I focused on three things that are usually lacking in Ethiopia: clean toilets, quality of service and a good atmosphere!” says Lily, a tall woman who sports dreadlocks.
Bureaucracy, unreliable workers, staff training, products running out overnight, rising prices — there have been many setbacks that put the restaurant owner’s nerves to the test. “I thought it would take me six months to open. It actually took me 18! You have to learn to be patient here, but I do not regret my choice,” she says.
Bernard Coulais, director general of the BGI-Castel group (specialized in beer and wine) in Addis Ababa, is the perfect barometer of the Ethiopian middle class. “I want to bring beer to every corner of Ethiopia!” Coulais says.
In Angola, a largely urbanized country, the average annual consumption of beer is 50 liters per inhabitant. In Kenya, it amounts to 12 liters. In Ethiopia, 80% rural, it falls to 4 liters. As a businessman who knows Africa well, Coulais sees great potential for expansion in Ethiopia. “Everything is changing so fast. Our sales are expanding as quickly as the road and electricity networks. We can’t even meet the demand.”
For now, in Ethiopia’s capital, poverty is still more striking than wealth. In many places, the city of nearly four million is still dominated by the destitute. In this majoritarily Christian nation, churches are surrounded by panhandlers, cripples, homeless children and women, who often can be seen begging with an undernourished baby in their arms.
Samuel crosses himself every time he drives past a church. This young taxi driver is part of what can be called the Ethiopian “lower middle-class.” Like so many others, he lives in one of these hovels with corrugated iron rooftops that are multiplying in the city, and where two or three generations of the same family live together.
Samuel has a 14-year-old daughter and owns a private car, which is worth a fortune here, due to very high taxes. A network of 80 people – friends and family – has contributed to buy him what is now the singular tool for his daily labors. Every month, the young man pays them back the equivalent of $6.50. His main concern is to have enough money to send his daughter to private school. “Public school,” he says, “is for poor people.”
Nevertheless, Ethiopia has now entered a forward march towards modernity. Demographically, it is the second largest country in Africa, with 85 million inhabitants. Coming from its single-party system of Maoist tendency that does not care too much for human rights, Ethiopia’s ambition is to become Africa’s post-Communist “tiger,” like Vietnam did in Asia.
School attendance, nearing 100% today, is one of the great successes of Ethiopia. It owes much toMeles Zenawi, the former Prime Minister, who defeated the dictatorial regime in 1991 and ruled the country with an iron hand until his death in August 2012. At lunchtime and in the evening, flocks of schoolchildren in uniforms, carrying their backpacks, come out of public schools under the watchful eye of the former Prime Minister, whose portrait can still be seen on Addis Ababa’s main avenues.
In order to reach “Fountain of Knowledge School,” located outside of the city center, you need to take a horse-drawn carriage. For two or three birrs, the local currency, you can thus avoid twisting your ankles. At the end of this rocky, potholed road, you can find one of the private schools that the “upper middle-class” values so much: 1,400 pupils, clean, well-disciplined and in good health.
There are 30 children in each class, compared to between 60 and 100 in public schools. The particularity of this school is that it teaches French. “Of course here we have children from families of civil servants, lawyers, doctors, but also from underprivileged backgrounds,” says Sylvia Feo, the school director. “In Ethiopia, parents make huge sacrifices so that their children can have access to quality education.”
With her husband who works as an engineer, she belongs – like Lily and Mimi Kassahoun – to that young generation who came back recently. The total number of Ethiopian expatriates scattered around the world is estimated to be between two and three million, mostly in North America. But that number may start to shrink, as more of them are now coming back, attracted by the opportunities of such rapid growth.
A new Nazareth
Some 100 kilometers from the capital, Teferi-Bel Amakeletch’s hotel appears at a bend in the road, like a castle from the tales of the Arabian Nights. After spending 25 years abroad, this agricultural engineer also decided to come back home. She settled in Nazareth, a quickly growing city of 200,000. You have to go through the city to reach Djibouti, which has, through its port, the only access to the Ethiopian sea. Nazareth has always been a resort town, even during Emperor Haile Selassie’s time. Thermal waters and a temperate climate, with warmer temperatures and less rain than in Addis Ababa, have made the city’s reputation. Nazareth is “only” 1,600 meters high.
When she bought this cheap piece of land and began to build her dream hotel – a mix of Mediterranean architecture and Arabo-Indian style – Amakeletch had no idea of the difficulties that lay ahead. One day, cement is running out because of the construction frenzy; the next, imports are blocked because of currency fluctuations.
But this dynamic 40-something is forging ahead. Her shop-hotel, the first in the country, should open at the beginning of the summer. It is a bet on Nazareth, and Ethiopia as a whole. “There are many obstacles, but not enough to make me give up,” she says. “Ethiopia is the land of opportunity, like the United States was 200 years ago. Or better yet, call it the new Far East!”
Source: World Crunch