Chinese Transportation Projects in Ethiopia

The Diplomat published on 26 January 2019 an analysis titled "Revisiting Chinese Transportation Projects in Ethiopia" by Istvan Tarrosy, Hungarian Academy of Sciences, and Zoltan Voros, University of Pecs.

The authors revisited the Chinese financed and built light rail system in Addis Ababa and the railway between Addis Ababa and Djibouti. They questioned how Ethiopia can make either project profitable and asked what happens if Ethiopia fails to repay the loans provided by China. Neither the light railway nor the Addis Ababa-Djibouti railway will be able to generate the desired income, although the railway may help increase trade as the freight trains come on line. China has already extended the debt repayment period from 10 to 30 years, probably because Ethiopia failed to start paying back the loans. The authors concluded that the debt is a worrisome issue for Ethiopia.

Update on South Sudan

Chatham House in London published on 16 October 2012 a discussion between two experts titled "South Sudan: Current Trends, Regional Impacts and Donor Relations." The participants are Matthew LeRiche, London School of Economics, and Edward Thomas, Rift Valley Institute in Nairobi, Kenya.

Click here to access the transcript.

2012 IMF Economic Outlook for Sub-Saharan Africa

The International Monetary Fund (IMF) economic outlook for Sub-Saharan Africa published in 2012 is now available. It offered the following conclusions:

--Despite difficult external conditions, output in Sub-Saharan Africa grew by 5 percent in 2011. Most countries shared in this expansion. Exceptions included South Africa, slowed by weakness in major European trading partners, and countries in West Africa affected by drought in the Sahel and civil conflict in Cote d'Ivoire.

--For 2012, the baseline projection is for much of the region's output momentum to be maintained. New resource production in several countries and recovery in West Africa will help nudge output growth up to 5.5 percent.

--The outlook is subject to substantial downside risks because of global uncertainties. Renewed financial stresses in the Euro area would reduce the pace of growth in Sub-Saharan Africa in both 2012 and 2013.

--Most Sub-Saharan African banking systems have proved resilient to recent episodes of global financial stress.

--The rapid spread of pan-African banking groups in the last few years may in some cases have outpaced supervisory capacity.

--Natural resources are an important contributor to merchandise exports in nearly half of the 45 countries in Sub-Saharan Africa. However, the share of resource exports that accrue to national budgets varies widely across countries, with oil producers being the most successful in terms of revenue extraction.

--Countries that obtain considerable fiscal revenue from natural resources have experienced significantly higher volatility in exports, revenue, and nonresource GDP growth than other Sub-Saharan African economies.

Click here to access the entire report.

IMF Program Note on Djibouti

The International Monetary Fund (IMF) issued a short program update on Djibouti on 13 April 2012. The IMF said the macroeconomic environment for Djibouti remained mixed in 2011. Real GDP growth rose from 3.5 percent in 2010 to 4.5 percent in 2011, thanks to the recovery of transshipment activity and transit trade with Ethiopia. The current account deficit deteriorated from 5.8 percent of GDP in 2010 to 12.6 percent of GDP in 2011. Djibouti's economic outlook for 2012 is relatively favorable. Real GDP is expected to grow at a rate of about 4.8 percent, buoyed by port activity, trade with Ethiopia, construction and foreign direct investment.

Click here to read the report.