Ethiopian Review

China is amongst the most important contributors to the development of African infrastructure, namely its roads, railways, dams and bridges, hospitals and schools. The local population has benefited tremendously and the efficient transportation and communication network has led to better trade as well. China has not still stopped and its efforts to improve this segment of Africa continue. The latest in its endeavors is the deal with Ethiopia to build roads in this East African country.

The well known state owned infrastructure company, China Road and Bridge Corporation will construct the 80 km highway connecting the country’s capital, Addis Ababa to Nazareth, a city in the heart of the country. The project will be funded by a soft loan provided by China, and the $701 million loan agreement was signed by CRBC and the Ethiopian Roads Authority.

The final agreement for the project was signed on June 27th, after detailed discussions took place between Chinese Minister of construction Wang Guangtao, and the Ethiopian authorities. CRBC has already proved its expertise in the field of road construction since it is already completing 3 road projects in Addis Ababa that are likely to cost $ 40 million.

The project is yet another successful venture of the Chinese that can be attributed to their strategy of funding projects through soft loans in exchange for the contract being awarded to a Chinese company. This pre-empts the need for inviting bids and there is no threat of foreign competition for China. Formalities for such jobs are always completed during visits of high level delegations led by Chinese ministers, and the Africans are only too happy to oblige, since in the long run, it is their country that benefits from these loans, which the African countries may not have been in a position to take under tougher repayment regulations. Africa has also not forgotten the loans waived off by China to many of its countries. The economic downturn has adversely affected most African nations but the impact has been diluted by the Chinese government pitching in with orders for African goods, to make up for the loss of European and American markets. Both Europe and America are very badly affected by the global economic recession. It is this strategy of China that is largely responsible for the China Africa trade crossing the $ 100 billion mark last year.

- China Africa