Ethiopia: Addis Ababa is being transformed by new infrastructure works

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The Ethiopian capital is experiencing a building boom.

Addis Ababa, the capital city of Ethiopia

Above Addis Ababa’s concrete skyline, cranes tower high amid blasts from nearby drills and diggers. At the feet of buildings shrouded in bamboo scaffolding, excavators dig up dirt tracks, to be replaced by paved roads and a modern railway.

It is a scene common to most neighbourhoods in the Ethiopian capital, which has turned into a giant building zone and a city in transformation.

“It looks like a construction site when we compare from the previous time,” said Berhanu Kassa, manager of B.B. Construction in the Ethiopian capital.

“Especially in the past five years, it’s a really big change,” he added, speaking at the site of his latest project, a mixed-use commercial building on one of the city’s main thoroughfares where workers offload concrete slabs from a delivery truck.

Addis Ababa’s construction boom — funded both from private and public coffers — is being driven by the country’s recent rapid economic growth.

But the government hopes it will attract further investment and help industrialise the economy in order to reach middle income status by 2025. The public works projects, worth billions of dollars, include new roads, railways and massive power generation schemes across the country.

Meanwhile the majority of new buildings are owned by private investors, who by law must be Ethiopian citizens.

The development promises to boost Ethiopia’s economic growth, officially 9.7% in 2013 though the International Monetary Fund (IMF) pegs it at closer to seven percent.

“The basic engine blocks of economic transformation are the infrastructure,” said Zemedeneh Negatu, managing partner and Ernst & Young in Ethiopia.

“The Achilles heel of Africa is power, lack of power, lack of road networks, lack of the basic needs that you need to transform your economy.”

The majority of the new buildings are hotels, apartments and offices. Most are being built by Ethiopian-owned construction firms, though foreign-owned contractors from China or Turkey are cashing in too.

The government said the big push in the sector — which is bolstered by state-led incentives such as tax breaks and ready access to land — is driven by the need to create jobs for Ethiopia’s 91m people, about one in four of whom are unemployed.

” Officials say 4m jobs have been created in the last three years, including an increase in construction sector employment.

Berhanu said Ethiopia’s economic growth is fuelling the expansion of his business by creating a demand for new infrastructure, and he in turn was contributing to this by creating employment and supporting local industries.

“I hire a lot of workers here, I use a lot of local materials, I use a lot of subcontractors and because of that all we grow together and the country benefits,” he said.

Zemedeneh is confident it will continue to attract investors from abroad who witness the country’s growth for themselves and said he only expects the city’s transformation to continue.

“The bottom line is you will not recognise Addis if you come 10 years from now, it will be a completely, completely different city,” he said.

Find out more

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