The idea to build a pipeline for refined petrol looks to get revamped in the ten year development plan of the Ministry of Transport (MoT).
At least 925 kilometer of oil way might be constructed in the ten year period.
It is to be recalled that the idea to construct the pipeline stems almost a decade back, which up to now has not borne fruit. However, there was a promise of interest from companies in the US, Asia and others who sought to realize the pipeline not only between the ports in Djibouti to Ethiopia but also up to South Sudan oil fields.
Companies like Black Rhino and Toyota Corp have been mentioned as possible firms that were to connect the three countries through the oil pipeline for both crude and refined.
On the flip side the project that targets to connect Djibouti to Awash National depot, 226km east of Addis Ababa seems to be feasible.
About six years ago, the Ethiopian and Djibouti Governments had signed a framework agreement with the Black Rhino Group and Royal Bafokeng Holdings, owned by a US private equity group Blackstone for the construction of the multi-product fuel pipeline that stretches 550km in to Awash.
However, the project was not realized and the Ethiopian government at the time also seemed to be focusing on the development of the electrified railway that connects the ports in Djibouti to central Ethiopia to transport oil on fuel tanker wagons.
Despite the railway line commencing operation in 2018 so far oil has not been transported on it. Nonetheless, the project that connects Awash to that main line has commenced recently.
Through all this, MoT has now expressed its desire to see a petrol pipeline in the ten year development plan. According to sources, the government is highly eager to see the infrastructure in the first five years period from the ten years plan.
On the latest transport and logistics investment potentials summit that organized to invite interested local and global actors to invest on the stated sector, MoT has included the pipeline development as one of the 44 projects that shall be developed on public private partnership, joint venture or full investment.
While the document distributed on the summit did not give details, it expressed that the main objective of the project is to construct a pipeline as an alternative mode of transport for oil and gas cargos.
The ministry added that pipeline transport, which is less costly, is used to transport petrol and relevant liquid products. It is important to install a petroleum carrying pipeline from the sea port to inland destinations that will particularly lower the cost of procuring and operating fuel transporting vehicles.
“Pipeline transport is highly profitable and environmentally friendly having sustainable economic and environmental contribution. Constructing and operating pipeline transport infrastructure and services requires feasibility study and preparation of a standard,” it highlighted, adding, “Therefore, taking its potential contribution to the overall economy into account, pipeline transport is used as a basis for policy formulation.”
On its ten year development plan document, MoT said that it has a plan to see at least 925km pipeline by 2030 to transport refined petrol. Meanwhile, details were not revealed. On the other hand, the document disbursed at the summit stated on its description for pipeline project that there are potential cross border pipeline projects connecting Ethiopia with the neighbors. “Pipeline with connection with Sudan, Kenya, South Sudan, Eritrea and Djibouti is envisaged. The exact project location will be determined based in a feasibility study of the specific project,” it says, “For the most part; the pipelined will be underground to minimize disruption for in use and wildlife.”
The demand of Ethiopian oil is aligned with the economic growth for instance since the global pandemic occurrence about a year ago the demand has slightly declined but on average it is growing by 10 percent every year.
During the first quarter of 2020/21, the volume of petroleum products imported amounted to 878.7 thousand metric tons, which was 13 percent lower than last year owing to slow down in importation of all types of petroleum products.
A mega oil way under works
The West and China
History books well recorded that in the 1800s China simultaneously experiences major internal strains and Western imperialist pressure, backed by military might which China cannot match. China’s position in the world and self-image is reversed in a mere 100-year period (c.a. 1840-1940) from leading civilization to subjected and torn country.
Japan was not the first modern and mechanized power to menace the freedom of China. It was the rapid encroachment of the Western powers after the British defeated China in the Opium War in 1842 which caused China to fall suddenly from the proud position of the advanced and enlightened Cathay of earlier centuries to the weak and half-conquered China of the past hundred years.
Mark Edward Lewis in his book entitled “The Early Chinese Empires” explained that as a result of the great voyages which had opened a way across the Atlantic, a way around the Cape of Good Hope, and a way around Cape Horn, Western traders and missionaries had begun to reach the coast of China by sea even before the end of the seventeenth century. Portuguese, Spanish, and Dutch merchants came in search of commodities that had a high value of rarity and luxury on the European market. Toward the end of the eighteenth century the English became the roost numerous and active among the foreigners along the coast of China, and their trade was practically monopolized by the British Fast India Company.
According to Mark Edward Lewis, East India ships carne to China primarily for cargoes of silk, tea, and porcelain. The first flowered wallpaper used in Europe also cane from China. In return the Chinese bought such luxury goods as clocks and watches. American clipper drips brought furs, silver dollars from Mexico, and ginseng root which the Chinese valued as medicine.
But on the whole the Chinese, who considered their civilization infinitely superior to that of the West, had much more interest in selling to the Westerners than in buying from them, and therefore all trade was carried on according to terms dictated by China. When the Chinese emperor replied to George III’s request for more trade by refusing to open any more ports and making it plain that trade at Canton could be continued only at his pleasure, the reply was accepted only because there was nothing George III could do about it.
John Fairbank and Merle Goldman in their book entitled “China: A New History” stated that the force which reversed the relationship between China and the West was the Industrial Revolution in Europe. The Industrial Revolution had a double effect. First, the use of machinery and the development of modern science improved the weapons of war to such an extent that England had an overwhelming superiority in arms.
Second, British merchants had far more manufactured goods up sell than could be sold in England and so they had no patience with any restrictions put on trade by either their own or the Chinese government. They first smashed the monopoly of the East India Company and then demanded of China that she open her ports to foreign trade and accept for all merchants the principle of free opportunity to trade in any commodities.
John Fairbank and Merle Goldman further noted that Britain chiefly wanted a market in China for her textiles, and all ships sailing from England had to carry a quota of cotton cloth, even though the market for it in China was as yet so undeveloped that much of it had to lie sold at a loss. However, the British commodity most unwelcome to the Chinese government was opium from India.
The new British drive for free trade came to a crisis when a zealous Chinese official seized and burned a large stock of British-owned opium. This started the Opium War which ended in the Treaty of Nanking in 1842. This treaty, and one which followed establishing the principle that any privilege won by any foreign country would be equally enjoyed by all other foreign countries, laid the foundation for a series of wars and diplomatic dealings which completely changed the international status of China.
Rana Mitter in his book entitled “Modern China: A Very Short Introduction” indicated that defeated in the Opium War, China was forced to recognize the Western nations as equals and to open her markets to Western merchants. From then on other nations more and more refused to treat the Chinese as equals, and China became shackled by what are known as the “unequal treaties.” Whenever the Chinese were defeated, they not only suffered the normal consequences of defeat but had to pay all indemnity to cover the expenses of whatever country defeated them.
Partly in order to ensure the collection of these indemnities a customs service was created, supervised by representatives of foreign powers, to collect dues on foreign trade. Duties were collected at the low rate of 5 per cent, which opened the way to the penetration of China by foreign commodities and at the same time prevented the Chinese from developing industries of their own under the protection of a tariff framed in their national interest.
Rana Mitter further noted that in a number of cities international settlements, or foreign concessions, were established over which foreign powers had complete control, and a Chinese having a civil suit against a foreigner had to have it judged under foreign law. These cities were known as “treaty ports,” and the system by which Americans and other foreigners were exempt from Chinese law was called “extraterritoriality.”
Thus China, instead of being conquered and made a colony by one nation, became virtually the colony of all nations which had merchant ships to send to China and gunboats to accompany them. More treaties were signed as the nineteenth century progressed, all increasing foreign control. Then in 1894 came the calamitous war with Japan.
Its consequences were even worse than a defeat by Britain or France might have been, for it meant that Japan now claimed a place in the ring of despoilers closing in on China-and Japan was in closer striking distance of China than any other naval power. This intensified the competition for strategic bases and economic spheres of influence in China to the point where China was threatened with actual dismemberment.
This crisis was deferred by the policy of the Open Door, proposed by American Secretary of State Hay in 1899 in a series of notes to the treaty powers. The Open Door did not propose to stop imperialistic demands on China. It simply registered a claim that, whatever any other country took in China, it must leave an Open Door for American trade and enterprise.
Even though it was an expression of American self-interest, the practical effect of this arrangement was to halt the process of cutting China up into colonial possessions. There developed instead a uniform procedure of presenting joint international demands to the Chinese government. This also restrained Japan from acquiring exclusive rights, privileges, and territorial control.
To be continued….
The electoral race: ETHZEMA
Elections in their true nature keep a democratic country functioning, as they give the people the right to select their own government. Choosing the right leadership is integral to the success and growth of any given country. With the 6th Ethiopian general elections fast approaching, Capital has organized a series of interviews with aspiring political parties, with topics that encompass their incoming policy plans with regards to important matters that are required for the progress of Ethiopia.
To this end, Capital drew links with Ethiopian Citizens for Social Justice (ETHZEMA), through their National Policy formulation coordinator, Amanyehun Redda. The following were the party’s subsequent plans with respect to the key stone areas that require dire attention for a better Ethiopia. Excerpts;
Capital: What kind of policy plan does ETHZEMA have towards developing education in Ethiopia?
Amanyehun: Each and every citizen must find food shelter and health services easily and fulfilling basic needs of citizens. Finding food shelter health service should not be a luxury. With regards to our party policy plan, we give special attention to education. If a country has no quality education at all the system in the country will automatically fail. Quality education is also integral to social justice. On our end we will work to increase education and schools in both urban and rural areas and facilitate education for all. Quality education should not only be for the wealthy society but world class education must be accessible by all.
Wealthy people of course can easily invest in education (private education) meanwhile as government must try to facilitate for quality education for the poor or less fortunate society. A good example is that of Rwanda where its public schools are known to provide quality education which makes them preferable than the private schools.
Apart from building quality education, we will also work on making the teaching profession the most respectable in the industry whilst also developing the ability and capability of teachers. Teachers’ salary will be looked into and up scaled in order to meet living standards whilst also encouraging them to stay in their profession. We say this because in recent assessments it has been noted that 80 percent of the teachers were unhappy with their profession, and as ETHZEMA we want to change that narrative.
With regards to higher education institutions, it is clear that such arenas are being used as political recruitment arenas as opposed to being a source of knowledge and skill for citizens. We plan to advance the academic sector with excellence and more so without any political interference whatsoever. We plan to support education systems with facilities and technology required to enable students to become highly employable with good incomes. Moreover, as ETHZEMA we plan to increase job creation by promoting entrepreneurship facilitating loans and tax incentive, and so on.
All in all, our agenda with regards to education is to build an education system which is combined with indigenous knowledge in order to build a world class education for all.
Capital: How does ETHZEMA planning to tackle job creation?
Amanyehun: ETHZEMA has 5 economic policies with the first agenda being fulfilling the basic needs of citizens including food, housing and basic necessities required for safe living. The second is job creation, equal income distribution and provision of a decent life for every citizen.
When you looked into the making of job creation, you should look into the sector that makes the country to thrive. As a party we are focused on the manufacturing and agriculture sector since it is the biggest avenue for employment. Giving attention to such areas directly provides job opportunities for the youth.
Furthermore, service sectors such as tourism provide huge areas for employment, however peace and stability is crucial for tourism. To this end, we are committed in building peace within the country in order to provide a playground where tourism thrives both for the country’s economy and job creation for the youth.
The other worry on employment is that employers every now and then criticize the lack of professionals and professionalism with regards to completing required tasks. We plan to resolve this by providing a solid foundational base by providing quality and action base education and training for our citizens. This will both help to create new job opportunities and advance our employees who are a backbone of the economy. With regards to harnessing a skill set, students when we are elected to office will have national duties within their respective lines of education so as to equip them with the require with the real life experience in conjunction to the academic background.
With regards to creating professionals man power, we will build business incubation centers. For those who have scalable and competitive business ideas, the government will give them support to change their ideas to reality. Investors will inject capital; all commercial banks will have an investment arm to support entrepreneurs. When we become government we will set up an entrepreneur’s wing of government which is a Startup fund for youths which will be established in support of international organizations.
Capital: What kind of policy framework do you have in store to support and improve the agriculture sector?
Amanyehun: As ETHZEMA, we acknowledge that the number of population is growing over time and it is most important to us to full fill the basic needs of citizens which have direct links with the agriculture sector. A look into the agriculture sector shows that the sector to a significant degree is led by professionals in which according to our assessment lack fundamental knowledge on the sector. Therefore, as part of policy we will seek to revamp the sector with the require professionalism and direction with regards to leadership.
We also recognize the sectors contribution to the national GDP, thus we have frameworks in place that will make us as a country to be food sovereign and secure whilst striving to create jobs within the sector. Create more space for employment.
Based on our plan, within 3 years we plan to be nationally food independent and within 5 years to be independent on family base level by increasing house hold income for citizens.
By supporting and increasing the national fund on the sector we will increase its contribution on export and job creation stabilization to the market system,
Currently, 5 percent of the national budget goes to the agricultural sector which provides 36 percent contribution to the total GDP and 70 percent to export sector and which also accounts to 80 percent of employment of the country. We plan to improve on the allocation percentages and we will plan out mandatory policies that will make banks to support the sector. Moreover, insurance for farmers will be a top priority for us and we plan to ease the taxing system of the sector.
Capital: What kind of policy does ETHZEMA have regarding decreasing inflation and building sustainable living standards?
Amanyehun: When we talk about inflation we have to ask what the base is. Annually the total number of the population increases by 2.95 million people, which increases demand of food, shelter and other basic needs. Thus in retrospect this will result to the increase in number of consumers, so in a place where supply is not growing inflation will be created.
Thus we can note that the number of population should be move in equivalent proportions to that of the economy. To this end it is clear that inflation could be tackled by improving the economy. In the cycle of improving the economy we will make it our crucial priority to create more job opportunities and empower businesses.
Similarly, we plan to increase supply and productivity of both the agriculture and the manufacturing sector and facilitate modern and accessible market linkage since lack of modern market linkage is one of the challenges in the inflation threshold. Therefore, various measures will be put in place to connect both the producers and the consumer directly.
Capital: How will ETHZEMA tackle the foreign currency crunch that has proven to be a challenge for the country?
Amanyehun: Regarding the foreign currency crunch, which also plays a part in inflation; we plan to stabilize the crunch by having more exports than imports. We have strategies in place that will allow us to be an import dependent economy, by increasing productivity, as we seek to improve inflation as highlighted above.
Currently, the economic policy being taken by the government with respect to taking loans and support from the international actors is killing the ability of birr, we will not kneel for this, we will decrease amount of imports.
The other thing we will do is increase the diaspora saving as one means of increasing forex. Ethiopia is the second country in Africa in terms having large number of Diasporas, following Nigeria, whilst Egypt is the third place. However, Ethiopia gets only 7 billion from remittance, and Egypt gets 28 billion dollar in remittance annually. This is a result of antipathy between the government and the diaspora, so ETHZEMA will build a democratic and accepted government which will be p[lay an integral role in the foreign currency crunch.
We will also be keen in promoting other avenues that generate forex such as tourism. To this end, we will ensure that our country remains peaceful as we continue to promote or great touristic sites within the country to the world.
Capital: What is the general economic policy of ETHZEMA?
Amanyehun: Our economic policy covers five main thematic areas that aim to improve our country. The first is fulfilling basic needs of citizens, and improving basic supplies and necessities. The second one is job creation and we envision creating space for all that is ripe to the working world. The third one is creating sustainable and modern market systems, free for competition and free from burden of inflation. The fourth one is improving the export sector, and the last one is promoting the private sectors.
