Day: August 24, 2022

South African workers are holding protests nationwide against the rising cost of living, as inflation hits its highest rate of since 2009.

Thousands of workers took to the streets in all nine provinces to demand, among other things, a basic income grant, a better minimum wage, and a cap on fuel prices and interest rates.

They also want the ongoing problems at the state-owned supplier of electricity, Eskom, to be resolved so that businesses stop losing work due to power cuts.

Azar Jammine, chief economist at consultancy firm Econometrix, said the July inflation rate of 7.8 percent was expected.

“The main causes obviously have been the steep increase in fuel prices at the beginning of July and the continuing rise in food prices as a result of the Russian invasion of Ukraine and the halting of food exports from the latter until recently, which pushed up commodity prices globally,” Jammine said.

The $88 basic income grant demanded by of the Congress of South African Trade Unions (CPSATU) and the South African Federation of Trade Unions (SAFTU) is unrealistic, Jammine added.

“It’s a path to total catastrophe in a very short space of time if we were to succumb to the kind of basic income grant that they’re looking for, which would cost R400-billion extra per year,” Jammine said. “Let us rather just live with the kind of social grants that we already have, which are more magnanimous and widespread than is the case with most other countries.”

Economist Lebohang Pheko, a senior research fellow at the Trade Collective research group, disagreed.

“My question is, can we afford not to?” Pheko said. “I think the notion of a basic income which is able to deal with things like hunger at household level and at childhood level which has other impacts like stunting, cognitive functioning at a very crucial developmental age is quite important.”

But can the protests force the government’s hand?

“I do think that what these kinds of protests do is they are a challenge to the state, they are a reminder, a poll cast from the very poor and from the very angry of what is happening on the ground,” Pheko said. “And what do you do when you receive something in the mail? You do well to read it.”

Jammine, meanwhile, is optimistic prices will improve soon.

“Given the fact that fuel prices came down sharply in August and are likely to fall further in September and given that Ukraine has now started shipping food back abroad, exporting to Middle East and other countries, food prices could also start coming down,” Jammine said.

Ironically, COSATU, which initially called for the protests, is an alliance partner with the ruling African National Congress party, which has been in power since 1994.

Source: Voice of America

Ethio-Djibouti Railway (EDR) disclosed that its cargo transport service enabled Ethiopia to save a 2.4 billion Birr logistics expenditure during the concluded fiscal year.

Ethio-Djibouti Railway Share Company CEO Abdi Zenebe told ENA that the train cargo and passengers transportation services being provided by the company has been increasing.

During the concluded Ethiopia fiscal year the company has transported over 1.7 million tons of import-export cargoes on 71,000 containers, of which 14,000 are export.

Pointing out that 98 percent of the Ethiopian coffee has been transported to the international market through the Ethio-Djibouti train, the CEO said that the freight transport provided by the company has enabled Ethiopia to avoid 2.4 billion birr logistics cost in the past year.

“Its role is important and is expanding to different sectors. We, for instance, transported 98 percent of Ethiopia’s coffee export. It also indirectly reduced 2.4 billion birr logistics cost of the country this past year alone.”

The CEO noted that Ethio-Djibouti Railway Share Company is currently operating less than 35 percent of its capacity and it has plan and capacity to transport new cargo items soon, including fuel import.

“We are using less than 35 percent of the capacity; its operating capacity is expected to increase when we start transporting fuel soon. We signed deals to transport cars and we should also use the cement transportation in Ethiopia. These are part of our next 100 days tasks.”

Ethio-Djibouti Railway Share Company is playing a major role in strengthening people-to-people relations transporting over 155,000 passengers in the past year.

The electrified train transport is estimated to have avoided 61,000 ton of Carbon emission in the past year.

In terms of job creation, it has created jobs for 2,891 people, of whom 2,431 Ethiopians and 460 of them are Djibouti citizens.

Ethio-Djibouti Railway is a share company of Djiboutian and Ethiopian companies and the Ethio-Djibouti train transport started operation in 2018.

Source: Ethiopia News agency

Berbera port is the main overseas trade gateway of the breakaway Republic of Somaliland. The port city is located on the Gulf of Aden – one of the globally most frequented seaways connecting the Indian Ocean and the Mediterranean.

Only a few years ago, Berbera port was a dilapidated runway, originally built by the British empire, and then modernised first by the Soviet Union and later the US. The port is the lifeline of Somaliland, which imports most of what it needs, from food to construction material, cars and furniture. Its main export is livestock to the Arabian Peninsula.

This picture changed considerably after the Emirates-based Dubai Ports World (DP World), a leading global port operator and logistics giant, took over the port management in 2017. It expanded the quay by 400m, established a new container terminal, designed a free zone, and started to manage the port’s operations.

Lined up alongside the quay are the latest crane models, which have become operational since June 2022. DP World employees practise operating the cranes every day. The hope is that the port will attract 500,000 TEU (unit of cargo capacity) per year, about one third of the capacity of neighbouring Doraleh port in Djibouti. This would allow Somaliland to become a logistical hub on the Gulf of Aden competing with other ports in the region such as Djibouti, Mogadishu and Mombasa.

The cranes are crucial for the speedy handling of cargo required in a modern port. The staff training, however, takes place in a port that is yet to get busy. So far, container ships arrive only infrequently.

We have been studying the Horn of Africa’s emerging port infrastructures. The boost that the revamped Berbera port needs is for Ethiopia to come to the party. Ethiopia has been landlocked since Eritrea gained independence in 1993, and relies on the port of Djibouti – 95% of its trade goes through the port.

In 2017, a concession agreement was signed between DP World, Ethiopia, and the government of Somaliland to rebuild and modernise the port of Berbera. The 30-year concession involves: a commercial port, a free zone, a corridor from Berbera to Ethiopia’s borders, and an airport in Berbera.

The concession allowed Somaliland’s government to retain 30% of the shares in the port, 19% for Ethiopia, and 51% for DP World. But in June 2022, Somaliland announced that Ethiopia had failed to acquire its 19% share of Berbera port. Ethiopia failed to meet the conditions.

Somalilanders remain optimistic, nonetheless. The infrastructure project means a great deal to the country. It promises to foster its ambition to receive international recognition, achieve economic development, and fulfil hopes for improved living conditions of its citizens.

The context

DP World’s expansion in the Red Sea and the Gulf of Aden is taking place in the context of turbulent political transformations in the Horn of Africa.

Ethiopia’s Prime Minister Abiy Ahmed came to power in 2018 on the back of popular protests and awakened hopes of a democratic transition in the country. He ended the two-decades-long rivalry between Ethiopia and Eritrea, which brought him the Nobel Peace Prize. With a population of more than 100 million and one of the fastest growing economies in Africa, Ethiopia’s transition brought prospects of developments across the Horn of Africa.

DP World’s will to expand its operations in the region coincided with conflicts between DP World and Djibouti. In 2006, DP World had signed a 30-year concession to design, build, and operate the Doraleh container terminal in Djibouti. Growing tensions led the government of Djibouti to cancel DP World’s concession in 2018.

DP World shifted its interest from the port in Djibouti to Berbera in Somaliland and Bosaso in Somalia (Puntland). In 2017, a concession agreement was signed between DP World, Ethiopia, and the government of Somaliland to rebuild and modernise the port of Berbera. The projects covered by the 30-year concession included a commercial port, a free zone, a corridor from Berbera to Ethiopia’s borders, and an airport.

These projects are steadily progressing. Berbera port has already completed its first expansion phase. The DP World-owned free zone is under construction. Large parts of the Berbera corridor, a highway linking Berbera to Toqwajale at the Ethiopian-Somaliland border; and from there to Jigjiga and Addis in Ethiopia are finalised. According to Somaliland officials, the airport is also completed, but its original designation as a military outlet for the UAE remains ambiguous.

What next?

The infrastructure project means a great deal to Somaliland, promising to put the country on the path to international recognition and achieve economic development. However, these aspirations will not materialise without Ethiopia on board, which has not met the conditions under which it was to get a 19% share of the Berbera port. In addition it has not yet opened its markets to Somaliland traders.

Somalilanders remain optimistic, nonetheless, expecting that especially trade from eastern parts of Ethiopia will redirected to Somaliland. But this plan is not without risks. The pandemic and war in Tigray has slowed down Ethiopia’s economic growth, and the stability of the country is on the brink.

While DP World’s strategy to control ports along the Red Sea and the Gulf of Aden is already transforming the political geography of the Horn of Africa, the success of its strategy largely hinges upon Ethiopia, and so do the hopes and aspirations of Ethiopia’s coastal neighbours.

Everybody, so it seems, is currently waiting for Ethiopia.

Source: The Conversation Media Group Ltd