Chinese to build dam on the River Nile

Ethiopia, in a bid to accelerate the pace of construction of the Grand Ethiopian Renaissance Dam, has signed agreements with two Chinese companies to finish the work.

Background

The Grand Ethiopian Renaissance Dam (GERD) formerly known as the Millennium Dam, is a gravity dam that has been under construction on the Blue Nile River in Ethiopia since 2011. It is located in the Benishangul-Gumuz region, 15 kilometres from the border of Sudan. The dam when operational would make Ethiopia, Africa’s largest power exporter whilst transforming it to a middle-income nation by 2025.

At 6.45 gigawatts, the dam will be the largest in Africa, making it the 7^th largest in the world. The dam will have three spillways which, in the event of a flood, is designed to discharge the runoff into the Blue Nile before reaching Sudanese territory.

Last year, Ethiopia’s Prime Minister Abiy Ahmed cancelled the contract of state-run military conglomerate, Metals and Engineering Corporation (METEC), citing bad quality in the manufacture of turbines. He said that not a single turbine was properly functional for a period longer than seven years.

The project has also been a source of constant friction with Egypt over energy and water interests respectively. On completion, the dam could take from five to fifteen years to fill up causing Egypt to fear reduced water supply to its fields and reservoirs.

Analysis

The Ethiopian Electric Power (EEP) on Tuesday signed a contract worth $40 million with China Ghezouba Group Co., Ltd (CGGC). They have been tasked with handling the pre-commissioning activities of the dam.

‘‘CGGC is expected to work aggressively in partnership with other companies in order to complete the project as per schedule’‘, EEP’s CEO Abrham Belay said. The project is scheduled to finish construction in 2020 and will be fully operational by 2022.

Voith Hydro Shanghai was also signed on for $113 million required to complete the construction of the generating station and spillways of GERD.

The project that was supposed to be completed in a period of five years, has seen numerous delays with the previous contractor METEC. The delays along with the mismanagement of funds were the reason for the cancellation causing EEP to employ the Chinese.

The Chinese government is providing a significant amount of international finance towards the hydroelectric infrastructure. Chinese corporations and financial institutions are involved in mega infrastructure projects not only in Ethiopia but also across Africa. The multiple projects that the Chinese handle in Africa points toward huge investments.

The 2012 Annual Report on Overseas Chinese Study said that they were 1.1 million Chinese immigrants living in Africa. The figures now possibly reaching 1.5 million or more. The Chinese immigrants are mostly involved in commerce while some of them have jobs in infrastructure projects.

Africa is now at the forefront of the industrial development due to its vast reserve of natural resources, with many of the world’s economic powers building relations with Africa’s resource-rich nations. Chinese trade in Africa has surpassed that of the USA in 2009, making them the largest trading partner.

Counterpoint

It seems that Chinese economic and social practices coupled with the sheer numbers of immigrants operating in Africa may end up destroying much of the trade relationship that has been built thus far. The formers attempt to blanket Africa has drawn the ire of many African leaders and common citizens. Reports of unpalatable Chinese behaviour has now become the norm rather than an exception.

Africa has taken a staggering amount of debts from China. Although the processing of loans in China is much quicker than Western countries, it usually comes higher interest rates as well as material and labour demands. The sheer scale of amount and rates have many politicians and people worried.

Africa has bought into the Chinese principle of not meddling with a country’s social and political affairs, unlike Western countries, while overlooking the terms attached to the Chinese loans that could force Africa in some sort of a debt trap. China’s takeover of the debt-ridden port Hambantota in Sri Lanka has not been forgotten by the Africans.

Assessment

Our assessment is that the Chinese have been successful in establishing a strong footprint in the African continent. With the increase in trade, the Chinese could attempt to recreate the historical Silk Road in this present age. Although the alliance between China and Africa can lead to significant infrastructural development in the African continent, the change in the behaviour over the years points towards neocolonialism with the Chinese using loans and projects to influence the dark continent.

India Watch

The rising influence of China in Africa has undercut Indian influence in the continent which has existed for over 60 years. The more recent turn of events are proving to be detrimental to China,  perhaps providing a platform for India to reengage with Africa.  India hopes to increase its trade with Africa to $150 billion by the year 2023. Trade between India & Africa stood at US$ 62.66 billion (2017-2018) making India the fourth largest trading partner of Africa.