China Railway Engineering Corporation have just completed a USD 3.4 billion rail project which links Addis Ababa to the strategically located East African port of Djibouti.
The route will help landlocked Ethiopia export goods to the wider world and represents another stage in China’s efforts to develop East African rail infrastructure, which in turn is part of its grand Belt and Road plan to connect Eurasia and beyond with large scale infrastructure developments.
The rail link is a boon for Ethiopia which is experiencing high growth as it implements a government backed plan to modernise the economy. Exports in the form of textiles, coffee and footware are a vital part of this plan as they earn hard currency and create jobs for a growing population.
Chinese state banks have heavily backed Ethiopia in financial terms, (China’s EXIM Bank provided most of the funds for the rail project) not many other countries would provide this much credit to a poor African country. As well as financing and building commercial projects the Chinese government in Ethiopia the government gifted a new African Union HQ in Addis Ababa.
The Chinese government are also significant political allies backing Ethiopia’s authoritarian regime which has been criticised for the country’s lack of democratic institutions as well as a poor human rights record, so far a booming economy (for some) have allowed it to retain legitimacy, but China’s backing gives the government a shield against calls for greater democracy and openness from Africans and the West.
For Djibouti the new rail link will help cement its growing importance as a port, the country already hosts French and US military bases and now the Chinese have started work on their first overseas military base there which could turn out to be a significant historical milestone if it does set out to become a world power.