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  • Dealing Sugar !!!

    By Mikias Sebsibe

    Responding to an anonymous tip via the toll-free 8478, the investigation team at the Trade Competition and Consumer Protection Authority sprang into action earlier this month.

    The informant relayed a tip that a truck carrying 180 quintals of sugar has been smuggled in to Addis Ababa from Dire Dawa. 

    Subsequently, the general manager and board members of the company (name withheld as the case is still under investigation), were brought in for questioning.

    At a time when a constraint in supply of sugar is gripping the nation, such trade practices become more frequent. The practice ranges from price hikes, hoarding and transporting the commodity outside the authorized distribution route to the impossible task of making “honey” out of sugar, which is later sold as genuine honey.

    Sugar is one of the essential commodities whose price and distribution is closely regulated by the government. Although businesses are often singled out as the prime culprits and held accountable for the unlawful trade practice, their profit maximization effort is often in response to a problem from the supply line. The recent shortage of sugar is also a result of a miscalculation by the Ethiopian Sugar Corporation (ESC) which resulted in the delay of import of sugar into the country.

    “We expected Tendaho Sugar Factory to start production last year,” Zemedkun Tekle, corporate communication director at ESC, told The Reporter. Tendaho, whose project launch predates ESC’s establishment, was expected to enter production during the first half of the 2013/14 budget year.

    “When we made the projection [at the end of the 2012/13 budget year], the project was over 99 percent complete. We did not expect the 0.0 something would cause this much delay in production,”  Zemedkun added.

    The factory, whose construction began in 2007, was enabled by a USD 400 million line of credit from the EX-IM Bank of India with India’s Overseas Infrastructure Alliance (OIA), which is largely blamed for the delay, awarded to undertake the project in a turnkey contract.

    With Tendaho in mind, ESC boldly announced that Ethiopia is edging closer to becoming sugar self-sufficient and claimed that the country will seize to import sugar as of the 2013/14 budget year.

    However, delays at Tendaho coupled with ceasing of production at Fincha Sugar Factory, the largest sugar producing factory at present with daily output of over 10,000 tcd (tons of cane per day), resulted in an unexpected shortage in the supply of sugar causing panic in the market.

    Currently, Ethiopia produces sugar from three sugar factories – Fincha, Wonji and Metehara. But these factories stop operations and conduct maintenance during the rainy season particularly from July to September with imports filling the gap in supply.

    However, Fincha Sugar Factory ceased production two months prior the timetable due to untimely rain with mud making it difficult for vehicles to transport sugarcane from the plantation to the crushing plant.

    “There was no sugar from Fincha - a factory which was producing nine thousand tons of sugar per day at the time - until October this year,” Zemedkun told The Reporter. The other two factories also resumed production as of mid-October.

    Had it gone according to plan, ESC would have filled the gap in supply during the rainy season from the Tendaho Sugar Factory. As the factory is located in the arid Assayita town of the Afar Regional State, productions can be carried out all year round.

    The constraint in supply led to a depletion of the country’s sugar stock, which at one point was as low as 80,000 quintals, according to a city government official. This stock was not even enough to meet the monthly quota of Addis Ababa which stands at 102,000 quintals.

    “Addis Ababa was accorded a special attention and the stockpile was almost entirely supplied to the market in the capital,” Gemechis Melaku, head of the Addis Ababa Trade and Industrial Development Bureau, told The Reporter.

    Whereas industries and regions were forced to remain without supply of sugar for some time, the constraint in the capital led to all sorts of unlawful trade practices including smuggling sugar out of the city.

    In a frantic attempt to adjust the supply of sugar, the country, initially, ordered the import of one 100 thousand tons of sugar which arrived in July this year.

    “The market was starved, so the import was quickly sucked up,” Zemedkun said. A further 60 thousand tons of sugar arrived in the country in September and November. But the market is yet to stabilize with Trade Competition and Consumer Protection Authority still grabbling with cases of unlawful trade practice in the retail of sugar.  

    “It is the hangover effect of the shortage. It should stabilize soon,” Zemedkun forecasts.

    Distribution gap

    Before the infamous move of introducing “price cap” by the government, in June 2010, the Ministry of Trade devised a scheme to regulate the price and distribution of sugar and other essential commodities such as wheat and edible oil. The scheme also introduced a quota system on the basis of population size, which is continuously revised.

    Based on the designated quota, Addis Ababa Trade and Industrial Development Bureau can receive up to 102,000 quintals of sugar every month while industries get 124,000 quintals.

    Regional states including the City Council of Dire Dawa are allocated a total of 402,153 quintals every 45 days and the purchase and distribution is handled by the Merchandise Wholesale and Import Trade Enterprise (MEWIT). Oromia Special Zones get some 10,700 quintals every month and a half.

    “The sugar we import is highly subsidized by the Ethiopian Sugar Corporation. That eats up the investment capital we would otherwise have used on sugar development projects,” Taitu Ali, acting director-general of ESC’s Marketing Division, told The Reporter justifying quota system and the need to closely regulate the distribution and price of the commodity.

    The purchase is done by submitting a request letter and effecting payment to ESC’s Marketing Division, whose headquarters is located off Chad Street on Philips Building around Mexico.

    The Addis Ababa Trade and Industrial Development Bureau said it has distributed a little over 259,000 quintals in the first quarter of the budget year. Latest figures from the MoT also reveal that the bureau effected purchase of some 77,000 and 101,800 quintals of sugar for the month of October and November. 

    The distribution channel to the level of end-users in regions is largely carried out by regional trade bureaus. In Addis Ababa, the trade bureau relies on consumer cooperatives set up in all 116 weredas and Et-fruit. The cooperatives directly sale to end-users and retailers in a 20/80 ratio with 80 percent of the sugar supplied to retailers while the remaining amount sold directly to consumers. VAT-registered service providers get their sugar from Et-Fruit. 

    However, the distribution channel is not without its problems. According to Yosef Getachew, investigation and prosecution director at Trade Competition and Consumer Protection Authority, large number of unlawful trade cases indicates malpractice by consumer cooperatives.

    “A number of cases show conspiracy between traders and cooperatives,” Yosef told The Reporter.

    The Addis Ababa Trade and Industrial Development Bureau, which oversees the activities of the cooperatives, largely blame traders for gaps in distribution. However, it also admits loose controlling and supervision mechanisms as another contributing factor.

    “However, we cannot be at every retail shop. We expect the consumer to be a watchdog but that has not been to our satisfaction,” Gemechis, head of the city trade bureau, said.

    In a bid to motivate informants, a directive entitles tipsters a fee amounting to 30 percent of the property which is a subject of the unlawful trade practice. 

    Prolonged procedures to purchase the sugar and the 20/80 ratio which favors retailers are considered as contributing factors for the distribution gaps which may need a revision, according to Zemedkun.

    GTP vs reality

    Ethiopia’s ambitious goal set under the Growth and Transformation Plan as one of major sugar producing countries in the world by 2015 now appears unrealistic. The government had planned to raise the annual production of sugar to 2.25 million tons by the end of the GTP period (June 2015). Besides satisfying the domestic demand, some 1.24 million tons were expected to be exported generating 661.7 million dollars annually.

    However, ESC’s projection for the current budget year is more conservative. The corporation projects the annual production to reach 1.2 million tons. The sugar production can expect a boost when Tendaho Sugar Factory, which will crush 13,000 tcd at full capacity, and Kessem Sugar Factory, with an initial capacity of 6,000 tcd, begin operation this year. According to ESC, both factories have entered testing phase.

    Prime Minister Hailemariam Dessalegn, while presenting his government’s quarterly report to parliament, said the country will be able to finish seven of the ten sugar projects currently underway. Besides Tendaho and Kessem, the projects include Tendaho II (13,000 tcd), Arjo Dediessa (8,000 tcd), Kuraz I (12,000 tcd) and two factories at Tana Beles , with a combined capacity of 24,000 tcd. 

    “We will soon evaluate where exactly the progress of each of these projects are to determine whether we can achieve them all,” Zemedkun told The Reporter. 

    With a boost in domestic production expected this year, ESC’s plan for the budget year earmarked 600,000 tons of sugar for export. If not the export, ESC is confident that the 60,000 tons of sugar imported during the current budget year will be the last.

    Meanwhile, without adequate supply of sugar, investigators and prosecutors at the Trade Competition and Consumer Protection Authority, tasked with a broader responsibility of ensuring market transparency, continue to be inundated with cases where unlawful trade involving sugar as little as 50 kg being reported to the authority.

    This budget year alone, nearly 500 quintals of sugar has been confiscated with traders punished with fines and imprisonments.

    Source:The Reporter

    Read more »

  • Ethiopian to order narrow-body aircraft 674916dd

    Ethiopia League is better organised – Ayoola ‘Kanu’ Moses

    The fastest growing airline in Africa, Ethiopian Airlines, is planning to order single aisle (narrow-body aircraft) that it will deploy on regional routes.

    Reliable sources told The Reporter that the management of Ethiopian is looking at Airbus A320 NEO and Boeing B737 MAX aircraft. The sources said the management of Ethiopian recently issued a request for the proposal. Both Airbus and Boeing have submitted their initial responses. 

    The arch rivals - Airbus and Boeing - are competing to sell their narrow- body aircraft to Ethiopian. The European consortium, Airbus, is proposing its A320 NEO narrow-body jetliner. 

    The Airbus A320 NEO family is a family of aircraft under development by Airbus replacing the predecessor A320 family. The letters “NEO” stand for New Engine Option and are the last step of modernization program A320 Enhanced which was started in 2006. In addition to the NEO, the modernization program also included such improvements in aerodynamic refinements, large curved winglets (sharklets), weight savings, a new cabin with larger luggage spaces and an improved air purification system. 

    These improvements in combination are predicted to result in 15 percent less fuel consumption, 8 percent lower operating costs, less noise production, and a reduction of nitrogen oxide emissions. The price of A320 NEO is about 100 million dollars (74 million euros). The A320 NEO was launched in December 2010. Airbus has firm orders for the A320 NEO family totaling 2523 as of November 2013. The A320 NEO first flight is slated for 2014 autumn. 

    Boeing's 737 MAX is a re-engined version of the narrow-body plane designed to take on Airbus' A320 NEO. 

    The 737 MAX incorporates the best of future engine technologies for unprecedented levels of efficiency, reliability and passenger appeal. 

    MAX Efficiency includes 8 percent lower operating costs than its main competitors. Boeing claims that the new 737 MAX Advanced Technology winglet provides an increase in fuel efficiency of more than 1.5 percent. 

    “MAX Reliability means that, building on the 99.7 percent airline dispatch reliability of the Next-Generation 737, an airline with a fleet of 100 737 MAXs will avoid delaying over 65,000 passengers compared to using its competitor,” Boeing stated in its official website.

    According to Boeing, MAX Passenger Appeal is found in the new Boeing Sky Interior, which dramatically elevates the passenger experience, creating preference and loyalty.

    For better environmental performance, the superior fuel efficiency of the 737 MAX reduces carbon emissions. Boeing says the noise footprint of the 737 MAX is improved for airlines and airport communities, at 40 percent smaller than today's single-aisle airplanes.

    The price of MAX ranges from 80 to 110 million dollars. Boeing received 1763 orders for MAX since its launch in 2011.  The first flight of B737 Max is scheduled for 2017. 

    Boeing has for decades dominated Ethiopian fleet especially on the long haul. Ethiopian operates B787, B777, B767, 757, 737, MD11 and Bombardier Q400 aircraft. Airbus, which has been trying to break Boeing’s monopoly on Ethiopian for years, succeeded in 2009 when Ethiopian ordered 12 Airbus A350 XWB jetliners. Back then, the management of Ethiopian decided to use a mixed fleet.

    Again this year the management will make a decision on having a mixed fleet or keep on having only Boeing fleet. An aviation expert The Reporter talked to said that there are a number of issues an airline considers when it places new aircraft orders. 

    “The performance of the aircraft, the price of the aircraft, the cost that you will incur to introduce the new aircraft into the existing fleet are the most important issues that you consider when you place new aircraft orders. You base your decision on these issues,” the expert said. “If they (Ethiopian officials) decide having a mixed fleet they will order the A320 NEO. If they decide having only Boeing fleet, they will order B737 MAX,” he added.

    In line with Ethiopian’s 15 year development roadmap, Vision 2025, the carrier plans to double its fleet to 112 planes and carry 18 million passengers over 92 routes by 2025. 

    Source:The reporter

    Read more »

  • Obama to hold frank discussions on press freedom, political opposition

    Obama to hold frank discussions on press freedom, political opposition

    President of the United States of America, Barack Obama will hold bilateral meetings with President Mulatu Teshome (PhD) and Prime Minister Hailemariam Desalegn where he will raise issues concerning press freedom, transparency, space for civil society, and the political opposition.

    Ambassador Susan Rice, Obama's National Security Advisor, said in a press briefing, which was held in Washington on Wednesday, that this trip is an opportunity for continuing frank discussions and to urge progress in these areas.

    Similarly, the President will also stress the importance of strong, democratic institutions, respect for the rule of law, fighting corruption, and support for open and accountable governance, and respect for human rights.

    According to Rice, facilitating peace in South Sudan, countering Al-Shabaab in Somalia, and advancing Ethiopia’s growth and development, as well as promoting regional stability will also be core areas of discussion.

    “The upcoming travel will go a long distance, as well, to advance our trade and investment relationship with Africa, as well as our continued work to help African governments strengthen their business environment and their capacity for regional and global trade,” Rice said.

    “We’re intensifying our efforts to create an environment that enables greater trade and investment through encouraging regional integration, legal reforms that allow for the free flow of goods and services, greater transparency, and anti-corruption measures,” she said adding that the upcoming engagements will advance US trade and investment relationship with Africa, as well as strengthening business environments and capacity for regional and global trade.

    While in Ethiopia, the President  will hold a bilateral meeting with the chairwoman of the African Union Commission, Nkosazana Dlamini-Zuma (PhD) and speak to the whole continent from the African Union headquarters.

    Read more »

  • “You are what you eat”

    On the road to Yohannes Kitfo, a five-minute walk from the famous juice house, Shake Off – famous for its strawberry and mixed juices – are the offices of Edmark International. Inside are different pictures of the before and after photos of people who lost weight.

    The motto is ‘Lose to Win’ and there are photos of people who lost weight following the “miracles of Edmark products.”  Following the four steps of what is dubbed as a healthy program, Yonas Mengesha managed to lose 28 kg in three months. The man who was 106 kg is now 78 kg.

    The colorful pictures, which are posted on the walls attracts the people who go to the office. The other one is Elizabeth Geremew. She lost 25 kg within three months from 92 kg to 67 kg. In the last picture she is seen holding her big pants to show how much weight she lost.

    With physical appearance being the main aim of the program, a person who takes part in the program is required to take the company’s supplements in order to get to the desired goal. There is a four-step program known as the P4 Slimming Program. The first step is Detoxify and the supplement is Shake Off Phyto Fiber. The second step is Burn Fat and the supplement is MRT Complex. Step Three is Balancing and the supplement is known as Splina Liquid Chlorophyll and the final step is Rejuvenate and the supplement is Edmark Café Ginseng Coffee and Red Yeast Coffee. 

    Even though nutritional supplements are recently introduced in Ethiopia, in different countries they are available in the form of tablets, capsules or sachets and many countries categorize them under food products. These are concentrated preparations of nutrients such as vitamins, minerals, dietary fiber or nutritional substances.

    Currently, in Addis Ababa there are more than 27 companies that got approval from the Food, Medicine and Healthcare Administration and Control Authority to import different nutritional (food) supplements and most of them are strongly attached to network marketing business.

    Some of the companies include the American Forever Living Products, the Chinese Tiens, the Malaysian DXN and Edmark International.

    The supplements they serve is different from company to company such as preventing body aging, weight management and other products. 

    These supplements are famous and many also recommend them for losing weight, to get relief from concentration of uric acid, aging, disk slippery, stimulating the immune system and also improving mental and physical performances. Their promotional materials also advertise how they are a path to a happy life, ensure one’s health and attain financial freedom.

    There are also testimonials behind those products and one is by Yimegnushal Diladirgachew, 45. She strongly believes that by using Edmark's products she has managed to change her life totally. “I feel like I am a new person,” Yimegunshal says.

    In her bag she has a cup which serves as a thermos and also a pack of coffee and red yeast coffee. Without anyone asking her, she shares what changed her life and how she lost a couple of weights and how she sleeps well at night. Apart from the four-step program to lose weight, she says that she used CoCollagen which helps in human hormone growth. According to their promotional material, it provides elasticity and gives skin its firmness as well as the ability to retain moisture.

    She went to hospital because of nerve problem and she was told there is a scarcity of synovial fluid. The doctor recommended an injection which will give her relief for some time.

    She started taking CoCollagen but she did not understand the full effect and after some time going up the stairs was easy. For her the rejuvenation is real and says she changed her lifestyle when she started eating more fruits, vegetables and cereals. She paid 4,000 birr for the whole package. She also became a member of the company and also its network marketing.

    It is not only Edmark that claims to have the remedy for weight problems, the aging process and skin beauty. One of the producers of Aloe Vera Forever Living Products also has customers who make similar testimonies.

    It is not only that. They says that there are supplements that increase the libido or function as sexual stimulators.

    After reading their promotional material some would say that it is fully organic and 100 percent free from side effects. Still others would ask, “Are supplements really necessary?” and some adverse effects are mentioned in different researches. According to Dawit Mengistu (MD), founder and manager of Bole Wellness Center and health and wellness coach of forever living products, nutritional supplements are important since people do not consume nutrients in sufficient quantities. “If one person has a balanced diet, supplements are not necessary,” he says.

    According to him, people’s intake of vital nutrients is decreasing from time to time, especially vitamins that are extracted from fruits and vegetables. Apart from that ,the amount of toxic intake like smoking cigarettes and drinking alcohol is increasing. These, according to him, make supplements more necessary. Even the World Health Organization recommends some of the supplements during famine, especially for those who do not have a balanced diet.

    In using supplements the foundation for him is to identify which ones are natural and which are synthetic mentioning that natural supplements are preferable.

    Even when using natural supplements there are adverse effects, which are mentioned in different researches such as over-consumption. This might result in restoring the toxic substances and killing of important bacteria in the body. In addition, liver failure, blindness and kidney problems are also mentioned. According to a study published by BMC Medicine last year, there are supplements that contain ingredients not listed on the label.

    When looking into the Ethiopian context, one question that is raised is the medical background of people. For instance, cases of allergic reaction to ingredients such as fish oil or other substances should be considered. Mostly the supplements are associated with network marketing and anyone can buy it. Dawit says that public awareness is important on what supplements are and how to use them. He also believes that the side-effects usually happen with overdose. “People should be careful when using supplements,” Dawit says.

    For him the most important things people should consider when buying supplements is the company’s credibility and profile, checking whether there are side-effects and even contacting the respective companies. He says that there are more than 200 companies which produce Aloe Vera. So he recommends that the users consult professionals.

    However, there are a considerable number of Ethiopians who do not read labels of medicine and that is one of the problematic areas for professionals like Dawit.

    Another question that is raised with regard to supplements is whether they have Genetically Modified Organisms (GMOs).

    According to Tewodros Girma, director of Food Registration and Licensing Directorate at the Food, Medicine and Healthcare Administration and Control Authority ,the companies openly admit if the supplements are made of GMOs. The authority also has the mandate to ask for the details of the ingredients and if the products have GMOs then that will be banned. The companies that import these supplements have to pass through different registration and screening processes to ensure the safety and quality of food supplements.

    According to the food supplement directive of 2014, the usage of supplements with nutritional value may be recommended by health professionals.

    These companies should have good manufacturing practice, internationally accepted certification and other relevant approvals. Apart from that, qualitative and quantitative compositions data, including names of all ingredients, packaging procedure, packaging materials, method of preparation, sample product completed batch manufacturing record, final packaging and labeling procedures are some of the mentioned criteria in the directive. 

    According to Tewodros, even though they fulfill these criteria and are found suspicious, it will be tested in the authority’s laboratory. Since this is an untapped market, according to Tewodros, there are many requests to import food supplements but he says that they are looking at the requests cautiously. 

    In the past, some companies had products which claimed to treat diseases or could be used as preventive medication which, according to Tewodros, is illegal. Because of that, many companies were closed for a couple of months. The 60-year-old Abera Lemma also bought the supplement Chitosan because he was told it will be a relief for uric acid. He left all the medicines and took that for some time, which did not bring about any result.

    The office has different monitoring procedures but still Tewodros says that supplements such as detoxification or those used for weight loss do not have full approval. According to him, the same is true for using the substances for network marketing. Many of the companies, including Tiens agents such as Aster Worku, claim that since the substances are organic they sell the products like “candies”. 

    According to Tewodros, this is not right and they should consult doctors before buying these supplements. He also says that saying these products are organic is wrong since most of the supplements had passed through factories.

    Source:The Reporter Ethiopia

    27 December 2014 Written by  Tibebeselassie Tigabu
    Read more »

  • Africa rising - but who benefits?

    Africa rising - but who benefits?

    Woman in a branch of Zara in South AfricaGlitzy shopping centres are being built across Africa

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    Many of the fastest growing economies in the world are in Africa.

    The continent's future appears to be bright, but do growth figures reflect an improving quality of life?

    It is a story that is being told with increasing frequency.

    Against the backdrop of a prolonged slump that has brought financial paralysis to much of the Western world, experts have identified Africa as having many of the world's fastest-growing economies.

    Some point to the fact that high growth rates should be viewed in context, since African economies - mostly relatively small - are expanding from a low base, making improvements seem disproportionately impressive.

    But, while the US and UK struggle to emerge from prolonged recessions and European nations such as Greece and Spain experience mass unemployment, the International Monetary Fund and the World Bank say countries such as Ghana, Ethiopia, Rwanda and Mozambique are experiencing a boom.

    Chart showing how Africa's economic growth compares favourably with other regions

    Many have ascribed this trend to what they believe are burgeoning middle classes in many nations.

    The African Development Bank's (AfDB) chief economist Mthuli Ncube has described this trajectory as "unstoppable."

    For renowned economist Jeffrey Sachs, the mobile phone has become a symbol of this apparent new dawn. He has described it, and the access to the internet that it can bring, as the single most transformative tool for development.

    It's good to talk
    South African man with a tablet computerMobile communications have been at the forefront of Africa's boom

    More than 70% of adults in Nigeria - the continent's most highly populated country - own a handset.

    And in Kenya the widespread use of mobile phone payment software has opened up opportunities for small and medium-sized businesses by providing ease and flexibility where transactions and banking are concerned.

    Farmers, for example, can receive the latest market prices with a single text message or gather information about sales and stock.

    World's 10 fastest-growing economies

    Annual average GDP growth 2012, %



    Sierra Leone












    Ivory Coast



    Burkina Faso



    Papua New Guinea






    Lao PDR





    The ubiquity of mobile phones in Africa has also created a new breed of entrepreneur that can be found in cities as far apart as Dakar, Dar es Salaam and Durban - the vendor selling air time.

    Salim Evoudidi, one such salesman in the Democratic Republic of Congo, seems to typify the type of aspirational worker said to be driving the emerging middle class.

    He arrives at his regular spot on a busy street in the capital, Kinshasa, beside other air time vendors, at around 0700 and works for nearly 12 hours every day.

    "I have a family, I have a wife and four children. I've been able to send three of them to school and rent a house for us," he says.

    "I've been doing this job since 2005 - so, for seven years. There is an evolution. There are more and more customers - Congolese people spend a lot on telecommunications."

    Mr Evoudidi's ambition is to start a business, and he hopes the money he makes in his current venture will generate enough money to provide a launch pad.

    The notion of "Africa rising" - the term that journalists have coined when referring to the idea of economic development on the continent - has, for some, become hackneyed, with bloggers now calling it a meme.

    The Economist, which famously labelled Africa the "Hopeless Continent" in 2000, inverted that idea more than a decade later for special coverage looking at what it now considers to be the hopeful continent.

    But, beneath the surface of what appears to be a good news story in a part of the world previously portrayed in the Western media as being ravaged by war and famine, questions remain.

    What constitutes middle class status? And does that term really point to a heightened quality of life?

    Middle class myth?

    George Alagiah sees how Ethiopia has become a hub for making shoes

    The UN defines a middle class person as someone living on $10-$100 a day.

    However, the AfDB uses the measure of $2-$20 a day, which it says is an appropriate calculation, given the cost of living on the continent.

    Middle class is defined in relation to the average income, and that average is lower than in the West.

    Abdul Jalil, an English teacher at a school in Maputo, Mozambique's capital city, says the money he makes from his job, and extra tuition for adults, places him firmly in the middle class bracket.

    "It depends how big your family is. I'm married with two children - so it's not a big family.


    There is no doubt that the proportion of wealthy Africans has increased.

    The theory is that as there are more people in Africa with disposable incomes and that foreign companies view the continent as the last great market in the world in which to invest and sell their goods.

    Unlike Europe, which has an ageing population and a diminishing work force, Africa has an increasing population, an expanding work force and a flourishing middle class with money to spend.

    Analysts believe that as African economies are developing, the wealth will trickle down from rich to poor via the middle income group.

    With growth of 6% and productivity rising by 3%, it is easy to see why things are looking up. A commodities boom and massive investment by China is giving Africa's young urban generation cause for hope.

    However, not everyone is quite so optimistic. Some believe these are myths that have been overstated by the continent's corporate cheerleaders.

    "My wife also works as a teacher. If I was the only one working, I wouldn't be satisfied with that money.

    "At the end of the month I have some money left."

    Some argue that the concept of the middle class as an engine for growth is a myth and wealth generated is not trickling down to wider society.

    Instead, it is said, other interested parties - such as the local elite and foreign investors from China, India and Brazil - are benefiting from an abundance of natural resources and increased willingness by companies to do business in Africa.

    Last month, a report released by Kofi Annan said that tax avoidance, secret mining deals and financial transfers were depriving Africa of the benefits of its resources boom.

    It said such deals were costing the continent about $38bn (£25bn) a year.

    Duncan Clarke, from the consultancy Global Pacific, says the reality is that Africa has a small middle class. He says those who live at a global middle-class income level comprise "less than 5%" of the continent's population.

    Mr Clarke says the informal economy, which he calls "swathes of survivalist pockets of existence", remain the bedrock of the continent's economy.

    BBC Africa Debate

    Tune in to the BBC World Service at 1900 GMT on Friday 21 June to listen to the BBC Africa Debate - Africa Rising: Who benefits? - recorded in Lagos, Nigeria.

    And on 28 June, the debate moves to Accra, Ghana, where the question is: Can the middle class drive growth in Africa?

    Or take part on Twitter - using #bbcafricadebate - Facebook or Google+

    Poverty, he notes, is still widespread.

    Changing skylines

    In Ghana, a country often cited as an economic success set to benefit from a relatively recent oil discovery, the reality of so-called middle class life differs from the experience of those in other parts of the world.

    Electricity is currently being rationed, the country is undergoing a water shortage and doctors have been on strike to protest at salary cuts.

    Meanwhile, people who fit in to the middle class bracket are said to have been priced out of prime property as expatriates and the upper class rent or buy luxury properties.

    Africa's growth drivers

    Expected annual average GDP growth, %



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    Ivory Coast




    Burkina Faso








    An AfDB report on the continent's economic outlook has warned: "Growth has been accompanied by insufficient poverty reduction, persisting unemployment, increased income inequalities and in some countries, deteriorating levels of health and education."

    Few places sum up this dichotomy more than Angola, which has enjoyed high growth rates thanks to its huge oil and gas reserves.

    But most locals don't appear to be benefiting from the natural resources boom, with about two thirds of the country's population living on less than two dollars a day, according to the World Bank.

    However, other nations appear to have found ways to to share the wealth generated by natural resources.

    Botswana has used revenues from its diamond mines to make significant investments in education and health care.

    And, by teaching locals to cut and polish diamonds, it has created jobs to spread wealth and ensure that the presence of multinational companies for expertise is not needed.

    Those who believe lives are being improved across the continent point to the rapidly changing skylines of many African cities.

    Start Quote

    You can't rely on your salary”

    Abdul JalilMozambican teacher and businessman

    Modern apartments and office blocks are being built in heaving metropolises - such as Lagos, Nairobi and Johannesburg - to provide a new generation of homes and workspaces.

    Meanwhile, shiny new shopping malls are opening up fresh opportunities to spend hard-earned money.

    But it is too early to say whether this new generation of buildings will be matched by widespread improvements in the quality of life enjoyed by Africans.

    About 15km outside Maputo, at his family home, Mr Jalil explains his hopes for the future.

    He is building a new house and, like Mr Evoudidi, he believes the key to a successful middle class life is to become an entrepreneur.

    The teacher is investing in a minibus, to be used a school bus.

    Just under half the cost was funded by a bank loan, and the other money came from his savings.

    "It's normal to run a small business on the side," he says.

    "You can't rely on your salary."

    Who do you think is benefitting from Africa's economic growth?

    Africa is a clear case study of poor trickle-down of resources. We are yet to have our teeth in the real national cakes. Here is how: Economic figures which are in most cases doctored to paint a rosy picture are only empty words to a majority of poor Africans. Even as we discover bounties of natural, we are sure of one thing; Only our leaders will share the spoils as the masses battle with buffaloes of poverty in our villages and slums. Only our selfish leaders and former colonialists are invited to the banquet to discuss how to share the offing wells of oil in Kenya and Uganda and the gas in Tanzania. Why should authorities in Tanzania insist on piping the gas resources in poor Mtwara province to Dar es Salaam? Why can`t the so-called investors invest in the villages in Mtwara? This is our cardinal sin since independence[ if any]. The bottom line is that the very colonial powers who divided Africa in the Berlin conference of 1884-1885 are the ones eating from the pots of gold with our presidents and prime ministers getting a few remains! Because our leaders are getting the spoils, they are quick at giving sinful tax holidays to the so-called investors.

    BENJAMIN OBEGI, Nairobi, Kenya

    It is only a small niche of people at the top who are benefitting. I would hasard a guess at 5% of the population is benefitting. it is the corrupt members of Governments and their hangers-on.

    Name withheld, Harare, Zimbabwe

    This article contains competing narratives about the economies of (sub-Saharan ) Africa: One the one hand record-high average growth rates for more than ten years. On the other hand a continent still plagued by high poverty, wide inequalities, poor human capital and inadequate infrastructure. Can one reconsile seemingly contradictory narratives in order to answer the question who benefits from Africa's economic growth? The last ten years has benefited well connected elites as well people who have escaped absolute poverty, been able to send one more child to school or buy better protection against malaria. A bigger pie has has some trickle-down effects. But a legacy of many decades with low growth is difficult to overcome. Igniting growth is easier than sustaining it. In order for a rising Africa to stand up-right institutional reforms will be needed in order to secure more labour-intensive growth, modernize eduacion and infrastructure, improve governance and increase agricultural productivity. Then, at best contonued high growth rates will benefit larger segments of the continent's population.

    Peter Stein, Stockholm, Sweden

    One would hope that as the economies grow in the African continent - that would translate into improvement in the lives of the people. Regrettably, given a number of reasons including corruption, and clandestine deals with foreign companies, only political leaders and their affiliates benefit - while the majority of people suffer utterly. This is extremely sad and must stop!

    Unisa Dizo-Conteh , London, UK

    1. in Zimbabwe, the few influential politicians are benefitting. they win big tenders, they are dubiously awarded mining rights especially for diamonds and gold. 2. multinational companies, and foreign countries benefit from Zim's mineral wealth in two parts, just as examples: a. we do not have processing plant for platinum in Zim, and the raw ore is exported to SA. in the raw ore there are 7 other minerals which are not declared such as gold, copper etc, which will benefit that multinational or that importing country. b. there are no tight security proceedures at our diamond mines whereby if the mining company decides not to declare the diamond, they will do so. or they decide to declare half of it, they do so without being noticed nor being asked, and noone bothers except the few influential politicians. 3. In Zimbabwe there is absolutely no middle class. there are the poor and a few with wealthy. the rest are just peasants, surving below the poverty datum line. 4. Informal sector in Zimbabwe i think is destroying the economy. firstly they do not pay any taxes, secondly quality is not maintained, we end up with substandard "everything", pensions for informally employed people are not paid, and they are setting up everywhere uncontrolled

    Dhuwa EDC, Harare, Zimbabwe

    Africa's Politicians and business leaders. It is incongruous that Nigeria, a rich oil-producing nation, relies on charity - WHO, Oxfam, MSF, DFID, Water Aid to fund its health programs. Same thing in DRC. Other countries (CAR, Chad) have limited natural resources and need all the help they can get.

    J Barber, High Peak, UK

    Zambia is not mentioned, however it fits very well under the title of this article. It is a fact that the inequality gap has been insufficiently reduced regardless of the increase in growth that the economy has seen.Human Capability and human growth is almost non existent. Many parts of the capital city are dirty (garbage), lack infrastructure of quality, and the streets are a carnival of bad drivers, street vendors, and homeless people. It is an obvious fact that this will never change, because of the exact "reason d,etre" which stemmed the title of this article. If we have to ask who benefits, it means that soemthing is wrong, the prime questions that people should be asking are, "where is all the money going? Which individuals, or groups of people are taking the benefits of the majority and creating an upper class minority?"

    FP, Lusaka, Zambia

    The common man would benefit in the long run in the long run, the idea behind the chart is that Africa as an emerging continent is no longer a myth.The increase in the number of middle class means more Africans have a higher purchasing power and can spend a little extra on stuffs other than basics,This implies that new businesses, new investments and in effect more people below can be employed and at least earn a token . The real reason why the common man does not have a share of the national cake hitherto is because of our very selfish Leaders in Government, challenges in Electricity etc. I stand to be corrected but this is my candid opinion.

    Tente, Lagos, Nigeria

    The only people who are really benefiting from economic growth in sub-Sahara Africa are the same people who have been benefiting since the colonial powers left. The politicians and civil servants who run the countries, the military who back them and the business men who corrupt them; it's just that there's more money to spread around now and 5% of the population are now included instead of 3% or 4%. The fact is that the vast majority of the populations of these countries will never be able to aspire to even living above the poverty line until corruption is conquered and the money used to develop the infrastructure of the countries rather than feather the luxurious nests of the few at the top. I lived and worked in west Africa for five years and that's the way it was and unfortunately still is.

    Hugh Hunt, Elhovo, Bulgaria

    Claiming there is economic boom in Africa citing countries like Ethiopia is nothing less than lazy journalism. One has to look at the drivers for the GDP figures. In case of Ethiopia, it's aid driven construction boom (4 billion a year to be exact) which is neither sustainable nor does it reflects true economic output growth. Africa needs to pursue sustainable growth by first building infrastructure, developing human resources and creating a conducive climate for investment.

    Sam, London, UK

    The short answer is China. If you look at the quality of investment in Africa's natural resource industries, it is poor. Production ssets are sourced from China. Engineers and artisans too. Soft loans (probably) include clauses which allow for increased immigration into Africa of relatively poor Chinese. How else to explain why we have Chinese marketeers, chicken-rearers, shopkeepers etc.? China offers seductive loans for infrastructure projects, identified by them, and which are almost always built by Chinese firms. Look at the growing national debt of, say, Zambia. The other beneficiaries are indeed, the growing middle class. With their increased wealth, they shop at foreign owned shops, buying imported, most often Chinese ,goods. There is some trickle down through employment in service and transport industries, but to the shanty town or rural dweller, the middle classes are remote and elite.

    Name withheld, Paris, France

    The oil in Ghana was discovered around 2006 by the previous NPP government. Production was started in 2009 when the present NDC administration came to power. All decisions by this govt is on the premis that there is oil in Ghana and that anything goes. Loans are being taken from any quater and govt expenditure keeps on rising. meanwhile the proposed salary increase for workers is being curtailed. It is the govt and businesses close to govt who are benifitting. By some strange agreement last year the oil companies never paid taxes. Personnaly the oil in Ghana is taking Ghana on the road as Nigeria took in the 80s. Corruption here corruption there corruption everywhere.

    SAMUEL B QUARSHIE, Accra, Ghana

    Having seen the "other" side of the world economy at work in my two decades of living in the diaspora, I can confidently recommend my fellow Africans to come back home and start investing their motherland. Despite all the negative, bad press, and dark coverage of Somalia in the media, I truly wonder what is the true scale of economic growth in Mogadishu city as evidently seen in the city streets.

    Abdalla Dheere, Mogadishu, Somalia

    No one can deny that Africa is rising indeed, and this is not a conclusion driven simply by looking at economic numbers or charts. You simply need to visit some countries (i.e.: Ghana, Rwanda, Mozambique) to realise that. You do have a middle class growing but not consuming from local businesses enough. Once the government provides a good environment for local entrepreneurs to thrive, locals will consume from them which will in turn make growth sustainable. Africa is the perfect example showing how GDP growth does NOT equal sustainable economic growth. It is all good showing those charts, but it does NOT translate into an improving and sustainable growth for the locals. If you look at most EU GDP numbers, the Economist should have a cover that says ''Hopeless Continent''.

    Jini Sebakunzi, Geneva, Switzerland

    Africa..its getting better, after living abroad for 10 years i am actually happy to settle back home, there are lots of opportunties provided you have saved some funds to start a business. As for Ghana there is hope if the governemnt decides to provide constant power and water. Not having those basic necessities like Nigeria just hinders growth.

    Ella Tieku, Port Harcourt, Nigeria

    This African boom is a fable, a mirage waiting to fizzle. The current boom is mainly in service sector. In Uganda you can clearly see that the service sector has grown , spawning a huge chunk of middle class yuppies. Foreign banks, telecom companies, retail outlets etc are all over the place; they are even going 'down town' to near-slum segments to fight for the low end customers. This economic boom is not the result of producing; the service sector - championed by international multinational vultures - is only scavenging on a transcient income (mostly from remittances from Ugandans abroad and aid, NGO projects etc). There is nothing much being added; agric which is the main productive sector is in a slump >> climate change issues; oil monies are being repartriated. I will give it ten years.... if this boom will still be there. America has seen first hand the startling mirage of service sector based economy, now they are demanding for 'Made in America'. Until Africa's economic boom is production base

    David Mulabi, Buikwe, Uganda

    Economic growth rates must take population growth into account: for an economy to grow in a meaningful sense, it must cover the growth of its population. With populations in African countries often growing at more than one-and-a-half percent per year, one-and-a-half percent of economic growth goes merely to keep the population at existing levels of average income. This means that the headline projected figure of eight percent growth for the whole continent could in fact equal less than six-and-a-half percent. This may still sound encouraging, but if growth drops to the same level as in the developed countries, it will hardly be growth at all.

    Mr Henderson, Teddington, UK

    The issu with Africa is that all the economic benefits are captured and monopolised by a class of elite politicians. There are no mmechanisms for redistribution of wealth. In Malawi, for example, taxes are spent on politician's travels, ministerial fleets of petrol-guzzling Mercedes, maintaining 6 or so presidential palaces, etc. The ordinary Malawian still struggles to get a single decent meal a day. Kids, especially girls still drop out of school in grade 4. Hospitals run on empty drug shelves. All the while, politicians are swimming in the luxuries of whatever little the country gets from taxing the poor!

    DM, Nsanje, Malawi

    Is this not a stage that Africa has to negotiate Just as all developed nations went through an emerging from a "peasant" culture. Britain, the USA, etc saw the rise of business moguls who became obscenely rich through exploitation of the masses and control of the means of production. Over time however the wealth became more evenly distributed and a rich middle class evolved. Just give Africa some more time and a true middle class will arise

    Neville Smith, Moss Vale NSW Australia

    The impact and continuing prevalence of neo-colonialism, though subtle and indirect, is still widespread and unbelievable. Though the West seems eager to downplay it and present a "rosy" continent on the rise, the fact remains that Africa is still light years behind in terms of development. Development must start with the people and when one considers the quality of human capital it is sad that there's still a huge gap. This remains the single reason why brazenly corrupt and despot governments still hold sway in these African nations. The under developed educational infrastructure presents a huge challenge for the much needed human capital improvement. The recent aggressive foray of China is merely an attempt by this emerging nation to continue where the imperial powers of old stopped. It remains to be seen if the African leaders will allow China to emerge as a stronghold but with the brazen opening of the borders to substandard Chinese goods leading to the collapse and uncompetitiveness of local industries there seem to be less hope in this regard. Haven worked in the financial industry for close to a decade in Nigeria I can confidently say this: MUCH OF THE EMERGING MIDDLE CLASS IS DISGUISED POVERTY with the consumerist culture that contributed to the recession in the west taking hold of young working class Africans with extra cash.

    Joy Meregini, Northampton, UK

    The World Bank's Africa Development Bank has to lower the global standard of measuring middle class to a very ridiculous level in order to justify the façade of phenomenal growth in Africa. ADB categorises living between $2 and $20 a day as middle class! This means in Nigeria if you earn N10,000 a month, well below national minimum wage, you are a middle class! This is absurd. Of course, there is what is called "floating class" within middle class bracket i.e. between $2 and $4 who can "slip back into poverty". Living between $2 and $4 is poverty, there is no question of slip back into it; you are in it deep seated. The so-called economic growth is reflected in the opulence of the thieving capitalist elite and not in infrastructural development or the living standards of ordinary people.

    Peluola Adewale, Lagos, Nigeria


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