An Import Substitution Lesson – Ethiopia Assembles AU's Anti-Al Shabaab Tanks –

Three of East Africa’s Presidents, Rwanda’s Paul Kagame, Uganda’s Yoweri Museveni and Kenya’s Uhuru Kenyatta have visited Ethiopia’s Metals and Engineering Corporation (METEC), a place regarded as the country’s ‘centre of dynamism.’

Metec is not only a statement but also a testimony that industrializing Africa is possible; it’s something that Rwanda’s Ministry of Defense officials honoured in an inscription on a glass plaque left behind after a recent visit.

Located some 45km South-East of the capital Addis Ababa, Bishoftu Automotive Industry (BAI), one of the fifteen industries that make up Metec, is involved in designing, engineering and assembling various types of autos, for mainly, the home market.

In total, Metec’s fifteen workshops directly employ between 13,000 and 15,000 Ethiopians with 3,000 of those at Bishoftu and 40 percent of them girls who take on an unusual role; with their long hair rolled up in smart ponytails, they bend down to work and disappear in a world unfamiliar to most East African girls their age.

Although ten percent of the work force at Bishoftu is composed of soldiers, the rest are civilians, most of them youths aged below 25 years; there are few degree holders here, only certificates and gifted hands from vocational technical colleges.

It’s also not a place to find the so called ‘foreign expats.’ Well, not anymore. They did their part in the earlier days of the plant, some six years ago, transferred their technical-know-how to locals and now everything at all Metec’s fifteen workshops is done by Ethiopians.

The only foreigners seen at the time of visiting were a group of Chinese investors who were being shown around the premises, perhaps with plans to strike a partnership to churn out more products.

One of the locals working at Bishoftu is Kuri Aspa, a 23 year old pretty woman with a calming smile that could easily earn a front desk position at a top corporate firm in the city or a slot on the catwalk of Ethiopia’s next top model with high chances of winning the pageant.

But those are the kind of prejudices for women that have no place in Ethiopia; as a matter of fact, Aspa was hunched over the gearbox of a T-55 battle tank which was two steps away from rolling off the final point of the assembly line.

Watching her delicate hands work with effortless efficiency, it is such an irony that the final product of Aspa’s soft-touches would be an armored T-62 combat ready tank that would be bought by the African Union and deployed in Somalia to fight Al-Shabab terrorists.

Hybrid technology

Although most of the weaponry assembled at Bishoftu is used by the Ethiopian defense forces, the plant also supplies the African Union and at the time of visiting, a long line of tanks fully assembled and branded with AU insignia could be seen in the yard, ready for delivery.

Maj. Metafer Beshawhwured is Metec’s Assistant General Manager in charge of Sales Marketing; he told Sunday Times that there’s nothing that can’t be assembled at Bishoftu. That’s true; at least going by the evidence of finished works on display.

Some of the battle tanks made at Bishoftu include T-55, T-62 and T-72s, the difference being in their models and technical specifications and capabilities on the battlefield.

Russian and Chinese technology tanks formerly used by the Ethiopian defense forces; once retired are sent to the plant where they are recycled, redesigned, reengineered and assembled into hybrid products combining technologies from both countries.

They also have the monstrous Zilla; a multi-purpose armored personnel carrier favored by most anti-riot police forces around Africa; in spite of its size, it can accelerate from 0-40m in six seconds and boosts of a cruising range of 60km/hr for 500km.

“We are trying to build a self-contained economy by learning from others and making things that we need, here at home, by ourselves,” Maj. Beshawhwured told me.

Asked whether Ethiopia has been approached by any of East Africa’s presidents to supply their countries with some of their products, the soft-spoken soldier couldn’t say yes or no but gave the indication that all three presidents were impressed by what they saw.

Eight buses a day

The armory assembly wing of the plant is, naturally, the most exciting, but Bishoftu is a large facility and makes a variety of other civilian vehicles including public transport buses similar to the ones seen on Kigali city roads.

For instance there’s the twelve meter long Bishoftu bus, a thirty seater with a maximum speed of 80km/hr running on a six cylinder-four-stroke-in-line turbo charged engine.

There’s also the 18-meter Bishoftu articulated bus with space for 50 seated passengers and 112 standing passengers; it weighs 128,000kg with its 336-horse-power dragging it 70km an hour.

These two and a handful of other varieties dominate Ethiopia’s public transport; the plant makes at least eight buses on average, daily.

At least 600 young Ethiopian women and men would have rendered their various skills at different stages of the works, by the time a single bus rolls off the final station of the assembly plant.

The plant has a partnership with the Chinese bus giant, Yutong that enables technology transfer and other technical collaborations between the two countries.

Normally, Ethiopia import technology from the Chinese and study it before fabricating it locally using local technology.

From personal user cars to public transport vehicles, Bishoftu is manufacturing products made by Ethiopians in Ethiopia for Ethiopians and a whole value-chain has sprouted up around this plant creating thousands of other jobs, indirectly.

The state policies have also made sure that it’s easier to buy a car made in Ethiopia than one imported and as a result, Ethiopian streets are not the place to find the fancy fuel guzzlers from America and Germany.

It’s deliberate, to encourage Ethiopians to buy cars made in Ethiopia by Ethiopians.

“That cuts the cost by at least 40 percent of the value of an imported car,” Major Beshawhwured said.

An import substitution lesson

Both Rwanda and Ethiopia are pursuing the same strategy, transforming their countries from being rural and agriculture driven to industrial economies; for obvious reasons, save foreign currency but also to create jobs.

In both countries, the state is at the vanguard of these efforts and in Rwanda, the economic free zone approach is the vehicle that has been designated to deliver industrial success.

The Ethiopian government is also in the process of setting up five economic zones located in various parts of the country to spur the country’s drive to boost manufacturing.

Clearly, both countries have started off by taking the first step on a journey of potentially a million miles with challenges littered along the way and unlike Ethiopia, in Rwanda’s case, inadequate electricity remains the biggest bottleneck.

Also Rwanda’s policy makers can learn something from the Ethiopians; if the country is going to encourage local production of formerly imported goods; such a move requires supportive policies that encourage locals to buy locally made goods rather than imported ones.

Currently, products of the country’s few local producers are left unprotected from competition presented by imports on the stalls of local markets and industry players say they could do with some protective policies.

The benefits could be many including boosting the manufacturing sector’s contribution to the country’s productivity which is currently around 12 percent; help reduce the country’s import bill which can only be covered by around 25 percent of export earnings.

In its latest outlook on Rwanda, the International Monetary Fund says with the drop in commodity prices of especially minerals, the economy’s balance of payment will worsen next year posing major foreign exchange risks.

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