Indeed, under his 17-year tenure, Zenawi unapologetically pushed back on structural adjustments, and advocated for pro-poor policies, and strengthened the public sector. Even foreign news outlets such as The New York Times, despite chastising him for his socialist- Marxist economic policies, acknowledged that Zenawi had genuinely transformed Ethiopia into Africa’s fastest-growing economies by the time of this death.
If Ethiopian Airlines isn’t enough proof for your eyes, dear reader, please visit Ethiopia to appreciate this man’s legacy. During his leadership, Zenawi appeared in many places, talking African economics and politics, etc.
One of the most burning—almost obsessive questions—he had to deal with was the question of liberalising the Ethiopian economy, which meant allowing European and North American multinationals, specifically banks and telecoms, to operate in Ethiopia, and compete with local businesspeople.
Note that to this day, there are only locally-owned commercial banks operating in Ethiopia, as are only locally-owned telecoms. There is no private ownership of land (thus no accumulation by dispossession), and housing is mostly in the hands of government, among other things.
Appearing at the World Economic Forum in 2012 in Addis Ababa (the same year he died), in characteristic fashion, Zenawi spoke from his heart.
It began the question about the insistence that the government should allow private sector players to participate and cash in on building public infrastructures (power, telecoms, roads) cross the country. In his response, he busted the fiction that private players like to invest in infrastructure development.
It was a fiction because infrastructure development was not only high risky, but the private sector does not have money for these big projects. But it was in responding to the question of telecommunication and finance where he spoke with precision and power. I will produce these responses verbatim, and a little analysis:
ZENAWI ON BANKING
“We have not liberalised the financial sector in the sense that we have not allowed foreign banks to operate in Ethiopia. Why? Tidjane here [pointing at Tidjane Thiam, Group Chief Executive, Prudential, United Kingdom], manages an economy that is many times bigger than mine. [If] these giants [such as Tidjane] can wreck a giant economy such as that of the United Kingdom, ours is a flimsy boat. They come in, they use instruments we cannot control, and in most instances, the best of us do not even understand.
How are you going to regulate these people? It is not possible. We do not have the capacity now. So, what did we do? We allow the private sector in Ethiopia, which is not infinitely more complex than the public sector, and therefore could easily be monitored and regulated by the public sector… So, we have more than 10 private banks here [in Ethiopia], but not foreign banks. Is it not going to be a permanent feature? No. [But] as we grow, as we develop, and as we become more sophisticated in regulatory capacity, of course we will liberalise. But not now. And we have lost nothing because of this policy.”
One quickly realises that Zenawi understood (a) that African governments were young. Both the public and private sectors needed protection from the sophisticated private sector players in the Western world. (b) Government with the imperative to regulate the private sector has to build sufficient local capacity to regulate a private sector that would even use technologies they may not understand.
Consider Crypto Currency, for example, which is the new thing everywhere, who in Bank of Uganda understands this thing really well? Zenawi also understood (c) government had the imperative to facilitate and protect local entrepreneurs from marauding multinationals. Thus, one needed to have a strong group of native bankers.
ON TELECOMMUNICATION
“Ethiopia as a country, I think in per capita terms, is investing more in infrastructure than perhaps any other country in Africa. Whether it is railways, power or telecommunication. We are doing it by borrowing from banks that are not good at speculation, mostly, Chinese banks. So, we have the money—borrowing it—and we want telecommunication in every school, every village, and we want it cheap. Not at 30 per cent discount rate, but two per cent or three per cent [interest rate]. That is why we have not opened up telecommunication to private investors.
Is that going to be the permanent feature? No. Once the market failure is overcome, we move out. There was a time we owned breweries in this country, now we are privatising all our breweries because the [local] private sector can now do a good job. We used to own—and still own—some textiles. The only textile factories we have are the ones we could not privatise, because they were not making profit.
One quickly sees a man who understands that while some sectors might be of no interest to the private investor, they are of importance to the public. Later in his speech, Zenawi stressed that their “policy is based on making sure that the public sector plays its role so that we’ll have an Asia-type growth.”
AFRICA PUPPET SUMMIT 2022
I recalled Zenawi’s wise words while painfully watching African leaders lining up in Washington under the so-called “US- Africa Leadership Summit 2022” inside what they called a “dealer room,” (Sic) signing clearly extortionist-colonialist deals with the United States.
These leaders handed over entire economies (cobalt and copper for DRC and Zambia, and Uganda danced to a supposedly free $4.5bn investment in oil security). There is no free lunch in Washington, my friends. Can you imagine, the United States promised a paltry $21m to be given to the IMF to improve financing situation of low-and middle-income countries?
No wonder, Col Muammar Gaddafi treated these African leaders like children, and Zenawi didn’t want to associate with many of them.
yusufkajura@gmail.com
The author is a political theorist based at Makerere University
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