Evictions, unrest cast shadow on Ethiopian construction boom

Bloomberg

When Ethiopian farmer Mulugeta Mezemir ceded his land three years ago to property developers on the fringes of the expanding capital, Addis Ababa, he felt he had no choice.
A gated community with white picket fences and mock Roman pillars built by Country Club Developers now occupies the fields he tilled in Legetafo, Oromia region, after the 60-year-old said local government officials convinced him to accept an offer or face expropriation. He took the cash and vacated the land, which in Ethiopia is all state-owned.
“We were sad, but we thought at the time that they were going to take the land for free,” said Mulugeta, a father of 12, while feeding hay to cattle a few meters from foundations for the next phase of housing. “We thought it was better to take whatever they were paying.” As Ethiopia, which the IMF estimates saw 8.7 percent economic growth in the last fiscal year, undergoes a construction boom, complaints over evictions and unfair compensation have fomented the country’s most serious domestic political crisis in a decade.

Fatal Protests
In protests by the largest ethnic group, the Oromo, that began in November, security forces allegedly shot dead as many as 266 demonstrators, according to the Kenya-based Ethiopian Human Rights Project. The government says many people died, including security officers, without giving a toll. Foreign investors including Dangote Cement Plc had property damaged. Ethiopian Communication Minister Getachew Reda said protesters were in part angry at “some crooked officials” who have been “lining their pockets by manipulating” land deals around the capital.
Property developers CCD followed legal procedures, paid standard rates of compensation and employed many members of farmers’ families, according to Tedros Messele, a member of the company’s management team.

‘Beggars, Labourers’
“The booming construction industry has contributed to Addis Ababa’s rapid expansion that’s dispossessed many poor farmers and turned them into beggars and daily labourers,” Nemera said. “The Oromo protest movement opposes the mass eviction of poor farmers.”
Ethiopia’s state-heavy model seeks to industrialize the impoverished nation within a decade by improving infrastructure and combining investment with cheap labor, land and water to produce higher-value goods. Projects for what the IMF calls African’s fastest-growing economy include the continent’s largest hydropower dam, railways and the building of 700,000 low-cost apartments by 2020. Construction accounted for more than half of all industry in the fiscal year that ended in July after it grew an annual 37 percent, according to National Bank of Ethiopia data. Industry comprised 15 percent of output.

Domestic Supply
Investors such as Diageo Plc, the world’s largest liquor maker, and Unilever Plc are tapping into the expansion by building Ethiopian facilities. Citizens of Africa’s second-most populous nation are using money earned there or abroad to build residences, malls and offices. The ruling party hasn’t kept pace with the boom by improving governance and the ability of domestic manufacturers to supply the industry, said Tsedeke Yihune, who owns Flintstone Engineering, an Ethiopian
contractor.
“Construction has not been used as it was supposed to, as a means of building domestic capacity, building good governance, as well as delivering the government’s development agenda,” Tsedeke said in an interview in the capital.