The Ethiopian government has been on an all out roll out to adopt a new kind of development model. The Ethiopian government is actively investing in key projects, and preferring what is known as state directed development. For example, the country has a huge stake in the yet to be launched Ethiopia grand renaissance dam, which is set to power much of Ethiopia and the Eastern Africa region with electricity.
The Ethiopian government is also actively investing in the Ethiopian Airlines, and this is seen in the way the airline has almost become the leading airline in Africa. However, contrary to many governments investments in Africa, the Ethiopian government leaves the management of these state enterprises to well capable
individuals, and even civil servants do not receive any free goodies from state run enterprises. For example, while a government run enterprise might have been forced to forward all the profits to the government, the Ethiopian government, in 2013, allowed Ethiopian Airlines to reinvest about 100 million dollars of the profits the airline had made.
This state directed development, certainly copied from China, could be a lesson for African countries that are rapidly liberalizing various industries, subjecting their fragile markets to competition. One of the reasons for the Chinese upward growth trajectory, has been the shielding of such companies as alibaba, baidu, and tencent from foreign competition, allowing the companies to grow some muscle before these companies were subjected to foreign competition. Could Africa borrow from such a model?
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