Ethiopia, Africa’s fastest-growing economy, is looking to its capital to help sustain an expansion that averaged more than 10 percent a year in the past decade.

Planners predict the population of Addis Ababa and five satellite towns will more than double by 2040 to 8.1 million, highlighting United Nations estimatesthat Africa’s global share of urban dwellers will double to 20 percent in the next 35 years. Planners envisage developing an area 20 times the current boundaries of the city. Ambitions for mass transport match the standard of central Paris, ensuring every resident lives within 500 meters (0.3 miles) of a bus or train ride to the center.

One of its new residents would be Bekele Feyissa, a 45-year-old father of six who farms cereals on a plot in Sebeta. The town is about 20 kilometers south of the center and is set to be swallowed by the city.

“If the city grows, it will be good for us as we will get electricity,” Bekele said, standing in the shade of a hedge as a donkey pulled a cart along an unpaved road beside him.

The government’s plan for Addis Ababa is critical to its aspirations for developing into a middle-income country in about a decade, mirroring efforts by Kenya and Zambia. The continent’s economic potential will be highlighted as U.S. PresidentBarack Obama hosts more than 40 African leaders at a summit in Washington next week.

International Monetary Fund data show Ethiopia is on the way to achieving its goal, with average annual growth of 10.9 percent during the past decade powered by spending on electricity plants, railways, roads, health and education.

Investment Boom

That investment is funded by increasing tax revenue and more than $3 billion a year in Western aid, along with cheap loans from China and India, domestic state banks and institutions including the World Bank.

Public investment accounted for 63 percent of growth in the fiscal year that ended July 7, 2012, the World Bank said in July 2013.

Ethiopia, where civilization can be traced to the Axum Empire that began two millennia ago, is Africa’s oldest independent country and the only one on the continent to avoid European colonization although Italy occupied the country from 1936 to 1941. Fossils of human ancestors dating back about five million years have been found there. Emperor Menelik II, who also led military conquests of Oromo territory, founded modern Addis Ababa in 1887. The city, set among eucalyptus-covered hills, is the world’s third-highest capital.

Soldiers overthrew the last emperor, Haile Selassie, in 1974, leading to 17 years of military rule until another revolution in 1991, which ushered in the current ruling party. While the United Nations says the formerly famine-prone land was the world’s 15th least-developed last year, it calculates the poverty rate decreased to 30 percent from 39 percent in the seven years to 2011.

Global Standing

Addis Ababa is the third-likeliest city in the developing world to improve its global standing over the next two decades, according to an index published in April by A.T. Kearney Inc., a Chicago-based consulting company. The gauge is based on 26 metrics of how well municipalities generate, attract and retain talent. Jakarta and Manila topped the rankings.

The blueprint for the expansion — entitled “Addis Ababa and the Surrounding Oromia Integrated Development Plan” — provides for “a megacity of between 8 to 10 million in the coming 25 years,” Mathewos Asfaw, general manager of the master-plan project office, said in an interview at the Desalegn Hotel in the Bole neighborhood, which is dotted with embassies, mansions and malls.

The plan explains how the city’s land will be used and sketches out the hospitals, schools, public transport and other services required. It also describes the steps needed to provide water, collect waste and reduce pollution by grouping harmful industries.

‘Double-Digit Growth’

While fewer than 20 percent of Ethiopia’s more than 90 million people live in urban areas, towns and cities account for about 80 percent of the economic expansion, according to the World Bank. “Addis Ababa’s role in sustaining Ethiopia’s double-digit growth should not be underestimated,” it said in a 2010 study. Half the population will live in cities and towns by 2040.

Addis Ababa’s skyline already is transforming. Tower cranes are a common sight, with low-cost apartments, malls and office blocks shooting up. To make way, old residences and slums are torn down, leaving their inhabitants struggling.

Tracks for a light-rail network China Communications Construction Co. is building soar above the main roads. Turkish textile companies, Chinese glass factories and international chains such as the Radisson Hotels International Inc. andMarriot International Inc. are also opening.

Security Network

The city has avoided violent crime that plagues other African metropolises, partly thanks to an extensive network of uniformed and plain-clothed law enforcers the state uses to maintain order. That’s also helped prevent attacks by extremists. Ethiopia hosts the headquarters of the African Union, and its troops are in neighboring Somalia, where Islamist militants have been waging an insurgency for more than seven years.

Addis Ababa’s biggest growing pain may be the political furor surrounding its disputed role in a federal system arranged along ethnic lines. The structure reflects power sharing among the Tigray, Amhara, Oromo ethnic groups and about 75 other communities. The dominant language is Amharic.

The city is surrounded by the state of Oromia, of which it’s also the capital. Oromo separatists have waged a four-decade campaign for more autonomy for the country’s 35 million Oromos, the most populous ethnic group.

Campus Unrest

When news of the Addis Ababa master plan spread in May, protests erupted on at least eight university campuses by students who called for it to be scrapped because it represented an annexation of Oromo territory. At least 11 people were killed when the police used live ammunition against demonstrators who became unruly, according to the government.

Opposition parties such as the Oromo Federalist Congress slammed the crackdown — and the blueprint. Party General Secretary Bekele Nega described the project as a federal power grab to weaken the Oromo and a scheme by corrupt officials to transfer farmers’ land to investors without fair compensation.

A lack of information on the proposals was the main cause of the protests, said Ezana Haddis, a lecturer at Institute of Urban Development Studies at the Ethiopian Civil Service University. Ethiopia’s government routinely adopts a top-down approach on policy making that involves little genuine public consultation before implementation, he said.

“Those kinds of public consultations are just window dressing; they are not going to change anything,” Ezana said in a June 5 phone interview from the capital. “They will conduct lots of them, but I don’t think they will be fruitful.”

Farming Communities

The capital more than doubled in size to 54,000 hectares in the 10 years to 1994 as farming communities in Oromia were incorporated, Ethiopian academics Feyera Abdissa and Terefe Degefa said in a 2011 research paper Urbanization and Changing Livelihoods: The Case of Farmers’ Displacement in the Expansion of Addis Ababa.

As the city spread, increasing from 2.1 million people in 1994 to 2.7 million in 2007, displaced farmers were often inadequately consulted and compensated, they said.

Cereal farmer Bekele complains he was only compensated 700 birr ($36) when he lost half a hectare of land from his farm to a flower investor. Already companies likeDiageo Plc, the world’s biggest distiller, and Turkish cable manufacturer Saygim DM have set up plants in the Sebeta area.

It’s a similar tale to the north of the city around Sululta, another Oromia town to be integrated. Factories of China-Africa Overseas Leather Products and Oromia Steel Pipe Mills line the main road. Olympic winning long-distance runner Kenenisa Bekele has set up a resort with a running track. Construction sites and piles of rubble are dotted around.

Residential Developers

Gemachew Tadesse, 40, who guards a factory under construction near Sululta, says a few years ago his family lost two plots of land to hotel and residential developers. When his father complained about the level of compensation, local officials put him in jail for a night and threatened to take the land without paying anything, Gemachew said.

“They said the land is the government’s, not yours,” he said. His father now sometimes doesn’t have enough to eat, according to Gemachew. “The expansion plan is not good because farming is better for us.”

Corrupt land deals have been rife in areas such as Sululta and Sebeta, according to the opposition’s Bekele. The eviction of poor Oromos without adequate compensation will “continue and accelerate” if the plan goes ahead, he said.

The blueprint for the expansion of Addis Ababa coordinates development in the capital with surrounding areas in the Oromia regional state and seeks to improve the lives of its inhabitants as well as local farmers, said Mathewos.

There will be a “new paradigm” to bring farmers’ living standards to the same level as city dwellers by clustering them in “rural growth centers,” he said. “We shouldn’t sustain the existing productivity level or the living standards and living conditions of the rural population.”
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* Originally published on Bloomberg, on Aug 2, 2014, titled “Addis Ababa Doubling in Size Gives Africa Another Hub”.