A MONEY LAUNDERER AND SMUGGLER IN ETHIOPIA

Author: Jiatong Yu

Sometimes western media and local media portrayed Chinese migrants as villains who bring with them illegal activities wherever they settled. True, some of the Chinese migrants operate in grey area, but the hostile environment the Chineses live in adds a complexity here.  

A supermarket owner in Addis Ababa

Mr. Hu was the owner of Da Hua Supermarket located right at the end of the China Market, where most Chinese migrants and China shops settled in Ethiopia. Hu was from Fujian province and had been living in Addis Ababa ever since 2011. 

Hu never graduated from a middle school and struggled to make a living in his hometown due to a highly competitive business environment. Therefore, like most Chinese business migrants in Ethiopia, he came to Africa hoping to make more money for his family back in China.

At first, he invested in a small Chinese hotel with his friend from Fujian. Yet shortly after a year, they found their hotel business far too challenging and could not sustain a steady income. “It was too long a story,” Hu said, “and too big a trouble.” For all that we know, Mr. Hu split up with his friend and started a supermarket instead. 

It was during the Chinese New Year when I met Mr. Hu, which means he didn’t get a chance to be with his wife and daughters on the single most important day for the Chinese. Talking about his family members, Hu sighed and showed me the picture of his two daughters aged three and five. “I have no choice. I have to be here in Ethiopia or I can’t earn enough money for them.” Hu said. 

According to Hu, as most Chinese construction and infrastructure projects were finished by the end of 2017, the number of Chinese workers had been constantly decreasing. Fewer Chinese, fewer customers, less money. Hu was having trouble paying his rent and costs with the decreasing amount of customers.

Safety concern also troubled Hu. In early 2019, multiple Chinese companies and shops were robbed. A jewelry store was broken in and swept clear just off the China Market street, not far away from Mr.Hu’s supermarket. Hu felt threatened and bought two big dogs to guard his supermarket—which worked. The two dogs noticed a thief and barked him/her off one night.

At a time of low income and high risks, Mr. Hu engaged in multiple illegal practices to keep his store running. 

“Money laundry”

At the back of Hu’s supermarket was a small room in which he engaged in illegal money exchange—or so called “money laundry” in the western media. 

In Ethiopia, residents can not bring currency exceeding the value of 3,000USD abroad without additional fees and formalities. Chinese migrants like Mr.Hu are thus unable of sending the money they earned to his family—to support whom is the sole purpose of Mr. Hu.

Therefore, Hu was willing to make a sacrifice and to provide an exchange rate more favorable for tourists and those wishing to hold Birr. Incurring lost, yes. But in the eyes of Mr. Hu, it was a worthwhile deal. Through Alipay or WeChat Pay, Mr. Hu could exchange Birr into RMB with no procedure costs whatsoever and transact the money to his wife immediately. 

Since there were too many Chinese migrants facing a similar dilemma as Mr. Hu did, an association was created through WeChat that updated “favorable” exchange rate daily. For the Chinese migrants, this particular exchange rate was more reliable and important than the formal exchange rate on the international market. 

“Smuggling”

Ethiopia does not have a port of its own and all goods are imported through the Djibouti port. For China shop owners who have to import goods and raw materials from China, transportation through Djibouti incurs a huge cost that sometimes would make their stores unprofitable. 

Mr. Hu was not to be beaten by this challenge. Upon the opening of his store, he heard from his fellow companions that airplane hottest were willing to carry some goods from China for him if he paid a reasonable fee. Though the hottest still charge money, it is much cheaper than the fees and tax collected at the Djibouti port. Mr. Hu soon happily engaged in a long term agreement with some air hottest—both Chinese and Ethiopian—to carry his commodities from China. 

Despite these money-making methods that Mr. Hu had adopted, his store was still in depression when I visited—with few tourists and Chinese workers present, his income would not be able to cover an ever-increasing operation cost. The future of Da Hua supermarket was gloomy. Mr. Hu was still waiting: if the environment does not get better in later 2019, he might just pack up and leave Ethiopia. “Many of us are waiting now. If this does not get better, I think most Chinese migrants will leave.” 

To protect the privacy of people involved, the names of main characters and locations are modified.