.

By Kevin Hamlin, Ilya Gridneff and William Davison Jul 22, 2014

Ethiopian workers strolling through the parking lot of Huajian Shoes’ factory outside Addis Ababa last month chose the wrong day to leave their shirts un-tucked.

Company President Zhang Huarong, just arrived on a visit from China, spotted them through the window, sprang up and ran outside. The former People’s Liberation Army soldier harangued them loudly in Chinese, tugging at one man’s aqua polo shirt and forcing another’s shirt into his pants. Nonplussed, the workers stood silently until the eruption subsided.

Shaping up a handful of employees is one small part of Zhang’s quest to profit from Huajian’s factory wages of about $40 a month -– less than 10 percent the level in China.

“Ethiopia is exactly like China 30 years ago,” said Zhang, 55, who quit the military in 1982 to make shoes from his home in Jiangxi province with three sewing machines and now supplies such brands as Nine West and Guess?. “The poor transportation infrastructure, lots of jobless people.”

Almost three years after Zhang began his Ethiopian adventure at the invitation of the late Prime Minister Meles Zenawi, he says he’s unhappy with profits at the Dongguan Huajian Shoes Industry Co. unit, frustrated by “widespread inefficiency” in the local bureaucracy and struggling to raise factory productivity from a level he says is about a third of China’s.

 

Chinese and Ethiopian work supervisors stand for inspection by their President Zhang Huarong outside a shoe factory operated by Huajian Group outside Addis Ababa.

.

Four Tongues

Transportation and logistics that cost as much as four times those in China are prompting Huajian to set up its own trucking company. And the use of four languages in the plant — Ethiopia’s national language, Amharic; the local tongue, Oromo; English and Chinese — further complicates operations, Zhang says.

It takes two hours to drive 30 kilometers (18 miles) to the Huajian factory from the capital along the country’s main artery, illustrating the challenges. Oil tankers and trucks scream along the bumpy, potholed and, at times, unpaved road. Goats, donkeys and cows wander along the roadside and occasionally into bumper-to-bumper traffic. Minibuses and dented taxis, mostly blue Ladas from the country’s past as a Soviet ally, weave through oncoming traffic coughing a smoggy exhaust.

Huajian is nonetheless becoming a case study of Ethiopia’s emerging potential as a production center for labor-intensive products from shoes to T-shirts to handbags. In a country where 80 percent of the labor force is in agriculture, manufacturers don’t have to worry about finding new workers. Its population of about 96 million is Africa’s second-largest after Nigeria’s.

 

.

Seeking Investment

A combination of cheap labor and electricity and a government striving to attract foreign investment makes Ethiopia more attractive than many other African nations, said Deborah Brautigam, author of “The Dragon’s Gift: The Real Story of China in Africa” and a professor of international development and comparative politics at Johns Hopkins University’s School of Advanced International Studies in Washington.

“They are trying to establish conditions for transformation,” Brautigam said in a telephone interview. “It could become the China of Africa.”

Huajian’s 3,500 workers in Ethiopia produced 2 million pairs of shoes last year. Located in one of the country’s first government-supported industrial zones, the factory began operating in January 2012, only three months after Zhang decided to invest. It became profitable in its first year and now earns $100,000 to $200,000 a month, he said, calling it an insufficient return that will rise as workers become better trained.

Fleeing China

Under bright fluorescent lights, amid the drone of machines, workers cut, glue, stitch and sew Marc Fisher brown leather boots bound for the U.S. Meanwhile, supervisors monitor quotas on whiteboards, giving small cash rewards to winning teams and criticism to those falling short.

China, Africa and global retailers all have stakes in whether Ethiopia and such countries as Tanzania, Rwanda and Senegal become viable production bases for labor-intensive products. Promoting trade, boosting employment and spurring investment are among the topics that will be discussed on August 4-6 at the first White House U.S.-Africa Leaders Summit in Washington.

African nations have a compelling opportunity to seize a share of the about 80 million jobs that China will export as its manufacturers lose competitiveness, according to Justin Lin, a former World Bank chief economist who now is a professor of economics at Peking University.

‘Manufacturing Powerhouse’

Chinese Premier Li Keqiang and Ethiopian Prime Minister Hailemariam Desalegn, who met on May 4, backed the move of Chinese industries to Ethiopia. China is “supporting Ethiopia’s great vision to become Africa’s manufacturing powerhouse,” Hailemariam told reporters at a joint press conference in Addis Ababa.

Weaker consumer spending in the U.S. and Europe after the financial crisis prompted global retailers to hasten their search for lower-cost producers, said Helen Hai, head of China Africa Consulting Ltd. in Addis Ababa. She ran Huajian’s Ethiopia factory until July of last year.

While China’s inland regions offered manufacturers a cheaper alternative to the export-linked coastal areas, rising costs and a limited pool of available workers now are undermining that appeal.

Average factory pay in Henan, about 800 kilometers from the coast, rose 103 percent in the five years ended in September and 80 percent in Chongqing, 1,700 kilometers up the Yangtze River. In the same period, salaries rose 82.5 percent in Guangdong, where Huajian has its base in the city of Dongguan.

‘Great Potential’

Cost inflation in countries including China has prompted Hennes & Mauritz AB, Europe’s second-biggest clothing retailer, to work with three suppliers in Ethiopia. The nation has “great potential” for production, H&M head of sustainability Helma Helmersson said in an April interview.

China’s average manufacturing wage is 3,469 yuan ($560) per month. Pay at the Huajian factory ranges from the basic after-tax minimum of $30 a month to about twice that for supervisors. By contrast, average manufacturing wages in South Africa, Africa’s biggest manufacturer, are about $1,200.

The duty-free and quota-free access that Sub-Saharan Africa enjoys for the U.S. and EU markets gives additional savings thanks to the African Growth and Opportunity Act for the U.S. and the EU’s Everything But Arms accord for the poorest countries. Import tariffs on shoes made in China range from 6 percent to as much as 36 percent, Zhang said.

Past-Future Business

A spokeswoman for Guess? confirmed that a licensee has done business with the Huajian Ethiopia factory in the past and may do so in the future.

A spokesman for Sycamore Partners, which owns Nine West, declined to comment on its business relationships and whether it has a relationship with Dongguan Huajian Shoes Industry Co. Marc Fisher Footwear is making shoes in the Ethiopia factory, Jaclyn Weissman, a spokeswoman for the company, wrote in an e-mail.

Signs of Ethiopia’s allure include factories outside Addis Ababa set up by leather goods maker Pittards Plc of the U.K. and Turkish textile manufacturer Ayka Tekstil. Foreign direct investment in the nation surged almost 250 percent to $953 million last year from the year before, according to estimates by the United Nations Conference on Trade and Development.

Zhang spends about half his time in Ethiopia, he says. During the visit last month, he spoke to about 200 uniformed Huajian supervisors, a mix of Ethiopians and Chinese, gathered in the parking lot. A giant plasma screen mirrored the crowd as Zhang hurried onto the stage.

Chant, March

He berated those assembled for a lack of efficiency, then praised them for their loyalty to Huajian, his words translated into Amharic and Oromo. He ordered them to march on the spot, to turn left and to turn right, all chanting together in Chinese.

“One two one,” they chanted. “One two three four,” as they marched in step. Slogans followed: “Unite as one.” “Improvement together.” “Civilized and efficient.”

They sang the “Song of Huajian,” whose words urged “We Huajian people” to bravely move forward, to hold the banner of Huajian high and to “keep our business forever.” Chinese supervisors led the song, their Ethiopian colleagues stumbling over some words and struggling to keep up.

Later, Zhang explained that he can’t be as tough on the staff as he would like.

“Here the management cannot be too strong as there will be a problem with the culture,” he said via a translator. “In China you can be strong, but not here. The conditions here mean we have to show respect. On one hand we have to have strict requirements; on the other hand we have to take care of them. They have their own dignity. They may be poor but we have to respect their dignity.”

Labor Demands

About 200 of the workers rebelled in early 2013, going on strike for two days after demanding a share of profits following a period in which Huajian’s orders surged, said Hai. The incident was resolved with the help of Ethiopian labor officials, she said.

Five workers interviewed at the factory on July 10 described a workplace of strict standards, with rewards for good results and penalties such as docked pay for ruined shoes.

Taddelech Teshome, 24, said her day starts at 7:20 a.m. after her Chinese employers provide employees with a breakfast of bread and tea. When her morning shift ferrying shoes from the factory floor to the warehouse is over, she gets fed the national staple, sour bread, for lunch. After work, a Huajian bus takes her to nearby Debre Zeit, a town where she rents a room with her sister for $18 a month.

Following Sister

She came to Huajian just over a year ago from her home 165 kilometers away in Arsi region after her sister started at the factory.

“The work is good because I pay my rent and I can look after myself,” she said, wearing an aqua Huajian polo shirt. “It’s transformed my life.” Taddelech said she wants to work for two more years at the plant and become a supervisor. She eventually aspires to build her own house.

With inflation at 8 percent — down from 40 percent in July 2011 -– saving cash is tough. Mohammed al-Jaber, who earns $30 a month for gluing shoe linings eight hours a day six days a week, said he can add to his pay with perfect attendance each month — a $7.50 bonus — and overtime. Any extra gets sent home to his family in the Arsi region.

Once famine-plagued Ethiopia, run by former rebels since they overthrew a socialist military junta in 1991, is seeking investment to support a growth rate that’s expected to fall to 7.5 percent this year from 9.7 percent in 2013. The population is expanding annually by 2.9 percent, at a time when the urban unemployment rate is 17.5 percent.

Economic Transformation

Ethiopia aims “to transform the economy” via industrialization by attracting foreign investors to zones where key public services will be concentrated, State Minister Of Finance Ahmed Shide said in an interview in Addis Ababa.

One appeal for China: Ethiopia follows a similar tightly controlled, state-heavy economic model. Opposition parties won only one out of 547 parliamentary seats at the last election in 2010.

Ties are strong between the Communist Party of China and the Ethiopian Peoples’ Revolutionary Democratic Front: On July 10, Central Committee Political Bureau member Guo Jinlong visited Ethiopia and met with Prime Minister Hailemariam. The two pledged to enhance cooperation, the official Xinhua news agency said.

Key Bottlenecks

Ethiopia’s heavy public investment in infrastructure using credit from Chinese state banks promises to relieve some key bottlenecks. The Export-Import Bank of China is funding a railway from Addis Ababa to landlocked Ethiopia’s main port in neighboring Djibouti. Ethiopia lost its coastline when Eritrea became independent in 1993.

The Chinese and Ethiopian governments also are investing in hydroelectric plants — including what will be Africa’s largest, the domestically funded Grand Ethiopian Renaissance Dam on the Blue Nile — that should increase Ethiopia’s power supply five-fold by 2020.

That may help overcome obstacles including the supply of electricity and cumbersome customs and tax procedures. In May, a World Bank team went to visit a textile factory in the Eastern Industrial Zone, where the Huajian plant is located, and found they are faced with daily power outages lasting for hours, Ethiopia country director Guang Zhe Chen said.

Sustainable Power

“There’s a big issue if you can’t ensure sustainable power supply for industrial zones,” he said.

While countries like Ethiopia have the potential to host Asian manufacturers, a “surge” hasn’t occurred, in part because of trade logistics constraints. “Getting things in and out of Ethiopia is very expensive and time consuming.”

Ethiopia slipped one place to 125th in the World Bank’s 2014 Doing Business rankings for 189 economies. It was behind China, at 96th, and ahead of competitor Bangladesh, which ranked 130th, the Washington-based lender said on its website.

It’s easy to forget that China’s infrastructure also was rudimentary at a similar stage of development, said Lin. He recalls that the first time he made the 96-mile trip between Shenzhen and Guangzhou in southern China in the early 1980s it took more than 12 hours, including long waits for ferries to cross rivers. The same trip now can be done in two hours.

“There were no bridges,” Lin said in an interview.

Nor were workers accustomed to modern production techniques. When auto-parts maker Asimco Technologies Ltd. began manufacturing in China in the 1990s, workers weren’t responsive to training, said Tim Clissold, former president of the Beijing-based company and author of a memoir, “Mr. China.”

Smiling Politely

“It was very difficult to deliver improvements at individual factories,” he said. “You could do training, and everyone smiles politely and then continues doing what they were doing before.”

Now, rising Chinese wages that Zhang calls “an inevitable trend” are pushing Huajian to try to increase its workforce in Ethiopia to as many as 50,000 within eight years.

A model of a planned new plant at the edge of Addis Ababa is displayed at the factory. The 126-hectare (341-acre) complex, partly financed by more than $300 million from Huajian, will include apartments for workers, a “forest resort” district and a technical university.

At the gathering in the parking lot, after supervisors sang Huajian’s company song, Zhang dismissed the Ethiopian contingent. Then he continued haranguing the Chinese managers. To make his point that structure was needed to keep employees in focus, he thrust a broomstick toward them repeatedly, then toward the remote camera that was feeding to the plasma screen, the image blurring with each prod.

Then he left the stage, laughing and raising a triumphant fist.

To contact the reporters on this story: Kevin Hamlin in Beijing at khamlin@bloomberg.net; Ilya Gridneff in Nairobi at igridneff@bloomberg.net; William Davison in Addis Ababa at wdavison3@bloomberg.net

To contact the editors responsible for this story: Chris Anstey at canstey@bloomberg.net Anne Swardson, Paul Richardson

Sourced here  http://www.bloomberg.com/news/2014-07-22/ethiopia-becomes-china-s-china-in-search-for-cheap-labor.html

Filed under: Economy, Infrastructure Developments Tagged: Addis Ababa, Business, China, Economic growth, Ethiopia, Investment, Manufacturing, Millennium Development Goals, Sub-Saharan Africa, tag1, Textile industry

.

World Bank Urges Ethiopia to Devalue Birr to Boost Exports

By William Davison Jul 22, 2014                                  

Ethiopia’s birr is overvalued and the country would benefit from a devaluation to boost export revenue and accelerate economic growth, the World Bank said.

Reducing the currency’s value by 10 percent in real terms may lead to a 5 percent increase in stalled export earnings and a 2 percent increase in growth, Lars Moller, the bank’s chief economist in Ethiopia, told reporters today in the capital, Addis Ababa.

Ethiopia last devalued its currency by 17 percent against the dollar in September 2010. Since then, the birr has appreciated in real terms by more than 50 percent, leading to a currency that’s overvalued by 31 percent, Moller said at a presentation of the lender’s third Ethiopia Economic Update.

After growing at a rate of about 20 percent in previous years, annual Ethiopian goods exports have remained steady at about $3 billion for the past two years, primarily because of falling international commodity prices. Foreign earnings from goods may have grown about 8 percent in the fiscal year that ended July 7 from $3.08 billion last year, Prime Minister Hailemariam Desalegn said July 18 to reporters. The country uses the Ethiopian calendar.

Although the exact effect of devaluing the currency is uncertain, there would be some benefit to the country, Moller said.

‘Insufficient Depreciation’

“The bottom line is that Ethiopia competes on prices and the real exchange rate is overvalued,” he said.

A decision to adjust the exchange rate would be made on the basis of what its wider impact on the economy would be, State Minister of Finance Ahmed Shide said at the event. The birr is currently at 19.7495 per dollar.

Ethiopia, the world’s most populous landlocked nation, may grow as much as 8.5 percent this year and next, the International Monetary Fund said last month. The nation earns most foreign-exchange from state-owned Ethiopian Airlines, while coffee exports from Africa’s largest producer of the beans are the highest grossing commodity.

To boost exports, the World Bank also recommended focusing on adding value to commodity exports by expanding processing and packaging, building industrial zones, opening access to credit for small- and medium-size enterprises, and improving costly and time-consuming trade logistics.

Ethiopia is investing to tackle infrastructure bottlenecks such as power and transport networks that have been a barrier to growth, which should help the business climate, Ahmed said.

The World Bank estimates Ethiopia could earn $1 billion a year from exporting electricity by 2023 if all of its hydroelectric projects are completed as planned, Moller said.

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net Paul Richardson, Sarah McGregor, Andres R. Martinez

http://www.bloomberg.com/news/2014-07-22/world-bank-urges-ethiopia-to-devalue-birr-to-lift-export-revenue.html

.

Unleashing the Potential of Ethiopia’s Export Industry

 

 

                                                                                 

Lars Christian Moller                                                     Guang Zhe Chen
Lead economist and co-author of the report.         World Bank Country Director for Ethiopia

.

ADDIS ABABA, July 22, 2014 –

Addressing key obstacles in its export sector would help Ethiopia to tap into its significant export potential and further facilitate its economic transformation, according to a new World Bank Group report released today.

In its latest Ethiopia Economic Update, ‘Strengthening Export Performance through Improved Competitiveness,’ the World Bank Group identifies bottlenecks and offers recommendations on how Ethiopia can maximize its earnings from its existing, largely agriculture, export base.

The country also has many economic success stories it can learn from, according to Lars Christian Moller, lead economist and co-author of the update.

It helps flower exports to be located near a regional hub, Moller said, as all flowers are transported via Ethiopian Airlines.

“The growth of horticulture, which is a time-sensitive export product, is closely associated with the rise of Ethiopian Airlines,” he added. “The airline has become the country’s biggest export, earning nearly $2 billion per year.”

 .

ADDING QUALITY TO COMMODITY EXPORTS

Over the past decade, Ethiopia has been one of the world’s fastest growing economies.  While positive external conditions and increased exports contributed to this growth, the country also successfully leveraged agriculture exports to developed countries. To sustain growth, the report recommends Ethiopia build on its agricultural foundation by adding quality and value to its exports.

For example, Ethiopia is among the top producers and exporters of the best Arabica coffee in the world, but it is not taking advantage of the commodity’s full potential in the export market, according to the report. Ethiopia exports mainly raw, unprocessed green coffee beans for around $2 per kilo. However, a kilo of roasted Ethiopian coffee retails for as much as $40 per kilo in international markets.

 .

OVERCOMING UNDERLYING VULNERABILITY

While upward price trends helped boost Ethiopia’s export growth between 2003 and 2012, the recent drop in prices of key commodities has led to the worst export performance since 2013. It has also exposed underlying vulnerabilities in Ethiopia’s export structure and highlighted the importance of strengthening competitiveness.

 .

RECOMMENDATIONS

More than ‘what’ is being exported, it is the ‘how’ that is hindering potential, the update notes. As such, the update outlines seven areas of policy focus that could help unleash Ethiopia’s export potential:

• Coffee: If Ethiopia exported more wet-processed green beans instead of sundried, it could earn a significant mark-up. Roasting coffee would also considerably increase its value.
• Cut Flowers: Using higher quality packaging dramatically increases prices. Further value could be added with better management of the freight and cold chain.
• Live Animals: Processed meat is more lucrative (while retaining hides and skins for the leather industry). However, more needs to be done to meet international standards.
• Branding quality products would better enable Ethiopia to earn premium income. Examples include coffee from Yirgachefe, Harar and Sidamo, or Humera sesame seeds.

In addition, the update recommends that the country address key constraints in its export business such as reliable access to electricity, credit and foreign exchange.

Improving trade logistics and trading times: It currently takes 44 days to import/export a container. Ethiopia can significantly improve trading times by extending operating hours and improving border cooperation; reducing the number of trading documents required and enhancing border management procedures including establishing a single window system.

Establishing Industrial Zones: Based on best practices such as those under the World Bank Group-supported Competitiveness and Job Creation Project, Industrial Zones would enable Ethiopia to attract more export oriented foreign direct investment.

Ease of doing business: Reducing start-up capital for enterprises may also have an immediate impact on facilitating greater firm entry into the formal sector.

Improving the competitive environment:  Intensifying local competition and reducing market domination by individual companies could help improve the business environment.

A more competitive real exchange rate: Since Ethiopia’s exports compete mainly on price rather than quality, having a more competitive real exchange rate could lead to substantial increases in exports.  In order to prevent higher inflation associated with a weaker currency, any adjustment to the exchange rate needs to be complemented by other macro policy adjustments.

http://www.worldbank.org/en/country/ethiopia/publication/ethiopia-economic-update-strengthening-export-performance-through-improved-competitiveness.

Obama’s Africa Summit Set to See $900m+ in Deals Announced

US Secretary of Commerce Penny Pritzker.Agence France-Presse/Getty Images

.

US Commerce Secretary Penny Pritzker confirmed today that deals worth almost $1 billion would be announced at the US-Africa Business Forum in Washington DC early next month.

Ms. Pritzker told WSJ Frontiers that: “There will be announced at the summit at least $900 million in deals. It will be a combination of all different types of structures. But this is new money—and there will be more to come.”

The US-Africa Business Forum, which will be co-hosted by the Department of Commerce and Bloomberg Philanthropies, will bring together more than 200 U.S. and African businesspeople along with heads of state and other government officials, according to Ms. Pritzker. The aim of the business forum, which takes place alongside President Obama’s US-Africa Leaders Summit, is to “encourage U.S. private sector investment in Africa and vice versa,” she added.

More than 40 African heads of state are expected to gather in Washington for the presidential summit on August 6 to discuss economic development, security and governance.

The Wall Street Journal will be covering the summit and associated events in Washington with live updates on WSJ Frontiers as well as news and analysis at wsj.com/africa.

Write to Dan Keeler at dan.keeler@wsj.com.

 http://blogs.wsj.com/frontiers/2014/07/22/obamas-africa-summit-set-to-see-900m-in-deals-announced/

.

Ethiopia: The Bilateral Relation Between Ethiopia and China…

.

The bilateral relation between Ethiopia and China has never been at the height of its glory as it appears now, gossip observed. Ever since 200 Chinese laborers arrived in the highlands of Ethiopia in January 1868, building the road that led to the well known expeditions by Robert Napier’s (Gen.), against Emperor Tewodros, the Chinese reserve a significant place in building the nation’s physical infrastructure, gossip recalls.

From historical engagement of building roads, power plants and telecom infrastructure to the new undertakings of light railway to Addis Abeba and rail lines connecting the country to the sea, no other country than China has committed to making over five billion dollars available in a form of loans, gossip disclosed. In fact, the Chinese authorities have told members of Ethiopia’s top leadership their desire to see Ethiopia as a growth model for the entire continent, gossip learnt.

Gossip sees little surprise then in the high level visits and exchanges between the two countries. During one recent high profile visit by the Chinese Prime Minister, Li Keqiang, Ethiopian authorities have placed their requests to find financing on two major projects: the transmission line for the GERD, estimated to cost a little over one billion dollars, and the construction of railway line extending up north of Weldya, to link Mekelle and potash rich north-eastern part of the country.

Projected to cost 1.6 billion dollars, the idea of building a railway line between Mekelle and farther has first surfaced when the late Meles Zenawi was in office, gossip disclosed. Considering how expensive the project would turn out to be and in the absence of economic rationale that sways, Meles was reportedly reluctant to approve the project at the beginning, only to change his mind later on, claims gossip. Nonetheless, a disclosure of an agreement between the heads of the Ethiopian Railway Corporation (ERC) and the Chinese contractor, CCCC, provoked criticism within and outside of the administration, gossip disclosed.

During his visit to Ethiopia in May 2014, Prime Minister Keqiang had instructed his aides to look into the project for possible finance, gossip disclosed. Now Arkebe Oqubay (PhD), the Prime Minister’s point man for infrastructure and industrial affairs, is seen very keen and determined to see the project gets through, despite the grudges over its economic viabilities, gossip reveals.

Disappointingly to the senior EPRDFites though, the financing pledge by the Chinese Premier has not come handy to date, according to gossip. What should be far alarming, and contrary to the EPRDFites’ consolation that the nation’s debt sustainability ratio is in the category of low risk countries, the new leadership in China that is busy in restructuring foreign debts their country is owed has not demonstrated its customary enthusiasm in entering into new commitments, claims gossip.

Such state of affairs may explain the reason behind high level visits by senior EPRDFites, including one by President Mulatu Teshome (PhD), claims gossip. Having thought to have his years studying in the same college as Keqiang, and serving as a special envoy of his country to China, not to mention his fluency in Mandarin, his visits to textile, leather and telecom companies was trusted to lure more Chinese investors, and help him get hearings from Chinese authorities, according to gossip.

Despite little hopes among those who follow the case for the government, whether he succeeded is yet to be seen, claims gossip. In the meantime, though, two veterans EPRDFites, Abay Tsehaye and Bereket Simon, have paid a visit to the dragon nation to reassure Chinese authorities that Ethiopia won’t buckle on its international commitments, gossip disclosed. Theirs too is a result remaining on the suspense, claims gossip.

http://allafrica.com/stories/201407220580.html 

.

Meeting the Challenge: Allana Potash Focuses on Ethiopia to Meet Demands of Changing Market

VANCOUVER, B.C., July 22, 2014 (GLOBE NEWSWIRE) – The potash market has seen its share of trials in recent months. Cartel dissolutions, soaring production costs and declining spot prices have created a challenging market. But Toronto-based Allana Potash Corp. (AAA.TO) is one company that has turned those challenges to its advantage.

Since 2009, Allana’s primary focus has been on the acquisition and development of international potash assets. A cornerstone of its activities is the flagship Danakhil Potash Project in the Danakhil region of Ethiopia, which is on track to become the first functioning potash mine in Africa.

“Unlike major projects that have faced cancellations or significant delays due to declining potash prices, Allana has a number of unique advantages, including an extremely low capital expense/operating expense model and a growing number of investment partners,” says Richard Kelertas, senior vice-president, corporate development, for the company. “What we have with Danakhil is a world-class, high-grade potash resource that we can access with cost-effective, proven mining methods.”

This business model has attracted the attention of partners such as IFC, a member of the World Bank Group, and Liberty Metals and Mining Holding LLC. In January, Allana announced its most significant partnership yet with Israel Chemicals Ltd. (ICL), the fifth-largest potash producer in the world. Under the terms of the agreement, ICL is now a minority shareholder at 16.4%.

“For a large potash producer to work with a junior partner is a major validation of the project for us,” says Farhad Abasov, Allana’s chief executive officer. “While ICL has taken minority positions before, they have never remained as just a minor investor. They add value to the operation and management and usually expand their ownership over time as they become more comfortable with the jurisdiction and the process.”

“They saw a great opportunity with this project,” says Kelertas. “Not only is the economy growing, Ethiopia is the ideal location to cost-effectively service African, Asian and Middle Eastern markets.”

There are three core components included in the ICL deal: financial support, a take-or-pay offtake for 80% of production, and technical cooperation. ICL’s investment stands at $25-million, with the potential to reach $84 million, assuming full exercise of its warrants. Production is planned to reach one million tonnes of muriate of potash (MOP) annually. MOP is the standard grade of potash that is applied to staple crops such as corn, wheat and soy. The project also has the potential to produce sulphate of potash (SOP), which is applied to cash crops such as vegetables and orchards, as well as golf courses.

The take-or-pay offtake is unique for ICL and the industry as a whole. In a traditional offtake agreement, a company will commit to taking a certain amount of production at a discounted price. If the product cannot be sold, the producer is responsible for the inventory storage.

In the take-or-pay agreement, ICL will pay for its percentage of output, whether it has been sold or not. “That almost guarantees a large bulk of cash flow for Allana because 80% of our output will be paid for regardless,” Kelertas explains. “That’s a tremendous advantage no one else in this industry has, and provides major comfort for banks providing debt financing because it shows we will be able to service our debts.”

“Nobody in this sector has done anything like this. But ICL saw a lot of potential and synergies,” Abasov says.

ICL also has invaluable expertise in the infrastructure needed for solar evaporation. This is a commonly used process in which water is utilized to extract and convey potash deposits close to the surface and deposited in solar evaporation ponds. ICL manages one of the world’s largest solar evaporation pond systems near the Dead Sea. In the case of the Danakhil project, water-soluble potash deposits will be flushed with brine from a natural aquifer and the liquid pumped to surface evaporation ponds. There the high temperatures will accelerate the process for more efficient production.

“ICL knows everything there is to know about solution mining, transportation, construction and logistics,” Kelertas says. “Without that we would have had to hire the expertise to bring the project into production.”

In fact, capex costs for the project are estimated to reach only US$642-million, with total opex at $125 per tonne (delivered on ship, including sustaining capex and transportation from the site). This pales in comparison to the multi-billion-dollar projects that have been abandoned or postponed due to declining potash prices in the face of rising production costs.

With Allana’s low capex numbers, Kelertas says it can continue to deliver a high rate of return once the mine is at its full capacity of one million tonnes per year. “The very low cost structure means that we can be profitable even at a US$300 to $350 spot price. Other projects won’t get off the ground unless the price is $500 or higher, so many of them are looking at 2020 or beyond before they might get back on the drawing board.”

Unlike other parts of Africa, Kelertas says, Ethiopia is a geopolitically stable and rapidly growing economy and a mining-friendly jurisdiction. “There’s a tremendous amount of infrastructure money flowing into Africa as we speak, especially on the agricultural side. Analysts and investors, including heavyweights Warren Buffet and KKR, are projecting that agriculture will be one of the biggest investment areas over the next five to 10 years in the continent.”

As a mining-friendly jurisdiction, Ethiopia has been investing billions on its transportation and distribution infrastructure. “Road, rail and port facilities are all being built for us,” says Abasov. “Plus we have all the water supply we need for sustained production.”

The African market will become a thriving market for potash as the continent’s food requirements expand. According to the United Nations, Africa will make up 25% of the world’s population by 2050, versus 15% today, and urban dwellers will quadruple during the same period. At the same time, increased demand on available arable land will drive a need for increased crop productivity and yield, which relies on sustainable potash production for fertilizer applications. Ethiopia’s Agricultural Transformation Agency reports that 100,000 to 400,000 tonnes of potash will be consumed by Ethiopia, Kenya and other East African nations over the next five years.

“Ultimately Allana’s success will hinge on three principles,” Abasov says. “First the shallow nature of the deposit and the hot climate offer a significant advantage in terms of cost structure. Second, we are able to attract project financing from large global financial institutions with mandates to spur economic development in emerging nations. In terms of general development, over $3-billion of foreign direct investment has been made in the agriculture sector in Ethiopia alone. Third, the Ethiopian government is extremely supportive. In fact, we are one of only a few projects that are fully permitted. In addition, the federal government is taking on many of the construction expenditures relating to infrastructure building that will help ensure the long term success of our project.”

Once production is in full force, Abasov estimates that 30% to 40% of output will be slated for the African market.

“To succeed, we have to make sure we are one of the lowest cost producers on the planet,” Kelertas says. “And we will likely be once we’re up and running at full capacity.”

http://finance.yahoo.com/news/meeting-challenge-allana-potash-focuses-162901786.html.

ICT4Ag in Ethiopia: The Three S’s

.

“ICT is not the silver bullet. Find what works and do that.” This idea came out of the Tech Salon “What Can We Learn from ICT4Ag in Ethiopia” held last week, where ICT4Ag leaders discussed some of the current initiatives aimed at feeding 92 million people in Ethiopia.

 

Participants compared notes about working with farmers versus the private sector or government, and which ICTs have been successful or not. Most participants agreed radio has the greatest resonance with farmers, because 65 percent of Ethiopians own radios compared to 24 percent mobile phone penetration. Some initiatives use a multi-channel approach, that may include radio programming in combination with SMS reminders to do x,y,z, or notifications about prices or weather conditions. Most of the successful ag initiatives are small, and the current challenge in Ethiopia is bringing successful programs to scale.

Lead discussants included Judy Payne of USAID, Adam Abate of Apposit and Eric Couper of Abt Associates. Participants discussed these three S’s as challenges for ICT4Ag in Ethiopia:

Scale

Participants working in the public and private sector said the biggest challenge for improving agriculture in Ethiopia is scale. Everyone working in the space is trying to figure out how to increase reach for the current small but successful programs. Organizations are strategizing how to  increase awareness of programs and also convince farmers to adopt best  practices.

Systems

Ethiopia has the highest number of extension agents per capita in the world, and the government is the main provider of farming supplies such as seed and fertilizer. One discussant advocated for organizations to address the government’s supply and delivery system rather than doing farmer-facing projects. Unfortunately there are not many incentives in the government system to promote efficiency for deliveries, and farmers suffer because of this. Many problems farmers encounter can be contributed to inefficiencies in the government system, and late deliveries, bad product etc. affect their growing windows. In the future of ag in Ethiopia, farmers need better access to supplies to improve production.

Sustainability

Many of the ag initiatives mentioned such as iCow, Shamba Shape-Up, Farm Radio International and digitalGREEN are funded by donors. Participants discussed how this leads to lack of sustainability for projects. One participant said one opportunity to increase sustainability is to partner more with the Ethiopian government,  because the government controls so much of the supply system. By partnering with the Ethiopian government, organizations can address the systems that often create problems for farmers, i.e. late deliveries, delivery of bad product, etc.

One discussant said the private sector must be involved to create more sustainable ag programs. In Ethiopia, the private sector has been crowded out by the government and funders, and prohibited more entrepreneurial growth.

ICT may not be the silver bullet in Ethiopia. Although after the June Tech Salon discussion it’s evident that there are already many ideas among ICT4Ag leaders to help farmers get better access to supplies and bring successful programs to more farmers.

http://technologysalon.org/ict4ag-ethiopia-three-ss/

.

Addis to Host Transport Infrastructure Forum 

.

The Economic Commission for Africa will be hosting a regional infrastructure forum from 24 to 26 July 2014, at the UN Conference Centre in Addis Ababa.

The forum is conducted on the theme, “Boosting Market Integration and Intra-African Trade through Effective Management of Regional Transport Infrastructure and Services”.

According to the United Nations Economic Commission for Africa (UNECA), the meeting aims to assess the implementation of cross-border transport infrastructure Projects in Africa.

The forum is being held in Ethiopia, a country which records a high level of implementation of transport projects and infrastructure.

The host government will offer participants with the opportunity to travel on a study tour of one of its major transport infrastructure projects. The forum addresses emerging trade issues, particularly around the role of how to manage cross-border transport infrastructure and services in order to strengthening market integration and enhance intra-African trade.

It will also enable different stakeholders to exchange information and experiences on issues surrounding the relationship between trade and transport. Updates will be provided on where Africa stands on the implementation of the Program for Infrastructure Development in Africa (PIDA) and other regional projects. Expected at the meeting are representatives of national project implementation units/Agencies; associations of national road agencies, Regional Economic Communities (RECs), the African Union Commission Corridor Management Organizations, transport associations, development partners and international organizations.

http://allafrica.com/stories/201407221498.html

.

Russian GBP Seals Afar Petroleum Exploration Contract with $60 million

.

-  Positive yield leaves GBP with 30pc, while 70pc share goes to government 

Sergey V. Tagashhove, executive director of corporate communication at the GPB (left) is giving a gift to Tolosa Shagi, minister of Mines (right), and Alexander Ivanov, business development director of GPB is watching his company’s award to their new client

GPB Global Resources, a Russian petroleum company, is going to explore petroleum and natural gas with an estimated capital of 60 million dollars in the Afar basin, eastern part of Ethiopia, following a year-long negotiation with the Ministry of Mines (MoM).

This is according to the petroleum production and sharing agreement signed between the Company and MoM on Thursday, July 17, 2014. The Company acquired the concession right for 30pc, with the remaining 70pc share going to the Ethiopian government, if the exploration yields a positive result.

The agreement was signed by Tolosa Shagi, minister of Mines, and Alexander Ivanov, business development director of the Company, at the Ministry’s premises located on Dessie Street.

GPB Global Resources is a group of companies, engaged in petroleum and mineral resource projects in various parts, including Africa, South America and the Middle East. Since its creation, GPB facilitated Gazprom’s oil and gas projects in Libya, where its daily production exceeds 100,000 barrels of oil.

The Company will start the first stage of exploration on 42,226SqKm area for three years and can renew its exploration license twice for two years, if positive signs found in the area, according to the deal between the two parities. The exploration period will be for seven years in three stages and it will grant 25 years exploitation period, if the Company finds petroleum.

“The Company selected the area by using their satellite and technological equipment without any recommendation from the geological results from the Ministry,” said Tolossa.

The Company will start the exploration very soon after finalising the preparation time, according to Sergey V. Tagashhove, executive director of corporate communication at the GPB.

The Ministry is currently administering 15 petroleum production and sharing agreements with nine companies in Ethiopia, where the presence of gas was first confirmed in 1972 by Tenneco, a US company. Tullow Oil Plc, a British company, and Southwest Petroleum Company Plc, from the US, have already started exploration at the South Omo and Abay basins as well as in Tigray, Gambella and Somaia regions.  But recently Tullow has suffered a string of disappointing exploration results at the Chew Bahir basin in South Omo.

In July 2011, PetroTrans signed a petroleum production sharing agreements with the Ministry after it agreed to invest close to four billion dollars to develop the gas fields, but the deal was terminated by the Ministry exactly a year later.

According to a recent data from the Geological Survey of Ethiopia (GSE), Ethiopia has  reserves of  168 million tonnes of natural oil, 4.7 trillion cubic feet of natural gas and unspecified amount of petroleum in Kalub, Hilala, Ogaden, Gambella, Mekelle and  Abay basins.

Currently 73 foreign companies, 38 local companies and 40 joint venture companies by local and foreign companies have acquired 207 mineral exploration and 63 exploitation licenses.

http://addisfortune.net/articles/russian-gbp-seals-afar-petroleum-exploration-contract-with-60/

.

Dow Chemical Opens Subsidiary Office in Ethiopia

.

The American corporation, Dow Chemical Company, opened a subsidiary office in Ethiopia.
Max Robinson is appointed as the first General Manager of Dow Ethiopia, starting from Monday, July 7, 2014.

Dow operates in about 180 countries all over the world and employs around 53,000 people. Its presence in Africa is marked for over half a century.

The company currently has annual sales of more than U.S $ 57 Billion and presents 6,000 products that are manufactured at 201 sites in 36 countries. It is an American multinational chemical corporation and manufactures plastics, chemicals and agricultural products.

http://www.2merkato.com/news/alerts/3144-dow-chemical-opens-subsidiary-office-in-Ethiopia

.

Jimma University Hospital to Start Producing Oxygen and Vacuum

.

Jimma University Specialized Hospital’s (JUSH) oxygen and vacuum producing pant is said to start operation in the coming September.

The plant is part of the Hospital’s 500 Million Birr expansion work which other than the plant includes construction of new buildings and acquisition as well as installation of several equipments.

The plant is supplied and installed by Italian company, Allay Scientific Company. The plant, according to Fekadu Assefa, the Hospital’s CEO, is capable of producing 100 cubic meters in an hour with a purity level of 95 percent.

Fekadu noted, the fund for the expansion project is secured from Ministry of Finance and Economic Development (MoFED). He added the oxygen plant will save the Hospital a million Birr and also generate revenue by supplying to the market.

JUSH was first established in 1937, during the Italian occupation for the purpose of giving medical service to Italian soldiers. However, after the withdrawal of Italy was renamed as Ras Desta Damtew Hospital. But this name did not stick around forever, the Dergue dubbed it Jimma Hospital and it latter grew into a University Specialized Hospital.

http://www.2merkato.com/news/alerts/3141-ethiopia-jimma-university-hospital-to-start-producing-oxygen-and-vacuum

.

Bishoftu Finance Fair Organized Successfully

.

Agri-ProFocus/Agri-Hub Ethiopia organized its sixth and successful agri-business Finance Fair in collaboration with Oromia Seed Enterprise/ISSD in Bishoftu, Oromia on July 15 & 16, 2014.

The organizers and participants of the fair had a pleasure of having the Vice President Oromia National Regional State and Head of the Agriculture Bureau Ato Zelalem Jemaneh as Guest of Honor.

As a unique feature and a reflection of culture of Oromo people, local elders having fresh grass in their hand for a symbol of greenness, prosperity and a better future, made cultural blessings to the opening of the Finance Fair. Subsequently, General Manager of OSE and ISSD Coordinator Ato Kedir Nefo welcomes the participants and invite Ato Zelalem Jemaneh for the opening speech.

Admiring the organization of the fair as well as the paper presentations and discussions to be followed that day, Ato Zelalem mentioned that good results are expected at the end of the event. He also indicated that field visit which the fair comprises will make the event more successful.

The Bishoftu Finance Fair with a motto “Better Future for Farmers’ Access to Financial Services” was attended by more than 350 participants from farmers’ cooperatives, governmental and non-governmental organizations and the private sector.

Parallel to the market place in which over 15 organizations (financial institutions, cooperative unions, capacity builders, and private companies) exhibited their product and services, inspiring and fruitful paper presentations and discussions had taken place on the first day of the event. Over 35 people from different organizations and government offices had a filed visit on the next day to Biftu Primary Cooperative, 50 km from Bishoftu city.

 

Paper Presentations

Seven papers focusing on bottlenecks and challenges of access to finance were presented at the event. Kebede Dhuga (from APF/AHE) explained the objective of organizing the finance fair, and presented in detail the activities of Agri-Hub Ethiopia in promoting farmer entrepreneurship and in achieving access to finance. Arfasa Kiros (from OSE/ISSD), Dr. Abule Ebro (from LIVES), Awet Teki (from ATA), Belete Wakbeka (from Cooperative Bank of Oromia), and Dr. Tesfaye Kumsa (from Anno Agro-Industry) presented their individual papers in which productive questions and discussions followed from the audience. (All paper presentations will be posted on Agri-Hub Ethiopia website soon.)

 

Field Visit

Representatives of Financial Institutions, capacity builders, government offices and cooperative unions had a field visit to Biftu Primary Cooperative on July 16, 2014. The Cooperative which is engaged on seed producing sector briefed its current activities, financial situations and success stories through its representatives.

http://apf-ethiopia.ning.com/profiles/blogs/bishoftu-finance-fair-organized-successfully

.

Bill Gates
Addis Ababa University Honorary Degree
July 24, 2014

Thank you for that introduction, Dr. Admasu Tsegaye [President of Addis Ababa University].

Prime Minister Hailemariam; distinguished guests; faculty and students of Addis Ababa University.

I am deeply grateful for this honorary degree.

I never got my real degree. I dropped out to start Microsoft, and never went back.

So getting a diploma I can put on the wall and show my father is a relief.

It is a special honor to receive an honorary degree from Addis Ababa University.

This is one of the leading institutions of higher learning in Africa – a continent whose future has been a central interest of my career ever since my wife and I began our foundation nearly 15 years ago.

The first time Melinda and I came to Africa, 20 years ago, we were on vacation.

We visited Kenya, Tanzania, Rwanda, and Burundi. We were awed by the natural beauty. But we were no less awed by the poverty we witnessed. Children were dying from illnesses we’d never even heard of.
This struck us as deeply wrong – and totally unnecessary.

The foundation we started took as its motto “All Lives Have Equal Value” – because it was so obvious to us that the world was clearly not treating all lives as having equal value. If it were, kids wouldn’t be dying by the millions from diseases that are preventable and treatable.

In short, coming to Africa inspired us to start our foundation.

Of course, the Africa I’m visiting today is not the Africa we saw back then.

You know the stats: Income per-person in sub-Saharan Africa is up by two-thirds.

Seven of the 10 fastest-growing economies in the world are on this continent.

I could go on. But I didn’t come here to give a speech about economic statistical phenomena – because those figures don’t get at the real reason why I’m optimistic about Africa.
The real reason why I’m optimistic about Africa is that this continent is now in an incredible position to shape its own destiny for the better.

Why is this the case?

For one very simple and powerful reason: the countries of Africa are learning from each other.

I know that much of the narrative over the years about Africa has focused on how outside entities can help the people of this continent – whether those entities are foreign governments, or international aid organizations, or non-profits such as our own foundation.

Make no mistake – outside support has made a big difference, and will continue to do so. I spend a lot of my time advocating for donor countries to maintain foreign assistance focused on the needs of the poorest – and that assistance does have an absolutely critical role to play.

That is also why our foundation has such a focus on Africa, investing in research and supporting delivery efforts on the issues of greatest consequence to the people of this continent – from HIV/AIDS to malaria.

In doing so, our priority is to support programs developed by Africans, for Africans, because we understand that the real fuel for development will be the resources of African nations themselves – whether that’s in the form of government funding, private-sector investment, or just plain human creativity at all levels of society.

.
This is where the idea of “African countries learning from each other” becomes so important. If you want to spend your national budgets as effectively as possible, there is now a clear path for doing exactly that – and Africans themselves are defining that path, for others to follow if they choose.

That path may not be easy, but it’s fairly simple to explain, and it comes down to this: If you want your country to rise from low-income to middle-income status, emphasize two things: health and agricultural development.

If you get health and agricultural development right, the gains are exceptional, and they reverberate through the rest of your economy for decades to come.

African leaders have formally acknowledged these truths. At Abuja in 2001 and Maputo in 2003, the delegates to the African Union agreed to targets for investment in these sectors.

While the progress since then has been uneven, the emphasis on health and agriculture is absolutely right.

The reason for this is straightforward: There is no path to lasting growth within Africa that is not widespread growth. It’s not possible. If Africa seeks prosperity, it must provide for the health and nutrition of all – including the poorest. Unless this continent brings its rates of malnutrition and premature mortality way down, it will not achieve the productivity levels necessary to compete in the global marketplace.
I fully realize that health and agricultural productivity are far from the only factors in economic growth. There are plenty of others – education, good governance, a sound physical infrastructure, to name just a few.

There’s no question that a modernized approach to development finance is another much-needed factor in equitable growth. Ethiopia is going to host a very important Financing for Development conference a year from now. That gathering will seek to establish a vision of finance for the new targets that will succeed the Millennium Development Goals.

That will be a critical opportunity for the world to commit to the public and private investments that are necessary if we are to continue to accelerate human development and economic growth.
To be successful, that new vision of development finance will need to be rooted in basic human needs. In fact, any sensible definition of what it means to be a middle income country should go beyond per-capita numbers and include some measure of achievement on basic human needs like health and nutrition.

Across Africa, some countries are doing a very good job of meeting those needs – and others are not. The differences in outcomes are striking, even for countries with similar resources.

That variance represents a massive opportunity for countries to learn from each other’s best practices. If you learn from each other, then all countries in Africa should be able to do as well as the highest performing countries. That would be a stunning transformation.

A great place to start this conversation is where I’m standing today – Ethiopia.

I realize this is a nation that still faces many fundamental challenges, but Ethiopia has made enormous relative improvement in both health and agricultural productivity, which will give the country a solid basis for lasting growth.

Yes, Ethiopia remains for now a low-income nation by global standards – but that’s exactly my point.

With per-capita income comparable to many other African nations – and considerably smaller than some – Ethiopia is putting itself on a path to the global middle class.

If this proud country – which 30 years ago was seen by many as the world’s most extreme example of poverty and malnutrition – can put itself on this trajectory, there’s no good reason why other African countries can’t do the same.

What has Ethiopia done right? Quite simply, it has made health and agricultural development top priorities.

I want to talk briefly about what it’s done in both of these areas, and mention a few other nations that have also generated good examples in each.

Let’s start with health.

Our foundation started with a focus on health because that’s where the evidence pointed us. We were looking for the most strategic way to fight inequity so that our resources did the greatest good for the greatest number. Investing in health generates extremely high returns for huge numbers of people.

Here’s a striking illustration of that: A recent global commission of leading economists found a strong connection between health and national prosperity. Its report stated that about 11 percent of the economic growth in low- and middle income countries from 1970 to 2000 resulted from reductions in adult mortality.

Conversely, there’s a vicious cycle that results from not investing in health – and here too, the results show up on a national scale.

For example, malaria kills more than 600,000 people a year. That’s a big number.

But it actually understates the problem – including the calamitous economic costs of the disease.

Malaria infects roughly 200 million people annually, of whom probably more than 99 percent survive. At best, the survivors have to miss school or work for extended periods. At worst, they suffer lifelong disabilities, including cognitive impairment that virtually guarantees they’ll never reach their full potential.

Even when malaria and other diseases don’t take children’s lives, they can steal their future – and slow the progress of a nation.
This is the right time to invest in eradicating malaria – and other diseases that have long plagued this continent.

When I first started learning about development, there wasn’t a lot of hope that we could make rapid progress against malaria. Parasites had developed resistance to chloroquine – the main drug used to treat the disease – and malaria was resurgent across much of sub-Saharan Africa.

Since then, the global research community has begun committing more resources to malaria and other illnesses that disproportionately affect this continent. New vaccines and other health advances are emerging as a result.

But something else has been happening, as well. And that “something,” once again, is that Africa is learning from itself.

Countries on this continent – including some very poor countries – have made crucial innovations in providing for the health of their people. These innovations are models that virtually any African nation can follow, regardless of income.
Ethiopia has helped set the standard – most notably with its groundbreaking Health Extension Program. The federal government recognized that if it was going to make good on the Millennium Development Goals, it was going to have to expand access to primary health care across this large, predominantly rural country.

It came up with a smart plan. It identified the geographical gaps in health coverage, and went about filling those gaps, deploying more than 38,000 health-extension workers – nearly all of them women – in over 16,000 health posts nationwide.

Since its inception in 2004, the Health Extension Program has provided a range of vital services in maternal and child health; disease prevention; sanitation and hygiene; and basic health education.
Overall, the Health Extension Program has been a great success – and you can see it in the data.

The under-five mortality rate fell 67 percent from 1990 to 2012, meaning that Ethiopia met this Millennium Development Goal. The rate of decline has been especially impressive since the middle of the last decade, when the Health Extension Program began its work.

This level of success does not come without cost or effort. Indeed, one important factor in the program’s success is Ethiopia’s willingness to devote more resources to health.

While outside aid has remained vital to the improvements in Ethiopia’s health outcomes, this nation’s absolute government expenditure on health has more than tripled since 2000.

I applaud the government for this – and hope that Ethiopia’s public spending on health keeps pace with the needs of a population that is both growing and seeking better access to health care.
Ethiopia has shown a willingness not only to invest in health, but to do something that is sometimes even more difficult for governments, on any continent: It has been willing to measure results, adapt where needed, and admit the shortcomings that still exist.

For example, the Health Extension Program has been quick to offer new interventions in response to practical needs – such as by allowing health extension workers to treat childhood pneumonia and provide new, long-acting family planning methods.

It has also been willing to collaborate – as it has with one of our grantees, L10K, which serves as a bridge from households to the Health Extension Program.

The government recognizes that while it has achieved great gains in combating child mortality, it still has much work to do to reduce Ethiopia’s maternal mortality rate, which remains one of the highest in Africa.
The Health Extension Program is a remarkable example that other African nations, such as Namibia, are already learning from.
On vaccines, there is enormous variance across Africa. Across the continent, vaccine coverage ranges from the mid-90s to well under 50 percent. Ghana – another African country that could serve as a model for development in both health and agriculture – has been among the continent’s best examples on vaccination.

In 2012, with assistance from the GAVI Alliance, Ghana took the innovative step of simultaneously rolling out pneumococcal and rotavirus vaccines – the first time any African country had introduced the two vaccines at the same time.

The project was a success, and by the end of the decade, vaccines against two of the most prolific killers in the world – diarrhea and pneumonia – will be available in nearly every African country, thanks in part to GAVI’s excellent work, and in part to the national model that Ghana has established.

With regard to malaria – which I talked about a moment ago as an example of the economic burden of disease – a number of African countries, such as Zambia, are demonstrating that progress is possible where governments take determined action.
If this is the case now, with the weapons currently at our disposal, it will be even more so as new medications and other tools become available.

And while there is still a long way to go, it is inspiring to see the public-health gains so many countries in Africa have made in recent years. Along with Ethiopia, countries from Liberia to Malawi to Tanzania have met the MDG goal of cutting mortality by two-thirds even before the 2015 deadline. Others, like Madagascar and Niger, are on the verge of doing so.

That progress is both accelerating and spreading – in countries like Senegal and Rwanda, the rates of improvement are among the fastest we have measured in recent decades. That translates into millions of lives saved – young Africans who will soon be the ones leading the continent into the future.

Now I’d like to turn to the other central element of lasting growth for Africa – agricultural productivity.

Here too, Ethiopia has been a leader. The federal government did something extraordinary – it set up an organization, the Agricultural Transformation Agency, or ATA – that focused on providing data-driven, evidence-based solutions to improving farm productivity nationwide.

It’s very strategic for an African government to place this kind of bet on agricultural innovation. After all, the continent’s economy remains heavily reliant on agriculture: Two-thirds of Africans depend on farming for their livelihoods.

Ethiopia is no exception to this reliance: Agriculture accounts for about 45 percent of its GDP.

I’d like to mention a couple of great examples of what Ethiopia has achieved with its ATA initiatives. One of them involves one of my favorite subjects: fertilizer.

For the past three decades, Ethiopia had used only two types of fertilizer. When you think about how big and geographically varied this country is, that didn’t make much sense. After all, different fertilizers work best in different soils.
The ATA, working with the Ministry of Agriculture, found that the best way to assess fertilizer needs nationwide was to analyze the soil using remote sensors and satellite imaging.

I had the privilege of seeing this project myself on my last visit to Ethiopia. I got to see the special soil augurs and sampling techniques that your teams were using.
The result of this effort is a soil-mapping system that’s unprecedented not just for Africa, but for virtually anyone in the world.
By the end of this year, the government will have mapped soil fertility for the whole of Ethiopia. Our foundation provided some early support for this effort, and
we’re proud of the results.

There’s also been some great innovation with regard to farmer-owned cooperatives. These have a mixed record in Ethiopia and across Africa, but can provide much-needed services for their members, such as distribution and marketing. The world-renowned coffee sector here in Ethiopia has seen good examples of this.

Now the ATA is leading a $50 million project to build storage capacity within these cooperatives – it’s a three-year undertaking, and is drawing upon $3 million in capital from the World Bank. It’s a good illustration of how a little outside money can supplement a much larger, internally funded effort.
Ethiopia has begun to branch out from the collectives, and to open up its agricultural market. It is expanding its agro-dealer program, including through direct-seed marketing.

Just last year, some regional bureaus of agriculture began supporting the marketing of certified seed directly to farmers – a departure from the traditional practice of having farmers register with local agricultural offices or extension agents.

By opening its markets further – and by seeking the involvement and consent of the rural communities themselves – Ethiopia could realize significant gains from its most important resources of all: the ingenuity and creativity of its own people.

Other countries – such as Ghana, Nigeria and Tanzania – have undertaken their own bold investments, with huge payoffs. These are innovations that nations throughout Africa could emulate or adapt.

For example, Nigeria has established agricultural zones based on the distinct geographies of that country, to help growers in those regions with farming and processing techniques tailored to local crops.
While we admire these and other agricultural innovations unfolding across the continent, far more needs to be done. African food production has not kept up with population growth – and that growth will only accelerate in the near future.

Nor is Africa’s agricultural sector moving quickly enough to meet another accelerating challenge: global climate change, which poses an especially severe danger to this continent, its agricultural productivity, and its overall development.
What is needed is a continent-wide commitment to a new generation of sustainable agricultural productivity, in the spirit of the Green Revolution that did so much to propel large sections of Asia and Latin America into the global middle class.

We are proud to be partners with the Alliance for a Green Revolution in Africa – an African organization advancing African solutions, with a necessary emphasis on smallholder farmers, and on female farmers – who bear immense responsibility for overall agricultural production in Africa, but who realize relatively few of the economic gains.

I am heartened by the commitments made on agricultural development at the African Union summit last month – including commitments to allocate at least 10 percent of public expenditure to agriculture, and to work toward ending hunger in Africa by 2025 by at least doubling productivity in the sector.

Any commitment to lifting agricultural productivity in Africa – or to improving health – will require both realism and optimism.

Usually, people assume that realism and optimism describe two different schools of thought. I disagree. I believe my optimism about the future of Africa is extremely realistic.

You already have the tools to decrease child mortality and increase agricultural yields significantly. In the next decade, these tools will keep improving.

You also have examples of countries that have invested in health and agriculture to make life better for their people.

So, we know that if a country in Africa is not improving in health, or not producing enough food, its first reaction should not be to seek scapegoats or excuses.

No, the first reaction should be to learn from your neighbor. Because that country has as many challenges as you do – but it also has good ideas that you can adapt to your own circumstances.

The rise of this continent will depend on whether leaders – here in Ethiopia and all across Africa – are open to learning from each other, and from their own people.
Whether or not that happens will depend on you – the future leaders of this country, and this continent.

By focusing on basic health and agricultural productivity – and by learning from what is actually working right here – you can ensure that Africa will keep rising.

Our foundation is committed to working with you as you make this happen.

Thank you.

Sourced here  http://allafrica.com/stories/201407240600.html?viewall=1

.

Infrastructural investment to drive mobile expansion in Ethiopia, DRC

.

http://www.humanipo.com/news/46278/infrastructural-investment-to-drive-mobile-expansion-in-ethiopia-drc/

.

How coffee farmers sponsor government projects in Ethiopia

.

-  Farmers union own bank

Ethiopia, a poor East African country with record of abject poverty, is now one of the fastest growing economies in that region. This achievement followed an effective value chain developed by the country’s coffee farmers under the aegis of Oromia Coffee Farmers Cooperative Union (OCFCU) that does not only improved the earnings of the Ethiopian farmers but also empowered the OCFCU to sponsor some government projects.
Delivering a paper at the recently concluded conference on Finance for Revolutionising agricultural value chain in Nairobi, Kenya, co-sponsored by the African Rural and Agricultural Credit Association (AFRACA) and the Technical Center for Agricultural and Rural Cooperative (CTA), Mr. Dessalegn Jena of OCFCU said his union provides social services as part of its contribution to the government and people of Ethiopia.
He said the union has built 81 schools and related facilities and transferred to the government, constructed 20 clinics, provided 89 sources of potable water, 50 kilometres of all weather roads, built 7 bridges, four coffee processing mills, 46 warehouses, five flour mills and one coffee museum from the country’s coffee farmers’ profit.
Jena, who said coffee farming is the most viable agricultural activity in the country, revealed that agriculture accounted for 46.3 percent of the nation’s GDP, 83.9 percent of export and employs 80 percent of labour.
He said small scale producers contribute over 90 percent of agricultural products.
He said before the establishment of the Oromia Coffee Farmers Cooperative Union, farmers in the country were producing at a loss without an effective value chain, adding: “We came together and formed the union with a view to proving market information to the various farmers cooperative societies in the country.
“The union is also helping farmers to sell their coffee products at better price at local and international markets, it also improves and maintain the quality, productivity and sustainability of coffee production and provide coffee farmers with social services. We have value chain supporting facilities for our farmers that consist of 127 wet mills, 26 dry coffee hullers and two coffee processing and grading machines among others.”
He said part of the problems Ethiopian farmers faced in the past was the difficulty in accessing agricultural loans from banks as most commercial banks in the country demanded for huge collaterals before granting them loans with high interest rates.
He added: “To address that problem, we established the Cooperative Bank of Oromia designed to provide full fledged commercial bank service, solve the financial challenges of cooperatives, reach the rural communities where other banks do not reach and expand saving habits in the rural communities.
“At the moment, the Cooperative Bank of Oromia has Birr 7.3 billion as its asset, Birr 901.34 million capitals and its loan portfolio Birr 3.2 billion. In 2012 alone, the bank granted $12.3 million US dollars loan to farmers. In 2013, the loan the bank granted to farmers hit $15 million US dollars.
“Because farmers and farming activities everywhere require insurance service, the Oromia coffee farmers union also established our own Oromia Insurance Company (OIC) with a share capital of $7.7 million US dollars and $2.4 million US dollars initial paid-up. Cooperatives and farmers in Oromia regional state alone own subscribed share capital of $1.3 million US dollars in the insurance company.”
Jena said the essence of establishing the insurance company is to provide insurance services, index based livestock insurance, farm insurance and address the need of farmers in the country.

http://www.dailytrust.com.ng/daily/agriculture/29938-how-coffee-farmers-sponsor-government-projects-in-ethiopia

.

East Africa Rising

.

By Robert Kaplan

http://www.realclearworld.com/articles/2014/07/24/east_africa_rising.html

.

First bottles of Ethiopian wine produced by French firm Castel

.

Kim Willsher in Paris

The Guardian

http://www.theguardian.com/world/2014/jul/23/first-bottles-ethiopian-wine-castel

.

No recent FAA warning for flights in or out of Ethiopia: U.S.

.

There has been no recent Federal Aviation Authority (FAA) warning for flights in or out of Ethiopia, according to US Embassy in Ethiopia.

The FAA flight prohibition SFAR 87 of May 16, 2000 pertaining to Northern Ethiopia predates the June 18, 2000 cessation of hostilities between Ethiopia and Eritrea and has not been updated subsequently, the embassy said in a statement it issued yesterday.

The FAA advisory KFDC A0012/97 pertaining to Ethiopia/Kenya also dates to 2002, it said.

Neither the FAA flight prohibition nor the FAA advisory was issued after Flight MH 17 was shot down in eastern Ukraine on July 17, as some media outlets have erroneously reported.

Both the Special Federal Aviation Regulation (SFAR) No. 87 and the FAA advisory apply only to U.S. air carriers or commercial operators, it noted.

http://www.waltainfo.com/index.php/editors-pick/14262-no-recent-faa-warning-for-flights-in-or-out-of-ethiopia-us-

.

Bill Gates receives Honorary Degree from Ethiopia

.

Bill Gates. Photo©Reuters

Ethiopia’s Addis Ababa University on Thursday conferred Microsoft founder, Bill Gates with an honorary degree in recognition for his role to humanity. 

“It is a special honour to receive an honorary degree from Addis Ababa University,” Gates said, after receiving the degree from the university.

 

“This is one of the leading institutions of higher learning in Africa – a continent whose future has been a central interest of my career ever since my wife and I began our foundation nearly 15 years ago.”

His speech at Addis Ababa University marks 20 years since he first set foot on Africa, which inspired the establishment of the Bill & Melinda Gates Foundation.

Addressing students at the university, Gates said: “Africa is now in an incredible position to shape its own destiny for the better, for one very simple and powerful reason: the countries of Africa are learning from each other”.

He acknowledged the development gains made through foreign governments, international aid, and non-profit organisations, such as his organisation towards developing the continent.

“The real fuel for development will be the resources of African nations themselves – whether that’s in the form of government funding, private-sector investment, or just plain human creativity at all levels of society,” Gates continued.

“This is where the idea of ‘African countries learning from each other’ becomes so important. If you want to spend your national budgets as effectively as possible, there is now a clear path for doing exactly that – and Africans themselves are defining that path, for others to follow if they choose.”

Gates, the world’s richest man, also heaped praise on Liberia, Malawi, and Tanzania, for the great progress made in reducing child mortality rates, but acknowledged that there is still a long way to go before Africa reaches its full potential.

“There is no path to lasting growth within Africa that is not widespread growth. It’s not possible. If Africa seeks prosperity, it must provide for the health and nutrition of all – including the poorest,” he said.

After stepping down as Microsoft chairman, Gates has directed his focus to his foundation’s efforts to tackle health issues in Africa.

In recent efforts to eradicate polio, he secured $335 million in pledges from six fellow billionaires – including $100 million each from Mexico’s Carlos Slim and former New York City Mayor Mike Bloomberg.

He has also been credited for getting other wealthy personalities involved with philanthropy.

According to Forbes, Gates and Warren Buffett have so far convinced more than 100 of the super-rich to sign on to the Giving Pledge, a promise to donate at least half their net worth to charity.

http://www.theafricareport.com/East-Horn-Africa/bill-gates-receives-honorary-degree-from-ethiopia.html

.

Ethiopia attributes economic growth to rising exports-W/Bank

.

Rising exports have contributed to Ethiopia’s double digit economic growth over the past decade, but the recent drop in prices has exposed underlying vulnerabilities in the country’s export structure, the World Bank said in a report on Wednesday.

There is scope for improving the quality of existing commodity exports, through basic value addition, such as coffee wet processing or machine flaying of animal skins said Guang Zhe Chen, World Bank Country Director for Ethiopia.

Chen said by starting to compete on the quality of existing commodity exports (and not just on price), Ethiopia can reduce sensitivity to volatile international prices thereby supporting the gradual shift of production and exports into agro-processing and light manufacturing.

Ethiopia’s export sector is currently too small to contribute to structural transformation, unlike in East Asia, where booming exports helped shift economic activity and workers away from low productivity agriculture into higher-productivity, said Lars Moller, World Bank Lead Economist and Program Leader and one of the lead authors of the report.

http://www.waltainfo.com/index.php/explore/14261-ethiopia-attributes-economic-growth-to-rising-exports-wbank

.

State Minister Dewano holds talks with MED representatives

.

State Minister for Foreign Affairs, Dewano Kedir, held discussions with representatives of the Middle East Development LLC (MED LLC), on Tuesday.

The MED LLC delegation was headed by Tarek Fawad Malik, Chief Executive Officer of MED LLC.

The talks covered ways to capitalize on selected investment fields including agriculture and agro-processing as well as work to improve results.

The State Minister welcomed the delegation, and recalled the successful visit made by the Chairman of MED LLC, Sheikh Tarek M. Binladen, to Addis Ababa in October last year aiming at finding ways to invest in areas of agriculture and agro-processing.

He reminded the delegation that he himself had held fruitful and robust discussions with the Sheikh and other Saudi Arabian business persons.

Emphasizing the long-standing and historic ties between Saudi Arabia and Ethiopia, the State Minister said increasing investment links in areas of agriculture and agro-processing would elevate Ethio-Saudi Arabian relations to a new level.

He noted that the mix of investment and business policies and strategies of the Government had allowed Ethiopia to become an epicenter of preferred international investment and trade flows.

He underlined the strategic importance of Ethiopia, its massive infrastructure development, adequate labor force, peace and security, adequate power supplies, suitable climate, impressive economic development and huge market opportunities and macro- economic stability. These were, he said, key enablers for the improved investment and business landscape.

He suggested the delegation should also consider other priority areas for investment, including manufacturing, in order to advance common development and mutual progress.

Mr. Tarek Fawad Malik said the delegation appreciated the role of the Ministry in facilitating the close engagement of Ethiopia with international investors and business communities including MED LLC.

He noted that their visit to Ethiopia was to concretize practical cooperation in the area of agriculture.

He also said that MED LLC, a socially and ethically responsible organization, was ready to encourage pragmatic cooperation with Ethiopia.

Experts from the organization would undertake site visits and assess investment opportunities in collaboration with their Ethiopian counterparts.

State Minister Dewano assured the delegation that the Ministry was committed to support their project and make the objectives of MED LLC a success.

http://www.waltainfo.com/index.php/explore/14264-state-minister-dewano-holds-talks-with-med-representatives-

.

Zenia Lewis and Witney Schneidman   -  July 24, 2014

 

Editor’s Note: The U.S.-Africa Leaders Summit blog series is a collection of posts discussing efforts to strengthen ties between the United States and Africa ahead of the first continent-wide summit. On August 4, Brookings will host “The Game Has Changed: The New Landscape for Innovation and Business in Africa,” at which these themes and more will be explored by prominent experts. Click here to register for the event.

Trade and investment will be an important topic at this year’s U.S.-Africa Leaders Summit. However, while the fact that the annual U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum, often called the AGOA Forum, is folded into the summit will ensure that the trade relationship is on the agenda, it also means that the trade forum is getting less individual attention than normal. With the African Growth and Opportunity Act (AGOA) legislation expiring at the end of next year and other major players such as China constantly enhancing and adjusting their trade and investment policies as they relate to the continent, the U.S. administration must use the summit and the forum as opportunities to ensure that it isn’t simply rehashing the old stories of the past decade, but announcing new, improved and meaningful strategies for trade and commercial engagement with African leaders.

Trade Trends with Africa’s Leading Partners

Over the past decade, the U.S. has gone from a leading trading partner with Africa to being far surpassed by the European Union and China. The EU has been a major traditional trading partner of Africa, and over the last decade its trade with the continent has more than doubled: In 2013 it amounted to over $200 billion. China started from a smaller base but has seen much more explosive growth—moving from $10 billion in 2000 to over $170 billion in total trade in 2013. Japan trails the U.S. in its total trade with Africa but, unlike Japan, the U.S. has actually seen its total trade decline in recent years, in 2013 amounting to about $60 billion—importing about $40 billion from the continent and exporting around $20 billion. In 2011, the U.S. imported close to $80 billion from African countries—most of which entered duty-free under AGOA or the Generalized System of Preferences—and exported around $20 billion consistently for the last five years. The decline and flat lining in U.S.-Africa trade begs the questions for the administration: What more can be done to see an increase in this commercial partnership similar to what the EU and China are experiencing? What has the U.S. done and what should the U.S. be doing to be a better partner to sub-Saharan Africa?

U.S. Trade and Commercial Engagement Strategy

Right now the U.S. has a variety of strategies, preferences, programs and people on the ground in Africa to promote commercial engagement. AGOA is a trade preference that allows for duty-free export access to the U.S. market for around 6,000 products in eligible sub-Saharan African countries. The USAID trade hubs work to help exporters in sub-Saharan Africa utilize AGOA, but are located in only three different countries (though the West Africa Trade Hub has an additional satellite location and smaller resource centers in many countries in the region). U.S. Foreign Commercial Service Officers (CSOs), which assist U.S. exporters in targeting African markets, are based in four countries on the continent: Ghana, Kenya, Nigeria and South Africa. The U.S. Department of Commerce also announced in April 2014 plans to expand several of its existing offices and double its presence in Africa by opening its first-ever offices in Angola, Tanzania, Ethiopia and Mozambique.

The U.S. also has the Trade Africa initiative, which is a partnership between the U.S. and sub-Saharan Africa to increase both internal and intra-regional African trade, and “expand trade and economic ties among Africa, the United States, and other global markets,” though with an exclusive focus on the East African Community. In 2012, the U.S. Commerce Department launched its Doing Business in Africa campaign to encourage and support U.S. business engagement with the region. The U.S. is working to deepen its commercial engagement with the continent in many ways including integrating the private sector in three of its key initiatives: Feed the Future, Power Africa and the Young African Leaders Initiative. The new CEO Summit, which will include CEOs from Africa and the U.S. in a day long conversation with President Obama and African leaders, should also be a new, helpful strategy for identifying key obstacles to trade and investment as well as identifying strategies for removing those obstacles. These new U.S. approaches could pay significant dividends in the coming years.

Enhancing the U.S.-African Trade Relationship

Both sides stand to gain from a more cohesive and substantial commercial strategy. African exports make up around 2 percent of total world trade and increasing this number (including exports destined for the U.S.) will be positive for African countries. On the other hand, African countries represent an important market for U.S. products and exporters — as the continent’s middle class is growing, there’s more spending power and more growth — meaning more potential for exports in not only consumer goods but also construction, infrastructure, energy, health care, transportation equipment and sectors, where U.S. companies have a lot to offer. In fact, the current level of U.S. exports to Africa, just over $20 billion, translates into support for more than 100,000 American jobs.[1] There is a win on both sides if both sides are interested in making the relationship work with ease.

Changing Paradigm of Partner Engagement with Africa

It’s obvious that the U.S. is not the only partner that has seen the great market potential of Africa, and many others have adapted quickly to engage. China is always the example, with its higher risk appetite, innovative financing and fewer restrictions on its loans and assistance strategies than OECD Development Assistance Committee (DAC) countries like the U.S., and it has managed to engage all over the continent. The Chinese government’s website indicates that it has over 150 commercial attaches located on the continent—making identifying opportunities, partnerships and markets easier than for the U.S., which has a fraction of this number doing the same work (with only four countries housing Department of Commerce offices, holding no more than two officers each). Its Export-Import Bank even has an office on the continent, while the U.S. Export-Import Bank has to watch its reauthorization debated by Congress.

The EU is also changing its strategy with regards to Africa, as evidenced by the Economic Partnership Agreements (EPAs) that it wants to implement with Africa. The EPAs are reciprocal trade preferences that, unlike AGOA, would give the EU an advantage when exporting to African countries—preferences that the U.S. and other regions wouldn’t have. This has been a point of contention for many African countries because EPAs undermine regional integration in the sense that they give European countries even greater trade preferences than afforded to other African countries. The EPAs also give EU exporters preferential access to the disadvantage of U.S. companies and exporters. In July 2014, the first-ever EPAs between the EU and African regions were concluded with six of the 15 countries in the Southern African Development Community (SADC) signing the EPA, and the Economic Community of West African States (ECOWAS) and Mauritania endorsed for signature by ECOWAS heads of state. The U.S. must consider how the EU’s implementation of the EPAs may influence its own trade strategies with African countries and regional organizations.

The Opportunity for Promoting Deepened Trade and Commercial Ties Through the Summit

As the U.S. prepares for the U.S.-Africa Leaders Summit, the importance of their trade partnership is apparent, and the U.S. is clearly attempting to increase its efforts to engage, so having a clear message on what the next steps are for increasing this trade relationship will also be important. The U.S. should focus on announcing and acting on three items: extending the AGOA legislation; clarifying the country’s interests in external trade policy that relate to Africa; and having a more ambitious and cohesive agenda for promoting U.S.-Africa trade.

Expressing a clear commitment to extending AGOA

The renewal of the AGOA legislation prior to its pending expiration will be a major talking point for African leaders during the summit. Legislation is in the process of being drafted on the hill, but hearing from both the administration and Congress that they will support it as well as make efforts to increase the effectiveness of it in promoting African exports will be critical. Trade capacity building, monitoring and reporting, and AGOA country strategies are all items that new legislation should consider. There should also be a clear commitment to extend the legislation for a period long enough to promote investment—10 or more years being a critical requirement for reassuring new investors and getting positive trade development. Announcing this at the summit will show clear signs of the U.S.’s interest in continuing to promote growth, industrial development and deepened commercial ties.

Promoting increased utilization of AGOA through targeted strategies with African countries

AGOA has been a useful tool in promoting trade through allowing sub-Saharan African countries duty-free access to the U.S. market, but many countries are exporting little to nothing to the U.S. using these benefits. Encouraging countries to create AGOA export strategies—for those who have not already—will be important. Finding ways to increase support for trade capacity building efforts and regional integration could be achieved through dialogue initiated at the summit with African leaders that also includes regional organizations and the United Nations Economic Commission for Africa and the African Development Bank. Strategizing with these groups could have powerful effects for enhancing renewed legislation.

Indicating interest in supporting Africa’s trade development without reciprocal arrangements

The EU wants African countries to sign on to the EPAs, as indicated, but the possible negative consequences for the continent have been well documented and the advantage it would give to EU countries is counter to U.S. interests. While such agreements can’t be considered off the table in the future, noting that the U.S. is dedicated to increasing Africa’s trade capacity in the medium term through AGOA and not EPA-like agreements sends a strong signal to African countries.

Pushing forward trade facilitation efforts

The U.S. should also make a point at the summit to reinforce its commitment to supporting a better trade environment in Africa by agreeing to contribute more to the trade facilitation enhancements that are part of the Bali agreement. In essence, the Bali agreement requires countries to make certain changes to increase trade facilitation—create one-stop border shops, increase transparency in the legal and regulatory framework, and increase efficiency regarding processes and fees, and the like. This agreement has become a point of contention in Washington as those who are interested in renewing AGOA want to see African countries do as much as possible to make trading with the continent easier, and do not understand hesitation from African countries to make relevant reforms. Some African countries and other developing countries have expressed concern about the reform obligations placed upon them under the agreement, with worries that the cost of implementing them could be great, and the lack of funds could constrain them in other areas. They want to have specific funding in place to ensure that this will not be an issue.

The U.S. has a clear opportunity to support these efforts. Ensuring that the Bali agreement is effectively implemented would be beneficial to African countries trading with one another and the U.S. as well. The U.S. already provides some assistance through the USAID Partnership for Trade Facilitation, which was launched in 2011 and works to help countries prepare for implementing the agreement. A recent USAID publication, A Comprehensive Approach to Trade Facilitation and Capacity Building provides an impressive and detailed strategy for further engagement. It also recognizes concerns about sufficient donor support. The U.S. could make a great difference through increasing technical support geared towards implementing the agreement and providing increased funding to address African countries’ concerns about the Bali agreement, through vehicles like the African Development Bank’s Trade Fund, for example. The summit could serve as an excellent forum at which to announce specific plans like this that would show a serious commitment to enhancing U.S.-Africa trade.

Moving towards a more cohesive African trade and investment strategy

Lastly, as we can see, the U.S. has multiple programs, preferences, agencies and initiatives working to promote enhanced U.S.-Africa trade, but making a clearer channel of engagement seems to make sense for both sides. Navigating the different programs and initiatives that exist can be daunting for U.S. businesses looking to break into African markets and understanding the assistance available for African exporters in eligible countries under AGOA can be equally unclear. Creating both an online hub for directing businesses on available resources and programs as well as housing a U.S.-Africa trade promotion authority within a specific department could simply make engagement easier for both sides. Announcing and following through on such a plan at the Leaders Summit could be an exciting next step in deepening commercial ties.

The summit will prove an excellent opportunity for so many levels of engagement, and obviously all African countries will come with their own agendas and interests as well. Conversations surrounding trade will take place, but clear and detailed ideas for moving towards an enhanced trading relationship is what will be needed.

---

[1]  “U.S. Export Fact Sheet,” U.S. Department of Commerce, International Trade Administration, May 2011 Export Statistics Released July 12, 2011. Online: http://trade.gov/press/press-releases/2011/export-factsheet-july2011-071211.pdf

• Zenia Lewis

  Researcher, Africa Growth Initiative

• Witney Schneidman

  Non-resident Fellow, Global Economy and Development, Africa Growth Initiative

  Witney Schneidman is a non-resident fellow at the Africa Growth Initiative in the Global Economy and Development program. Formerly, a deputy assistant secretary of state for African affairs, he focuses on U.S.-African relations, trade and investment issues in Sub-Saharan Africa and issues related to economic growth and prosperity on the continent.

  Sourced here  http://www.brookings.edu/blogs/africa-in-focus/posts/2014/07/24-deeping-trade-commercial-ties

Submitted by Tyler Durden on 07/24/2014

30 years ago, the great outsourcing wave took millions of US low-skilled jobs and planted them right in the heart of China, which was about to undergo the fastest industrialization-commercialization-financialization experiment in history. $26 trillion in bank assets later, the world’s biggest housing bubble, and a teetering financial system that every day depends on Beijing making the correct central-planning decision (of kicking the can one more day, of course) or else the biggest financial collapse in history will take place, all lubricated by years of inflation in everything and most certainly wages, and suddenly outsourcing jobs in China is not all that attractive. In fact, it has gotten so bad that China itself is now forced to outsource its own labor to cheaper offshore markets. Such as this one:

Ethiopian workers strolling through the parking lot of Huajian Shoes’ factory outside Addis Ababa last month chose the wrong day to leave their shirts untucked. Company President Zhang Huarong, just arrived on a visit from China, spotted them through the window, sprang up and ran outside. The former People’s Liberation Army soldier harangued them loudly in Chinese, tugging at one man’s aqua polo shirt and forcing another’s shirt into his pants. Nonplussed, the workers stood silently until the eruption subsided.

Shaping up a handful of employees is one small part of Zhang’s quest to profit from Huajian’s factory wages of about $40 a month -– less than 10 percent the level in China.

“Ethiopia is exactly like China 30 years ago,” said Zhang, 55, who quit the military in 1982 to make shoes from his home in Jiangxi province with three sewing machines and now supplies such brands as Nine West and Guess?. “The poor transportation infrastructure, lots of jobless people.”

Reading the linked Bloomberg article, it becomes quite clear that it is not at all surprising that China has picked Ethiopia as its place to outsource labor: while 30 years ago the Chinese leveraged dragon was only just starting to stir, then-Marxist Ethiopia which back was considered one of the poorest countries in Africa if not the world, was in the midst of a great famine. And while things in China have changed drastically since the 1980s, in Ethiopia, and most other African countries, time has stood still, at least when it comes to wages. Which means that having effectively colonized Africa in the past 4 years, as we showed in 2012 with “The Beijing Conference”: See How China Quietly Took Over Africa, while the west was busy kicking its own can, bailing each other out and pretending its economy is solvent, China was busy setting up shop across all African nations with plans to do just what Zhang does now: hire an ultra cheap labor force now that China itself is becoming uncompetitive in the global labor landscape.

A combination of cheap labor and electricity and a government striving to attract foreign investment makes Ethiopia more attractive than many other African nations, said Deborah Brautigam, author of “The Dragon’s Gift: The Real Story of China in Africa” and a professor of international development and comparative politics at Johns Hopkins University’s School of Advanced International Studies in Washington.

“They are trying to establish conditions for transformation,” Brautigam said in a telephone interview. “It could become the China of Africa.”

Huajian’s 3,500 workers in Ethiopia produced 2 million pairs of shoes last year. Located in one of the country’s first government-supported industrial zones, the factory began operating in January 2012, only three months after Zhang decided to invest. It became profitable in its first year and now earns $100,000 to $200,000 a month, he said, calling it an insufficient return that will rise as workers become better trained.

Under bright fluorescent lights, amid the drone of machines, workers cut, glue, stitch and sew Marc Fisher brown leather boots bound for the U.S. Meanwhile, supervisors monitor quotas on whiteboards, giving small cash rewards to winning teams and criticism to those falling short.

Huajian Chairman Zhang Huarong said, “Ethiopia is exactly like China 30 years ago.”

China, Africa and global retailers all have stakes in whether Ethiopia and such countries as Tanzania, Rwanda and Senegal become viable production bases for labor-intensive products. Promoting trade, boosting employment and spurring investment are among the topics that will be discussed on August 4-6 at the first White House U.S.-Africa Leaders Summit in Washington.

China may not have hit its second, urban Lewis point yet, but if Ethiopia is any indication, labor conditions for the country that needs to create tens of millions of new jobs every year to preserve social stability may get complicated very fast.

African nations have a compelling opportunity to seize a share of the about 80 million jobs that China will export as its manufacturers lose competitiveness, according to Justin Lin, a former World Bank chief economist who now is a professor of economics at Peking University.

Here, instead of alienating the potential labor pool, China is keeping its options very open, and in fact welcomes the ability to outsource to a cheaper location: “Chinese Premier Li Keqiang and Ethiopian Prime Minister Hailemariam Desalegn, who met on May 4, backed the move of Chinese industries to Ethiopia. China is “supporting Ethiopia’s great vision to become Africa’s manufacturing powerhouse,” Hailemariam told reporters at a joint press conference in Addis Ababa.”

At the very bottom of it all: surging labor prices. Yes, in China. 

Weaker consumer spending in the U.S. and Europe after the financial crisis prompted global retailers to hasten their search for lower-cost producers, said Helen Hai, head of China Africa Consulting Ltd. in Addis Ababa. She ran Huajian’s Ethiopia factory until July of last year.

While China’s inland regions offered manufacturers a cheaper alternative to the export-linked coastal areas, rising costs and a limited pool of available workers now are undermining that appeal.

Average factory pay in Henan, about 800 kilometers from the coast, rose 103 percent in the five years ended in September and 80 percent in Chongqing, 1,700 kilometers up the Yangtze River. In the same period, salaries rose 82.5 percent in Guangdong, where Huajian has its base in the city of Dongguan.

Cost inflation in countries including China has prompted Hennes & Mauritz AB, Europe’s second-biggest clothing retailer, to work with three suppliers in Ethiopia. The nation has “great potential” for production, H&M head of sustainability Helma Helmersson said in an April interview.

China’s average manufacturing wage is 3,469 yuan ($560) per month. Pay at the Huajian factory ranges from the basic after-tax minimum of $30 a month to about twice that for supervisors. By contrast, average manufacturing wages in South Africa, Africa’s biggest manufacturer, are about $1,200.

China is not the only one to have discovered what may be the world’s last outsourcing diamond in the rough.

Signs of Ethiopia’s allure include factories outside Addis Ababa set up by leather goods maker Pittards Plc of the U.K. and Turkish textile manufacturer Ayka Tekstil. Foreign direct investment in the nation surged almost 250 percent to $953 million last year from the year before, according to estimates by the United Nations Conference on Trade and Development.

But only China brings with it a certain “flare” to the work ethic it is trying to inculcate within the local population:

Zhang spends about half his time in Ethiopia, he says. During the visit last month, he spoke to about 200 uniformed Huajian supervisors, a mix of Ethiopians and Chinese, gathered in the parking lot. A giant plasma screen mirrored the crowd as Zhang hurried onto the stage.  He berated those assembled for a lack of efficiency, then praised them for their loyalty to Huajian, his words translated into Amharic and Oromo. He ordered them to march on the spot, to turn left and to turn right, all chanting together in Chinese.

“One two one,” they chanted. “One two three four,” as they marched in step. Slogans followed: “Unite as one.” “Improvement together.” “Civilized and efficient.”

They sang the “Song of Huajian,” whose words urged “We Huajian people” to bravely move forward, to hold the banner of Huajian high and to “keep our business forever.” Chinese supervisors led the song, their Ethiopian colleagues stumbling over some words and struggling to keep up.

Later, Zhang explained that he can’t be as tough on the staff as he would like. “Here the management cannot be too strong as there will be a problem with the culture,” he said via a translator. “In China you can be strong, but not here. The conditions here mean we have to show respect. On one hand we have to have strict requirements; on the other hand we have to take care of them. They have their own dignity. They may be poor but we have to respect their dignity.”

What does a typical worker’s day look like:

Taddelech Teshome, 24, said her day starts at 7:20 a.m. after her Chinese employers provide employees with a breakfast of bread and tea. When her morning shift ferrying shoes from the factory floor to the warehouse is over, she gets fed the national staple, sour bread, for lunch. After work, a Huajian bus takes her to nearby Debre Zeit, a town where she rents a room with her sister for $18 a month.

She came to Huajian just over a year ago from her home 165 kilometers away in Arsi region after her sister started at the factory.

“The work is good because I pay my rent and I can look after myself,” she said, wearing an aqua Huajian polo shirt. “It’s transformed my life.” Taddelech said she wants to work for two more years at the plant and become a supervisor. She eventually aspires to build her own house.

With inflation at 8 percent — down from 40 percent in July 2011 -– saving cash is tough. Mohammed al-Jaber, who earns $30 a month for gluing shoe linings eight hours a day six days a week, said he can add to his pay with perfect attendance each month — a $7.50 bonus — and overtime. Any extra gets sent home to his family in the Arsi region.

As for higher level arrangements, the two countries are certain to get along: One appeal for China: Ethiopia follows a similar tightly controlled, state-heavy economic model. Opposition parties won only one out of 547 parliamentary seats at the last election in 2010. Ties are strong between the Communist Party of China and the Ethiopian Peoples’ Revolutionary Democratic Front: On July 10, Central Committee Political Bureau member Guo Jinlong visited Ethiopia and met with Prime Minister Hailemariam. The two pledged to enhance cooperation, the official Xinhua news agency said.

Meanwhile, China is doing what the west was so efficient at in its heyday: providing all the loans to fund this international expansion:

The Chinese and Ethiopian governments also are investing in hydroelectric plants — including what will be Africa’s largest, the domestically funded Grand Ethiopian Renaissance Dam on the Blue Nile — that should increase Ethiopia’s power supply five-fold by 2020.

That may help overcome obstacles including the supply of electricity and cumbersome customs and tax procedures. In May, a World Bank team went to visit a textile factory in the Eastern Industrial Zone, where the Huajian plant is located, and found they are faced with daily power outages lasting for hours, Ethiopia country director Guang Zhe Chen said.

Perhaps the biggest shocker here is that while China was colonizing Africa, first with infrastructure, then with debt, and now with local labor, neither JPM nor Goldman did the same. Perhaps the US truly is losing it to China which managed in a decade to take over the continent without firing a single shot (the US does have a few drone bases in central Africa but they won’t last). And even if the “west” tries to steal Africa from under China’s nose, it is far too late now.

Rising Chinese wages that Zhang calls “an inevitable trend” are pushing Huajian to try to increase its workforce in Ethiopia to as many as 50,000 within eight years.  A model of a planned new plant at the edge of Addis Ababa is displayed at the factory. The 126-hectare (341-acre) complex, partly financed by more than $300 million from Huajian, will include apartments for workers, a “forest resort” district and a technical university.

At the gathering in the parking lot, after supervisors sang Huajian’s company song, Zhang dismissed the Ethiopian contingent. Then he continued haranguing the Chinese managers. To make his point that structure was needed to keep employees in focus, he thrust a broomstick toward them repeatedly, then toward the remote camera that was feeding to the plasma screen, the image blurring with each prod.

Then he left the stage, laughing and raising a triumphant fist.

Sourced here  http://www.zerohedge.com/news/2014-07-24/where-china-goes-outsource-its-own-soaring-labor-costs

.

Huajian Group to build its own industry zone

.

- Receives 138 hectare plot 

The Chinese shoe company, which has already heavily invested in Ethiopia at the Eastern Industrial Zone in Dukem town of the Special Zone of the Oromia Regional State, Huajian Group, is now set to invest USD 2.2 billion on an industrial zone of its own located around Lebu area in the South Western outskirts of Addis Ababa.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2303-huajian-group-to-build-its-own-industry-zone

ZTE under fire for failing to pay over $1billion income taxes

.

Ethiopian Revenue and Custom Authority (ERCA), Large Tax payers Branch ordered Ethio-telecom to suspend any payment to ZTE. The order came through a letter written by the Large Tax Payer’s branch of ERCA to Ethio-telecom finance department. The letter stated that ZTE failed to pay tax of over One Billion Birr. After numerous attempts by the tax authority to collect the tax from ZTE, the tax authority finally decided to stop any payment to ZTE by its major customer, Ethio Telecom until the tax overdue by the company is fully paid.

ZTE is one of the two Chinese companies who signed the 1.6 billion dollar Ethio Telecom second expansion project signed last year. ZTE entered the telecom market of Ethiopia in 1996 and officially set up its Ethiopian Office in 2000. The company involved in some small projects between 2003 and 2005 but a substantial deal had not been made until 2006. In 2006 the company entered into a three-year sole supplier framework agreement with Ethio Telecom(the world’s only project in which a national telecom network is built by a sole equipment supplier) financed on seller credit. Unlike the current expansion project which has a greater scope and estimated to cost 1.6 billion dollar, the first expansion project involved 1.9 billion USD of investment by Ethio Telecom—1.5 billion USD for equipment and 0.4 billion USD for engineering construction. The implementation started in 2007 and was marred with many problems and had not received acceptance by Ethio telecom until recently. On the second phase of the expansion project Ethio telecom went for a multi-vendor strategy and selected Huawei in addition to ZTE giving each 50% of the project.

Over the last few years ZTE’s financial performance declined and the company declared a loss in 2012. Since then ZTE didn’t change its declining trend in the stock market. However it is a crucial time that ZTE is expected to put its resource in Ethiopia for the second expansion. However, instead of responding actively to this need, ZTE hasn’t yet had any contribution in the current expansion project delivery. The company delayed the signing of the contract and now postponing the delivery. It even reduced the staff number in Ethiopia.

Sources close to the case said that it’s a shame ZTE after being paid billions of dollars from Ethio telecom’s huge investment and other government ICT infrastructure failed to pay the tax. the amount of unpaid tax by ZTE is a significant percentage of the country’s annual budget and is more than the total amount allocated annually to building roads, hospitals, and schools in some of regional states.

It is not clear how the company was allowed to participate in projects in Ethiopia without obtaining a tax clearance from ERCA which is major precondition to participate in any government project. How ZTE signed these projects without a tax clearance from ERCA and eluded its customers especially Ethio Telecomremains a mystery.

An official from ERCA who wants to remain anonymous said this year is the last year of the GTP. To realize the GTP the revenue from tax plays a decisive role. ZTE’s tax debacle is not just starving the country of much needed finance but a stark contrast to the Ethio China good relationship. China is supporting Ethiopia financing the country’s major infrastructural projects and the behavior of ZTE is unbecoming to a company with a significant shared held by the Chinese government. ZTE should stop thinking it can do whatever it wants because of its relationship with the Chinese government, and concentrate in its delivery and compliance to the law in Ethiopia including paying its due share of tax and stop to be an embarrassment to the good relationship of the two countries.

Officials of ZTE in Ethiopia were not imediately available to coment on the matter.

http://www.awrambatimes.com/?p=12267

.

Ethiopia eyes regional integration through highways

.

A total of $610.6 million has been allocated for the implementation of the Ethiopian part of the project, with the funds coming from the Ethiopian government, international financial institutions and donor organizations.

.

Aviation: Ethiopians’ Big Ambitions

http://africanbusinessmagazine.com/sector-reports/aviation/aviation-ethiopians-big-ambitions/

.

Tendaho Dam construction reaches 98 pct

.

The Tendaho Dam built to irrigate sugar cane plantation for Tendaho Sugar Factory can now fully supply the water required, according to Water Works Design and Control Enterprise.

Some 98 percent of the construction of the dam that holds 1.86 billion cubic meters of water is finalized.

The dam has the capacity to develop over 60,000 hectares of land and provide pasture land and farm land for the community in the neighborhood.

Out of the 60,000 hectares of land planned to be cultivated, 10,000 will be allotted for social services, and 4,022 hectares of this is already given to members of the community, it was learned.

The remaining 50,000 hectares would be used to cultivate sugarcane for the sugar factory.

The construction of the dam was delayed as the locality is susceptible to earthquake.

http://www.waltainfo.com/index.php/explore/14319-tendaho-dam-construction-reaches-98-pct-

.

Ethiopia to build US$51m hospital in Amhara 

.

http://constructionreviewonline.com/2014/07/25/ethiopia-build-us51m-hospital-amhara-region/

.

Ethiopia’s Jatropha plantation set to produce biodiesel

.

The project is being implemented in collaboration with the Ethiopian and Norwegian governments at a cost of over $2.8 million.

.

Egyptian intensive care unit for cardiac surgery inaugurated at Black Lion Hospital

.

An Egyptian intensive care unit for cardiac surgery was inaugurated Saturday at Black Lion Hospital in the Ethiopian capital of Addis Ababa, Egypt’s Ministry of Foreign Affairs said in a Saturday statement.
Renowned Egyptian-born British heart surgeon Magdi Yacoub, Egyptian Ambassador to Ethiopia Mohamed Idris and members of the Ethiopian Parliament attended the opening.
“My visit with the Egyptian medical crew to Ethiopia represents the true bonds of the two peoples,” the statement quoted Yacoub as saying.
Yacoub, who received the Order of Merit from Britain’s Queen Elizabeth II in June, added, “This cooperation will continue and evolve to provide high-level medical service to Ethiopian citizens and save the lives of Ethiopian children and brothers who suffer heart diseases.”
The unit, which will mainly serve children, was funded by the Egyptian Foreign Ministry as part of growing medical cooperation between the two African countries, the statement said.
Several other Egyptian medical units specialized in a variety of conditions have recently been inaugurated in Ethiopia’s capital, including Saint Louis Hospital.
“The visit comes in the framework of an integrated system aimed at enhancing Egyptian-Ethiopian relations in all fields and on different tracks. Cooperation in the medical field has had direct positive effects on the lives of our Ethiopian brothers,” Idris said.
“The upcoming period will witness a lot of efforts and many mutual visits to develop cooperation between the two states and peoples,” the ambassador added.

http://www.waltainfo.com/index.php/explore/14311-egyptian-intensive-care-unit-for-cardiac-surgery-inaugurated-at-black-lion-hospital

.

KEFI Minerals On Track Towards Saudi Arabia, Ethiopia Mining

.

KEFI Minerals PLC Monday said it is on track towards re-activating the mining licence at Tulu Kapi in Ethiopia and it expects to submit its mining licence application for the Jibal Qutman mine in Saudi Arabia by the end of the year.

The gold mining company with operations in Saudi Arabia and Ethiopia said in a short update that it has had an exceptionally productive quarter after raising over GBP2 million in a placing to acquire the remaining 25% of its Tulu Kapi project and move forward its projects in both Ethiopia and Saudi Arabia .

In the remainder of 2014, the company plans to get independent verification of; the mineral resources and ore reserves, its revised mine plan and its estimates for capital expenditure and operational expenditure at the Tulu Kapi site.

It also plans to complete the acquisition for the remaining 25% of Tulu Kapi, and arrange bank finance in order to reactivate the mining licence at Tulu Kapi.

KEFI Minerals bought a 75% stake of the Tulu Kapi licence in December for GBP4.5 million after Nyota had struggled to find a joint venture partner at the site.

In June, Nyota Minerals said it had agreed to sell its remaining 25% in the Tulu Kapi gold project to KEFI for GBP1.5 million in cash and shares, after failing to fund its cash calls for the site.

The company also said on Monday that at the Jibal Qutman site, its joint venture Gold & Minerals is working on refining documentation in order to trigger the mining licence application for the site.

However, KEFI said that further expenditure on the process is being curtailed as they await the outcome of discussions with the regulatory authorities which are currently reviewing their policies for the minerals sector in Saudi Arabia with a view to encouraging exploration whilst ensuring appropriate local benefits.

“At Tulu Kapi, we are on track to complete the DFS documentation required to organise the project finance and re-activate the mining licence. In Jibal Qutman, results from recent drilling extend the known mineralisation and we expect to submit the Mining Licence application by year end,” Managing Director Jeff Rayner said in a statement.

KEFI Minerals shares were up 1.8% to 1.40 pence on Monday.

http://www.kitco.com/news/2014-07-28/KEFI-Minerals-On-Track-Towards-Saudi-Arabia-Ethiopia-Mining.html

.

Kefi Minerals rises as unveils “most productive” quarter in history

.

By Giles Gwinnett 

On the second quarter, managing director Jeff Rayner said: “We strengthened our board with the appointment of Norman Ling, former UK ambassador to Ethiopia, and we raised over £2 million to ensure that we can continue to support the rapid development of our projects.”

http://www.proactiveinvestors.co.uk/companies/news/70749/kefi-minerals-rises-as-unveils-most-productive-quarter-in-history-70749.html

.

Breaking Down the Silos: Learning Knowledge and Skills for Agriculture and Rural Livelihoods

.

By Anna Robinson-Pant, University of East Anglia.

As a researcher in literacy, gender and development, I was excited to have the opportunity to collaborate on a project that aimed to bring together policy makers, practitioners and researchers working on adult basic education, technical and vocational education and training (TVET) and agricultural development. These sectors are so obviously inter-connected in people’s lives and livelihoods, and yet researchers and policy makers in these fields often work in isolation from each other. Within the education sector alone, gaps in understanding, communication and conflicting policy priorities have developed between schooling and other forms of education; between adult literacy and other kinds of adult education (particularly vocational skill development); and between programmes for children and adults.

The IFAD-UNESCO project, ‘Learning knowledge and skills for agriculture and rural livelihoods’, set out to develop a more holistic analysis by researching how young people learn different kinds of knowledge, skills and strategies to enhance their livelihoods in rural areas. Rather than using training programmes and educational institutions as an entry point, the study adopted a ‘bottom-up’ approach to researching how informal, non-formal and formal learning is taking place in the everyday lives of young people. Research teams in Cambodia, Egypt and Ethiopia conducted ethnographic observation, focus group discussions and life history interviews in two contrasting rural communities. They explored how young people viewed their learning experiences (education in the widest sense – not just schooling), agricultural livelihoods and their aspirations for the future. They analysed this data in relation to case studies of skill providers in these communities and interviews with older women and men – to gain insights into intergenerational learning and understanding of changing social values and livelihood strategies. As Global Research Co-ordinator on the project, my role included supporting the country research teams through a review of the international literature and training in qualitative methods, and developing a comparative analysis across the three country contexts.

Having worked for several years in rural communities in Western Nepal, I have seen how young people dreamed of a future beyond the family land and subsistence farming. As roads, mobile phones and the internet have reached even remote mountain villages, I have witnessed the growing numbers of young women and men leaving for education and work in Kathmandu and the Gulf countries. So I guessed that the situation in our research sites in Cambodia, Egypt and Ethiopia would be similar. As much previous research has pointed out, young people often see farming as an occupation of ‘last resort’. In a sense, challenging our own assumptions as researchers was the first step on this project – how to suspend beliefs (particularly since many of the country research teams were originally from subsistence farming backgrounds) that young people would be better off in occupations away from agriculture and their rural communities. At our first workshop with stakeholders in Ethiopia, there was heated debate about whether the IFAD-UNESCO project was trying to ‘brainwash’ young people into staying in family farming.

As the field research progressed, the young people’s views and experiences from these very different contexts made us realise the complexity of the relationship between learning, agriculture and social change. Young people not only talked about their livelihoods in terms of ‘farming’ or ‘other’ in their accounts of their lives. Rather, they emphasised that farming was a ‘given’ within many different livelihood activities and roles over the course of their lives and that there were strong inter-connections between off-farm and on-farm work. For instance, a college student in Fayoum (Egypt) related how he returned to help the family with farming during holidays in order to support his studies. There were striking differences between the different country contexts in terms of how young people viewed agricultural work. In Siem Reap (Cambodia), some young women talked about the appeal of working in a factory rather than the farm as it offered a social space and chance to meet their future spouses, as well as gaining confidence through this interaction. In Gemi (Egypt), young women expressed great affection for the land and yearned to own their own piece of land for growing food for the family. In Basona (Ethiopia), the team interviewed several divorced young women who had moved to the town to make and sell alcohol. Although now independent of their families, they were dependent on traders and employment agencies that made them susceptible to abuse and exploitation.

So where did learning fit into this complex picture of rapidly changing and multiple rural livelihoods? As a young man in the Ethiopian study commented, ‘learning agricultural knowledge and skills is not a question of choice, we learned it because it is a way of life, where we are born from’. The findings revealed much about informal learning in these communities, such as how young people learned agricultural practices from their families. An older pastoralist woman in Yabello (Ethiopia) explained how young children would learn to look after one or two small calves at the age of 7, then move onto a larger herd at age 8, and she explained what they would learn – where water and fodder is available in which season, alertness, physical endurance to travel to distant places and fight with wild animals. New skills and technologies were also learned informally. Young people related how they had learned to use mobile phones through help from friends – even those who could not read and write had developed visual strategies to recognise incoming and outgoing calls.

Formal schooling is now a possibility for many young people in these communities – in contrast to their parents’ generation, some of whom saw schooling as a threat to traditional agricultural livelihoods, not least in terms of the financial burden and loss of labour within the family. Although young people did not expect to learn useful knowledge and skills directly relevant to agriculture in school, they emphasised the symbolic status of schooling, the confidence gained through being literate and an educated person. Young farmers commented that they had been excluded from agricultural extension programmes or training institutes due to the entry criteria: whether due to lacking educational qualifications or literacy skills or needing to own their own land. In Siem Reap (Cambodia), young women farmers explained how they turned to fertiliser traders to help them with technical advice on their crops. There were also instances of farmers learning informally from neighbours who had been included in training programmes, or by watching extension workers demonstrate new inputs to other farmers. In all the contrasting field sites, insights emerged into the ways in which informal learning supports and complements formal learning, particularly in terms of the wide range of ‘soft’ skills learned.

The project points to the need for researchers and policy makers to give greater attention to the extent and value of informal learning. The findings also provide strong evidence of young people’s diverse experiences and aspirations – challenging the one-size-fits-all approach in many educational programmes (whether adult literacy or agricultural skills development) and targeting youth as a homogeneous group.  Above all, as a team of educational and agricultural specialists, we learned the importance of moving outside our research and policy ‘silos’ to share assumptions and understandings of learning in these different sectors.

Anna Robinson-Pant is a Professor of Education and the Director of the Centre for Applied Research in Education (CARE) at the University of East Anglia. She is also the Global Research Co-ordinator on the IFAD-UNESCO project ‘Learning knowledge and skills for agriculture to improve rural livelihoods’.

http://norrag.wordpress.com/2014/07/28/breaking-down-the-silos-learning-knowledge-and-skills-for-agriculture-and-rural-livelihoods/

.

DO NOT DEVALUE THE BIRR: Ignore the World Bank By Tecola W Hagos

.

The recent poisoned advice from the World Bank to devalue the Birr by another 10% is a sure process of killing the Ethiopian economy for good. What they are attempting is to get at China through such pariah-nibbling at small economies around the world where China has gained well-earned influence and often mutually beneficial partnerships with numerous developing countries.

“Lars Moller, the bank’s chief economist in Ethiopia, told reporters today in the capital, Addis Ababa,” about the 10% devaluation so reported William Davison in his short article “World Bank Urges Ethiopia to Devalue Birr to Boost Exports,” Bloomberg, Jul 22, 2014.

The first and subsequent devaluations that were also instigated by the World Bank/IMF forcing the then new Ethiopian leaders of the new EPRDF Government as a condition for badly needed loans did not benefit Ethiopia at all. It degraded the labor value of every commodity Ethiopia was exporting. There was no dramatic increase in volume of exports due to the devaluation. The increase was due to other economic factors having to do with market demands not devaluation. It is absolutely stupid to think of devaluation in order to boost the volume of export.

In this regard, in an extensive and highly illuminating article, the well-received economist Prof Seid Hassan enlightened us on the subject of devaluation, four years ago, in 2010. [Must Read.]
“The devaluation of the birr is likely to aggravate inflation and it could spark a snowball effect of higher inflation as it can build into a cascade of expectations for further devaluation by private citizens. When devaluation is done overnight in secretive and surprising manner as is done to the birr, the action has the potential to irritate the business sector and speculators. As a result, the devaluation measure could be self-defeating and self-fulfilling. Moreover, for those who control the commanding heights of the Ethiopian economy and the party-controlled conglomerates and their ‘owners’, the action will tempt them to convert their assets into dollars/pounds/euros and expatriate their assets before their values are eroded… There is also a possibility for potential and future birr holders to shun the currency since holding the birr will be very expensive to them.” Seid Hassan, Zenawi and the devaluation of the birr: A layman’s guide, Pampazuka News, Issue 498, 09-30-2010. http://pambazuka.org/en/category/features/67399.

I hope you will understand the nature of my emotive statements herein, for my views are decidedly that of a layman. In fact, the Ethiopian Government should lodge stern warning and serious complaint against the individuals in the World Bank who came up with such destructive schema. This is not something that can be hidden from public scrutiny and challenge. We have read the devastation caused by devaluation in a number of South American countries. They have struggled out of that debacle by adopting the very opposite of what the World Bank is suggesting now for Ethiopia to adopt—by reevaluating their currency in reducing inflationary economy.

I believe that the Ethiopian Birr is severely undervalued. As a net importer country, it is in our best interest to increase the value of the Birr and not devalue it. I understand the argument that it will encourage export and discourage imports thereby expanding the domestic economy. I am not convinced that such domestic economic boom is possible, from having studied what followed devaluation in a number of countries in Africa and South America. What we must seek to evaluate is the labor cost of our unit production. It is not the general population’s economic condition that ought to determine the value of the Birr. The lower labor cost of production certainly overcompensates for the inefficiency rooted in less technologically advanced economies. I believe the starting point of our currency is first and foremost our medium of exchange in our domestic economic life. I would advocate that we should move back to the gold-standard system of valuing currency and reevaluate our Birr against the Dollar. If we had maintained a gold-bullion reserve rather than giving up our gold for mere 2-3% royalty to some mercenary exploitative Foreigner, the value of our Birr would have been right now at least on par with that of the oil based economies of the Middle East.

Devaluation is a fictional man’s system of creating virtual efficiency, a delusion of doing something, while doing nothing worth anything. The economy problems of Ethiopia can not be solved by manipulating indices such as the currency. What we need to focus our energy and talent is in creating and maintaining a political system that has core democratic values, the rule of law, and that encourages and rewards individual industry and creativity. There are also specific policies on the Ethiopian economy, the Ethiopian Government has to undertake. Foremost, the issue of land ownership must be resolved; monopolistic control of service and manufacturing industries must be dismantled; banking must be revolutionized to allow credit/debt based economy; serious effort must be carried out on educating qualified citizens to undertake the many tasks in an industrialized community. The problem essentially can be solved by such structural adjustments and democratic policy implementations rather than fiddling with the currency. Once again I quote Seid Hassan for his poignant remarks identifying what truly should be our concern in regard to the economy of Ethiopia, for his words are prophetic and valid to this day.

“If the birr collapses, therefore, it will not be due to those unscrupulous speculators, but due to structural problems and bad policies and their implementation by the government in power. But again, given what took place in Zimbabwe, a combination of existing shortages and the expectation of further devaluation could lead to the collapse of the birr… Speaking about the IMF, it is quite puzzling that the IMF would suggest a devaluation of the birr on such a massive scale, particularly for a currency that has not faced a currency collapse. Devaluation of this magnitude is generally necessitated by a currency collapse, which is not the case with the birr. One may also argue that this relatively massive devaluation may indicate the government’s willingness to forgo the necessary structural adjustment measures, using the massive devaluation as the only measure to ameliorate the problem.” Seid Hassan, “Zenawi and the devaluation of the birr: A layman’s guide,” Pampazuka News, Issue 498, 09-30-2010. http://pambazuka.org/en/category/features/67399.

I will conclude my concern with another outstanding economist, Mustafa Acar: “ these findings imply that policy makers in developing countries should be cautious when taking a decision on devaluing the currency or using the policy instruments under their control in such a way as to create real depreciation. More particularly, it is not advisable to call for devaluation if the major concern is increasing output in the short run. Along the same lines, we can say that it is not recommended for the LDC [Less Developed Countries] governments implementing a flexible exchange rate system to allow for a major depreciation, since it may hurt economic growth.” Mustafa Acar, “Devaluation in Developing Countries: Expansionary or Contractionary?” Journal of Economic and Social Research 2 (1) 2000, 59-83, 79-80. Devaluation has far extensive and deeper effect on the economic life of a country that devalues its currency. It sets bad precedent and a polarized solution to a problem lodged elsewhere in the government of a country. The fact is that devaluation eats at our savings and vaporize already completed transactions whose economic value was determined at then existing market system. Devaluation brings into the system one of the most unacceptable degree of inequity, unfairness, and corrosive of social values. It creates unusually high level of uncertainty and a form of economic Tsunami that would rock every corner of the Ethiopian society. It is problematic to no end. Do not devalue the Birr, but make structural political and economic reforms.

Tecola W Hagos
July 25, 2014
Washington DC

http://www.abugidainfo.com/index.php/22643/

.

Ethiopia is the biggest country in the world without Stock Exchange

.

Of the roughly 200 nations (both official and partially recognized) in the world, 40 of these countries have no stock exchanges. As frontier market investors with a focus on public equities, keeping an eye out on which countries are about to launch new stock exchanges is important as they usually represent promising investment opportunities. This is because stock exchanges require a great deal of capital, expertise, controls, and economic growth in order to survive, and a stock market launch is a promising sign that early economic challenges have been overcome. We could not find a definitive list of countries with no stock exchanges online, so we have compiled our own.

Here is a list of countries without stock exchanges (population over 1 million):

GDP per capita is on a PPP basis and is as of 2013 from the IMF.

There are also 20 countries with a population under 1 million that do not have stock exchanges: Andorra, Belize, Brunei, Comoros, Djibouti, Kiribati, Macau, Marshall Islands, Micronesia, Monaco, Nauru, Palau, Samoa, San Marino, Sao Tome and Principe, Solomon Islands, Tonga, Tuvalu, Vanuatu, and Vatican City.

Notable Countries With No Stock Exchanges:

Ethiopia

With a population of almost 90 million, Ethiopia is the biggest country in the world without a stock exchange. On the other hand, it is home to Africa’s first commodity exchange, the Ethiopia Commodity Exchange (ECX), which began operations in 2008. The ECX was founded by economist Eleni Gabre-Madhin (read an interview with her here) and trades five commodities: coffee, sesame, haricot beans, maize, and wheat. While the National Bank of Ethiopia has done studies on the feasibility of a future stock exchange, nothing is planned yet.

Burma / Myanmar

While Burma currently has the Myanmar Securities Exchange Centre (MSEC), an exchange founded back in 1996, it had little IPO activity after it’s opening and is effectively dead. Fortunately, the government has enlisted Daiwa Securities Group and the Tokyo Stock Exchange to help them start a new exchange: the Yangon Stock Exchange (YSE). From the latest reports, it is currently slated to open in October 2015 with six companies interested in listing.

Angola

Angola has a sizable population and is one of the more developed countries on this list, so it is a surprise they lack a stock exchange given the number of smaller and less developed countries in Africa with exchanges of their own. Unfortunately, while an exchange has been discussed since 2002, the launch of the Angola Stock Exchange has been pushed back again to 2017. The culprit is poor financial statements, and it will take time for expertise and infrastructure to be in place.

Conclusion

These 40 countries represent the final frontier for investors, and we certainly expect the top 20 countries on this list to have stock exchanges one day. The biggest reason for the larger countries to not have stock exchanges is rule of law and prevalent corruption. This means that until their rankings improve on Transparency International’s reports and others like it, stock exchange launches will continue to be delayed.

With our e-mail alerts, you will get everything from breaking news about Ethiopia to the days most popular videos, drama, health tips and stories sent straight to your inbox.

http://sodere.com/profiles/blogs/ethiopia-is-the-biggest-country-in-the-world-without-stock

.

CAREER CHANGE: Phil Baines, managing director at Cleveland Potash, in Boulby, east Cleveland, is moving to work in Ethiopia

.

A SENIOR figure at a potash firm is leaving his role just weeks after revealing £38m plans to create hundreds of jobs in the region, The Northern Echo can reveal.

Phil Baines, managing director at Cleveland Potash, in Boulby, east Cleveland, is moving to work in Ethiopia.

Bosses say Mr Baines will oversee a $1bn low-cost potash development in Dallol, in the north-east of the country.

The company refused to comment on reports it has lost £7m in the last six months.

Mr Baines is expected to leave his role next month, with the firm saying the move is part of a wider restructure.

Earlier this year, Cleveland Potash, which employs 1,100 workers, was awarded £4.9m from the Government’s Regional Growth Fund to support a £38m project focused on mining and processing the fertiliser mineral polyhalite.

The company said it will create 125 direct jobs and about 265 indirect posts, helping to secure the long-term future of the mine, which has a 1,100-strong workforce and is the biggest employer in east Cleveland.

At the time, Mr Baines said there was great potential to sell hundreds of thousands of tonnes over the coming years.

Speaking about his move, a spokesman for Israel Chemicals Limited (ICL), Cleveland Potash’s parent company, said: “ICL has embarked upon a significant restructuring programme to make it more efficient and competitive in the global market place.

“Within this programme, Cleveland Potash has joined the wider ICL family and a rebranding process will result in a new company name and logo for Cleveland Potash, which will become ICL Fertilizers.

“As part of ICL’s global expansion strategy, Phil Baines has been given the opportunity to lead a major global development, which is a potentially $1bn scheme in Dallol.

“Phil has been asked to take on this huge challenge because of his extensive managerial, mining, and engineering experience, which made him the perfect candidate and we wish him all the best.

“In his place we welcome David Zvida, who is relocating to the UK and joins us from his post as senior vice-president of operations at ICL’s Dead Sea Works.

“We are very much looking forward to David joining our team and to the exciting times ahead.

“Over the last 18 months, Cleveland Potash has strengthened its workforce and ICL has invested heavily in our operations in an effort to secure a sustainable business.”

Earlier this year, The Northern Echo revealed Cleveland Potash could move jobs to Amsterdam, with bosses considering plans to switch some back office roles to the Dutch capital.

The changes are being looked at by ICL, which wants to centralise work across its subsidiaries to maintain its global expansion.

The firm said up to 35 roles could be affected in human resources, purchasing and finance posts.

However, a spokesman said it expects any changes to only affect up to 20 per cent of that figure, and hopes to retrain a large number of staff in new roles.

Any decision could take up to two years.

Sourced here  http://www.thenorthernecho.co.uk/business/news/11374012.Potash_firm_moves_senior_boss_to_Ethiopia/?ref=rss

By William Davison Aug 1, 2014 

 

A woman shelters from the sun with an umbrella as she walks along the construction site of Asmara road in Addis Ababa. The city 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.

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 estimates that 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. President Barack 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. (1800) is building soar above the main roads. Turkish textile companies, Chinese glass factories and international chains such as the Radisson Hotels International Inc. and Marriot International Inc. (MAR) 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 like Diageo Plc (DGE), 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.”

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net Paul Richardson, James Hertling

Sourced here  http://www.bloomberg.com/news/2014-08-01/addis-ababa-doubling-in-size-gives-africa-another-hub.html

.

Leaders explore joint financing for LAPSSET project

.

Written by KENNEDY KANGETHE

The leaders who attended a consultative meeting in Nairobi on Thursday were President Yoweri Museveni of Uganda, Prime Minister Hailemariam Desalegn of Ethiopia and President Salva Kiir Mayardit of South Sudan/PSCU

.

NAIROBI, Kenya Jul 31 – Regional leaders are exploring ways to jointly finance the Lamu Port, Southern Sudan-Ethiopia Transport (LAPSSET) corridor project.

In a statement read by their host President Uhuru Kenyatta at the end of the meeting, the leaders noted that the seven components of the LAPSSET project require an estimated $24.5 billion (Sh2 trillion) – for the Lamu Port alone with its 32 projected berths costing $3.1 billion (Sh272 billion).

“With the large sums involved, it was clear to us that a joint approach that is innovative will be required for implementation,” the leaders said.

During the meeting, the leaders explored the complexities of shortening the period between project conceptualisation and the realisation of a sustainable financial model that will deliver implementation.

“We sought to learn from the African Development Bank’s Africa50 Infrastructure Fund approach, and how our joint efforts can help make a compelling business case to private sector players,” they said.

The four regional leaders said their discussion was especially informed by the upcoming Africa-USA Summit on August 4 to August 7 that will allow them a chance to engage with American investors on the LAPSSET project.

“This is a continuation of similar engagements that are being held with investors from across the Middle East and the Indian Ocean Rim,” they said.

The leaders also dwelt on the need for regional peace and security to provide the conditions in which the LAPSSET project and many others will deliver the full benefits of growth and equity to the region’s progress.

The project involves the development of a new transport corridor from the new port of Lamu through Garissa, Isiolo, Mararal, Lodwar and Southern Sudan.

This will comprise of a new road network, a railway line, oil refinery at Lamu, oil pipeline, Isiolo and Lamu Airports and a free port at Lamu (Manda Bay) in addition to resort cities at the coast and in Isiolo. It will be the backbone for opening up Northern Kenya and integrating it into the national economy.

In the 2014/2015 budget Treasury Cabinet Secretary Henry Rotich announced that Treasury had allocated Sh116 billion which would go towards all ongoing and new road projects in the country.

http://www.capitalfm.co.ke/business/2014/07/leaders-explore-joint-financing-for-lapsset-project/

.

Transmission Line Built With Br273 Million Complete

.

The Alamatta-Mehoni-Mekelle transmission line built with an outlay of over 273 million Birr is completed, said the Ethiopian Electric Power (EEP).

EEP External Relations Head, Misikir Negash said 141km long transmission line carries 230 kilovolt. The project, which is part of the Growth and Transformation Plan (GTP), would help channel the 300 mega watt generated from Tekeze and the 120 MW from Ashgoda Wind Farm to other lines. Of the over 273 million Birr allotted to the project, 85 percent was obtained from the Africa Development Bank as a long-term loan and assistance, and the remaining covered by the Ethiopian government.

The project was executed by Kalpatur, an Indian company, the head said. According to Misikir, the electric power demand of Ethiopia is growing on average by 35 percent as its economic growth is rapid and continuous. Electric power generating infrastructures are being expanded to meet this, he added. The goal of the GTP is to increase the electricity coverage of the country, which is 55 percent, to 75 percent, he noted. Ethiopia has the potential to generate over 1 million MW from water, wind and as geothermal energy.

http://allafrica.com/stories/201408010844.html

.

UK extends £17 mln for tax, audit program

.

The United Kingdom extended on Friday, August 1, 2014 a grant amounting to £17 million to address constraints related to tax, audit and transparency both at federal and regional levels.

Finance and Economic Development State Minister Ahmed Shide and Julius Court, Head of Office of Department for International Development signed the Memorandum of Understanding.

Speaking on occasion, Ahmed appreciated the support of the government of the United Kingdom. He said the UK has provided 300 million pounds on average every year to support various development activities in Ethiopia.

According to the State Minister, the Department for International Development is the big donor in various development projects and programs of Ethiopia; and the two countries have been working to strengthen their trade and investment relations.

Julius Court, Head of Office of Department for International Development, on his part said the government of United Kingdom will work with the government of Ethiopia on tax, audit

and transparency, in addition to the cooperation the countries have in health, education and infrastructure.
He said the United Kingdom Department for International Development will extend the necessary support for the realization of the program in Ethiopia.

http://www.waltainfo.com/index.php/editors-pick/14379-uk-extends-p17-mln-for-tax-audit-program-

.

India’s Allanasons to Invest $20 Million in Ethiopian Meat Plant

.

By William Davison Aug 1, 2014

Allanasons Ltd., an Indian food company, plans to invest $20 million in a meat-processing plant in Ethiopia as it seeks to take advantage of a large population of naturally fed cattle and sheep.

The Mumbai-based producer has been allotted land in Adami Tulu in Oromia region, about 170 kilometers (106 miles) south of the capital, Addis Ababa, where it will build a facility to produce 70 metric tons of meat products a day, said Aman Khan, head of Ethiopian operations.

“Ethiopia has the largest livestock population in Africa and the demand for meat proteins continues to increase globally, so we feel it is the right decision to invest in the livestock sector here,” he said in an e-mailed response to questions today. Allanasons is India’s largest exporter of processed food and commodities, according to its website.

The Horn of Africa nation’s estimated livestock population of 49 million cattle, 25 million sheep and almost 22 million goats directly contributes 15 percent to 17 percent of gross domestic product, according to the Ethiopian Agricultural Transformation Agency. Foreign sales earn about $150 million a year, or 10 percent of exports, and another $300 million of livestock may also be illegally exported, it said.

While veterinary and feeding practices should be improved in Ethiopia, the absence of growth hormones and antibiotics causing “major concern” for the industry is an advantage, Khan said. “The quality of meat of Ethiopian livestock should be considered good,” he said.

Officials need to address skilled labor shortages and poor transport infrastructure and cold chain systems to improve Ethiopia’s competitiveness, he said. “We feel that the government should consider supporting the meat industry in a more dynamic way considering the stiff competition,” Khan said.

http://www.bloomberg.com/news/2014-08-01/india-s-allanasons-to-invest-20-million-in-ethiopian-meat-plant.html

.

Youth Playing Significant Role in Dev’t of Ethiopia: NPC

.

The close to thirty percent youth of the total population of Ethiopia play substantial role in the development of the country, the National Planning Commission of Ethiopia (NPC) said.

Speaking at the 21st anniversary of the official launching of the National Population Policy and the commemoration of World Population Day, Acting Director of Population and Development Directorate of the National Planning Commission of Ethiopia, Fikre Gesso, said the 29.5 percent of the total population, which is 24.7 million, are young people between 15 and 29 years old and play a significant role in the country’s socio-economic and political development.

According to him, the increasing number of youth does not affect the country as they are additional resource. Ethiopia is following a policy of engaging the youth to work place, which is enabling to the growth of local investment and increasing saving culture, Fikre noted.

The government of Ethiopia introduced a youth policy in 2004 with the objective of encouraging the active participation of the youth in building a democratic system and good governance as well as the economic, social and cultural activities in an organized manner, to enable them to benefit fairly and equitably from socio-economic development outcomes, the acting director elaborated.

Deputy Commissioner of National Planning Commission with the rank of State Minister, Getachew Adem, on his part said the country is going through a demographic transition with fewer younger dependents, fewer older dependents and the largest segment of population of productive working age.

The young age dependency ratio of the country has declined dramatically from 88.4 in 1994 to 75 in 2012, leading to the demographic dividend, he said.

According to ENA, the 2014 World Population Day was observed on Wednesday, July 30, 2014 here in Addis Ababa under the motto “invest in young people”.

http://www.waltainfo.com/index.php/explore/14371-youth-playing-significant-role-in-devt-of-ethiopia-npc

.

Gambella set to reap 4 million quintals output in EC 2006/7 crop season

.

Utmost efforts are underway to reap about 4 million quintals of agricultural output in Gambella Regional State in 2006/7 crop season, according to the regional state agricultural development bureau.

Bureau Agricultural Input and Marketing Process Owner, Alemayehu Tadesse, made the remark at a training organized for agricultural development agents as well as model farmers and semi pastoralists in Itang Woreda.

“Coordinated efforts are being made to raise agricultural productivity in the region to 4 million quintals in 2006/7 crop season from 1.4 million quintals at present,” he said.

He said a lot is expected from agricultural development agents, farmers and semi pastoralists for the attainment of the target.

Deputy Speaker of Gambella Regional State Council, Tito Hawariat, on his part said all stakeholders need to take active part in the efforts to defeat poverty.

More than 1,400 agricultural development agents and 1,800 model farmers and semi pastoralists attended the training, it was learnt.

http://www.waltainfo.com/index.php/explore/14360-gambella-set-to-reap-4-mln-quintals-output-in-20067-crop-season

.

Houston Forum Can Open New Chapter in Ethio-American Business Relationship: MoFA

.

A forum that can open a new chapter in Ethio-American business and African-American business relationship in general is underway in the US, according to the Ministry of Foreign Affairs (MoFA).

Spokesperson of Ministry of Foreign Affairs, Ambassador Dina Mufti, told journalists that the forum kicked off today in Houston, Texas. The Ethiopian high-level delegation with more than 100 members is led by President Mulatu Teshome.

The delegation would explain the investment and trade opportunities that exist in Ethiopia to their counterparts attending the forum, he added.

According to the spokesperson, two days after the Ethio-American Business Forum will be held Afro-America Leaders’ Conference. Some 50 African leaders will take part in the conference that will discuss US’ contribution to peace and security in Africa, as well as its participation in investment and trade.

The leaders will simultaneously discuss on the possibility of the extension of AGOA, it was indicated.

Meanwhile, a Tigrayan Diaspora Festival aimed at involving Tigray born persons living abroad in the development of the state will be held from July 31- August 6, 2014 in Mekelle, Tigray State, Ambassador Dina disclosed.

He said the festival will open an opportunity to the diaspora to engage in the socio-economic development of the state.

According to him, a symposium that discusses quality of health, quality of education, good governance, investment, and technology transfer will be held during the festival.

http://www.waltainfo.com/index.php/explore/14355-huston-forum-can-open-new-chapter-in-ethio-american-business-relationship-mofa

.

Dairying: A way out of poverty

.

Posted on July 30, 2014 by Fanos Mekonnen

Ato Nurhussien with the first born cow of his first cow

For many poor households, dairying is considered a powerful pathway out of poverty. Marketing of dairy products, however, remains a major challenge to the realization of this potential. In Ethiopia, this challenge is exacerbated by the absence of structured marketing channels and strict religious observance by Orthodox Christians who do not consume animal products during fasting days and seasons. Despite such challenges, there still exist windows of opportunities to exploit niche markets and create wealth. The ability to exploit these markets to a large extent depends on one’s stamina and innovation in establishing reliable market outlets for dairy products.

We want to demonstrate the credibility of this using evidence from a dairy farmer in Agula’a, a small town located 30km north of Mekelle in Tigray region of northern Ethiopia.

Nurhussien Aligoshu is a dairy farmer who has never had a formal education in agriculture and has had no prior exposure to modern dairy farming. His first experience in dairying was in 2006 when a local organization offered him some seed money to purchase a crossbred dairy cow. Nurhussien was able to expand his crossbred dairy herd from 1 to more than 15 cows in just 8 years. His daily milk sales fluctuate between 30 and 70 litres per day depending on demand. Over the same period, Nurhussien’s monthly income from the sale of milk grew from barely 500 Birr to 15,000 Birr.

In addition to managing his dairy cows, Nurhussien has successfully organized and led a dairy marketing cooperative named ‘Daero‘ (with 30 active members) that has been able to find niche markets for liquid milk. Daero cooperative has approved a binding by-law which stipulates that members are not allowed to sell water-adulterated and coagulated/clotted milk. A fine of up to 500 Birr and cancellation of membership rights are imposed on offending members.

The by-law also requires members to participate in various committees which are assigned with diverse tasks. The marketing committee has the sole responsibility of identifying potential milk and heifer markets. The quality control committee oversees the maintenance of herd records and collection of good-quality raw milk to be delivered to cafés, hotels, and restaurateurs through trusted milk collectors/distributors who have established an elaborated business relationship with the dairy marketing cooperative. The selling of replacement heifers, which earns up to 30,000 Birr per heifer, within and outside Tigray, is also another income source enjoyed by the members.

The successful experience of Nurhussien and his fellow cooperative members clearly demonstrates the potential of dairy in boosting income and creating wealth for people with limited options. Members of the dairy marketing cooperative are able to engage in dairying with a clear vision and have managed to create a low- risk environment for dairy farmers. Success came from their overall cooperation, realistic organizational and institutional interventions, sharing of risks, minimizing of ad hoc milk sales and establishing of reliable marketing links with milk collectors/distributors.

In view of the ever-increasing herd size and volume of milk produced by the marketing group members that necessitated other market outlets, the Livestock and Irrigation Value Chains for Ethiopian Smallholders (LIVES) project identified potential clients and facilitated market linkages with large institutional milk consumers. LIVES also collaborates with Nurhussein and other members of the dairy marketing cooperative to test improved dairy technologies such as simplified corn silage using plastic bags.

Written by Yayneshet Tesfay (PhD) with contributions from Dawit Woldemariam and Gebremedhin Woldewahid.

http://lives-ethiopia.org/2014/07/30/dairying-in-wealth/

.

These university lecturers will go on to become local trainers and Business Development Services advisors after completing an intensive six-day entrepreneurship training course supported by UNDP.

Aynalem Ayele is a young woman brimming with confidence. “Ayni’s Design,” her small jewelry and clothing design shop in the heart of Ethiopia’s capital, Addis Ababa, offers creative designs of leather products, incorporating cultural motifs and items into everyday products for the young and savvy urban customer.  

Aynalem just completed an intensive six-day entrepreneurship and business training course as part of a UNDP-supported programme to accelerate the development of the private sector across Ethiopia.

As she reflects on expanding her business, Aynalem says excitedly that the training course helped her understand one important thing that other courses did not: “How you calculate ahead your business risks.”

UNDP provided US $6 million to the $26 million Entrepreneurship Development Programme for Ethiopia, launched in 2013 by the country’s prime minister, Hailemariam Desalegn, who remarked that “the acute lack of social capital and particularly that of entrepreneurship skills (…) stands in the way of ensuring rapid industrial growth.”

Girum Tariku, an Ethiopian in his late 30s, joined the programme after having been forced to file for bankruptcy. Following the training, he opened a printing and communication company. He is both the director and a major shareholder of the firm, and provides employment for six young people.

“I took the entrepreneurship training and it really helped me to translate my vision into clear workable objectives,” Girum said. His business, started with less than $1,500, now boasts an expanding capital asset of over around $52,000. Girum speaks of one day becoming a major player in the East African private enterprise scene.

Recent rollouts have helped introduce the programme to budding entrepreneurs and reached out to university lecturers all over the country, providing them with basic entrepreneurship skills during trainers’ workshops.

In addition to financing the scheme, UNDP identified similar programmes in Ghana and brought in trainers from that country to teach participants.

“This country is on the cusp of a major development transformation,” says UNDP Resident Representative Eugene Owusu. “In Africa, Ethiopia is the country to watch!”

The programme is expected to help 200,000 entrepreneurs through skills training and business advisory services over a period of three years.

To ensure the full implementation and sustainability of the programme, 25,000 additional people will be trained as trainers and a further 20,000 as business advisors.

Ethiopia is currently implementing the first of three five-year strategic plans to achieve Middle Income Country status by 2025, and the country is on track to meet the Millennium Development Goals on halving poverty by 2015.

Micro- and small businesses are expected to play a strong role in this transformation and to become a spring board for developing a vibrant private sector.

Around 1 million jobs have been created annually due to the focus on supporting micro and small enterprises in the country, with official reports indicating that 40 percent of the new jobs go to women. Latest official figures place urban unemployment rate at 17.5 percent, while youth unemployment is 23.3 percent.

http://www.undp.org/content/undp/en/home/ourwork/povertyreduction/successstories/supporting-young-entrepreneurs-in-ethiopia/

.

Ethiopia sees ‘surge’ in MICE growth

.

 

Sheraton Addis inner grounds

.

The Africa Hotel Investment Forum recently announced it was moving its 2014 event to Addis Ababa.

The organisation said the move was prompted by a “surge in interest from sponsors” leading to a need for a bigger space. It will now be held at the Sheraton in September. This reflects growth in the country’s nascent meetings, incentives, conferences and exhibitions (MICE) activities.

The African Union Commission is also based in Addis, in the striking, 100m-tall AU Conference Centre complex, built and funded by the Chinese. The United Nations Conference Centre has a wide choice of events spaces; and international hotels with MICE facilities include Sheraton, Radisson Blu, Hilton and Intercontinental.

A growth in summits and conferences taking place in Ethiopia has prompted Ethiopian Airlines’ in-house tour operator, Ethiopian Holidays, to develop MICE services alongside its leisure products. The operator can capitalise on its leisure portfolio for MICE venues – such as the handsomely-appointed Haile Resort overlooking Lake Hawassa, owned by Olympic gold medallist runner Haile Gebrselassie.

Other venues include the Kuriftu group’s Diplomat restaurant in Addis; its luxury lakeside spa resort in Debre-Zeit; and in Ziway, its excellent Wine House and Restaurant – in partnership with the nearby wine estate run by leading French vintner Castel.

http://buyingbusinesstravel.com/news/3022894-ethiopia-sees-%E2%80%98surge%E2%80%99-mice-growth

.

 Ethiopia to finalize Sustainable Tourism Master Plan

.

.

PRESS RELEASE

Addis Ababa, 29 July 2014 – The Federal Democratic Republic of Ethiopia is in the process of formulating its Sustainable Tourism Master Plan (STMP). The STMP is an initiative currently being developed through the technical support provided by the Sub-Regional Office for Eastern Africa (SRO-EA) and the Division for Regional Integration and Trade (RITD), in partnership with the Ministry of Culture and Tourism. The process of formulating the S TMP has entailed extensive field missions across the country, in-depth interviews with key stakeholders drawn from various sectors including public, private, professional organisations, civil society, regional government officials and academia. In addition, two regional consultative meetings have been already been held in Mekele and Dire Dawa and one more is scheduled to take place in Addis Ababa between 30th and 31st of July 2014. It is expected that following the field missions, interviews with stakeholders and the consultative meetings, a zero draft STMP will be prepared within one month which will then be subjected to national validation meeting to pave way for the preparation of the final draft of STMP.

The STMP is part on-going process of the implementation of the Inter-Governmental Authority on Development (IGAD) STMP. The IGAD STMP was informed by a regional tourism study commissioned by UNECA SRO-EA in 2010 and the green light for its formulation approved at the 15th meeting of the Intergovernmental Committee of Experts (ICE) of SRO-EA that took place in Djibouti, between 21st to 24th February 2011, whose main focus was on tourism under the theme Towards a Sustainable Tourism Industry in Eastern Africa. The IGAD STMP has since been completed and was officially launched the IGAD Tourism Inter-Ministerial forum held in Nairobi, Kenya by His Excellency Uhuru Kenyatta in December last year. In his opening remarks the President observed that ‘it is sad to note that our continent’s share of the global tourism industry stands at 52.4 million or 5.1% of
international arrivals, which translates to 33.6 billion US dollars or 3.1% of international tourism receipts.’ The IGAD STMP, among others, strongly recommends that member states align their respective tourism development instruments to the regional framework.

The formulation of the STMP for the Federal Democratic Republic of Ethiopia is indeed timely given the current prioritisation of the industry in the country’s development agenda following the establishment of National Tourism Transformation Council, chaired by His Excellency the Prime Minister, Hailemariam Desalegn, and the Ethiopian Tourism Organisation which is to spearhead tourism product development and marketing. The industry is, further, identified as a key sector in both the 1st and 2nd Growth and Transformation Plans. The identification of the sector as such is due its strong potential to bring about meaningful socio-economic development owing to the fact that such potential remains largely untapped. For instance, in terms of the prevailing cultural and heritage resources, the country is ranked at position 33 globally, above Egypt which is ranked 39th, and is regarded as one of the safest countries in the world. Yet, despite its current challenges, Egypt continues to draw over 9 million international tourist arrivals annually compared to the country’s 550 000 as of last year. Nonetheless, the industry still
contributes 12.3% of the GDP, is a leading foreign exchange earner and a key sector for both domestic and foreign investment valued at ETB 16.38 billion in 2013. The industry is also a one of the leading employers generating over 2.4 million jobs both directly and indirectly.

By embracing the IGAD STMP, which among others, advocates for both inter and intra-regional tourism, the Federal Democratic Republic of Ethiopia is, therefore, undertaking bold steps in the right direction of regional integration through the promotion of trade in services and subsequently towards Continental Free Trade Area.

Issued by:
ECA External Communications and Media Relations Section
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: ecainfo@uneca.org
www.uneca.org

http://www.ethiosports.com/2014/07/29/ethiopia-to-finalize-sustainable-tourism-master-plan/

.

Kefi Minerals Preparing Tulu Kapi Mine Licence Application

.

LONDON (Alliance News) – Kefi Minerals PLC Thursday said it is preparing a mine licence application for its Tulu Kapi gold project in western Ethiopia, following promising exploration results.

In a definitive feasibility study update, the company said recent drilling and trenching continues to confirm the previously modelled mineralisation, and an independent review of the resource model is underway.

Kefi said this milestone will be followed by a new mine plan and JORC-compliant reserves estimate, which are required to reactivate the Mining Licence Application by the end of 2014 and trigger construction in 2015.

JORC is the Joint Ore Reserves Committee, which provides mineral-resource classification schemes.

The company said reverse circulation infill drilling continued to hit strong gold mineralisation at the site, with results including 9 metres at 4.24 grammes per tonne of gold and 13 metres at 3.21 grammes per tonne of gold.

Last month, KEFI Minerals bought Nyota Minerals Ltd’s remaining 25% in the Tulu Kapi gold project for GBP1.5 million in cash and shares, having bought the first 75% in December 2013 for GBP4.5 million.

Kefi Minerals shares were quoted up 1.8% at 1.40 pence Thursday morning.

By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews

http://www.lse.co.uk/AllNews.asp?code=qm9vl00y&headline=Kefi_Minerals_Preparing_Tulu_Kapi_Mine_Licence_Application

.

US-Ethiopian Summit concludes successful and US companies to invest billions in Ethiopia

.

Tigrai Onlne – August 04, 2014

A high level Ethiopian delegation have concluded a very successful ‪US – ‪Ethiopia Business and Investment Summit in the United States. The summit was held in the American cities of Houston in Texas and ‪‎Los Angeles the biggest city in the state of California.

Above photo shows the Ethiopian Foreign Minister Dr. Tedros Adhanom and Ethiopian President Dr. Mulatu Teshome at the US-Ethiopian Summit.

The Ethiopian delegation which was led by the Ethiopian President Dr. Mulatu Teshome and the Ethiopian Foreign Minister Dr. Tedros Adhanom had extensive meetings with investors and business leaders in two of the biggest cities of the United States. The main aim of the summit was to show Ethiopia is ready for investing and invite big businesses and investors to come to Ethiopia to invest.

At the Summit Mr. Brien Morgan, managing partner of Detente Group announced a three billion US dollars investment on wind energy in Ethiopia. In addition, KKR Group announced to double its investment on flower investment in Ethiopia. Kohlberg Kravis Roberts (KKR) an American private global investment firm is investing $200 million dollars in Afriflora in Ethiopia. Salim group submitted a proposal to establish a household appliances assembly plant in our country. Many others have shown strong interest to invest in Ethiopia. “The outcome of the summit exceeded our expectations and we are very happy” said the Ethiopian Foreign Minister Dr. Tedros Adhanom after the summit.

Ethiopia is one of the fastest non-oil economies in the world. The Ethiopian economy is growing at a fast pace attracting many investors from around the world.

Chinese and Indians have dominated African investment in general and Ethiopia in particular. Investors from those countries have invested in construction, agriculture, horticulture, textile and other manufacturing sectors in Ethiopia.

Some companies from the United States have been involved in Ethiopia, but compared to the Chinese it is insignificant. America has realized now they are missing a golden opportunity in Africa and they are franticly trying to catch up with Easterners. Some say the Americans have lost already and what they are doing is too little, too late.

The investment of companies from the United States will create thousands of jobs and propel the Ethiopian economy to the next level. Despite the Eritrean regime’s unrelenting efforts to destabilize it, Ethiopia is the most stable country in the Horn of Africa.

The main reason for investors to pour in billions of dollars to Ethiopia is because they know the country is secure and they can trust the government and they have confidence in the Ethiopian system.

http://tigraionline.com/articles/usa-ethio-summit-2014.html

.

African leaders seek private investors for LAPSSET project

.

Tuesday, 05 August 2014

http://www.africanreview.com/manufacturing/engineering/african-leaders-seek-private-investors-for-lapsset-project

.

Ethiopia Draws Asia Manufacturing Interest

.

The interior of George Shoe Factory, located in the industrial zone of Addis Ababa, Ethiopia.

.

For a long time, economists have discussed East Africa’s chances to “get a foot in the door” of global manufacturing. China, as the world’s leading hub for mass production, has become expensive due to rising labor and energy costs. Meanwhile, East Africa offers a large young and cheap labor force. Until recently though, delays at ports, bad roads, power outages and political instability have prevented a shift from happening. But now, the Ethiopian government is building new industrial mega-zones that have successfully attracted some foreign investors who are moving manufacturing from China.

He Pingting, who goes by the American name Claire, gives a tour of the new factory building of George Shoe PLC. The Taiwanese shoe manufacturer started operating some months ago and recently exported its first container: 15,000 pairs of pink and light-blue women’s shoes made in Ethiopia.

.

Workers construct shoes at the George Shoe Factory, located in the industrial zone of Addis Ababa, Ethiopia.

.

He Pingting says the main challenge is the language barrier.

“We have so many stitchers. So, there are so many skills they need to learn. But, you know, teach them is a little bit hard because the language. …but no matter, we have a translator here and they’re very collaborative,” she said.

The factory is filled with a scent of glue. Young men and women in blue overalls sit in front of sewing machines and along assembly lines. Seven hundred Ethiopians work under Chinese and Taiwanese supervision: eight hours a day, six days a week for 800 to 1,200 Birr a month, which is about $60 (US), a fraction of a laborer’s wage in China.

Bole Lemi industrial zone

The factory building lies on the outskirts of Addis Ababa in a new gigantic 156-hectare industrial zone, called Bole Lemi.  It is only one of a handful of new planned zones across the country. After the completion of the second phase – another 186 hectares – Bole Lemi may offer up to 100,000 jobs.

Ethiopia is feverishly working on becoming the world’s newest hub for manufacturing and has good chances.

“Pakistan, Indian, Taiwan, Korean, Chinese. All are there,” he said. “You see the under-construction area, sheds are already contracted out. All leased now, all are leased. For instance this one, about 11,000 square meters, the next one 5,500 square meters. And we focus on this area for garment, especially garment, for garment and shoe, glove,” said Shiferaw Solomon, the director-general of the Ethiopian government’s Investment and Industrial Zone Corporation.

Behind Shiferaw Solomon outside the factory building, construction workers are working on two dozen new sheds that are to be ready by the end of August, a bit behind schedule. According to the Ministry of Industry, 20 foreign companies have secured factories at the site.

Fast growing economy

Ethiopia currently has one of Africa’s fastest growing economies. Unlike others, it is not driven by natural resources, but large public investments with foreign money. Shiferaw is optimistic that the government’s new industrial mega-zones and expansion of the textile and leather industry will give the country another push.

“We have abundant lands, abundant labor forces, materials, raw materials. Now, we’re at a stage of opening up,” said Shiferaw Solomon.

Driving out of the industrial zone, he foresees the potential his country has for the entire region. Already a rising political power, with a massive peacekeeping force in Somalia and other parts of the region, Ethiopia – Africa’s second-most populous country with more than 90 million people – is now also heading towards a new economic age.

“I’d like and I hope to see in the future Ethiopia is one of the competing countries, interesting countries and it serves as a hub for African at large,” said Shiferaw Solomon.

But the development comes with a price. Shiferaw says Addis Ababa and the entire country will suffer from power shortages for one or two years when all companies are operating.

http://www.voanews.com/content/ethiopia-drawing-asia-manufacturing-interest/1970953.html

   .

U.S. energy investment in Africa starts to make headway

.

   Author: E.G.Woldegebriel

ADDIS ABABA (Thomson Reuters Foundation) – As Washington hosts the U.S.-Africa Leaders Summit this week, an ambitious but low-profile energy programme announced by President Barack Obama in June 2013 is set to move back into the spotlight.

Power Africa is a U.S. government-led initiative around two-thirds funded by the private sector that aims to double the number of people with access to power in sub-Saharan Africa by 2018, connecting 20 million new customers.

When launched, the programme, focused initially on six countries – Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania – set a target of adding more than 10,000 megawatts (MW) of “clean, efficient” electricity generation capacity.

The U.S government has committed more than $7 billion in financial support and loan guarantees for the first five-year phase, while private-sector financial partners have promised to invest $14 billion, according to the scheme’s website.

Rajiv Shah, the administrator of the U.S. Agency for International Development (USAID), told Reuters ahead of the Aug. 4-6 summit new support for Power Africa would be announced worth “several billions of dollars”, and the programme’s aspirations would be more than doubled, as goals are already being met.

It is also likely to be expanded to other nations, Reuters reported.

So far, Ethiopia appears to be taking the lead in the Power Africa programme. The East African nation hopes to boost its capacity to 10,000 MW by the end of 2015, from the current level of 2,200 MW, in part with funding from Power Africa.

The government’s goal is to reach 37,000 MW by 2037 in order to meet demand from its population of more than 90 million – around half of whom lack access to electricity – and its expanding industries.

HELP WITH GEOTHERMAL

Under the Power Africa programme, the Ethiopian government signed an agreement last October with Reykjavik Geothermal, an Icelandic company, to build a 1,000 MW geothermal power plant in the Corbetti area of southern Ethiopia.

According to Amy Beeler, head of private-sector and energy-sector development at the Ethiopian office of the United States Agency for International Development (USAID), the project aims to generate 500 MW by 2018, with the remainder coming online by 2023. The total cost of $4 billion will be funded mostly by U.S. government agencies including USAID, with some finance from Reykjavik Geothermal. 

The programme has negotiated a power purchase agreement for at least 25 years with the state-owned utility, Beeler said. It is the first time in Ethiopia that an independent power producer will sell electricity to a state utility, and is the largest such scheme in Africa.

According to Beeler, Power Africa is not only about building power plants, but also includes training of engineers and government officials, as well as other infrastructure projects.

Gossaye Mengiste, an official at the Ministry of Water, Irrigation and Energy, said Ethiopia generates just 7.3 MW of energy from its only geothermal plant, Aluto Langano, which dates back to the 1980s. By contrast, the country currently has 171 MW of installed capacity from wind and about 2,000 MW from hydro.

“Although geothermal energy potential is in abundance in Ethiopia, its initial cost is larger than hydro or wind energy, begging the question: is it cost-effective for a poor country like us?” Mengiste asked. That suggests outside help is necessary, he added, referring to the Power Africa scheme.

COMPETITION WITH CHINA?

African nations are increasingly looking eastwards for development partners, and especially to China. Roads and buildings have been constructed with Chinese help, and Chinese-made cars and mobile phones are becoming a common sight.

Chinese involvement in Ethiopia’s energy sector ranges from the controversial 1,800 MW Gibe III hydropower project to a $1 billion credit for a power transmission line for a 6,000 MW hydro dam being built on the Blue Nile.

This has led some to question whether the Power Africa scheme is an attempt by the United States to catch up with China.

Besides Ethiopia, the continent’s most populous country, Nigeria, has also recently signed a memorandum of understanding with the U.S. government under the initiative. But the other four countries in the programme have yet to progress that far.

Michael C. Battle, a former U.S. envoy to the African Union, rejected suggestions his country is in a competition with the world’s second-largest economy to invest in Africa. Battle said Barack Obama’s interest in the continent predated his becoming U.S. president.

“It’s absolutely true that China is doing a phenomenal amount of work on the African continent, building infrastructure projects that are tremendous,” Battle said. In contrast, the main focuses of the U.S. aid approach to Africa have been eradicating disease, increasing educational opportunities, reducing poverty and creating a context for good governance, he added.

The Power Africa scheme is mainly a way for the U.S. government to back private firms that want to invest in the power sector in Africa, according to Battle.

AIM FOR SELF-SUFFICIENCY 

While the U.S. and other nations may have devised strategies to help Africa meet its infrastructure requirements, some development partners say that, in the long term, countries must meet their own needs.

Manabu Momita, a project manager at the Japan International Cooperation Agency, is working on the expansion of the Aluto Langano geothermal project, which is also being funded by the Ethiopian government and the World Bank. The goal is to increase the country’s geothermal capacity by 70 MW.

Momita emphasised that Japan’s assistance should be the beginning of a process that will lead Ethiopia towards self-reliance.

“We’re just starting geothermal development in Ethiopia, but (Ethiopia should not) try to rely on foreign governments’ assistance,” Momita said. Rather it should give “strong support” to its own development, he added.

E.G. Woldegebriel is a journalist based in Addis Ababa with an interest in environmental issues.

http://www.trust.org/item/20140804135508-h2i6m/

.

Japan considering introduction of advanced Kaizen in Ethiopia

.

- Evaluation confirms successful implementations so far

The philosophy for continuous improvements of quality and productivity, kaizen, made Ethiopia the third generation implementer, after Japan and Singapore, and it is getting new heights as Japan, the sponsoring nation, might consider Ethiopia to advance in kaizen for the next, more complex phase. 

Kaizen was introduced in Ethiopia in 2009 following the enquires of the late Prime Minister Meles Zenawi, which has been in practice from 2012 onwards, is planned to continue for some five years beginning early 2015, according to Tanaka Akihisa, director of he private sector division at the Japan International Cooperation Agency (JICA). He told The Reporter that the next phase of kaizen will see more advanced techniques that will assist the improvements of the manufacturing subsector. “Ethiopians have absorbed kaizen very fast. So we have successful results and for the next phase we will introduce the next advanced kaizen in Ethiopia,” he said.

Ethiopia, since 2012, has made improvements in terms of cost reducing production systems and avoiding rejects, according to Akihisa. The improvements and the enthusiasm from the Ethiopian side in practicing kaizen prompted Japan to boost its management philosophy. The recently aired advertisement via CNN is one that can be mentioned. CNN aired how kaizen is making changes in Ethiopia’s manufacturing sector.

Getahun Tadesse, director general of Ethiopian Kaizen Institute (EKI) told reporters on Friday at his office that the second phase of kaizen implementation would give priorities to the manufacturing, logistics and construction sectors. The export and import substituting commodities will have the upper hand of the Japanese kaizen in the production and quality spectrums. Akihisa cornered that following the evaluation results of kaizen implementation, his government is looking at Ethiopia to obtain the advanced stage, which giant companies like Toyota and the likes have implemented.

Both Akihisa and Getahun signed a terminal evaluation document on Friday agreeing on recent developments. According JICA reports, 250 companies have been trained for kaizen and some 30 companies according to EKI have attained some 37 percent improvements in the production activities.  So far, some 33 thousand management staff and workers are reported attending kaizen trainings and capacity building programs.

Gethaun said that the 33 universities and Technical and Vocational Education and Training (TVETs) institutions are among the targeted ones in the second phase implementation of kaizen. Monetary terms remain undisclosed but as part of official development assistance to Ethiopia, the government of Japan is looking at Ethiopia to champion over some African counties way longer associated with kaizen than Ethiopia in the past. Currently, in addition to establishing a kaizen institute, Mekelle University has initiated a curriculum and master’s level training and in the future the long serving Addis Ababa University (AAU) will include doctoral degree programs specializing in kaizen.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2323-japan-considering-introduction-of-advanced-kaizen-in-ethiopia

.

Ethiopia’s 2013-14 Exports Increase 6% on Jump in Oilseed Sales

.

By William Davison August 05, 2014

Ethiopian exports rose 5.8 percent to $3.3 billion in the year through July 7 partly due to an increase in oilseed revenue, the country’s second-largest source of export earnings.

The Horn of African nation earned $642.7 million from mainly sesame and niger seeds during Ethiopia’s fiscal year, rising 46 percent from 2012-2013, according to an e-mailed statement from the Trade Ministry, citing data from the Revenues and Customs Authority. Africa’s biggest coffee producer received $718.8 million from sales of the beans, down 3.7 percent from a year earlier, as volumes dropped 4.1 percent.

Ethiopia’s government is trying to attract investment into processing agricultural products and diversifying the economy, with a goal to earn $6.6 billion from farming exports and $1 billion from textile and garment sales by mid-2015. The World Bank in May gave the country $250 million to help develop export-led manufacturing zones and boost the business climate.

Textile and clothing sales climbed 13 percent to $111 million in a nation where retailers such as Tesco Plc (TSCO) and Hennes& Mauritz AB (HMB) have begun sourcing the materials, the ministry said. Earnings from shoe sales jumped 57 percent to $28.8 million, according to the data. China’s Huajian Group is among companies investing in shoe manufacturing in Ethiopia.

The value of gold exports declined 21 percent to $456.2 million in 2013-14, while the sale of the leafy narcotic khat rose 9.5 percent to $297.4 million and shipments of flowers jumped 7 percent to $199.7 million, the Trade Ministry said.

Sesame Sales

The country is the world’s fourth-biggest grower of sesame. Foreign currency earned from sales of the seeds to China has to be deposited at the state-owned Commercial Bank of Ethiopia to secure loans from the Export-Import Bank of China.

Ethiopia’s trade deficit may widen to $8.9 billion in 2013-14 from $8.5 billion a year earlier due partly to the rising cost of imports for a government infrastructure program, the International Monetary Fund said in October.

The government should consider reducing the value of the currency by 10 percent in real terms, which may lead to a 5 percent increase in export earnings, the World Bank said last month. The government could also embark on policy changes to help boost the competitiveness of exporters, including easing “high” start up capital requirements, boosting electricity supplies and freeing up credit and foreign exchange, the Washington-based lender said.

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net

http://www.businessweek.com/news/2014-08-05/ethiopia-s-2013-14-exports-increase-6-percent-on-jump-in-oilseed-sales

.

Ethiopia Earns 245 Million USD from Horticultural Products

.

The Ethiopia Horticulture Development Agency said 245 million USD was earned from export of flowers, vegetables and fruits during the just-ended Ethiopia fiscal year.

Agency Director-General Alem Woldegerima told Ethiopian News Agency that of the total revenue earned 199.74 million USD was secured from flowers, 40 million USD from vegetables and 6 million from fruits.

The Director-General, who recalled that the revenue from horticulture during the previous fiscal year was 230.5 million USD, said the performance of the just-ended year has exceeded the previous year by 6.4 percent.

Ethiopian flowers are mainly exported to Europe, according to Alem. He said the major consumer countries are the Netherlands, Germany, Belgium, and Norway.

Saudi Arabia, Japan, and the United States also import flowers. Fruits and vegetable are exported to Somalia and Djibouti, he added.

Currently, vast land is covered by horticulture, the Director-General stated.

Foreign investors are entering the country to invest in the horticultural sector, Alem revealed, adding that Israeli, Indian, Belgian and Kuwaiti investors are the majority of those. Dutch,Ecuadorian and Saudi are also following, it was indicated.

During the past Ethiopian fiscal year, a total of 1,119 hectares of land was given to foreign investors for the development of flowers, vegetables and fruits. Similarly, 100 hectares of land was given to local investors.

Sher Ethiopia from the Netherlands, Black Tulip and Fontana from Kenya and Esmeralda from Ecuador are reportedly either cultivating the land they secured or acquiring land.

According to ENA, more than 80 companies, most of them foreign-owned, are engaged in floriculture in Ethiopia, it was learned.

http://www.waltainfo.com/index.php/explore/14437-ethiopia-earns-245-million-usd-from-horticultural-products 

.

Berwaqo to Export Camel Milk

.

Berwaqo Milk Processing Plc, a one month old company, is preparing to export camel milk and its byproducts to other East African nations.

Currently the company processes 700 liters of milk every day. Yet it intends to eventually increase this number to 10,000 liters per day.

According to the General Manager and Owner of the company, Amir Muktar, Berwaqo is planning to export 40 percent of its total products to Djibouti, Hargessa and Somaliland. As to the rest of the product, it intends to sell it at Dire Dawa, Harar, Somali and Addis Ababa, Amir
furthered.

He added the company has secured a quality certificate from the Somali State Food, Medicine and Health Care Bureau and is hoping to acquire the same certificate from the Federal office.

Commenting on this he said, “The officials will come here and visit or factory. Hopefully, we will receive the certificate within the coming three days”.

USAID has decided to support the company in creating market for dairy producers and collectors as part of its Pastoral Resiliency Improvement and Market Expansion Project.

According to Capital, after it has been checked for qualifying in environmental compliance requirements, the company will secure a U.S $ 354,000 grant.

Amir commented, “We are pretty sure about the huge demand, camels’ milk is consumed daily to a large extent”. “Fortunately, the milk we collect from farmers is organic. This will help us to compete with other companies in the region.”

In addition to milk and byproducts, Berwaqo is planning to produce cosmetics from camels’ milk, Amir noted. He furthered, “Hopefully, we will start making cosmetics within the next three monts”.

According to Capital, a liter of camel milk is sold for 12 Birr in the local market.

http://www.2merkato.com/news/alerts/3171-ethiopia-berwaqo-to-export-camel-milk

.

Unlocking the multi-billion dollar leather potential in Africa

.

Africa contributes 21% of the total livestock production in the world yet it earns only 2.67% of the total global earnings from the multi-billion dollars industry.

COMESA Secretary General Sindiso Ngwenya attributes the poor earnings to low level of adoption and use of science, technology and innovation.

“The continent earns approximately US$4 billion from leather and leather products while globally the industry is greater than the sales of cotton, sugar, tea and meat combined earning over US$150 billion,” Ngwenya said. “This is despite being a bi-product of meat processing.”

In his statement delivered during the 4th Fourth Biennial Conference of stakeholders in agriculture and Network of Universities – called RUFORUM in Maputo, Mozambique Friday, 25 July 2014 Mr. Ngwenya said Africa’s supply of raw materials and semi-processed leather products was a low yield earner with minimum profits.

In order to advance Africa’s potential to become competitive in the leather and leather products sector, the Secretary General advocated for involvement of the local universities in enhancing research and technology to add value to the region’s agro-based commodities.

“Improvements in the leather tanning processes and designing of leather products will require research”, he said. “Development of Small and medium Enterprises tools will require research. Reverse engineering will require research. This is in addition to the development of technology to fabricate machinery for the leather industry.”

Ngwenya observed that even though COMESA has, over the last decade, recorded an annual real GDP growth of approximately 6.5 percent this growth has not led to the economic transformation. Low value adding economic activities and trade in raw materials is still prominent in our member states, he said.

In order to address this issue COMESA is developing an industrial policy that seeks to encourage countries to enhance their manufacturing sector and to add value to their primary produce. This is intended to improve the competitiveness of the industrial sector, thereby enhancing the expansion of intra-regional trade in manufactured goods and achieve structural transformation of the economies of its 19 Member States.

“This is easily attainable through the specialized institutions that already have the mandates to spear head these initiatives by working closely with the Universities both in the region and at global level”, he said.

COMESA Leather and Leather Products Institute (LLPI) based in Ethiopia has already developed strong linkages with Universities, Government and the Private sector under the Triple Helix approach which links the three institutions in the advancement of science, technology and innovation for industrial development.

“The development and implementation of the industrial policy will boost employment creation, particularly among our youth and ensure sustainable economic growth and poverty reduction in the region” Ngwenya said. It is estimated that the COMESA region alone has a demand of 365 million pairs of footwear and one billion square feet of leather.

Similarly, COMESA has developed the Seed Harmonization Implementation Plan (COMSHIP) under the Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA) with a view to developing the seed sector. This is aimed at advancing agricultural development along the value chain.

In order to deal with issues of biotechnology, COMESA is implementing a biotechnology programme alongside other initiatives that all require inputs from regional and international researchers, academics and professionals.

http://www.comesa.int/index.php?option=com_content&view=article&id=1259:unlocking-the-multibillion-dollar-leather-potential-in-africa-&catid=5:latest-news&Itemid=41

.

IBM and Dow Collaboration Delivers Sustainable Solutions in Ethiopia While Building Employee Leadership Skills

.

-  Company Employees Partner with International Medical Corps to Address Sanitation Issues in Ethiopia

MIDLAND, Mich., Aug 04, 2014 (BUSINESS WIRE) – Dow’s Leadership in Action (LIA) program and IBM’s Corporate Service Corps have come together with the assistance of nonprofit, PYXERA Global , to deliver sustainable solutions in Ethiopia while providing unique leadership development opportunities for participating employees.

Five employees from Dow and three from IBM will participate in a joint global pro bono project with International Medical Corps (IMC) that will promote and support a campaign to improve sanitation and hygiene behavior in the community of Wolayita. IMC delivers health care services to those impacted by war, natural disaster and disease with programs that focus on training and helping devastated populations return to self-reliance. Through this effort, Dow’s team will create a social marketing program to drive behavioral changes required to create sustained resilience – the ability of citizens and government to survive, thrive, or even avoid natural or man-made crises, such as illness, fuel and food shortages, storms or drought. IBM will assess, recommend, and design methodologies that can measure how resilient a community is, particularly in the realm of public health.

PYXERA Global facilitates these types of programs to aid companies entering new geographies. The nonprofit, which identifies high-impact organizations in emerging and frontier economies such as IMC, accelerates understanding of existing needs in these markets.

“Collaboration is instrumental in a project of this scope because no one company holds all the solutions to the world’s problems,” said Michelle Langley, Program Leader for Dow Sustainability Corps, Global Disaster Relief and STEM. “More than 35 percent of the world’s population lacks access to improved sanitation. By aligning strategies and leveraging each other’s employee talent, Dow and IBM can leave a lasting impact on the region.”

“By bringing together the top talent and emerging leaders at IBM and Dow, we are able to strengthen the impact we make on the community as well as deepen the experience for the employees, ultimately building lifelong relationships and sustainable solutions,” said Gina Tesla, Director, IBM Corporate Citizenship.

This project is just one example of how both companies offer unique leadership development opportunities to employees. In addition to the five Dow employees working with IBM, an additional 36 employees are working on projects that address health, education and commerce.

“International Medical Corps will be able to reach Wolayita community far more effectively as a result of this joint effort,” said Deirdre White, CEO of PYXERA Global. “Companies like Dow and IBM are playing a pivotal role in strengthening the ability of organizations throughout Africa to better serve communities. We’re seeing this across a host of issues areas from clean water and sanitation to infrastructure education, healthcare, and technology.”

Employees participating in LIA have worked virtually for several months in preparation for their trip to Addis Ababa, Ethiopia, in August to meet with their NGO partners. Dow and IBM employees have been collaborating during this time, together with PYXERA Global, in preparation for their sanitation awareness project. Both companies are building stronger community ties in the region and instilling long lasting skills for employees.

“When you lead a team there are no manuals or ‘how to’ documents. You have to use your experiences and make the best decisions at the time,” said John Kolmer, Dow Human Resources manager, Global Leadership Development. “This program gives people that real life experience by pushing them out of their comfort zone, and encouraging them to interact with people from different cultures and areas of expertise.”

Dow’s LIA is a collaboration between Dow Sustainability Corps (DSC) and Human Resources. DSC is part of Dow’s approach to meet the world’s most basic needs by matching interested and capable employees with NGOs, social entrepreneurs and local government agencies that need support for sustainable development projects, especially in emerging geographies and areas of growth for Dow. LIA leverages the strengths of DSC and the company’s Human Resources function to generate exceptional leadership development opportunities for participating employees and the NGO partners.

Follow Dow’s Leadership in Action program and project partnership with IBM’s Corporate Service Corps on Twitter by searching #DowLeads and #IBMCSC.

About Dow

Dow /quotes/zigman/224698/delayed/quotes/nls/dow DOW +1.39% combines the power of science and technology to passionately innovate what is essential to human progress. The Company is driving innovations that extract value from the intersection of chemical, physical and biological sciences to help address many of the world’s most challenging problems such as the need for clean water, clean energy generation and conservation, and increasing agricultural productivity. Dow’s integrated, market-driven, industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 180 countries and in high growth sectors such as packaging, electronics, water, coatings and agriculture. In 2013, Dow had annual sales of more than $57 billion and employed approximately 53,000 people worldwide. The Company’s more than 6,000 products are manufactured at 201 sites in 36 countries across the globe. References to “Dow” or the “Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com .

About IBM’s Corporate Service Corps

IBM’s Corporate Service Corps team members comprise some of IBM’s most talented employees, and provide skills to developing countries in disciplines that include information technology, research, marketing, finance, consulting, human resources and law. By the end of 2014, IBM Corporate Service Corps will have deployed 800 IBM employees for projects in South Africa, Ethiopia, Angola, Senegal, Tanzania, Nigeria, Ghana, Kenya, Morocco and Egypt. Since 2008, IBM Corporate Service Corps has dispatched approximately 2,500 IBM employees originating from 56 countries on engagements to 37 countries — making this pro bono problem solving program one of the world’s largest.

Follow IBM’s Corporate Service Corps on the CitizenIBM blog at www.citizenIBM.com and on Twitter, at @citizenIBM.

This Press Release contains information that may be or is privileged, confidential, proprietary or subject to copyright belonging to Dow or its affiliates. This information is intended solely for the use of the individual or entity to which it is addressed and any other use is unauthorized. If you are not the intended recipient of this information, this is notice that any retention, disclosure, distribution, copying or other use of this information is strictly prohibited and may be unlawful. Thank you.

SOURCE: The Dow Chemical Company

Dow
Jennifer Kitt , +1-989-636-9230
Media Relations
jnkitt@dow.com

http://www.marketwatch.com/story/ibm-and-dow-collaboration-delivers-sustainable-solutions-in-ethiopia-while-building-employee-leadership-skills-2014-08-04?reflink=MW_news_stmp

.

Al Ghandi Auto Opens Representative Office in Ethiopia

.

The United Arab Emirates (UAE) based automotive company, Al Ghandin Auto Group, opened a representative office in Ethiopia’s capital, Addis Ababa, for the purpose of serving the East African market. The company intends to go fully operational by the coming October.

CEO of the Group, Graham Turner, commented, “We are one of the world’s biggest General Motors dealers but now, currently the company deals with vehicles, motors, machines and construction equipment. We set up this office to understand what our customers want, explore the market and build our relationships”.

It was five years ago Al Ghandin started working with distributors. Nonetheless, it now sees the need to open an office in order to serve its customers in a better manner. In addition to this, the company is also interested in exploring other investment opportunities in Ethiopia.

Managing Director of Al Ghandi Investment Company, Buti Saeed Al Ghandi, noted the other reason for establishing the representative office is to forward in terms of investment and see opportunities the nation has to offer for the company.

Saeed noted he has met with different Federal Government officials from the Ministry of Finance and Economic Development, Ministry of Trade and the Privatization and Public Enterprises Supervising Authority (PPESA).

Al Ghandi’s representative stated his company wishes to move to the industrial sector in the long run and is planning to acquire an investment license.

Saeed explained, “A lot of the products we are selling, if they tend to get very popular here, we might think of convincing the original manufacturers to come here and do assembly here. That is long term strategy that is how we become part of your economy. We opened the office because we are looking at a very long term objective”.

Al Ghandin Auto Group has give divisions which offer automotive, industrial machines and equipment, car rental and leasing services, and vehicle testing facilities.

http://www.2merkato.com/news/alerts/3166-al-ghandi-auto-opens-representative-office-in-ethiopia 

.

Ethiopia to finalize Sustainable Tourism Master Plan

.

 

.
The Federal Democratic Republic of Ethiopia is in the process of formulating its Sustainable Tourism Master Plan (STMP). The STMP is an initiative currently being developed through the technical support provided by the Sub-Regional Office for Eastern Africa (SRO-EA) and the Division for Regional Integration and Trade (RITD), in partnership with the Ministry of Culture and Tourism. The process of formulating the STMP has entailed extensive field missions across the country, in-depth interviews with key stakeholders drawn from various sectors including public, private, professional organizations, civil society, regional government officials and academia. In addition, two regional consultative meetings have been already been held in Mekele and Dire Dawa and one more is scheduled to take place in Addis Abeba between 30th and 31st of July 2014. It is expected that following the field missions, interviews with stakeholders and the consultative meetings, a zero draft STMP will be prepared within one month which will then be subjected to national validation meeting to pave way for the preparation of the final draft of STMP.The STMP is part on-going process of the implementation of the Inter-Governmental Authority on Development (IGAD) STMP. The IGAD STMP was informed by a regional tourism study commissioned by UNECA SRO-EA in 2010 and the green light for its formulation approved at the 15th meeting of the Intergovernmental Committee of Experts (ICE) of SRO-EA that took place in Djibouti, between 21st to 24th February 2011, whose main focus was on tourism under the theme Towards a Sustainable Tourism Industry in Eastern Africa. The IGAD STMP has since been completed and was officially launched the IGAD Tourism Inter-Ministerial forum held in Nairobi, Kenya by His Excellency Uhuru Kenyatta in December last year. In his opening remarks the President observed that ‘it is sad to note that our continent’s share of the global tourism industry stands at 52.4 million or 5.1% of international arrivals, which translates to 33.6 billion US dollars or 3.1% of international  tourism receipts.’ The IGAD STMP, among others, strongly recommends that member states align their respective tourism development instruments to the regional framework.

The formulation of the STMP for the Federal Democratic Republic of Ethiopia is indeed timely given the current prioritization of the industry in the country’s development agenda following the establishment of National Tourism Transformation Council, chaired by His Excellency the Prime Minister, Hailemariam Desalegn, and the Ethiopian Tourism Organization which is to spearhead tourism product development and marketing. The industry is, further, identified as a key sector in both the 1st and 2nd Growth and Transformation Plans. The identification of the sector as such is due its strong potential to bring about meaningful socio-economic development owing to the fact that such potential remains largely untapped. For instance, in terms of the prevailing cultural and  heritage resources, the country is ranked at position 33 globally, above Egypt which is ranked 39th, and is regarded as one of the safest countries in the world. Yet, despite its current challenges, Egypt continues to draw over 9 million international tourist arrivals annually compared to the country’s 550 000 as of last year. Nonetheless, the industry still contributes 12.3% of the GDP, is a leading foreign exchange earner and a key sector for both domestic and foreign investment valued at ETB 16.38 billion in 2013. The industry is also a one of the leading employers generating over 2.4 million jobs both directly and indirectly. By embracing the IGAD STMP, which among others, advocates for both inter and intra-regional tourism, the Federal Democratic Republic of Ethiopia is, therefore, undertaking bold steps in the right direction of regional integration through the promotion of trade in services and subsequently towards Continental Free Trade Area.

 http://addisstandard.com/ethiopia-to-finalize-sustainable-tourism-master-plan/

.

Sheraton Addis lays off over 60 employees

.

The Sheraton Addis, the Luxury Collection hotel located off Taitu Street, has laid off over 60 of its employees who have been working there for up to 16 years, The Reporter learnt.

Some workers approached by The Reporter said they had been told to leave the hotel’s premises before dawn as their contracts had been terminated. Most of the employees were working night shifts before they were given their marching orders. They also indicated that they were forcefully escorted out by hotel security in the wee morning hours of July 28.

They also told The Reporter that they had been summoned to the Human Resources Department and given the contract termination papers before they were fully removed from the compound.

They also lamented that they found the hotel’s decision “shocking and overwhelming” as they claimed they “were thrown away from their duty, they have been working for over ten years with all due discipline and commitment.”

The Reporter’s repeated attempts to solicit comments from officials of the hotel were unable to bear fruit. However, it was understood from the letters of termination issued to workers that the hotel’s management decided to lay off these workers in order to keep the company’s image intact, which is frequently tarnished by unhealthy relationships among the management and the workers. The letter of termination, jointly signed by Director of Human Resource Department, Edna Tamondong and by the General Manager of the Hotel, Jean-Pierre Manigoff, also noted that the management’s harsh decision was “intended to safeguard the general safety of the industry.”

http://www.thereporterethiopia.com/index.php/news-headlines/item/2330-sheraton-addis-lays-off-over-60-employees

.

ZTE in row with ERCA over taxes worth 920 million birr

.

The Chinese telecom company undertaking multi-million dollar telecom projects in Ethiopia, ZTE (H.K) Limited Ethiopian Branch, has filed formal complaint to the office of the Prime Minister as well as the Ministry of Finance and Economic Development (MoFED) regarding 900 million birr tax claim that the Ethiopian Revenues and Customs Authority (ERCA) made against the company and the tax authority’s move to stop payments being made to ZTE by its contractor Ethio telecom.

ERCA claims that ZTE owed 900 million birr in unpaid taxes, penalties and interest out of the total sum of 920 million after the company settled the 20 million birr. Following that, the tax authority proceeded to writing a letter to the finance department of the contractor Ethio telecom to freeze payments that is made to the company.

Earlier this week, Ethio telecom’s corporate communication directorate head, Abdurahim Ahmed, confirmed that his company had received the letter from ERCA. According to Ethiopian Tax Law, ERCA reserves the right to order companies to stop payments or take other necessary measures to ensure tax compliance.

The company on its part did not deny that it was asked to pay only 920 million birr by ERCA, but said that the amount that was originally claimed went through a series of revisions following its appeal to the tax appeal committee. “The tax authority had made an audit on our company and had claimed around 920 million birr on April 21, 2014,” ZTE’s statement said.  But, the total amount of the claim also included penalties and interest payments apart from unpaid back taxes.

In its statement, the company also indicated that it had used its legal right of appeal and tried to prove to the authority’s tax appeal committee that the claims are not correct and that it had been paying its taxes properly and according to the law. According to the statement, the company had the committee acceptance for its part of the argument and the latter had ordered the rechecking of the claims.

“Based on this, we had managed to get a reduction of around 398 million birr and currently the claim had been reduced to around 522 million birr,” the statement explained further. ZTE also argues that, when all the penalties and interest are excluded, the total tax claim would be 157 million birr.

The Chinese telecom giant did not, however, deny that some of its arguments made to the appeal committee, which it claimed to be according to the law, had not been accepted. Nevertheless, it vowed to keep pushing the legal battle against ERCA until its arguments are either accepted or rejected according to the country’s taxation system. Since the formal legal procedure is still going on, ZTE refuses to believe that it is late on its tax obligations.

“We are intending to climb the appropriate legal ladder. Until all these processes are completed, it is our understanding that we cannot be said to be late in our payment,” the statement said.

According to sources, the company is still in negotiation with the tax authority, seeking further reduction of the claims, while, at the same time, awaiting arbitration from both PM’s office and MoFED if there is one.

Though ERCA is granted with the power of regulating and considering tax related appeals from individuals or organization of any tax payers, MoFED and the PM’s office also have an advisory role on such matters of tax dispute and complaints, especially with foreign companies, considering the peculiar types of business they are in, like foreign direct investment.

 http://www.thereporterethiopia.com/index.php/news-headlines/item/2331-zte-in-row-with-erca-over-taxes-worth-920-mln-birr

.

Israeli construction suspected of tax evasion

.

- Travel ban imposed on owner

Tidhar Excavation and Earth moving Ltd., an Israeli company taking part in the 2.6 billion birr road project that is expected to supplement the ongoing Light Railway Transit (LRT) project, is suspected of illegal tax evasion activities worth some 52 million birr, The Reporter learnt.

Investigators of the Federal Ethics and Anti-Corruption Commission (FEACC) told the Federal High Court Second Criminal Bench on Wednesday that three employees of the Ethiopian Revenues and Customs Authority (ERCA) Large Taxpayers Office suspected in the alleged tax evasion charges were arrested the same day while the owner and general manager of Tidhar, Menashe Levy, who is also suspected of the same charges, was banned from leaving the country but not arrested.

The investigators explained that the alleged tax evasion happened when Tesfa Hadush, leader of the tax audit team, and a two-member team, Muhammad Agmass and Anteneh Gezehagn, were assigned to do Tidhar’s tax audit for the business operation between the periods of 2008 to 2012. The audit, conducted in December of 2013 for one month, ended with auditors finding out that the company owed some 52 million birr in back taxes and notified it of its obligations.

According to the FEACC investigators, the story does not end there. The three soon approached Levy with another proposal, to reduce the 52 million to 6.1 million for a price of 3 million. After negotiations, the Menashe allegedly reached an agreement with the three to pay 1.8 million, 600,000 each, and have the taxes reduced to the proposed amount. Hence the four personalities were said to have evaded some 46 million birr in taxes and damaged the country.

Investigators asked for some 14 additional days to complete their investigation, during which time the suspects were ordered to remain in custody. In addition to that, they asked the court to issue a travel ban on the general manager until such time that he is placed under arrest. After hearing the justification, the court rejected the suspects’ right to make bail and granted the investigators 10 days to complete their investigation and institute charges.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2332-israeli-construction-suspected-of-tax-evasion

.

Beverage producers ordered to cut price

.

The Ministry of Trade last week ordered beverage producers to cut the recently surged market prices on their respective products.

In a meeting MoT called last week with beverage producers of soft drinks, beer and bottled water, the manufacturers were told to make sale adjustments to its sales prices before June. They were also told that the price adjustments that saw the surging of sale prices in the past couples of months are “irrelevant.”

The meeting, chaired by Trade Competition and Customers Protection Authority Director General, Merkebu Zenebe said “some producers have made irrelevant and inappropriate price increments. Before we go to legal action, we urge them to take correction mechanisms. Otherwise we are forced to pursue legal action.”

During the meeting at the MoT conference hall, soft drinks, beer and water products’ prices are said to have surged in connection to the government’s announcement of salary increments for civil servants listed out in detail.

Both officials of MoT and the authority explained that they gathered evidence from retailers that they were indeed forced to increase sale prices following their buying prices.  They blamed producers and suppliers for increasing the sales prices of each product.

A senior advisor at MoT, Nuredine Mahamed told the meeting that “the current price adjustment has been made with no economic reason.” He added that the price of beer since last month has shown over an eight percent increase and the increment has been witnessed boldly since June.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2327-beverage-producers-ordered-to-cut-price

.

 Ethiopia: Low Income Farmers Benefit From Irrigation

.

Over 30,000 farmers have benefited from irrigation development in Oromia, Amhara, Tigray and Southern Nations, Nationalities and Peoples states of Ethiopia, said the Participatory Small-scale Irrigation Development National Program Coordinator.

The International Fund for Agriculture Development (IFAD) supports the participatory small-scale irrigation development national program that was started six years ago in the four states. The program aims to support farmers with less than USD 30 cents daily income and poor household farmers in the states. A four-day workshop and field visit was recently conducted in Tigray State to evaluate the implementation of the program and exchange experiences. National Program Coordinator, Jemal Ali, said 114 irrigation schemes are being carried out with 535 million birr in all the states. He added that fruitful works were carried out in the just-ended Ethiopian fiscal year, though there were implementation gaps in the past years. In the past year, 64 irrigation schemes that can cultivate over 8,800 hectares of land have gone operational. Over 1.5 quintals of crops which benefited over 30,000 farmers were cultivated with those, and the beneficiaries have become food self-sufficient, according to the coordinator.

The remaining irrigation schemes will be completed by March, 2015.

According to the coordinator, they will have a capacity to develop over 12,000 hectares of land.

http://allafrica.com/stories/201408040202.html

By Juliet Eilperin – August 5, 2014

A group of African and U.S. firms on Tuesday will announce an additional $7 billion in spending to promote agricultural development in Africa, nearly doubling an Obama administration initiative aimed at mobilizing private money to ease hunger and poverty on the continent.

The commitments — which are being made as part of this week’s U.S.-Africa Leaders Summit and include a $5 billion pledge by ­Coca-Cola to source more of its products from Africa by the end of the decade — highlight how U.S. food aid policy has shifted under President Obama. Rather than relying primarily on federal funds to support small farmers overseas, the administration has enlisted African companies and major multinationals to help address some of the development challenges Africans still face.

In an interview, U.S Agency for International Development Administrator Rajiv Shah said the New Alliance for Food Security and Nutrition — the private-sector-oriented program Obama launched at Camp David in 2012 — was attracting new investment “because this way is working.”

“We have been able to do some extraordinary things to dramatically reduce hunger through the commercialization of the agriculture sector,” Shah added.

The initiative attracted $3.5 billion when it launched, with the majority of the money coming from large international companies. The new commitments bring it close to $15 billion. Two-thirds of the firms participating are African, and these companies account for roughly half of the program’s pledges.

Tuesday’s financial commitments include an array of initiatives, including plans by Coca-Cola to secure more reliable sources of mango puree in Kenya and Malawi and promote orange and pineapple concentrate production in Nigeria; $5 million from the Global Shea Alliance to provide storage facilities for women in communities that collect and process shea butter for Western food and cosmetic brands; and $1.2 million from Agriaccess Ghana Ltd. in support of training for local sorghum farmers.

Carl LeVan, an African-politics professor at American University and author of the new book “Dictators and Democracy in African Development,” wrote in an e-mail that the administration’s approach to food aid has benefits, as well as potential risks.

“Partnering with the private sector will increase the volume of aid, and it has the potential to improve the impact and efficiency of assistance, especially where corporations like Coca-Cola already have infrastructure and experience in Africa,” LeVan wrote. But he added that “private interests do not always line up with foreign policy objectives,” such as when multinational firms did business with South Africa under apartheid, or when they purchase land in Africa even if it means displacing villagers.

Shah said he is aware of the skepticism some Africans have of corporate investors, noting that each year the U.S. government publishes a report on the deals it helps secure under its food assistance programs. “We have to work hard to build trust and transparency with civil society and small farmers,” he said.

The administration has a separate initiative called Feed the Future, which launched in 2010 and receives about $1.1 billion a year in federal money. Rep. Betty McCollum (D-Minn.) announced Monday that she is working on bipartisan legislation to make the program permanent. It has provided assistance to 7 million small farmers in Africa, Shah said, and ensured that more than 12 million children there are “adequately nourished.”

In many instances, the United States has leveraged its aid dollars to push for new agricultural policies. In Ethi­o­pia, the government liberalized its regulations to allow private players — including DuPont, a participant in the administration’s New Alliance program — to develop and distribute seeds to farmers. Tanzania opted not to impose a ban on agricultural exports after working with U.S. officials. And Ni­ger­ian President Goodluck Jonathan said in a statement that his government “ended corruption of four decades in the fertilizer sector” by developing an “electronic wallet system” that allows farmers to get subsidized seeds and fertilizers though coupons they receive on their cellphones.

Vice President Biden emphasized the importance of cracking down on corruption while speaking to African activists and non-profit organizations Monday at the summit, calling it a “cancer.”

“Widespread corruption is an affront to the dignity of your people and a direct threat to each of your nations,” Biden said. “It stifles economic growth and scares away investment and siphons off resources that should be used to lift people out of poverty.”

Transparency International rates all countries in Africa as moderately to highly afflicted with official corruption. Botswana got the nonprofit organization’s highest rating for the continent last year, with a score of 64 out of a possible 100. Somalia scored the worst among African nations, with eight points.

Humanitarian aid groups have generally praised Obama — who took office shortly after rising food prices led to serious shortages in the developing world — for placing an early emphasis on alleviating hunger. But they have also cautioned against an overreliance on private companies to address the needs of the poor in Africa, as well as some anti-terrorism policies that have constrained humanitarian assistance activities in conflict zones.

Oxfam America policy director Gawain Kripke said the president and his deputies “deserve credit” for making agriculture and food security “a trademark, branded priority for this administration.” But Kripke warned that depending on corporations to provide the financial resources to lift the agricultural sector in Africa does not substitute for government aid, because “a lot of small farmers aren’t commercially viable or aren’t commercially interesting.”

Separately, several aid groups have questioned why the administration had not done more to modify a legal prohibition that bars organizations from conducting any transactions with groups on the federal terrorist list — even if it is minimal contact, such as paying a road toll, to deliver food assistance to civilians. Officials from Somalia — a country that suffered a famine in 2011 and still faces food shortages — said this week they are concerned these prohibitions will again impede assistance efforts there.

“They haven’t made a reasonable attempt to balance the humanitarian need for food assistance with the security needs,” said Kay Guinane, director of the D.C.-based Charity & Security Network.

Anne Gearan contributed to this report.

Sourced here  http://www.washingtonpost.com/politics/africa-agricultural-initiative-gets-7-billion-boost-from-private-companies/2014/08/04/276214d2-1be3-11e4-ae54-0cfe1f974f8a_story.html

Filed under: Ag Related, Economy, Infrastructure Developments Tagged: Africa, Agriculture, Business, East Africa, Economic growth, Ethiopia, Fertilizer, Investment, Kenya, Millennium Development Goals, Potash, Sub-Saharan Africa, tag1, United States

- Getachew Tikubet, (pictured, above), operations director at Bio-Economy Africa 

09 August 2014 Written by  Berhanu Fekade 

Getachew Tikubet holds a PhD in Biology with specialization on ecology and integrated systems. Together with his wife, Selamawit Assefa (PhD), he set up Bio-Economy Africa, a nonprofit organization that has been working on farmer training and agricultural research for some 15 years. Headquartered in Addis Ababa, Bio-Economy Africa has been stretching out to other African countries, embracing DRC, Côte d’ Ivoire and Mozambique, and recently Uganda and Ghana.

Africa’s top 10 future investment cities

By Thandi Skade | August 14, 2014

.

Ethiopia and Japan Held 14th Round Industrial Development Policy Dialogue

.

Japan and Ethiopia held a five days dialogue that lasted from August 11 to 15 on Industrial Development. The dialogue was held in Addis Ababa and it was the 14th Round of Policy Dialogue on Industrial Development.

According to Walta Information Center this Dialogue was referred to in the Joint Communiqué by Prime Minister Mr. Shinzo Abe and Prime Minister Hailemariam Dessalegn issued on the occasion of the state visit of Japan’s Prime Minister to Ethiopia in January.

The Dialogue has been held since 2000 when the late Prime Minister Meles Zenawi Professor Kenichi Ohno and Professor Izumi Ohno from the National Graduate Institute for Policy Studies requested for it.

The Dialogue has been conducted as part of a technical assistance project by the Japan International Cooperation Agency (JICA). This infers it has been coordinated closely with the “Kaizen” initiative that the Ethiopian Government is implementing across the country with
assistance of Japan. This is also the platform that created the “Champion Products approach,” which is a tool for promoting trade and increasing exports.

The Dialogue attracted many high level officials and was headed by Newayekiristos Gebreab, Economic Advisor to the Prime Minister.

Topics such as the positioning of “Kaizen” in the next GTP2, a direction of scaling up industrial capacity to achieve industrial development and a light manufacturing vision were discussed. In addition to this points Ethiopia should note were also raised.

Other than these, the dialogue also covered topics such as the situation of the “Latest Comer” countries, namely Myanmar, Cambodia and Bangladesh, was was introduced and an active exchange of views and discussions were conducted on policies to encourage more FDI based on
other countries’ experiences or the necessity to implement industrial policy step by step.

http://www.2merkato.com/news/alerts/3200-ethiopia-and-japan-held-14th-round-industrial-development-policy-dialogue

.

4G Nearly in Addis Abeba

.

-  Ethio Telecom will soon be available in Addis Ababa following the completion of an expansion project

Ethio Telecom will begin offering 4G service in Addis Abeba in the coming month following the completion of the Telecom Expansion Project (TEP), with the rest of the country expected to follow within a year.

Ethio Telecom made the announcement during a press conference at its headquarters on Churchill Avenue on August 5, 2014.

The project was conducted in three phases. The first phase involved replacing the old Nokia network – set up in 75 areas including Bisrate Gabriel, Mekanisa, Ayer Tena, Alem Bank, and Alem Gena areas – with a new Huawei network. The second phase involved 239 areas, according to Abdurahim Ahmed, corporate communications officer with Ethio Telecom.

In the third phase, Ethio Telecom built the capacity for providing the 4G service for 400,000 customers by completing civil works, erecting antennas and installing service equipment in an additional 410 sites. In these sites, there will be 210 antennas supporting 4G. A total of 722 antennas were installed making the city’s service coverage reach 100pc, Abdurahim said.

Problems which recently occurred with mobile and CDMA users while attempting to recharge accounts will now be automatically detected, according to Abdurahim. There is a technical team organized by Ethio Telecom and Huawei, a Chinese company which undertook the network project for 800 million dollars, working on the problem resolution of the area according to the officer.

The 210 network antennas among the new 410 networks will support 4G. Ethio Telecom has also acquired generators and batteries to mitigate the power problem, Abdurahim said.

The 4G has a downloading capacity of 150mbit/sec while 3G has a capacity of 42mbit/sec.

The country is divided into 13 telecom centres in a 1.6 billion dollars contract awarded to the two Chinese telecom companies Huawei and ZTE in August 2013.

ZTE has fallen into a tax row with the Ethiopian Revenues & Customs Authority (ERCA), which Ethio Telecom says occurred after the contract was awarded to the Chinese. According to Abdurahim, Ethio Telecom is seeking an explanation from the tax body. ZTE’s management says that it has managed to get the amount required reduced from 920 million Br in tax, interest and penalty to 522 million Br and would continue to make its case until the authority makes further concessions or rejects ZTE’s case.

The new 4G service will be provided to smart phones with 4G capacities, including the iPhone 5, Galaxy s5, and Nokia Lumina, as well as with dongles for wireless networks.

There are two types of dongles that the company provides. The first comes in different capacities, ranging from 2GB, 4GB, 8GB, 10GB, 20GB, and 30GB as Abdurahim stated. The second type has no limit on its capacity.

The network in the Addis Abeba telecom centre was completed in six months, with the remaining 12 circles for the rest of the country expected to be completed by the end of this fiscal year, according to Abdurahim. Circles in areas where there are mega projects, such as sugar factories, will be prioritized, he said. The end of this fiscal year will also see the number of mobile subscribers rise to 40 million and the capacity to 59 million, according to Ethio Telecom’s plan.

http://addisfortune.net/articles/4g-nearly-in-addis-abeba/

.

Huawei Concluded a Optical Fiber Installation with Eltel

.

Huawei and Eltel concluded a major contract in Ethiopia. The agreement is for the installation of Optical Ground Wire (OPGW) covering 1, 600 Kilometers on the existing power transmission lines.

The project which is expected to be finalized by the end of 2015, is going to witness Ethiopia’s first ever live line condition installation.

The areas that the project will be carried out are located in Central, Southern, South Western and Western parts of the country.

The entire project is part of Ethiopia’s National Grid Development and Improvement Project. As Eltel concludes its task, the nation will be equipped with a high quality backbone for 3rd party users and enhance the utility’s internal communication capabilities.

Eltel has a decade old experience with delivering electrification projects in Sub-Saharan Africa, including Ethiopia.

http://www.2merkato.com/news/alerts/3196-ethiopia-huawei-concluded-a-optical-fiber-installation-with-eltel

.

New Zealand Company ‘ready’ to invest in Ethiopia

.

A New Zealand Company called Dairy and Beef Solutions has expressed readiness on Tuesday to invest in Ethiopia.

Dairy and Beef Solutions Ltd of Mr. Derek Fairweather, having talks with Ethiopian State Minister of Foreign Affairs, Dewano Kedir in Addis Ababa emphasized his company’s capacity and productivity and outlined what it could contribute to improve the dairy and beef sector.

State Minister Dewano Kedir briefed the company’s representatives about investment in Ethiopia.

The State Minister made clear the investment opportunities in the sector, the peace and stability of the country and the support and follow-up assistance provided by the government for investors in Ethiopia.

He also underlined the advantages of the huge market and cheap labor available in Ethiopia, adding that the agricultural sector was one of the priority areas of the country’s Growth and Transformation Plan.

Mr. Derek Fairweather appreciated the support he has received from the Government of Ethiopia explaining his company’s preparedness to invest here.

http://www.waltainfo.com/index.php/editors-pick/14569-new-zealand-company-ready-to-invest-in-ethiopia-

.

UNDP, Microsoft agree to empower 200,000 entrepreneurs in Ethiopia

.

The United Nations Development Programme has signed a collaborative agreement with Microsoft East Africa Limited to enhance development activities in the areas of entrepreneurship.

The two organisations have agreed for Microsoft to provide training and mentorship services to Ethiopia’s UNDP supported Entrepreneurship Development Programme (EDP) for 200 thousand entrepreneurs.

These services form part of Microsoft’s 4Afrika Initiative, which looks to accelerate Africa’s economic development and improve its global competitiveness by empowering local entrepreneurs.

Microsoft brings this vision, as well as its vast experience in providing ICT skills, education and curriculum for developing countries, to the deal.

As part of this agreement, senior Microsoft executive volunteers will provide support, including mentoring entrepreneurs on strategy and marketing; support the best innovators and nominate them for the 4Afrika Innovation Grant Award; provide access to Microsoft BizSpark, a global program that provides free software to startup entrepreneurs and help entrepreneurs exchange products and service and gain global recognition through the Microsoft Small and Medium Enterprise (SME) portal

UNDP’s partnership deal with Microsoft also includes a ‘Build Your Own Business’ training, which is designed to help micro and small businesses empower current and aspiring entrepreneurs.

This is UNDP Ethiopia’s first private sector partnership.

“The goods and services offered by Microsoft provides a unique opportunity to unleash the potential of young and budding entrepreneurs. This will help them to play a vital role in the economic growth and transformational development of Ethiopia,” UNDP Resident Representative, Eugene Owusu, said. 

“The goods and services offered by Microsoft provides a unique opportunity to unleash the potential of young and budding entrepreneurs. This will help them to play a vital role in the economic growth and transformational development of Ethiopia.”

Eric Odipo, Country Manager of Microsoft East and Southern Africa, agrees. “It is crical to develop the capacity, knowledge and skills of local entrepreneurs who will stimulate local economies. We look forward to working with the UNDP in taking innovative business models to scale.”

http://www.waltainfo.com/index.php/editors-pick/14577-undp-microsoft-agree-to-empower-200000-entrepreneurs-in-ethiopia-

.

Ethiopian Airlines Enters into Codeshare Agreement with United

.

http://www.travelpulse.com/news/airlines/ethiopian-airlines-enters-into-codeshare-agreement-with-united.html

.

Business Discussions Between Dow and Ethiopian Stakeholders

.

A business networking and awareness creation session between the US Chemical Company, DOW and various stakeholders from Addis Ababa was held on Wednesday (August 12) at the Radisson Blue Hotel. Among those attending were officials from the Ministry of Foreign Affairs and the Investment Commission as well as representatives of the Chamber of Commerce and Sectorial Association, the Agricultural Investment Land Administration Agency and the US Company, DOW.

Presentations covered the opportunities and prospects for investment in Ethiopia. The President of the Ethiopian Chamber of Commerce and Sectoral Association, Solomon Arega, and the Commissioner of Ethiopian Investment Commission, Fitsum Arega, detailed the prospects and advantages; and Commissioner Fitsum explained the incentives and tax system arrangements designed to help foreign investors succeed in Ethiopia.

Mr. Ross McLean, Head of the DOW delegation, and John Kolmer, Manager, Human Capital Development for DOW, said they were impressed at the welcoming opportunities available in Ethiopia and spoke of their plans to invest in Ethiopia in the manufacturing sector and in agriculture and chemical industries. Members of the Leadership in Action team from DOW, who will be in Ethiopia for a week, indicated that their presence would encourage other US companies to look towards future investment in Ethiopia.

http://allafrica.com/stories/201408150212.html

.

Allana Potash Engages AMEC to Complete Front End Engineering and Design Studies on Danakhil Project

Malt Factory To Suspend Production

.

-  Lack of interest by farmers to harvest barley leads to shortage, halting of factory operations

The Assela Malt Factory which is located at the outage of Assela town

Assela Malt needs 600,000qls of raw malt barley to produce 360,000qls of malt a year and supply of 30,000 to 32,000qls of malt to the breweries every month

.

The Assela Malt Factory, the main supplier of malt for breweries in Ethiopia, is suspending production until the middle September when barley ordered from Denmark is expected to be delivered.

“The factory will stop production as soon as it finalises processing the 15,000qt it has in its stock, which will be finished before mid-august,” said Amare Wakjira, managing director of the Factory.

The Factory is located just outside Assela town in Tiya Woreda of Arsi Zone, a region popular for the quality of barley it produces; despite the fact the factory is not getting enough supply from the farmers.

“The main reason for the scarcity of barley is the farmers’ poor interest to harvest barley,” said Amare.

The Company is paying farmers 360 Br more a quintal starting July to encourage farmers to grow more barley; its old price used to be 900 Br to 1,050 Br. Sometime before that Diageo, the owner of Meta Brewery, had bought 70tns of barley from the same market where Assela gets its supply, according to a source working in the industry.

Diageo’s communication office confirmed the purchase but declined to discuss the subject of malt. The office asked questions to be emailed to it, but Menen Wondwossen, corporate relations director, replied saying, “We are not able to comment on this at the moment.”

The Assela Malt Factory sent a Letter of Credit (LC) to Denmark on August 5, 2104, for shipments of 17,500tns of barley, a four month supply, for six million dollars, at nearly twice the price in the domestic market. The Factory expects the ships carrying the barley to arrive at the Port of Djibouti on September 10 and reached to the Factory on September 30, 2014.

The Malt Factory needs 600,000qls of raw malt barley to produce 360,000qls of malt a year, which it supplies to the breweries in installments of 30,000qls to 32,000qls. Its clients include BGI Ethiopia, Harer Brewery, Bedele Brewery Share Company, Meta Brewery and Beer Garden. The Factory sold close to 220qlt for 345 million Br to these five breweries in 2011/12.

Some of these breweries declined to comment on the consequences of the malt factory suspending production.

Dashen Brewery gets its malt from its, Gondar Malt Factory, a sister company, both owned by Tiret Endowment Investment Organizations (TEIO).  Gondar Malt Factory started production last year with an investment of 670 million Br, in Gondar town, in the Amhara Regional State, with a production capacity of 16,200tns of malt a year. The company gets barley from Gondar, Gojjam and Northern Shoa. The brewery consumes three quarters of the malt produced by the malt factory.

According to data from the Ethiopian Revenue & Customs Authority (ERCA), 5,425tn of malt was imported in 2003 at a cost of 2.8 million dollars. This number had grown more than 15 fold by last year, forcing the country to spend 47.3 million dollars on the import of malt.

Following maize, wheat, teff and sorghum, barley is the fifth most important cereal crop in the country, and it is produced on about one million hectares of land of which Arsi and Bale contributed close to 20pc.

Asella Malt was established 30 years ago, and remained for long the sole local supplier of malt to the local beer industry, whose production capacity has reached about four million hectoliters. Raya, Zebidar and Habesha breweries are expected to join the industry in coming years.

Starting from July 8, 2014, the Factory increased its prices from 1,695 Br to 1,795 Br a quintal.

http://addisfortune.net/articles/malt-factory-to-suspend-production/

.

The Role of Potassium in Cropping Systems of Sub-Saharan Africa: Current Status and Potential for Increasing Productivity

.
04-05 September 2014
Addis Ababa, Ethiopia

.

Background

The sustainability of agricultural systems greatly depends on balanced fertilization to improve soil fertility for secure and sustainable food production. Potassium (K) fertilizers play a crucial role in improving the quality and yield of crops and thus contribute to the welfare of farming communities. Governments, private companies and foreign countries have invested in extensive agricultural projects in Africa that demonstrate the benefits of applying proven practices and guidelines derived from scientific field experiments. Many African countries have the potential to produce not only for their own consumption, but also for other countries across the continent and beyond to feed the growing global population.

In many African countries, one of the main obstacles to agricultural productivity is soil fertility depletion. African soils have been subjected to severe degradation caused by both natural and human factors. In addition to low use of chemical fertilizers, use of farmyard manure or crop residues has also been minimal, thus exposing soils to higher risk of nutrient depletion. In general, the smallholder agricultural production system is exposed to low level of input use, particularly with respect to fertilizers and improved seeds.

In several sub-Saharan African (SSA) countries, although fertilizer use has slowly been increasing, the average intensity of fertilizer use throughout the region remains much lower than elsewhere. Of the major nutrients, K is used in smaller quantities, thus not meeting crop demand. In many countries, nitrogen (N) and phosphorus (P) have been considered as the nutrients least present in soils; therefore, DAP (di-ammonium phosphate) and urea fertilizers have been the only fertilizer sources that have been in use in Ethiopia and in several other SSA countries. Moreover, until recently, it was widely believed that K fertilizer was unnecessary. In Ethiopia, a shift in this erroneous common thinking was triggered by research activities conducted by stakeholders during the last few years, the results from nationally launched soil fertility mapping, and ongoing new fertilizer demonstration trials being conducted in many areas. Results from these initiatives proved that several nutrients including K are limiting crop yield. Based on these results, Ethiopia introduced six new fertilizers (including K) for distribution to farmers beginning in the 2014 cropping season.

One cause for the low use of K is related to the often higher levels (are above levels considered critical) of exchangeable K in soils, particularly in Vertisols with higher clay contents. On the other hand, even in such soils, good crop response to K application is being found. The Symposium “The role of potassium in cropping systems of sub-Saharan Africa: current status and potential for increasing productivity” will address the issues related to the role and benefits of K fertilizers, focusing on chemical, physical and biological processes in soil and plants, farm management and economic application of fertilizers. During the symposium, issues including soil fertility, quality of mineral fertilizers, and efficient use of fertilizers will be discussed.

This event will be of interest to soil and plant nutritionists, agronomists, extension officers, as well as governmental/non-governmental organizations and private companies that have an interest in balanced fertilization. Invited speakers will include scientists from the region, and beyond. Poster presentations are open to all, and students are encouraged to participate and present relevant research related to the themes of the symposium.

Main Themes

• Potassium fertilizer management in major cropping systems of sub-Saharan Africa.
• Current advances made in the determination of potassium status in soils and plants.
• Evaluation of soil potassium fertility in Ethiopia and East Africa.
• Evidence of the effect of potassium fertilization on nutrient and water use efficiency.
• The beneficial role of potassium in tackling biotic and abiotic stresses in cropping systems.
• Nutrient mining and stagnation of agricultural productivity in sub-Saharan Africa.
• Potash production in Ethiopia: prospects and challenges.
• Public-private partnerships: the role of NGOs in scientific information generation and transfer.

Confirmed Speakers

• Tilahun Amede, ICRISAT, Kenya
• Gezahegn Ayele, USAID/CIAFS, Ethiopia
• S. K. Bansal, Potash Research Institute of India
• Benayahu Bar-Yosef, Agricultural Research Organization of Israel
• Khalid Bomba, CEO, Agricultural Transformation Agency, Ethiopia
• Mulugeta Demiss, Agricultural Transformation Agency, Ethiopia
• Peter van Erp, Soilcares Research, The Netherlands
• Eyasu Elias, CASCAPE, Ethiopia
• Sileshi Getahun, State Minister of Agriculture, Ethiopia
• Mart Farina, Adviser, Omnia Fertilizers, South Africa
• Sam Gameda, IFPRI, Ethiopia
• Mitiku Haile, Ethiopia representative to UNESCO, France
• Wassie Haile, Hawassa University, Ethiopia
• Hillette Hailu, Haramaya University, Ethiopia
• Bashir Jama, Director of Soil Health Program, AGRA
• Huising Jeroen Elzo, IITA-International Institute of Tropical Agriculture, Kenya
• Erik Karltun, Agricultural Transformation Agency, Ethiopia
• Selamyihun Kidanu, Agricultural Transformation Agency, Ethiopia
• Teshome Lakew, Ministry of Agriculture, Ethiopia
• Hillel Magen, IPI director, Switzerland
• Tekalign Mamo, Minister’s Advisor and State Minister of Agriculture, Ethiopia
• John Mellor, Prof. Emeritus Cornell University, U.S.A
• Abebe Shiferaw, Agricultural Transformation Agency, Ethiopia
• John Wendt, IFDC- East & Southern Africa Division, Kenya
• Nega Wubeneh, Agricultural Transformation Agency, Ethiopia
• Uri Yermiyahu, Agricultural Research Organization of Israel

Link: Ethiopia Ministry of Agriculture
Documents: First Announcement (pdf 773 kB), Second Announcement (pdf 775 kB)
Email: Ms. Hanan Mohammed (Event Manager)
Tel: +251 11 6186915, 251 11 6186911, 251 911 614309

Sourced here  http://www.ipipotash.org/en/events/SSA+2014.php

Anna Rosenberg, Head of Sub-Saharan Africa at FSG, is currently on a research trip to Kenya, Uganda and Ethiopia. Here are her latest insights:

As I sit on the plane from Addis Ababa to London, I am gathering my thoughts and impressions of Ethiopia. My trip made me realize just how complex a place it is. Ethiopia is different. Or at least, that’s what everybody keeps telling me. “The first mistake foreign businesses make, is to think that Ethiopia is part of East Africa. Ethiopians are not really Africans, nor are they Arab,” a leading distributor for the healthcare industry told me.

Ethiopians count time differently. It is currently the year 2006. Midnight is 6pm according to “Habesha time.” Unlike its neighbors, Ethiopia has long been closed to foreign exposure. It was famously never colonized, if one ignores the 5 years of Italian rule in the 1930s and 1940s – enough to introduce pasta to the national cuisine. From 1974 to 1991, Ethiopia was under communist influence. Today, Ethiopia is only at the very beginning of opening up to the world.

Yes, Addis Ababa has been the capital of international diplomacy in Africa since the early 1960s. Home to the African Union headquarters and other international organizations, Addis also hosts diplomats from around the world in its swanky hotels and remarkable Chinese-built AU building. Diplomats are easily spotted – they drive big cars and wear expensive suits.

The Chinese-built headquarter of the African Union is nothing less but a remarkable piece of architecture

The two sides of Addis include swanky buildings and impoverished areas

It seems odd. The majority of the population earns about US$60 per month and cars have a 240% import duty. The result is a stark contrast between rich and poor, diplomat and local. Most shops sell cheap Chinese imports or second-hand clothing. As a result, you can find the odd Ethiopian walking around in a Marks and Spencer shop assistant jacket. Russian Ladas from the socialist area, today widely used as taxis, contrast with the diplomat’s 4x4s. The high import duty means that cars, no matter how old, appreciate in price!

The real economy can be seen in the city’s vast market place Merkato, but Westerners rarely come here

The shop-owners in the Merkato are collectively investing in real estate to move their shops from their little shacks into proper buildings 

However, not all Ethiopians have low income levels. The number of dollar millionaires rose from 1,300 in 2007 to 2,700 people last year. GDP grew by 7.1% in 2013 and the government is implementing reforms to improve the operating environment. Ethiopia is therefore increasingly attractive for multinationals that want to tap into a large population estimated at around 90 million people.

This population figure is nonetheless misleading. Local distributors in the FMCG keep telling me that, “the addressable market is more like 10 million when you count the people living in cities.” Some argue that the addressable market is even smaller. Contrary to other African countries, urbanization is not very pronounced in Ethiopia as about 85% of its citizens live in rural areas. Despite low urbanization, consumer goods companies present in the market are experiencing dramatic growth rates of between 20% to 50%. It seems that growth, while from a low base, is happening fast.

I have come to see that doing business in Ethiopia is a long-term game. Companies must understand it will take time for income levels, and consequently consumption, to grow. It will take time for the government to build the required infrastructure to connect rural to urban areas, so that the addressable market will approach 90 and not 10 million people.

The government’s main objective is to transform Ethiopia first and foremost into an export market before it becomes a consumer market. Industrialization, job creation and poverty reduction are also major priorities – and indeed, it has already made major strides in reducing poverty. The government also wants to tackle the recurrent problem of Forex shortages, which is only possible by having more US dollars come in through exports rather than by importing more. For example, the high import duty on cars has been implemented because the country spends a large amount of its export earnings on importing fuel. The government wants to change this trend.

According to many local and international business leaders, the government differs from other African governments in that it delivers on many of its promises. It has created various industrial zones, given preferential treatment to investors keen on producing locally, such access to land and tax exemptions. The amount of infrastructure being built across the country is nothing less than remarkable.

The railway currently under construction in Addis will provide a much-needed improvement to public transport

This image vividly represents Ethiopia’s ongoing transformation

The government also wants to keep a tight grip on the economy. It will only allow foreign companies to invest in sectors that have a true need. As the minister of Foreign Affairs Tedros Adhanom Ghebreyesus told me, “Multinationals need to bring something we don’t already have, either technology or innovation.”

As a result, some sectors are still closed to international companies. These include retail, telecommunications and banking, among others. The government wants to protect local industries and strengthen them before international players come in. There is nonetheless mounting pressure for these sectors to open up and as many say, it is only a matter of time.

The Commercial Bank of Ethiopia is one of the few banks allowed to operate in the country

Some companies are in fact already sneaking in through the back door. Leading international telecommunication providers are allegedly acquiring stakes in Belcash and M-Birr, two companies that provide the technology infrastructure for mobile banking. Telecom giants are therefore already positioning themselves for preferential access to the market.

Ethiopians want international brands, and they want them now. The odd coffee shop uses a similar logo to Starbucks, and I saw several shoe shops that call themselves Aldo and Clarks.  “But Ethiopia was long closed to foreign influence, and they don’t have a direct association with international brands. So, a no-name brand from Turkey for example, can become very successful here, because consumers don’t know the multinational brand. Companies are on a level playing field, and it all comes down to marketing,” a distributor whose Turkish nappies enjoyed a much larger market share than P&G’s pampers, told me.

International brands are much aspired to, as can be seen from this Apple logo on a bus

Local brands are widely popular, and for a good reason. I quite enjoyed St. George’s beer 

Understanding the “local code” is crucial when trying to reach the consumer, as I have been told repeatedly. To give you an example, an international FMCG company endorsed a local musician. However, it turns out this local musician was not well-liked by the 30 million strong Oromo tribe because of his praise of a former Emperor who committed manslaughter of the Oromo many decades ago. The company had planned to send this musician on a tour into the Omoro tribal area, which caused a massive outcry. The marketing mishap reveals how companies must understand cultural sensitivities to succeed in Ethiopia.

Several international companies are already tapping into Ethiopia’s opportunity very successfully. They include the typical pioneers for doing business in Africa; namely Coca-Cola, Pepsi, Diageo and Heineken. GE already paid various visits to the country and is planning to set up an assembly factory. Coca-Cola has a long history of being in the country. Apparently Emperor Haile Selassie owned shares in the company – and at a time, Coca Cola was traded for gold!

The pioneers are already here. Their success partly rides of the back of what the head of GE for East Africa described: “in Africa, we are working backwards, we create the infrastructure that will lead to the demand for our products.”

The pioneers of FMCG companies are already present in the market: Heineken, Pepsi and Diageo

I can see that this approach takes time and is expensive, but ultimately, the “working backwards approach” leads to success not just for the companies, but for the socio-economic development of countries.

Given the realities I have seen in Ethiopia, this model makes perfect sense to me.

For additional insight from Anna’s research trip in East Africa, be sure to read her earlier posts: Kenya – A Regional Trendsetter, Notes from the Field: Kenya, Nairobi – African Cities Need Urban Planning, Kenya – Let the pictures speak for themselves, and The Uganda Trap. 

Sourced here  http://blog.frontierstrategygroup.com/2014/04/ethiopia-cracking-the-local-code/

US-Africa Summit An ‘Eye Opener’ For U.S. Business Community

.

By Dana Sanchez

 http://www.whitehouse.gov/photos-and-video/photogallery/us-africa-leaders-summit” width=”621″ height=”350″ />

President Barack Obama and Africa leaders participate in the U.S.-Africa Leaders Summit at the U.S. Department of State in Washington, D.C., Aug. 6, 2014. Official White House Photo by Chuck Kennedy

.

Top African officials suffer from summit fatigue, but the recent U.S.-Africa Leaders Summit wasn’t like other summits dominated by politicians and bureaucrats, according to an editorial by William Wallace in FinancialTimes.

Thousands of Africans flew in and dozens of meetings were going on at any given time across Washington, D.C. on the sidelines of the main events. It was an eclectic carnival of players, Wallace writes.

For the U.S. business community this was an eye opener. You do not always have to know the president of a country these days to get things done. There is a dynamic array of other potential African partners, most of them in the private sector, and most of them, businessmen and women.

Donald Kaberuka, president of the African Development Bank, refuted the widely held belief that the U.S. is waking up to Africa’s commercial potential only because China is so far ahead. “It was not a political meeting,” he said. “It was not even a catch-up meeting. It was business people leading the way.”

Kaberuka said companies such as Coca-Cola, IBM, GE and JPMorgan have begun shifting their agendas on Africa towards a more healthy mix that places investment and trade higher on the agenda.

Others at the summit commended how Power Africa, an initiative launched by U.S. President Barack Obama in 2013 to bring U.S. expertise to bolster electricity generation, is targeting attention on a critical shortfall, according to Wallace.

Little reminder was needed of the flip side of the transformation the continent is undergoing such as the inadequacy of the public health response to Ebola. But, if the goal was to shift U.S. perceptions of Africa as simply a repository of disease, poverty and war — a place needing handouts, then the US-Africa summit made a healthy start, Wallace wrote.

American perceptions of Africa have long been swayed by the loudest U.S. constituencies with vested interest in the continent. More often than not, these have been non-governmental organisations — the human rights lobby — and faith-based groups. They played a central role for example in focusing U.S. attention on the plight of the Southern Sudanese during Sudan’s civil war.

The effect has been to distort the complex mix of realities in Africa’s 55 states – seen, as these have often been, through the lens of activists with a narrow agenda – and also to divert resources, Wallace wrote.

U.S. envoys to Africa admit to spending disproportionate amounts of time dealing with flashpoints such as South Sudan and the threat of terrorism coming from countries such as Somalia. They don’t spend much time on commercial opportunities that emerged as African economies have grown and a new class of business consumers.

For a few days in Washington, D.C. that changed.

The first U.S.-Africa summit, attended by nearly 50 African heads of state, took on issues from Islamic extremism to corruption but the dominant theme was Africa’s business potential and the role U.S. companies could play in creating jobs and in mobilizing the needed funds.

It may not quite qualify for what U.S. secretary of state John Kerry called a “pivotal moment in history.” That would be Aug. 4 1914, when the World War I began, not Aug. 4 2014, one delegate quipped.

But there was a shift away from Washington’s habitually paternalistic tone, heralding what Obama described as a “partnership of equals that focuses on African capacity to solve problems, and on Africa’s capacity to grow,” according to FinancialTimes.

http://afkinsider.com/69019/us-africa-summit-africa-shows-potential-drive-global-growth/

.

Unpacking Power Africa: A good opportunity for the private sector?

.

BY Kate Douglas

Efforts by the US to boost political and commercial ties with Africa came under the spotlight this month when President Barack Obama hosted some 50 African leaders for the first US-Africa Leaders Summit in Washington DC. Alongside a number of discussions around opportunities for better business partnerships between the two regions, the Summit generated about US$37bn in financing deals and investment in Africa.

At the heart of the US commitment for better engagement is Power Africa, a private sector-led initiative aimed at doubling electricity access in sub-Saharan Africa where an estimated 600m people lack access to reliable electricity. The initial set of Power Africa partner countries – Nigeria, Ethiopia, Ghana, Kenya, Liberia and Tanzania – are said to be paving the way for investment and growth through utility and energy sector reforms.

Obama announced the initiative last year (alongside a commitment of $7bn of US government resources) during a visit to the continent. The goal was initially to add over 10,000MW of power generation capacity to give an additional 20m households and businesses access to electricity. But at the Summit, Obama announced a tripling of the original target to 30,000MW and new connections for at least 60m. He also pledged a further $300m in grant assistance a year to expand Power Africa’s reach.

An additional $6bn in new private sector commitments was also revealed, bringing total private sector investment under Power Africa to over $20bn, with companies like General Electric (GE) and African investment company, Heirs Holdings, leading the way.

Alongside this are pledges in both technical and financial support by entities such as the World Bank, African Development Bank (AfDB), Overseas Private Investment Corporation (OPIC) and the Government of Sweden.

Power Africa is already involved in a number of energy projects, ranging from a loan guarantee for the Kiwira River Hydro Project in Tanzania to providing transactional and technical advice to move the proposed Corbetti Geothermal Power Plant project forward in Ethiopia. In northern Kenya, US government finance institution OPIC has approved up to $250m in financing under Power Africa to support the development, construction, and operation of the 310MW Lake Turkana Wind Power project.

Currently Power Africa has just over 40 private sector and financial partners, with roughly a third being African. However, according to Peter Ballinger, director of business development at OPIC, Power Africa projects are complex in nature and are not for anyone to just come in and invest.

“We are really looking to work and partner with companies that have experience, have done this before, and bring something to the table whether it’s a new technology, or additional capital, or some sort of wherewithal,” he told How we made it in Africa.

According to USAID, which houses the Power Africa website, the first step in becoming a Power Africa partner would be to express interest through the website. A Power Africa team member will then reach out to discuss how best an investor can get involved.

“If there appears to be a strong fit, your organisation may be invited to provide a letter of commitment expressing your support for Power Africa and setting forth the specific activities you intend to pursue in furtherance of Power Africa’s objectives,” states the website.

The thinking behind Power Africa

During the Summit, Obama reiterated the view that Africa needs sustainable development through trade, as opposed to aid, and that the US is looking to increase commercial ties as equal partners.

The US has been somewhat slow to engage with Africa’s growth story, falling behind China and the European Union as the continent’s largest trading partners. Within 15 years, trade between China and Africa has risen from just $10bn in 2000 to over $200bn in 2013, with China’s involvement in the continent extending to the construction of large infrastructure projects such as roads and ports.

At the Summit, Jeff Immelt, CEO of GE, summed up the sentiment that US companies “kind of gave Africa to the Europeans first and to the Chinese later, but today its wide open for us”.

Both sides set to benefit

According to Ballinger, the Power Africa initiative is a win-win for both the US and sub-Saharan Africa – the continent needs increased energy generation, while US companies have the opportunity to make good returns from these projects.

“US companies [bring] experience and technology and equipment to projects. So for companies like GE, yes, supporting Power Africa was a strategic business decision on their part,” noted Ballinger.

“So American companies I think will very much benefit from the groundwork that the US government has laid through Power Africa with our Power Africa countries.”

Role of public-private partnerships (PPPs)

Africa has a significant infrastructure deficit and the private sector can play an important role in closing this gap, as noted by Stuart Kufeni, CEO of the SADC Development Finance Resource Centre, which houses the Public-Private Partnership Network.

“Most of these infrastructure projects are huge and our governments can’t raise that kind of money in total, so they need the private sector’s participation in those projects. For instance, now from 2013 to 2017, we are looking at projects [in Southern Africa] in the region of US$65bn for infrastructure alone. There is no way our governments can raise that much,” Kufeni told How we made it in Africa last year.

In addition to financing, the private sector also has the expertise to develop these large projects.

At the Summit, Tony Elumelu, chairman of Heirs Holdings, said the private sector can play a key role in solving Africa’s power deficit. Nigeria recently took steps to privatise its power sector, and Elumelu said this allowed his company to acquire a major power asset last November, with a then output of 150MW of electricity. Just nine months later they had tripled this to 453MW.

“This is what the private sector can do,” noted Elumelu. “So learning from this… we [the private sector] have a role to play in helping to reform the power space.”

Balancing good returns with high risk

OPIC’s Ballinger said the Power Africa projects are good investment opportunities for the private sector, but they are not without risk.

“Many of these projects are highly risky, and so I think investors have an expectation of rate of return that they need, certainly they also have to service the debt, long-term debt, through organisations like OPIC. And then they have got to deliver on their contract to the off-taker which in almost every case is a government entity like… TANESCO in Tanzania or KenGen in Kenya.”

The complexity of PPP deals means there can be challenges, such as meeting tight government deadlines to conclude contractual and financing agreements.

“So governments have to understand that when you are putting together a very complex public-private partnership, that giving them six months to reach financial closure… sometimes it’s too tight for international financial institutions to commit, especially on these larger energy projects, which are very complex in nature.”

http://www.howwemadeitinafrica.com/unpacking-power-africa-a-good-opportunity-for-the-private-sector/42451/

.

Some 8,000 MW power generating projects under well way

.

Construction of the hydropower dams with an aggregate capacity of generating 8,000mw power is well in rogress, the Ministry of Water, Irrigation and Energy said.

The Minister Alemayehu Tegenu told ENA that construction of hydropower dams is being undertaken to realize the target set in the five year pan, which is increase hydropower generating capacity to 10,000mw from the current  2,268mw.

Gilgel Gibe III, is one of the preojects being undertaken. Some 86 percent of the construction of the dam has so far completed. Up on completion, the dam will generate 1870mw power.

Other projects that are being constructed in various parts of the country are also well in progress, he added.

Despite its huge potential for hydropower, 45,000mw, Ethiopia has developed and use only 2,268mw power, Alemayehu stated.

Alongside constructing new hydropower dams, expansion of existing dams such Tekeze and Gelgel Gibe II are being carried out.

The dams being built in various parts of the country will help to increase citizens access to electricity and wearn additional revenue from its sale.

The master plan has been also prepared which enabling to the country brings the solution to generate the power and empower the wise utilization of abundant resource in the country, he mentioned.

The ministry has been working in order to accelerate energy development to meet the domestic electric    power need and export to the neighbor countries, he indicated.

Beyond the political and economical benefits, Ethiopian energy development effort helps to create East African power pool Integration.

Recently, the construction of over 1,000 km Ethio-Kenya electric power lines have been finalized and expected to generate close to 2,000 MW, he added.

Ethiopia has also signed a memorandum of understanding with South Sudan and Yemen to export electric power.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2130:some-8000-mw-power-generating-projects-under-well-way&Itemid=260

.

KIG to Produce Ethiopia’s First Cranes Soon

.

The five months old crane manufacturing company, KIG, is set to begin production in a month time after receiving machinery and inputs.

KIG has already installed eight production cranes at its production plant that lies on 6,000 square meters. The installed production cranes each have a 20 tones capacity. Yet, according to KG’s managing director, Kahsay Gebregziabher, production has been stalled because of delivery delay in sheet metals and other machineries KIG has ordered.

Kahsay noted, three months ago his company ordered five containers from Germany and Italy. The freights each had 25 tons of sheet metals bought for U.S $ 600 per ton and were expected to be delivered in a month time. However, it was only three of them that arrived at the
Modjo Dry Port, according to the managing director.

Production started two months ago, as per the plan. The company has also ordered production machinery, which it still has not taken delivery of.

In addition to these, according to Kahsay, KIG has a 23 Million Birr order from the Metal and Engineering Corporation (MeTEC) for 10 cranes.

According to Fortune KIG was established with a capital of 300 Million Birr by KG Engineering and Lucernini, an Italian company. The cranes it plans to produce has a capacity ranging from 10 tons to 50 tons and are going to be sold from three Million Birr to 22 Million Birr, respectively.

According to Kahsay, his company is the second of its kind in Africa and has the potential of exporting its products to other African nations.

The production capacity of KIG initially will be five cranes a month.

http://www.2merkato.com/news/alerts/3203-kig-to-produce-ethiopias-first-cranes-soon

.

Ethiopians in Canada contributing to national development

.

Ethiopian Diasporas residing in Canada are contributing to the development of the country, Ethiopian Ambassador to Canada, Birtukan Ayano has said.

The Diaspora has contributed close to 456,930 USD for the construction of the Grand Ethiopian Dam (GERD) being built over River Nile, last Ethiopian fiscal year alone.
According to the Ambassador, they have also pledged to provide 46,000 USD.

Activities are being undertaken to further mobilize the Diaspora in a bid to increase their contributions to the country’s development.

The Canada- Africa Business Summit to be held in September 2014 will be a good opportunity for Ethiopia to introduce the investment opportunities, she added.

High level officials from the Ethiopian Ministry of Foreign Affairs will promote investment opportunities at the Summit.

Canadian companies including Alana Potash are engaged in Ethiopia in mines exploration and development. Nine Canadian companies conducted assessment in Ethiopia last fiscal year.

Discussions have already started between Ethiopia and Canada to sign investment protection agreement, the Ambassador said.

Trade relation between the two countries is low with an annual 141.3 million Canadian dollars.

http://www.waltainfo.com/index.php/explore/14619-ethiopians-in-canada-contributing-to-national-development-

.

KENYA-ETHIOPIA 400MW POWER PROJECT TAKES OFF

.

A 686Km high-voltage line to bring 400MW of power purchased from Ethiopia into the Kenyan national grid is set to take off with the signing today of the funding deal with the International Development Agency (IDA), the concessionary-lending arm of the World Bank Group.

The Sh54billion transmission line is part a regional strategy to pool power that will gradually include Uganda and then Tanzania.

The power will come from the controversial Gibe III dam in Ethiopia whose construction has not been without hitches as pressure-groups raised the spectre of adverse downstream effects of damming a river that feeds into Lake Turkana.

Ethiopia is estimated to have 45,000MW of power and first sought guarantee from Kenya that it would take up the power if the nation undertook to put up the HEP dam.

The African Development Bank has already given Sh30billion toward the project while the French Development Bank (ADB) through its infrastructure-arm Proparco and the Government of Kenya will also partially fund the project whose total cost is put at Sh94billion.

Two High-Voltage Direct Current converters will be put up at Suswa in Kenya and Wolayita Sodo in Ethiopia.

The project will be implemented by the Kenya Electricity Transmission Company (Ketraco) and the Ehtiopia Electric Power Corporation (EEPCO).

Kenya will buy the power at 5 US cents per Kilowatt Hour which is much lower than most power producers sell their power to monopoly distributor Kenya Power. Lake Turkana Wind Project for example, proposes to sell power to Kenya Power at 7 US cent/Kwh.

The power will transmit at 600Kilovolts much higher than the beefed up 400Kv line being built from Mombasa to Nairobi to bring power from the likes of Rabai Power station, Kipevu III and the proposed 600MW coal-fired plant in Kilifi.

Indeed, Ketraco is embarking on a stabilization project of the national grid so that it can handle these high voltages.

The power will come in direct current form which is much cheaper to transmit over long distances and sees lower dissipation rates (wastage).

Two high-voltage DC converters will be built at Suswa and Sodo. The Sodo one will convert generating alternating current into direct current for transmission and at Suswa the DC will be converted to AC and injected into the national grid.

The route from Ethiopia, according to project documents will be:from Ethiopia into Kenya approximately 90 km West of Moyale town and traverses Marsabit, Samburu, Isiolo, Laikipia, Nyandarua and Nakuru. From Moyale the transmission line route runs adjacent to the Great North Highway (Marsabit – Moyale) in a southerly direction avoiding Marsabit National Park. From Marsabit area the route runs southwards at a maximum distance of 500 m parallel to the main Isiolo – Marsabit Highway to Laisamis.

.

Recent Visits of President, Prime Minister to USA Described as Fruitful

.

Government Communication Affairs Office announced that the recent visits of President Mulatu Teshome and Prime Minister Hailemariam Desalegn to the United States were successful.

In a press briefing Communication Minister Redwan Hussein gave on August 15, 2014 said the Ethio-US investment forums held in Houston and Los Angles in the presence of President Mulatu Teshome have aroused the interest of big US corporates in doing business in Ethiopia.

The US-based energy company Chevron has, instance, expressed interest in carrying out oil exploration in Ethiopia; and the cut-flower company, KKR , has requested additional 200 hectares of land to expand business, according to the minister.

Other US companies are also reportedly keen to invest in hotel, resort, tourism and the services sector in general, he added.

He stated that the forums were effective in selling the idea that Ethiopia is a country where one can undertake business and get profit.

Redwan further indicated that the forums also paved way for local producers to access US markets and facilitated the collaboration of companies of the two countries in working together in export products.

He also stated in the forum held in Los Angeles the Ethiopian diaspora had a chance to know more about their country’s ongoing development. The minister said in the forum many young Ethiopian diaspora expressed their desire to take part in the development endeavours underway in the country.

In the U. S-Africa Leaders Summit, which was held in from August 4-6, 2014 in Washington DC, Ethiopia’s rapid economic development and its resilient green economy were among the key concerns of the summit that acknowledged Ethiopia and identified it as the most successful country in natural conservation, and in small-scale farming development that brings changes in the lives of low-earners,   Redwan elaborated.

Due to the above factors, President Obama invited the Ethiopian Prime Minster to share his country’s experience for the summit, the minister disclosed.

According to him, Ethiopia was also identified as exemplary country for the summit’s another agenda of “invest in health” and it was selected to co-chair the meeting with the US.

He further stated the summit also appreciated Ethiopia’s efforts to ensure lasting peace in the continent and is among the six African countries engaged in active deployment of peacekeeping forces.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2134:recent-visits-of-president-prime-minister-to-usa-described-as-fruitful&Itemid=260

.

Tsehay to Start Sales in October

.

The Chinese real estate company, Tsehay Real Estate Plc, is going to start selling units in the coming October on one of the buildings it is 70 percent complete.

On Thursday, August 14, 2014 the company invited what it called potential buyers, to visit its site around CMC area after announcing it has thus far spent 600 Million Birr on it 12 storey project. According to Deputy General of Tsehay, Yijung Wang, these building that are at different stage of completion will be available for sale when they reach 70 percent completion.

The buildings Tsehay is constructing have multiple types of units. They range from two bed rooms with 140 square meters to five bedroom penthouses of 275 square meters. All of its building will have 646 units out of which 300 of them will have two bedrooms and one guest
room of 144 square meters. They will also have access to parking area for only one car and additional parking place for an extra cost. In addition to this, ground level units will have gardens and units starting from the first floor will have terraces.

According to Wang, all buildings will be completed by April 2016 but residents will have access to their units as every building’s construction is completed.

Tenadam Zewse, Senior Advisor to Tsehay, commented buyers will have to make a 70 percent down payment for the unit they wish to acquire. He added the prices begin at U.S $ 1,100 per square meter and increase as the units get higher on the buildings. This is, according to
Tenadam, because units on top of the building will have better quality and view.

The real estate company is going to start erecting four more building by the coming October, Wang noted. These buildings are going to be for commercial purposes and will be built on 10,000 square meters.

Tsehay Real Estate Plc was established in 2012 by China Geology Corporation Overseas Construction Group (CGCOC) and Red Fox International Business Company.

http://www.2merkato.com/news/alerts/3204-ethiopia-tsehay-to-start-sales-in-October

.

Turkish investors top list for quality

.

Getahun Negash

.

The newly restructured Ethiopian Investment Commission announced that Turkish Foreign Direct Investment (FDI) to Ethiopia is leading the group of emerging economies that have shown interest in investment opportunities in Ethiopia.

.

DOW Chemical Co. to open office in Addis Ababa

.

Ross McLean

.

One of the leading chemical giants in the world, DOW Chemical Co. on Tuesday announced that it is going to open a country office in Addis Ababa.

.

Electric Services installs transformers to reduce power cuts

.

Alemyehu Tegenu, Minister of Water Irrigation and Energy

.

In a bid to curb the recurrent power cuts, the Ethiopian Electric Services has installed 248 transformers in Addis Ababa and the regional states. 

The new transformers are believed to augment the existing old transformers which can hardly cope with the ever- increasing power load. In an exclusive interview with The Reporter, Alemyehu Tegenu, Minister of Water, Irrigation and Energy, said that there was no shortage of electric power in the country. Alemayehu said the cause for the power cuts is related to the old power distribution lines.  According to him, the power distribution network and the electric transformers are over-loaded.

Alemayehu said the power consumption trend in the country is changing. “Previously residents of Addis Ababa used biomass fuel. Now people use electric power to cook. The rapid investment activity needs more energy. The existing power generation capacity is adequate to accommodate the existing demand. However, the aging distribution system is unable to handle the ever-increasing power demand,” Alemayehu said.

Electric transformers in Addis Ababa are exploding in every nook and corner. Residents of Addis Ababa question the quality of the transformers. However, Alemyaheu said that the problem got nothing to do with the quality of transformers. “All the transformers are tested before they are installed. The problem is that there is a high power demand that the transformers at times are unable to accommodate. The power load is too high for them.”

According to the minister, to mitigate the power cuts the Ethiopian Electric Services has installed 248 supportive transformers all over the country. A Chinese power company, China Hydro, hired by the Ethiopian Electric Services has installed 170 of the supportive transformers. “We have noted some improvements and we will install more supportive transformers based on the need assessment we undertake.”

Alemayehu said the old transmission lines are being replaced with the new ones, adding that hundreds of new substations are being installed. “We have built new substations in Sebeta, Sululta and Akakai towns,” he added.

The country now has an installed generation capacity of 2,268 MW from hydro, wind, geothermal and thermal energy. The electric power demand is increasing at a rate of 32 percent every year. Every year more than 700 MW of new power demand is created due to the flourishing manufacturing sector. According to the minister, the current demand for electric power is more than 2000 MW.

The Ethiopian government is currently building power plants with a total installed generation capacity of 8450 MW. The Grand Ethiopian Renaissance Dam (6000 MW), the Gilgel Gibe III (1870 MW), Genale Dawa (254 MW), Adama II wind power project (153 MW) and the 70 MW geothermal power development project in the rift valley are the ongoing power projects that will rescue the country from power crisis.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2386-electric-services-installs-transformers-to-reduce-power-cuts

.

Ethiopia and Japan Held 14th Round Industrial Development Policy Dialogue

.

Japan and Ethiopia held a five days dialogue that lasted from August 11 to 15 on Industrial Development. The dialogue was held in Addis Ababa and it was the 14th Round of Policy Dialogue on Industrial Development.

According to Walta Information Center this Dialogue was referred to in the Joint Communiqué by Prime Minister Mr. Shinzo Abe and Prime Minister Hailemariam Dessalegn issued on the occasion of the state visit of Japan’s Prime Minister to Ethiopia in January.

The Dialogue has been held since 2000 when the late Prime Minister Meles Zenawi Professor Kenichi Ohno and Professor Izumi Ohno from the National Graduate Institute for Policy Studies requested for it.

The Dialogue has been conducted as part of a technical assistance project by the Japan International Cooperation Agency (JICA). This infers it has been coordinated closely with the “Kaizen” initiative that the Ethiopian Government is implementing across the country with
assistance of Japan. This is also the platform that created the “Champion Products approach,” which is a tool for promoting trade and increasing exports.

The Dialogue attracted many high level officials and was headed by Newayekiristos Gebreab, Economic Advisor to the Prime Minister.

Topics such as the positioning of “Kaizen” in the next GTP2, a direction of scaling up industrial capacity to achieve industrial development and a light manufacturing vision were discussed. In addition to this points Ethiopia should note were also raised.

Other than these, the dialogue also covered topics such as the situation of the “Latest Comer” countries, namely Myanmar, Cambodia and Bangladesh, was was introduced and an active exchange of views and discussions were conducted on policies to encourage more FDI based on other countries’ experiences or the necessity to implement industrial policy step by step.

http://www.2merkato.com/news/alerts/3200-ethiopia-and-japan-held-14th-round-industrial-development-policy-dialogue

.

Acacia seeds as a source of protein

.

By Johanna Rendle-Short

.

I listened with interest to a recent ABC (Australia Broadcasting Corporation) radio program talk about how Australia’s wattle, the acacia tree, could be used as a source of protein in Ethiopia.

http://www.thereporterethiopia.com/index.php/living-and-the-arts/lifestyle/item/2365-acacia-seeds-as-a-source-of-protein

.

Belgian Ambassador Calls For Consolidated Economic Relation

.

Ethiopia and Belgium should strengthen their economic relation by using the strong diplomatic tie they have developed,  Belgium’s Ambassador to Ethiopia said.

In an exclusive interview with ENA, Ambassador Hugues Chantry said though the countries have long-standing diplomatic relation, their economic tie is weak.

Belgium imports coffee and horticultural products from Ethiopia, while Ethiopia imports agricultural chemicals and machinery, he said, adding that the trade exchange is still way below the desired level.

The ambassador said his country is committed to using the strong diplomatic relation that exists between the two countries as a leverage for creating better trade and investment ties.

Belgian businesspersons who invested in Ethiopia are few and the capital flow of those engaged in textiles and flowers is not more than 20 million Euros, he added.

Efforts are being exerted to encourage businesspersons to engage in various investment sectors in Ethiopia, according to the ambassador.

The Ethiopia Embassy in Brussels has for instance been promoting the wide investment opportunities in Ethiopia, in collaboration with Belgium Chamber of Commerce, he elaborated.

Subsequently, Belgian investors have carried out feasibility studies in areas of green development, water development and civil engineering, and some have shown interest to invest in Ethiopia, Ambassador Chantry added.

The fast growing Ethiopian economy has the potential to attract many investors, he stressed, adding that he has therefore been encouraging Belgian investors to benefit from the low labour cost, natural resources, peace and security in the country.

On other hand, the ambassador appreciated the role Ethiopia has been playing in bringing peace and stability in the Horn of Africa.

He said his country would provide all the necessary support for Ethiopia’s effort through the European Union.

Ethiopia and Belgium established political and diplomatic relations in 1906.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2104:belgian-ambassador-calls-for-consolidated-economic-relation&Itemid=219

.

Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Addis Ababa, Africa, Agriculture, Allana Potash, Business, East Africa, Economic growth, Ethiopia, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1, United States

.

Initiative for Mining Transparency Summit Opens in Addis

.

The Initiative for Mining Transparency in East and West Africa Summit kicked off on Wednesday in Addis Ababa.

Participating countries are expected to present their experiences in mining where discussions will focus on success stories and challenges faced.

The summit will enhance experience sharing among the countries taking part in the gathering, it was indicated.

The summit provides an important portal for sharing mechanisms to tackle problems of corruption and disintegrated production systems.

http://www.ertagov.com/news/component/k2/item/2909-initiative-for-mining-transparency-summit-opens-in-addis.html

.

Impact and Optimism: The Story of One Nuru Ethiopia Farmer During the 2014 Belg Season

.

Posted on August 20, 2014 by Douglas La Rose

.

U.S. admires Ethiopia’s increasing commercial competency

.

The U.S. Ambassador to Ethiopia Patricia Haslach said her country admired the increasing commercial competency of Ethiopia. 

In an exclusive interview with ENA, the Ambassador said that U.S. companies are inspired to invest in the country and be part of the fastest economy.

“We are very excited Ethiopia presents an excellent market and the largest growing economy in the world and a lot of opportunities here.” she said.

She appreciated Ethiopia’s aspiration about becoming a middle income economy by 2025 saying “It is very admirable. All of the work leads to the MDGs. This is all extremely positive.”

The African Growth and Opportunity Act (AGOA) offers tangible incentives for African countries to continue their efforts to open their economies and build free markets that are willing to continue the Trade and Development Act, she added.

There are 470 U.S. companies with an aggregate capital of 1.5 billion USD, operate in Ethiopia since the last two decades in the areas of technology, agriculture, hotel and tourism, health, construction, manufacturing, power and textiles, among others.

These companies benefited over 100,000 employees. A number of other U.S. companies interested to invest various sectors, Haslach said.

The U.S.-based manufacturing giant, General Electric (GE), is planning to establish a medical equipment assembly plant in Ethiopia.

The company is planning to assemble various medical equipments and machines in Addis Ababa and distribute them to African countries. They want to use the extensive cargo flight network of Ethiopian Airlines.

The ambassador also appreciated the Ethiopian Airlines contribution in attracting investors and to the country’s economy. “It is an excellent Airline.”

“The Ethiopians Airlines is the biggest asset and power in Africa to invest not just in Ethiopia but also in the African continent. … I fly with Ethiopian Airlines all the time.”

Ethiopia’s fastest economic growth over the past decade changes the relation with the U.S from aid and donation to economic partnership, according to American Affairs Director General with the Ministry of Foreign Affairs, Ambassador Taye Atsikeselassie.

The involvement of giant U.S. companies in the Ethiopian economy is a success to the country because of the fact that their involvement here encourages other to come, he said.

He noted that U.S investment is different from other countries’ investments in its reach knowledge and technology package and it will have an immense role in knowledge and technology transfer in the country and introduce with new way of doing things.

“American investment by enlarge is a high take investment. It is a knowledge based investment. So it transfers knowledge and technology. It is an instrument for job creation. Just like any other investments it opens upslope eyes because they are coming with new technologies with new way of doing things. It has cone of ripple effect. “

Due to the rigorous works of all stakeholders to attract U.S. investment, the country that has no business with the US a few years ago appears in the map of America’s investment destination, Amb. Taye said.

He stated that the country is handling investors with admirable asset prospects.

“We have good policies; we have the commitment and the willingness to stretch our hands embraced that cuddly capital they are always scarce risks. We are capable of doing or giving some regulatory incentives to companies.”

Public Relation Director with the Investment Agency, Getahun Negash also uttered that the U.S. investment in Ethiopia has been increasing over the past few years.

During the just concluded budget year (2006E.C), US stands second next to China in terms of number of projects (106 licensed projects) next to China.

Ethiopia and the U.S. have been enjoying strong relationship going back to 1903 when the first US ambassador arrived in Addis Ababa to present his credentials to Emperor Minelik II, though the people-to-people relations were much older.

According to ENA, U.S. is the first country that opened Embassy in Ethiopia.

http://www.waltainfo.com/index.php/explore/14640-us-admires-ethiopias-increasing-commercial-competency-

.

Achievements boost Ethiopia’s trustworthiness at UN: Ambassador

.

The political and economic achievements of Ethiopia are boosting the country’s trustworthiness at the United Nations, Ethiopia’s Permanent Representative to the UN Dr. Tekeda Alemu said.

The Permanent Representative told ENA that many international organizations are acknowledging Ethiopia for its successes in alleviating poverty.

The achievements made in economic, social and political areas enabled Ethiopia to be considered as a model for developing countries in various forums.

The international media, once engaged in reporting the famine and poverty in Ethiopia have started to report the economic and social developments in the country, he said.

Dr. Tekeda stated that the consecutive economic development also boosts its diplomatic capability this in return increases the international community’s recognition to the country.

The huge projects the country is carrying out to alleviate poverty coupled with the rapid economic growth raises amount of development assistance flow to Ethiopia, he stated.

The Ambassador indicated that most of the UN reports issued about Ethiopia recognize the country’s good performances in various areas. Ethiopia is one of the countries that UN recognizes in their efforts and success in ensuring peace and stability.

Ethiopia has been playing significant role in enhancing trade integration and in ensuring lasting peace in Eastern Africa, he said adding, this makes Ethiopia preferable in the eyes of the UN in peacekeeping missions.

Up on going fully operational, the mega projects would create strong commercial, power and infrastructure ties in the East African region, he said.

Ambassador Tekeda also said Ethiopia is one of the countries that the UN has big faith in achieving the MDGs by the year 2015.

http://www.waltainfo.com/index.php/explore/14642-achievements-boost-ethiopias-trustworthiness-at-un-ambassador-

.

Foreign currency saved by fabricating machinery locally

.

Hibret Manufacturing and Machinery Industry (HMMI) at the Ethiopian Metal Engineering Corporation has saved 1.5 billion Birr in foreign exchange by manufacturing several machines locally.

The industry has manufactured more than one thousand light and heavy duty machines in the recently concluded Ethiopian fiscal year, Deputy Head of HMMI, Capt. Mesfin Seyoum, stated.

HMMI has an annual capacity of manufacturing one thousand machinery with digital and manual operating systems.

Capt. Seyoum added beyond addressing local demands, HMMI has finalized preparations to export its internationally recognized brands to Rwanda, Djibouti and Sudan.

The first of its kind in East Africa in fabricating machinery, HMMI is engaged in manufacturing spare parts for vehicles, aircraft, heavy machinery, etc.

http://www.ertagov.com/news/component/k2/item/2907-foreign-currency-saved-by-fabricating-machinery-locally.html

.

Ethiopia seeks to brand, trademark signature coffee

.

Ethiopia, Africa’s largest coffee grower, is set to continue talks with global buyers in hopes of branding and trademarking its world-renowned coffee and boosting national revenue.

“The objective of the negotiations is to prevent illegal coffee trade, unfair price fixing and profiteering involving Ethiopian coffee brands in the world market,” Teshome Sileshi of Ethiopia’s Intellectual Property Office told Anadolu Agency on Tuesday.

He said 15 million Ethiopians directly or indirectly involved in coffee production receive less than 10 percent of the retail price from coffee sales while the rest goes to international middle men and distributors.

“So far, 34 countries have recognized and registered brands and trademarks for globally popular and on-demand varieties… grown in south and eastern Ethiopia,” he said.

“Twenty-seven of the stated countries are members of the European Union, while the rest include India, Japan, Canada, the U.S., Saudi Arabia, China and South Africa,” he added.

According to Sileshi, applications have been submitted to Australia and Brazil to brand and trademark Ethiopian coffee products, but, he said, “They haven’t responded yet.”

“The negotiation will continue drawing experiences from two consultant companies: Light Years IP and Arnold & Porter LLP,” Sileshi said.

Coffee is one of Ethiopia’s top-earning export crops.

Africa’s largest coffee producer, Ethiopia generated some $719 million from coffee exports during the 2013/14 financial year.

http://www.waltainfo.com/index.php/explore/14641-ethiopia-seeks-to-brand-trademark-signature-coffee-

.

Gov’t Pledges to Uphold Vision of Meles in Creating Green Economy

.

The government is working with determination to attain the vision of the former Prime Minister Meles Zenawi to make the Ethiopian economy green, Prime Minister Hailemariam Desalegn said.

Tree seedlings were planted on Wednesday, August 20, 2014 at Gulele Botanic Centre in commemoration of the second anniversary of the death of Prime Minister Meles Zenawi.

Speaking on the occasion, Prime Minister Hailemariam Desalegn said the general public and the government have been working day and night to realize the legacy of Meles.

Meles has laid solid foundation that ensures the interest of his country and that of Africa in general at international forums, according to the premier.

The trees seedlings plantation ceremony is a forum where our pledge would be renewed in realizing the green economic development of the Great Leader, he added.

Meles Foundation Board President, Azeb Mesfin, said on her part the late prime minister was a leader who served his country and its people without respite.

Foreign Affairs Minister, Dr. Tedros Adhanom, said the trees seedlings planting ceremony has inspired him and he would work without rest to realize the vision of the Great Leader to create a prosperous Ethiopia.

Meles has carried out various activities to extricate the people of Ethiopia from poverty and integrate the region by creating peace and stability in East Africa, he added.

The minister recalled that the diplomatic principle of the late prime minister was outward looking and based on mutual benefit.

Ambassadors and foreign diplomats who took part in planting tree seedlings said Meles has earned international recognition for his country and made Ethiopia the voice of Africa.

Mexico’s Ambassador to Ethiopia, Juan Alfredo Miranda Ortiz, said the late Prime Minister Meles Zenawi has boosted the relationship of Ethiopia with other countries.

“He is a great leader who turned a new chapter in the relationship of Ethiopia and Mexico,” according to Ortiz.

Political Advisor to China’s Ambassador to Ethiopia, Qin Jian, on his part said the strong relations Ethiopia has created with Asian countries, and particularly with China, were the efforts of  Meles Zenawi.

Meles is a great leader who made Ethiopia an investment destination and built the image of the country across the globe, he added.

President Mulatu Teshome, ministers, high government officials, ambassadors, diplomats, and religious leaders have attended the tree seedlings plantation ceremony.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2143:govt-pledges-to-uphold-vision-of-meles-in-creating-green-economy&Itemid=260

.

Officials eulogize Meles for his Green Devt Strategy

.

Meanwhile, high ranking government officials who planted seedlings at the Meles Zenawi Foundation Park said the endeavor to instill Green Development is benefiting the public at large. Following is some of their impressions.

Bereket Simeon, Advisor to the Prime Minister, said “Meles’ legacy is being maintained. The activities of the foundation are also going well. The public have stepped up efforts to maintain the ongoing development endeavors.’

“The tree planting endeavor that is taking place in four major regions covers some one million hectares of land. A remarkable green development is being witnessed. Therefore, through our evaluation we will build on those experiences. The evaluation that is being made in all member parities of EPRDF is based on his green development aspirations,” said Abay Tsehaye, Advisor to the PM.

Amin Abdulkadir, Minister, MoCT, remarked: “Meles’ memorial park is found across the country. That enabled all sections of the society to plant seedlings in their respective areas. This helps achieve the national plan of green development which makes the country exemplary for the rest of the world.”

Hilawe Yoseph Ethiopian Ambassador to Israel for his part said: “I believe that we will remain committed to address our weaknesses and to build on our best achievements”.

http://www.ertagov.com/news/component/k2/item/2913-officials-eulogize-meles-for-his-green-devt-strategy.html

.

World Council Program enhances food security and rural livelihoods in Ethiopia

.

Subsistence farmers see incomes increase by 129%

MADISON, WI (August 18, 2014) — World Council of Credit Unions recently completed a successful development program in Ethiopia that worked with rural savings and credit cooperatives (RuSACCOs) and farmers to improve food security and livelihoods among farming families. The 2009–2014 program was funded by the monetization of 23,000 tons of wheat through USDA’s Food for Progress program.

World Council worked in three regions of Ethiopia, Tigray, Oromia and Amhara, which span half the country, to assist RuSACCOs with expanding financing for agricultural production and to mobilize savings. The program also provided non-financial services, such as farmer training and infrastructure investments, to improve farmers’ access to markets and increase commercial food production.

The World Council program exceeded its targets, helping 44,645 farmers to produce higher crop yields and increase their incomes. The program provided agricultural training to farmers to help transition them from subsistence farming to commercial food production. Soil and water conservation techniques were introduced to target farmers, and 71.5% of surveyed farmers reported that these techniques helped them to increase crop production. Poor farmers were also supported through the introduction of higher quality agricultural inputs and training on methods such as the proper use of fertilizers and better planting techniques. Farmers were able to introduce higher-value and more nutritious crops thanks to World Council’s support. By diversifying their crops, they were able to reduce risk and saw a significant increase in overall crop production, income and nutritional intake.

The average income for each farmer increased for both primary and secondary crops throughout the term of the project. Primary crop production not only allowed for the diversification of vegetables and grains, but also increased farmers’ incomes by 129%. Secondary crop production also showed a dramatic improvement of 150%; prior to the project, many farmers were not capable of growing secondary crops due to limited rainfall. Thanks to the program, farmers were better able to survive drought conditions in rural Ethiopia, achieve food security and provide for their families.

At the end of the program, both loans and savings per SACCO member had experienced a dramatic increase. On average, savings per member increased by 89%, and loans per member increased by 167%. Through its SACCO strengthening, infrastructure and agricultural training interventions, the World Council program provided support that transformed lives in rural Ethiopia and gave farmers the tools they needed to feed their families.

Learn more about World Council’s work in Ethiopia at www.farmerfinance.woccu.org/ethiopia.

World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions’ financial performance and increase their outreach.

World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 57,000 credit unions in 103 countries serve 208 million people. Learn more about World Council’s impact around the world at www.woccu.org.

http://www.cuinsight.com/press-release/world-council-program-enhances-food-security-and-rural-livelihoods-in-ethiopia

.

New Enterprise to Manage ECX’s Warehouses

.

ECX will continue to manage its trading floor and the 60 warehouses at 17 different sites in Addis Abeba will be under the responsibility of the newly established public enterprise.

The Ministry of Trade (MoT) is establishing a new enterprise in order to manage the Ethiopian Commodity Exchange’s (ECX) warehouses.

The Ministry has finished the necessary draft directive, which is ready for discussion with the  relevant stakeholders before passing it on to the Council of Ministers, according to Kebede Chane, minister at MoT.

“The initiation to separate the two bodies came from the Ministry,” said Abenet Bekele, chief strategy officer at the ECX.

Abenet Bekele, chief strategy officer at the ECX

The draft directive is prepared by a committee that was organized by the MoT comprising experts from ECX, Ministry of Agriculture (MoA), representatives from the regional Trade and Industry Bureaus and Ethiopian Commodity Exchange Authority, (ECXA)according to Kebede.

Kebede Chnae, Minister at MoT

The new enterprise will be responsible for the construction and management of new warehouses, including the existing 60 warehouses at 19 different sites, which the ECX rents from the Ethiopian Grain Trade Enterprise (EGTE) and other private owners.

The ECX has been in business since April 2008 with 100 members, it trades six types of commodities, of which three of them have rules and regulations at the floor including sesame, coffee and white pea beans. The other three commodities traded on the floor are mung beans, wheat and maize. In addition, it manages warehouses in which commodities will be stocked before and after sales until its delivery takes place.

The reason to separate the management of the warehouses, according to Kebede, is because the ECX is expanding and opening branches starting this September in regional towns, including Adama, Hawassa, Jimma, Gonder and Humera.

There were reports that the ECX had been facing challenges in warehouse management, where the quality of the produce traded on the floor would be different upon delivery at the warehouse; some workers at warehouses are accused of removing high grade commodities from their sacks and replacing them with lower grade qualities, with the sacks still displaying the high grade labels. The ECX had to fire some people because of this. The separation will minimize the problems of the ECX related to handling the processes both at the trading floor and warehouses, Kebede says.

The new enterprise will deploy Inventory Warehouse Management System to ensure quality and to reduce wastage during the commodities stay at warehouses.

The committee drafted the regulation based on the experiences of South Africa and Colombia, said Kebede.

The ECX, MoT, Ministry of Agriculture (MoA), and the Ethiopian Commodity Exchange Authority will discuss the draft regulation in the coming two weeks, says Kebede. This discussion will also decide whether or not the new enterprise will be under the ECX or the MoT.

The warehouse enterprise will also serve other clients than the ECX, with the latter being its main client.

In the last fiscal year ECX has seen increasing its members from 100 to 346 – 33 of which are cooperatives and unions, with 2.7 million small scale farmers under them. The ECX also has 14,725 buying and selling clients with a trade volume of 586,000 tns during the just ended fiscal year  and a revenue of 26.2 billion Br. Trading volumes of commodities at the floor amounted to 391,000tns in 2009/10, 500,000 in 2010/11 and 601,000tns in 2011/12. It declined to 539,000tns in the following year.

Since ECX is the expected main client of the enterprise, the new framework will be the advantage of ECX, says Abinet

ECX announced the launch in September 2014 of a 3.8 million dollar online trading system which enables online trade from Addis Abeba directly with remote online trading centres. The other system to be launched on September is Traceability, 1.3 million dollar project which uses software to trace commodities every step of the way from farm to warehouse.

http://addisfortune.net/articles/new-enterprise-to-manage-ecxs-warehouses/

.

India Promotes 4.6 Billion Dollar Textile Industry in Ethiopia

.

Biruk Taye, 28, came to inTexpo, an exhibition of Indian textiles at the Sheraton Addis Hotel, in the Lalibela Ball Room, on Wednesday, August 13, 2014, with the expectation to find new partners, who will work with agents in Ethiopia.

The exhibition is the first of its kind in Ethiopia for the Indian textile industry. It is organised by the Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) and Exposition UK LTD, in association with the Embassy of India and support from the Ethiopian Chamber of Commerce & Sectoral Associations (ECCSA).

The opening ceremony took place on Wednesday, August 13, 2014. It was attended by Gashaw Debebe, secretary general of ECCSA, Utpal Aich, first secretary of the Embassy of India, and 20 delegates from participant companies.

The 20 Indian exhibitors filled the hall, occupying the whole ball room, for which they paid 6,000 dollars each.

The organisers of the event worked together with Ethio Ushering & Organizers, an Ethiopian co-organiser; all the 20 participants of the event came from India, according to Sandeep Grover, managing director of Exposition UK.

In the years from 1992 to 2012, a total of 365 Indian firms have taken investment licenses for different projects with a total capital of 43 billion Br in Ethiopia creating a total trade turnover of 1.3 billion dollars between the two countries in 2013 alone, said Gashaw.

There are 140 textile factories in Ethiopia; seven of these are Indian companies, with a capital of 12 billion Br, according to the Ethiopian Textile Industry Development Institute (ETIDI).

Biruk was trying to become an agent for Yogindera Worsted Limited, one of the companies at the exhibition. The Company was displaying different threads, which its representatives were excitedly showing and explaining to Biruk.

Biruk managed to convince the company to give him one acrylic, one polyester and one yarn roll thread, each costing three dollars, which Biruk wanted to show to potential bulk buyers. The Company, based in Ludhiana, Punjab, India, was founded in 1997 with a capital of 52 million Br.

“At least, if I find a firm that can work with me, I can have a two percent  commission for every single item I sell,” said Biruk, holding the three sample threads, as he left the hall to find buyers, which he would have to report back to Yogindera by the afternoon.

Other exhibitors were displaying a varied range of products including shirts, suits, fabrics, yarns and embroidery products.

Kalkidan Hayelom, a fashion designer, came to the Expo to check for materials on display. With designers relying on imported materials, she says the Expo was an opportunity to see if there was anything new.

Currently, India’s synthetic and rayon textile export is nearly 4.6 billion dollars. The Middle East and the Gulf, Asia and the European Union account for 25pc, 23pc and 22pc of the total export, respectively. India’s total synthetic and rayon output  is around 21 million square metres, according to the expo brochure.

The exhibition moved from Sudan where it also had a two-day show from August 10 – 11, 2014, following a three month preparation, according to SRTEPC’s joint director.

“There is  good opportunity in the exhibition. Here they are telling us the prices of their products. A three metre rolled viscose Embroidery is sold for 50 dollars and Silk for 70 dollars. This price is not much different from the price in Dubai that I have been importing, but when the transportation is considered it is much better,” said Said Idris, owner of A.Y.H General Trading.

India’s 2013 export of textile and clothing products was 40 billion dollars, which the country plans to double to 80 billion dollars by 2020. In 2013, it lags far behind China’s 274 billion dollars.

For Biruk, business may have worked out as he says he managed to find buyers for the Indian company’s products, although he declined to name any. Some of the Indian companies, too, such as Balavigna, are even considering the possibility of setting up a plant in Ethiopia, according to First Secretary Aich.

http://addisfortune.net/articles/india-promotes-4-6-billion-dollar-textile-industry-in-ethiopia/

.

Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Addis Ababa, Agriculture, Business, Economic growth, Ethiopia, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1

By Asrat Seyoum and Wudineh Zenebe

New foreign policy direction has been in the works in Ethiopia during the past few years. It is a slow evolution to the so-called ‘economic diplomacy’ and by now, the focus of the Ethiopian diplomatic mission abroad is one matter and one matter alone: attracting investment.