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China’s Poly Technologies to produce potash in Ethiopia

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The Chinese Poly Technologies, already engaged in natural gas and petroleum exploration projects in Ethiopia, announced its desire to produce potash in the country.

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Ethiopian diaspora, back home to boost economy

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New Rural Insurance Policy for Small-Holder Farmers on the Way

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A new policy of rural insurance is to be drafted in the near future as officials from Ministry of Agriculture (MoA), Ethiopian Insurance Corporation (EIC) and Federal Public Financial Enterprises Agency (PPEFA) have discussed a policy framework study made by the latter two.

The discussion at the stakeholders’ forum held at Hilton Hotel in order to use ideas rose as an input for the policy framework on January 13, 2015.

The study focused on designing a new policy framework for rural insurance; and it took more than a year to finalize, says Fikru Tsegaye, Marketing & Strategic Management director at the Ethiopian Insurance Corporation. It is mainly focused on providing insurance solutions for agriculture and rural based risks targeting smallholder farmers. It emphasizes that lack of a single framework has left the service fragmented.

As the majority of farmers are smallholders, the study gives more emphasis on how to use a holistic approach that would help to provide the insurance. The study has indicated that such fragmented practice of providing agriculture insurance was only implemented as a pilot project by EIC but failed to deliver significant changes due to several drawbacks such as infrastructural limitation, telecommunications, and financial limitations.

As the nature of agricultural insurance needs a well-developed communication infrastructure that would facilitate the way data, such as weather forecast, is acquired, such limitations were considered as challenges. Moreover, financial incapability of smallholders is also another challenge as most Ethiopian farmers depend on subsistence farming. To overcome this, the sector needs subsidy from government, said Fikru Tsegaye, director of marketing & strategic management at EIC.

Solomon Zegeye, general insurance manager at Nyala Insurance S.C. shares this view. This policy, in order to materialize, needs the support of government, especially on subsidizing the farmers, as many of them cannot afford to buy insurance policy, he told Fortune.

Nyala is among the few insurance companies that have worked on agricultural insurance since 2009 but it mainly focused on providing insurance for commercial farms and livestock production at a larger scale. The company provides three kinds of agricultural insurance, namely multi-period crop insurance, livestock insurance and weather index insurance.

Three main suggestions were given by Solomon; one is that this policy framework, prior to its drafting process has to be backed by subsidy of farmers, a regulatory framework by National Bank of Ethiopia and founding national reinsurance company.

As risks associated with agriculture are high and occur at a larger level, the establishment of national reinsurance companies is a must, noted Solomon. The policy framework will attempt to design a rural insurance that considers the financial capacity of poor farmers, added Fikru.

The state-owned EIC as well as Nyala, Africa and Oromia insurance companies are currently engaged in providing rural insurance. The EIC has gained 8.2 million Br of gross premium and at the same time incurring 5.6 million Br of gross claim, in 2013/14.

According to the 2014 report by NBE, total capital of insurance has reached two billion Br and private insurance companies accounted 78.6pc of the total capital.

http://addisfortune.net/articles/new-rural-insurance-policy-for-small-holder-farmers-on-the-way/

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Successful training to develop soil and site specific fertilizer recommendations

http://www.cascape.info/index.php/news/8-project-news/96-successful-training-to-develop-soil-and-site-specific-fertilizer-recommendations

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Smallholder Agricultural Carbon Projects in Eastern Africa

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Trainers Manual

Moses Masiga, Pauline Nantongo Kalunda, Lillian Kiguli, Annet Ssempala, Seth Shames, Krista Heiner, Margie Miller – ENR Africa Associates, Environmental Conservation Trust of Uganda, EcoAgriculture Partners, Environmental Conservation Trust of Uganda

Abstract

This manual has been developed to help build the capacities of farmers, farmers groups, extension staff and project managers who are implementing agricultural carbon projects in Eastern Africa. The manual describes the steps for implementing an afforestation/reforestation voluntary carbon project based on the Plan Vivo Standard. It builds on experience gained by the Environmental Conservation Trust of Uganda (ECOTRUST), ENR Africa Associates, and EcoAgriculture Partners while undertaking a participatory action research project focusing on the institutional arrangements of smallholder agricultural carbon projects in Sub-Saharan Africa. This work was supported by the CGIAR Research Program on Climate Change, Agriculture, and Food Security (CCAFS).

The manual was created specifically for use by trainers as part of the Trees for Global Benefits project in Uganda, managed by ECOTRUST, in order to facilitate capacity building among local actors in the project. It was piloted in the Mt. Elgon Region of eastern Uganda, and has benefited from the input of farmers and extension staff.

The manual is divided into four modules: Getting Started; Carbon Project Development and Implementation Cycle; Implementing the Carbon Project; and, Stakeholders and their Roles. These modules are further subdivided into sessions, which are an indication of progress from one stage of the training to another within a module. Not all modules will be appropriate for all learners. Within each session the training activities listed may have to change based on the expertise of the trainers, the experience of the learners, and materials at hand.

The first module, “Getting Started,” introduces learners to the key concepts of the training, such as climate change, climate change mitigation, and the need to undertake climate change mitigation actions commonly referred to as carbon projects. The first module is intended for three target audiences: farmers, extension workers, and carbon project managers.

The second module, “Carbon Project Development and Implementation Cycle,” is more technically oriented, and it seeks to provide hands-on experience to learners on the modalities of designing and implementing a carbon project. The specific approach that is described in the module is for a Plan Vivo afforestation/reforestation project, although the information provided in the manual can be used for training on other carbon projects in agricultural landscapes. This module is targeted at project developers and, to a limited extent, extension staff.

The third module, “Implementing the Carbon Project,” focuses on afforestation/reforestation activities and the implementation plan for farmers. This module is targeted toward farmers and extension staff who will conduct farmer trainings. Even though the steps of the training process have been provided in the manual, the farmer groups and extension staff can subdivide the steps based on the resources, time, and level of knowledge in order to better target these training materials to their specific outcomes. Project managers can also benefit from this module by increasing their understanding of how the farmers and other carbon project implementers carry out their tasks. A field demonstration and a land use planning session are among the many activities planned during this module.

The fourth module, ”Stakeholders and their Roles,” is beneficial for farmers, extension workers and carbon project managers. However, the level of detail required in describing the key stakeholders and their roles will change based on the audience. For farmers, the most important stakeholders to consider are those clearly linked to farmer activities. In a similar way, extension staff may be interested in the project stakeholders or partners that help farmers supply inputs and manage benefits. For the project developers, the main focus should be on the carbon value chain, from farmer activities to the carbon market.

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http://ecoagriculture.org/publication_details.php?publicationID=681

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Creating opportunities for two million Ethiopian farmers

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http://www.elearning-africa.com/eLA_Newsportal/creating-opportunities-for-two-million-ethiopian-farmers/

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Blog of Project manager Remko Vonk

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http://www.cascape.info/index.php/news/94-blog-of-project-manager-remko-vonk

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Erdoğan’s Africa tour to kick off with Ethiopia visit

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President Recep Tayyip Erdoğan is to go to Addis Ababa on Jan. 22 as part of his scheduled visits to several African countries, including Ethiopia and Djibouti, with a large group of ministers, bureaucrats and businessmen.

During his visit to Addis Ababa, Erdoğan will meet with Ethiopian President Mulatu Teshome Wirtu and Prime Minister Hailemariam Desalegn, according to a recent statement issued by the Office of the President.

He is scheduled to visit Djibouti the following day, and there meet with Djiboutian President İsmail Omar Guelleh. The visits will help businessmen from Turkey and these African nations to establish close ties, the statement said.

Erdoğan’s office also pointed out that Turkey has close historical and cultural ties with the countries of the Horn of Africa and that these countries are the strategic gateways to Middle Eastern and world markets.

The visit will also be an opportunity to discuss regional developments in Africa, the statement said. Erdoğan is expected to return to Turkey on Jan. 24.

The president plans to travel to 12 African countries this year, according to reports by the Office of the President.

The Djiboutian ambassador to Turkey, Aden Hossein Abdillahi, told Today’s Zaman that the current trade volume between his country and Turkey is only $550 million, but that this can be doubled within a couple of years if Turkish businessmen are ready to make the most of the opportunities Djibouti offers as a gateway to the entire African market.

In an interview with Today’s Zaman in November 2014, Abdillahi said his country aims to be a trade center, the “Dubai” of the region.

http://en.cihan.com.tr/news/Erdogan-s-Africa-tour-to-kick-off-with-Ethiopia-visit_6550-CHMTY1NjU1MC8xMDA1

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Economists Predict Africa’s Growth to Go Beyond Oil, Commodities in 2015

 

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BGI’s Hawassa Plant to Boost Beer Capital Production to 1.44m hl

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BGI Ethiopia, Ethiopia’s giant brewery, received eight large fermentation tanks for the expansion of its Hawassa plant on Thursday January 15, 2014 with an investment of 30 million euros.

The eight large fermentation tanks will increase the production capacity of the Hawassa plant by nearly double, said Essayas Hadera, marketing manager of BGI Ethiopia. Each having a capacity of 2,200hl, two of the tanks are Bright Beer Tank (BBT), used for fermentation process and the remaining six tod tanks used for processing the beer.

Ziemann International GmbH, a Germany based Company supplied beer tanks for many countries, including Russia, Mexico, and Belgium, manufactures the fermentation tanks. The tanks were purchased two months ago, all of which arrived at the Hawassa plant last Thursday.

St George beer entered the Ethiopia market in 1922 by Belgian owners. Later it had German owners, before it was nationalized by the military regime. It is currently owned by BGI, which also has a winery at Zeway. BGI has three plants at Hawassa, Addis Abeba and Kombolcha, with a total of 2,687 permanent and temporary workers.

BGI Brewery has three brands – St. George, Amber and Castel– with an annual production capacity of 2.65 million hectoliters. It has paid a total of 1.5 billion Br in taxes during the last fiscal year, having a total investment of 2.8 billion Br.

The Hawassa plant was inaugurated on June 7, 2011, as the company’s third plant in Hawassa town, located 273km south of Addis Abeba.

“Installation of the tankers will start by this week,” Essayas told Fortune.

The installation of the tankers will be completed in process between April and September 2015, he added. When all have been installed, the Hawassa plant will have the capacity to produce 1.44 million hectoliters a year, raising the total of the three plants to 3.6 million hectoliters. A quarter of the installation will be finalized by April 2015 and will increase the production capacity by quarter, according to Essayas.

Ethiopia’s beer industry consists of five major breweries: Meta Abo Brewery, Harar Brewery, Bedele Brewery, Dashen Brewery, and BGI. Combined, they have an annual production capacity of close to 5.62 million hectolitres. Raya is expected to be inaugurated by mid-February 2015, having a total capacity of 5.62 million hectoliters annually and BGI has a 42pc share in Raya. Habesha Brewery another new company is currently under formation.

BGI sources 50pc of its malt input from the Assela Malt Factory, supplier of malt for the existing breweries except Dashen, who sources from Gonder Malt Factory. Currently, Assela meets only 52pc of the annual malt barley demanded by the breweries. Production amounts to 36,000tn to 40,000tn a year.

The demand for beer is projected to grow by 15pc annually, much higher than the African average of five percent recorded in 2014 and the current production stands at 5.6 million hectoliters. On the same day BGI received the tanks, Heineken inaugurated its plant located at Kilinto, which it built for 110 million euros, with 10 tanks and a production capacity of 1.5 million hectoliters, pushing the total production capacity of the factory to three million hectoliters. By the next Ethiopian fiscal year, the country will have a total production capacity of 12.2 million hectoliters annually from the six breweries.

http://addisfortune.net/articles/bgis-hawassa-plant-to-boost-beer-capital-production-to-1-44m-hl/

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Heineken Inaugurates its Largest Ethiopian Plant

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- Plant will produce Harar and Bedele products, as well as the Heineken brand

Heineken Brewery, the world-renowned brewery with a presence in 84 countries, operating over 165 breweries producing 254 brands, inaugurated its largest factory in Ethiopia with an investment of 110 million euros.

The factory, which rests on a 343 sq. metre plot of land in the outskirts of Addis Abeba in a place called Kilinto, on the way to Debre Zeit, has a capacity of producing 1.5 million hectoliters a year. Heineken opened its first African plant in 1923 in the Congo; it now has a presence in more than a dozen African countries, where it employed around 15,000 people in 2010.

The new investment, which comes following the acquisition of Harar and Bedele breweries in 2011, raises the total investment of the company in the country to 310 million euros. Heineken employs 280 people at the new plant, out of which 180 are permanent.

Heineken, which reported revenue of 3.07 billion euros in Africa and the Middle East that led to an operating profit of 665 million euros in 2013, needs a total of 20,000tns of malt a year for the new factory, out of which 50pc is sourced from the local market.

“We are planning to source our malt barley from local farmers through the integration of smallholder farmers in the CREATE project that the company launched in 2013,” said Jean-François van Boxmeer, Chairman of the executive board and the CEO of Heineken NV.

CREATE is a program by Heineken aimed at improving both quality and quantity of barley grown in Ethiopia as well as improved access to markets for the small-holder farmers. By 2017, the company plans to support 20,000 farmers in the production process.The company has now integrated 6,000 smallholder farmers in the supply of the malt barley. And by 2020, the factory plans to source 60pc of its production ingredients from the local market.

Diageo, owner of Meta Brewery, had also designed and piloted barley contract farming project with the aim to source 1,000 metric tons of barley from a substantial number of local smallholder farmers with a potential to source up to 20,000 metric tons of barley within Ethiopia for local use and/or export a year.

The factory gets the water needed for the brewing process from the two water wells 1.5km from the factory each having the capacity of generating 141 cubic meters of water per hour. The wells have a 400m and 500m depth with a temperature of 32 degree Celsius.

The new factory at Kilinto is now producing the seven brands of the company’s beers through its two brewing lines, each having a capacity of producing 42,000lt an hour. The seven brands produced are Bedele Regular, Bedele Special, Walia Beer, Harar Beer, Hakim Stout, Harar Sofi, and Sofi Lemon. It is also planning to commence producing Heineken beer in April.

While this happens in Addis Abeba, Heineken plans to reach the eastern Ethiopia market through Harar Brewery and the western market through Bedele Brewery.

In a country with a per capita consumption of beer at about five litres, Heineken produced 101 hectoliters only in December.

The civil construction of the brewery, done by Rama Construction Plc, took two years to complete.

The inauguration ceremony on the 15th of January, 2015 was attended by Prime Minister Hailemariam Desalegn and the state minister of Industry Mulatu Meles (PhD).

Heineken, which has invested 310 million euros in the country, plans to expand the factory within the same compound.

Together with the 600,000 hectoliters and 900,000 hectoliters production capacity of Bedele and Harar beer factories respectively, the factory’s production will make the country’s production capacity of six million hectoliters increase by three million hectoliters.

“The major strategic purpose of opening this factory is the need to address the 1,000km distance between the Bedele and Harar factories, which is difficult for logistics,” stated Johan Doyer, the managing director of Heineken Ethiopia.

Heineken plans to export products from Ethiopia to African and the Middle Eastern markets.

http://addisfortune.net/articles/heineken-inaugurates-its-largest-ethiopian-plant/

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New Crown Cork Factory Joins Market

A new crown cork factory is prepping to begin production by mid-February 2015, bringing the total of such factories in Ethiopia to six, including one which plans to go into production around July this year.

The factory, to become operational by February, Peniel Industry Plc, is established by Birtukan Abeba with a capital of 120 million Br. The crown cork company rests on 2,000sqm of land in Nifas Silk Lafto District at Lebu Industrial Village. The land as well as the building was property of its sister company Alba Aluminum Plc. A two-year feasibility study was done, after which it took the company around a year to modify the interior of the building to a cork factory, which meets the ISO standard, says Birtukan, adding that the machinery have all been imported and ready for installation, at the plant which will employ 83 people.

The company will begin manufacturing three billion crown corks a year; it could also begin producing cans after conducting market evaluation, according to Birtukan. The principal raw materials required for the production are sheet metal and polyvinyl chloride (pvc), which will be imported from Germany, according to the manager.

The local demand for crown cork is met through both local production and import. At present, the major source of supply to the local market for crown cork is mainly import. During the period between 2011 and 2013, on average, about 93.25pc of the total imports of crown corks were supplied by five countries, India (42.39pc), Spain (14.34pc), Egypt (14.2pc), Italy (12.97pc) and France (9.35pc), according to the Ethiopian Revenue & Custom Authority (ERCA). Others supply the remaining.

Ethiopian Crown Cork & Can Manufacturing S.C.,CGF-crown Cork and Aluminum Cap Manufacturing Factory, Daylight Applied Technologies Pvt. Ltd Co. and Metal Crown are the four local factories in Ethiopia. Based on the existing production trend, it is estimated that 1.3 billion pieces of crown corks have been produced locally in 2013, showing 12.6pc production growth compare to the 2012 fiscal year, according to Central Statistics Agency (CSA).

Besides Peniel Industry Plc, a new Ethio-Italian company is also set to join the four local factories. The Italian New Box S.P.A and Alemayehu Negussie, who is an Ethiopian Investor, own the company. The company will go through the commissioning process by March and start manufacturing by June or July, 2015. It will have the capacity of manufacturing one billion crown cork a year. Therefore, these two companies are expected to raise the total local crown corks production to 4.3 billion pieces, which will still fail to meet the growing demand.

The demand for the crown cork in 2014 was 3.3 billion pieces. This figure is estimated to reach 5.5 billion pieces in 2015, according to research by One Cent Management and Marketing S.C.(OCM), May 2014. One Cent Management is an Ethiopian private equity and assessment management share company established on December 3, 2010. The demand for crown cork depends mainly on the performance of its end-users such as beverage, mineral water and cosmetics industry, explains Fitsum Getu, chief investment and research director at OCM. It has seen a higher demand compared to the market supply of crown corks.

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Millennium Goals – A Journey of Partial Success for Ethiopia

Helen Wolde, an eight months pregnant woman while holding a session with her nurse on antenatal care at Kirkos Sub-city Health Office Gotera Massalech Health Centre.

Helen Taye, 23, has been married for six years and is expecting her first child, Fortune met with her while she was in Kirkos Sub-city Health Office Gotera Massalecha Health Centre to get antenatal care services (ANC). This marked her second visit since she found out she was pregnant two months ago.

“Since this is my first child I have no idea what to expect during my pregnancy but the service has shed light for me in this aspect as well as taking care of me and my baby’s health,” stated Helen.

The centre gives care for 45 days after the birth of the child starting from post pregnancy period including child delivery services. All these services are given free of charge.

Since the centre was established in 2012, it has given 613 antenatal care services, 93 delivery services starting from last year and had transferred 34 cases that is beyond its provision to hospitals. The centre has a yearly plan to give 355 antenatal care and 337 deliveries. Through the years it never recorded either a child or maternal mortality.

This story is also reflected at the national level as Ethiopia is among the six countries in Africa, including Egypt, Liberia, Malawi, Tanzania and Tunisia that achieved one of the Millennium Development Goals (MDGs)-reducing child mortality by two-thirds in 2012, according to “Assessing progress in Africa toward the Millennium Development Goals, 2014” report by UN Economic Commission for Africa, the African Union, the African Development Bank, and UNDP.

In 1990, the under-five mortality rate in Ethiopia was one of the highest in the world at 204/1,000 live births; by 2012, this rate had been slashed to 68/1,000 live births. The expansion of health infrastructure and the successful implementation of Health Extension Package (HEP) are believed to have contributed to the achievement of the goal, according to UNDP Ethiopia. This includes focus on delivering an essential package of care that is most related to the diseases affecting children and the poor; a push to improve coverage and delivery of health services in rural areas; and a major effort on vaccination, which has been particularly successful.

However, challenges remain in reducing the maternal mortality ratio to three-quarters in 2015 (Goal 5). This is considered to be one of the goals that the country might not be able to achieve. Progress on reducing maternal mortality has been slow since 2005 when the country managed to reduce maternal mortality rate (MMR) to 510 per 100,000 births from 700 per 100,000 births in 2000. Achieving Goal 5 requires the country to reduce MMR to 175 per 100,000 births by 2015 from 420 per 100, 000 births in 2014, which seems to be an insurmountable task, explained UNDP Ethiopia. Early pregnancy and childbirth, low level of deliveries attended by skilled health personnel, and low nutritional status are some of the major challenges to reach this goal, according to UNDP Ethiopia.

In an effort to give a kick to the maternal mortality reduction program the UN Country Team, in collaboration with the Ethiopian government has developed a joint programme, stated UNDP Ethiopia. After an extensive consultation between the government and the UN Country Team a MDG Acceleration framework for achievement of Goal 5 in pastoral areas was designed as well as Accelerated Action Plan for reducing maternal mortality, which is already under implementation, according to UNDP Ethiopia.

A nurse explaining about the physical as well as biological changes pregnant women might experience, what they mean and which sings warrant a visit to the centre.

The Ethiopian government had also allocated around 5.5 million Br for the health sector starting from 2012 to 2014 which helps pregnant mothers like Helen to get antenatal care in a nearby location. Pregnant women pass trough physical examinations such as blood pressure, weight measurements, etc to track the mother’s health record and to keep it at a medically advisable level as well as HIV counselling and test, according to Tigist Fantaye, a nurse at Kirkos Sub-city Health Office Gotera Massalecha Health Center.

Additionally, necessary medication based on the physical diagnosis, training on sanitation, childcare and nutrition are given at the centre. The antenatal care goes in fixed four schedules at 0-16 weeks, 24-28 weeks, 30-32 weeks and 36-40 weeks, according to Tigist. But if there is a “danger sign”, which the mothers are taught on their first visit that can be a symptom of health disturbance of the mother or the child, the centre is open 24/7. But it is still shocking to see mothers in the city who come to the centre injured and bleeding, while they try to give birth without the attendance of skilled health personnel, stated Tigist. This calls for a better awareness creation in the community, she suggested.

Beside these two goals, substantial progress was observed in Ethiopia in terms of achievement of MDGs. Ethiopia is on course to achieve eradicating extreme poverty, which targets to halve the proportion of people whose income is less than one dollar a day in 2015, achieving universal primary education, promoting gender equality and empowering women with a target to eliminate gender disparity in primary and secondary education, by 2005 and in all levels of education no later than 2015, combating HIV/AIDS and Malaria, ensuring environmental sustainability and developing a global partnership for development. UNDP Ethiopia attributes the success achieved in Ethiopia to political will and government commitment and close collaboration between government and development partners. The remarkable economic growth that the country has achieved is also credited with the progress that the country made in achieving MDGs. However, achieving gender equality and women empowerment is lagging behind along with the reduction of maternal mortality.

As a result of the massive investment in basic education, most countries have achieved universal primary enrolment (Goal 2) in Africa and the continent as a whole is expected to achieve Goal 2 , according to Assessing progress in Africa toward the Millennium Development Goals, 2014 report. The Ethiopian government had allocated around five million Birr, which is out of the total of 50 million Br allocated for the execution of MDGs project in order to carry out new schools construction and expansion projects between 2012 and 2014.

The government had the goal of building 929 primary, secondary, preparatory and vocational schools but only 473 schools have been built. It achieved 60pc of its goal regarding school expansion projects. The projects have faced problems such as delay of imported equipment for furnishing the school, especially to the vocational school construction, as well as lack of road access, explained Samuel. But as a whole, Ethiopia is on track to achieve universal primary education, he added. The Net Enrolment Ratio (NER) for primary education (Grade 1–8) increased from 40.4pc in 2000 to 91pc in 2014.

By 2025, Ethiopia has set out to be one of the middle income countries in the world taking eradication of poverty as its core objective of development plan. Ethiopia is among six countries such as Swaziland and Uganda, which are less than five percentage points away from reaching the target. While countries like Ghana, Angola, Malawi and Rwanda have already achieved the target in 2013.

Ethiopia targets to reduce people whose income is less than one dollar a day to 27.8pc in 2015 from 55.61pc in 2000. The Ethiopian government takes the construction of roads as a core element in the mission to eradicate poverty as roads are believed to play a major role in strengthening the economic network in the country as well as assisting the business sector to flourish, explained Samuel.

Even though the end of the MDG-2015 may not achieve some of the goals, we cannot deny how far we have come considering where we started, stated Haji Ibsa, PR at the MoFED. One criticism of the MDG plan is that its extra emphasis on the gap between current levels of performance and actual, neglecting the effort exerted to reach the current level of performance in the first place, according to Assessing Progress in Africa toward the Millennium Development Goal, 2014 report.

“By the end, some goals might be achieved while others might not be achieved. Whatever the outcome is, it does not mean that the Goals become less relevant. Even goals that will be achieved by the 2015 deadline will still be important. Achieving Goal 1 (halving the number of people living in poverty, for example) does not make the poverty reduction goal any less relevant. Given this, there is a global consensus that successor Goals be designed to succeed the MDGs,” says a statement from the UNDP Ethiopia.

The MDGs, which intend to improve the lives of the world’s poorest people, have faced different criticism over the years. General criticisms include a perceived lack of analytical power and justification behind the chosen objectives. Also, lack of national government commitment, which drives from the mechanism used to introduce local change through external innovations supported by external financing are among many.

Despite the aforementioned criticisms, the 2010 MDG review summit called for thinking about the successor to the MDGs. The UN Secretary General established an intergovernmental Open Working Group to design Sustainable Development Goals (SDGs), which are successors to the MDGs. The Open Working Group recommended 17 Goals and 169 targets. The Ethiopian government will also work on strengthening the achievement made focusing further not only on the quantity but also on the quality of the goals, stated Haji. The MDGs are expected to be endorsed at the September 2015 session of the UN General Assembly.

Sourced here  http://addisfortune.net/columns/nation-falls-short-of-mdgs/

Villagers discuss the impact of Farm Africa’s goat-rearing, beekeeping and irrigation programmes a year on from the 2013 Guardian Christmas appeal donations to the Tigray Food Security project

 James Jeffrey in Adwa, Ethiopia

The Guardian, Thursday 15 January 2015

By 2013, widowed Letay Gebre-Michael could feed her children only two meals a day. Now she serves three meals daily with an afternoon snack, thanks to three goats she received from international NGO Farm Africa.

Each goat gave birth to two more giving Gebre-Michael a herd of nine. She donated three goats to another qualifying individual – a requirement of beneficiaries of Farm Africa’s goat-rearing programme – and sold two at market.

With the proceeds she bought school materials and clothes for her children, clothes for herself and food. And the goats keep reproducing: she’s back up to seven goats.

“Before, the children would get depressed because of their hunger, and physically they were thin,” says Gebre-Michael, sitting on a stone wall enclosing her small homestead in the sun-drenched hills of Laelaymegariatsemri, an area of 1,500 households in northern Ethiopia’s Tigray region. “Now they have gained weight and are happier.”

Farm Africa’s Tigray Food Security project uses simple but innovative initiatives such as goat rearing to enable poverty-stricken individuals to forge livelihoods in the rugged Tigray highlands, where many inhabitants remain untouched by Ethiopia’s growing economy.

Half the £230,000 raised by the 2103 Guardian Christmas appeal went to Farm Africa; the UK’s Department for International Development matched UK donations pound for pound through its UK Aid Match fund. Farm Africa has directly assisted 2,456 individuals through its project.

Before Gebre-Michael joined Farm Africa in mid-2013 she worked as a day labourer farming crops, paid only in kind. Now she has a means of income – earning 1,300 Ethiopian birr (£40) through the goats – and plenty of goat milk for her children, she says. She hopes to save enough to buy an ox to work a small plot of land to grow additional crops.

Don’t underestimate the power of a goat, would appear to be the moral of the story. When one of 32-year-old Abrehet Gebrekidan’s five children developed an eye infection, she sold a Farm Africa-supplied goat to pay for medical treatment, retaining her five other goats.

“Now they are small but come Easter they can be sold for a good amount,” Abrehet says.

More than 700km south, the Ethiopian capital, Addis Ababa, offers stark reminders of Tigrayan women who came searching for work but found homelessness and sexual exploitation.

To help stem that tide Farm Africa has invested £685,000 in this project, initially funded by Irish Aid. Building on this success, DfID’s UK Aid Match fund has generated over half of the additional cash that allowed the programme to reach more women and landless youth.

“My children were jealous of school friends who had a change of clothes,” says 40-year old Gizat Wellu, received two beehives from Farm Africa, plus training and equipment. “Now I can afford to buy them clothes.”

He produced 30kg of honey for which he earned about 140 birr (£4.50) a kilo. He paid off debts, installed a third beehive and bought enough food materials so his family eats three meals a day. After encouragement by Farm Africa he deposited money in the government-run savings and credit association.

It is left to village communities to decide who participates in the project, focusing on assisting landless youth and women.

“I’m very happy with the new experience,” says 22-year-old beekeeper Fana Fesseha, cradling her three-year-old daughter Samhal. “My family and I are excited because it should be successful – already we are getting advantages.”

She carried out a blue bucket full to the brim with 20kg of honey from her two beehives. She hopes to sell this for 120 birr (£3.90) a kilo at the market, 20 minutes’ walk away in the small town of Dibidibo.

She’s already sold 10kg to pay back loans and buy food. She’s keeping 300 birr (£9.50) as an emergency fund.

“Early on the biggest challenge was the bees’ behaviour – I was a bit afraid of their stings. Since I’ve got used to them I can manage the beehives properly.”

Atsede Teku, 45, and her family used to sleep on traditional beds of stone and mud. Income and food was scarce and her marriage suffered and ended in separation.

The local community nominated her for Farm Africa’s irrigation programme, and she received irrigation training and equipment for a half hectare plot of land she already owned.

“I never expected this change,” says Atsede, whose harvest of garlic, onions and peppers has netted about 10,000 birr (£325). “Now my friends consider me a role model and visit to discuss farming.”

Her husband returned and the family built a new house and compound, and bought new beds.

But success varies individually. No programme is a guaranteed fix.

“Last year I was unlucky,” 33-year-old widow Nechi Aregawi says of one of her goats dying. Currently she has two goats and little extra income until they breed.

Nechi and two sons eat meat only three times a year to mark holidays. I ask if remarrying is an option. She laughs. “It’s not common around here,” she says.

“I have seen how my neighbours’ lives have changed much [through goat rearing],” Nechi says. “I hope my situation will change like theirs.”

Thanks to funding, the project is helping to support more than 12,000 people. The work is being extended until 2017 meaning it will reach even more people to help them to move closer to self-sustainability.

Haregeweyni Belay, 40, is another irrigation programme beneficiary.

“I’m optimistic about the future because we have started to fight poverty,” Haregeweyni says, one of her six children at her breast. “We’ll work hard until we defeat poverty.”

Her land’s output has improved through the programme and hand-operated irrigation equipment provided, she says, though a motorised pump would further boost the crop. What if Farm Africa can’t provide the pump?

“I’ll try and work the land to buy it myself,” she says.

Sourced here  http://www.theguardian.com/society/2015/jan/15/farm-africa-goats-ethiopia-guardian-charity-appeal-dfid

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A mobile solar wagon, developed by students of Arba Minch University

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What role does solar energy play in providing electricity to rural people in Ethiopia?

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Most of Ethiopia is rural, and most people do not have access to the national power grid. Only a small minority can afford diesel-generators, which are expensive. Moreover, diesel is not always available. Accordingly, stand-alone photovoltaic systems that need no connection to the national grid are very useful. At the moment, more than 13,200 stand-alone PV systems are installed in the country.

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Does such off-grid technology help to create jobs?

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I see a huge potential. These applications serve small-scale enterprises. For example, farmers can run small flour mills with solar power. They become able to sell flour in local markets and not only grain, which is less valuable. Moreover, they can operate off-grid water pumps. They can also use appliances like this to serve other farmers and charge money for such services. Some villagers have solar kiosks and recharge mobile phones and other devices. They also sell cooled beverages. PV systems allow rural people to offer and enjoy options that used to be available only in urban areas. In a village near Arba Minch, we introduced a  solar-powered hair saloon, and it was full of customers right from the start. PV definitely improves opportunities for earning money – as well as the standard of life in general.

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Are PV systems and components manufactured locally?

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Well, in the long term, as the market grows, I think there will be scope for local production of at least some components, so additional jobs will be created that way. At the moment, most components and systems are imported from Europe and China.

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In advanced countries, prices for PV systems have dropped dramatically in recent years. Has the technology become affordable in Ethiopia?

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Yes, prices have been coming down fast. Today, you can get a 60 Watt system for 12,000 Birr or so, that is the equivalent of € 450. One year ago, the price was around 20,000 Birr. Per kilowatt hour, off-grid solar power now costs not quite 10 Birr. That is much cheaper than diesel-gener­ated power, which costs more than 30 Birr per kilowatt hour. A small enterprise that invests in a stand-alone system can break even in one to two years.

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That sounds good, but can rural people afford such investments?

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Well, in some places people have access to micro-finance institutions (MFIs), and the interest rates they pay are 10 % to 15 %. However, the micro-finance system needs to be expanded to the entire country. Moreover, many small businesses struggle to meet MFI conditions. For instance, some MFIs expect entrepreneurs to already have at least 20 % of the capital needed. On the other hand, many rural people do not have a registered address, which is another thing MFIs require. Lots of poor people do not even have documents that would prove that they own their homes.

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Could the government do something to make funding more easily available?

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In view of people’s poverty, it would be great if the government would grant direct funding. But it has been helping in other ways. Solar systems are ex­empted from taxes and import duties. That really matters.

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How important are education and advanced training?

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Education is crucial. So far, many people simply do not know much about off-grid power supply. Ethiopia’s Ministry of Energy has started to support advanced training for solar electricians. Foreign agencies are also contributing to raising awareness in rural schools or health centres. It is vitally important to reach out to the rural population. Solar systems are easy to operate, but one must command some basic skills and understand the technology.

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What is Arba Minch University doing in this field?

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Four years ago, we set up a solar competence centre in cooperation with Sahay Solar Africa, a German non-governmental organisation. We are training engineers and electricians. So far, we have trained over 300 students. We also go out to the rural areas and teach local people. In cooperation with Neu-Ulm University of Applied Sciences, we are running an applied entrepreneurship education programme (AEEP). The goal is to develop new business ideas based on off-grid applications. The German Academic Exchange Service (DAAD) and private companies are involved in the programme too. We want to incubate new businesses in cooperation with German partners. The focus is on business and management aspects, whereas our competence centre is promoting technological skills. Seven of our tutors spent eight weeks in Neu- Ulm this year and were taught there. Afterwards, we held courses in and near Arba Minch this summer with around 50 students.

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Are there any tangible results?

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Yes, there are. Our students have developed several products and business ideas like mobile solar wagons with charging stations, mobile solar photo studios with a laptop and printer or a mobile ice cream machine. They developed a system for franchising those products to local people. We are currently testing the scheme in the area around Arba Minch as well as in Laka, a mountain village some 60 kilometres away from the town. We are getting along pretty well, although we do face challenges such as heavy rainfalls and flooded streets in the mountain areas.

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Is the involvement of private-sector companies important?

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Yes, it is a crucial issue. It helps us that we can build on practical experience of companies like Phaesun from Germany. Phaesun specialises in off-grid systems and has been active in Ethiopia for some time. It inspires our students to see that PV is indeed commercially viable, even at an international level.

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Engidaw Abel Hailu heads the Solar Competence Center at Arba Minch University in Ethiopia.

Sourced here  http://www.dandc.eu/en/article/ethiopian-university-building-renewable-energy-capacities

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Turkey ready to support Africa on all platforms

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By SERDAR KARAGÖZ

http://www.dailysabah.com/money/2015/01/22/turkey-ready-to-support-africa-on-all-platforms

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Africa debt: Ethiopia tops off banner year for sovereigns

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African DCM becoming more sophisticated; Debt sustainability a concern.

Africa’s Eurobond market closed 2014 on a high, following soaring investor demand for Ethiopia’s debut offering. The $1 billion 10-year debut Eurobond, which was priced at 6.625% over 10 years, boasted $2.6 billion in orders.

“The order book was of the highest quality, with fund managers taking up 96% of the bond. It was a tremendous inaugural transaction to end the year with,” says Maryam Khosrowshahi, head of public sector coverage CEEMEA at Deutsche Bank who worked on the deal.

Some 50% of the bond was taken up by fund managers in the US, 35% from the UK and 14% from the rest of Europe. Deutsche Bank and JPMorgan were the lead managers and Lazard advised the Ethiopian government.

The money raised from Ethiopia’s deal will finance a variety of programmes in the country, including projects in the health, education, sugar and energy sectors, as well as the development of economic zones in the country, says Khosrowshahi.

Ethiopia’s successful debut follows Kenya’s debut Eurobond in June, Côte d’Ivoire’s return to the debt capital markets in July – three years after the sovereign defaulted on its 2032 Eurobond – and returns to the market by Ghana and Zambia, among others.

According to Dealogic, there have been nine sovereign Eurobonds from Africa this year worth $8.5 billion. This was marginally less than 2013 which saw 10 deals completed at $10.7 billion.

“We should continue to see issuance from the continent next year,” says Khosrowshahi. “African sovereigns with strong economic performance and prospects should be able to garner investor interest and support once the backdrop is more constructive in the New Year.”

Nicholas Samara, vice-president of CEEMEA DCM at Citi says: “I’m not sure we will see such high volumes in 2015 because large chunks of debt were issued from Africa in 2014. But what we should note is that sub-Saharan Africa is becoming more sophisticated in terms of the development of the capital markets.”

Samara adds: “ Kenya’s issue earlier this year is a great example. The $2 billion Eurobond was spread over two tranches and six months later, the government re-opened the sovereign bond to raise an additional $750 million. This is something that has never happened in sub-Saharan Africa outside of South Africa before.”

Ethiopia’s success comes despite a challenging backdrop. Plummeting oil prices this year have put pressure on commodity exporters in Africa such as Nigeria, Gabon and Angola and pushed up rates for some African securities in the secondary market. Nigerian borrowing costs are now higher than Kenya, Rwanda, Senegal and Ivory Coast, despite the fact that they all have lower credit ratings than Nigeria.

The falling oil price may actually be beneficial for Ethiopia as 20% of the country’s imports of goods is purely spent on fuel – quite a substantial amount. Lower global oil prices may help to plug the current account deficitAmelie Roux, Fitch Ratings

“The falling oil price may actually be beneficial for Ethiopia as 20% of the country’s imports of goods is purely spent on fuel – quite a substantial amount. Lower global oil prices may help to plug the current account deficit,” says Amelie Roux, analyst at Fitch Ratings based in Paris.

Ethiopia’s current account deficit widened to 8.6% of GDP in 2014 from 5.9% a year earlier.

Investors were drawn to Ethiopia’s debut as a diversification play away from oil, says Khosrowshahi, as Ethiopia’s economy is driven by the agriculture, industry and service sectors.

“What is also important to note, however, is that the plummeting oil price has affected secondary bond trading for all countries with links to oil,” she says. “While Africa is the last frontier, the last emerging market region which investors can expect to benefit from real growth, the region is also becoming more and more integrated into the global capital markets landscape. It’s a good sign.”

Debt sustainability, however, may be an issue, with FX reserves in Ethiopia covering less than two months of exports. “This is low in absolute terms and low in comparison to Ethiopia’s peers. To manage this will be difficult and the government will need to make structural changes to the economy to change this,” says Roux.

But as Khosrowshahi says: “Debt to GDP levels in Ethiopia are low. Central government debt to GDP is 22%. Public sector debt to GDP is 46%. The country has had strong GDP growth over a number of years, and significant focused investment in social, infrastructure, and industrial development should contribute to maintaining similar economic expansion in the years to come.”

“While FX reserves are low, investing in tertiary sectors will help with debt sustainability. Debt to GDP levels in Ethiopia are lower today than they were in the last decade following the debt relief package by the IMF. There aren’t that many countries in Africa with such good metrics,” says Samara.

GDP growth for Ethiopia has averaged 10.9% between 2004 and 2013 compared to a regional average of 5.3%, according to the World Bank.

But Ethiopia has long been closed off to foreign investment, with the banking and telecoms sectors kept exclusively for locals, and the public investment effort has been financed by domestic credit, bilateral loans – usually from Chinese lenders – or concessional loans from the World Bank.

“Ethiopia has exhausted these avenues. For instance, domestic credit is not enough to fuel the country’s huge infrastructure needs: The country’s stock of domestic credit is around 30% of GDP, not that low, but not enough for what the country needs,” says Roux.

“The Eurobond issue is an indicator that the country is looking for alternative sources of funding and highlights the country’s need for dollar funding in particular.  It may also be an indication that the country is starting to open up to international investors more generally,” she says.

http://www.euromoney.com/Article/3414262/Africa-debt-Ethiopia-tops-off-banner-year-for-sovereigns.html?single=true

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Standard Bank to open rep office in Ethiopia

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The office will provide a foothold for the South African bank to build relationships with local businesses.

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NAIROBI - South Africa’s Standard Bank aims to open a representative office in Ethiopia by the end of March, joining others eyeing a fast growing African economy although foreigners are barred from offering commercial banking services there.

The office will provide a foothold for the South African bank to build relationships with local businesses and develop market intelligence to help advise clients interested in investing in Africa’s second most populous country.

It will not offer commercial banking services, such as taking deposits or lending, as only Ethiopian state-owned or private institutions are allowed to run such operations.

“We are looking to open up a representative office, hopefully by the end of March this year,” Taitu Wondwosen, a senior vice president at Standard Bank who will become the representative, told Reuters.

“We go where our clients are. More and more of our clients are starting to ask about Ethiopia,” said Wondwosen, whose bank has operations across the continent. “It just makes sense to for us to start to get to know Ethiopia.”

Ethiopia, a market of about 96 million people whose agriculture-dependent economy has been growing at eight percent or more a year, has been heavily investing in new roads, railways and power plants to attract manufacturers and other investors.

Foreigners are restricted from areas such as banking and telecoms, but Ethiopia offers attractions because of its new infrastructure and as labour and other costs in Asia and elsewhere rise.

Wondwosen said clients and potential investors had shown interest in manufacturing, such as the textile industry, construction and infrastructure work, as well as other areas

http://ewn.co.za/2015/01/22/Standard-Bank-to-open-rep-office-in-Ethiopia

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Qatari investors plan new cement plant in Ethiopia

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Yayu Fertilizer Factory (as conceived above) lies on 54,000sqm and will be a multi complex factory consisting two Urea manufacturing plants, one DAP manufacturing plant, a coal mining and chemical manufacturing.

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Tekleberhan Ambaye Construction Plc (TACON) resumed the construction of Yayu Fertilizer Factory building after settling the problem it had with the Metal & Engineering Corporation (MetEC) three weeks ago.

TACON was subcontracted by the MetEC for two billion Birr in 2012 for the construction of the civil work of Yayu Fertilizer Factory. MetEC was awarded the project the same year from the Ministry of Industry (MoI) after revising the cost of the project to 540 million dollars from the initial price of 730 million dollars that was given by the a Chinese firm called China National Complete Plant Import & Export Corporation (COMPLANT).

Yayu is a multi-complex of industries that will have two Urea and one DAP fertilizer manufacturing plants, a coal mining plant and a chemical manufacturing plant that will manufacture chemical inputs for the fertilizer factories.

The subcontractor finalized the site clearing for the power plant terminal, gas disposal plant and ammonia and Urea units and a place for the installation of six machineries. It made a 20pc progress on the construction of the basement and column for the structure of the factory, which is located at Yayu Wereda, Illubabor zone in Oromia Regional State, 600Km West of Addis Ababa.

But 10 months prior, the construction was quit by TACON following the disagreement with MetEC because MetEC did not pay the total down payment for TACON, which is 30pc of the two billion Br, according to sources. But Michael Desta, head of public and foreign relations at MetEC said the construction was halted because of heavy rain at the area.

“MetEC did not make the down payment to TACON not because of financial problem but rather due to bureaucracy at the financial department of the corporation,’’ a source close to the case told to Fortune.

The negotiation for the resumption of the contract started two months ago following the initiation that came from the director general of MetEC, Kinfe Dagnew (B. Gen) and Siefu Ambaye chief executive officer (CEO) of TACON. They had a discussion on the issue, which was finalized with the agreement that TACON would resume construction with a promise from the officials of MetEC it will get the payment in shorter period of time, according to sources.

About 14 years ago, the government set up a Coal Phosphate Fertilizer Complex Project Office to study the potential of a fertilizer factory at Yayu and the office conducted feasibility studies including socioeconomic impacts, geological and environmental studies with Chinese companies such as Ging Sion Explorer and China National Complete Plant Import and Export Corporation (COMPLANT), which resulted with finding of 100 million tons of coal is saturated at Yayu area.

The coal mine has the potential to produce 300,000tns of Urea, 250,000tns of DAP fertilizer, 20,000tns of ethanol and 90MW of electric power annually with 730 million dollar project cost. But MetEC revised the study and offered 540 million dollars for the project, which led it to sign a deal with the Ministry of Industry (MoI) in 2012.

Yayu will lie on 54,000sqm plot and its Part One of the project of Urea manufacturing plant will have a production capacity of 300,000tns of Urea annually using 9.2 million tonnes of coal with 35,000 workers. The factory will have 75,000tn of solid waste product that can be used as an input for the production of construction input materials such as brick and cement.

The civil works to be constructed by TACON includes the structure of the building and MetEC will work on the mechanical part including the machineries that will be made by Hibret Manufacturing & Machine Building Industry (HMMBI), one of the MetEC companies engaged with manufacturing industrial machinery and spare parts. Some parts of the machineries will be imported from South Korea as the design of mechanical parts was conducted with the collaboration of the Korean government. Addis Abeba Institute of Technology (AAiT) is a consultant of the project.

The factory that was expected to be completed by the end of the current fiscal year of 2014/15 only has a 20pc progress and it was set out to minimize the import of fertilizer to the country as one of the five companies the government plans to construct with 2.8 billion dollars. Three of them are at Yayu, and two at Bale Melka Arba one single phosphate fertilizer factory and one triple super phosphate manufacturing factories.

In Ethiopia, an agrarian country, a total of 16 million hectares of land are used for agricultural purposes. An estimated 12 million hectares of the total area are used for growing food grains. The government imported 552,000tns of fertilizer in 2010/11 and 560,000tn the following year. Its imports in 2012/13 were down to 477,000tns. For the current fiscal year, the government is importing 900,000ql of fertilizer with a total cost of 431.9 million dollars from five companies.

Sourced here  http://addisfortune.net/articles/fertilizer-factory-construction-resumes-after-10-months/

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YAYU: A Game Changer?

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By Girma Feyissa

President Mulatu Teshome (PhD) and his entourage had paid a visit to the western part of Ethiopia two weeks ago. The visit signifies the government’s realisation of the urgency to exert every possible effort to optimise the amount of foreign currency reserve the country should have, either by way of improving the country’s export earnings or by way of import substitution. The presidential tour had focused on both the optimisation aspect and the import substitution.

Export of processed coffee and the plan to establish a fertilizer producing company at Yayu, 581Km west of the capital, satisfy both aspects. This is not to speak about the much more important ethno-geopolitical impact the tour might have.

Whether one likes it or not, it is a national truth today that Oromia is not only the most populated, but also the most endowed with natural resources, including precious stones that make some indents in the world market. Critics add that most of the prisons and their occupants are also found in the same region.

Some wonder why the Ethiopian military structural hierarchy does not reflect either the number of the population or the economic contribution of the region to the national treasury. By all accounts, the region had remained the lactating cow of the aristocracy for years on end.

That takes me back over four decades when I had to make an economic survey for the installation of telephone network in the region. I remember there was not much recorded material to suggest who came there to settle first and why the land tillers had to be subservient to the land lords and what rights did they have to own some property there.

On a national level, Western Oromia Zone had very little share of the budget for any kind of modernisation except for the transitory link of asphalt road up to Bonga. About three decades ago, Bedele Brewery was established. I had visited the factory and I remember having resentment in regards to why a brewery was given priority instead of dairy production or something else productive.

The planned fertilizer factory at Yayu, in the proximity of Mettu, if it is realized in earnest, shall be the first productive investment in the area. The brewery has only been a consumable producer.

The Yayu Fertilizer Factory, on the other hand, is going to be productive. The basic economic implication will be import substitution. The foreign exchange required to pay for the import of fertilizers would be saved.

Backward and forward linkages would have significant socio-economic implications around the factory. President Mulatu has also said that Yayu shall soon grow into a planned small town where town planners and architects shall use their knowledge to plan an ideal town for settlement by both farmers of the surrounding villages and the factory workers.

Packaging firms making use of the farming products and transiting infrastructure as well as the construction of massive warehouses to be used as stores can be established at strategic spots. Small delivery vans or even horse-driven carts could be used to deliver house-to-house services. The cost of the fertilizers shall be reduced to an affordable minimum, which shall be reflected on the price of food in the country.

The residual by-products of the factory may induce the establishment of other factories, which eventually reduce the cost of import.

By virtue of it being very large, the regional state has also benefited from the government’s distributive growth policy. Many universities have been opened in many zones of the region.

There is no denying the fact that a few high profile political positions are filled by Oromo individuals. But that does not entail equitable power distribution commensurate with the population number and the economic contributions made by the region.

Oromia is not represented proportionally down the line of governance in all the offices of the bureaucracy. It is hoped that the recent visit of the president and the socio-economic implication of the focus on their processing of coffee production and the Yayu fertilizer manufacturing plant could be streamlined into the right track.

Could the oncoming political election make any indent?

Some people may argue that the industries established in the country so far are located in the region. But this is mainly because of the proximity of the capital and the advantages drawn from the existing infrastructure conducive to the industries and their ability to dispose them to the nearest market or outlet for export.

But the Yayu project is hoped to be a game changer in the transformation process of changing the subsistence farming into productive commercial farming with better yields and more employment opportunities for the youth who could be graduates from these institutes of higher learning.

http://addisfortune.net/columns/yayu-a-game-changer/

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Turkey to invest in Ethiopia’s hydropower

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Turkish President visiting Ethiopia on January 22, 2015 at national palace of Ethiopia

BY ANDUALEM SISAY GESSESSE

The Turkish President Recep Tayyip Erdogan, who began his official visit in Ethiopia this morning, announced that his country is interested to invest in generation of electricity from hydro power.

“A new era is incepted between Ethiopia and Turkey. We want the energy field to be part of our cooperation. We encourage our energy companies to invest in this sector as Ethiopia has over 45,000 megawatts hydroelectric generation potential,” President Erdogan said after attending science and technology cooperation agreement signing between the two countries with Prime Minister Hailemariam Desalegn of Ethiopia.

Prime Minister Hailemariam Desalegn on his part indicated that his government is ready to sign the power purchase agreement from the Turkish when they are ready to be engaged in power generation.

When the Turkish began producing hydroelectric power, the Ethiopian government will buy from them and resell it to the public for only power generation is allowed for foreign companies according to the law of the land.

Ethiopia is currently generating a total of slightly over 2,000 megawatts of electricity from various hydropower plants and is also undertaking construction of the 6,000 megawatts Great Ethiopian Renaissance Dam with only local financing. In addition the 1700 megawatts Gibe III hydropower undertaken with external financing is also expected to be completed this year.

Having total area of 1.1 million km 2 , 122 billion m 3 of water resource per annum and 75.8 Million populations in the Horn of Africa, Ethiopia is often referred to as the water tower of Africa Ethiopia.

Trade and WTO accession

Appreciating Turkish companies’ investment in Ethiopia so far, “We want more Turkish investment and will be working very hard with Turkish government and companies,” Prime Minister Hailemariam said expressing his hope that the currently $400 million trade between the two countries will increase by the end of 2015.

“With a total population of 170 million in the two countries, the trade volume is insufficient. By the end of 2015 we want to increase it to 500 million,” President Erdogan said.

Ethiopia as part of its accession journey to the World Trade Organization (WTO), Ethiopia will start bilateral discussion with Turkey.

Currently Turkish companies are the major investors in Ethiopia with around $2.3 billion. The investment could triple if Ethiopia allowed Turkish banks to operate in Ethiopia making international money transfer of Turkish companies easy, Erdem Karal, Second Secretary at the Turkish Embassy told newBusinessEthiopia.com reporter in Addis Ababa.

Turkish president at the National Palace of Ethiopia on January 22, 2015

During the bilateral WTO talks Turkey, which is the member of WTO, among others is expected to request Ethiopia to open its doors for Turkish banks to operate.

As part of the principle of open your market first before accessing the WTO members market, when a country applies to WTO membership, a member country who has specific business interest in the applicant country usually demands the applicant to open a certain sector or industry for its investors.

Investment financing

Currently Turkish Eximbank has also financed a section of Ethiopia-Djibouti route under construction. In addition, Turkish companies so far have created jobs to around 8,000 Ethiopians in the areas of textile, construction materials production and railway, among others.

Apart from economic cooperation the heads of the two countries have also expressed their interest to deepen relation in supporting the Government of Somalia. Beyond infrastructure trade and investment, the two sides have agreed to work closely in military training and defence as well as cultural areas, according to President Erdogan who also visited Somalia and Djibouti after Ethiopia.

Sourced here  http://www.newbusinessethiopia.com/index.php/component/k2/item/211-turkey-to-invest-in-ethiopia-s-hydropower/211-turkey-to-invest-in-ethiopia-s-hydropower

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Semera – Tadjoura Railway Tender Postponed Again for the Fifth Time

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CEO points at the need to give more time and more information to bidders

Ethiopian Railway Corporation (ERC) postponed the tender it had announced to hire a contractor for Semera -Tadjourah, railway project for the fifth time.

Initially, the tender was announced on August 7, 2014 requesting the bidders to submit their technical and financial proposals by August 22, 2014, for the construction of a 280Km rail project connecting Semera with the Djibouti port at Tadjourah. Totally, 11 companies purchased the bidding documents. But the Corporation postponed the bid submission date to October 13, 2014 and subsequently changed the dates to November 2, 2014, and January 30, 2015.

The recent submission date was meant to take place by this week on January 30, 2015, but according to a letter sent to the bidders on January 15, 2014, the ERC stated that the bid document submission date is again extended to March 3, 2015.

“We received the letter with the changed submission date for the fifth time without specifying the reason why the Corporation is changing the date,’’ said one of the bidders.

The project is part of the national project that extends form Mekele – Weldya/Hara Gebeya – Semera-Tadjourah Port Railway Project. But the 268.2Km Mekele-Woldiya/Hara Gebeya Railway project was awarded to the China Communications Construction Company (CCCC) for 1.6 billion dollars in 2012 after obtaining the financing from (EX-IM) Bank of China. The project is expected to take three and half years to complete.

The Corporation has changed the requirements in the tender, which could lead to the exclusion of some of the bidders, said one international bidder. These changes included a requirement that bidders should previously have worked on a project worth 200 million dollars as well as undertaken 180Kms of road project and 180Kms of rail project.

The tender was postponed for two reasons, says Getachew Betru (PhD), chief executive officer (CEO)of ERC.

“One is because of requests from the bidders for more time to prepare financial and technical proposal. The second reason is that we needed to provide some explanations to some bidders who were not clear about some points in the bid document.’’

The ERC facilitated and took the bidders for sight visits to the place of the construction on September 2014 and December 2014.

This project will be a 280Km railway connecting Afar Regional State and Djibouti with the aim of transporting potash, metals and other products from northern part of Ethiopia to Djibouti’s Port Tadjourah for the international market.

The detailed feasibility study of the project was conducted by Overseas Infrastructure Alliance Plc (OIA), an Indian firm, in 2012 with the financing of the government of Ethiopia. OIA also prepared a bidding document and detailed engineering design for the project that is expected to be finalized in five years with a 300 million dollar financing that is secured from Indian government.

The ERC is undertaking the construction of railways in two schemes – Light Railway Transit (LRT) and National Railway Network of Ethiopia (NRNE). The LRT project which has a 31Km length was awarded to China Railway Engineering Corporation (CREC) with 475 million dollars in 2011. The project is expected to start operation by May 2015. For the NRNE, the ERC has identified eight railway corridors for study, design and subsequent implementation, the total estimated length of which is 5,060km. Semera to Tadjourah rail project is part of the national project that was planned to be constructed as phase one.

From the NRNE projects, another Chinese company, China Railway Eryuan Engineering Group Co. Ltd. (CREEC) is constructing the first lot of the 317Km Addis Ababa-Me’eso railway lines. The second lot of the 340Km Me’eso-Dire Dawa-Dawale electric railway project was awarded to another Chinese state owned enterprise China Civil Construction Corporation (CCECC) in 2011 and progressing well.

http://addisfortune.net/articles/semera-tadjoura-railway-tender-postponed-again-for-the-fifth-time/

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Danakil DFS to potentially uplift value of Premier’s interest in Circum

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23rd January 2015

http://www.miningweekly.com/article/danakil-dfs-to-potentially-uplift-value-of-premiers-interest-in-circum-2015-01-23

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Why Investors Should Consider These Three Developing Countries

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-  Ethiopia one of three developing economies given the nod due to a perceived United States – friendly bias

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By Andrew L. Peek,

The Fiscal Times

January 25, 2015

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Even in boom times, investing in the developing world is a risky business. In the Middle East, for example, there was no indication that the Arab world’s somnolent and seemingly permanent autocracies would be undone by the Arab Spring when a single street vendor in Tunisia setting himself on fire in 2010.

There were likewise few indications that the Yemeni government of Abd-Rabbu Mansour Hadi would collapse this week under the guns of its Houthi rebels, which seemed like an irritating but non-existential threat until about 96 hours ago.

Political uncertainty, of course, is why investments in the developing world pay a premium. But not all uncertainty is created equal. In places like South America, where countries have industrialized under the shadow of the North America, the reliable populist currents will be anti-American. The same goes for the Arab League and the same for Russia, though for different reasons.

Since the United States waged the Cold War alongside the imperial remnants of France and Britain, the same also goes for many of their former colonies.  There is almost always a political advantage to scoring points off the Americans, and nobody is more exposed than their companies — but not everywhere.

In certain places, for reasons of state or some quirk of their historical experience, some nations default to American friendship.  Outside of all other factors, that should be the litmus test for investment in risky areas: when push comes to shove, how much does the government want to make Americans happy?

If there’s a problem – usually a combination of local security problems coupled with a limited range of options for political reform – can the deck be stacked in our favor? Three unlikely states in particular stand out:

1. Vietnam – It is no secret that Vietnam is experiencing an economic boom with the first flush of its modernization, like Japan in the 1970’s and China in the 1980’s. But even if it weren’t, it is the best possible developing country to invest in. Virtually alone among the continental Asian states, Vietnam has set itself against China’s drive for regional dominance. Some of the island nations have also, of course: Japan, Australia, and the other fortunate offshores who have a freedom of movement that China’s land neighbors do not. For a variety of reasons, though, Vietnam has decided not to accommodate China. To do that successfully over a long period of time, Hanoi must build a closer relationship with the United States – particularly since Vietnam is currently outside of America’s regional security infrastructure. To stay its current course, Hanoi needs to make Washington happy.

2. Azerbaijan – Outside of Korea, Azerbaijan probably has the most unfortunate geopolitical situation in Asia. It is perched between a hostile Iran and Russia and locked into a two-decade-long frozen conflict with Armenia. Azerbaijan has responded since the end of the Cold War by aggressively courting the West, particularly the United States. It has been an instrumental part of supplying the NATO forces in Afghanistan, as well as a stout U.S. supporter in its conflict with Iran, which itself has a sizeable Azeri population. But Baku is in a difficult place. The Afghan war is ending – it has ended, officially – and a potential US-Iran rapprochement keeps hovering around the diplomatic margins. A complete thaw seems unlikely, however, since none of the non-nuclear differences between the US and Iran has been settled. Azerbaijan’s leaders are eager to solidify their positive relationship with Washington. They will be looking to accommodate Americans.

3. Ethiopia – Ethiopia has its unlovely spots. The NGO Freedom House rates the Addis Ababa government as “not free,” — the same score as Iran. But Ethiopia is also strategically situated, jammed between Sudan, Somalia, and across the Bab el-Mandeb from the collapsing state of Yemen. It’s also an avowedly Christian nation – by legend, the second in history – and doesn’t have many friends in the region. Like Vietnam, Ethiopia is also outside of the U.S. security architecture in the region, such as it is. No real friends, but plenty of conflicts. It has fought the al-Qaeda aligned rebels in Somalia and has a long-running dispute with neighboring Eritrea. If the threat from Islamist radicalism increases – and it may well, spreading from places like Libya, Yemen, and Somalia – Ethiopia will be increasingly eager to cooperate with the United States.  And like Vietnam and Azerbaijan, that means treating American investors with kid gloves.

In all of these countries, political instability isn’t totally absent, but is dampened by a desire to build stronger relationships with the United States. In addition, because their friendliness stems from geopolitical concerns, they would probably weather a change in government. There are few enough countries where Americans can count on being seen as the good guys, out of range of the mob. Investors should value it.

http://www.thefiscaltimes.com/Columns/2015/01/25/Why-Investors-Should-Consider-These-Three-Developing-Countries

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Turkish President Seeks to Boost Bilateral Trade from $400m to $500m

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Ayka Addis- a textile factory that employs 8,000 people under one roof.

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Ayka Addis, the largest textile factory in the country was established with 140 million-dollar investment in 2010 being an ice breaker to the entrance of Turkish investors in Ethiopia.

Since then, Turkish companies especially in the textile sector have been flowing to the country reaching more than 150 and employing 50,000 Ethiopians currently. These Turkish companies invested more than three billion dollars in the country. The number of the Turkish investors in the country in 2004 was only one with jobs created standing at five. The number of the investors grew to 155 within the following 10 years.

The country geared its focus to Africa adopting the African initiative in 2003 following the 1998 African Action plan; and declared 2005 as the year of Africa. And Ethio-Turkish business forum was also established in 2009 with a mission of serving as a business platform for bringing business people together.

In 2003, the Turkish investment in Africa was only four billion dollars while this number grew to 25 billion in 2013.

The overall volume of foreign trade has increased from 742 million dollars in 2000 to four billion in 2010 and 7.5 billion dollars in 2011. The volume of Turkey’s foreign trade with all African countries has increased from nine billion dollars in 2005 to 14.1 billion dollars in 2010 and 17.1 billion dollars in 2011.

With the visit to Ethiopia of Recep Tayyip Erdogan, the 60 year old president of Turkey, hope was laid in the investors both in the country and others intending to invest in the country.

“We would like to become Ethiopia’s partners and we have to promote and protect companies on both sides,” said Erdogan.

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President Erdogan and Prime Minister Hailemariam Desalegn at the press briefing.

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Although Turkey is among the 10top destinations for Ethiopia’s exports, the trade balance between the two countries still remains in favour of Turkey. In the 2013/14 fiscal year, the export to Turkey earned 84.6 million dollars standing at the ninth rank accounting to 2.6pc of the total earnings from export. And the trade gap between the two countries stands at 100 million dollars.

Among the top 10 destinations of Ethiopian exports are China, Somalia, Germany, Saudi Arabia, Netherlands, Switzerland and US.

But the Ethiopian government seems to be comfortable with the existing relations between the two countries as Hailemariam Desalegn, Ethiopian Prime Minister stated during a joint press briefing with President Erdogan at the national palace.

“Although the trade balance is in favour of Turkey, the growing foreign direct investment (FDI) from turkey will fill this gap,” he said.

Turkey is the number one investor in the country having 115 projects with an investment of 69.2 million dollars within the time January 2010 and October 2014. Out of these projects, 26 projects are under the implementation stage investing 3.6 million Br and employing 3,384 permanent and 2,492 temporary employees, 35 projects are in operation with a capital of 18.4 million Br and creating 1,627 permanent and 1,798 temporary jobs. The remaining 54 projects are in the pre-implementation stage creating 26,708 jobs permanently and 12,180 temporarily. India and China follow with investments of 38.9 million Br and 25 million Br respectively. Saudi Arabia and Sudan take the fourth and the fifth stages with investments of 14.2 million Br and 13.6 million Br.

The total trade turnover between the two countries stands at 400 million dollars in the first 11 months of 2014 growing from the 110 million dollars in 2004. And there is an interest in the two parts to increase the figure to half a billion.

“The first target is to bring this number to 500 million and then we will proceed to establishing a free trade agreement, which we have discussed and is a must to sign,” stressed Erdogan.

The major export items of Ethiopia are coffee, oil seeds, pulses, spices, khat, livestock, meat, flower, fruits and vegetables, textile and skin and hide products.

The human resource of Ethiopia, a country with the second largest population in Africa after Nigeria puts it at the primary focus of his country, according to Erdogan.

Erdogan, who expressed the financial bureaucracy problems of Turkey’s investors stressed that this has to get its end by the opening of Turkish Bank in Ethiopia which, as he said were discussed between the two leaders.

“Our Bank should come here and it will be a good leap to Ethiopia as well,” said Erdogan.

Turkey came to ninth rank as export destination for Ethiopia in 2013/14from 15th in 2012/13. China came to first place from its second rank; Saudi came to fourth from fifth, and Israel came from 10th to eighth position, while Somalia went down from first to second.

Turkey was a destination of Ethiopia’s oil seed that generated 38.4 million dollars, pulses that generated 15.6 million dollars, meat that generated 349.5 million dollars, and textile that generated 27.4 million dollars in the 2013/14 fiscal year.

Believing to transform this relationship to a higher stage as both the leaders were pronouncing, the two nations have launched a new relationship project for the years 2015 to 2018.

“Africa is going to be the next growth pool of the world,” said Hailemariam Desalegn. The two governments signed a memorandum of agreement to cooperate in the fields of science and technology. The Addis Abeba University, which will be linked to universities in Turkey for cooperation, conferred an honorary doctorate degree on the president

The president, who made his first visit to Africa making his first start from Ethiopia since he assumed the position of the presidency in 2014 promised that Ethiopia is going to be the central place or headquarter for the Turkish investment in Africa.

http://addisfortune.net/articles/turkish-president-seeks-to-boost-bilateral-trade-from-400m-to-500m/

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Norway to place Ethiopia among six focus countries for development cooperation

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Foreign Affairs Minister Dr Tedros Adhanom received on January 25 a Norwegian delegation led by Foreign Minister, Borge Brende.

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The bilateral discussions of the two Foreign Ministers dwelt on numerous issues of common interest. Both Ministers exchanged views on the promotion of Ethio-Norway partnership and expanding the depth, breadth and scale of the relations of the two friendly countries.

Dr Tedros gave a briefing on Ethiopia’s renaissance journey, the ongoing IGAD-led peace talks as well as IGAD’s role in supporting the South Sudanese warring parties end conflict and advance the cause of peace and stability. Dr. Tedros noted that Ethiopia will remain committed to advancing peace and stability in the region and attaches special importance to dialogue to resolve disputes.

He also recalled the successful conclusion of the 53rd Extraordinary Meeting of the IGAD Council of Ministers held in Mogadishu on January 10, adding that the very fact that meeting was held in Mogadishu tells a lot about the improving security situation in Somalia.

Foreign Minister Borge Brende on his part noted that his visit to Addis Ababa is a demonstration of Norway’s commitment for the further strengthening of the bilateral ties with Ethiopia.

He also underscored that Norway stood committed to step up its cooperation with Ethiopia. The Foreign Minister underlined the need for further consolidation of the bilateral partnership of the two countries.

Borge Brende noted that Norway’s Foreign Affairs Ministry is prposing placing Ethiopia among the six focus countries for development cooperation program.

Dr Tedros expressed his gratitude to Norwegian Foreign Affairs Ministry’s decision to make Ethiopia as one of the six priority countries in the country’s development cooperation program. This, he said, would help Ethiopia’s efforts to realize a carbon-free middle- income country status by 2025.

Both sides reached a consensus in jointly pushing cooperation forward in many areas including climate change, education, private sector engagement, trade and investment.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17244:norway-to-place-ethiopia-among-six-focus-countries-for-devt-cooperation-&catid=71:editors-pick&Itemid=396

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Industry Ministry Deliberates Draft Strategy for Construction Inputs

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Draft vies for domestic production substituting imports of nine input categories

The Ministry of Industry (MoI) received first draft of an industry strategy which the Addis Abeba Institute of Technology (AAiT) produced with Korean experts and a hired consultant, with a team travelling to several countries across the world for experience sharing.

The MoI gave the job to Institute in July 2014 to produce a Construction Input Development Strategy for 2015-2025. The strategy considers nine construction inputs with the aim of increasing the country’s construction input manufacturers within a decade, according to a senior official at the Ministry. The input sectors included in the strategy are marble, plastic, aluminium, wood products, gypsum, glass, adhesives, ceramics, and pints. The strategy vies to make production of these inputs competitive enough to substitute imports.

The draft has been discussed with stakeholders three inputs at a time, with the draft for the last three input items being discussed on January 10, 2015, according to Abubeker Yimam (PhD), project engineer of the strategic plan from AAiT.

The draft strategy explores the problems of the sectors and suggests solutions for the problems such as enabling industries to improve actual production to their capacities; to increase the number of factories in a sector, such as ceramics production, where there has been only one factory for a long time, with a new one coming soon; as well as beginning aluminium manufacturing in Ethiopia. It also suggests local production of inputs for flat glass manufacturers.

“The strategy will help the plan of increasing the manufacturing industry’s contribution to the Gross Domestic Product (GDP) to 17pc from five percent currently,” says an official.

This strategy is part of the ministry’s current engagement with Addis Abeba University, AAiT, Adama Science and Technology University and Industrial Training Services (ITS) working on the design of plans for the industry sector in three platforms; feasibility study, strategic plan and man power study. Recently, Adama Science & Technology University finalized a draft Cement Industry Development Strategy, with the aim of increasing the country’s cement consumption by more than threefold and had a discussion with the stakeholders’ manufacturers of cement in December 2014.

AAiT conducted the research with Korean experts and external consultant. The process involved 24 people in groups of four, each travelling to one country including China, Turkey, United Arab Emirates (UAE), Spain, Italy and Korea, for best experiences, according to Abuberker.

The strategic plan was conducted with the assistance of a steering committee organized by the MoI having six members chaired by Haile Assagide, chief executive officer (CEO) of Derba Cement Factory, Mesfin Abi, CEO of Habesha Cement Factory, two from Chemical & Construction Inputs Industry Development Institute and additional two representatives from the industry.

Comments from participants included problems to be reconsidered such as access to finance, problems related to lack of infrastructure such as road, water and electricity, the establishment of industrial bank, according to Abubeker.

The strategic plan included budget for the implementation, but both the Institute and MoI declined to disclose the budget saying it needed revision as the draft came up with lower implementation cost.

http://addisfortune.net/articles/industry-ministry-deliberates-draft-strategy-for-construction-inputs/

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Local company to export bamboo chopsticks to China

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Bamboo Star Agro-Forestry, a company established in 2007, is set to produce bamboo chopsticks and other products that will be destined for the Chinese market. 

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House Ratifies Three Proclamations to Deal with Corruption

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Anti-Corruption Commission gains more power, while financial fines are enhanced

The house ratified the three proclamations in view of the deterrent effect the previous punishments could have on the corrupt ones

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The first anti-corruption law that is made in separation to the 1994 criminal code of the country was ratified by the parliament. The new proclamation included new provisions in addition to those in the criminal code.

Among the new provisions that the proclamation brought into light are the punishment to the improper disclosure of secret codes and keys in order to get personal benefits, licensing or certifying unqualified persons, disclosing military secrets- as punishable both by the criminal code and corruption proclamation, and the bribing of mediators.

The new proclamation that strengthens the punishments to be effected on the corrupt has also included monetary punishment on every imprisonment. Therefore, if an enterprise that has got legal personality is found to be involved in corruption, for those actions punishable by simple imprisonment, less than five years imprisonment, from five to 10 years of imprisonment, and more than 10 years of imprisonment, it will be punishable by 20,000 Br, 30,000 Br, 50,000 Br, and 80,000 Br respectively.

This amount of money was set on the public hearing process of the Law, Justice and Administrative Affairs Standing Committee of the parliament. The former punishments were 30,000 Br, 50,000 Br, 100,000 Br and 200,000 Br respectively.

“This is because monetary punishment has a better deterring effect in the eyes of the corrupt than imprisonment,” states the proclamation.

Although many governmental and nongovernmental organizations were put into consideration while making the law, there are some that are excluded from being questioned by the law. These are corruption cases that are committed by religious organizations, political organizations, international organizations, small and micro enterprises and other religious or cultural institutions.

This is because, the income collected in religious institutions, which is based on faith, does not follow proper controlling mechanisms, which is done to comply to the believers’ faith as the believers do not question the use of the money. International organizations have immunity not to be questioned by the law and the expense is higher than the result to be found by the trial process to question small and micro enterprises.

Together with the proclamation, the parliament also ratified other two proclamations, a proclamation to amend the revised anti-corruption special procedure and rules of procedure of evidence proclamation, and revised anti-corruption commission establishment proclamation.

The proclamations were necessitated because of the need to include public organizations and ensure speedy and effective gathering of information, investigation, prosecution and hearing of corruption offenses and the injunction and retrieval of property obtained thereof.

As a result of the new proclamation, other provisions in the criminal code are revoked and corruption cases are to be seen using the new proclamation. But those that have been committed before the ratification of the new proclamation are to be tried using the provisions in the criminal code.

http://addisfortune.net/articles/house-ratifies-three-proclamations-to-deal-with-corruption/

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ADDIS ABABA, January 26, 2015 – Ethiopia has averaged a 10.7% economic growth rate over the last 10 years, more than double the annual average of countries in Sub-Saharan Africa, which was around 5.2%. However, despite having a huge potential to contribute to Ethiopia’s economy, the development of oil, gas, and mineral resources are not among the key drivers of the country’s growth. 

Although the country has geological potential for the discovery of new, sizeable oil, gas and mineral deposits, most of its extractive industry is still in its infancy stage. Currently, there is one large-scale gold mine in operation, while a growing number of large mining projects are under development and exploration for oil and natural gas is intensifying after significant discoveries in neighboring countries. Ethiopia also has an extensive and unique artisanal mining sector; the government estimates there are around 1 million miners, making it an important source of job creation, and an important source of foreign currency.

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  In 2012, the Ethiopian mining sector accounted for 19% of the country’s exports revenues- mainly from artisanally mined gold- while in comparison, coffee, Ethiopia’s largest export commodity, generated 26% in export revenues.

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World Bank Group Washington, DC, 2014
Strategic Assessment of the Ethiopian Mineral Sector

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The report notes that resource wealth can potentially have a positive impact on the social and economic development of Ethiopia if the industry is developed and managed in a sustainable and transparent manner, following international good practices.

So what can Ethiopia do to ensure that its resource wealth contributes to sustainable development?

The report highlights the following recommendations:

• Obtain good-quality geo-data and put in place an effective data management system: To to manage and plan for the industry, the government needs to know what is actually in the ground. Effective acquisition, maintenance and dissemination of geo-data can help to attract investment and can help governments to make informed decisions and negotiate more effectively. Currently, only 74% of Ethiopia is mapped at a low-quality scale.
• Put in place an effective management system and a governance framework: This will ensure that the benefits are distributed as fair and widely as possible, and social and environmental risks are minimized:Ethiopia was admitted as a candidate country to the Global Extractive Industries Transparency Initiative (EITI) in  March 2014,one step towards that goal.
• Diversification of Ethiopia’s economy and facilitation of economic linkages to avoid heavy dependency on the resource wealth: The linkages that are being created between the potash and agricultural industries in the Afar Region is just one example of potential economic partnerships; supporting the production of potash fertilizers in order to increase small holder farmer’s crop production.
• Balance short-term and long-term development priorities, and reinvest the resource wealth into productive investments including high-quality health and education

Past experiences of other resource-rich countries provide a roadmap that can inform Ethiopia’s decision-making as the government start to put institutions, policies and laws in place to ensure that resource wealth contributes to sustainable development.

Developing the untapped potential of the extractive industry is not without its challenges, which include the possibility of increased corruption and the need to manage the potentially significant social and environmental impacts. Recognizing this, the WBG, along with other development partners, have joined together to support Ethiopia’s efforts to develop the industry in a clear and viable way.

“As highlighted in the study, if well managed and well supported, the Ethiopian mineral sector has the potential to make a difference in the economic development of Ethiopia and to contribute to the poverty reduction agenda,” said Christian Moller, WBG lead economist. “This will require a strong public sector. As the World Bank Group, we are committed to contribute to this process.”

In October 2014, the WBG and the Ministry of Mines jointly organized the 2014 Ethiopia Extractive Industries Forum, one of the major recent initiatives. It was organized with support from other key partners such as the UNDP, the Australian Government, Department of Foreign Affairs, Trade and Development (Canada), UK Department for International Development (DFID), and the African Minerals Development Center (AMDC). The event, the first of its kind, was held to help raise awareness about opportunities and challenges in the extractive industry, as well as to share good practices for its sustainable management. It included a broad-based representation of stakeholders with about 120 participants from industry, government, development partners, and civil society.

The forum also provided the opportunity to discuss the findings of the “Strategic Assessment of the Ethiopian Mineral Sector” study, which was jointly published by the Ministry of Mines and other development partners. The report represents the first comprehensive assessment of the Ethiopian mining industry, examining the primary opportunities and challenges for growth and transformation in mining, while also providing an initial analysis of policy options for Ethiopian decision makers.

“In today’s global village the Ethiopian government by itself cannot overcome the challenges facing the mining sector,” said His Excellency Ato Tolosa Shagi, Minister of the Ministry of Mines, in his opening speech during the forum. “Therefore, we would like to underpin our co-operation with development partners and best performing countries in the areas of building up the indigenous expertise with more emphasis in regulating the mineral and oil and gas resources to properly administer contracts as we are dealing with nonrenewable natural resources.”

The WBG is providing technical assistance to the Ethiopian government to support them in translating the recommendations of the report to build a competitive, predictable, and responsible strategy, legislative and institutional framework for the Oil, Natural Gas and Mining industry. This will allow the Ethiopian government to conclude better deals for the extraction on their oil and mineral resources in a way that maximizes the benefits to the country, reducing the risk of costly or politically difficult remediation at later stages. It is supported by the Extractive Industries Technical Advisory Facility (EI-TAF), a demand driven multi-donor trust fund. The EI-TAF will be launched in the beginning of 2015 and will help to structure extractive industry development projects and related policies.

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RELATED

WORLD BANK

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• Document: Strategic Assessment of the Ethiopian Mineral Sector
• Document: Extractive Industries Forum: Ethiopia’s Growth and Transformation and its Extractives Industries Sector Forum Report
• Slideshow: Ethiopia’s Growth and Transformation and its Extractives Sector
• Video: Making Ethiopia´s Resource Wealth Contribute to Poverty Reduction
• Event: 2014 Ethiopia Extractive Industries Forum

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Sourced here  http://www.worldbank.org/en/news/feature/2015/01/26/ethiopia-extractives-mining-strategic-assessment-mineral-sector

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China firms building new 700km railway in Ethiopia

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ADDIS ABABA -

Ethiopia expects to open a new railway line linking the capital Addis Ababa with the Red Sea state of Djibouti in early 2016, a project at the centre of plans to create new manufacturing industries, the head of the state railways said.

The 700km line is being built at a cost of US$4 billion (RM14.47 billion) by China Railway Engineering Corporation (CREC) and China Civil Engineering Construction (CCECC).

Ethiopia is seeking to have 5,000km of new lines working across the country by 2020.

“By October 2015, a considerable portion of the Addis Ababa-Djibouti project will be finished,” said Getachew Betru, chief executive of the Ethiopian Railways Corporation, adding that trains would run soon after. “We will start early 2016.”

In addition to the Djibouti line, two others are being built across the country which are among a range of big infrastructure investments that also include new roads and dams to produce hydro-electric power.

In a bid to keep the economy expanding at the 8% or more it is already achieving, the nation of 96 million people wants to become an African manufacturing hub, offering investors efficient transport, plentiful labour and cheap power.

In the capital, a new US$475 million light railway system will be tested in the next few weeks before scheduled services start. It will be the first city metro to operate in Sub-Saharan Africa.

Among the new national railway lines, one will connect the region of Afar, where Ethiopia is encouraging the mining of potash for fertiliser, to Djibouti, the main export point for land-locked Ethiopia. Canada’s Allana Potash Corp is among the firms developing mines in Afar.

Most Ethiopians still depend on subsistence agriculture, but the country is building a textile and garment industry, produces shoes, assembles cars and trucks and other products. It is drawing some investors from China and India, where wages are rising.

For now, logistical difficulties such as poor roads and an old fleet of trucks mean transporting goods from the capital to Djibouti can take days. The new railway line will cut the journey time to about eight hours.

“It is a game-changer for us,” said Getachew. “It will be one of the most vibrant economic corridors in the world.”

http://www.therakyatpost.com/business/2015/01/29/china-firms-building-new-700km-railway-ethiopia/

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Premier Urges Chinese Companies to Engage in Building Industrial Zones, Parks

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Prime Minister Hailemariam Desalegn invited Chinese companies to participate in the building of industrial zones and parks in Ethiopia.

During the discussion he held with the Special Envoy and Vice Foreign Minister of China, Zhang Ming, the premier said the Ethio- Chinese cooperation in aviation, railway infrastructure building, road construction, poverty reduction and industrial development is vital for Ethiopia’s development.

He particularly noted that the participation of Chinese companies and investors in the building of industrial zones would contribute a lot to Ethiopia’s industrial development.

The PM also urged Chinese companies to engage in potash development and benefit themselves as well as Ethiopia.

The government of Ethiopia would provide support to Chinese companies that engage in the various sector, the Prime Minister pledged.

Hailemariam finally appreciated the support of China to IGAD in its effort toward stabilizing Eastern Africa and particularly South Sudan.

China’s Vice Foreign Minister Zhang Ming said on his part the bilateral ties between Ethiopia and China have shown tremendous growth last year.

According to him, the leaders of the two countries have set long-term plan to further strengthen the friendship of the states.

The relationship of China and Ethiopia has been growing fast after the signing of a comprehensive cooperation agreement in 2003.

http://www.ena.gov.et/en/index.php/economy/item/311-premier-urges-chinese-companies-to-engage-in-building-industrial-zones-parks

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Dangote Says Nigeria Will Become Africa’s Number One Urea Exporter By 2017

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VENTURES AFRICA- World’s richest black person and President of the Dangote Group, Alhaji Aliko Dangote says Nigeria will be the largest exporter of urea in Africa by 2017.

He made this declaration during an interactive session between members of the organised private sector and the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, concerning global oil prices in relation to Nigeria’s foreign exchange market.

“Nigeria will be the biggest exporter of urea in Africa by 2017. Most of these plans are in the pipeline,” said Dangote, who is building a 2 billion dollar fertilizer plant in the country’s Edo State. He urged all members of the private sector present to support the government’s approach to diversifying the economy. Urea is an inexpensive form of nitrogen fertilizer with an NPK (nitrogen-phosphorus-potassium) ratio of 46-0-0.

Dangote noted that the recent global crisis has made the need to refocus on ways to further develop the Nigerian economy more dire. He described it as an opportunity for stakeholders in the country’s economy to sit down and discuss about how to diversify the economy and encourage more exports, “because that is the way we should be going instead of going to the Central Bank of Nigeria every day to buy forex”.

The rate at which the Nigerian population is growing, it is projected to hit 210 million by 2020. This will therefore be a great opportunity to promote exports and expand the economy.

In response to a statement made by the CBN governor that sugar is one of the items importers always seek forex to import, Dangote had this to say: “I can assure you that in the next four years, you will not allocate forex for sugar importation.”

He then concluded that boosting productivity is paramount to the strengthening of the economy. With the plans on ground, Dangote expects the country to become the highest seller of foreign exchange by the first quarter of 2018. “Our plan now is to start exporting most of our other products.”

http://www.ventures-africa.com/2015/01/dangote-says-nigeria-will-become-africas-number-one-urea-exporter-by-2017/

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Betting on Sub-Saharan African Currencies: What African Currencies to Sidestep

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VENTURES AFRICA – The boom is still going in sub-Saharan Africa. Sovereign bond issuance hit record highs in 2014 and now investors are speculating on currencies. But weakening commodity prices and widening domestic deficits are currently hurting certain currencies (with little relief imagined in the near term for some countries).

This week’s article highlights the top five currencies to avoid in the near term:

 

Ghanaian Cedi

The decent of the Ghanaian Cedi is well documented in 2014. The currency was the continent’s worst performing currency in 2014, plummeting 26% against the dollar. The country fiscal policy has been lax, as emphasized by the IMF’s initial commentary following Ghana’s request for a $1.5 billion bailout as part of greater stabilization plan. The country’s budget deficit of 10% of GDP in 2013 is a manifestation of a country that is struggling to meet cost-cutting and revenue-boosting goals promised to the IMF. The country was once hailed as an up and coming economic giant. But the government is struggling to capitalize on a pseudo tax break from low oil prices as a net importer. It has not escaped the pain of falling commodity prices as the country stalls in its efforts to boost the mining sector. All indications from the IMF and the country’s leadership point to efforts to turn the corner. But changing a lax financial culture and waiting on commodity prices to increase does not lend to a promising outlook for the Cedi in the near term.

Zambian Kwacha

Zambia’s commodities industry is still booming despite a drastic slide in copper prices. But the question remains for how long the industry can survive the decent. The Zambian currency is a good indication that things are challenging in the current environment. As the price of copper dropped nearly 20% between the end of January 2014 and the end of January 2015, the Zambian Kwacha nearly dropped a staggering 18% against the dollar. The government took aggressive measures to combat dollar growth and popularity within the country in 2012 when it banned the use of the US dollar for domestic transactions and in 2014 when it added a regulation that forced businesses to remit foreign currency profits back home into local currency. The efforts have achieved little in protecting the Kwacha. It is hard to bet on the Kwacha despite the government’s desire to do something better to protect the 12% growth in financial services from 2014. Also what will a new president mean for the country’s economic policies going forward?

Nigeria Naira

The fall of the Nigerian Naira began in early May after the kidnapping of the 2000 Nigerian girls and the #BringBackOurGirls campaign around mid- to late-April. If a political miscue in the government’s response to Boko Haram’s acts of terrorism created the initial bad taste in investors’ mouth, the fall in the oil price was a bitter addictive to economic brew in the country. The currency tumbled 13% in the last six months as the Brent crude oil price nearly plunged a remarkable 58% in the same time period.  The government is limited in options as timing is a huge factor. First, the 2015 proposed budget was based on a revised benchmark oil price of $65 per barrel, which is 32% higher than the current price. Elections are in February and politicians naturally must play to the masses than to actual needs of the economy at hand. Accordingly the Nigerian Central Bank appears prepared to hold interest rates around 13% and stall a necessary increase until after the presidential election. The myriad of timing constraints and the overall oil environment does not bid well for the currency of Africa’s biggest oil producer.

South African Rand

Africa’s second largest economy struggles mainly from internal disruption as the African National Congress’s reelection has not reenergized the economy. Foreign investors continue to call for structural changes within the South African market. The country relies heavily on the mining sector but relationships with mining companies has slowly deteriorated due to employee strikes, reactive government policies and responses (that often frustrate mining companies), and an all-inclusive rising cost of doing business in the country. Low GDP growth expectations and a fall in commodity prices are further deterring factors for betting on the South African Rand. The Goldman Sachs Commodity index dropped more than 40% in the last six months and the South African Rand – unable to fight the tailwind – fell 10% in the same period. Little is coming from the government and the market to suggest a change in the near term.

Uganda Schilling

The Ugandan shilling sadly is an easy currency to target for this list with its current start to 2015. The currency has fallen almost 4% since the start of the year in addition to the approximate 11% it fell against the dollar during 2014. This year’s early fall is due to a drop in coffee exports and a widening trade deficit. The country should currently benefit from lower oil prices as it receives pseudo tax break as a net oil importer. But these low prices similarly work against the country’s desire to expand its oil sector. A Brent crude oil price below $50 provides little incentive for foreign investors to invest directly in the oil industry in the country or invest in sectors that would support the oil industry.  The tourism sector has also missed its targets as potential tourists are scared by increasing safety concerns in East Africa and the country’s decreasing patience for particular groups of individuals within its border (including gays).

 

Positive outlook but tricky downside dynamics

 

Mozambique Metical

Betting on Mozambique is betting on a booming giant. But the country is budgeting on the potential of a gas bonanza in the future. Yet the gas price is not working in its favour, particularly at a time when the country requires a great amount of infrastructure investment. The price has not been above $6.00 since February 2014. A new norm was assumed by mid-2014 in $4.00 range but now prices sit below $3.00, equating to drastic 37% drop in the last two months. Then why bet on Mozambique? The country has investors heavily locked into infrastructure projects that it can still support from a large pot of foreign aid. Running a large deficit is less a faux-pas in economic management as foreign donors remain adamant in their support of the country.  All indications from donors suggest that financial support will remain, especially after a successful presidential transition, and that the government is intent on seeing infrastructure projects to fruition. Those commitments and the potential for a rebound in gas prices suggest that the Mozambican metical is priced cheaply and has nice upside, even if it may take a while. But no one knows how long “a while” may be and, as one big former investor in the country described it, delays in project completion should easily be anticipated, undercutting the upside in the near term.

Ethiopia Birr

Ethiopia arguably should be a benefactor in the current oil and gas environment. Government insiders suggest that the country could save $500 million on refined petroleum imports in the current environment. However that number is exaggerated as it does not account for the potential volume increase of imports. Regardless of the volume considerations, the country has a pseudo tax break from lower oil prices and is prepared to use it to further invest in infrastructure to support other sectors, especially manufacturing, and boost Ethiopian exports. Exports should benefit from lower transport prices. But, as the government continues to warn us, these numbers are all things considered except any “major disasters.” Local sentiment is that the government could devalue the currency again to boost its exports (and consequently devalue the wealth of local individuals in one night). In other words, it is hard to bet on a currency that (1) locals fear could be devalued by the government, (2) could immediately suffer once oil prices rebound, and (3) endures in a very strict foreign exchange environment.

http://www.ventures-africa.com/2015/01/betting-on-sub-saharan-african-currencies-what-african-currencies-to-sidestep/

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Allana Potash Developing Low Cost Potash In Emerging Markets In Africa

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Allana Potash Site in Ethiopia 

January 26 – 2014

Developing a potash resource in the middle of Ethiopia where the temperature remains a steady 40 degrees Celsius all year round is a process. Allana Potash Corp. (T.AAA) knows it has a substantial resource but it also knows that lining up the financing to bring the resource to market is critical.

We spoke to Farhad Abasov, President and CEO of Allana as he swung through Vancouver on an investor road show which took him to Toronto, New York and Chicago. We’d last spoken with Abasov in February when Allana announced its strategic alliance with Israel Chemicals Ltd, a deal which brought both investment and expertise to the Ethiopian project.

When last we spoke to Abasov the world’s potash markets were in some turmoil but this seems to have calmed. “The potash market has stabilized somewhat.” said Abasov, “We’re seeing price stability and supply discipline. The global price of MOP(muriate of potash or the standard potash applied to staple crops such as corn, etc.) is between $US300 and $US350 a tonne. High cost producers are reducing production which is creating a more balanced supply demand situation with the price stable.”

Against that background, Allana is performing optimization studies on its Ethiopian property. These studies and the general progress including financing for the project were announced in a press release November 5, 2014. (link)

“Our potential lenders required that we do extra work to provide comfort on the various elements of the project.” explained Abasov.

The first concern was the suitability of the aquifers Allana would be using for its solution mining operations. The solution mining process means that Allana will dissolve the potash underground and then pump brine to the surface where it will be placed in solar evaporation ponds. There’s where the 40C year round temperature does its magic.

“The first concern is the water supply. The lenders wanted comfort on the local aquifers that supplied the industrial water for our solution mining process. We have done aquifer stress tests on the flow and recharge rates. We needed to ascertain that the recharge rate was sufficient. On the water side we’ve had no surprises. The rates are quite good.”

The second area in which the lenders were seeking comfort was on the issue of scalability. “We had done work on a 40 meter sized solution mining chamber for our initial Feasibility Study, but the commercial scale production chambers will be 80 meters in width. So we needed to demonstrate that this larger size was achievable. Our work confirmed that is was.”

As the work on the project continues Allana is also deeply involved in the creation of the infrastructure required to get the potash to market. Here the focus is on the construction of a port facility in the region of Tadjoura in Djibouti. The construction of the port is on schedule with completion set for 2016. As well, a road linking the port to Ethiopia is set for completion in 2015. These key infrastructure elements are being completed by the respective government agencies in charge in both Ethiopia and Djibouti.

“We will process the potash at a plant on our site.” explained Abasov, “Then it is trucked to the port. We’ll be building our own low-cost handling/storage facilities in the port itself.”

Allana sees the market for its production as East Africa itself. “We want to create new demand with in the region. East Africa itself could use 300,000 to 400,000 tonnes per year with another 100,000 tonnes going to the rest of Africa. The remainder of our production could go to South East Asia.” said Abasov.

At the same time as Allana is working on conventional potash, it is also in the midst of doing a Preliminary Economic Assessment (PEA) of the higher valued Sulphate of Potash(SOP) potential at the site. “The Kainitite-rich brine we will eventually be producing is unique because it will already have sulfide in it. We are investigating how best to process it and if it is possible to produce SOP from it at a very low cost.” said Abasov. Producing SOP is very attractive as its current price in China is $US600 per tonne as opposed to $300 to $350 a tonne for conventional potash (MOP).

Corporately, Allana is looking to enhance its debt package. At this point it has development banks with significant experience in Ethiopia lined up to provide financing, but Abasov would like to bring on commercial banks as well. To that end Allana is in discussions with a number of large European banks. “We want to max up the debt side,” said Abasov, “because we want to avoid common shareholder dilution.”

At time of writing Allana is trading at C$0.31 with 325 million shares outstanding and a market cap of C$100.8 million dollars. Allana trades on the TSX under the symbol “AAA”.

https://theafrikamarket.com/2015/01/26/allana-potash-developing-low-cost-potash-emerging-markets-africa-allana-potash-developpement-faible-cout-de-potasse-dans-les-marches-emergents-en-afrique/

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Equity firm to inject capital in major hospital

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Ascent, an equity firm based in Nairobi, Kenya, with an office in Ethiopia, is going to sign a final deal to pump additional investments in a company involved in the health sector.

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Officials of the company however declined to reveal the amount of money or the name of the health institution. Michael M. Selassie Principal and Country Director of Ascent for Ethiopia told Capital that his firm will finalize the deal in the coming two weeks. “We have a confidentiality agreement, so we will not tell the amount we are injecting or the name of the company, however we will announce the deal in two weeks,” Michael said.
He also mentioned that another deal is in the pipeline, which will be finalized in the coming three to four months. He also refrained from stating the company and the money they are going to inject.

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According to the partners of the private equity fund Ascent, the firm will be looking to pump money in small and medium enterprises (SMEs) across the East African region. The firm raised USD 50 million recently to be invested in enterprises in Kenya, Uganda and Ethiopia. The firm also announced that it will provide hands-on expertise to businesses pursuing long term growth ambitions under the Fund’s 10 year lifespan, which literally converts so that it will sell back the shares it bought after 10 years.

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The firm also announced that it will focus on the manufacturing sector that produces fast moving consumer goods and service businesses. Other areas of interest include medical services, distribution operations, oil and gas plus Information and Communications Technology (ICT) sectors.
While high population growth of 3.2 per cent per year and proximity to large neighbouring markets like South Sudan and the Democratic Republic of Congo (DRC) has created big opportunities for fast moving consumer goods like soft drinks in Uganda and more sophisticated industrial operations bases in Kenya that have equally attracted investors keen on efficiency and stable returns on investment, according to various media outlets.
The Fund offers a 20 percent return on investment per year while transaction sizes range between USD 2 million and USD 10 million.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4881:equity-firm-to-inject-capital-in-major-hospital&catid=35:capital&Itemid=27

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Ethiopian officials learning Korea’s food reserves policy

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Ethiopian government officials are studying Korea’s farm policy and know-how in securing food reserves efficiently, Seoul officials said Tuesday.

The African country dispatched a delegation of high-profile officials to Korea, seeking inputs to deal with food security issues, according to the Ministry of Agriculture, Food and Rural Affairs.

The eight-member delegation, led by Mirafe Marcos, chief of staff of the Agricultural Transformation Agency, and Misrak Mamo, director general of the Strategic Food Reserve Agency, arrived on Jan. 25 for a weeklong discussion on managerial system and technology for food reserves.

Establishing an efficient food reserve system has been one of the key agendas of the Ethiopian government, according to food security experts, as the lack of sustainable food reserves has threatened the country’s food security. According to a 2013 report by the Swiss-based NCCR Trade Regulation, the core challenges of Ethiopia’s food security stems from poor distribution and policies.

“We were requested (by the Ethiopian counterparts) to share Korea’s know-how in increasing the efficiency of strategic food reserve policies, especially by fostering a strong partnership between the state and local business entities,” the Agriculture Ministry said.

“The event marks the first time Korea is sharing its provision of the food reserve system with a foreign country,” the ministry added, pointing out that both parties will hold a meeting Wednesday to primarily cover the (Korean) state control on strategics grain reserves.

The Korea-Ethiopia agricultural cooperation is supported by Korea’s International Development Cooperation, led by the prime minister. The IDC is currently engaged in partnership with 26 developing countries, including Ethiopia, to promote sustainable economic development on the global level.

http://www.koreaherald.com/view.php?ud=20150127000922

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Private sector discusses energy policy

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The Ethiopian Climate Innovation Center held a round table session with the public and private sector to discuss the opportunities and risks of private investment in Micro-Hydro Power (MHP) development.

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A research paper on the topic presented by Dr. Paulos Chanie says the private sector has not gotten involved in micro-hydro energy development for transmission and distribution of power to non-electrified areas in the country or selling it to the national grid as much as it could.

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According to the research paper, for the private sector to get involved it needs finance, technical knowledge and more attractive policy.
Several questions were raised during the discussion such as what kind of policy changes would be needed and how small and medium enterprises (SMEs) can obtain financing for micro-hydro projects.

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According to Paulos Chanie, so far there are no clear and focused institutional arrangements to facilitate and regulate the involvement of the private sector in the generation of power from MHP and the possibility for transmitting and distributing it either through a mini-grid or national one.
The research provided policy recommendations such as expediting the enactment of the feed-in tariff policy, which was drafted in2009 and still is under revision weaknesses, the need for highly centralized policy making the process easier. It also recommended getting stakeholders to participate and for tariffs and administrative procedures to be changed to favor smaller investors.

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The Ethiopia Climate Innovation Center (ECIC) is an organization that supports Ethiopian small and medium enterprises (SMEs) that are trying to address climate change challenges. It aims to accelerate the development, deployment and transfer of climate technologies by providing SMEs a set of holistic country-driven support services, such as financing and capacity building.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4879:private-sector-discusses-energy-policy-&catid=54:news&Itemid=27

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PetroChina in running for Ethiopian tender for gasoline, diesel –sources

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SINGAPORE Jan 29 (Reuters) - Ethiopia’s tender to buy up to 180,000 tonnes of gasoline and diesel for delivery over March to August could be awarded to either Emirates National Oil Company (ENOC) or PetroChina, industry sources said on Thursday.

This is the first time PetroChina has participated in a tender to supply oil products to Ethiopia, traders said, a sign that Chinese state-owned companies are aggressively trying to market surplus oil products from the country.

Ethiopian Petroleum Supply Enterprise (EPSE) was seeking 40,000 to 60,000 tonnes of 91-octane gasoline and 80,000 to 120,000 tonnes of 500 ppm sulphur gasoil for delivery into Djibouti.

PetroChina placed the lowest out of three offers at a $5.75 a barrel premium above Middle East quotes for the diesel cargo and $6 a barrel premium for the gasoline cargo, one of them said.

The credit period it offered for the tender was 150 days.

ENOC’s offer was slightly higher at a $6.50 a barrel premium for the diesel cargo and $4.72 a barrel premium for the gasoline cargo. But it offered a longer credit payment period of 186 days, the source added.

Kuwait’s Independent Petroleum Group made the other offer.

The tender is expected to be awarded later on Thursday, sources said.

EPSE has an existing term contract to buy 1 million tonnes of gasoil, 45,000 tonnes of gasoline and 120,000 tonnes of jet fuel for 2015 with Vitol, traders said.

http://af.reuters.com/article/ethiopiaNews/idAFL4N0V84FI20150129

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Lethal Maize disease outbreak to cut output significantly

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A disease that infects corn has been found in Oromia and Southern Regional States, has the potential to cause a great deal of harm. Maize Lethal Necrosis Disease (MLND) which was first detected in Kuria, Western Kenya is a crop disease that infects and kills maize (corn).

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It first surfaced in Kenya in 2011 and since has spread to Tanzania, Uganda and Rwanda. Now it is threatening parts of Ethiopia.

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After the disease is identified agricultural experts have been travelling to Kenya to assess the damage done by the disease to learn more about it. A series of meetings have also been held to tackle the disease.  MLND produces a rapid synergistic reaction that severely damages or kills infected plants. If the infected crops are left untended, the virus continues to spread to nearby farms via insects. These pests are tiny and spread so quickly that this disease has the potential to cause widespread devastation to maize crops. MLND poses a serious threat to rural livelihoods and food security. Farmers have been told by the Agricultural Ministry to be on the look-out for corn that has a dead heart at the growing point, abnormal colours or patterns on leaves that are often yellow or necrotic; moldy seeds or stems that are stunted or have died back.

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In Ethiopia the disease was first observed in the Rift Valley.  Extension workers are now being sent out to tell farmers to use certain chemicals to eliminate pests that might spread the problem. An expert with the Ministry of Agriculture told Capital that the disease might significantly reduce the annual yield.  One farmer in Oromia said,  “I saw a unique feature last July on my maize and now I lost 300 quintals in three days.’’ The Ministry says they are trying to alleviate the problem by sending seed inspectors to check for Maize lethal necrosis disease (MLND) in seed farms.  Alemayhu Kibert, an agronomist said that the government initiation must be strengthened to avoid catastrophe due to the new disease. “Maize is hugely consumed in different form in Ethiopia especially in southern region, and if the disease spreads, it will threaten our food security that we have been seeing a good result in the past ten years” he said. In the last budget year 253 million quintals of maize was produced which is an increase of 21 million quintals from the previous year.

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The best approach for the management of MLND is to employ integrated pest management practices encompassing cultural control such as closed season, crop rotation and crop diversification, vector control using seed treatment followed by foliar sprays, and host-plant resistance, according to the Ministry. It is necessary to use good field sanitation methods, including weed control measures to eliminate alternate hosts for potential vectors the ministry advised.  In Kenya, varieties are being screened for resistance and tolerance and Ethiopia’s Agricultural Ministry says they are inspecting corn at the border to prevent infected maize from coming into the country.  In 2013, Ethiopia’s tomato production was severely affected by Tuta Absoluta, commonly called Tomato Leafminer (TLM) moth. This disease was suspected to have come from Yemen and entered into Ethiopia via the northern part of the country. TLM spreads fast into major tomato producing regions including Oromia and Somali Regional States jeopardizing 50 to 60 percent of the country’s total tomato production.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4883:lethal-maize-disease-outbreak-to-cut-output-significantly-&catid=54:news&Itemid=27 

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 Somalia Takes One Step Further Towards Stability

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VENTURES AFRICA – The United Nations Special Representative of the Secretary-General for Somalia, Nicholas Kay, has welcomed the announcement of the nomination of a new Federal cabinet by the Prime Minister of Somalia, Omar Abdirashid Ali Sharmarke, on 27 January 2014. “This announcement is an important step towards the establishment of a new cabinet,” Special Representative Kay said in statement released by his office.

Somalia has, for over a two decades, been rocked with violence from civil war and terrorism which led to the collapse of state institutions. But the failed state is gradually regaining some shape with the forming of a Federal Government in 2012, the first permanent central government in the country since the start of the civil war. The nation has concurrently experienced a period of intense reconstruction, particularly in the capital, Mogadishu.

Kay said once the cabinet is approved by the Federal Parliament, the Federal Government will need to address urgently Somalia’s state and peacebuilding goals. “Much remains to be done to complete Somalia’s Vision 2016,” he said. “The Federal Parliament has an important and urgent role to play in passing key legislation and establishing the remaining independent commissions foreseen in the provisional constitution, particularly the National Independent Electoral Commission.”

Kay also urged for a spirit of compromise and reconciliation among the differing factions in the country. Two days before the UN Rep’s call, a leader of Somalia’s Islamic extremist group, al-Shabab, announced Tuesday that he has quit the insurgency and renounced violence perpetrated by the al Qaida-linked group. Zakariya Ismail Hersi, who was al-Shabab’s intelligence chief, called for reconciliation while speaking to the media for the first time since his surrender to Somali authorities in late December.

http://www.ventures-africa.com/2015/01/somalia-takes-one-step-further-towards-stability/

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By FASIKA TADESSE
FORTUNE STAFF WRITER

He has been ploughing on his four qert, equivalent to one-hectare of land for the past 34 years, but he started using improved seed since 2005.

He sowed Kuncho, an improved teff variety, BH-660, an improved maize variety and Guna, an improved wheat variety. He is happy with the production yield he gets from the improved seeds. Despite that, he is always disheartened by the difficulty in the process he runs into when acquiring the seeds.

To get the seeds, he follows the procedure that is commonly practiced by all farmers across the country. Development Agents (DAs) take note of the type and quantity of improved seeds each farmer needs, an information which eventually reaches the seed enterprises. And when the seeds come, they will be distributed through the cooperatives.

Yaregal gets the seeds he needs for each season from Raqat Farmers Cooperative, one of the 160 cooperatives which get improved seed supply from Merkeb Union. Merkeb distributes the seeds for the cooperatives, which is sourced from Amhara Seed Enterprise, based on a quota set by the regional agriculture bureau. And that quota does not fulfil the farmers’ need.

During the last seeding season, Yaregal was only able to get a bag of maize seed which weighed 12.5Kgs and cost 500Br, which he had to share with three other farmers.

“The whole bag should only be used for 0.5ha of land,” said Yaregal.

These farmers had to buy three more bags from private seed producers for 600 Br each.

According to some data only eight percent of farmers in Ethiopia are using improved seed.

With a population of over 90 million people, Ethiopia is an agrarian country. Agriculture accounts for 46.6pc of gross domestic product (GDP) and 90pc of exports but the sector is not well developed mainly caused of limited use of improved seeds, fertilizers and pesticides, and less crop yields, according to a 2013 report from Feed the Future, a global hunger and food security initiative of the United States government.

Farmers using improved seeds could see substantial increases, over 60pc in maize production, while wheat and other self-pollinating crop varieties could increase by 30pc. Overall, there is potential for an increase of seven million tonnes per year, according to data from the Agricultural Transformation Agency (ATA).

To improve the use of improved seeds, MoA has a responsible body led by Agricultural Input Supply Director, which oversees the distribution of Agricultural inputs for farmers such as Yaregal. The Ministry works on development and distribution of the improved seeds with universities, research institutes, Ethiopian Seed Enterprise (ESE) and three regional seed enterprises in Amhara, Southern Nation, Nationalities & People Region (SNNPR) and Oromia Regions. The enterprises distributes the seeds along with the universities and research institutes produced for the unions who distribute it to the farmers through cooperatives.

The ESE, formerly known as the Ethiopian Seed Corporation, was established in 1978 to produce and distribute improved varieties of seeds under the Ministry of State Farms. Currently, it is accountable to the MoA. It was joined by the three regional enterprises four years back. Tigray Region is also working on the establishment of its own enterprise that is expected to join the others soon.

Since 1980, the MoA registered a total of 907 improved crop varieties, of which 332 are cereals, 179 pulses, 82 oil seeds, 172 varieties of tubers, roots and vegetables, 36 varieties of fruits, 27 medicine condiment plants, 20 variety of forage & pasture, 23 fibre crops, and 36 stimulant varieties. But not all of them are distributed for the farmers as some of the varieties are obsolete because of productivity decline and diseases, according to a data from the MoA.

For the improved seeds, the Ministry provided three types of seeds for the seed enterprises and independent seed producers. Breeder, Pre Basic and Basic Seeds are the types and processes of seeds until the certified seeds are produced by government and private seed producers to distribute to household farmers, according to Endale Gudeta, higher expert on seeds at the MoA.

Before reaching the hands of Yaregal, the improved seeds pass through a process that starts at the MoA, them goes to seed enterprises, then to unions and cooperatives, having an average price range of 1,450 Br for maize, 767 Br for wheat, 802 Br for barley and 1,188 Br for teff. These seeds are also categorized into two, cycle one (C1) and cycle two (C2). C1 is a seed directly from the seed enterprises or private seed producers, which can be used for three consecutive seeding seasons while C2 is a seed collected from a farm harvested with certified seed sand can be sowed for two years in row.

“But informally, the farmers use C3 seeds, which is not advisable by the Ministry,” said Endale.

Edossa Dadi, a farmer, from Ambo, in West Shoa zone of Oromia is one of the farmers who faces a problem of getting the seed variety he wants. He ordered Huluqa variety wheat seed through the DAs, but he was told he cannot get the variety from the stating that they do not have it and recommend to him that he change to another variety of seed, which he did not want to consider as an option.

“I will buy C2 or C3 seed of Huluqa variety from other farmers,” he told Fortune.

Unlike Edossa, who prefers to buy deteriorated seed following shortage of improved seed, some farmers like Sisay Meshesha, from Bokoji Limu and Bilbilo Wereda have formed an association that is named Limu Dima Improved Seed Producers Cooperative to avoid the problem by preparing seeds themselves. But they cannot fully escape from the problem as they are currently facing problems in getting basic seeds to produce certified seeds, according to Sisay.

Contrary to the farmers’ complaints of the inaccessibility of improved seeds, the amount of seed, which is left over from distribution, has been increasing significantly during the last four years. The amount of seed that was not distributed to the farmers in 2010/11 fiscal year was 270,476ql but it had increased to 378,216ql the following year. The amount went even higher in 2012/13 to 759,454ql but slightly declined to 549,474ql during the last fiscal year.

At the same time, the demand and supply of the seeds equally increased in the same years the left over seed sum increased. In 2010/11 the supply of improved seeds increased considerably from half a million quintals to 1.2 million quintals, after 10 years of stagnation.

The officials of the MoA give three main reasons for the increasing amount of left over seed, including farmers’ preferences, which are always changing, unexpected weather change occurring before the seeds are distributed to farmers, which forces them to sow normal seeds, and late delivery of seeds by farmers who grow improve seeds under contracts from the seed enterprises; these farmers, called out-growers, are paid 15pc premium by the enterprise.

“Our main challenges are the out-growers who deliver the seeds too late for the seeding season, leading to accumulation of stock for the next seeding season,” Endale said.

Every year before entering of the seeding season Development Agents, those are assigned to assist farmers, collect the amount and type of seeds the farmers’ want and send it to the seed enterprises who prepare the seeds.

Tadesse Dessalegne (PhD), technical coordinator of East African Agricultural Products, a research institute established by Ethiopia, Kenya, and Uganda for Regional Centre of Excellence, cited poor demand assessment made by seed producers, to identify which type of seed is needed in which areas, is the major reason for the increasing amount of left over seed.

“Many varieties of seeds that are produced at the enterprises are demanded less by the farmers,” he said.

Merkeb Union was forced to store 14,400ql of improved seed until the coming seeding harvest season because of the above problems. It had prepared 25,000ql of seed to distribute to the farmers in the last fiscal year but it only managed to sell only 10,600ql. That led them to planning to sell the remaining seed for the coming harvest seeding season by reducing the amount of new supply they were going to receive, according to Migebaru Wube, general manager of Merkeb.

“The main reason for the left over seed is the distribution system,” according to Amsalu Ayano (PhD) director of Integrated Seed System Development (ISSD) Ethiopia, a project aimed to increase the use of improved seeds in Ethiopia with the financial support from the government of Netherlands and launched a pilot project which works on linking seed producers directly with farmers since 2011.

Cooperatives are less interested in selling the seeds as they are not getting good incentives from the government because they are service oriented and discouraged not to have a good marketing strategy to increase the number of farmers who use improved seeds, according to Amsalu.

Less than eight percent of farmers use improved seed in Ethiopia, according to a grain report by the United States Department of Agriculture (USDA) released in 2013. Even though the MoA claims the percentage of improved seed users reached 20pc stating the supply has been increasing by 15pc every year in line with the GTP.

The MoA projected to distribute 3.6 million quintals of improved seed in the 2014/15 seeding season while it has received a demand of 2.2 million quintals from regions, which declined by 0.5 million quintal from the previous year demand caused by the amount of unsold stored seeds at the seed enterprises, according to Endale.

As of September 2014, a total of 487,472ql of improved seed was distributed by the four seed enterprises and private seed producers. From the total amount, the highest sum went to Oromia, amounting to 171,154ql, Amhara got the second highest amount with 165,590ql, and Southern region got 126,864ql and Tigray got the smallest amount of improved seeds totalling 23,862ql.

From the main cereals improved seed varieties distributed in 2013/14, wheat holds the lion’s share with 1.5 million quintals, followed by barley having 284,000ql share, maize comes next with 249,000ql, and teff stands last with 226,000ql. During the last cultivation season, the country cultivated 12 million hectares of land with major crops with the expectation of obtaining 300 million quintals of yield, according to a data from the Central Statistics Agency (CSA) of Ethiopia.

On average, national yields of the main cereals, such as maize, wheat, barley and sorghum have increased at a faster pace, but still remains 45pc short of the global average.

Sisay feels a sort of frustration while he looks toward the coming seeding season. Members of their cooperative increased after non-member farmers realised members of the cooperatives are benefiting from the improved seed; so 100 additional farmers joined them in the last year, pushing their number of members to 200.

“We were highly challenged to meet the demand of improved seeds for the first 100 members, and I don’t think it will be easy for us to satisfy the new demand from the new members,” said Sisay.

For Amsalu, to avoid the challenges of those frustrated like Sisay and to decrease the left over seed at the cooperatives, the government should encourage the seed producers to sell their products directly to the farmers rather than selling through the cooperatives.

In addition, the MoA should encourage more business oriented private seed producers who can motivate the farmers to use seeds that the private seed producers sell. Furthermore, the government should conduct demand assessment researches to explore the actual demand for varieties receiving a demand aggregate date collected by the DAs, suggests Amsalu.

Sourced here  http://addisfortune.net/columns/the-improved-seed-irony/

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Fertilizer Blending to Begin in a Month at Four Plants Nationwide

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Specific areas will get specific fertilizer mix based on their soil type

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The Ministry of Agriculture (MoA) and the Agricultural Transformation Agency (ATA), together with four cooperative unions located in four regions are constructing four fertilizer blending factories that are expected to start supplying their products after one month.

The plants are being constructed by Gibe Dedessa Farmers Cooperative Union in Oromia Region, Merkeb Cooperative Union in Amhara Region, Enderta Multipurpose Farmers Cooperative Union in Tigray Region and Melek Site in Southern Nations, Nationalities & Peoples Region (SNNPR).

The construction of the blending factories was initiated by the first ever soil fertility study and digital soil fertility mapping project done in the 2013/14 fiscal year in 162 Weredas that revealed the soil in the country needed additional nutrients other than nitrogen and phosphorus.

The Ministry and the ATA found out that sulfur, potassium, boron and zinc nutrients are deficient in many areas which indicated that one compound fertilizer NPS and five blended fertilizers namely NPSB, NPKSB, NPSZnB, NPKSZnB, and NPSZn are needed to address the key nutrient deficiencies in the tested soils according to ATA’s 2013/14 report. Now the soil fertility survey of 350 Weredas is completed, but so far only the soil map for Tigray has been completed.

The Gibe Dedessa blending factory will avail its products to six western Oromia Zones including Illubabor Zone, Jimma Zone, Half of the western Shoa, and the four Zones of Wollega, according to Arebu Ali, Deputy manager of Union.

Through Ethiopian Soil Information System (EthioSIS) project, which undertook extensive demonstrations in 30,000 sites, both on farmers’ plots and at farmer training centers, the introduction of new fertilizers to the soil was validated.

The country, which has been using only di-ammonium phosphate (DAP) and Urea for the past 14 years, abandoned DAP and began importing a new fertilizer called NPS.

The blending factories are meant to increase the production and productivity of the farmers in the country through the supply of appropriate fertilizer to the soils.

Since 2003/04, productivity and production of cereal crops has increased by an annual average of 5.3pc and 9.1pc, respectively. Reports from the Central Statistics Agency (CSA) indicate that there is a 15.35pc increase in total cereal production over the past year, especially in teff, wheat and maize.

The national fertilizer blending program, that was launched by the signing of a memorandum of understanding (MoU) between the MoA and the ATA and Allana Potash Corp in 2013, has seen the first of the planned five plants in June 2014, which, together with the new ones, is expected to benefit 11 million farmers. It was built by a 1.2 million dollar grant from the USAID Feed the Future innovation, which has also given another four million dollars for improved inputs.

The blending factories will be administered under the respective unions and they will distribute their products to the farmers in their mandated areas through the cooperatives, according to Tekalegn Mamo (Prof.), State minister and ministries advisor of MoA.

“We will have more blending factories, which will supply their respective Weredas and Kebeles appropriate fertilizers depending on their fertility,” Tekalign told Fortune.

That, he says, will increase the productivity of the farmers.

For the five factories, including the one that is operational, five international managers were hired; one for each of the factories. The staff of the factories will be hired by the unions.

http://addisfortune.net/articles/fertilizer-blending-to-begin-in-a-month-at-four-plants-nationwide/

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INTERVIEW – Farming changes may hold key to Ethiopia’s industrial goals, says expert

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By Edmund Blair

* Higher productivity needed to free workers from land

* Industrial ambitions rely heavily on cheap labour

* Challenge to change practices used since biblical era

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ADDIS ABABA, Feb 2 (Reuters) - Ethiopia’s ambition to become a manufacturing hub may hinge on Khalid Bomba’s ability to transform small-scale farming just as much as it relies on new railways, roads and other more obvious signs of change in a nation once brought to its knees by famine.

The 46-year-old one-time investment banker is now chief executive of Ethiopia’s Agricultural Transformation Agency (ATA). His task is to boost output from a sector that employs 85 percent of the workforce, most of them tilling plots of less than two hectares.

“The cheap labour for industrial manufacturing is going to come from the rural areas,” he told Reuters in an interview at the Addis Ababa headquarters. “You are not going to have people coming off the farm if productivity levels don’t increase.”

Ethiopia boasts some of the highest economic growth in Africa, at 8 percent or more a year, much of it fuelled by a huge state infrastructure programme that includes a new railway to Djibouti’s port, a city metro in the capital and vast hydro-electric dams, all aimed at attracting industrial investment.

But agriculture still accounts for more than 42 percent of gross domestic product, high even in Africa. The level is about 30 percent in next-door Kenya. Yet, Ethiopia still has to import some basic foods to feed its population of 96 million.

The challenge for Bomba and his team at ATA, which launched in 2011, has been to work out better planting, fertilising and harvesting techniques, while ensuring adoption by farmers whose practices have sometimes barely changed since biblical times.

One of the first areas targeted by ATA was production of tef, a grain that is the main ingredient in Ethiopia’s national dish “njera”, a kind of sour flat bread. Yields at 1.2 tonnes per hectare were half or less that of other grains in Ethiopia.

“The way that tef has been planted and grown has not changed for hundreds, if not thousands, of years,” Bomba said. “The fact of the matter is that Ethiopia’s farmers had been planting too much seed.”

HABITS OF A MILLENNIUM

Typically, farmers scattered 30 to 50 kg of seed per hectare. But using just 3.5 to 5 kg, alongside planting in rows and using a particular seed variety, boosted output by 50 to 70 percent, said Bomba, who was born in Ethiopia, studied in the United States and Britain, and spent 10 years with JPMorgan investment bank.

Initially, just two farmers were willing to work with ATA, but take-up of the new practices has steadily increased. In 2014, 2.1 million farmers adopted the techniques, although the rest of 5 million trained were still too wary to employ them.

Rising output has driven down market prices of tef to the equivalent of about $60-$75 per 100 kg from $85-$100. Higher yields also mean farmers can switch some of their land to other crops or even grow a second crop of pulses on the same tef land.

Exports of tef, which are banned to avoid domestic shortages, could start on a small scale by the end of 2015 or 2016, Bomba said, although safeguards would be in place to protect local supplies.

Yields of wheat, maize and other crops have also improved. Wheat production has climbed almost 8 percent a year since 2006, and reached 3.9 million tonnes in the year 2013/2014, meeting more than 85 percent of domestic needs. ATA is also studying the nation’s soil to improve fertiliser use.

Reflecting the strong hand of state in other areas of the economy, spreading better practices has relied on a government network of 60,000 so-called “extension workers”, who help with training. ATA is also spreading ideas by mobile phone.

Just as Ethiopia’s industrial drive has drawn heavily on Asia’s experience, ATA was created after studying how nations such as Malaysia and South Korea grew. Bomba led that study when he was working at the Bill & Melinda Gates Foundation, a philanthropic organisation that still partly funds ATA.

Roads and railways were the “shiny objects” that often captured the world’s attention, he said, “but at the end of the day the backbone of this country remains the agricultural sector.”

http://www.trust.org/item/20150202143917-x0tex/

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Ethiopia may save USD 1 billion due to fall in oil prices

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Ethiopia could save a billion dollar due to the global oil price fall according to Zemedeneh Negatu Managing Partner of Ernst & Young.

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The significant decrease in oil price that has affected African countries either positively or negatively depending on whether they are oil importers or exporters was among several economic issues that were raised at the Emerging Africa Summit held at the UNECA on Thursday, January 29, 2015.

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“While the global oil price drop has affected different African countries in different ways, Ethiopia is one of those countries that is benefiting from it” he said.
“Ethiopia, which is an oil importer, will save at least a billion dollar if oil price stays below 50 dollars per barrel for the next 12 months, as it is speculated. And luckily for Ethiopia, the price of its main export item, coffee, has gone up significantly in the world market in different exporting seasons. In addition to that, the very successful bond the country had issued in the international financial market has drawn satisfactory returns. You can see that Ethiopia is one of those countries that is actually benefiting from the simultaneous collapse of oil price and the increase in coffee prices,” Zemedeneh said.

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Among countries that has been negatively affected by the oil price drop has been Nigeria which is an oil exporting country. “I was in Nigeria a month ago and there is a serious concern because the country is on the losing end of the situation. The issue needs to be analyzed based on who is importing what and who is exporting what, and that is how we actually should tell the African story of the impact,” Zemedeneh stated.

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Listing further positive circumstances Ethiopia is in, he also said that he expected the yields on the Ethiopian Eurobond to be fairly stable.
The opportunities and risks of investing in Africa were among the many discussion points that were raised at the Emerging Africa Summit that lined up several high profile speakers well known in the finance, investment and economic sectors.
“The development of the economy in Ethiopia is significant; the size of the population is amongst the highest in Africa. There is a big agricultural economy here with a huge amount of opportunity. There is a lot of interest on Ethiopia from a lot of investors,” stated Colin Coleman, Managing Director of Goldman Sachs South African Office.

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Coleman also stated that there is a significant amount of multinational and private equity firms who are interested in growing their African footprint. “The next 50 years in the world is going to be a very significant time for Africa and a real opportunity for the continent to make its mark in the world, in a way similar to China had done it 30 or 50 years ago,” he said.

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According to an analysis by Goldman Sachs, Sub-Saharan Africa incremental growth could add 12 trillion dollars to the world’s economy in the next fifty years. Nigeria would be a 4 trillion dollar economy and South Africa would grow to a 2 trillion economy from the current half a trillion economy both.
“There is a lot of dynamism in the technology space, in communication, retail, consumer and oil and natural resource trades. Regional integration is very important because the markets of the various African countries are too small by themselves to compete. Infrastructure is needed to make people, goods and services move across Africa more seamlessly,” Coleman has commented of assignments that lay before Africa’s growth.

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There is a growing interest in Africa from investors but that is not to say there are no risks, said Oumar C. Seydi, Director of International Finance Corporation (IFC) for Eastern and Southern Africa. “There is still perception gap. We also have significant challenges such as Ebola which we are fighting very hard to tackle. The legal regulatory framework also has challenges we need to work on. We also still have skill gap despite there being a lot of improvement, and this is also the place where we have the largest number of countries that are classified as fragile and conflict affected. These are challenges that we continue to face and must address but, overall, the trend is very hopeful,” Seydi stated. He also stated that Ethiopia continues to be the sleeping giant and the country can be far more successful given the significant prospects that are coming to the country.

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It was stated that investors need to keep in mind several things when exploring opportunities of investment in Africa. Among these is understanding that the continent is filled with countries with significant difference in their investment landscape. It was also stated that investors need to have an established presence to assess opportunities and get a clear view of the prospects within countries of their interest.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4900:ethiopia-may-save-usd-1-billion-due-to-fall-in-oil-prices-&catid=35:capital&Itemid=27

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Revolutionizing agriculture in Ethiopia: Dal to lead $18 million development project

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Approximately 80-85 per cent of the country’s population is employed in agriculture. The country has the largest livestock population in all of Africa, and agriculture contributes more than 40 per cent of the country’s total GDP. But the country is both heavily populated and economically poor — the second poorest country in sub-Saharan Africa, in fact. There’s widespread food insecurity, limited social support for and acceptance of women, and 30 per cent of the country’s 85 million people live on less than $1.25 US a day.

Improving Ethiopia’s economy and addressing the poverty of its people both depend a great deal on growth — in all meanings of the word.

For more than 10 years, Dalhousie’s Faculty of Agriculture has had strong collaborative partnerships with Ethiopian agricultural institutions, working together to increase the country’s agricultural capacity. Now, a new international development project will take those partnerships to a whole other level.

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Ethiopia, Russia to strengthen cooperation in trade, business

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Addis Ababa, 2 February 2015 - Foreign Affairs Minister Dr. Tedros Adhanom met with Mikhail Boganov, Special Representative of the President of the Russia Federation for the Middle East and Africa countries and Deputy Minister of Foreign Affairs of the Russian Federation on Friday (January 30).

The two sides discussed bilateral and political relations, and trade and investment partnerships between Ethiopia and Federation of Russia.

Boganov, who noted the historic ties between the two countries, and emphasized the Federation’s interests and concerns in Africa, welcomed Ethiopia’s role on the continent.

Following the recent visit of the Speaker of the House of Federation, Kassa Teklebirhan, to Russia, Boganov stressed the need to create partnership between the two parliaments.

He also underlined the need to widen trade and business cooperation and specifically mentioned Russian plans to become involved poultry and food security investments in Ethiopia as well as the expanding market for Ethiopian coffee in Russia.

Boganov also spoke of possible cooperation for training of personnel in various areas.
Dr. Tedros agreed that Ethiopia and the Russian Federation had an excellent and cordial relationship that should be encouraged and nurtured.

With regard to trade and investment, he felt that growth was slow compared to the potential.

In order to have a strong long term relationship it was important to let investment and trade have a key role, and Russian investment to Ethiopia should be increased. The possibility of promoting Ethiopia in Russian publications was raised.

Dr. Tedros suggested a new air service agreement could increase the number of Ethiopian Airlines flights to Moscow.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17380:ethiopia-russia-to-strengthen-cooperation-in-trade-business-&catid=52:national-news&Itemid=291

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ERCA manages to achieve 97.8 percent of its targeted tax collection

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The Ethiopian Revenue and Customs Authority (ERCA) announced a higher performance in collecting tax in the first half of the current budget year, according to a six months performance report.

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Early this week, the authority disclosed that it has gathered 64.66 billion birr in the past six months starting July 2014, achieving 97.8 percent of its target. The authority targeted to collect 66 billion birr in the sated period. Even though the six months performance was lower by 2.2 percent, it surpasses the performance of last year’s similar period by 21.2 percent.  According to the report, out of the total amount 27.6 percent is secured from direct tax, while 70.8 percent was generated from indirect tax.

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Efrem Mekonnen, Public Relation Head of ERCA, said that the authority has collected 36.6 billion birr (56.5 percent of the total revenue) from Inland Revenue and 28 billion birr (43.4 percent) from international trade. The authority has also earned 63.5 million birr from lottery issuance. ERCA which is mandated to collect the Addis Ababa city’s revenue has achieved 76 percent of the planned income.  The authority’s public relation head said that out of the 12.3 billion birr estimated to be collected from Addis Ababa city, 9.4 billion birr has been realized.

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Parliament has approved a federal government plan to collect 115.9 billion birr in the budget year, while ERCA planned to collect more, 134.2 billion birr.
In the stated period, ERCA has collected 69,715 new finger prints that increased the total deposit of collected finger prints to 2.5 million.
One thousand eight hundred seventy complaints have been submitted by tax payers during the six months and ERCA has given response to 98 percent (1,849) of the cases, according to ERCA public relation head.

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ERCA has included additional five companies on its ‘authorized economic operators (AEO)’ list increasing the number of authorized tax collection agents to 21 in the stated period. The authority also stated that in the six months ERCA has given 30 billion birr worth tax free incentive for companies that are mainly engaged in the manufacturing and agriculture sectors.

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The authority is one of the public offices that has high staff turnover. In the past six months, 904 employees left the authority. According to Efrem, over 88 percent of the employees left ERCA based on their personal interest, while three percent were fired due to misdemeanor. Sources said that insecurity is the top factor that drives out the employees. Fear of corruption allegation and lack of confidence are part of the reason for employees to flee from the authority.

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ERCA losses at least 1,000 employees annually, but it also hires larger number of new employees than the deserters.  In the first half of this budget year, it hired 2,158 new employees.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4905:erca-manages-to-achieve-978-percent-of-its-targeted-tax-collection&catid=35:capital&Itemid=27

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ZTE, ERCA settles income tax disagreement

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The disagreement between the Chinese telecom firm ZTE (H.K) Limited and Ethiopian Revenue and Customs Authority (ERCA) is settled after the government lifted the penalty and interest fee sanctioned on ZTE by the tax collector. ZTE has been requested by ERCA to pay about 920 million birr taxation arrears, however, the company turned down the request saying  the amount is very high than the actual tax it has to pay for the government.

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The Chinese telecom firm, that undertook the 1.7 billion dollar telecom expansion project in 2010, has been requested by ERCA to pay an income tax of 157 million birr with interest and penalty.

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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 an appeal by ZTE to the authority, the amount was reduced to 522 million birr. Yet ZTE has countered that the reduced amount was still high.
ZTE has admitted that it should pay 157 million birr in tax excluding penalties and interest.

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Public Relation Head of ERCA Efrem Mekonnen said that the company and ERCA have agreed to settle the disagreement.
ZTE had also appealed to the Ministry of Finance and Economic Development (MoFED) and the Prime Minister Office to bring a resolution to the contention.
According to Efrem, MoFED, which is the responsible body to lift the interest payment, has accepted ZTE’s claim and override the payment of the interest, while ERCA has also agreed to lift the penalty. “We have lifted the penalty on special consideration and ZTE has agreed to pay the tax within three years,” Efrem added. He explained that the company has started paying the cash on a monthly basis.

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Capital’s effort to find out the exact amount that ZTE will pay to the government in taxation is unfruitful as concerned authorities declined to give information.
Officials at La Gare branch of ERCA, who are responsible to examine such kind of cases, declined to give any statement on the issue.
ZTE officials also declined to comment on the issue.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4907:zte-erca-settles-income-tax-disagreement-&catid=54:news&Itemid=27

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French company to commence Addis Ababa city new sanitary landfill construction

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The French company,VINCI Grands Projets, is set to start construction of the 13,145,020 Euros Addis Ababa city new sanitary landfill.

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What If You Could IPO An African Country? These Are The Three To Bet On

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VENTURES AFRICA – Record number of firms in Africa are lining up for a potential initial public offering (IPO) in 2015. Baker & McKenzie, a leading law firm, said 30 firms were preparing to list this year. Last year, the 24 IPOS by African domiciled companies were a 33 percent rise in volume and, at just over $2 billion, nearly 225 percent increase in value from 2013.

In sub-Saharan Africa, South Africa, Nigeria and Kenya offer the highest projected IPO values and the best markets for accessing local and foreign investors, particularly spurred by the exit strategy and investment activity of private equity investors focused on the continent. With the boom in private equity fundraising for Africa, the outlook is very bright.

But risks remain with specific African markets disproportionately exposed to the global volatility. Some economists and investors fret that the low oil price, low gas price, and strong US dollar could burden specific African markets in the near term and possibly long term depending on how prices shift by mid-2015 and through 2016.

What if a Country went for an IPO?

All things considered, what would it be like to IPO a country in the current market? Walk with me for moment…The factors used for evaluating an IPO are very transferable to evaluating a target country for an IPO or investment:

• Why go public? (Translated: Why open the market at this moment?)
• What will the company do with the money from the IPO? (Translated: What will the country do with the new foreign direct investment (FDI)?)
• What is the competitive landscape for the company and its relative position? (Translated: How does Country A in sub-Saharan Africa match up against Country B-Z?)
• What are the growth prospects? (Translated: What is the upside growth potential of the country?)
• What is the current profitability? (Translated: Is the country actually turning foreign direct investment into greater returns (i.e., GDP per capita, income growth, etc)?
• What is management like? Does the management team have prior experience running a publicly-traded company and/or a history of success in business ventures? (Translated: Do the leaders of the country have sufficient experience and qualifications to run the country?)
• What are the past operating results? (Translated: What has been the country’s past performance?)

With all the IPO factors translated to be applied to a country, we can formulate a list of the best countries to IPO (or translated: the countries that would garner the greatest value in the public market based on a cross section of factors). This week’s article highlights the top 3 countries on that list:

Rwanda

Rwanda – often called the “Singapore of Africa” – is an investor favorite for all the reasons that would make it an ideal IPO candidate. The country still requires significant investment, particularly in infrastructure. Fully (as lot has been done to date) bridging the infrastructure gap in the county is an instance gateway to unlocking further value in the country’s manufacturing and financial sectors among others.

Rwanda is definitely the little giant in the competitive landscape…its population of more than 11 million is bigger than NYC (~8.4 million) but not by much. Yet it is booming from an economic productivity perspective, best indicated by 7-plus projected growth in 2014 and 2015. On a per capita (PPP) basis, the GDP has grown north of 165 percent in the last 20 years from $575 in 1995 to approximately $1530 in 2015. The smart investor will ask what the distribution on that investment dividend is and statistics show that a significant portion, hovering around 40 percent, still goes to the top 10 percent of the country.

But management, aka Paul Kagama and crew, are making great strides to change that number and lift more people out of poverty. Economic management may be the country’s strongest IPO characteristic. Kagame & Co. have built Rwanda’s brand as a tourism location, an emerging financial and technology hub, and an up and coming bilingual (French and English) services hub. The country is one of Africa’s most technologically advanced countries with a consistently easing environment for doing business. All these factors considered point to an amazing upside for potential investors. Leadership is dedicated to and capable of driving the country towards achieving significant growth in target sectors and has a demonstrated track record, as the numbers indicate.

The caution is to not overpay for the small giant. But this article did not promise a pricing range for the IPO.

Nigeria

Nigeria is an IPO candidate taken from a different view than Rwanda. The country requires significant amount of investment, particularly in infrastructure, similar to Rwanda.

Nigeria may have one of the highest return upsides for capital. The country, due to its size, has Facebook potential:

(1) it has a population north of 175 million,

(2) it is Africa’s biggest oil exporter and (usually forgotten) has the biggest gas reserve in Africa; and

(3) it has one of the most technologically advanced and entrepreneurial populaces in Africa. And from a financial standpoint, the naira is significantly undervalued with a low oil and gas price environment hanging above its head…in other words, any investor is buying in at a cheap foreign exchange rate with all expectations of a higher naira value in the future.

On a per capita (PPP) basis, GDP has grown north of 330 but has a long way to go on a dollar value, especially considering the wealth of resources in the country. As an oil and gas behemoth, the country has not captured the full value in the resource exploration and production value chain. Why is that? That question leads us to the underlying risks (or more so challenges) in Nigeria.

The country has strong leaders. But a consensus has yet to be found among leadership on addressing terrorism in the country, managing oil production in a low price environment, and realizing value in the gas sector. Local entrepreneurs have strived in the euphemistically described “burgeoning wild west” of Nigeria but greater internal financial structure and security from management could push this country’s stock to the front of the pack as an investment opportunity. Its financial, energy and industrial sectors combined could and should be unrivaled by the competition.

Nigeria is a major buy in any market, but especially with a low naira valuation. Expect a low valuation in the current environment with great stock appreciation over time.

Ethiopia

Ethiopia is the equivalent of an early stage IPO – probably before it could get an ideal offer price but still with an immense upside. The country requires significant investment, specifically in its numerous business sectors…although infrastructure is a big need for the country, the country’s leadership is already making great strides in investing in that space.

If Nigeria has Facebook potential, then Ethiopia has WhatsApp potential: (1) it has a population approaching a 100 million and (2) it is one of the world’s fastest growth countries but it lacks (1) the natural resources of other booming African countries (ala Nigeria) and (2) the technological infrastructure of other emerging economies (ala Rwanda). It is euphemistically the emerging app with great upside but many investors are still wondering how success (monetizing in technical terms) will look like in the long run. The country is generally unaffected by changes in oil and gas prices, except for the pseudo tax break it receives on its oil import bill in a low price environment.

Ethiopia banks its growth on a multitude of consumer-driven industries, including manufacturing, financial services and consumer products. The growth is steady but may not have the consistent opportunity to have a 15 percent boom year (i.e., oil rising above a $100 in next six months will not add 33 percent to 66 percent to the revenue line like it could in a Nigeria and Angola). Still, on a per capita (PPP) basis, the country has grown north of 125 percent in the last twenty years.

The country’s management consistently provides strong (not always favored) leadership with the economic management of the country. Criticism is expected on the iron-fist nature of the ruling party. But a lot of credit should be equally handed out for the leadership’s ability to combat terrorism, manage security, and drive growth. There is ample room for improvement with currency management, financial (including debt) management, and guiding the development of the technology and (overall telecom) sector.

All things considered, Ethiopia may not get the ‘Nigeria’ price at this stage…but you may be very surprised how close it will get. It has an upside that is immense albeit not fully spelled out.

Ghana and Angola

Ghana and Angola are tricky countries. One (Ghana) has a significant mining sector with some oil and gas potential. One (Angola) is an oil behemoth that could use growth in non-oil sectors. Both countries are gradually boosting their financial services sectors and have great upside in that sector. Yet one (Ghana) has a currency suffering in the current environment (largely due to some economic miscues) and one (Angola) could soon feel pain if the oil price does not recover. In a dream world, investors probably like to merge the two countries and IPO them together.

But, unable to M&A two countries (or just because it sounds ridiculous to discuss countries in this sense), Ghana and Angola stand as the tricky two countries tied for fourth place on this list (or the honourable mention countries as the first three countries were not ranked). Per capita and GDP growth numbers remain strong and the upside is simply massive because of a growing financial sector supplemented by a strong mining (including oil & gas) sector, major infrastructure improvements, quickly improving energy sectors, and committed leadership. Leadership, for reasons not to be overly indulged, can also be the catch-22 as the International Monetary Fund (IMF) has been critical at differing stage of both countries’ leadership from a financial and economic management perspective and an openness in the market perspective.

http://www.ventures-africa.com/2015/02/what-if-you-could-ipo-an-african-country-these-are-the-three-to-bet-on/

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Ethiopia to construct 11 new universities

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Addis Ababa February 05/2015 –

 The Ministry of Education announced plan to construct 11 new universities during the second growth and transformation plan period, which will begin in the next Ethiopian fiscal year.

Oromia, South Ethiopia and Amhara are among the regional states the universities will be built with the aim of increasing access to higher education, according to the State Minister Dr kaba Urgessa.

Up on completion, these universities will increase enrollment capacity to 600,000 in regular program alone and raise number of higher learning institutions to 42.

Design of the buildings, selecting specific areas for the construction and conducting surveys on the selected areas are being underway, Kaba said.

Construction of the universities is expected to be completed within two years and priority will be given to science fields.

Training of lecturers for these universities will be started next academic year, so as to equip them with skilled labor, he added.

Constructing and equipping these universities will be carried out in accordance with the lessons learnt from the previous practices, the Minister said.

http://www.ena.gov.et/en/index.php/social/item/359-ethiopia-to-construct-11-new-universities

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Ethiopia undertakes activities to boost ties with foreign countries

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Addis Ababa February 5, 2015 –

Prime Minister HaileMariam Desalegn said activities that help to protect the national interest and improve ties with neighboring and other countries undertaken during the past six months.

While presenting his government’s 6 months performance report to the parliament, HaileMariam said activities have been carried out to strength bilateral relation with foreign sovereigns.

He mentioned bilateral talks carried out on various levels with Djibouti, Kenyan, Sudan and Egypt governments so as to boost political and economic ties.

HaileMariam said that his government has been striving to build lasting peace in Somalia.

Ethiopia, as the chair of IGAD, is working to provide peaceful resolution for the crisis in South Sudan, he added, it has been playing its role for the successful conclusion of the peace process.

Following consecutive discussions with the Egyptian authorities and deployment of public diplomacy delegation, the bilateral relation has now shows progress, according to HaileMariam.

The Premier also expressed his hope that the relationship between the two countries will be enhanced further and the suspect on the Egyptian side regarding the Grand Dam will be resolved soon.

http://www.ena.gov.et/en/index.php/politics/item/361-ethiopia-undertakes-activities-to-boost-ties-with-foreign-countries

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“Doing Business in East Africa” held in Washington D.C.

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Addis Ababa, 5 February 2015 (WIC) -

The Ethiopian Embassy along with the Embassies of Kenya and Tanzania and in collaboration with the US Commerce Department, have organized “Doing Business in East Africa,” an after hour Networking Series.

The information exchange event was intended to give the opportunity to network with US trade officials and members of the African diplomatic community. It also envisages an opportunity to hear about the latest momentum around Africa-US trade.

Included in the program was the opportunity to hear important announcements about Trade Winds Africa, the largest ever US- government-led trade mission to Africa, it was learnt.

Ambassador Girma Birru, Special Envoy and Ambassador Extra-Ordinary and Plenipotentiary of Ethiopia to the US, made a remark on the Networking event for the “US Business Development Conference and Trade Mission to Africa in September 2015.

Ambassador Girma noted that although there are some disparities among countries, the recent economic performance of the East African region has been remarkable by international standards. The region is one of the fastest growing regions in the continent, with average GDP growth of 5% in 2013-2014, compared to the sluggish global economic performance of 2.4% during the same period and cited Ethiopia as the third growing success economy in the world.

The region has abundant agricultural and other natural resources and provides ample opportunities for U.S. businesses. With a total population of about 320 million, the region is also a big market for food and other consumer products, he underlined.

Recognizing this immense potential, and as a follow-up to the very successful U.S. – Africa Leaders Summit, convened by President Obama in August 2014, Ambassador Girma punctuated “we are very pleased that the U.S. Department of Commerce is organizing a “Business Development Conference and Trade Mission” to 8 African countries in September 2015″.

The Trade Mission will offer you a unique opportunity to explore, first-hand, the vast business and investment opportunities that exist in Africa in the various areas, the Ambassador Extra-Ordinary and Plenipotentiary, added.
In reference to the African Growth and Opportunity Act (AGOA) which he said has served as the cornerstone of U.S.-Africa commercial relations, AGOA, he underscored has contributed to economic development in the 40 countries that benefit from this program through market access, job creation, and closer commercial ties with the United States.

Increasing number of American companies is recognizing the opportunities that exist in the continent partly through this preference program. Imports of American products (such as Boeing planes by Ethiopian Airlines) have contributed to job creation in the U.S. as well, he proclaimed.

However, he exclaimed AGOA is set to expire at the end of September, 2015. With a new Congress and many issues competing for legislative attention, it appears that AGOA’s reauthorization will not be as seamless as expected, Ambassador Girma expressed his opinion.

Given the necessary lead-time that U.S. buyers need for placing orders (such as in the textile industry), African governments and the private sector are quite concerned the delay in reauthorization of AGOA could result in unnecessary disruptions in commercial transactions between the two sides, the Special Envoy added.

It is paramount, therefore, that a call for action on AGOA needs to be taken by all concerned, particularly the U.S. business community, to ensure the uninterrupted continuation of this landmark trade relation between the U.S. and Africa he emphasized.

“I would like to take this opportunity to express our continued commitment to collaborate with the U.S. Government and the private sector to make the September Trade Mission to Africa a success, thereby contributing to the strengthening of our economic ties,” the Ambassador concluded.

Earlier Antwaun Griffin, Deputy Assistant Secretary of Commerce for US Operations made a welcoming remark. Ambassador Robinson Njeru Gthae of Kenya and Ambassador Liberata Mulamula of Tanzania, to the US have also made speeches pertaining to the occasion.

Present on the event were Ambassadors, Michael Lally, Executive Deputy Assistant Secretary of Commerce for Europe, the Middle East and Africa and John Saylor, Chairman of Virginia-Washington DC, District Export Council, Ambassador Robert Perry, Vice President, Corporate Council on Africa, Jude Kearney Chair Africa Practice, Greenberg Traurig, LLP, Marta Alonso, Verification of Conformity Manager & CCCS Supervisor, BIVAC North America, Bureau Veritas and other invited guests.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17472:qdoing-business-in-east-africaq-held-in-washington-dc&catid=52:national-news&Itemid=291

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Government working to keep stability of macro-economy: Premier

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Addis Ababa February  5, 2015 –

Prime Minister HaileMariam Desalegn said his government is working to keep the macro economy stable so as to maintain the economic growth.

During the past four consecutive years, the nation has managed to grow by 10.1 percent in average.

This year, the economy is expected to grow by 11.4 percent. The industry sector is expected to contribute the lion’s share, 23.7 percent.

Agriculture and services sectors are expected to grow by 8.7 percent and 9 percent respectively.

While reporting his government’s 6 months performance to the parliament, the Premier said “We need to have a stable macro-economy in order to sustain the ongoing economic growth.”

Fiscal and monetary policy measures taken so far helped to keep the inflation in single digit, he said.

Since increasing amount and type of export items is important to improve foreign currency earnings, the government has been working to expand this sector.

Because of this, the revenue earned from export market has increased by 60.3 million USD in this half year from the previous year same time, he said.

The increase in the revenue earned from the export market will help the nation to step by step be free from foreign assistance, HaileMariam said.

Parallel with this, improving domestic saving is important to diversify financial sources, he added. Gross domestic savings has reached 22.5 percent at the end of last fiscal year.

Improving amount of tax collected from domestic sources has also being carried out to improve government’s revenue.

In this regard, 69.5 billion Birr revenue was collected from tax and non-tax items during the six months, he said. Although the performance exceeds the previous year same time, it is below the target.

HaileMariam said activities need to be done to improve and expand tax collecting system so as to increase the revenue.

http://www.ena.gov.et/en/index.php/economy/item/360-government-working-to-keep-stability-of-macro-economy-premier

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Ethiopia launches mobile money schemes to extend banking reach

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* Millions have little access to branches or services

* Schemes will allow payments via mobile phones

* Mirrors model pioneered in neighbouring Kenya

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By Edmund Blair

ADDIS ABABA, Feb 4 (Reuters) - Ethiopian banks and microfinance firms are launching mobile money services, helping reach swathes of the population that now have little access to branches or services, the mobile technology providers and banks said.

The launch of the services, which allow customers to make payments or receive money via a mobile that is linked to a bank account, mirrors technology used in other African nations that has drawn millions of people into the financial system.

Netherlands-based BelCash is offering a technology called helloCash, while MOSS ICT, mainly owned by an Ireland-based firm, is rolling out M-Birr in the nation of 96 million people.

In both cases, Ethiopian banks and institutions will offer the service to customers and hold the cash deposited, in line with government policy that bars foreign firms or banks from investing in the financial sector or the telecoms industry.

“One of the things that the government wants to do is ensure there is financial inclusion,” said MOSS ICT deputy general manager Kidist Negeye, adding M-Birr would help reach rural areas. “Another aspect is the mobilization of domestic savings. The government wants to increase the number of deposits.”

The central bank approved the roll out for M-Birr, which will be offered by five micro finance firms, in December. It already has 5,000 to 6,000 users and expects to add 13,000 in February. Kidist said the potential was “in the millions.”

BelCash’s helloCash service could have 2-3 million users this year and 10 million by 2017 or 2018, the firm’s chief executive Vince Diop said, adding that BelCash would receive a fee for each transaction made.

Two of Ethiopia’s 16 private banks, Lion International Bank and Cooperative Bank of Oromia, as well as a microfinance firm, have signed up for helloCash. Two more banks have yet to submit applications to the central bank, he said.

The pilot project was under way and commercial services should start in about two months, Diop said.

Bankers say Ethiopia has no more than 1,500 ATM cash machines, while there was just over 2,200 bank branches as of June, or one for every 40,000 people, the central bank says. Only one in 10 people have a bank account.

In addition to branches, which are expensive to set up, banks plan to authorise thousands of agents, such as shops or merchants, in line with new regulations. Such agents will be able to take deposits and hand out cash via the mobile system.

Ethiopia’s initiative mirrors the model pioneered in Kenya, where there are now 27 million users in the nation of 45 million. Safaricom, a unit of Britain’s Vodafone , was first with such a service, launched in 2007.

http://mobile.reuters.com/article/idUSL6N0VE44020150204?irpc=932

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Pittards to boost production by threefold

Pittards PLC, British company investing in Ethiopia, disclosed it intends to increase its production capacity by threefold in the coming two years.

According to Pittards Project Manufacturing General Manager, Tsedenia Mekbib, the company made investment in Ethiopia’s manufacturing sector for the first time in 2011 after it bought the government owned Ethiopian Leather Company.

In the past fiscal year Pittards earned USD 4 Million from the export of 100,000 pairs of gloves, Tsedenia explained. She furthered the company is working to boost Ethiopia’s foreign currency earnings by 60 percent.

Currently Pittards manufactures industrial and fashionable gloves, leather garments and jackets.

Its factory, upon establishment, had 80 employees. Yet this figure grew to 700 workers and it is still trying to increase the number of employees to 1500.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17440:pittards-to-boost-production-by-threefold&catid=52:national-news&Itemid=291

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BIG PICTURE – KEFI Minerals advancing rapidly to mine development in Ethiopia

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By Ian Lyall

Since taking control of the asset, KEFI’s team has presided over a 50% rise in the resource base with an increase, rather than fall in the grade

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Ethiopia bets on grand projects in drive for industrial power

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A labourer walks alog a Metro-line construction in Ethiopia’s capital Addis Ababa

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By Edmund Blair and Aaron Maasho

ADDIS ABABA (Reuters) - Chinese workers mingle with Ethiopians putting the finishing touches to a metro line that cuts through Addis Ababa, one of a series of grand state infrastructure projects that Ethiopia hopes will help it mimic Asia’s industrial rise.

Brought to its knees by “Red Terror” communist purges in the 1970s and famine in the 1980s, Ethiopia has been transformed in the last quarter century, becoming one of Africa’s fastest-growing economies.

At the heart of the state’s “Growth and Transformation Plan” are railway, road and dam projects to give the landlocked nation cheap power and reliable transport, as well as the metro line – the first urban light railway network in Sub-Saharan Africa.

“This is the future,” said Abate Yaye, 27, from the poor south as he helped complete the $475 million system being built by China Railway Engineering Corp, much of it on concrete stilts to keep it above the crowded streets of an expanding capital.

“We will become an example for the whole of Africa.”

Hefty state-led investment has kept the economy of Africa’s second most populous nation growing at more than 8 percent a year for over a decade, but economists say Ethiopia’s rulers need to relax their grip and give room for more private enterprise to maintain momentum.

Foreigners cannot invest in banking and telecoms and foreign retailers are barred, while Ethiopian banks are directed to buy low-yielding government development bonds.

“This is a country where, relative to rest of Africa, there is pretty good state capacity and a commitment to a development mission,” said S. Kal Wajid, the outgoing Ethiopia mission chief for the International Monetary Fund.

But he said private business needed room to grow and generate income so the economy could reap greater benefit from the new projects. “Where you are making a lot of infrastructure investment, there is a risk that the pay-off may not be as big as you thought,” he added.

DEBT LIMITS

Others in Africa have looked with envy at Asia’s inexorable rise but few governments, if any, have proven as single-minded as Ethiopia has in mobilizing its resources in a bid to turn an agrarian nation of 96 million people into a manufacturing hub.

Yet it comes at a cost. The IMF said last year Ethiopia was “on the cusp” of shifting from low to moderate risk of debt distress. Total debt at about 50 percent of gross domestic product was still manageable, but tougher if it rises much more.

“In the next five-year plan, there should be a clear indication of a change of emphasis and a significant emphasis on the private sector,” said Wajid, referring to the next Growth and Transformation Plan starting in July.

The government insists it will not rack up unsustainable debts because funds are used to finance infrastructure and other projects such as sugar factories and industrial zones.

Investors also say Ethiopia benefits from better security than others in a region blighted by Islamist militant attacks. And few executives cite corruption as a big hindrance in business, although it can be elsewhere in Africa.

But Ethiopia is no model for political and media freedom – there is just one opposition party member in the 547-seat parliament and international rights groups say the authorities muzzle critics. The government insists politics is open to all and that it allows free speech.

The current five-year growth program ends in June and the government has given little away about the next plan. But it remains clear about its economic goals.

“Without investing in infrastructure, it is now abundantly clear that Africa cannot sustain growth,” Finance Minister Sufian Ahmed told Reuters in December.

Sufian’s deputy Abraham Tekeste said this month the new plan would likely continue “most of the priorities” of the last one.

The government can point to a list of investors suggesting its formula works. Clothes retailer Hennes and Mauritz (ST:HMb) is starting to source supplies from Ethiopia, consumer goods maker Unilever (L:ULVR) is building a factory, Diageo (L:DGE) and Heineken (AS:HEIN) have bought breweries.

U.S. private equity giant KKR invested in a flower farm last year while an Ethiopian winery is among the investments of 8 Miles, an African-focused fund chaired by singer Bob Geldof who launched Live Aid to help Ethiopian famine victims.

LIMITED ROOM

The government’s ban on foreign retailers is aimed at encouraging local manufacturing, to cut back on imports, not wanting a consumer culture that could drain foreign exchange.

Central bank foreign reserves barely cover two months of imports – an inadequate level, according to the IMF. Other east African states have at least four months.

The government says it wants to keep banks in the hands of Ethiopians and telecoms controlled by the state as the sectors provide funding for national projects such as infrastructure. Earnings from the state telecoms monopoly are helping fund a railway linking Addis Ababa to a port in Djibouti, for instance.

But that leaves few domestic funds available in the market for businesses that could create jobs in future.

“If they are looking at achieving their goal of being a middle-income country and getting employment, you must enable access to financial options,” said James Kanagwa of pan-African lender Ecobank (LG:ETI), one of half a dozen foreign banks with representative offices in Addis Ababa but barred from commercial work.

Ethiopia, with average annual per capita income of $470, aims to reach middle-income status by 2025, which the World Bank says starts at $1,046.

For now, even Ethiopian banks have limited room for maneuver. They must invest the equivalent of 27 percent of their loan portfolio in the development bonds, hindering their ability to lend to the private sector.

“The lending capacity of banks is growing very slowly,” said Mulugeta Asmare, president of Bank of Abyssinia, one of 16 private banks in a sector dominated by state-owned Commercial Bank of Ethiopia.

Banks must rely on equity and deposits for funding, in a nation where only one in 10 people have a bank account, because there is no developed capital market.

After launching a debut $1 billion Eurobond in December, Prime Minister Hailemariam Desalegn said tapping international markets did not herald “liberalizing the financial sector”.

“If you have an efficient effective state development model, great,” Colin Coleman, managing director for Goldman Sachs based in South Africa, told a conference in Addis Ababa last month.

“But you must allow businesses to develop in order to get the dynamism in the economy.”

http://www.investing.com/news/stock-market-news/ethiopia-bets-on-grand-projects-in-drive-for-industrial-power-327096

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Ministry of Transport says finance for national railway network not secured

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The Ministry of Transport (MoTr) on Tuesday revealed that the construction of the Ethio-Djibouti railway project is on schedule; however, other railway projects, which are part of the planned nationwide railway network, have not secured the required loans except one which is partially financed by the Government of India.

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Ethiopian PM Calls For ‘Economic Integration’ With Djibouti

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AFRICANGLOBE – Ethiopian Prime Minister Hailemariam Desalegn on Sunday called for enhanced efforts for further cementing economic integration with neighboring Djibouti.

The Ethiopian Premier made the call during an address to the Djiboutian Parliament in which he lays out the strategic objectives of economic integration between the two Horn of Africa countries and the region as a whole.

The region, Desalegn said, would be better off integrated considering the comparative advantages there are in each country to share with the other.

“What we have is shared by you for greater unity and integration,” he told the Djiboutian MPs.

He said that the Ethiopian government would pursue the cause of integration with Djibouti “with singular dedication”.

“I hope and expect this will be reciprocated by our Djiboutian brothers and sisters,” said Desalegn, who arrived in Djibouti on Saturday to attend a meeting of the Ethiopian-Djibouti joint commission.

There have been flagship projects linking the two countries of which electric power sharing and railway link are notable ones. Ethiopia has already begun exporting electricity to Djibouti.

“Let the rest of the world learn from our example,” Desalegn said, indicating the need for the two countries to further enhance cooperation towards long-term strategic objectives.

“We need to learn to sacrifice short-term benefits for long-term gains for the benefits of the peoples of Djibouti and Ethiopia,” Desalegn said.

“Rest assured [that] we will both shine in region as pillars of regional integration,” he said.

Ethiopia uses the port of Djibouti for exports and imports.

Following his address, the Ethiopian Prime Minister visited the port and the Djiboutian Free Zone.

http://www.africanglobe.net/africa/ethiopian-pm-calls-economic-integration-djibouti/

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Tripartite trade leaps threefold in a decade

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COMESA Secretary General and Chairperson of the COMESA-EAC-SADC Tripartite Taskforce Sindiso Ngwenya disclosed that intra-regional trade among the three Regional Economic Communities (RECs) has grown threefold in a period of 10 years from 2004 to 2014.

Giving an update on the Tripartite Free Trade Area negotiations to the African Union (AU) High Level Trade Committee (HATC) at the 24^th AU Heads of State Summit, in Addis Ababa, Ethiopia, Ngwenya said growth has taken place on the basis of the individual Free Trade Areas (FTAs) of the three RECs.

He said the combined intra-trade of the three RECs for the period grew from US$30.6 Billion to US$102.6 with COMESA recording growth from US$8 billion to US$22 billion, SADC from US$20 billion to US$72 Billion and the EAC with US$2.6 billion in 2004 growing to US$ 8.6 billion by 2014.

“I am confident that the establishment of the COMESA-EAC-SADC FTA would follow the same growth path, however at an accelerated growth pace and, supported by infrastructure and industrialization programs”, Ngwenya said.

In order to launch the establishment of the African Union Continental Free Trade Area (CFTA), Ngwenya proposed the initiation of negotiations for the establishment of a free trade area between the Tripartite (COMESA-EAC-SADC) on one hand and the Economic Community of West African States (ECOWAS).

Namibia Minister of Trade and Commerce Carl Hermann Schlettwein called for unity of purpose by member states and the need to speak with one voice particularly with regard to World Trade Organisation (WTO) negotiations.

Mr. Schlettwen said there was need for flexibility by the United States on the African Growth and Opportunity Act (AGOA) to facilitate the participation of African countries.

AU Commission Deputy Chairperson Erastus Mwencha congratulated the Tripartite members for the progress being made in establishing the Free Trade Area.

Mwencha urged members of the Tripartite not to be pessimistic by looking at what happened under the Doha Development Agenda where the promise of trade for the integration of less developed countries under the WTO multi-lateral system was not realized.

“As we approach the Tripartite Free Trade Area, some people come with a mindset of a zero sum game. We can fast track the FTA through the coalition of the willing”, he said.

Mwencha called for unity of purpose adding that no member state should remain behind when the implementation of the Economic Partnership Agreements (EPAs) starts.

And Chairperson for AU High Level Trade Committee (HATC) and Ghana’s Republican President, John Dramani Mahama disclosed that the Tripartite Free Trade Area will be launched in June 2015.

Mahama said between now and the launch, there was need to work hard to achieve the dream of our forefathers to attain African unity.

http://www.comesa.int/index.php?option=com_content&view=article&id=1426:tripartite-trade-leaps-threefold-in-a-decade-&catid=5:latest-news&Itemid=41

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Ethiopia, Canada celebrating 50 years of diplomatic relation

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Addis Ababa, 9 February 2015 - State Minister of Foreign Affairs, Dr Yinager Dessie met with Malcom Brown, Deputy Minister of Canada for International Cooperation on Saturday (February 7, 2015).

The two Minister’s discussion dwelt on bilateral and regional maters of mutual interest.

On the occasion Dr. Yinager Dessie noted that Ethiopia and Canada are commemorating 50 years of friendship this year with great satisfaction and immense optimism of a bright future ahead.

He said the longstanding relationship of Ethiopia and Canada is underlined by a warm feeling of friendship by the people and Government of Ethiopia towards Canada.

Doctor Yinager briefed Malcom Brown about the rapid and inclusive growth of the Ethiopian economy which registered double–digit economic growth for the past 10 years.

Business Mission to Ethiopia taking place February 21-25, 2015. Details here: http://www.ccafrica.ca/economic-mission-to-ethiopia.html

Speaking about growing economic ties between the two countries, he appreciated the Government of Canada, the Canadian embassy in Ethiopia, Canadian Council for Africa for working closely with the Ethiopian Ministry of Foreign affairs of Ethiopia by implementing the follow up action plan which is the outcome of the Canada Africa business summit held from September 15-18, 2014 in Toronto.

He extended his appreciation and gratitude to the contribution made by the Canadian Government in the areas of food security, health and good governance while also hailing the selection of Ethiopia as Canada’s country of focus for cooperation through Canadian International Development Agency (CIDA).

He also expressed Ethiopia’s keenness to learn from Canada’s experience in hydropower development, construction technology health and generally enhancing cooperation on economy.

Dr. Yinager briefed Ethiopia’s role in bringing peace and stability in the region and current political and security situation in Somalia and South Sudan.

Mr. Malcom Brown, Deputy Minister for International Development of Canada, acknowledged the overall progress Ethiopia made in achieving development.

Discussing the upcoming national election, he hailed the active and wide participation of the public in voter registration and expressed his hopes all actors would work towards ensuring free and fair election.

Dr. Yinager affirmed the Ethiopian Government’s readiness to ensure that the election is conducted in peaceful, free and fair manner reflecting the will of the people.

He also pledged that Canada will further enhance the Ethio- Canada and Canada- Africa cooperation in all sectors. He went on to note that Canada’s desire to engage in mining sector In Ethiopia and share its vast experience in hydroelectric power generation.

Malcom Brown lauded Ethiopia’s effort in bringing peace and stability in the region and reiterated Canada’s desire to work with Ethiopia in peace and security issues.

The two sides exchanged views in the great contributions made by the Government of Canada to Ethiopia and other African countries in development assistance at all levels.

They also discussed the ongoing activities in upgrading the cooperation between the two countries from the developmental cooperation to a more robust economic cooperation.

The two sides pledged to continue engaging in extensive activities that broaden and deepen the bilateral relation.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17523:ethiopia-canada-celebrating-50-years-of-diplomatic-relation-&catid=52:national-news&Itemid=291

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Ethiopian to order 20 wide-body aircraft

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Addis Ababa, 9 February 2015 - With a view to boosting its long-haul fleet, Ethiopian Airlines is going to place firm orders for 20 wide body aircraft.

Ethiopian Airlines Group CEO, Tewolde Gebremariam, told The Reporter that his management is evaluating the Boeing’s new aircraft under development B777X and the Airbus A350-1000. “We are evaluating both so that they have to compete,” Tewolde said.

According to him, the evaluation started last month and will be finalized after three months. The number of aircraft could be 15-20, according to Tewolde.

Ethiopian fleet is dominated by Boeing aircraft. Currently, the national flag carrier operates B787, B777, B767, B7575, B737, MD11 and Bombardier Q400 aircraft. For the first time in its long history, Ethiopian had placed orders for Airbus aircraft in 2009. Ethiopian ordered 14 A350-900, Airbus’ new jetliner. Delivery of these aircraft would begin next year.

According to Boeing, the 777X is Boeing’s newest family of twin-aisle aircraft that builds on the passenger-preferred and market-leading 777. Boeing Commercial Airplanes in November 2013 launched the airplane at the Dubai Air Show with 259 commitments from four customers. Production of the 777X is scheduled to begin in 2017 and first delivery is targeted for 2020. The unit cost of B77x is 360 million dollars.

A350-1000 is Airbus’ newest jetliner. Measuring nearly 74 meters from nose to tail, the A350-1000 – scheduled to enter service in 2017 – is the longest-fuselage version of Airbus’ all-new family of wide-body jetliners designed for high efficiency, maximum reliability and optimized performance.

According to Airbus, in a typical two-class configuration, the A350-1000 seats a total of 369 passengers. “Combined with a range of 8,000 nautical miles, this represents a significant revenue-generating advantage for operators,” Airbus says. The aircraft also can be configured for a higher-density layout to accommodate up to 400 passengers.

Last Sunday Ethiopian took delivery of its newest B787-8 Dreamliner aircraft it leased from a US-based leasing company, IFLC. After flying 16 hours direct from Seattle, Everett, the brand new Dreamliner arrived at the Addis Ababa Bole International Airport around noon. Two Ethiopian captains and two first officers flew the aircraft direct from Seattle to Addis Ababa. The aircraft transported medicines and medical equipment donated to hospitals in Ethiopia and Somalia free of charge.

Ethiopian is the third airline in the world to own and operate Dreamliner aircraft next to All Nippon Airways and Japan Airlines in 2012. The largest African carrier in terms of revenue and profit own ten Dreamliner aircraft, which makes it the largest Dreamliner fleet operator in the continent. The new one has full flat seats in the business class cabin and the latest entertainment technologies.

Government officials, including US Ambassador to Ethiopia, Patricia Haslach, business-class customers, representatives of Boeing and General Electric (GE) and board members and senior management members of Ethiopian attended the arrival of the jetliner.

At the reception held at the VIP saloon, Tewolde said that the Dreamliner was a state-of-the-art aircraft. “It is our core fleet and very popular among our customers. We have more load factor on the routes we operate Dreamliners,” Tewolde told the invited guests.

Though Ethiopian needs to order for more Dreamliners, it was unable to find slot at Boeing as the US aircraft manufacturer is fully booked. Subsequently, the airline leased three B787 from ILFC. The two will arrive in Addis Ababa in March and April this year.

Ambassador Paricia Haslach said that Ethiopia was the second country in the world next to Japan to own and operate the Dreamliner aircraft. The Ambassador said that Ethiopian was African best airline. “I am sure that I will see the B777x in Addis Ababa,” she added.

Currently, Ethiopian operates 80 aircraft. The airline plans to double the number by 2025. The airline is implementing a 15-year strategic plan dubbed Vision 2025 aimed at making Ethiopian a leading aviation group comprising seven profit units. The airline anticipates to own 150 aircrafts, serves 92 international destinations and carries 18 million passengers by 2025. “Five years into the implementation of Vision 2025, we have exceeded all the parameters,” Tewolde said. Ethiopian has 43 aircraft, including 14 A350-900 and 20 B737MAX on its order book.

The airline flies to 84 destinations in five continents – 50 of them are in Africa. The national carrier will soon launch new flights to Tokyo, Manila, Dublin and Los Angeles. Last June, the International Air Transport Association (IATA) ranked Ethiopian the largest and most profitable airline in Africa.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17550:ethiopian-to-order-20-wide-body-aircraft&catid=52:national-news&Itemid=291

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KfW IPEX-Bank, AFD to financing Ethiopian new cargo Terminal

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Addis Ababa - KfW IPEX-Bank is financing the export of the technical interior equipment of the new air cargo terminal at Addis Ababa international airport with a loan amounting to EUR 32.8 million.

http://www.fanabc.com/english/index.php/news/item/2170-kfw-ipex-bank-and-afd-are-financing-ethiopian-airlines-new-cargo-terminal

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Ministry to Grant Mining License to ASCOM Mining

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Addis Ababa, 9 February 2015 – The Ministry of Mines (MoM) is going to grant a large-scale gold mining license to Ascom Mining, an international mining firm engaged in primary gold exploration project in the Benishangul Gumuz Regional State in south-west Ethiopia.

ASCOM is a multinational mining company involved in prospecting for gold in Benishangul Gumuz Regional State, Assosa Zone, Sherkole Wereda, Shungu and Nazali localities since 2009.

The firm made a discovery of a large amount of primary gold in the license area covering 268.17 sq.m of land in a mountain commonly known as Dish Mountain. It was in March 2014 that ASCOM’s experts made presentation about the gold discovery to officials of the MoM in Addis Ababa. The gold deposit is projected to be over 70 tons.

The Minister of Mines, Tolossa Shagi, told The Reporter that experts of Ascom presented progress report to the ministry twice. “We have informed them to expedite work on the feasibility study,” Tolossa said. According to the minister, once the company finalizes the feasibility study the ministry will review the study and grant the large-scale mining license to the company.

“They have confirmed the presence of the resource. They are now working on the final feasibility study. Once they have submitted the final study we shall grant them the mining license,” the minister told The Reporter.

It was on November 20, 2008 that ASCOM secured a gold and base metals exploration license after Ariab Gold Mining Plc, Sudanese and Ethiopian JV Company, transferred it to the former.

Shareholders of ASCOM Mining Ethiopia Plc are ASCOM Precious Metals BVI, holding 96 percent of the company, and Ariab Gold Mining Plc, owning the rest, 4 percent. Shareholders have different nationalities and are from Sudan, Egypt, the Middle East and other North African countries. In addition to the Benshangul Gumuz site, ASCOM has another exploration license in Ethiopia, in the Gambella Regional State.

Thus far the only company engaged in a large-scale gold mining in Ethiopia is MIDROC Gold. Nonetheless, two years ago in 2012 another firm, Ezana Mining Plc, secured a large-scale gold mining license from the Ministry of Mines.

Panel names Ethiopia one of top sources for illicit financial flow

Mobile Money Moves to Ethiopia

WIPO Extending 4 Million USD Scientific, Technical Information Assistance to Ethiopia

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Addis Ababa February 9, 2015 - Ethiopia and other least developed countries are each accessing 4-million-USD yearly based cost of World Intellectual Property Organization’s (WIPO) scientific and technical information to their development.

This was disclosed by WIPO Director of Division for Least Developed Countries, Kifle Shenkoru.

He told ENA that the organization has established an information and technical center, which has been benefiting developing countries through training and financial aid to stimulate their socio-economic development, in Ethiopia.

According to the director, WIPO is supporting Ethiopia and the other countries by providing training entrée that permits them to access scientific and technical information worth 400,000 USD annually.

Currently, Ethiopia is finalizing its National Innovation and Intellectual Property Policy and Strategy which will help encourage the country’s creative, innovative, and inventive activities in agriculture, trade, and environment, among others.

In this regard, WIPO is facilitating and coordinating various activities as per the request of the Ethiopian government to finalize its National Innovation and Intellectual Property Policy and Strategy, he said.

Even if Ethiopia is a member of WIPO and participating actively, it has not signed many of the agreements, it was indicated.

Ethiopian Intellectual Property Office (EIPO) Acting Director-General, Girma Bejiga, said on his part the National Innovation and Intellectual Property Policy and Strategy has reached its final stage to be ratified by the government.

A three-day meeting under the motto of “Finalization of the National Innovation and Intellectual Property Policy and Strategy for Ethiopia” was opened here today in Addis Ababa.

http://www.ena.gov.et/en/index.php/component/k2/item/376-wipo-extending-4-million-usd-scientific-technical-information-assistance-to-ethiopia

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Mamo Kacha family to join hotel business

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Mamo Kacha, a family-owned-and-run business named after Mamo Yenberberu, the renowned businessman in the logistics and export trade businesses, is collaborating with Collier International to develop two hotels which would be rated at 4.5 to five stars. 

Yenberberu Mamo (Abbey), managing director of Mamo Kacha, told The Reporter that they are planning to build the first hotel on a 2,300 sq.m plot that they had inherited from their late father. The plot is located close to the African Union headquarters and is currently owned by the company.

Abbey said that the UK-based Collier International has been hired to conduct feasibility studies which would be finalized in a couple of months. Collier International, apart from working on feasibility studies, is handling architectural designs and necessary details the star-rated hotels would require. Abbey recalls that the relationship his firm established with Collier International began after both parties attended the 2014 Africa Hotel Investment Forum (AHIF) here.

The construction of the hotel is expected to be finalized and operational in early 2018. According to Abbey, though it is too early to talk about the financial details of the project, the company is set to invest the required sum as the hospitality industry has become lucrative. At a location in Yeka sub-City, the family owns another property where they plan to erect a special boutique hotel which is also expected to be rated 4.5 to five stars. This hotel, according to Abbey, would most likely be run by giant hotel brands such as Hilton Worldwide or Sheraton Group.

The Mamo Kacha family is known for owning and running various businesses in Ethiopia and the US. Among others, 300 gas stations, cab services and real estates are some of the ventures the family is engaged in. Established 75 years ago, Mamo Kacha is also well known in Ethiopia. Abbey’s brother, Eyob (Joe) Mamo, is known as a gas station mogul in the US and is owner and CEO of privately held Capitol Petroleum Group, which controls 42 percent of Washington, DC’s, gas stations

The Africa Hotel investment Forum was hosted last year in Addis Ababa, bringing together some 520 industry players and big faces of the industry. The AHIF-2014 was successful in bringing about signings of six major hotel contract managements to be started here.

That same forum has been announced to be held again this year. The well-known UK-based event organizer, Bench Events, was officially launched on Tuesday that the 2015 forum is taking place from September 29 to October 2 here. Neway Berhanu, managing director of Calibra Hospitality Consultancy Company, which was instrumental to bring the much-echoed forum to the country, is also finalizing deals to open three international brand hotels here.

Neway told The Reporter that his company has been in contact with three global players to work together with local investors. However, Neway declined to mention the names of the brands and the local companies. In addition to Sunshine Construction, which is jointly working with Marriot, it is expected to open a five-star hotel around Mesqel Square in the foreseeable future.

The upcoming AHIF is expected to gather 650 delegates of whom some 200 are said to be local participants. During the launching press conference, Fistum Arega, director general of the Ethiopian Investment Commission (EIC), who also chairs the newly-established Ethiopian Tourism Organization, said that the government is considering re-evaluating the incentives provided to the hotel and tourism sector. He said that access to land, finance, duty-free incentives will be revised soon.

http://www.thereporterethiopia.com/index.php/news-headlines/item/3131-mamo-kacha-family-to-join-hotel-business

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Kuriftu spreads wing to Djibouti

09 Feb 2015 Meseret Bekele

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Addis Ababa February 9, 2015 – The Boston Partners plc, the Ethiopian company known for building Kuriftu Resorts, is going to construct a resort in Musha Iseland, a small island off the coast of Djibouti with a bid to expand the establishment of Kuriftu resorts to East Africa.

Ethiopia’s Prime Minister HaileMariam Desalegn and Djiboutian President Ismail Omar Guelleh were present during the inauguration of the construction of the resort.

The resort, which is an extension of the Kuriftu Resort and Spa, will consume 7 million USD, according to the owner Tadiwos Getachew Belete.

Up on completion after a year, the resort will have 30 presidential suits, two villas and 120 rooms.

This island will help to provide full service for tourists who want to visit Ethiopia and Djibouti by combining natural, historic and cultural heritages of Ethiopia with a “blue sea, white sand and sea food” in Djibouti, he said.

This is the first resort outside Ethiopia for Boston Partners that has six resorts in various parts of the country including in Addis Ababa, Debre Zeit, Bahir Dar, Burayu, Adama and Ziway.

Boston Partners has plan to enter in to hospitality industry in every African country and expand the establishment of Kuriftu resorts to East Africa, he added.

It had concluded a 50 million USD agreement with a US-based company, Fairfax Africa Fund, back in August 2012 to pursue this goal.

The agreement was said to help Boston Partners achieves its plan to build, own and operate several hotels and resorts in East Africa including Ethiopia, Kenya, Tanzania and Djibouti.

http://www.ena.gov.et/en/index.php/economy/item/375-kuriftu-spreads-wing-to-djibouti

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Addis to host Ethio-Swedish Agro Technology Forum

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 Addis Ababa: February 7, 2015 – The first Ethio-Swedish Agro Technology Forum in dairy, sugar and energy will be held in Addis Ababa on 10 February 2015, the Ministry of Foreign Affairs (MoFA) said.

MoFA Business Diplomacy Director General, Hirut Zemen, said that the Forum is organized by the Ethiopian Embassy in Sweden and Ministry of Foreign Affairs of Ethiopia.

In addition to strengthening the bilateral ties between Ethiopia and Sweden, the forum would help to effectively exploit Ethiopia’s agricultural potential, she said.

Swedish based four companies, namely Valley International Projects (V.I.P.), Delaval, Alfa Laval and Tetra Pak will take part at the forum to be held at Sheraton Addis.

Managing Partner of V.I.P, Carl Gustafsson, said that the forum would serve as a catalyst input to Ethiopia’s promising start of being Africa’s leading fastest economy, towards the goal of achieving to be middle income economy.

V.I.P. with its local partner, Sylverstar Group, is keen to promote the Ethiopian diary industry being competitive in the global arena in terms of both in quality and marketing, he said.

High level government officials, stakeholders and invited guest are expected to attend the forum, it was noted.

http://www.fanabc.com/english/index.php/news/item/2171-addis-to-host-ethio-swedish-agro-technology-forum

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FAA removes prohibitions over Ethiopian territory for US planes

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Addis Ababa: February 6, 2015 – The United States Federal Aviation Authority (FAA) has removed the prohibition that it placed on US carriers and commercial operators from overflying some parts of Ethiopia

The ban was placed in 2000 for north of 12 degrees north latitude during the Ethiopia and Eritrea border conflict, the FAA says.

The removal of the ban was announced by the FAA on February 4, 2015 and published in the Federal register Vol. 80, No. 23.

“This action removes the prohibition against certain flights within the territory and airspace of Ethiopia contained in Special Federal Aviation Regulation, (SFGAR) no. 87,” it says.

http://www.fanabc.com/english/index.php/news/item/2167-faa-removes-prohibitions-over-ethiopian-territory-for-us-planes

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Ethiopia’s Economic Growth Could Be Model for Other African Countries: WB Officials

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Addis Ababa February 11, 2015 - The rapid economic growth Ethiopia has been registering could be a model for other African countries, World Bank (WB) said.

A 10-person high-level WB delegation held here on Monday discussion with Prime Minister Hailemariam Dessalegn about the relations of the bank with Ethiopia.

World Bank Africa Group Executive Director, Louis Rene Peter Larose, said during the occasion the consecutive rapid economic growth Ethiopia has been registering can be a good experience to other countries of the continent.

The effort of the country to strengthen south-south economic cooperation is another worthy experience that can be cited, the executive director added.

The World Bank recognizes this economic growth, Larose said, adding that the bank and Ethiopia have excellent relations and this relationship would further be consolidated in the future.

World Bank Group Executive Director, Alex Foxley, said on his part the Ethiopian government has generally registered economic growth and alleviated poverty in the country.

The executive director stated that activities undertaken jointly by the bank and the government were evaluated; and WB would continue its partnership with the government in the coming five years.

Finance and Economic Development Minister, Sufian Ahmed, said the aim of the discussion was to assess the development works the bank has been supporting in the country and confer on future collaborations.

Representatives of the bank also want to see the progress Ethiopia has made in education, health, the private sector and infrastructure development, he added.

http://www.ena.gov.et/en/index.php/economy/item/385-ethiopia-s-economic-growth-could-be-model-for-other-african-countries-wb-officials

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Ministry says would work more towards building development army

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Addis Ababa, 11 February 2015  - The Ministry of Civil Service said it has been making efforts towards building a committed and vibrant civil servant which contributes share for the successful accomplishment of development plans set by various institutions.

Opening a three-day consultative meeting held yesterday at Adama Town, Good Governance and Reform Cluster Coordinator and Civil Service Minister with the rank of Deputy Prime Minister Aster Mamo said that the performance of government institutions in creating a vibrant civil servant with similar attitude and perception over the last six month is not yet achieved. In this regard, the Ministry will work aggressively to fix the major problems in the remaining six months.

The public, leaders and civil servants should work jointly to register better results in the next six months. Most of the government institutions carried out successful activities at the plan preparation period, Aster said adding, only few institutions are performing better when it comes to translating the plan into practice. Replicating best practices of certain institutions is helpful to have similar results in other institutions.

Regarding good governance, she said most government institutions have been making efforts through making discussion with the public to identify root causes of problems and put long, short and medium term solutions. In some institutions, it has been possible to address good governance problems and gain good results whereas some still remain behind in providing timely and effective solution.

“Still there is lack of leadership commitment in some government offices, Aster said. The performance of a given institution is measured by the commitment of its leaders and civil servants. Hence, much is expected from leaders in building capacity of civil servants,” she added.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17585:ministry-says-would-work-more-towards-building-devt-army&catid=52:national-news&Itemid=291

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“We are ready to actively participate in May general elections,” political parties

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17589:we-are-ready-to-actively-participate-in-may-general-elections-political-parties&catid=71:editors-pick&Itemid=396

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Ethiopia tipped for tourism surge

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Annual report lists Ethiopia among emerging destinations, while bookings for Cuba rise and trips to Malaysia prove less popular

A rock-hewn church at Lalibela

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   By Oliver Smith 

Ethiopia has been tipped to become a popular holiday destination in the coming years by one of Europe’s biggest long-haul tour operators.

The East African country, which suffered a series of famines in the 1980s but can boast some of the continent’s most dramatic landscapes, has been included among a list of emerging destinations in Kuoni’s annual travel trends report.

Around 20,000 Britons visit Ethiopia each year, according to the Foreign Office, but that could increase with Kuoni offering trips there for the first time.

^{The Danakil Depression}

The country’s highlights include the monolithic rock-hewn churches at Lalibela; the Simien Mountains National Park, a Unesco World Heritage Site that is home to a number of endangered species, including Ethiopian wolf and walia ibex; and the otherworldly Danakil Depression, with its colourful sulphur and salt lakes.

Trips to see the tribal communities of the Omo Valley are another, though some believe they are exploitative. In 2013, Exodus, an operator specialising in activity and adventure travel, announced it would no longer offer such tours.

Parts of the Ethiopia are off-limits, however. The Foreign Office advises against all travel to within 10km of the borders with Sudan, South Sudan, Kenya and Eritrea, and to larger parts of the country’s north-eastern and south-eastern regions.

Kuoni’s trips feature Lalibela, the low-key capital Addis Ababa, the towns of Gondar and Bahir Dar, the Bale Mountains National Park and the Simien Mountains National Park.

^{The Simien Mountains National Park}

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Other emerging destinations listed by Kuoni included the Philippines, following the recent launch of direct flights from London to Manila, La Réunion, in the Indian Ocean, and Sri Lanka‘s east coast.

The tour operator’s annual report also highlighted those countries which have grown in popularity over the last year – and those which have fallen from favour.

Bookings for Brazil have risen 58 per cent, year-on-year, with the World Cup said to be behind the trend. A further rise is expected as Rio de Janeiro prepares to host the 2016 Olympic Games.

Malaysia, on the other hand, is proving less popular, with the two Malaysia Airlines disasters believed to be behind the fall in booking.

George Clooney’s marriage to Amal Alamuddin in Venice appears to have inspired holidaymakers – inquiries for weddings and honeymoons in Italy have increased 20 per cent since the ceremony in September.

Overall, the Maldives is Kuoni’s most popular destination for 2015, based on sales until the end of January. It is the 10th year running the islands have topped the list.

The UAE has risen to third, behind Thailand, while Cuba has jumped to seventh, its highest ever ranking, with travellers apparently keen to see the country before improved relations with the US affect its undeveloped charm.

Kuoni’s top 20 destinations for 2015

1. Maldives (2014 position: 1)
2. Thailand (2)
3. UAE (3)
4. Sri Lanka (4)
5. USA (6)
6. Mauritius (5)
7. Cuba (10)
8. Antigua (12)
9. Singapore (13)
10. Barbados (8)
11. St Lucia (11)
12. Mexico (16)
13. Vietnam (14)
14. Italy (-)
15. Indonesia (15)
16. Malaysia (9)
17. Australia (24)
18. India (18)
19. Hong Kong (25)
20. Switzerland (17)

http://www.telegraph.co.uk/travel/destinations/africaandindianocean/ethiopia/11402638/Ethiopia-tipped-for-tourism-surge.html

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Ethiopia, Argentina Agree to Expand Relations

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Addis Ababa  – Ethiopia and Argentina have agreed to expand their longstanding political relations to the economic sphere.

State Minister of Foreign Affairs, Berhane Gebre-Kristos, signed here today a technical cooperation agreement that enables the two countries to strengthen their economic relations with his Argentinean counterpart Eduardo Zuain.

According to State Minister Berhane, both sides will benefit if they collaborate in agriculture and livestock sectors as Argentina has capability in the sectors and Ethiopia has extensive agriculture, livestock resources and strong human resource.

The countries have agreed to cooperate in science and technology, and research, it was disclosed.

The countries also agreed to work together in protecting their common interests at international forums, Berhane added.

The state minister said his counterpart has requested that Ethiopian Airlines fly to Argentina so as to bolster the people-to-people and economic ties. The airline will responsibly consider the invitation, he added.

Argentina’s State Minister Eduardo Zuain said on his part Argentina is ready to strengthen its economic relations with Ethiopia.

He stated that the countries will build their economic relations by consolidating the agricultural, health and technical cooperation; and we have signed the technical agreement to consolidate this.

The state ministers have also discussed the situation in Somalia and about peace and stability in the region, it was learned.

http://www.ena.gov.et/en/index.php/social/item/379-ethiopia-argentina-agree-to-expand-relations

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AU Summit provides Ethiopia with opportunity to strengthen ties with various countries

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Addis Ababa, 10 February 2015 (WIC) – The 24th African Union Summit concluded last week provided Ethiopia with the opportunity to strengthen its bilateral ties with various countries.

MoFA Spokesperson, Ambassador Dina Mufti made the remark at a press conference held today at the Ministry’s premises.

He said the Summit helped Ethiopia to held discussion with various African, Asian and European counties as well as heads of continental and international organizations.
He said PM Hailemariam Dessalegn and Foreign Affairs Minister Dr Tedros Adhanom, held discussion with heads of states and governments, ministries and representatives of the various organizations at the sideline of the Summit.

According to Ambassador Dina, the discussions were successful in terms of deepening Ethiopia’s ties with the countries and officials with whom PM Hailmariam and Dr Tedros met.

He further said that the visit paid by Prime Minister Hailemariam to Djibouti over the weekend was significant in further cementing the relationship between the two neighboring countries.

During his visit, the two sides signed six agreements that help both countries take their relationships one step further.  The agreements were signed in the areas of boarder trade, transport, mining, gas and railway, among others.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17572:au-summit-provides-ethiopia-with-opportunity-to-strengthen-ties-with-various-countries&catid=52:national-news&Itemid=291

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Hellocash Mobile Money Service Goes Live in Ethiopia

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 Addis Ababa: February 11, 2015 – Lion International Bank and Somali Micro Finance in partnership with BelCash Technology Solution PLC launched the official pilot of the HelloCash mobile money services.

BelCash Technology Solution PLC is an Ethiopian based technology service provider for financial industry.

The HelloCash mobile money platform will provide financial services to all Ethiopians. The HelloCash service enables existing and potential customers of Lion International Bank and Somali Micro Finance to carry out transactions in four key areas of financial transactions: Deposit, Withdraw, Transfer and make payments.

The HelloCash mobile money service is provided in compliance with National Bank of Ethiopia’s directives on mobile money.

The pilot of HelloCash mobile money service is underway in three part of the country with locations consisting of a mix of agent outlets and branches.

HelloCash Mobile Money would make financial services available to more Ethiopian, especially at the grassroots in order to drive financial inclusion in the country.

One of the uniqueness of HelloCash mobile money services is its interoperability and shared infrastructure features. The system is designed for multi banks and MFI’s to be interconnected and offer the mobile money service to their respective customers, therefore, partnering financial institutions are able to share each other’s agent and branch network to serve each other’s customers.

This allow any customers of any partnering bank to visit any agent or branches to conduct financial services regardless of which bank customers belongs too. The sharing of agent network allows partnering banks to optimize their investment as well as increase national wide service coverage.

CEO of BelCash International, Mountaga Vince Diop mentioned that this is only the beginning of what seems to be an irreversible step to reinforce Financial Inclusion in the country.

BelCash Technology Solutions PLC provides the Banks and the Micro Finances, Go-to-Market turn-key mobile money solutions (including capacity building, business and operational models, hardware, disaster recovery and Call center facilities) and facilitate the penetration of Mobile and Agent Banking in the Ethiopian Financial landscape.

The Financial Institutions providing HelloCash in Ethiopia are confident to build a unique network of more than 20,000 agents across all Ethiopia within the 3 coming years.

http://www.fanabc.com/english/index.php/news/item/2205-hellocash-mobile-money-service-goes-live-in-Ethiopia

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Ethiopia Distributes its Cargo Among Neighbouring Countries’ Ports

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In the wake of Ethiopia issuing bonds, it has come to the realization that it may need alternative ports aside that of Djibouti.

Ethiopia Distributes its Cargo Among Neighbouring Countries’ Ports

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Ethiopia is to start using the Port of Berbera this month on an agreement reached between the two countries on January 29, 2015, while the use of Port Sudan has started by the importation of 50,000 tonnes of fertilizer.

Ethiopia had expressed its dependence on Port Djibouti as a concern when it issued a one billion dollar sovereign bond in October 2014. The move towards issuing the bond came after Ethiopia got a ranking of B+ by foreign rating companies namely, Moody’s, S&P and Fitch.

It seems that the effort to reverse the full dependence of the country on Djibouti by finding alternative ports is bearing fruit.

“Five to 10pc of the country’s imports are planned to come through the port of Berbera, and we will be looking for proper ports for different areas of the country,” said Workineh Gebeyehu, minister of Transport when reporting his office’s six months’ performance to the Parliament. “But the Port of Djibouti continues to be the major one.”

Considering the annual average growth rate of Ethiopia, that is 10.1pc through the five years of the Growth and Transformation (GTP) period, Djibouti has started 9.8 billion dollars of expansion of Port Djibouti. The expansion, which is meant to be completed by the end of 2017 is planned to increase the capacity of the port 15 times.

Ethiopia is also undertaking construction of a 98Km railway that will stretch from Somali, a region in eastern Ethiopia, to Djibouti. It is being constructed by a Chinese firm, China Civil Engineering Construction Corporation (CCECC). The 1.98 billion dollars project, according to the CCECC website, is financed by the Chinese Export Import (EXIM) Bank.

The Ethiopian Shipping & Logistics Services Enterprise (ESLSE), which has 15 ships out of which two are for oil, has finished dealing with an agent in the Berbera Port and one of its ships will be deploying 20 to 30 containers to the port this month. The agent is a Member of GSK Group of Djibouti. For now ESLSE will be bringing goods to Berbera from India, Middle East and Saudi Arabia while planning to extend its reaches to China and the Far East, according to Alemu Ambaye, (Chief ENG), Shipping Services Sector deputy chief executive officer.

“In terms of suitability, while Berbera has a slight closeness to our country, the road to it is not suitable,” Alemu told Fortune.

The road that extends from Jigjiga-Togo-Wuchale is concrete asphalt but the road within the border of Somalia is not suitable and therefore the Ethiopian government is working with the Somali government to source financing, according to Samson Wondimu, the communications director at the Ethiopian Roads Authority. The port, for the time being is going to be used for importation of coal according to Tesfaye Chanchissa, public relations officer at the Ethiopian Maritime Affairs Authority.

The rate of payment, which is based on loading and unloading of goods is also said to have a slight difference from Djibouti although it is yet to be experienced, according to Alemu.

The service that the Shipping lines will give will be transshipment- which means the ships will come mainly to Djibouti and will go to its place of origin after reaching the Port of Berbera. The ESLSE ship that is coming from Dubai will reach Djibouti then Berbera and finally go to Dubai.

“We will use alternative ports without affecting the benefits of other ports,” stated Workineh.

The same as Workineh, Alemu also believes that there is enough load that can suffice all the ports.

The ESLSE will be deploying goods at the newly agreed ports every two weeks. It has also made new customers in the line which is why it started the new route. Ethiopia has been using Port of Sudan for its exports.

Currently, Ethiopian cargo, especially container, delivered to Port of Djibouti is around 10,000 containers a month and 550 – 600 trucks leave Djibouti to Ethiopia every day carrying Ethiopian cargo, according to a data from Ethiopian Maritime Affairs Authority

http://addisfortune.net/articles/ethiopia-distributes-its-cargo-among-neighbouring-countries-ports/ 

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Ethio-Swedish Agro Technology Forum held in Addis

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 Addis Ababa: February 11, 2015 – The first Ethio-Swedish Agro Technology Forum for the dairy, sugar and energy sectors was held at Sheraton Addis yesterday with the presence of Ethiopia’s State Minister of Industry, Dr Mebrahtu Meles and Ambassador of Sweden to Ethiopia Jan Sadek.

The Forum was organized by the Ethiopian Embassy in Stockholm and The Ministry of Foreign Affairs of Ethiopia in Addis Ababa, in collaboration with Valley International Projects (VIP), founded by Swedish businessman Carl Gustafsson and his Ethiopian partner Akal Mamo.

The Swedish business delegation consisted of companies TetraPak, AlfaLaval and DeLaval. Ethiopian stakeholders of diary, sugar and energy sectors and the Swedish business delegates made their respective presentations, followed by business-to-business meetings in the afternoon.

The forum was attended by about 50 people engaged in the sectors.”

http://www.fanabc.com/english/index.php/news/item/2204-ethio-swedish-agro-technology-forum-held-in-addis

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Listing in Africa – Extractive Industries

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Year shows Growth and Apprehension for Private Banks in Ethiopia

By BROOK ABDU
FORTUNE STAFF WRITER

The branches opened by private banks in the fiscal year were 1,205 growing from the previous year’s 859. Four banks in the sector sent their presidents off on a resignation from the presidents.

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The last fiscal year had been one of growth and expansion for Ethiopia’s banking sector, though still dominated by the state owned Commercial Bank of Ethiopia (CBE) and although most of the private banks still face the challenge of meeting a paid-up capital minimum of 500 million Br by 2016, according to a decree by the central bank.

In the fiscal year that ended on June 30, 2014, the total number of bank branches in the country reached 2,208; of these 1,205 are private bank branches. Of the new 480 branches opened during the year, 346 were also opened by private banks. The growth has led to improving the branch-to-population ratio of one to 49,826 people to one branch to 39,402. The CBE alone has opened 124 branches during the year, still playing a dominant role, but

the share of state-owned branches has fallen from 50.3pc to 45.4pc.

The sector has seen its profits and expenses as well as its assets and capital growing during the year and over the years. The 16 private banks had a cumulative pretax profit of 4.7 billion Br, which grew by 24pc, and profit after tax of 3.6 billion Br. These banks have paid an income tax of 1.2 billion Br. The growth in the profit before tax surged from the prior year’s 11pc of growth. Among the banks, Oromia International Bank saw an increase in profit of 99.1pc, while Wegagen Bank saw a decrease in profit of six percent.

The highest profit after tax went to Dashen Bank, which had registered a profit after tax of 712.5 million Br while the smallest slice went to Debub Global Bank with 18.5 million Br.

The performance of the sector in the fields of financial intermediation has significantly increased. The interest income in the sector has grown by 30pc reaching 7.1 billion Br. The highest share of this went to Dashen, which has reported an interest income of 1.3 billion Br, followed by Awash International Bank with 1.2 billion Br. Debub, being one of the new participants in the market earned the least, which is 37.2 million Br.

This growth has fed into increasing paid up capital, although most are yet to meet the 500 million Br requirement by the central bank. The total paid-up capital of the banks increased by 35pc to 10.8 billion Br. The 16 banks had 15.1 billion Br as capital and reserves, enabling them to have a capital adequacy ratio (CAR) of 28.6pc, which is far better than the legal requirement of eight percent. CAR shows the capacity that the banks have to absorb risks if considerable portion of loans, advances and other assets go sour as banks are prone to such risks.

The private banking sector has also seen its assets increasing by 21pc to 121 billion Br. Dashen stands at the top of the list having a total asset of 22 billion Br.

Dashen is also the leading spender with its expenses reaching 1.2 billion Br and the smallest being Zemen with an increase in expenses being only three percent. The promising growth in the profit of the private banks is shadowed by a growing expense, especially in the staff and general and administrative realm. Salary and benefit expenses have expanded by 40pc reaching two billion Birr and the general administrative expenses in the banking sector have shown a growth of 46pc reaching 1.9 billion Br, which resulted from the competition in the sector to maintain their employees with salary increase and benefits.

With this comes the challenge of meeting the central bank’s decree of a minimum paid up capital of 500 million Br by 2016. Debub Global Bank, for example, has recapitalized its first profit gained in the last fiscal year, which was 18.5 million Br, forgoing dividends that had to be paid to shareholders.

“The amount set by the central bank is very important to make the banks cover risks,” says AlemayehuGeda (Prof.), a macroeconomist who teaches at the Addis Abeba University, Department of Economics. “The inflation has devalued the money at least five times within the past five years that makes the amount on the directive logical.”

Despite the increase that is seen in the profit of the banks, the earnings per share (EPS) of the banks have shown a decline. The average EPS of the industry has fallen down to 36pc from 39pc in the previous fiscal year. This is a result of the capitalization of the banks to comply with the NBE directive, according to Abdulmenan Mohammed Hamza, accounts manager at Portobello Ltd, a London firm.

In the fiscal year of 2013/14, banks have been focusing on the expansion of their technological bases by expanding core banking and increasing the number of their Automated Teller Machines (ATM). Banks that did not have the machines had invested in new ones. And some like Dashen and United Bank have taken licenses from NBE to start issuing agent and mobile banking in the fiscal year.

But the growth in the adoption of new technologies in the country is slow for Alemayehu, as he compares the growth with other countries, especially with Kenya, which is a worldwide model for its M-Pessa mobile banking.

“Technology does not mean ATM and core banking,” argues Alemayehu. “We need to exploit the potential of new banking systems through which we can access our accounts at home like the Kenyan M-Pessa and internet banking.”

The banks were also seen acquiring their own ATMs except for Zemen and Dashen that use the same machines and the six members of the PSS, Awash International Bank, Nib International Bank, Addis International Bank, United Bank, Berhan International Bank and Cooperative Bank of Oromia.

“They are wasting their resources on what they can possess in groups,” comments Alemayehu.

Even though the banks have experienced growth in these dimensions, the macro economist Alemayehu says that the banking sector is shallow as they do not give world-class services by supplying investment banking, startup capital, and they do not have the experience in issuing bonds.

Since April 2008, no interbank money marketing has been conducted and since its introduction in the country in September 1998 only 23 transactions have taken place, which are worth 259.2 million Br with interest rates ranging from seven percent and 11pc a year and the maturity period spanning from one day to five years, according to the year’s report from NBE.

“Interbank money market remained dormant because of excess reserves in the banking sector,” states the report.

Alemayehu Geda urges for a cautious opening of the Ethiopian financial sector which the government has reserved for domestic investors only. The absence of international investors in the sector has caused the local banks to walk in smaller strides towards change, according to Alemayehu. The banking sector, he believes, has been protected for the past 15 years and this should be reversed; but with a risk he says.

“The banking sector has to be made open to foreign investors slowly by letting the management go first then in the form of shareholders in the sector,” he suggests.

If foreign investors are let in at a time, local banks, which are shallow, could disappear, he says, giving the example of Kenya, where there were 120 banks before liberalizing the sector – only six survived after the liberalization.

The private banks should also organize themselves and challenge the government on some of its biases, like housing saving that is only allowed to be deposited at the CBE, and policy making such as monetary policy and decision of exchange rates.

“If they could not do that, they should lobby the government,” he says.

Despite the increasing expenses and the slow growth of the technology in the industry, the Ethiopian banking system is growing as a recent report of the International Monetary Fund (IMF) shows.

“Ethiopia significantly lags behind the other Sub-Saharan African countries in all measures of financial access, including number of branches, ATMs, depositors, and creditors” states a report from the IMF released in October 2014. “[But] the banking system is expanding and the structure of its liabilities and assets is evolving and the financial soundness indicators [which include CAR, return on assets and return on equity and asset quality] do not indicate immediate risks to the health of the banking sector.”

The number of banks per 100,000 adults stands at around three while that of the Sub-Saharan Africa is about four, the depositors per 1,000 persons is 100 in Ethiopia while this number is 150 in Sub-Saharan Africa. The number of ATMs in Ethiopia per 100,000 adults is well below two while the number in Sub-Saharan Africa is about five according to a data from IMF report.

The fiscal year that showed growth in all banks with many in the industry left to fulfill the NBE directive over minimum capital requirement has stayed being the concern of the banks in the fiscal year. The deadline set for the fulfillment of the directive is June 30, 2016 after which the fate of these banks will be being prohibited from accepting new deposit, underwriting new loans, conducting international banking business and being compelled to merge or be closed.

The year 2013/14 was also a year in the banking sector that had shown an unfamiliar presidential reshuffle, resulting in rise of vice presidents to the post of presidency. Four banks in the sector saw their presidents leave of their own volition. These are Bank of Abyssinia, Berhan International Bank, Debub Global Bank and Lion International Bank. In all banks where the presidents have left, others have taken their place in top positions in the sector. This is in direct contrast to the long-standing comment on the sector that it has no opportunity for the growth of new leadership.

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Despite recent excitement for opportunity in Africa, much-vaunted as mining’s new golden goose, investment and industry are slowing to a crawl.

Africa remains the big growth story, so much so that the annual Mining Indaba in Cape Town bills itself as the world’s largest investment conference. More than 7 000 delegates attend it, with exhibitors displaying their stuff in the main hall and hospitality suites competing to fête well-heeled delegates.

The indaba, which is held in the Cape Town International Convention Centre, has become so entrenched since its formation 21 years ago that it has sparked the Alternative Mining Indaba in the suburb of Woodstock, which seeks to discuss and understand the social effects of mining, accountability, transparency and good governance.

At the Mining Indaba, a succession of speakers supply nonstop information in the large main hall and in smaller auditoriums. The delegates, mostly suited men, are drawn from 110 countries in six continents, including 47 delegations from the rest of Africa. Notably conspicuous, also with their own hospitality suites, are large delegations of Canadians and Australians keen to use their mining experience to expand their presence in Africa.

Little joy

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The indaba is associated with big money, shown not least by the fact that it is sponsored by more than 400 companies, including some of the world’s biggest by market capitalisation.

But for all the trappings of wealth and success, not to mention high projected growth rates, the mood was pessimistic, even downbeat, with words such as “crisis” peppering the conversation.

The indaba’s chief executive, Jonathan Moore, told delegates at the opening that commodity prices, as measured by a Bloomberg index, were 17% down on last year. The price of base metal iron ore fell from $180 a tonne to just $60 over the past three years. In the past year, iron ore, not unlike oil, halved in price.

Exploration and investment are down. Statistics compiled by Deloitte in the State of Mining in Africa report show that investment in mineral exploration is down 50% compared with 2012.

Deloitte’s data shows that, in the case of 14 countries that make up 80% of the continent’s total, all have been in decline since 2012.

“The continent is slowing in future mineral development. Considering the current prices of many commodities, the outlook for growth looks very gloomy indeed,” say the authors of the report, John Woods and Andrew Lane.

They say that 30 projects are scheduled to come on line in Africa by 2018. These include nine copper mines, four gold mines, three coal mines, three platinum mines, two uranium mines, one iron ore mine, one nickel mine, one zinc mine and one potash mine.

A dominant recent narrative is that mining investment has been flowing into the rest of Africa rather than to South Africa, in part because of regulatory and energy uncertainty, but also because many South African mining operations are relatively mature. This means production costs are typically higher.

But if you think that mining investment is flooding out of South Africa, think again. The authors say the 30 new projects amount to a total investment of $18-billion.

“We estimate the total forward spend on these projects to be approximately $10.5-billion, with South Africa taking 29%, DRC [Democratic Republic of Congo] 23%, Mauritania 8%, Namibia 8%, Zimbabwe 8% and Zambia 7%.”

The report shows that South Africa heads nine countries in terms of the ease of doing business, followed by Ghana, Botswana, Namibia, Zambia, Mozambique, Tanzania, Zimbabwe and the DRC.

Most of these countries, with the exception of Mozambique, the authors note, have seen their ease-of-doing-business ratings decline rather than improve over the past year.

The Mining Indaba attracts 7000 delegates.

Notwithstanding Eskom’s current problems and poor prognosis for the next few years, energy is the big differentiator between South Africa and its African mining competitors. Poor infrastructure, including energy provision, means that mines usually have to supply their own power.

A World Bank report, The Power of the Mine, predicts that mining demand for power will triple to 23 gigawatts by 2020. It says: “Africa needs power to grow its economies and enhance the welfare of its people. Power for all is still a long distance away – two-thirds of the population remains without electricity and enterprises rank electricity as a top constraint to doing business.”

The report says, without investment, sub-Saharan Africa will see the number of people without electricity increase from 590-million in 2013 to 655-million by 2030. But mining in the region has spent $15.3-billion installing 1?600 megawatts for its own use since 2000. None of this power has found its way to the national grids.

The authors say this is a loss for everyone – people, utilities, mines and national economies. They argue that, instead of going it alone, it would be better for mines to set themselves up as anchor tenants for power utilities, which could use these mines to develop a grid to provide widespread electricity for all at a lower, shared cost.

Woods and Lane show that a significant investment in infrastructure is often a prerequisite for investment in mining.

“Generally the mining sector and governments agree infrastructure development is critical for the growth of the mining sector. Well-maintained and appropriately sized capacity in rail, ports, power, roads and communication leads to more economic reliability, and maintenance of lower costs for mining operations.”

Their report shows that infrastructure is being developed in sub-Saharan Africa. Surveying the period between 2003 to 2030, they estimate $317-billion will be spent on energy and power, $186-billion on rail, $87-billion on ports and the relatively small amount of $50-billion on mining. This, they say, excludes Rio Tinto’s $20-billion Simandou project in Guinea.

Source of funds

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The authors say that “mining companies and governments across Africa are at the sharp end of investor, labour, mining community and media scrutiny”.

It is worth noting where the funding of African mining projects comes from. The Deloitte report analysed the source of funds for 29 projects currently in development. “The Toronto Stock Exchange is funding 29% of the projects, followed by the Hong Kong Stock Exchange funding 17% and the National Stock Exchange of India funding 10%.”

The JSE is a distant eighth after the Australian, Euronext (Paris) and Russian exchanges.

Africa is not universally seen to have only an upside. A report by Deloitte, Australian Investment into Africa, says the value of listed Australian mining investment fell by 27.3% last year. Ebola in West Africa, which halted operations, and the five-month platinum strike in South Africa were the primary reasons for the loss of value.

Some of the world’s biggest companies by market capitalisation sponsor the indaba.

If delegates were hoping for light at the end of the mining tunnel, the macroeconomists who speculated on the future did not lift the gloom. Get ready for the long haul was the message; commodity prices could take several years before they recover. The fall in prices is caused by supply exceeding demand, the key factor being the slowing Chinese economy.

One speaker, Jim O’Neill, was less bearish than most and argued that, if you take a long view over several decades, things are not that bad now. (He is famous for popularising emerging markets and coined the term Bric – Brazil, China, India and China – which later, when South Africa joined, became Brics.)

The state of global economic health is best seen in Europe, a giant that usually drives demand, but at present, in O’Neill’s terms, is a “laggard”.

He argued that “we are doing better than we think”, one positive being the low oil price, but he said the days of China clocking up double-digit growth were gone. That was the old China in which policymakers pursued growth at all cost. They were much more focused now on the quality of growth.

The new China consumed more relative to its own production, he said, predicting that China would grow by between 5.5% and 7.5% for the rest of the decade.

If we were looking for high growth, we were more likely to find it in India, O’Neill said, which he expects will grow faster than China.

With little to no room for optimism, some talk was about whether commodity prices have hit the bottom. The optimists maintain that prices are as low as they can go. The pessimists worry they will fall further. But, for most, the challenge appears to be to survive the present fallout to be able to benefit when prices do recover.

There is a strong focus on running operations and managing costs as efficiently as possible.

For Chris Griffiths, chief executive of Anglo Platinum, this is about modernisation – a package of measures to reduce costs by rationalising operations and putting high-cost operations up for sale.

Griffiths said platinum prices had not recovered from the lows following the 2008 collapse, but that costs had been rising at a higher rate than consumer inflation. Innovation, which was both possible and affordable, was the solution– an active move to mechanisation, using very low, remote-controlled vehicles in the narrow stopes.

He sees this as resulting in fewer jobs, although they will attract higher wages. He also sees a growth in service jobs associated with the higher-tech operations.

Fewer jobs will undoubtedly create new labour tension, which will challenge Griffiths, who wants to modernise labour relations. He said the combative “them and us” needed to end and be replaced by partnerships with employees, communities, unions and nongovernmental organisations.

Regulation

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Deloitte’s report says: “Governance, mining legislation and the tax law seem to be broadly stabilising, with the exception of Zambia and Zimbabwe, which increased their tax royalty rates twice in the past six years.”

But Randgold Resources’ chief executive Mark Bristow said: “Mining can play a major part in Africa realising its potential but our potential to contribute fully to the continent’s continuing transformation is handicapped by an irresponsible short-term culture, which is an unfortunate legacy of the boom years.

“The harsh truth of the matter is that the mining sector has inflicted debt, impairments and write-downs on itself without making provision for its own long-term future, and is in a sorry state.

“In fact, even at current prices, and this applies to gold in particular, the industry is not viable without a major reinvention. Yet, even now, almost all Africa’s mining countries are revising their mining codes and regulations to increase their share of the miners’ revenues.

“To put it bluntly, they are demanding more money from an industry that is basically insolvent,” Bristow said.

Sourced here  http://mg.co.za/article/2015-02-12-mining-indaba-peppered-with-investment-pessimism/

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Addis Ababa Airport to be extended, new hub planned

 Addis Ababa: February 13, 2015 – Ethiopia will complete expansion work on the capital’s airport in 2018 to triple the number of passengers it handles from 7 million a year.

http://www.fanabc.com/english/index.php/news/item/2219-addis-ababa-airport-to-be-extended,-new-hub-planned

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It’s Time Ethiopia And Its Neighbours Took The Bull By The Horns

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VENTURES AFRICA – Africa has had its fair share of crisis, but its current developmental strides are shifting focus from the continent’s troubles to the abundant potentials and opportunities. These positive changes have been reinforced by continuing regional integration in the Eastern, Southern and Western parts of the continent. However, the countries in the Horn of Africa are still held back by age old skirmishes, which are still barriers to socio-economic cooperation. This lack of transnational partnership continues to hamper the growth and development of these countries, which have among them states languishing at the bottom of international societal indexes.

In a recent High Level Joint Commission Meeting of neighbours Ethiopia and Djibouti held in early February, the leaders of the two countries underscored the significance of enhancing bilateral cooperation in the political, economic and social sectors. Djibouti’s Prime Minister Ismail Omar Guelleh and his Ethiopian counterpart HailemariamDessalegn reiterated their commitment and determination to consolidate the existing strategic relations between the two countries and peoples in all fields of cooperation.

Ethiopia building bridges to economic prosperity

Landlocked Ethiopia is a major economic partner of Djibouti and Sudan and is reliant on both countries’ ports for imports and exports. About 85 percent of the country’s yearly oil consumption comes from Sudan via the Port of Djibouti. A protocol concerning Ethiopian access to Port Sudan was signed between the two countries in 2000 in Khartoum. They are now in the process of linking their power grids. Ethiopia has also improved relations with Somalia, a country bordered by the Indian Ocean to the east. Although Somalia is just recovering from years of civil war and insurgency by Islamist extremists, Ethiopia and its ally, Djibouti have expressed commitment to helping Mogadishu cement the peace bulding process. In contrast, Ethiopia’s dealings with its northern neighbour Eritrea are extremely tense due to an ongoing border dispute between the two countries. After the end of a 30-year war in 1991, the two countries still have not found common ground. While Ethiopia has flourished and has become one of the fastest growing economies in Africa, Eritrea’s economic fortunes have not improved. Now, Ethiopia’s fears are not about another war, but the effect that chaos in Eritrea may have on its growing economy.

Eritrea’s change may be tied to a new leader

Eritrea’s stance on issues, and the way the international community views the poverty-stricken nation, may only change with a change in leadership. In a joint communiqué released by both Guelleh and Dessalegn after the  meetings held from February 2 through 9, they condemned they perceive as a policy of continuous and deliberate destabilization pushed by Eritrean Government led by IsaiasAfwerki. They pushed for the international community to strengthen sanctions against the Eritrean state instituted because of its support for Somalia based rebel groups. Djibouti and Ethiopia’s leaders say they seek sanctions to put further pressure Eretria’s leader who has shown no signs of readiness to make changes. However, a refugee crisis, high-level defections, and recently, mutiny in the army indicate that Afwerki’s regime faces serious threats and may fall sooner rather than later.

Just as the process of change began for Ethiopia after long-time strongman, MelesZenawi, died in 2012, Afwerki’s ouster may signal the beginning of change for Eritrea.  While everyone affected by the tension between Ethiopia and Eritrea craves peace, there are many thorny issues the two nations need to sort out. One important area of disupte is the contested border town of Bademe. The town was awarded to Eritrea by the Ethiopia-Eritrea Border Commission (EEBC) though Ethiopia has not relinquished control. Ethiopia may have to let go for the sake of peace. This will exert more pressure on Afwerki who uses the perceived Ethiopian threat to justify his system of one-man rule and compulsory military conscription.

Djibouti is Ethiopia, Ethiopia is Djibouti

Apart from having a common enemy in Eritrea, Djibouti and Ethiopia have always had good relations. There have been reports of genetic linkage between the two countries, which have led to a proposal for unification of the nations. Prime Minister Ghelle last May said there was no difference between them: “We believe that Ethiopia is Djibouti and Djibouti is Ethiopia, no difference at all.” According to the Ethiopian Reporter, Djibouti proposed a unification with Ethiopia, which the latter is likely to embrace. However, the people and the governments of the two countries should be the ones to decide what kind of integration they would like to forge. The Horn of Africa could form an important economic quartet if relations with Eritrea improve. The East African Community is arguably the most important economic bloc in Africa, and its integration has fostered the economic growth of member states. Such success can be replicated in the Horn of Africa, but this requires vision, commitment, will, and most importantly, that Ethiopia settles its scores with Eritrea. Ethiopia and Djibouti may not be enthusiastic about having a larger economic bloc in the Horn of Africa, but both countries have recommitted to the decision of the Inter-Governmental Authority on Development (IGAD) Assembly of Heads of State and Government to revitalize the eight-country trade bloc, to speed up the regional integration process. It remains to be seen whether countries in the EAC, who are comfortably building Africa’s largest economic bloc would be ready for an extra commitment with IGAD.

http://www.ventures-africa.com/2015/02/its-time-ethiopia-and-its-neighbours-took-the-bull-by-the-horns/

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GlaxoSmithKline considers Ethiopia as a strategic country for investment in Africa

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Economic integration is defined by Investopedia – an authoritative financial dictionary – as an economic arrangement between different regions marked by the reduction or elimination of trade barriers and the coordination of monetary and fiscal policies.