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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.”
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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.
According to the Minister of Transport, Workneh Gebeyehu, who presented his office’s six-month performance report to the House of Peoples’ Representatives on Tuesday, the construction of the Addis Ababa/Sebeta-Me’iso and Me’iso-Dire Dawa and the other long range project, the Awash – Woldiya/Hara Gebeya, are achieving a progress of 60 percent and 71 percent, respectively.
Regarding Awash – Woldiya/Hara Gebeya project, Workineh told MPs that the contractor has already began undertaking the implementation and submitted basic design and mobilization works. The contractor is also undertaking camp building, preparation of the Kombolcha station, and the issue of right off along the railway line, Workneh said. However, because of a new decision, The Mekelle-Woldiya/Hara Gebeya project, which is part of the Mekelle-Woldiya-Asayta-Tajura project, has changed and the feasibility work and contract improvement is being done.
In addition, the Assayta-Tajura Port, Addis Ababa/Sebeta – Ejiji – Jimma-Bedele and Modjo-Shashemene-Bodity-Woytto projects have been part of the nationwide railway projects but the finance has not been secured yet. The only project which has already secured partial financing from the Indian government is the Assayta- Tajura project, according to Workineh.
Since the past few years, the project financing issue on the railway project has been a cumbersome issue for government officials.
The former Minister of Transport, Diriba Kuma reported to the same House that MoTr projects are having a difficult time when it comes to attracting foreign loan. Later on Prime Minister Hailemariam told the house that his government had no problems in securing of foreign loans for the projects. He rather said that the problem lies in having proper documentation which would be necessary to secure the required loan.
Two years later, Workneh made a report similar to his predecessor who is now the mayor of Addis Ababa.
In the same reprt, the minister also highlighted plans to improve the nation’s transport flow, which is in line with the Growth and Transformation Plan. “We have made significant progress in that regard,” he told MPs.
More than 11,000 km of road has been built and maintained over the GTP period, out of the planned 14,000 km, registering an overall 81 percent performance.
Workneh stated shortcomings in the Universal Road Access Program (URAP), citing failures of regional governments to mobilize local communities to get involved in such projects.
The Standing Committee on Transport Affairs asked the minister to elaborate on the ministry’s cooperation with infrastructure development agencies such as electricity, water and telecommunications; and the Addis Ababa Light Rail Project.
The minister responded by saying that a committee had been established to enhance cooperation with infrastructure development agencies. In relation to the LRT, he noted that a draft manual on the LRT system is currently under study and will be made public soon.
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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 24th 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.
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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.
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.
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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.
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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.
Borrower and investor is Ethiopian Airlines, Africa’s largest airline and member of the Star Alliance. General planning as well most important technical components of the building, cooling and storage facilities come from the exporter Unitechnik Systems from Germany.
KfW IPEX-Bank and the French Agency for Development (Agence Française de Développement – AFD) are acting as both co-arrangers and lenders of the financing. KfW IPEX-Bank financing will also benefit from a twelve-year term and export credit insurance from the Federal Republic of Germany (“Hermes cover”).
AFD is providing in parallel a loan amounting to a further EUR 50 million to finance the building (incl. airside and landside apron work) constructed by local construction firm Varnero. “The conclusion of this export financing shows that German quality and engineering know-how is globally demanded, specifically for high-quality long-lasting technical equipment”, says Christian K. Murach, member of the Management Board of KfW IPEX-Bank. “With our financing we are not only contributing to the improvement of the infrastructure of a prospering country but also to securing many highly skilled jobs – be it on site in Addis Ababa or with the exporter in Germany.”
Ethiopian Airlines’ new cargo terminal is among the largest projects in the history of Unitechnik Systems based in Wiehl in the German state of North Rhine-Westphalia. Already in 2006 the company played an important role in the construction of the existing air cargo terminal at Addis Ababa airport. Most recently Unitechnik supplied an air cargo terminal in Durban/South Africa with cooling equipment. The technology for this current project is adapted to the needs of the client and combines relatively low complexity with a high grade of usability. It is robust, easy to handle, to service and to control.
This air cargo terminal financed by KfW IPEX-Bank and AFD will be erected in two phases reaching in its final stage of expansion an annual capacity of 1.2 million tonnes of air cargo. That will make it the largest air cargo terminal in Africa and one of the largest in the world. It is integral part of Ethiopian Cargo Vision 2025 aiming at supporting fast growing volumes of perishable exports of fruits, flowers and meat mainly to destinations in Europe and the Middle East. Ethiopian Cargo is the largest cargo operator in Africa with 24 freighter destinations using 8 dedicated cargo aircraft, mainly wide-bodies such as the B777-200 LR freighter. By 2025 Ethiopian Cargo is planning to serve 37 international destinations with a fleet of 18 dedicated freighters.
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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
A high level panel delegated by the African Union (AU) and chaired by Thabo Mbeki, the former president of South Africa, has found Ethiopia to be among the top African nations in terms of being a source of illicit financial flows (IFFs), most of which makes ways to the developed world.
The panel was tasked to find out how prone Africa is for a systematic financial theft which mostly is orchestrated by giant multinational companies operating in the continent. The panel’s report dubbed “track it, stop it and get it” found that in five decades alone, the continent is estimated to have lost one trillion dollars; and currently nations including Ethiopia are losing some 60 billion dollars due to illicit financial flows across the board. With Nigeria leading the pack of top loser counties in Africa, Ethiopia alone lost a cumulative of USD 16.5 billion between 1970 and 2008. But, since 2010, Ethiopia more likely lost USD 10 billion which could have shortened significantly the 13 years journey that the country have taken to achieve MDG4 (reduce child mortality by two thirds ) to nine years. In addition to that, the panel found out that failing to curtail illicit financial flows cost the country some six percent of its GDP annually.
This figure puts the country among the top ten losers; rather creditors via illicit financial flows. Next to Nigeria, countries like Egypt, South Africa, Morocco, Angola, Algeria, Cote d’Ivorie, Sudan, Ethiopia and the Democratic Republic of Congo are the top ten countries which are still losing out billions of dollars in form of “illegally earned, transferred or used” money as it (illicit financial flow) is defined by the panel. Names of the top illicit finance receiving nations include the US, China, India, Spain, France, Japan, Germany, South Korea, Mexico, and the like.
During the summit of heads of state and government which was concluded late last week, the panel appeared before the leaders to present its report on the findings of the three-year-long study that the panel has conducted. In its 15 main findings, the report made it loud and clear that the amount of money leaving Africa via IFFs is muscling up over the years. In 2010, the sums of dollars that flew out of the continent are estimated to be 60 billion dollars. Hence, the report went on to indicate that time has come to prompt the continent to the fact that illicit financial flows are political issues. According to Mbeki, the leaders have decided to adopt the report during the 24th ordinary summit.
The report basically made three classifications regarding the way illicit finances are flowing: via commercial activities, falsification of prices (trade mispricing), quantities and qualities of traded goods. Transfer pricing, profit shifting, tax evasion and the tax incentives which lack cost benefit analysis are some of the systemic commercial thefts the high level panel reported upon. Arms and drugs smuggling, human trafficking, poaching, oil and mineral theft are the criminal activities facilitated by illicit financial flows, the panel argued. Corruption and nontransparent deals are also the impeding factors to curtail the flight of finance from Africa. However, some studies allude to the fact that it is corruption which is extremely bleeding the continent really bad. These studies indicate that, up to 150 billion dollars annually is lost due to corrupt systems along the board in the continent.
To make matters worse, the continent faces huge gaps to finance infrastructural requirements as well as human development issues. The illicit flights alone largely exceed the official development assistants many African nations receive, Mbeki noted.
Mobile Money Moves to Ethiopia
Mobile money services have launched in Ethiopia. Riding on the infrastructure provided by Netherlands-based BelCash and MOSS ICT, the mobile money services is projected to help reach a significant portion of the 96 million people nation who currently don’t have plenty of access to banking services.
Reports from the National Bank of Ethiopia reveal that, as at June 2014, the country had no more than 1,500 automatic teller machines (ATMs) with only 2,200 bank branches.
BelCash is rolling out helloCash, while MOSS ICT, reported to be mainly owned by an Ireland-based firm, is providing the M-Birr infrastructure. The services will allow customers send and receive money via mobile accounts that is linked to a bank account.
MOSS ICT’s Kidist Negeye thinks the services could go beyond merely onboarding new bank subscribers. “One of the things that the government wants to do is ensure there is financial inclusion, another aspect is the mobilization of domestic savings. The government wants to increase the number of deposits,” he says.
This new service in Ethiopia is coming after similar services had been launched in other African countries, and industry experts are optimistic. BelCash’s CEO, Vince Diop believes helloCash service would have onboarded over 10 million users by 2017/2018.
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.
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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.
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Kuriftu spreads wing to Djibouti
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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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.
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FAA removes prohibitions over Ethiopian territory for US planes
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.
Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Addis Ababa, Agriculture, Business, East Africa, Economic growth, Ethiopia, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1
