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Ethiopia to revise law on biotechnology
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Addis Ababa, 7 April 2015 –
The previous law, which is currently under revision and due to be approved soon, was a bit prohibitive and it did not contain a provision that would regulate research and development in modern biotechnology.
The different articles that have been there and the old versions were stringent. They used to put a lot of stifling preconditions for the research to take place. That is why it became very difficult for technology developers and users to benefit from the previous law or regulation said Dr. Endale Gebre, Director for Biotechnology at Ethiopian Institute of Agricultural Research in an exclusive interview with The Ethiopian Herald.
And it did not have a better resolution to provide opportunity for research and education in modern biotechnology so it looked on everything that is related to modern biotechnology be it for research, education and for development unanimously, which we think that not a good decision because research and education has to take place and people have to investigate what kind of science it is and what kind of technologies can be developed through that science, he added.
Dr.Endale also said that the law should not have been prohibitive for research and education as such and in this sense it was really somewhat restrictive, prohibitive and protective type of law but that is considerably revised and improved in the current law. “So, we think research and education will have a special provision in the new law. I think in Ethiopia it will in the very near future be possible to do research for development reasons targeted toward biotechnology products, technologies and so on. I think that would be one good outcome of the revised law and there are also other points which the revised law provides for better than the previous one. We expect the approval to take place in the next few weeks, at worst not more than months,” he added.
He added that Open Forum on Agricultural Biotechnology (OFAB) is creating opportunity for various stakeholders working in the area of biotechnology.
“So, bio-tech having such big potential opportunity for us to apply for the agricultural development, I think it will be of great value to understand it better and to enable the different stakeholders around the agriculture sector understand what biotechnology is and how to utilize it effectively for research and development.”
Dr. Kassahun Tesfaye, Assistant Professor and Director of the Institute of Biotechnology at the Addis Ababa University told this reporter that the country has several challenges of development in different sectors. For instance, the agricultural development is restricted because of several biotic and abiotic stresses.
And actually the conventional breeding programme and conventional crop, animal improvement programme have done a significant job in changing the situation but there are cases where we really need biotechnology to come up with a solution.
The challenge is that biotechnology is a knowledge intensive field. And also in-terms of infrastructure investment, it needs a lot of investment and that is mainly the reason why developing countries, Ethiopia inclusive, have not adopted the use and application of bio-tech. Apart from that the current bio-safety proclamation, Ethiopia evinces limitation to move biotechnology further to make use of the product out of it. For bio tech you need to have a strong laboratory facility where the equipment and consumables are quite expensive. It needs strong multi-disciplinary team to come up with certain technological application that can contribute to food security or the development of the country, Kassahun added.
He further said that there are several rumors on bio-tech here and there as there are activists out there that always teach and preach negative effect of the technology.
“But until now, I have not come across a data or empirical scientific evidence that clearly shows that bio-tech has significant side effect. Hence, from that point of view like any technology or new thing people would accept with some reservations. That’s acceptable and we need to work on awareness creation. Apart from that, like any kind of technological improvement or innovation it might have some limitations like if you go back when people suddenly invent fire, then fire has its own advantage and dis advantage. If you handle fire properly, it can really help you a lot. If you mishandle fire then it can destroy the whole city. The same is true for bio-tech as a technology; it has its own way to be handled properly, the concern from environment, food safety and health issue should be properly handled,” Kassahun added.
Dr. Nega Berhan Head of Department of Biotechnology an Associate Professor at University of Gondar on his part said that the technology has widespread applications in developed nations and in some developing countries also. In our case, the law is stringent and we need to actually assess both the merits and demerits. For me, the technology has greater benefit in ensuring food security in the country.
“The population is growing by three per cent annually, and our domestic product has been growing by 2.9 per cent so it is not well tuned. If we need to tune we have to actually apply this technology so that we can feed our people and ensure food security. But it doesn’t mean that it will not have any problems. So, we need to actually say which techniques are important and sort things out and also relax the rule. And regarding the disadvantage we need to have strict regulations so the law that we have in hand needs to be amended so that we can be benefit from this technology; we can ensure food security and feed the people,” he added.
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Sebeta – Meisso – Dewele rail reaches 77%
Addis Ababa: April 7, 2015 – The Sebeta – Meisso – Dewele rail laying has reached 77% according to Workineh Gebeyehu, Ethiopian Minister of Transport.
The 7th joint Ethio-Djibouti Rail Road Ministers Commission met and discussed ways to link the port with the railway.
Djibouti’s Transport Minister Musa Ahmed Hassan said regular meetings between the railway corporations of the two countries and officials has enhanced the construction of the project. He noted the project on Djibouti’s side is also progressing well.
Getachew Betru (Ph.D), head of the Ethiopian Railways Corporation said the focus now is on service of the railway. The project is expected to be completed after seven months, ahead of the slated timeframe.
http://www.fanabc.com/english/index.php/news/item/2675-sebeta-–-meisso-–-dewele-rail-reaches-77
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Ethiopia Eases towards COMESA Free Trade Area
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Prime Minister Hailemariam at summit of head of states.
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The Ethiopian government is finalising instruments and expediting internal consultations for the accession of the Common Market for Eastern & Southern Africa (COMESA) Free Trade Area (FTA).
Industry areas in which the country is going to join the free trade area have been identified by the Ministry of Finance and Economic Development (MoFED) at the end of 2014. MoFED’s study conducted at the end of 2014 recommended a phase by phase approach to accede into the COMESA FTA and accordingly, categorised three trade areas based on their responsiveness to the FTA competition after accession. These are extremely competitive, upon capacity building and uncompetitive.
Trade areas categorised under ‘extremely competitive’ and ‘competitive upon capacity building’ will join the free trade area with a complete elimination of tariffs in the future. The remaining uncompetitive industries will join FTA gradually with 30pc reduction of tariffs every year.
The change of the tariff system has been accomplished based on the industries selected to join COMESA FTA and ready to submit to the Council of Ministers for final endorsement. MoFED is given an authorisation by the Inter-Ministerial Coordinative Committee to conduct internal consultations with different stakeholders such as the Ethiopian Revenue & Customs Authority (ERCA) and commercial associations, Semere Tesfaye, senior expert of United Nations Agencies of Regional Economic Cooperation at MoFED told Fortune. He added that following the consultation, the instruments for the selected trade areas to FTA will be made public and then deposited with the COMESA Secretariat, which will then distribute them to the member countries.
Ethiopia failed to join the COMESA FTA in 2000 because of reduced competitiveness of the local industries compared with the industries of other COMESA Member States. However, with the growing economy of the country, some industries are potentially recorded to be able to contend in the FTA area, Semere said, declining to name the trade areas selected for the COMESA FTA.
Having a disadvantage of keeping back the revenues the government would have obtained from tariffs in the short run, the accession of Ethiopia into the COMESA FTA results in more market opportunities for domestic industries, increased efficiency of local industries, access to less expensive and high quality products for the consumers, and prevention of domestic monopolies charging high prices, the study showed.
COMESA is the largest regional economic organisation in Africa having 19 Member States and a population of about 390 million. It is an organisation of states focusing on the formation of a large economic and trading unit capable of overcoming trade barriers. COMESA’s 18th summit was held in Addis Abeba between March 22 and March 31, 2015 with the theme of “Inclusive and Sustainable Industrialisation”. Prime Minister Hailemariam Dessalegn was elected as Chairperson of the COMESA authority by Heads of State and Government Summit.
The FTA was realised in October 2000 when nine Member States, namely, Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbabwe eliminated their tariffs for the goods coming from COMESA Member States.
http://addisfortune.net/articles/ethiopia-eases-towards-comesa-free-trade-area/
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Ministry to Step Up Bio-Fuel Development Efforts
Addis Ababa: April 7, 2015 – Opening a two-day workshop on the two year bio-fuels development performance of five states in Ethiopia, Minister of Water, Irrigation and Energy Alemayehu Tegenu noted that the bio-fuel potentials of the country need to be exploited in an integrated and organized manner in a bid to bring about the desired result in the sector in the near future.
According to Alemayehu, the so far bio-fuels development activities in 18 Woredas across the country have not been fully executed towards achieving the set goals of the nationwide bio-fuels projects due to lack of quality researches, weak performance of the executing body and technology transfer.
At the event, the Minister called on representatives of Tigray, Amhara, Afar, Benshangul-Gumuz and Oromia States to exert relentless effort in planting jatropha at large and small scale farms through introducing bio-diesel and making use of latest technologies in cooperation with micro and small enterprises.
It was learnt that 24 million jatropha trees have so far been planted across the country enabling it to save 40 million USD using ethanol blended gasoline.
The workshop is expected to put a way forward in addressing today’s challenges in bio fuel sector.
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Egypt group to develop Ethiopia housing projects
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CAIRO – Egypt-based Arab Contractors Company is building two projects in Ethiopia at an investment of more than $111 million, said a report citing its top official.
The company is studying a plan to build a new affordable housing project in Addis Ababa mainly residential units of seven, nine and 12 floors each, reported the Daily News Egypt.
“Arab Contractors Company had last year invested $30 million in similar construction projects in Ethiopia,” the company’s president and CEO Mohsen Salah was quoted as saying in the report.
The company, which is affiliated to the Egyptian Ministry of Housing, has projects in more than 29 countries. It has major investments in Africa, amounting to $2 billion, he added.
http://www.tradearabia.com/news/CONS_279107.html
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House Passes the First Industrial Park Bill for the Country
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The Bill was drafted by EIC with government and private sector stakeholder inputs
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The House of Peoples’ Representatives enacted the Industrial Park Bill on March 31, 2015, the same day it heard the report from the House Industry Affairs Standing Committee, which had been reviewing the document since March 10.
Even though the development of industrial parks is one of the priorities of the government’s Growth & Transformation Plan, it has never been backed by any rules and regulations, states Proclamation 23/2015.
As stated in the Bill’s preamble, the World Bank (WB) and other organisations had also expressed concerns that could have affected the continuation of their support in the absence of clear regulations regarding the Industrial Park Bill. The WB is financing the second phase construction of Bole Lemi Industrial Park, which covers 18ha of land, and the Kilinto Industrial Park, on 308ha, at a cumulative cost of 250 million dollars.
The absence of clear rules that state the rights and obligations of major players such as industrial park developers and operators has also created a gap in infrastructure development and other facilities such as banks and Customs Authority office within the park, stated Shiferaw Solomon, vice director of Industrial Parks Development Corporation (IPDC). But as per the new proclamation, industrial park developers are required to include the development of these facilities and other related services in their master plan.
The proclamation includes some incentives to encourage investors such as creating duty free park for the manufacturers within the perimeters of the industrial park. Furthermore, industrial park developers will be granted a 10-year tax hiatus if they are located in Addis Abeba and within 45Km radius of Addis Abeba while other parks beyond 45Km radius will have a 15-year tax hiatus.
The preparation of the Bill by the Ethiopian Investment Commission had inputs from the Ministry of Industry (MoI), IPDC and regional governments as well as a Chinese group that conducted a study and forwarded recommendations on its own.
The Council of Ministers is expected to issue regulations that will be followed by directives necessary for its implementation that will be prepared by the Ethiopian Investment Board, said Sissay Gemechu, CEO of IPDC. The Ethiopian Investment Board, which is chaired by the Prime Minister, will oversee the administration and supervision of the parks. It will also decide on complaints raised from industrial park developers and operators.
Currently, there are four operational parks including Bole Lemi 1 and 2, Eastern Industrial Park and George Shoe and two in the process of establishment. Ayka Addis, a Turkish textile factory and government’s joint project and Huagian industrial park are the ones in the process of establishment. The government has also set out to develop industrial parks that will be located in Dire Dawa, Hawassa, Mekelle and Kombolcha, on a total area of 5,130ha of land.
http://addisfortune.net/articles/house-passes-the-first-industrial-park-bill-for-the-country/
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137 Egyptian companies invest US$2 billion in Ethiopia
Addis Ababa: April 6, 2015 – Egypt hopes to increase the volume of trade with Ethiopia by 150 percent over the coming three years, as well as to boost Egyptian investments in the Ethiopian market, according to Trade and Industry Ministry Mounir Fakhry Abdel Nour.
A press release issued by the ministry on Sunday said that the current trade reaches US$200 million, according to the minister, who added that US$500 million is the target for the three coming years.
Around 137 Egyptian companies have invested a total of US$2 billion in Ethiopian market. The highest-ranking investments, reaching US$250 million, are carried out by the El Sewedy Industries Group, which hopes to establish an industrial zone for Egyptian companies in Ethiopia. The required licenses are currently being issued.
The Ethiopian-Egyptian Business Council will now be led by Ahmed Sadeq al-Sewedy, chairman of the group, according to the ministerial decision.
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Improving seed prevents rust disease, boosts wheat productivity
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Addis Ababa, 4 April 2015 –
A new project in Ethiopia aims to improve the livelihoods of wheat farmers by encouraging the development and multiplication of high-yielding, rust-resistant bread and durum wheat varieties.
High quality seed is the key entry point for elevating farmer productivity in Ethiopia. As Norman Borlaug, the late Nobel Peace Prize laureate and wheat breeder who worked for many years with the International Center for Maize and Wheat Improvement (CIMMYT) wrote: “Rust never sleeps.”
Stem leaf and yellow rusts choke nutrients and devastate wheat crops without recognition of political boundaries, making it essential that global action is taken to control all virulent strains of these devastating diseases to ensure food security.
At a recent workshop hosted by the Ethiopian Institute of Agricultural Research (EIAR) in the capital, Addis Ababa, 150 participants from 24 organizations discussed the project, which builds upon the successes of a previous EIAR and International Center for Agricultural Research in the Dry Areas (ICARDA) program funded by the U.S. Agency for International Development.
The purpose of the March workshop titled “Seed Multiplication and Delivery of High-Yielding Rust-Resistant Bread and Durum Wheat Varieties to Ethiopian Farmers,” was to launch the three-year seed project, which has a budget of $4.75 million, and enrich the involvement stakeholders and key partners.
Aims include enhancing rust disease surveillance, early warning and phenotyping; fast-track variety testing and pre-release seed multiplication; accelerating seed multiplication of durable rust-resistant wheat varieties; demonstrating and scaling up improved wheat varieties; and improving the linkages between small-scale durum wheat producers and agro-industries.
In order to achieve these goals EIAR, CIMMYT and the University of Minnesota will implement project activities in collaboration with other key Ethiopian stakeholders, including agricultural research centers, public and private seed enterprises, the Ethiopian Agricultural Transformation Agency, the Ethio-Italian Development Cooperation “Agricultural Value Chains Project in Oromia” and the Ethiopia Seed Producers Association.
The project covers 51 districts in four major wheat-growing regions of Ethiopia. Milestones will be marked by measurable markers, including when 164, 000 households (HHs) directly access the new technology; more than 2 million HHs benefit from indirect access to high-yielding rust resistant cultivars; wheat yield increases by 25 percent for farmers with access to rust-resistant seed varieties; about 5,000 agricultural experts, development agents, seed producers and model farmers are trained; wheat cultivars with durable rust resistance to current rust threats are planted on more than 50 percent of wheat areas; an increased number of seed growers and associations participate in accelerated seed multiplication; and increased participation of women farmers are leading accelerated seed multiplication and scaling up activities.
All partners will be involved in close monitoring and working groups related to the projects.
At the workshop, a key topic was emphasizing to farmers that they must avoid susceptible rust suckers as they are pumping more spores on cultivars under production, which is one reason for the recurrent epidemics of wheat rusts and break down of resistant genes.
Delegates also engaged in discussions on the importance of cropping systems and variety diversifications. Fruitful deliberations and interactions occurred and important feedback was captured for project implementation and to ensure successful results.
A previous workshop on the surveillance, early warning and phenotyping component of the project was held at the Cereal Disease Laboratory in Minnesota.
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Central Bank to Introduce Secondary Bond Market, Corporate Bonds
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There is a primary bond market in the country, trading only in treasury bonds with Corporate bonds, bonds issued by corporations, coming soon
The National Bank of Ethiopia (NBE) is to introduce a secondary bond market and corporate bonds in the second Growth & Transformation Plan (GTP II) period starting in the next fiscal year.
The secondary bond market allows primary bond holders to sell their bonds to third parties without having to wait for the bond maturity date, according to Yohannes Ayalew, chief economist & vice governor of the central bank.
Corporate bonds are also to be allowed for any corporate entity, which has a legal personality and fulfills the eligibility conditions, which will be provided in the directive the National Bank will issue in the near future, said Yohannes.
This is to introduce an alternative way of financing, Yohannes Ayalew, chief economist & vice governor of the central bank said. NBE will serve as the regulatory body for the resale and a directive will be issued for the secondary bond market, said Yohannes, adding that the bank will put forward and supervise the eligibility conditions in issuing such bonds in the future. The interest rate on the bonds will be determined by the market, i.e., through the negotiations between the sellers and the buyers.
Currently, there is a primary bond market in the country, trading only in treasury bonds and the Grand Ethiopian Renaissance Dam (GERD), which is a long-term capital market. Treasury bonds have a maturity date of less than one year. Ethiopia had also started issuing sovereign bonds for the international capital market after the Ministry of Finance and Economic Development (MoFED)’s decision last year. Since then, the country has sold one billion euro bonds as a sovereign bond to obtain funds that can help it to finance its infrastructure development programs.
The studies the central bank has conducted recently indicate that a secondary market is more important than a primary market in creating an active market daily, increasing the financial flow and encouraging savings, Yohannes said. Corporate bonds, which are also coming soon, are bonds issued by corporations. They are more profitable than shares bought in the stock market because unlike the stock market, with corporate bonds, the profit is not determined by the share of the profit of the company, which is expected to encourage people to move to capital market investment, according to Yohannes.
There should be an overall reform and strict, liquid and vibrant financial sector, which can generate resources to create an active and effective secondary market, an anonymous macroeconomist explained to Fortune. Stable macroeconomic conditions with stable price, liberalised interests, a transparent and predictable legal system, simple exit strategy and a tax free bond market are mandatory preconditions to create a vibrant secondary bond market, the macroeconomist added, noting that the legal system was essential to create confidence in private investors.
In Ethiopia, all these mandatory preconditions are not yet present. Currently, the financial sector does not fit with the growth ambition of the government and the Treasury bond market is dormant. The NBE plans to start a secondary bond market not out of conviction but rather due to lack of adequate financial resources from the banking sector as the investment projects in the country are huge and the banking sector is drying up to meet their demand, the macroeconomist said, also adding that the Treasury bond market should be active and liberalise itself to bring about a vibrant secondary bond market.
http://addisfortune.net/articles/central-bank-to-introduce-secondary-bond-market-corporate-bonds/
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Dubai wants more Ethiopian produce
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Addis Ababa, 6 April 2015 –
Non-oil trade between Dubai and Ethiopia in 2014 was valued at just over $470 million which is an increase of 6% over the previous year.
Over 30 business representatives, led by Shisema Gebresilassie, Head of the Addis Ababa City Government Trade and Industry Development Bureau and Getachew Regasa, Secretary General, Addis Ababa Chamber of Commerce and Sectoral Associations, recently met with representatives of the private sector in Dubai.
They were hosted by the Dubai Chamber of Commerce and Industry (DCCI).
Atiq Juma Nasib, the DCCI Senior Vice President, Commercial Services Sector, said, “Dubai is a gateway for African entrepreneurs to international markets, including those across the Middle East, Europe and Asia.”
He said, “On its part, Dubai Chamber is actively seeking ways to develop mutually beneficial business relations with key global partners. The markets of Eastern and Southern Africa are important to us. They have strong potential across a number of industry sectors, particularly trade and tourism.
“This is why we opened our second international office in Addis Ababa in 2013, to bring our business communities closer together and to increase two-way business and investment between our two destinations.”
It was suggested that UAE could benefit from Ethiopia’s agricultural and organic products in addition to expanding halal food investments. Ethiopia is a big beef exporter to the Gulf States.
Besides seeing Dubai as a major gateway to other markets, the Ethiopians were asked to take advantage of the UAE’s expertise in developing different economic sectors in light of the enormous investment opportunities, growing economic development and the peace and stability Ethiopia enjoyed.
Dr. Abdulkadir Risku, the Ambassador Extraordinary and Plenipotentiary, Embassy of Federal Democratic Republic of Ethiopia in UAE said, the bilateral relations between the two countries flourished after the opening of Dubai Chamber’s representative office in Addis Ababa.
Ethiopia’s exports to the UAE include meat, dried beans, vegetables and flowers. Meanwhile imports from the UAE include petroleum oils and machinery.
Shisema said, “Ethiopia is becoming one of the most stable and preferred investment destinations in the world thanks to the generous investment incentives introduced by the government and the five-year growth and transformation plan transforming the agriculture dominated economy into industry.”
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Sugar Production to Begin at Former Pakistani-Owned Plant
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Government’s acquisition of the factory will help meet its GTP goal of an increase from three to 10 factories
A sugar factory which the government took over from its Pakistani owners will commence trial production this month with an initial crushing capacity of 5,000tns of sugar a day.
The factory, known as the Arjo Dedessa Sugar Development Project, is located in the rift valley of Dedessa in the Oromia Regional State. It was established in 2009 and was previously owned by Al-Habesha Plc, a Pakistani company. After its 26-year old Manager, Mohsen Haji, was killed in a car accident in Kazanchis on January 19, 2011, the company pulled out, selling the factory to the Sugar Corporation, Investment Promotion Team Leader at the Ethiopian Investment Commission, Aschalew Tadesse, disclosed to Fortune.
When it acquired the company in August 2012, the Sugar Corporation was executing the various activities of sugar cane cultivation. Ninety percent of the construction of the sugar factory plant was completed by the time the government acquired the factory in August 2012 while the remaining 10pc was finalised by the government.
The Sugar Corporation does not yet know exactly how much money has been invested in the factory, as the investment varies from time to time, said Zemedkun Tekele, corporate communications director of the Corporation.
Located on a 28,000ha plot of land 540 kilometres from Addis Abeba, the factory has the capacity of crushing 8,000tns of cane per day. However, the design of the machinery is meant to increase its crushing capacity to 12,000tns per day, Zemedkun said.
The government decided to buy the company to realise its Growth and Transformation Plan (GTP) to increase the number of sugar factories from the existing three to 10, said Zemedkun. Currently there are three operating sugar factories namely Wonji Shoa, Finechaa and Metehara. Wonji Shoa, the largest, has a crushing capacity of 6,250tns of cane per day and its production capacity is 174,946tns of sugar annually. Metehara and Fincha sugar factories have an annual production capacity of 136,692tns and 110,000tns sugar respectively.
The current demand for sugar in the country is assessed at five million to 6.5 million quintals of sugar annually, Zemedkun explained to Fortune.
Budget shortage, complex structure of the Sugar Corporation, simultaneously running the factories and undertaking expansion projects, lack of a clear roadmap of the projects and unrealistic planning are challenges to sugar projects attaining their production schedule, explained an expert who declined to be named.
Currently, there are seven sugar factories under construction, all owned by the government. One of these factories, Kessem Sugar Development project, located along Tekezzie River on 20,000ha will have a crushing capacity of 10,000tn of sugar per day and is expected to start its production this year. In addition to these ongoing seven sugar factories, there is also an ongoing private initiative, Hiber Sugar S.C. which will operates on 25,000ha of land in Amhara Regional State at Tana Beles Basin.
Established in October 2010 by Council of Ministers’ Regulation Number 192/2010, the Sugar Corporation is empowered to manage the established sugar factories and sugar production projects in progress as well as new sugar development projects.
http://addisfortune.net/articles/sugar-production-to-begin-at-former-pakistani-owned-plant/
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Scooties to Be Assembled in Ethiopia
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Addis Ababa: April 6, 2015 – Balaaji Manufacturing Plc, an Indian owned company is poised to launch the first brand new electrical motorcycle a.k.a “scooty” assembled in Ethiopia.
The company located in Legetafo, Oromia Region, began its factory operations in 2014 on a 3,600sqm plot of land with initial capital of 250,000 dollars and began production on January, 2015. It has now amassed 450,000 dollars of total capital.
The company is now producing 10-15 scooties per day but this number will be increased to 30 per day after two months. According to the company, the tentative price of one scooty is 24,000 Br.
“We believe that there is market for our products and these specific motorcycles are the pollution free alternative compared to the same means of transport which consumes fuels,” read the statement by Bharatt Jindall, the co-owner of the company.
The company plans to launch the motorcycles on April 7, 2015 at a programme that will be held at Monarch Hotel.
http://www.fanabc.com/english/index.php/news/item/2669-scooties-to-be-assembled-in-ethiopia
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Fairfax, American Investment Firm, to Buy 75pc of State-Owned Cork Maker
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ECCCMI acquired for 206.2 million Br but up to 500 million Br will be spent to expand and re-establish the company.
ECCCMI which is known for the production of cans and crown corks will be the first company privatised by PPESA during the current fiscal year
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The Privatization & Public Enterprise Supervising Agency (PPESA) has finally decided to award Ethiopian Crown Cork & Can Manufacturing Industry S.C. (ECCCMI) to Fairfax Africa Fund, LLC, a company that offered 206.2 million Br to purchase 75pc of the state owned enterprise.
On March 5, 2015, the agency made an opening for three companies, ECCCMI, Agricultural Mechanisation Services Enterprise, and Bilito Siraro Farm. Moreover, two companies, Bahir Dar Textile S.C and Kombolcha Textile S.C were made available by the Agency for interested buyers for negotiated acquisition. But except for ECCCMI none of the other companies attracted any bidders.
Only Fairfax was interested in buying ECCCMI from the PPESA. Fairfax is a U.S. based investment firm which invests in emerging economies with high growth potential. They have investments in Africa, the Middle East and other locations. Their total worldwide investment portfolio exceeds 150 million dollars.
As per the offer, the Agency had evaluated the proposal submitted by Fairfax, said Aseb Kebede, vice head of public relations office at PPESA. Fairfax had submitted a request to the Agency in order to be considered as a local company when it paid the money offered.
As far as the transfer of public enterprises is concerned, the Agency has a precondition for domestic and foreign bidders. For local companies, PPESA requires 35pc down payment with the remaining sum to be paid within five years, while foreign companies are expected to pay a 50pc down payment, and the rest within three years.
The board of PPESA, which is chaired by Aster Mamo, Minister of Civil Service and Cluster Coordinator for Good Governance & Reform with the rank of Deputy Prime Minister, evaluated and finally approved it. The board is a collection of members from PPESA, represented by its Director General, Beyene Gebremeskel, and other representatives from the Ethiopian Workers Association Corporation.
The board of PPESA usually evaluates the business plan of each interested buyers, their record of investment and their management and the kind of technology they propose to bring, stated Asebe.
According to this approval, Fairfax will pay 35pc of the down payment and the remaining sum in the next five years.
“Our bid for Crown Cork includes a group of Ethiopians as partners and therefore we submitted the bid as a joint foreign Fairfax and Ethiopian investors’ partnership with Fairfax as the main bidder,” stated David Johns, director of Fairfax African Fund, in a statement that was sent to Fortune via email on March 6, 2015.
The company will spend up to 500 million Br, including the offered price to expand and re-establish the company.
To pay the remaining 65pc, re-auditing and registration of ECCCMI assets has to be made jointly by the agency and Fairfax in order to make sure that there is no error of counting, he added.
Looking at the fiscal year so far, it was reported that PPESA already lost the expected revenue of 1.3 billion Br from the transfer of enterprises to private holders though the period was marked with a 398.4 million Br profit from 27 public enterprises that are under its administration.
The Agency made 7.6 billion Br from the sale of goods and services from the 27 enterprises that it manages, down from a target of 8.6 billion Br. In addition, it has managed to make 17.3 million dollars from the exports of the five enterprises under it.
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Alternative routes to be constructed at a cost of 4 billion Birr in Addis to ease traffic congestion
Addis Ababa: April 4, 2015 – Feleke Haile, the Authority’s head told fanabc.com that the projects include Kaliti roundabout – Tulu Dimtu, Goro – Ayat, Tulu Dimtu – Lebu.
The total length of the roads under construction is 28 km. A loan secured from the Chinese government is used to fund the projects.
Haile added concerted efforts are underway to ease traffic at Akaki and the first phase of the road project connecting Akaki with Lebu is scheduled to be completed this year.
Once completed the roads will significantly ease traffic congestion and facilitate travel between Addis Ababa and the southern parts of the country.
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Nation to Build Close to 160 Oil Depots
Addis Ababa: April 4, 2015 – About 160 oil depots will be built across the country to sustainably resolve the occasional shortage of petroleum, Ethiopian Petroleum Supply Enterprise said.
The construction will be carried out in two phases, and 40 depots are going to be sunk in Addis Ababa and in 10 regional states in the first phase to be finalized in 14 months.
Each depot costs on average 16 million birr, it was indicated.
Chief Executive Officer of the enterprise, Taddesse Hailemariam said the petroleum demand of Ethiopia has dramatically increased due to the country’s rapid economic growth.
The number of depots in the country is low when compared with the huge demand of the country, he added.
Even if the government is spending 250 million USD per month to import petroleum, the society is facing shortages because of artificial problems created by few people, the CEO stated.
The depots will use computer technology to avoid old problems.
Ethiopia has 13 emergency depots and 250 gas stations, 5 of them are owned by local companies.
http://www.fanabc.com/english/index.php/component/k2/item/2652?Itemid=674
Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Agriculture, Business, East Africa, Economic growth, Ethiopia, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1
