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Ethiopia: If the shoe fits, build zones

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Textile companies and retailers are setting up operations in and around Addis Ababa to take advantage of the low cost of labour

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Chinese shoemaker Huajian plans to employ about 100,000 people in Ethiopia by 2023. Photo©Petterik Wiggers/PANOS-REA

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At the Bole Lemi Industrial Zone, 15km east of Addis Ababa, Taiwanese footwear manufacturer George Shoe Corporation is preparing to begin production.

In mid-April, hundreds of eager new recruits – many of them university graduates – were preparing to begin work, making up to 1,500 pairs of shoes a day.

Like its Chinese competitor Huajian – which plans to create a light manufacturing zone on the outskirts of the capital by 2023, providing employment for around 100,000 people – George has big ambitions for its Ethiopian enterprise.

In just a few years time, the company plans to open its own industrial park in Modjo, one of the country’s main tannery districts, directly employing 10,000 workers.

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Leather, textile zones

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Bole Lemi is one of two indus- trial zones (IZs) being established in Addis Ababa – the second is Kilinto, situated in the capital’s southern suburbs – and the government has plans to construct similar complexes in other cities, starting with Dire Dawa, Kombolcha and Awassa.

These IZs are a key feature of the ruling Ethiopian People’s Revolutionary Democratic Front’s development strategy.

The idea is to provide the space and infrastructure needed for light manufacturing to thrive. “We are going to open zones in leather and tex- tiles, but also agroprocessing,” says Sisay Gemechu, the state minister for industry.

Ethiopia slipped 37 places – from 104 in 2007 to 141 in 2012 – in the World Bank Trade Logistics Index

However, only two of Bole Lemi’s 20 factories are occupied, both by George. Sisay says that all of the completed units are rented and that it is confident the 10 further facilities being constructed will be too.

Bole Lemi seems to be a perfect metaphor for the current Ethiopian manfacturing sector: enormous potential that is as yet unfulfilled.

United Kingdom-based leather goods manufacturer Pittards is steadily expanding production in Ethiopia, as is Turkish-owned Ayka Textile.

Retailers H&M and Tesco are sponsoring training for textile workers with the aim of sourcing garments from the country. Despite this, foreign direct investment (FDI) remains low, reaching $1bn in the 2012/2013 fiscal year.

One Western economist blames the modest level of FDI on “the heavy hand of the Ethiopian government in the private sector”.

A 2012 World Bank study on Chinese FDI in Ethiopia found that 54% and 84% of investors, respectively, cited tax administration and customs and trade regulations as major constraints on their businesses.

An underdeveloped financial sector and a dysfunctional foreign exchange market are other impediments, says Jan Mikkelsen, the International Monetary Fund representative in Ethiopia.

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Trading hurdles

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Trade logistics in this landlocked country are also problematic.

According to the World Bank, Ethiopia has dropped from 104th to 141th place in its rankings during the past five years.

The majority of Ethiopia’s imports and exports are trucked to and from the port of Djibouti along a treacherous highway and the cost is phenomenal. A new rail link to Djibouti, scheduled for completion at the end of 2015, will reduce costs.

Even with these considerable constraints, Helen Hai, former vice-president of Huajian, argues that Ethiopia will be able to exploit its major comparative advantage – a competitive and young workforce.

“The labour cost in shoemaking in China is about 22% of the overall cost portfolio,” she explains. “In China today, the cost of each labourer is $500 [a month]. In Ethiopia it is only $50. So, the question, comes down to the efficiency.”

She claims that after one year of on-the-job training, her Ethiopian employees were able to achieve 70% of the efficiency of Chinese workers, meaning that other investors could soon follow.

http://www.theafricareport.com/East-Horn-Africa/ethiopia-if-the-shoe-fits-build-zones.html

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Djibouti and Ethiopia Pursuing Geothermal Power Schemes

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Djibouti and Ethiopia are developing new geothermal power capacities that are intended to enable them meet increasing demand for electricity and enhance their sustainable-energy portfolio.

The World Bank has provided details about its contractor prequalification procedure for the drilling of four full-size geothermal production wells in Djibouti, while Icelandic powerplant builder Reykjavik Geothermal says it hopes to commence its $2-billion Corbetti Geothermal Power Project in Ethiopia in July.

The World Bank, one of the financiers of the $31-million Djibouti Geothermal Power Project, which is being developed by another Icelandic firm, Reykjavik Energy Invest, advertised the invitation for bids from qualified drilling companies to execute the project. Funds will come from a number of institutions.

The bank said the steam-well drilling program entails civil engineering preparatory works, to be funded by the African Development Bank (AfDB) at Lake Assal geothermal field.

The second component—the actual drilling of the four wells—is co-financed by Global Environment Facility, the OPEC Fund for International Development and the World Bank’s International Development Association (IDA). French financier Agence Française de Développement (AFD) will fund the acquisition of steel material needed during the execution of the drilling program, while the inspection and testing of reservoir flow rates will be supported by Energy Sector Management Assistance Program.

Technical assistance support will be provided by the AfDB for designing the drilling program and the well test protocol by a geothermal consulting company yet to be named.

The final component would involve executing the well test protocol and ensuring third-party certification of the results of the drilling program before preparing a technical feasibility study for the geothermal power plant, “provided that the geothermal resource is suitable for power generation.”

Djama Guelleh, Djibouti’s head of electricity, said if the geothermal resource is proven to be commercially viable for large-scale power generation, “a follow-on project will be undertaken to competitively offer the geothermal resource to the international independent-power-producer market.”

The project, to be developed under a public-private partnership, would help Djibouti cut reliance on imported electricity from neighboring Ethiopia and meet the country’s peak demand of 70 MW, of which Ethiopia meets 65%.

In Ethiopia, which gets up to 90% of its 2,000-MW installed power-generating capacity from dams, Reykjavik Geothermal said in March it will, by next July, commence the development of the $2-billion geothermal project with capacity to generate 500 MW.

http://www.ethiopiainvestor.com/index.php?option=com_content&task=view&id=5054&Itemid=88

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Large Foreign Presence at Ethiopia’s Second Hotel Show

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The second event saw an increase in the number of participants, including companies from Turkey, India and China

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Ozzie Managing Director Kumeneger Teketel (left), Minister of Culture and Tourism Amin Abdulkadir (centre) and Deputy Operation Officer of Bekele Abshiro Plc Ali Barbre (right) at the opening of the second Hotel Show.

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The second hotel show opened last Friday May 16, 2014, for a three-day hospitality trade fair. There was a modest improvement from the first event in the number of participants and brands.

The first fair took place eight months ago, in October 2013, at the United Nations Conference Centre. This event saw 50 participating companies and 120 brands, according to the event organiser, Ozzie Business & Hospitality Group. The second trade fair, officially opened by Amin Abdulkadir, minister of Culture & Tourism, and Kumeneger Teketel, Ozzie’s managing director, at the Millennium Hall, has attracted 70 participants with 200 brands in hospitality and related sectors, including from countries such as China, India and Turkey. State Minister for Foreign Affairs, Dewano Kedir, was also one of the invited guests attending the event.

Event sponsors included MNS and Ozti, both from Turkey, among several others from the same country, as well as Sealed Air and Italco, from the US.

MNS recently inaugurated a plant at Legedadi, Oromia, making beds, sofas, pillows, towels, spring mattresses and wall-to-wall carpets. The company’s brochure claims that 80pc of the product will be for export. Ozti supplies kitchenware, all imported from Turkey.

The event showcases hotels, resorts, lodges, consultancy firms and products, such as hotel equipment, hotel supplies, construction materials, interior design, food and beverages. Nergek, a local supplier of electromechanical products, is now importing toilet materials designed for people with disabilities, including toilet seats, sinks and a shower set on which people can sit or stand.

Ozzie’s original intention was to hold the hospitality trade fair every six month – a target that it missed by barely two months. The company wants to see African businesses in the hospitality sector at the next event, said Kumneger.

Not happy with the service of the hospitality sector in Ethiopia, Esayas Woldemariam, international service managing director at Ethiopian Airlines, said at the event that service providers needed to change their mentality and become more service-oriented. Ethiopian has many passengers that transit through Ethiopia and that have to stay at hotels, making the airline the main customer of the hotel industry.

http://addisfortune.net/articles/large-foreign-presence-at-ethiopias-second-hotel-show/

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Multi-Donor Initiative to Support Private Sector Development

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The Ethiopian government has signed a Governance Framework for a Multi-Donor Initiative (MDI) for its private sector development (PSD) in respect to the country’s Growth and Transformation Plan (GTP) on Thursday, May 15, 2014.

The document was signed between the Ethiopian government and donor partners such as the Department for International Development (DFID), the Italian Cooperation, the Swedish International Development Agency (SIDA) and the Canadian International Development Agency (CIDA). The International Finance Corporation (IFC), in collaboration with the Ethiopian government and donor partners, is acting as a secretariat, implementing entity, and administrator of donor’s funds.

The IFC’s strategy for Ethiopia includes bolstering direct investments in priority sectors, small and micro enterprise development and supporting the government in improving the investment climate.

“The overall aim of the MDI is to support Ethiopia’s GTP objectives, including promoting and investing in scalable private sector interventions, aiming to support development and increase access to finance,” stated Resident Representative of the IFC, Amadou Labara.

This signing serves to formalize the collaboration among IFC, the Ethiopian government and donor partners that has now existed for nearly two years.

http://addisfortune.net/articles/multi-donor-initiative-to-support-private-sector-development/

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Celebrated Ethiopian entrepreneur behind soleRebels reveals her next big idea

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BY Kate Douglas

Bethlehem Tilahun Alemu is one of Africa’s most celebrated entrepreneurs. In 2004 she founded soleRebels in Ethiopia, and the company has since become one of Africa’s largest footwear brands with its range of artisan-made shoes now selling in over 55 countries globally.

According to Making It magazine, soleRebels is set to generate US$15m-$20m in revenue by 2015. Alemu’s success has led her to be named by CNN as one of 12 “smart women” entrepreneurs in the past century, alongside Coco Chanel and Elizabeth Arden. She has also been featured on the front cover of Forbes magazine and in 2011 was selected as a Young Global Leader by the World Economic Forum.

Last week, Alemu officially launched her second company, Republic of Leather, an online startup that addresses the global trend of consumers wanting to have more control over how and where their products are produced. Republic of Leather allows just this.

Alemu told How we made it in Africa the idea stemmed from her love for leather products and the fact that her home country, Ethiopia, is a key source of quality hides and leathers used by many global luxury brands to craft high end articles.

“I have worked side by side with the producers of these very same fine leathers for years as I built my footwear brand soleRebels. I have deep relationships that span from the supply side – right from the origin and selection of the hides and skins themselves – through to our tanners network.”

The company’s online platform allows customers to select their products from a range of leather goods, such as jackets, bags and gloves. Customers can then use an online app to customise details, from the leather type and colour to the stitch patterns used, and can then choose the artisan and location around the planet where they want their designs to be handcrafted.

“I saw that there were many areas around the globe where leather crafting and production had been undermined and had withered, despite its economic importance,” explained Alemu.

“I knew that a platform that tapped into these rich global talents and resources would have the power to reinvigorate these centres of production and create fantastic employment opportunities in communities around the planet, while also reinterpreting how – and literally where – luxury goods are made.”

According to Alemu, the company also allows customers to choose from a list of 850,000 accredited charities around the world to which 5% of the purchase price will be donated on their behalf.

“Our vision at Republic of Leather is to re-imagine the luxury leather goods market by powering the creativity of our customers, creating jobs for craftspeople all over the planet, and energising the causes our customers are passionate about,” she emphasised.

At the moment, the Republic of Leather production sites are in Ethiopia’s capital, Addis Ababa, Nicaragua, the UK and the US, but Alemu aims to add 45 more country sites within the next six to 18 months.

http://www.howwemadeitinafrica.com/celebrated-ethiopian-entrepreneur-behind-solerebels-reveals-her-next-big-idea/39386/

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From Track to Highway

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Marathon motors, the sole importer and distributor of the South Korea-based Hyundai vehicles has introduced a new brand car: Grand i10, for the Ethiopian market on Friday, May 16, 2014. During the event that was held at the facility of the company around the Diaspora roundabout, the legendary athlete-turned-businessman Haile Gebreselassie, owner and chairman of the company, is seen here chatting with Kim Jang Gwan, Ambassador of the Republic of Korea to Ethiopia, immediate left and Taye Dibekulu, president of United Bank, far left and Melkamu Assefa, chief executive of Marathon Motors on his immediate right and Tsegaye Tetemqe, president of Zemen Bank on the far right.

http://addisfortune.net/articles/from-track-to-highway/

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Ethiopia receives nine new vessels in Djibouti

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By Mohammed Taha Tewekel

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ADDIS ABABA – The Ethiopian government on Saturday received nine new vessels worth over $300 million from China at a ceremony organized in Djibouti.

“The vessels are not only Ethiopian assets but they are also Djibouti’s properties,” Ethiopian Prime Minister Hailemariam Desalegn said at the ceremony.

“The vessels indicate the rapid development in Ethiopia,” he added.

Named after the capital cities of Ethiopia’s regional states, the vessels were built with loans from the Chinese government.

Most of Ethiopia’s exports and imports are transported through the Port of Djibouti, which is located 900km east of Ethiopian capital Addis Ababa.

“Djibouti benefits from Ethiopia’s rapid development and in turn Djibouti’s growth is an advantage to Ethiopia,” Djiboutian President Ismail Omar Guelleh told the ceremony.

“The relation between Ethiopia and Djibouti is not limited to a government-to-government level but it has been intensified in people-to-people ties,” he said.

The Djiboutian leader went on to say that relations between the two neighbors are boosting in different spheres, including the economic and social fields.

“Djibouti gives a port service to Ethiopia but it does not consider that it is giving the service to another country but regards it as it is doing it for itself,” he said.

“We believe that Ethiopia is Djibouti and Djibouti is Ethiopia, no difference at all,” he added, going on to reiterate that the new vessels will further help speed up the ongoing development endeavors in Ethiopia.

Ethiopia had used Eritrean ports until 1998 when the two countries engaged in a war of their border disputes.

Following the war, Ethiopian began to use Djibouti ports to export its products.

http://somalilandsun.com/index.php/component/content/article/5784-ethiopia-receives-nine-new-vessels-in-djibouti

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Thought for Food

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The International Food Policy Research Institute (IFPRI) 2020 Resilience Conference, held May 15-17, 2014 in Addis Ababa, Ethiopia, brought together policymakers, practitioners, and scholars to discuss how resilience can be strengthened for food and nutrition security. Ethiopia was lauded for its success in building resilience on the food front, specifically when the Horn of Africa was hit by the worst drought in 2011. It is systems like Ethiopia’s safety net program that are being rewarded and recommended on the road to having food and nutrition security.

http://addisfortune.net/articles/thought-for-food/

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MoI Partners up with a Chinese Company to Establish an Industrial Zone

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The Ministry of Industry and Zhejiang Jinda Flax Llc, a Chinese textile company, are going to establish an industrial zone designated for textile factories, around Bole Lemi area in the Bole District, according to the Memorandum of Understating (MoU) the Ministry of Industry (MoI) and the Chinese company signed on Tuesday, May 13, 2014.

The formal Investment Agreement is expected to be signed by the end of July 2014, when the land needed for the project is available. The two parties have agreed to work jointly for the establishment, development and construction of the coming Kingdom Linen Textile Industrial Zone in Ethiopia, a new company that will be established by the two parties for this purpose.

Zhejiang Jinda is a subsidiary of Chinese Kingdom Holdings Limited and produces textile decoration fabrics such as weave fabrics, yarn decorated fabrics and calico (not fully processed fabrics) printing fabrics which are widely applied to clothing sofas, curtains and bed appliances in its factory in China.

The MoI is expected to provide the Chinese company with the Red line and Coordinates Graph of the land and the soil analysis report of the future site of the industrial zone within two weeks after signing this MoU, according to the document.

Within two months after the signing of the Investment Agreement, Kingdom shall be granted all the necessary registration documents of the newly formed company in Ethiopia and the certificate of approval of investment of the project.

Before June 2015, the Chinese company will commence the construction of phase one of the industrial zone project. In addition, the Chinese company will train 50 Ethiopian recruits in industrial park production facilities.

For industrial purposes the Ministry has allocated a total of 5,130ha in four cities and towns across the country, including Addis Abeba, Dire Dawa, a self-administered city about 515km east of the capital; Kombolcha, 376km to the north of the capital in Amhara region; Shillabo, 1,140km from the capital in the Somali Regional State; Hawassa, 273km south of the capital in the Southern Region.

Eastern Industrial Zone in Dukem, 37km southeast of Addis Abeba on 200ha of land, is the only private operational zone that was implemented by Chinese investors. Eleven companies are already involved in the manufacture of leather and leather products, textile and garments and car assembly at this zone.

Bole Lemi is the only other functional industrial zone which was constructed by the government. It has five sheds which are constructed by the Ethiopian government, each on 5,500sqm of land with a total cost of 2.5 billion Br, and given to investors. The remaining 10 shades each on 11,000sqm are under construction financed by a loan, which the government has obtained from the World Bank (WB).

There are also projects of industrial zones in different levels of execution in Sendafa, Akaki Kaliti, Legetafo, and Mekanisa Lebu.

http://addisfortune.net/articles/moi-partners-up-with-a-chinese-company-to-establish-an-industrial-zone/

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Ministry Registers Impressive Gains in Irrigation Works

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Highlights from the opening session of the 2020 Conference

Source: M. Mitchell/IFPRI

IFPRI’s Shenggen Fan greets H.E. Hailemariam Dessalegn, Prime Minister of Ethiopia, before both deliver opening remarks.

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“If the past is any guide, we will face a barrage of shocks, both natural and man‐made, in the coming years. In just the past five years, we have seen a major earthquake in Haiti; drought in the Horn of Africa; earthquake, tsunami, and nuclear crisis in Japan; and conflicts that have left millions of people homeless, maimed, or dead. And let us not forget the food price spikes of 2008 that have made the global food system more volatile since then… The IPCC recently published a new report confirming that humans are causing climate change and warning of further shocks to come.”

Shenggen Fan, Director General at IFPRI, began his introductory remarks by outlining some of the major challenges that threaten the food and nutrition security of the world’s poor and most vulnerable people. He and the other distinguished keynote speakers from the inaugural session then went on to share their reflections on what building resilience looks like within the context of agricultural development. Rather than merely helping people “bounce back” from the negative impacts of shocks, building resilience, they agreed, involved a more transformative process in which individuals, households, and communities become better-off than before the shocks occurred.

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Defining resilience, of course, is just the starting point. Helping people become better off and more resilient to future shocks is the aim of myriad development efforts seeking to implement a resilience framework. To find such an example of people bouncing back stronger, several speakers pointed to the case of Ethiopia, which is subject to frequent drought, the most recent occurring in 2011. Though many worried about the possibility of another famine similar to the one that took place thirty years ago, such conditions never materialized.

What changed from the 1980s? Fan pointed to the country’s Productive Safety Net Programme (PSNP) and Risk Financing Mechanism as playing key roles in mitigating the most recent food security crisis. While the former initiative aims to better target benefits to most vulnerable people and provide them with predictable sources of income, the latter program’s flexibility allowed food assistance to be quickly scaled up and major food shortages were largely averted. Erastus Mwencha, Deputy Chairperson of the African Union Commission, observed that Ethiopia had “risen from the ashes” to become one of the most resilient and food secure nations in Africa. H.E. Hailemariam Dessalegn, Prime Minister of Ethiopia, underscored the government’s 15 percent allocation of its budget to agricultural development and food security− the highest percentage of any African nation− as a key component of the country’s resilience-building efforts.

Yet we must be careful not to attribute development successes to outside experts or processes. David Nabarro, United Nations Secretary-General Special Representative on Food Security and Nutrition, delivered his opening remarks via a video message, emphasizing that resilience is something that comes from within rather than without. If our resilience building efforts are to be successful, he argues, they must enable and empower people, societies, and institutions to strengthen their own livelihood systems and make them more resilient to shocks. Kanayo Nwanze, President of the International Fund for Agricultural Development (IFAD), drove this point home in stating that “development is not something that we do for people. Development is what people do for themselves. It must start and end from within. Our job is to facilitate the process.”

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Speaker videos and summary notes

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• Rajul Pandya-Lorch, Head of the 2020 Vision Initiative and Chief of Staff, International Food Policy Research Institute (IFPRI), USA
  Text Remarks | Video
• Shenggen Fan, Director General, International Food Policy Research Institute (IFPRI), USA
  Text Remarks | Video
• H.E. Hailemariam Dessalegn, Prime Minister of Ethiopia
  Text Remark | Video
• Kanayo Nwanze, President, International Fund for Agricultural Development (IFAD), Italy
  Text Remarks | Video
• Ertharin Cousin, Executive Director, United Nations World Food Programme (WFP), Italy
  Text Remarks | Video
• Fawzi Al-Sultan, Chair, Board of Trustees, International Food Policy Research Institute (IFPRI), Kuwait
  Text Remarks | Video
• H.E. John Kufuor, Former President, Republic of Ghana, (video message)
  Video
• Ban Ki-moon, Secretary-General, United Nations, USA (video message)
  Text Remarks | Video
• David Nabarro, United Nations Secretary General Special Representative on Food Security and Nutrition, Switzerland, (video message)
  Text Remarks | Video
• Rajiv Shah, Administrator, United States Agency for International Development (USAID), USA (video message)
  Text Remarks | Video

Sourced here   http://www.ifpri.org/blog/building-resilience-within

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By Nicholas Norbrook in Addis Ababa  -  May 20 2014

Spearheading the government’s interventions in the farming sector, the Agricultural Transformation Agency has already vastly improved yields for wheat and teff.

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Ecobank and Eleni Join Forces to Strengthen Africa’s Agricultural Financing Capabilities

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Ecobank Transnational Incorporated (‘Ecobank’ or ‘the Group’) has signed a memorandum of understanding (‘MOU’) with eleni LLC (‘eleni’), the leading proponent and developer of commodity exchanges in Africa, with a view to establishing a cooperative framework to promote and accelerate the development of Africa’s agriculture.

Mr. Albert Essien, Ecobank’s Group Chief Executive, and Dr. Eleni Gabre-Madhin, chief executive officer of eleni, signed the MOU at an official ceremony held during the AfDB’s Annual General Meeting in Kigali today.

Dr. Gabre-Madhin, a globally recognized thought leader in Africa’s development, is the former founder and CEO of the acclaimed Ethiopia Commodity Exchange (ECX), which has garnered various international awards and plaudits, including the Africa Investor Agriculture Initiative of the Year in 2011 and, a first in Africa, the CIO award for IT excellence in business. eleni LLC, established with co-founders Keith Thomas and Jawad Ali, is the only proven pioneer building commodity exchanges for frontier markets in Africa, with a demonstrated impact on the livelihoods of millions of smallholder farmers in Ethiopia.

The partnership between Ecobank and eleni aims to realize a shared vision of transforming Africa’s competitiveness in global commodity markets, enhancing value addition and processing in the domestic economy and enhancing food security. The partnership builds on the synergies between Ecobank’s unrivalled pan-African presence and its commitment to financial inclusion and eleni’s successful track record of creating and operating commodity exchanges in Africa, with projects in Ghana, Cameroon, Mozambique, and Nigeria. Ecobank recently announced that it was a keystone investor in the establishment of the Ghana Commodity Exchange (GCX), eleni’s first major foray in West Africa.

“As well as increasing market transparency and reducing transaction costs, commodity exchanges play a crucial role in the monitoring and assessment of risk,” commented Albert Essien, Ecobank’s Group CEO. “Instruments such as warehouse receipts reduce uncertainty and improve access to finance across the value chain. We look forward to collaborating further with eleni to enhance Africa’s agricultural financing capabilities.”

“We are very excited to be working with one of Africa’s leading financial institutions, with a solid pan-African focus, as this opens up a tremendous opportunity to establish the leading platform for commodity-related payments and transactions across the continent,” concluded Dr. Eleni Gabre-Madhin.

http://allafrica.com/stories/201405221708.html

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Alliance Generates Investments in Africa’s Agriculture

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21 May 2014

The 2014 Feed the Future Progress Report, released May 19 in Washington, says that organizations supported by the New Alliance for Food Security and Nutrition are showing results. One organization is the Alliance for a Green Revolution in Africa (AGRA), established in 2006 by the Rockefeller and the Bill & Melinda Gates foundations.

AGRA leads a $47 million Scaling Seeds and Technologies Partnership to expand production by African companies of high-quality seeds and increase the number of smallholder farmers who have access to innovative technologies.

Through the New Alliance and Grow Africa, more than 2.6 million smallholders have been reached through services, training or production contracts and 33,000 jobs have been created.

Grow Africa seeks to accelerate investment and change in African agriculture based on national agricultural plans. Grow Africa supports the Comprehensive African Agricultural Development Programme (CAADP), established in 2003 by the African Union’s New Partnership for Africa’s Development (NEPAD). So far, 40 African countries have now completed national agricultural plans.

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An employee of an Ethiopian poultry farm admires improved production as a result of advice from staff at the new Bishoftu Farm Service Center.

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The African Union has proclaimed 2014 as the “Year of Agriculture and Food Security.”

http://iipdigital.usembassy.gov/st/english/article/2014/05/20140521299510.html?CP.rss=true#axzz32PkRhAog

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Government plans to expand electricity access to 75% by 2015

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Ministry of Water, Irrigation and Energy (MoWIE) announced by the year 2015 it plans to expand access to electricity from the present 51 percent to 75 percent of Ethiopia’s population.
The move by the government will made to promote and support the development and expansion of social service as well as income generating activities in rural parts of the country, according to The Ethiopian Herald.
During the opening of a two day National Workshop, State Minister Kebede Gerba, commented the development of large scale hydropower projects is being done with assessments to environmental and social impacts of the projects.

Kebede also said developing small and micro hydropower has gained the attention of the government for they are suitable and economical in electrifying remote rural areas. In addition to this, they are helpful to establish agro processing plants and productive activities in rural part of the country.

He further noted since 2005 the country has shown great progress in the power sector by implementing Universal Electricity Access Program via grid expansion. In particular he lauded the success of the program with the supply of electricity to households of rural towns, villages and social service centers.

In addition to this, Kebede stated the government has established Off-grid Rural Electrification Fund in order to harmonize the efforts of grid expansion by involving the private sector and cooperatives.

http://www.waltainfo.com/index.php/explore/13480-government-plans-to-expand-electricity-access-to-75-by-2015-

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Special report| Ethiopian Sugar Corporation’s “May Day Dam”

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Posted on Wednesday, May 21, 2014  by Fetsum Berhane

http://hornaffairs.com/en/2014/05/21/ethiopian-sugar-corporations-may-day-dam/

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Ethiopia’s sugar production could grow five-fold in a year

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Ethiopia’s massive investment in sugar development projects across the country could see the nation produce 1.58 million tons of sugar annually, five times its current output, by mid 2015.

The expected output is 70 percent of the government’s plan as stated under the five-year growth and transformation plan (GTP), which set out to produce 2.25 million tons of sugar per annum.
The government expects at least seven of the ten sugar manufacturing plants currently underway in five regional states to be completed by the end of the plan period (mid 2015).
The boost in sugar production could come as early as this month when the first phase of Tendaho sugar factory which has the capacity to crush 13,000 tons of cane per day (tcd) begins operation.
“Dry testing has been conducted and we expect the factory to begin crushing before the end of this month,” Shiferaw Jarso, Ethiopian Sugar Corporation (ESC) director general with a ministerial portfolio, said today at a press conference.

At full capacity, Tendaho factory will crush 26,000 tons of cane per day (tcd) and produce more than 619, 000 tons of sugar annually, making it the biggest sugar factory in the country.
Launched in 2006, the Tendaho project, which is being constructed by Overseas Infrastructure Alliance of India, predates the establishment of ESC and has been marred by delays.
Next in line is the Kuraz I sugar factory, one of the five sugar factories being built in South Omo Zone (SNNP region) with a combined annual production capacity of more than 1.9 million tons of sugar.
According to Shiferaw, Kuraz I, which will have 12,000 tcd crushing capacity, is expected to be completed in September 2014. Factory plant erection is being carried out by the Metal and Engineering Corporation (MetEC).
ESC also expects the year 2014 to witness the completion of Kessem sugar factory, a plant with an annual sugar production capacity of 260,000 tons at full capacity. The sugar plant is being built in Fentalle and Dulecha weredas of Afar regional state by China Complant Group Inc.

“The project is going very well and it is on schedule. We are confident that the plant will be completed in November,” Shiferaw said.
Two of the three sugar projects in Tana-Beles sugar development projects each with 12,000 tcd are expected to follow during the first months of 2015, according to ESC’s director general.
The remaining sugar development projects including Welkait sugar factory in Tigray region is expected to go operational during the GTP II period. The project received a 500 million dollars financial boost from China during the Chinese premier’s recent visit to Ethiopia.

“Construction of the plant will commence in June [2014] and it is expected to be completed in 24 months,” Shiefraw told journalists.
Currently, Ethiopia produces some 300,000 tons of sugar per annum while the demand for sugar stands at around 500,000 tons. The country’s sugar production is expected to not only satisfy domestic demand but will be an export commodity in the not-so-distant future.

At full capacity, the entire sugar development projects including those expected to roll out during the GTP II period is estimated to reach 4 million tons of sugar per annum.
With improved productivity the massive goal can be achieved, the director general believes.

http://www.waltainfo.com/index.php/explore/13469-ethiopias-sugar-production-could-grow-five-fold-in-a-year

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Ethiopia, China establish textile industrial zone in Addis Ababa

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The Ethiopian government is collaborating with a Chinese company, Zhejiang Jinda Flax Llc, to establish a textile industrial zone in Addis Ababa.

The Ethiopian Ministry of Industry and the Chinese textile company had signed a Memorandum of Understanding (MoU) for the industrial zone, designated for textile factories in the Bole District in Addis Ababa.

Available data shows that Ethiopia is home to over 230 textile and garment industries with 20 training institutes, employing about 37 per cent of the country’s public sector work force.

According to a copy of the MoU in Addis Ababa on Wednesday, the ministry would sign a formal Investment Agreement with the Chinese company at the end of July when the land needed for the project would be available.

The two parties had agreed to work jointly for the establishment, development and construction of the coming Kingdom Linen Textile Industrial Zone in Ethiopia.

Zhejiang Jinda is a subsidiary of Chinese Kingdom Holdings Limited and produces textile decoration fabrics such as weave fabrics, yarn decorated fabrics and calico (not fully processed fabrics) printing fabrics which are widely applied to clothing sofas, curtains and bed appliances.

The ministry agreed to provide the Chinese company with the Red Line and Coordinates Graph of the land and the soil analysis report of the future site of the industrial zone within two weeks after the agreement.

It said: “within two months of the signing of the Investment Agreement, investors will be granted all the necessary registration documents of the newly formed company in Ethiopia and the certificate of approval of investment of the project.

“Before June 2015, the Chinese company will commence the construction of phase one of the industrial zone project. In addition, the Chinese company will train 50 Ethiopians in industrial park production facilities.“

The ministry said it had allocated a total of 5,130 km in four cities and towns across the country, including Addis Ababa, Dire Dawa, a self-administered city about 515 km east of the capital.

Others are Kombolcha, 376 km to the north of the capital in Amhara region; Shillabo, 1,140 km from the capital in the Somali Regional State; Hawassa, 273 km south of the capital in the Southern Region.

11 Chinese companies are already involved in the manufacturing of leather and leather products, textile and garments.

http://sodere.com/profiles/blogs/ethiopia-china-establish-textile-industrial-zone-in-addis-ababa

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ETHIOPIA RECEIVES 250 MLN USD WORLD BANK LOAN FOR JOB CREATION PROJECT

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ADDIS ABABA, May 22 (NNN-ERTA) — Ethiopia has received a 250 million US dollar loan from the World Bank to support Ethiopia’s efforts in creating new jobs in manufacturing sector through the development of industrial zones in Addis Ababa and enhancing linkages with the local economy.

State Minister of Finance and Economic Development Ahmed Shide said Tuesday that the establishment of industrial zones would spur both foreign direct and domestic investments in Ethiopia.

The country is now “establishing industrial zones to use as a platform for catalyzing investment and job creation, with a focus on export-led manufacturing”, he added.

This project will provide large and medium-sized firms with new, serviced industrial land and buildings, including water, electricity, and transport connections, and with a one-stop shop to reduce the cost of doing business in Ethiopia.

It will also target small and medium enterprises (SMEs) which will act as local suppliers for the light manufacturing sector, as well as sector institutes which will be involved in project implementation and in developing skills and training of workers with requisite skills.

The World Bank’s country director for Ethiopia, Guang Zhe Chen, said: Tthe project will help strengthen the government’s jobs-creation agenda by drawing lessons learnt from global practices, as well as attracting new investors.”

http://www.namnewsnetwork.org/v3/read.php?id=MjY5MzEw

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Mega Projects cement Ethiopia’s renaissance: DPM Demeke Mekonnen

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Deputy Prime Minister Demeke Mekonne said that Mega Development Projects, fruits of May 28, have significant roles in cementing the bases for the realization of the renaissance of the country.

Forwarding his welfare message of the 23rd anniversary of May 28 to all Ethiopians, the completion of Sugar, Railway, Power, Road and other Mega Projects, which are undergoing as planned, will lay a base for sustainable strong economic development of the country.

In his exclusive interview with WIC, the Deputy Premier said that the Mega Projects, included in the Growth and Transformation Plan, will obviously cement the bases for the development of the country’s export led industrialization.

“If we, for instance take the Sugar Projects,” he said, “they will raise the country’s Foreign Exchange Income in addition to fulfilling the sugar demands of the country.”

They also give a room to the government to allocate the huge money that had been spending to purchases sugar from abroad to other development projects, Ato Demeke said.

According to the DPM, Ethiopia will be first in Africa and one among the major Sugar Exporters in the world after the completion of the Sugar Projects, which are currently under construction.

These mega projects, the fruits of May 28, will fortify the base of sustainable economy development, WIC learnt.

He also urged all Ethiopians to strengthen their participation and commitment to realize these pioneering development projects, he added.

Ethiopia is building an integrated economy, enhancing the agricultural sector in such a way that it could promote industrialization and vice versa, which has been laying bases for the realization of the renaissance of the country.

He also elaborated that the performance of the country’s Growth and Transformation Plan so far can be viewed in three dimensions: those projects completed before the period, those on the right truck with the same pace to the given period and those that lag behind.

The reduction of child mortality, job creation, expansion and development of microfinance institutions are some among money projects that performed beyond the target set in the GTP, he emphasized.

On the contrary, the reduction of mothers’ mortality, export and expansion of manufacturing are some of the sectors that lag behind, Ato Demeke added.

Most of the sectors are underway in line with the GTP period and will be completed by next year, the Deputy Premier stressed, adding that as the year 2015 is critical for us in accomplishing all of our GTP projects, the government along with the people will exert more consolidated efforts.

http://www.waltainfo.com/index.php/explore/13461-mega-projects-cement-ethiopias-renaissance-dpm-demeke-mekonnen

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French Companies Considering Investment in Ethiopia

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Four French companies, working on the areas of chemical, water technology, construction, and food processing industries, are looking at investment alternatives in Ethiopia.

As indicated in an investment forum hosted in Addis, French companies, which often prefer to invest in French Speaking Africa, are now turning their eyes to the fast growing economy in East Africa – Ethiopia, to make it one of their investment destinations in the continent.

Ethiopian Investment Agency briefed the companies’ delegates that manufacturing, leather and leather industry, mining, agriculture and tourism are the most promising areas of investment here.

The French delegates head, Mark Schneider said that they will invest in various areas once they identify their areas of preference.

http://allafrica.com/stories/201405220161.html

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 New Abattoir’s Construction to Commence in 4 Months

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The Addis Ababa Abattoirs Enterprise is going to commence construction for a new abattoir, Capital reported. The new abattoir is going to be situated at Hanna Mariam and the construction is expected to start after the last and fourth round of study has been completed. The study is expected to be finished within three to four months.

According to Efrem Desalegne, Managing Director of the Enterprise, the study has already costed 20 Million Birr. And the last phase of the study is expected to reveal the cost and duration of the construction. The study is being carried out by a meeting consortium group from South Africa, New Zealand and Australia.

According to Efrem, the new slaughter house will replace the old one and upon completion the latter will be used for other purposes.

The new abattoir is going to be on 17,400 square meters and it is going to have the capacity to handle 14,000 animals per day. Compared to this, the old slaughter house has the capacity of only slaughtering 1,200 animals per day.

The old abattoir has seen some improvements in the past years. Nonetheless, expansion and improvement projects faced difficulties due to space limitation. With the new slaughter house, the Enterprise expects to render different new services such as export slaughtering service and environmental mitigation actions.

The export service is expected to be given through an automatic line which can handle bulls, sheep and goats.

An upgrading system for processing by products to produce animal tallow, meat bone meal, glue and pure bone meal will also be installed in the new abattoir. In addition to these the new abattoir will feature a biogas plant and water treatment plant to enable the treatment of water and reuse of water.

http://www.2merkato.com/news/alerts/2964-ethiopia-new-abattoirs-construction-commence-in-4-months

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Not so fair trade

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BUYING ‘Fairtrade’ coffee is not really helping the very poor, new research suggests. By comparing living standards in Fairtrade-certified producing areas in Ethiopia and Uganda with similar non-Fairtrade regions, four development economists from the School of Oriental and African Studies (SOAS) in London found that Fair Trade agricultural workers often earned lower incomes.

After four years of fieldwork in the coffee, tea and flower sectors in Ethiopia and Uganda, where they gathered 1,700 survey responses and conducted more than 100 interviews, the SOAS researchers found people living in ordinary rural communities enjoyed a higher standard of living than seasonal and casual agricultural workers who received an apparently subsidised wage for producing Fairtrade exports. Women’s wages were especially low among producers selling into Fairtrade markets, according to the researchers.

Comparing areas where the same crops were produced by similar, though not Fairtrade-certified employers, they found that workers received higher wages and benefited from better conditions. This was not because the Fairtrade cooperatives were based in areas with higher or particular disadvantages. The rationale of Fairtrade is that producers of commodities subject to price volatility should be protected through payment of a minimum price to cover living and production costs, a price which adjusts whenever the market shifts above the minimum threshold. In addition to this, traders should pay workers a “social premium” of around 5-10% for development and technical assistance.

The SOAS research suggests that Fairtrade has failed to make a positive difference. Within the areas studied, the poorest (typically wage workers in Fairtrade initiatives), often lacked access to schools, health clinics, improved sanitation and other social projects, even when they had worked on accredited processing stations or for compliant producers.

PS: The Fairtrade Foundation has published a lengthy reply: “We note the innovative methodology and large sample size that SOAS’s research project has used to answer its three research questions, only one of which focuses on Fairtrade. We also note however that the study has not sought to evaluate the impact of Fairtrade’s model and interventions as it has not followed an impact evaluation methodology.”

http://www.economist.com/blogs/baobab/2014/05/agriculture-ethiopia-and-uganda

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Building a green and resilient economy in Ethiopia

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by Sarah McMullan

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For us, anticipating, adapting to, and recovering from shocks are essential to our future.”  With those words, H. E. Hailemariam Dessalegn, Prime Minister of Ethiopia, highlighted the importance of resilience for his country.

In his inaugural address at the opening of the 2020 Conference on “Building Resilience for Food and Nutrition Security” Thursday evening, Prime Minister Hailemariam outlined recent steps his government has taken in its quest to become a “green and climate resilient” middle income country by 2025. These include a green economy strategy to rehabilitate degraded land, plant forests and build climate resilience in agriculture, water, irrigation, and energy.

Prime Minister Hailemariam noted the work of Ethiopia’s Agricultural Transformation Agency which aims to maximize the contribution of agriculture—the source of half the nation’s GDP and 80 percent of its employment— to the country’s development.  He also highlighted the resilience-building features of the Productive Safety Net Program, which provides conditional food and cash transfers to vulnerable households.  Acknowledging that there is still work to be done, he welcomed the opportunity at the conference to “share experiences and learn from others.”

http://reap.ifpri.info/2014/05/18/building-a-green-and-resilient-economy-in-ethiopia/

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Growing Africa’s agriculture 

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Sustainable commercial agricultural production is vital to the health and well-being of Africa’s economy and people. Smallholder farming accounts for the majority of African agricultural production, and subsistence agriculture – where farmers focus on producing what is needed to feed their families – is still widespread. In Uganda, for example, 86% of the population live in rural areas and rely on subsistence agriculture. Low inputs and low productivity result in stagnation, and stagnation in the developing world is equivalent to poverty, hunger and malnutrition.

As leader of a company that has been involved in Africa for over 100 years, I see enormous potential to more rapidly develop this area together with regional partners. There is a need for more partnerships between farmers, government, NGOs, local business and multinational corporations to accelerate Africa’s commercial agricultural growth. This will not only help thousands of farmers escape the subsistence trap but also offer benefits to all partners.

According to the Food and Agriculture Organization of the United Nations, the global demand for food is expected to increase by 60% by 2050. Smallholder farmers will need to play a key role in meeting the growing need. Africa’s food and beverage markets are to reach a threefold increase by 2030, the World Bank estimated in 2013, bringing more jobs, greater prosperity, less hunger and significantly more opportunity for farmers to compete globally.

There are, however, numerous challenges that subsistence farmers are faced with and that inhibit potential growth. These include limited access to infrastructure, to productivity-enhancing technologies and to education – issues that require substantial investment and long-term partnership of local business, farmers, corporations, governments and NGOs.

Two critical challenges are the inability to compete with low-priced international products – it is virtually impossible to compete with imported rice from Vietnam, for example – and the lack of access to a strong commercial market. These cause farmers to maintain production at levels merely enough to provide for their family, providing little or no incentive to invest in improved crops and fertilizers, or access to these products. As with cash crops such as cotton, coffee and tobacco, markets are most likely to be built on demand for the product and accelerated by large multinational corporations. Multinational companies such as Heineken can play a significant role in creating this demand, partnering with farmers, government and NGOs to help African agriculture gain a larger share of the world’s commercial market. Local sourcing creates shared value.

Heineken currently produces from 56 plants in 23 African countries and has made a Clinton Global Initiative commitment in 2011 to source 60% of its agricultural raw materials used in Africa within the continent by 2020. This is also part of the commitments we made under our Brewing a Better Future programme, Heineken’s approach to sustainability and one of our key business priorities. Together with the European Cooperative for Rural Development (EUCORD) and the Dutch Ministry of Foreign Affairs, we recently invested in three Public Private Partnership projects in Ethiopia, Rwanda and Sierra Leone and we appointed a local sourcing director to increase the focus on and coordination of these projects.

In the Democratic Republic of Congo, our commitment to train farmers to produce consistent volumes of high-quality rice has seen their average annual production increase by 62% between 2009 and 2012. We have committed to invest more than $4 million by 2017 to accelerate our sourcing initiatives in the region, which will reduce the number of crops imported from other countries, educate local farmers through support and training, and improve income for thousands of farmers and their families.

Through partnerships with government and international NGOs such as EUCORD, Heineken seeks to use its commitment to actively improve agricultural productivity in the countries in which we operate. Working together with NGOs, Heineken is using its agricultural experience and capacity to train and organize smallholder farmers to integrate as many rural families in their supply chain as possible. Our objective is to make the agricultural sector more competitive in order to lower the costs of local grains – both as a source for the agro-processing industry as well as for local food consumption.

For farmers, the benefits include improved agricultural knowledge, increased productivity and profitability, better food security and an improved overall livelihood. Governments will see improved employment, economic development and a growing international trading position. And for commercial corporations – whether local businesses or multinationals – the long-term benefits are significant as well. For Heineken, these include securing a long-term sustainable source of raw materials, reduced exposure to unavailability or potential volatile prices, reduced transport costs; and a smaller carbon footprint.

We believe in Africa and can see the immense opportunity it offers. We also realize it is our obligation to partner with the continent to stimulate sustained and sustainable growth. We are encouraged by the results of our partnerships and want to engage in dialogue with other multinationals, local business, farmers, NGOs and governments about successful partnering for shared supply chain value. Together, we will be able to stimulate the growth of a sustainable and commercial agricultural sector for Africa and take an important next step to increase the global food supply.

Author: Jean-François van Boxmeer is Chairman of the Executive Board & CEO, Heineken. He is a co-chair of the World Economic Forum on Africa 2014.

http://forumblog.org/2014/05/growing-africas-agriculture/

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Posted on Friday, May 23, 2014 

by Fetsum W. Berhane

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In western Ethiopia, about 576 km from Addis Ababa, lay a mega sugar project expected to double Ethiopia’s current sugar production.

Water extracted from Beles River, a tributary of the Blue Nile, will supply to the 75,000 ha sugar plantations, extended from Awi Zone and South Gojjam Zones of Amahara Regional State to parts of Benishangul Gumuz Regional State. It takes a 56 kms drive – just to finish one side of the plantation field.

Beles sugar project comprises three sugar factories – each with annual production capacity of 242,000 tons of sugar and 20,827 m3 Ethanol, when completed.

The entire plantation gets water supply from Beles River channeled via an 8 meters high and 21 meters wide diversion weir built over the river. The construction of the diversion weir and irrigation canals is completed. Sugarcane planting, with water being delivered through sprinklers, pumps and tunnels, is underway.

The project staffs are camped in Awi Zone, Jawi Woreda “Meles Village”, named after the late Prime Minister, where I spent two nights. Upon inquiry I learned they started living in the village the day after the passing of Meles Zenawi. They found it fitting to name the site of a mega project after the leader that set Ethiopia on a developmental path.

About 1525 households have been displaced to make way for the plantation field and were paid a compensation of 72 million birr, according to the chiefs of the project. The farmers confirmed to me they received a saving account where they withdraw at will. I observed a resettlement village with school and health facilities and a newly constructed ten kilometers road that connects the village to the main road. However, some of the resettled were not yet provided a farm land.

The re-settled farmers were provided lands in three areas that were said to be either uninhabited or taken from investors. Of which, in two areas the farmers received their plot.

It was in the third area that a group faced problems. The group of farmers who went to the third area, which was said to be uninhabited, faced hostile reaction. The semi-pastoral locals chased the farmers and escorting officials with arrows and characterized the situation as an indication that the government did not recognize of their existence.

My inquiry led me to conclude the mistake arose from the lack of coordination between officials of the two regions. This is one of those issues that require extra-caution in execution. Even though it was a minor conflict and there was no causality, it leaves a bad taste in future relationship of the communities and stained the otherwise satisfactory resettlement process.

Two of the three factories of Beles sugar project are scheduled to start production in about six months. The fact that it is being built by local contractors is its notable feature.

With three other sugar mega projects, named Kessem, Tendaho and Kuraz I, that are to be completed in 2007, the corporation can claim success in attaining “70 percent of the high case scenario” set under the Growth and Transformation Plan, according to Shiferaw Jarso, Director General of Ethiopia’s Sugar Corporation.

The GTP target for the sugar sector is set at building 10 new sugar factories and a 2.25 million tons of sugar production putting the nation in a club with Brazil and India.

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Related Posts

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• Special report| Ethiopian Sugar Corporation’s “May Day Dam”
  
• HRW tells Ethiopia: No shortcut to dev’t; Suspend Gibe III & Sugar plantations
• Briefing | Ethiopia’s sugar projects progressing steadily

Sourced here  http://hornaffairs.com/en/2014/05/23/beles-sugar-project-a-visit-to-meles-zenawi-village-resettled-farmers/

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Filed under: Ag Related, Infrastructure Developments Tagged: Agriculture, Allana Potash, Business, China, Economic growth, Ethiopia, Ethiopian government, Ethiopian Sugar Corporation, Fertilizer, Investment, Millennium Development Goals

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Ethiopia’s Farms and finance

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Ethiopia has yet to produce private sector champions. Photo©Ami Vitale/PANOS-REA

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By – Nicholas Norbrook in Addis Ababa.

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The government has a mission to use a strong state to build infrastructure and develop the industrial and agricultural sectors. It argues that it could repeat the rapid growth of East Asia in the 1990s, but critics warn about intimidation of the opposition and the risks of crony capitalism.

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The rebel army that chased the Derg military regime out of power in 1991 inherited a time bomb that could easily have spun out of control. Massively poor, plagued with chronic food shortages and with a population explosion around the corner, Ethiopia sat in a region gripped by post-Cold War insecurity.

Today, the neighbourhood is not any easier. The population has almost doubled from 50 million to 92 million people.

Now, Ethiopia is mentioned in the same breath as the East Asian miracle and is perhaps on the cusp of massive state-driven take off.

The unassuming Prime Minister Hailemariam Desalegn tells The Africa Report: “Everyone is now talking about the Ethiopian renaissance”.

Even institutions traditionally at odds with state-led models recognise the progress. In an October 2013 report, the International Monetary Fund praised Ethiopia’s “strong growth performance and impressive progress in decreasing poverty and inequality”.

Motorists in both the capital and further afield testify to and occasionally swear at the infrastructure outlay. Addis is one of the few capitals in Africa constructing cheap urban mass transit systems.

The $4.8bn self-financed 6,000MW Grand Ethiopian Renaissance Dam is one-third complete and should start generating 700MW by September 2015.

An old Model

Maternal mortality rates have fallen sharply, and the government is rolling out a pilot medical insurance scheme. Primary school enrolment has climbed to 85%. Investors from the East and West arrive daily at Bole International Airport, with Unilever, Ikea, Tesco and H&M just the latest. New industrial parks are being completed, with factories slowly swinging into action.

Ethiopia does not claim to have come up with the model it is following.

Several East Asian countries have run developmental states over the past 30 to 40 years: boost agriculture, protect and promote nascent manufacturing sectors, flaunt cheap labour, use the banks to steer progress.

It requires tight discipline in the leadership.

The ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) is closely modelled on the Communist Party of China, right down to ‘criticism and self-criticism’ sessions, where senior cadres can be dressed down by hundreds of colleagues.

Henok Teferra, vice-president of Ethiopian Airlines, says Ethiopia needs a plan tailored to local realities, but also the capacity to execute plans, including the government’s 2010-2015 Growth and Transformation Plan (GTP): “Action without vision is a nightmare, and vision without action is a daydream, isn’t that what they say?”

Will Ethiopia be successful in its developmental state? And can it avoid the crony-capitalism pitfalls of other countries that have taken the same path?

Within Ethiopia there is a passionate debate about it, and not just in the ranks of the EPRDF, whose former prime minister, Meles Zenawi, articulated the vision of an Ethiopian developmental state most clearly.

Scholars like Merkeb Negash at Jimma University argue, for example, that while Ethiopia may not have a sophisticated technocratic elite and strong autonomous institutions as do Japan and China, it does not necessarily follow that the state will be captured by rent-seeking business elites.

Just as the South Korean government relied on – but never fully trusted – advisers from Japan and the United States, Addis Ababa is importing expertise.

There is a strong level of cooperation between ministries, too.

One of the international advisers, requesting anonymity, says he was impressed that the customs department allowed the ministry of industry the latitude to draft legislation and procedures for bonded warehousing for the special industrial parks.

“It was incredible. Customs people worldwide normally protect their fiefdoms,” he says.

This sort of facilitation is also noticeable at the Agricultural Transformation Agency, modelled on the development agencies of South Korea and Malaysia. This may appear rosy, but the pitfalls are legion.

Bellwethers include the health of state-linked conglomerates, such as the Endowment Fund for Rehabilitation of Tigray – linked to the political elite of the Tigrayan ethnic group, involved in logistics and manufacturing – and the Metals and Engineering Corporation.

The latter is run by the top brass of the military and is set to build sections of the country’s dams and 10 sugar factories.

The sacking of the top three officials in the customs department for corruption in May 2013 suggests the current leadership is aware of the importance of oversight.

It is unclear, however, how successfully Ethiopia can simultaneously pick winners and prune bad companies, a hallmark of successful developmental states.

Building developmental states requires sacrifice and the ability to forge a national project that a majority accepts, something that Ethiopia’s federal character both helps and hinders.

Many people have lost their land for dams and big agribusiness projects. The villagisation project that agglomerates nomadic peoples has also been unpopular.

The ruling party runs a closed-off political system, as seen in the 2005 elections. There was a large turnout for the opposition, and the government responded with a wave of intimidation and arrests.

In its 2013 annual report, Human Rights Watch says “freedom of expression, assembly and association have been increasingly restricted in Ethiopia”.

One criterion for success of a developmental state is a sustained rise in industry’s share of gross domestic product.

In Ethiopia’s case, the sector’s contribution has remained steady at around 12%. Boosters say Ethiopia is only in the very early stages of development.

There are a number of projects that will come together in two to three years: a railway to the port of Djibouti, a large motorway that runs alongside the railroad, the dam to generate cheap electricity and a light rail line in Addis Ababa.

“It’s a jigsaw puzzle that is only just starting to come together,” says Zemedeneh Negatu, a partner at Ernst & Young Ethiopia.

Financial repression

But the tension between ambition and the funding reality is ever present.

Ethiopia’s debt levels are still low. But when vendor financing is factored into deals, such as the loans for the telecoms upgrade being carried out by Chinese companies Huawei and ZTE, the picture is less clear.

“These are only projected liabilities. The huge [$2.4bn] loan from China EximBank has not actually yet been approved because the Chinese government is also concerned about Ethiopia’s ability to repay,” says Guang Chen, the World Bank country director for Ethiopia.

“To support this developmental state, they are going to have to find more resources domestically,” he argues.

Just like China, South Korea and Japan before it, finance is the steering wheel for Ethiopia’s developmental state.

Ethiopia engages in what Shane Shepherd of Research Affiliates calls financial repression.

It is “a set of policies that keep real interest rates low or negative and regulate a captive audience into investing in government debt, resulting in cheap funding,” he says.

Hence the Ethiopian government’s policy that caps interest rates and another that requires private sector banks to spend 27% of their loans on government bonds that go towards building the Grand Ethiopian Renaissance Dam.

Alongside getting cheap funding for infrastructure, the government argues that the private sector leaves financing gaps and is unable or unwilling to invest in manufacturing.

“Look at Ethiopian private banks – all their loans go to services and trade,” Premier Hailemariam says. “They are not giving long-term loans to industry and infrastructure. So you have to have policy banks which can give low interest rates and support industrial production.”

Young spenders

Anecdotally, it might be working. Addis Alemayehu, a managing partner at advertising agency 251 Communications, is starting up a company to take advantage of two things: incentives for companies in the manufacturing sector and the huge young population that is starting to have some discretionary spending power.

“There are more university students here than the population of Djibouti. Imagine all these people buying soap for the first time,” says Addis.

But he says finance is still a problem: “You could have a purchase or- der from God himself, you still wouldn’t get the finance.”

Privately, officials accept they need to do more to create national champions that will become globally competitive.

At the 2 April presentation of the GTP at the United Nations Economic Commission for Africa office in Addis, the International Monetary Fund, World Bank and various diplomats stood up for private sector interests, with no representatives from either the private sector or the Ethiopian Chamber of Commerce in attendance. This told its own story.

Others say the emergence of private sector companies will take place quickly.

Helen Hai, who launched the Chinese shoe company Huajian’s factory in 2012, recalls: “When the first South Korean textile factories opened in Bangladesh, Daewoo trained up 200 workers. After two to three years, half of those had left to set up small manufacturing facilities.”

http://www.theafricareport.com/East-Horn-Africa/ethiopias-farms-and-finance.html

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Visa pushes for more access to barely-tapped Ethiopia

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By Richard Lough

ADDIS ABABA, May 26 (Reuters) – Visa Inc., which is piloting Ethiopia’s first international debit card, is seeking to persuade the government to ease tight restrictions on banks in an effort to boost the use of electronic payments.

Ethiopia has one of Africa’s fastest-growing economies but few people in the Horn of Africa nation of 90 million have bank accounts and the range of services is limited.

The government bars foreign banks, saying it needs to protect domestic lenders, and local debit cards have until now not worked abroad.

Jabu Basopo, Visa’s manager for southern and east Africa, said the focus was on persuading leaders of the $43 billion economy that is dominated by state enterprise about the benefits of electronic payments.

“They are willing to try some things,” said Basopo. “They have agreed to a pilot for international cards. It is a very controlled environment.”

Users of Visa’s international card, which is being trialled by government officials, will be restricted to spending an amount that has been pre-loaded on the card. Visa said the government was pleased with the trial so far.

Basopo said local banks lacked muscle to push the central bank to drive change in an industry where the largest commercial lender is run by the state and holds two-thirds of all deposits.

He pointed to Rwanda as an example of where business-friendly reforms to liberalise banking regulations in the past four years had led to a swift deepening of the market.

“Rwanda was in a similar situation. (Now) every bank is listed to Visa. All the ATMs in the country are linked to Visa … and we’ve seen a lot of growth in terms of retailers actually accepting Visa cards now,” Basopo said.

Retail transactions in Ethiopia are primarily made in cash. Retailers say a scarcity of debit cards hinders growth in the retail sector, which is also off-limits to foreign chains.

“If you look at the main efficiencies brought by electronic payments … more money stays in the banks and the banks are able to lend that money back to retailers to do more business,” Basopo said.

Visa, the world’s largest credit and debit card company which counts 10 Ethiopian banks as members, first entered the country in 2004.

The International Monetary Fund has warned that Ethiopia’s huge public spending on roads, railways and power is suffocating private lending. It says Ethiopia should row back on public spending to allow the private sector greater access to credit.

(Editing by Edmund Blair and Erica Billingham)

http://finance.yahoo.com/news/visa-pushes-more-access-barely-114022675.html

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Ethiopia pushes retail door ajar to foreigners

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Richard Lough / ADDIS ABABA — Reuters      

http://www.ethiopiainvestor.com/index.php?option=com_content&task=view&id=5071&Itemid=88

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MIDROC Gold to start production at Sakaro gold mine

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MIDROC Gold Plc., the sole primary gold producer in Ethiopia, is to start mining gold at its second mine in the Juji zone of the Oromia Regional State in a locality called Sakaro. 

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World Bank Approves $200m Loan for Geothermal Projects

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Guang Zhe Chen, World Bank country director for Ethiopia.

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The World Bank’s board of directors, based in Washington DC, US, has approved two hundred million dollars of credit for the Ethiopian government to develop its potential geothermal sites at Aluto and Alalobad, in the rift valley of Afar Regional State, on Thursday, May 29, 2014.

The loan will be financed by the International Development Association (IDA) and Scaling-up Renewable Energy Program (SREP) of the World Bank trust fund.

“In addition to providing energy security, the project will support Ethiopia’s efforts to build a climate change resilient green economy, by developing renewable energy sources with low carbon emissions,” said Guang Zhe Chen, the World Bank country director for Ethiopia.

The finance, which will be employed to support the Geothermal Sector Development Project of the country, is envisioned to help fulfill the increasing demand for electricity by tapping into the substantial geothermal energy potentials, according to the press release of the Bank.

http://addisfortune.net/articles/world-bank-approves-200m-loan-for-geothermal-projects/

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Drinks manufacturers set sights firmly on Ethiopia

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BY Dinfin Mulupi

Beverage manufacturers are pumping millions of dollars into expanding their production capacity in Ethiopia where soft drinks and beer consumption is poised for growth.

Amsterdam-based brewer Heineken is scheduled to open a US$127m brewery on the outskirts of Ethiopia’s capital Addis Ababa in a few weeks.

Last year, Coca-Cola Sabco invested $20m in refurbishing its plant in the city of Dire Dawa and building a new returnable glass bottling line. Meanwhile, Pepsi bottler Moha Soft Drinks is setting up a new bottling plant 780km north of Addis Ababa. Through its seven operating units Moha manufactures Pepsi Cola, Mirinda Orange, 7Up, Mirinda Tonic and Mirinda Apple.

Beverages industry growing

Brooks Washington, principal at business development fund Roha Ventures, says the beverages industry in Ethiopia is “growing insanely”. Roha is setting up glass bottle manufacturing plant Juniper Glass Industries in Ethiopia to meet growing demand.

“Ethiopia has a great consumer story. It is growing so quickly but there is still so little that is manufactured locally. One of the industries that people are really excited about is beverages but right now they import almost all of the glass bottles that they use for soda and beer. Currently between 120m empty bottles are imported into Ethiopia, [yet] you have everything that you need to manufacture glass bottles in Ethiopia.”

Juniper is expected to start production in the second half of 2015 and will manufacture between 120m and 150m glass bottles every year. Roha is pumping an investment “shy of $50m” into its Ethiopian venture.

Washington explains that some beverage manufacturers have expressed interest in purchasing bottles from Juniper once it starts production.

“Soda and beer consumption levels are growing and all the leading brands are making huge investments in Ethiopia. There is clear demand. Additionally, importing glass bottles is very difficult and expensive.”

The American investor says Ethiopia is an interesting investment destination for Roha Ventures due to its fast growing consumer market, expanding middle class and rapid urbanisation.

Ethiopia is Africa’s second most populated country with more than 90m people and is one of East Africa’s fastest growing economies.

“Ethiopia has the building blocks to be able to do this business well. The electricity is cheap, land is cheap, labour is cheap and all these things make it a really exciting place to do business.”

http://www.howwemadeitinafrica.com/drinks-manufacturers-set-sights-firmly-on-ethiopia/39960/

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Weaving a New Path with Ethiopia’s First Certified Organic Cotton Cultivation

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It is an important step for the Ethiopian textiles industry, as the European market demands organic cotton

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AYCOOM Agricultural Development Plc has secured 10,000ha of land in the South Omo Zone of the Southern Region. It will now start the first certified organic cotton cultivation in the country at a cost of 815 million Br.

This company, formed by a 55pc share from Ayka Addis Textile & Investment Group and a 45pc share from Omo Valley Agricultural Development Plc, will largely supply Ayka’s demand for organic cotton. Omo Valley is a company owned by the Amibara Business Group, which has already been supplying cotton to Ayka for the past six years from its 13,000ha of land in different parts of the country.

AYCOOM signed a land lease agreement on Tuesday, March 25, 2014, with the Gnangato and Hamer woreda administrations. Construction work on the workers camps had, however, already begun, according to Amare Teklemariam, CEO of Ayka. The agreement will have AYCOOM pay 158 Br a hectare a year for 25 years.

The total cost of the project may depend on the technology to be deployed on the farm, but the feasibility study puts it at 815 million Br, according to the CEO.

The need for organic and quality cotton has pushed the textile company, which sells most of its products in Europe, to engage in such a venture, says the CEO. Currently, there is no certified organic cotton farm in Ethiopia, according to the Ethiopian Textile Industry Development Institute (ETIDI).

The other reason for this move is the increasing foreign exchange that the Company is spending on organic cotton imported from abroad. The Company spent 72.5 million Br for the import of organic cotton in 2013 alone.

“This will also enable the Company to be an end-to-end producer, integrating its production processes,” says Amare.

The Company will also get its cotton from the Cotton Made in Africa Project, through farmers in Metema – 900km from Addis Abeba, in the North Gondar Zone of the Amhara Region. Ayka signed an agreement with the Metema Cotton Producers’ Union and member associations on Friday, March 7, 2014, for the supply of 50,000qts of cotton in the 2014/15 harvest season.

Garment made from organic cotton has a greater demand in the global market and could fetch better prices, saysYared Mesfin, cotton and textile marketing director at the ETIDI.

“There was not enough market for organic cotton in the country and the process of certification is cumbersome and costly for small-holder farmers,” said Assefa Aga, general manager of the Ethiopian Cotton Producers, Ginners & Exporters Association (ECPGEA), explaining the reason for the absence of organic cotton farms in the country.

Organic cotton farms cannot use manmade fertiliser and pesticides above a certain threshold level.

AMIBARA has been engaged in agriculture for the last 15 years; it comprises of 11 different companies as subsidiaries, with around 700 million Br capital and 3,000 permanent and 10,000 temporary workers. Its subsidiaries include – Gelista Agricultural Development, Middle Awash Agricultural Development Enterprise, Amibara General Aviation Service, Addis Modjo Edible Oil Complex and Amibara Agrochemicals.

The business group has been supplying cotton to Ayka since the textile Company first became operational in 2008. This has led to the partnership, according to Amare.

“We have been using their cotton for the last six years and we are happy with their performance,”Amare said.”They run some of the biggest cotton farms in the country.”

The business group believes that its expertise in cotton production will enable it to effectively run the farm, says Yusuf Omer (Sheikh), directing manager of the business group.

Amibara is hoping to access loans from the Development Bank of Ethiopia (DBE) and the Commercial Bank of Ethiopia (CBE).

There seems to be a trend with big textile companies in the country investing in cotton cultivation, with the list including Adama Textile, Elyse Textile and Almeda Textile. Such companies are trying to minimise the risks in cotton market volatility, says Yared.

“In the short run, this kind of process integration can solve the raw material problem in the market,” he said.

Yet this development will not pose a threat to already existing cotton farms, according to Assefa.

“There will not be a problem for existing cotton producers, as there is shortage of cotton in the market,”he said. “Even though major textile companies are beginning cotton production to secure their input.”

In the last harvesting season, 2012/13, 55,000ha of land were covered with cotton and 35,000tns of produce was collected, according to the ECPGEA. Total cotton production stood at 79,710tns in the 2011/12 harvest season. Ethiopia expects to import around 20, 000tns of cotton in the current fiscal year, in order to cover the growing demand from the textile industry, according to the ETIDI.

The Institute is trying to rectify problems in the industry by increasing productivity and working on modernising marketing practices, according to Yared.

http://addisfortune.net/articles/weaving-a-new-path-with-ethiopias-first-certified-organic-cotton-cultivation/

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US to Open Trade Liaison Office in Ethiopia

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Penny Pritzker, US Secretary of Commerce, said her country has made plans to open a trade liaison office in the capital of Ethiopia in order to facilitate commercial ties with Ethiopia.
Pritzker told President Mulatu Teshome her country is keen to strengthen the two nations’ trade relations. She added the opening of the office will boost the bilateral trade relations. In addition to this, she said, it will help to jointly solve commerce related problems.
Acording to the EH, the Secretary further noted US investors are interested in investing in Ethiopia’s renewal energy.
On his part Mulatu said Ethiopia is eager to boost the long standing diplomatic relation of the two countries. He added the economic and trade ties should also be strengthened.
Mulatu also raised the need to extend the AGOA program which provides African countries with the opportunity to export their products to the U.S without any tax. The program will expire in 2015, according to the current schedule.
Mulatu said Ethiopia has not fully utilized this opportunity for different reasons. But now Ethiopia has been building its capacity over the past years in order to compete in the international market and took other measures, it will be able to export more quality products to the U.S.

http://www.waltainfo.com/index.php/explore/13585-us-to-open-trade-liaison-office-in-ethiopia

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Tendaho Sugar to be inaugurated, Indians blamed for delay

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Shiferaw Jarso, director general of Ethiopia’s Sugar Corporation, under a ministerial portfolio lamented the performance of the Indian companies involved in the construction of Tendaho Sugar Factory that is due to be inaugurated in two weeks, far behind its schedule.

The Ethiopian government signed an Engineering Procurement Construction (EPC) contract with an Indian company Overseas Infrastructure Alliance (OIA) for the construction of the Tendaho Sugar Factory and the expansion of Fincha and Wonji Sugar factories on January 10, 2007. The project was enabled by a loan of 640 million dollars from Exim Bank of India; of which 400 million dollars was for the construction of the factory while the remaining was to be used for the expansion of the Fincha and Wonji sugar factories.

“We fell in their hands due to our need for finance”, Shiferaw said with an obvious frustration, adding that “this is the result of poverty.”

His made the remark at a press conference with local journalists who visited the 10 sugar factories under construction.

Answering questions as to why the Tendaho project delayed, Shiferaw gave an extended account of the whole process in which he handed the biggest share of the blame to the Indian companies involved.
[The quotes here is a translation as the original comment was made in Amharic]

We had no capital to finance the project by ourselves at the time. Hence we searched for foreign finance and the Ex-Im bank of India agreed to provide it. However the government of India has demanded for an Engineering Procurement Contract (E.P.C) as a precondition for releasing the loan. We did that since we had to get the loan. There is a lot that can be said about the Indian [financing] system but cannot be said in official venue. Any way the company was chosen thanks to the precondition and started selecting its own vendors instead of those we chose already. Secondly, there was disagreement and an extended legal battle between the companies. The main problem is their desire to get the export incentive given for Indian companies with overseas contracts. Their internal conflict was a reason for more delay.

In an E.P.C contract, the contractor delivers a final output completing the tasks. There is no role for us. But we were forced to intervene between them, mediating payment quarrels and supervision. They say they received the materials and hide it from us when we go to check due to their own problem. We could have cancelled the contract based on the agreement but to cancel the contract at that stage is a problem. It’s their fund hence it will only delay the project more. There is no gain for the nation from that. The government has considered that option at one point. There was a consensus on canceling and on our ability to finance it ourselves but was dropped after consideration of the relationship between our nations.

They are very difficult, in my experience. We can’t say all Indian companies are difficult but we found a lot of problems from our E.P.C. Anyhow we now finishing. Therefore, the answer to your question is Yes it will be completed at the end of this month (June 8). …Most of it is completed. I was there last week. There can be a 2-3 day delay in testing but it will definitely be completed up to Ginbot 30 (June 8). That’s our estimate. I talked a lot about Tendaho because it is a frequent question.

I hope it will be completed, i think it will. We will see what happens together. If my word fails…better to see it together.

He, however, admitted there was a lack of capacity with the government to manage these “difficult” companies even though that was “not their duty” in the framework of an Engineering Procurement Contract (E.P.C), in which the contractor is responsible for the project up to delivery. We are also responsible for the year and half delay caused due to flooding at the beginning of the project, he said.

Replying to a question about the Indian contractor failing to pay the wage of Ethiopian employees:

“They (Indians) are difficult on issues of payment. We had to fight and even make them pay on the spot. We fell in their hands due to our need for finance; this is the result of poverty. We would have done it ourselves If we had the money at the time” [Translation mine]

The first phase of the project is now complete and expected to be operational in two weeks, according to the corporation. The factory will be able to produce 619,000 tons of sugar and 63,000 cubic meter of Ethanol per year at full capacity after completion of the second phase making it the biggest in the continent.

http://hornaffairs.com/en/2014/05/28/ethiopia-tendaho-sugar-inaugurated-india-blamed/

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Oromia plans to reap over 208 mln quintals of agricultural output

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Preparations that enable to reap 208.5 million quintals of agricultural output in the upcoming Meher (production) season are underway in the Oromia Regional State, according to the state agriculture bureau.

Bureau Governemnt Communication Process Owner, Abera Lemma, told WIC the stated volume of crop will be harvested from the 6.12 million hectares of land which the state set to cover with various types of seeds.

Similarly watershed development activities were carried out on 3.3 million hectares of land during the past nine months of this budget year, according to Abera.

More than 8.2 million people took part at the watershed development activities which include planting of tree seedlings, terracing and fencing, among others, he said.

In order to carry out successful watershed development, short term training was provided to 16,477 development agents, 32,685 leaderships and 3 million farmers, he added.

http://www.waltainfo.com/index.php/explore/13570-oromia-plans-to-reap-over-208-mln-quintals-of-agricultural-output-

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EPRDF: Economic success is due to the firm hand of Meles Zenawi

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The May 28 victory has brought success in development and democracy in Ethiopia, said a statement by Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF).

As Ethiopia marks Derg Downfall Day, it is worth recognizing some of the impressive achievements made during the past 23 years, says the statement.

It is also indicated that Ethiopia ranks among the 10 fastest-growing economies in the world, averaging over 10% GDP growth over the last five years.

Ethiopia has already attained the Millennium Development Goals (MDGs) for child mortality and is on track for achieving them in gender parity in education, HIV/AIDS, and malaria.

Much of this economic success is directly due to the firm hand of the late leader Meles Zenawi who is considered the main architect of the drive to modernize this country of 90 million people.

His determination is best reflected in the ambitious Renaissance hydro-electric dam project that ultimately will make Ethiopia a regional power exporter by the turn of the decade.

His successor, Prime Minister Hailemariam Desalegn is continuing along the same lines. The government’s current five-year development plan (2010/11-2014/15), the Growth and Transformation Plan (GTP), is geared towards fostering broad-based development in a sustainable manner to achieve all the MDGs.

The GTP also envisions a major leap in terms of not only economic structure and income levels, but also the level of social indicators.

The current annual GDP growth rate of 11% is being benchmarked as a base figure, but plans are to double the size of the economy by 2015, with GDP per capita expected to reach $698 by 2015.

The Derg, (basically a military junta), came to power after ousting, Haile Selassie I, the former Emperor of Ethiopia from 1930 to 1974.

On May 28, 1991, the Derg, led by Mengistu Haile Mariam, was finally toppled by a coalition of forces under the umbrella of the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF).

http://hornaffairs.com/en/2014/05/28/ethiopia-eprdf-may-28-development-democracy/

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Textile Industries-University Forum Established

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Ethiopia established an Industry-University Forum to enhance the growth and textile industries by increasing the number of qualified human labour for industries, Ethiopian News Agency reported.

Industry State Minister, Tadesse Haile, said creating chain among the industries and universities is critical to generate qualified labour to the industries thereby improving their effectiveness and competitiveness.

In addition to this, the forum will enable universities to engage in researches that can be executed and transform industries to a better level.

The newly established forum is expected to create opportunity for jointly run activities between universities and industries to have a good management.

The Forum has established some 10 zonal structures for the leather-industry-university ties and 6 structures for textile industry-university ties.

http://www.2merkato.com/news/alerts/2997-ethiopia-textile-industries-university-forum-established

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Bole International Airport to Install New Baggage Handling System

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The Ethiopian Airports Enterprise (EAE) announced it is going to install a new baggage handling system (BHS) at the Bole International Airport. EAE said the new BHS is to be built at the cost of 92 Million Birr and the construction will commence on September 2014.

According to the Enterprise’s Public Relations and Communication Office Head, Wendim Teklu, the current BHS was installed 12 years ago and can only handle 1,500 bags per hour. Nevertheless, the proposed BHS can handle up to 6,000 bags per hour.

Wendim noted passengers that pass through Bole International Airport have increased from 900,000 to 6.5 Million. Tumber is estimated to reach 20 Million by the year 2017. The number of airplanes that are being accommodated have also rose to 45 airplanes from 19 airplanes in a single day.

In addition to installing a new BHS, a design work for the expansion of the passengers’ terminal is completed and the construction work will begin soon.

http://www.2merkato.com/news/alerts/2991-ethiopia-bole-international-airport-to-install-new-baggage-handling-system

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Ethiopia says may delay joining WTO to protect service industries

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By Binyam Tamene

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ADDIS ABABA (Reuters) – Ethiopia may delay plans to join the World Trade Organisation in 2015 if the country is required to liberalise its tightly regulated telecoms and banking industries sooner than it would like, the trade minister said.

Kebede Chane told lawmakers late on Tuesday that member countries had raised dozens of questions with Prime Minister Hailemariam Desalegn’s government, focusing on the time frame for opening up the service sector to international competition.

Ethiopia’s fast-growing market of 90 million people has lured foreign investors from Sweden, China and Turkey to its manufacturing sector. But laws deny outside firms access to areas viewed domestically as cash-cows or politically sensitive.

“A lot of issues are being raised regarding the service sector,” Kebede said in parliament, referring to the telecoms, banking and power industries. “We are being asked to clarify our timetable for privatising these sectors.”

Addis Ababa, with its strong state-interventionist policies, has one of sub-Saharan Africa’s fastest growing economies and its fifth biggest.

But it has spurned the liberalising approach of other African markets to shield its infant private sector from foreign competition and to keep profits at home.

Reuters revealed this week that Ethiopia – once run by communists – was pushing the door ajar to outside investors by offering management of government-owned enterprises while leaving the state in full control. [ID:nL6N0OC2RQ]

U.S. retail giant Walmart told Reuters Ethiopia offered a “compelling growth opportunity”.

STATE CONTROL

Other big brands are prising open the door in areas opened up by the government. Drinks giant Diageo DGE.L bought a brewery and fashion retailer Hennes & Mauritz makes garments in Ethiopia. Trade officials said last year that Unilever and Nestle were both sniffing around.

However, Ethiopia has held onto control of its telecoms monopoly and kept foreigners out of retail and banking.

A U.S. management consultancy firm this week announced its deal to run Ethiopia’s just-launched state-owned cash-and-carry chain, the first such concession in the retail sector. [ID:nL6N0OD3K2]

Kebede said Addis Ababa was under pressure to deepen reform to liberalise its service industries before the conclusion of its current five-year economic plan ending in 2015.

“We need to give serious thought to this issue,” Kebede said. “Right now, our economy is small and still needs to develop a lot.”

The minister cited Asian powerhouse China, which he said took 50 years to accept membership into the global trading club.

New WTO rules adopted in 2012 lowered the bar for joining for the world’s least developed countries. They allow members to open fewer sectors, liberalise fewer types of transactions, and only open up their markets as their economies develop.

“We are now looking into which laws are compatible with WTO’s regulations and which are not. We are taking one step at a time. As a result, membership might not be completed (in 2015),” Kebede said.

http://sodere.com/profiles/blogs/ethiopia-says-may-delay-joining-wto-to-protect-service-industries

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Sur Construction Handed 2.1 Billion Br Tigray Road Project

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Tadesse Yemane (Left), general manager of Sur, is promising to deliver the construction of the road even before the stated time to Zaid Woldegabriel, general director of ERA

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Despite being just 53kms in length, the cost is high due to the difficult nature of the terrain

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Sur Construction has landed a 2.1 billion Br project for the design and construction of a 53km road in the Tigray region.

The contract, signed on Thursday May 22, 2014, covers a segment of  the 275km road project from Maytsemri to Frewoyni, which is ongoing in four phases. Sur has been awarded the third phase, from Tekeze River to Abadi.

Phase one of the project has already been finalsed by Gemshu Beyene Construction Plc, who are already at work on the second phase – an 87km segment for which it will be paid  777 million Br. Another company is undertaking the fourth phase, a 101kms road, for 874 million Br.

“The third phase of the project is divided into two because of the difficult terrain,” according to Samson Wondimu, communications head at the ERA. “The first one is awarded to Sur; a contractor will be selected for the remaining 34kms during the next fiscal year.”

The projects are part of the ERA’s fourth Road Sector Development Program (RSDP IV).

The consultant for Sur’s project is Towers Consulting Engineering, a local firm.

The Tekeze River-Abadi road project will connect Maytsemri and Hauzen – two detached Tigray cities. The total cost of the project will be funded by the government of Ethiopia.

The road has a 10mt carriageway width within town limits and a seven metre carriageway width in rural areas. The project will include overpasses and bridges, as well as drainage pipes, and it is expected to be finalised within three years, according to the statement of the ERA.

The contract was signed between Zaid Woldegabriel, the ERA’s general director, and Tadesse Yemane, general manager of Sur Construction Plc , at the ERA’s headquarters on Ras Abebe Aregay Street, near Mexico Square.

“As the terrain is difficult for construction, I hope Sur will start the construction of the road before the rainy season comes and becomes an obstacle,” Zaid said.

This is the 40th project for Sur with the ERA; it has so far finalised 37 projects.

Tekeze Hydro Electric Power, Tis Abay II Hydro Electric Power, Semen Terminal-Karalo Asphalt Road, Merawi-Gondar asphalt road, Humera Air Field and Mekelle University are the major projects Sur has undertaken for the ERA, according to the company’s website.

Over the past five years, the ERA has worked on the rehabilitation of 728 km of trunk roads and the upgrading of 5,023kms of trunk and link roads. It has also carried out the construction of 4,331 km of new link roads and maintained 4,700kms of asphalt and gravel roads.

http://addisfortune.net/articles/sur-construction-handed-2-1-billion-br-tigray-road-project/

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World Bank Cash Injection Takes Total Loans to Record High

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From left to right: Guang Zhe Chen, World Bank Country Director for Ethiopia , Sisay Gemechu, state minister for Industry and Ahmed Shide, state minister for Finance and Economic Development.

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The latest loans will help to finance industrial zones, a geothermal project and, potentially, the Modjo-Hawassa highway

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Latest and expected  injection of 430 million dollars from the World Bank to Ethiopia is bringing the country’s total loans for the year to a record high of 1.64 billion dollars.

Ethiopia’s loans from the Bank, coming through the International development Association – the Bank’s interest free facility for 80 of the world’s poorest countries- have been growing by hundreds of millions of dollars every year for the past few years, They have shot up from 640 million dollars in 2011 to 974 million dollars in 2012 and 1.15 billion dollar in 2013.

The latest figure of 1.64 billion dollars is believed to be the largest sum the Bank has ever extended in a single fiscal year to a client country, in this modality.

One of the latest loans, a 250 million dollar agreement signed on May 20, 2014, is the first time the Bank has forwarded financing for industrial zones in Africa. The financing goes towards attracting investment and improving enterprise competitiveness and productivity in targeted industrial zones at the Bole Lemi and Kilinto sites. The second loan, a 180 million dollar agreement also expected to be signed this month, will go towards financing a geothermal project.

“We are investing in the industrial zones because it is a basic instrument in the industrialisation process of the country and it is what is required of a country that aspires to join the middle class,” Guang Zhe Chen, World Bank Country Director for Ethiopia, who signed the agreement with Ahmed Shide, state minister for Finance and Economic Development (MoFED), told Fortune.

The bank believes this investment will enhance the competitiveness of the country, even though prior investments in the sector have had mixed results at best, according to Guang.

“There is only one industrial zone that is fully operational at this time and it is the eastern industrial zone, which is still not fully occupied despite its establishment five or six years back,” he said, adding that he has concerns with the gap in the legal framework and institutional capacity to enable effective and successful implementation of the project that the Bank will finance.

The loan for the geothermal project, through the Geothermal Sector Development Project (GSDP), will bring the total current loans and grants portfolio of Ethiopia to around six billion dollars.

The World Bank is also likely to provide financing in the range of 250 million dollar to 300 million dollars for the 218km Modjo to Hawassa Highway. The government has been looking for financing since 2011, targeting the Africa Development Bank(AfDB), the World Bank, China and Korea as possible sources. The African Development Bank extended a 126 million dollar loan in December 2013 to finance a 56km segment of the 93kms from Modjo to Ziway; the other section is supported by the Korean EXIM Bank. The World Bank’s loan is still in the making, though, according to Guang.

There are 39 countries in Africa which are to benefit from IDA loans; Ethiopia’s credit portfolio at the Bank is exclusively facilitated by the IDA.

Since its inception, IDA credits and grants have totaled 161 billion dollars, averaging seven to nine billion dollars a year in recent years and directing the largest share, about 50pc, to Africa, according to documents from the bank. Ethiopia gets the lion’s share from that.

The IDA loans finance primary education, basic health services, clean water supply and sanitation, environmental safeguards, business-climate improvements, infrastructure and institutional reforms. The IDA has supported 150 projects in Ethiopia to date, including 25 that are now active.

http://addisfortune.net/articles/world-bank-cash-injection-takes-total-loans-to-record-high/

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Environmental Network Seeks Solar Dissemination in Ethiopia

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Participants of the national workshop held at Gullele botanic garden.

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The solar products are intended to be used predominantly for lighting and mobile phone charging

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The Horn of Africa-Regional Environment Centre & Network (HoA-REC&N) is looking towards a third attempt to procure 10,000 solar lanterns for distribution in Amhara, Oromia and Tigray.

The Centre, an autonomous institution under the Addis Abeba University (AAU), is a body that promotes more than 40 higher learning institutions and research centres, endigenous civil society and community based organisations in Djibouti, Ethiopia, Kenya, Somalia, South Sudan and Sudan. It held a National workshop on May 19 and 20, 2014, at the Gullelle Botanic Garden, on the dissemination of solar energy technologies in Ethiopia.

The workshop was organised in collaboration with the Energy & Resource Institute of India (TERI) to discuss challenges and market availability for solar powered products in Ethiopia.

Participants came from the federal Ministry of Water Irrigation & Energy (MoWIE) and six regional water & energy bureaus, as well as the National Bank of Ethiopia, NGOs, solar product suppliers and researchers.

The Network has twice tried to buy the lanterns it intends to distribute to the regions,  Araya Asfaw (PhD), the executive director told Fortune. Both tenders failed, however, because of the high prices offered by suppliers. He did not specify the time, but a third tender is in the pipeline. This project is supported by the European Union Energy Facility, and the lanterns are expected to be distributed in September 2014.

The lanterns will allow mobile phone charging. The project will also include establishing 20 solar mini grid shops mainly to recharge the distributed lanterns for household lighting, Asfaw said. That is to complement the small panels on the lanterns, which require 12 hours of charging for just six hours of lighting.

The mini grid shops will be run by TVET students, who will receive training for that purpose, Asrat said.

The workshop had four private businesses displaying the solar powered products they had imported for sale. A supplier told the workshop that one of the problems facing the solar products sector in Ethiopia was that the government did not have enough awareness and expected to buy state-of-the art products for a cheaper price than they were actually worth.

Most of the products displayed included mainly solar lanterns and home lighting systems. One company displayed a solar powered cooker it made in Ethiopia.

http://addisfortune.net/articles/environmental-network-seeks-solar-dissemination-in-ethiopia/

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Farmers return to coffee as global demand hit new highs

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As global demand for coffee reaches unprecedented highs, Kenyan farmers are replanting what they uprooted decades ago due to its poor returns and this time even the government is keen to reap from the international demand.

In the 1980s Africa produced about 30 percent of the world’s coffee, but today, going by current statistics, it only accounts for 13 percent, a far cry from its potential according to data from the Ministry of Agriculture.

According to International Coffee Organization, Ethiopia with 7.45 million bags in 2010 was lead producer, followed by Uganda with 3.1 million, Ivory Coast with 2.2 million, Tanzania 917,000 and Kenya 850,000. Coffee is the second most traded commodity in the world after oil with an estimated value of $80 billion annually.

A reality check on the performance of most African producer countries indicates that all is not well as evidenced by recent statistics that the continent produced an estimated 17 million bags in 2010. This accounts for only 13 percent of the global coffee production compared to 30 percent in the 80s. In Kenya despite the good prices and government interventions, coffee production has remained low averaging between 40,000 metric tones and 55,000 metric tonnes.

“In 10 years the supply gap will be 30 million bags. This is a big opportunity for farmers in the country to increase production and earn more from their produce,” said Coffee Board of Kenya Managing Director Ms Loise Njeru. The government projects to introduce coffee production to 100,000 metric tonnes according to Vision 2030. This however will still be below the peak of 130,000 metric tonnes achieved in 1988/89.

World coffee prices are expected to remain high for over 10 years according to experts with supply falling below demand last year. About 158 million bags of coffee were consumed in the world in 2010 compared to 159 million bags the previous year.
In 2010 the country received Sh16 billion, an improvement from Sh10 billion registered the previous year. Coffee earned the country Sh22 billion in 2011. “We have witnessed crazy prices at the Nairobi Coffee exchange. Speculation may correct this in the long run, but the prices will not come to the low levels they were due to constrained supply,” said Mr. Kennedy Gitonga an economist at Coffee Research Foundation.

He said the Columbian mild which is similar to Kenya’s coffee will be coming to the market in few years after maturing, which will tilt the coffee market with added supply. However prices will be stabilized by rising demand, estimated at 2.5 percent per year.
Mr. Gitonga said Kenya could exploit the anticipated decline in coffee production in the world, by taking measures to mitigate the effects of climate change and increasing production per tree. “Kenya has no carryover stocks, even in times of high supply, indicating that local coffee is highly sought after at the world market,” he said.

And as researchers brace for challenges associated with the climate change, they are advising farmers to introduce measures that ensures that production is not reduced. Some of the challenges expected are new diseases and insects, drought and floods. Coffee Research Foundation, the body charged with carrying out coffee research in the country has advised farmers to initiate primary farming practices that have long been forgotten, to cushion the crop from the vagaries of nature.”The threat of climate change is real and the time to act is now to avoid being caught up a few years down the line. That is why we shall factor in climate change in our development of new varieties,” said the director of research Mr. Joseph Kimemia.  Among the measures cited by the research body include plating coffee friendly trees to keep the crop shaded. Planting grass strips in coffee rows and regular pruning are others.

Tree shaded Mr. Kimemia said can reduce temperature by 4 degrees Celsius while the other measures can hold more water for the plant. Firms like Kakuzi have reduced acreage of coffee to reduce risks as production plummeted. They have converted some of the land under coffee to mango growing.

But with the fast growing markets in China, India and Brazil, global supply of coffee is expected to be in a tight supply situation for several years and Africa has an opportunity to increase its production, the meeting convened for African coffee producer states and which deliberated on how to increase production and consumption noted.

A growing middle class in these countries that is increasingly taking to drinking coffee, has led to reduced exports from some of the traditional coffee growing countries. There are other emerging markets like Russia that the continent could use to increase exports. The continent with an estimated population of 1 billion also has a potential to increase local consumption but also has to increase value addition and produce brands for local and export markets.

However Kenyan coffee is a favourite in the global scene where it is purchased to blend produce from other countries.  This demand is rekindling hope to thousands of farmers who had previously abandoned the crop due to poor returns.

That coffee sector is on the road to recovery can be seen from the eyes of  farmer Jeremiah Muthomi of Meru Greens who says that in parts of Eastern and Central where his firm has contracted out growers, farmers have gone back to coffee on parcels where they were growing horticultural produce. “With the current coffee boom, farmers have started replacing horticulture with coffee trees,” he said.
Elgon Kenya Ltd is positioning itself to be a lead supplier to the coffee industry following the encouraging developments.

But on the flipside of all this interesting developments, local consumption remains low. Compared with other continents, Africa has an average consumption of only 750 grammes per person per year. In Brazil consumption is at 2.8 kilos. Ethiopia which is the top producer in Africa consumes nearly half of its produce while in Kenya only 3% is consumed locally. Algeria, Morocco, South Africa and Egypt which are non producing countries have a combined demand of 3.5 million bags every year and growing.

A coffee expert from Brazil Mr Carlos Bando, said the continent needed to invest in local consumption habit surveys to understand their needs in a bid to encourage more consumption. According to ICO, coffee consumption is estimated to be growing at 2.4 percent per year, and in 2010 the volumes were 158.2 million bags, a slight drop from the 159.2 million in 2009.

Among the reasons raised in the meeting for low coffee productions were concerns that farmers were aging and that it was necessary to encourage the youth to be active in reviving the crop. “We have to find innovative ways to encourage the youth to participate in growing coffee. Coffee has to appeal to the youth and has to be fashionable and trendy,” said Mr Ishak Lukenge from Uganda.

He said a youth programme had been initiated in his country where tournaments are organized around coffee, where youths plant coffee and discuss the crop before tournaments.

http://www.farmbizafrica.com/index.php?option=com_content&view=article&id=1074:farmers-return-to-coffee-as-global-demand-hit-new-highs&catid=10:market-trends&Itemid=144

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Heated human waste to heal Kenya’s sick soil

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Written by Bob Koigi for Farmbizafrica

A researcher is exploring various methods of increasing soil nutrients to Kenya’s tired soil including burning human waste at higher degrees and mixing it with urine in what is seen as a cheaper alternative to conventional fertilizers whose prices have hit sky high.

Leilah Krounbi a Ph.D. candidate in the field of crop and soil sciences has been working on a method of increasing soil nutrient dubbed pyrolysis

The use of pyrolysis, thermal combustion in the absence of oxygen, of woody materials to produce biochar has been hailed as a potentially powerful tool to capture carbon and add it back into soils. The transformation of sewage sludge into a “bio oil” for energy has also been studied.

Krounbi wondered if pyrolysis could also be used to turn human waste into fertilizer. So she teamed up with crop and soil sciences professor Johannes Lehmann and joined the Climate Foundation and Sanergy – a latrine project based in Nairobi, to answer the Bill & Melinda Gates Foundation’s “Reinvent the Toilet” challenge.

The urea in urine is high in nitrogen, and feces contain a lot of phosphorus – both nutrients that are lacking in many soils. By burning feces at temperatures between 200 degrees C and 500 degrees C, the waste matter could be converted into solid, sanitized biomass. Soaking that biomass in urine, either before or after pyrolysis, would add nitrogen.

Krounbi is trying to figure out the right mix and optimal pyrolysis temperature, while also studying logistics and its effectiveness in the field. There are several challenges to overcome, such as the conversion of nitrogen in urea to ammonia.

“There is a lot to consider as I’m looking at how to take human waste and turn it into something useful. While serious soil degradation is a problem, it’s not being remedied with inputs ” Krounbi told her peers at a Department of Crop and Soil Sciences seminar.

Her experiments have been fueled by Fido. Krounbi collected dog feces from for her studies. While her initial findings have been promising, Krounbi said she is looking forward to testing her methods in the field and measuring the results in Kenyan soils and crops.

“The rural dilemma is a dearth of nutrients, including carbon, nitrogen and phosphorus. The urban dilemma is excess nutrients – human waste going to waste,” Krounbi said. “This could provide a way to close the urban-rural nutrient cycle and char away the dilemmas.”

http://www.farmbizafrica.com/index.php?option=com_content&view=article&id=1171:heated-human-waste-to-heal-kenya-s-sick-soil&catid=20:crop-types&Itemid=142

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Micronutrient Conference Kicks Off Here

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Addis Ababa June 3/2014 –

First Lady Roman Tesfay

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The world’s leading nutrition, food security, global health and agriculture experts are in Addis Ababa to address micronutrient malnutrition, which affects one in three people in the world at the 2014 Micronutrient Forum Global Conference.

The overall goal of the Conference is to help reduce malnutrition and its consequences by fostering dialogue, partnership and new evidence.

The Conference is being held under the theme: ‘building bridges’ with an emphasis on bridging scientific advances and multi-sectoral programming needs to ensure adequate micronutrient intake and status across the life cycle.

The conference brings together people from a wide array of sectors, including nutrition, health, agriculture, social protection, food security, the private sector and their spheres of influence.

Speaking on the occasion, First Lady Roman Tesfay stressed the need to work hard to expand the results gained so far in improving the micronutrient status and trends of feeding practices of families.

Working on nutrition is important to improve health of mothers and children in particular and the society at large, she added.

The overall development in the country over the past decade has led to the improvement of feeding practices of families, she said, adding, but still there are gaps to be bridged.

Health Minister Dr Kesetebirhan Admasu on his part said efforts being exerted to eliminate micronutrient deficiencies are bringing good results.

These efforts helped to reduce prevalence of stunting and underweight among children to 32 percent and 23 percent from the 44.4 percent and 28.7 percent, respectively in 2011, he added.

According to the Minister, these results combined with other initiatives enabled the nation minimize under five mortality a year before the deadline.

The country is working to reduce prevalence of stunning to 21 percent within the coming six years through various interventions, the Minister stated.

Ethiopia has gained good results in reducing prevalence of micronutrient deficiencies, said Chair of the Micronutrient Forum Steering Committee, Lynnette Neufeld.

The efforts and results gained in this regard enabled Ethiopia to host the five-day Forum, the first to take place in the continent.

Ethiopia has developed and implemented several nationwide programs and interventions to eliminate micronutrient deficiencies.

The development of National Nutrition Strategy and National Nutrition Program are witnesses of these efforts that are geared towards the improvement of the micronutrient status of the population.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2145:micronutrient-conference-kicks-off-here&Itemid=260

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Alecto Says Centamin Agrees Initial Commitment At Aysid Metekel

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http://www.lse.co.uk/AllNews.asp?code=4xsdp5l3&headline=Alecto_Says_Centamin_Agrees_Initial_Commitment_At_Aysid_Metekel

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Investment Proclamation Amendment Bill Tabled

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An amendment for the Ethiopian Investment Proclamation was sent to the House of Peoples’ representative s for discussion, Capital reported.

The draft proclamation indicated the Ethiopian Investment Agency will be restructured as a commission and will be managed by a board whic will be he board will behaired by the Prime Minister. 

The Commission will also have additional powers such as ratifying significant issues with the goal of promoting the manufacturing sector, especially industrial zone developments.

The document attached to the draft proclamation states the manufacturing sector requires strong management and fast decision making without the intervention of other bodies.

And in order to respond quickly also address dynamic global economy matters efficiently, the Prime Minister will chair the Investment Board.

The draft proclamation gives the Prime Minister some significant powers for which he is not obliged to involve the Council of Ministers. One of these powers is stated under Article 29 (6) of the draft document. The provision stipulates “where necessary, authorizing the granting of new or additional incentives other than what is provided for under the existing regulation”.

Another provision granting the Prime Minister with such powers is Article 29 (7) which states “where necessary and without prejudice to the provisions of Article 5 of the Proclamation, authorize the opening of investment areas for foreign investors, otherwise exclusively reserved for domestic investors”.

The draft bill bestows upon the investment board the power to oversee the administration and the supervision of industrial development zones.

http://www.2merkato.com/news/alerts/2999-investment-proclamation-amendment-bill-tabled

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EU Recommends Establishment of Arabica Coffee Researcher Institute in Ethiopia

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During a workshop organized by European Union (EU) and Coffee Development Sector, the EU recommended Ethiopia to host a research institute of Coffee Arabica, according to The Reporter.

A consultant at the German based Dipl. Lng, Gunther Herhaus, made a presentation of a research that revolved around the recent poor performance of Ethiopia’s coffee sector. During his presentation, Herhaus highlighted opportunities that can see the success of Coffee Arabica. He suggests the success will come through commencing various mechanisms that will mitigate the current problems and as well by coming up with ideas of establishing a research institute.

Herhaus recommended one of the possible methods to bring back the Ethiopian specialty coffee was by establishing a research institute that helps farmers and exports maintain quality and production. He further noted, “Arguably, Ethiopia remains the most important place for Coffee Arabica and possibly the right location for a research institute as well”.

The consultant further noted, factors that impacted the coffee sector to be insufficient attention to the quality as farmers care more about quantity, inconvenient transportation, poor data collection on market assessment, and frequent amendments on regulations and poor cultivation and storage.

Germany is a major destination for coffee export. In 2010 Germany has imported 1,089,176 Tons out of which 34 percent of from Brazil. Nonetheless, Ethiopia had only 3.7 percent share from this figure.

Herhaus, on the other hand is optimist that Ethiopia is capable of making remarkable progress and share important markets after resolving issues he stated.
He said “It can reclaim the top spot when it goes through these necessary steps towards a certain goal”.

http://www.2merkato.com/news/alerts/3006-eu-recommends-establishment-of-arabica-coffee-researcher-institute-in-ethiopia

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Africa Hotel Investment Forum drops Nairobi and shifts to Addis Ababa

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By Prof. Dr. Wolfgang H. Thome, eTN Africa Correspondent | Jun 02, 2014

http://www.eturbonews.com/46487/africa-hotel-investment-forum-drops-nairobi-and-shifts-addis-aba

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Moving Women Out Of Poverty In Ethiopia

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Author:  Masha Hamilton, VP for Communications, Concern Worldwide U.S.

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Her husband helped a friend abduct a young woman who the friend wanted to marry. As soon as the woman was brought into the friend’s home, she hung herself.  Stunned, and hoping to hide what had happened, the men threw the woman’s body over a cliff near the village.

But herders found the body, uncovering the crime. The 270 households of Homa, some 235 miles southwest of Addis Adaba, the capital city, were horrified. Salgado’s husband, along with his friend and one other who had helped, was sentenced to life in prison.

Talking about it today, nine years later, Misrach’s face hardens and her eyes stare into the distance. She recounts the hardships that followed, including isolation in the village and hungry nights as she struggled to find a way forward. Eventually, she began to buy butter in the local market and travel to a larger nearby town to resell it, keeping whatever profit she could for herself. But she couldn’t afford to buy much more than about four to five kilograms of butter a week, so she only made a profit of between $2.50 and $3.50 weekly.

“To afford food for myself and my children was difficult,” she said, sitting on a wooden bench outside her small, round hut. “We were going hungry many, many nights.”

Her often desperate situation continued until just last year, when Concern Worldwide, the 45-year-old non-governmental-agency for which I work, stepped in.

Our organization, which is skilled at helping the world’s poorest people move sustainably out of poverty, reached into Homa to help Misrach and other strong, determined women like her help themselves.

Concern Worldwide offered the seed money for a 20-member women’s micro-lending support group. The women were given one-year loans of $100 each in 2013, and one year to pay them back with no interest. They were asked to invest in businesses, meet bi-monthly as a group, and contribute dues toward future loans. It is their determination that has made the project work.

With her purchase power boosted, Misrach began buying 100 kilograms of butter a week, and now makes upwards of $10 a week. This year, having paid back the first loan, she took out a second for $150 and bought a cow as an investment and to help supply her family with milk. She can feed her family and even began providing her husband in prison with some small food items. And the women selected her to be the treasurer of their group, demonstrating their confidence in her and her rising status in the village.

“I used to feel I was worried all the time. Now I feel I am safe,” she says. “My children’s lives will be better than mine.”

Ethiopia has one of the strongest performing economies in sub-Saharan Africa. Still, about 29 percent of the population currently lives below the poverty line, and it ranks 173 out of 187 countries on the United Nation’s Human Development Index.

Women disproportionately bear the burden of the country’s economic struggles, according to the UN’s Womenwatch. This is “mainly a result of the gender based division of labor and lack of access and control over resources prescribed not only by tradition and culture, but also reiterated in the law,” it notes. For rural women, access to land and livestock is virtually impossible. Poverty also means more infant deaths, undernourished children, and lack of education. Observers have routinely noted how hard Ethiopians must work physically in an effort to keep their families afloat.

Thirty-year-old Dakutye Darcho is a perfect example of this. When we ask her how she used her microloan she said she was eager to explain but can’t stop work.

So we meet in the hut that used to be her home and is now her “bakery.” She is barefoot and wears torn clothes. While we talk, she makes round after round of injera, a sourdough flatbread with a spongy texture that is a national food here. The work requires her to rotate her arm in a circular motion over a pan as she stands above a fire that she keeps going by constantly fueling with dried grass.

Before her first $100 loan, Dakutye and her husband served as middlemen for locally grown crops, especially maize and sweet potatoes, traveling to nearby villages to sell them in markets. When the loan came through, she began building a second home so the first could become her workplace. She, too, took out a second loan after paying back the first. She and her husband still sell the crops in nearby markets, but her family’s financial mainstay has become her injera bakery business.

“I can provide more nutritious foods and better clothes for my kids, and now I can buy their school supplies,” says the mother of five children who range in age from 6 to 21. “Thanks to God, I really really feel they are better off now.”

Her personal dreams have become larger too: once she completes their new home, she hopes to build another that she can rent out.

“I’m working all the time,” she acknowledges with a smile in response to a question. “But I don’t feel tired. I feel I am a strong woman now.”

http://www.trust.org/item/20140602182619-vqetx/?source=search

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Ethiopia: World Bank Approved cash to Develop Potential Geothermal Sites

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Photo:  In 2013, Ethiopia has entered into a deal worth $4 Billion with American-Icelandic Company, Reykjavik Geothermal, for the development of a 1000-megawatt geothermal farm.

Ethiopia has a huge wealth of renewable energy including a potential 45,000 MW from Hydro Power, 10,000 MW from geothermal energy in Oromia, Afar and Somali regional states.

The Ethiopian heavy investment in renewable energy including wind, solar and hydropower is part of its climate resilient green economy strateg

Ethiopian Electric Power Corporation CEO, Miret Debebe, said the geothermal project would also boost “trade with neighbouring countries.”
The World Bank’s board of directors, based in Washington DC, US, has approved two hundred million dollars of credit for the Ethiopian government to develop its potential geothermal sites at Aluto and Alalobad, in the rift valley of Afar Regional State, on Thursday, May 29, 2014.

The loan will be financed by the International Development Association (IDA) and Scaling-up Renewable Energy Program (SREP) of the World Bank trust fund.

“In addition to providing energy security, the project will support Ethiopia’s efforts to build a climate change resilient green economy, by developing renewable energy sources with low carbon emissions,” said Guang Zhe Chen, the World Bank country director for Ethiopia.

The finance, which will be employed to support the Geothermal Sector Development Project of the country, is envisioned to help fulfill the increasing demand for electricity by tapping into the substantial geothermal energy potentials, according to the press release of the Bank.

U.S.-Africa Energy: The U.S. Secretary of Energy, Dr Ernest Moniz, will lead a high-level U.S. official delegation to the forthcoming U.S.-Africa Energy Ministerial meeting from June 3 to June 4 in Ethiopia.
The Africa Regional Media Hub of the U.S. Department of States said in a press statement in Lagos that the delegation would meet with northern and sub-Saharan African energy ministers.
The listed U.S. officials on the delegation to include Dr Rajiv Shah, Administrator of the U.S. Agency for International Development, and Mr Fred Hochberg, Chairman of the Export-Import Bank.

`The Ministerial will also bring together representatives from government, private sector, and academic communities to discuss best practices and technologies for sustainable energy development in Africa.

http://www.geeskaafrika.com/ethiopia-world-bank-approved-cash-to-develop-potential-geothermal-sites/3698/

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US-Africa Energy Ministerial Conference opens

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Addis Ababa, 2 June 2014 (WIC) - The US-Africa Energy Ministerial Conference opens today (June 3) in Addis Ababa.

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The Conference, jointly hosted by the Ethiopian Government and the US Administration, is focusing on the theme of “Catalyzing Sustainable Energy Growth in Africa” and will provide a forum for commitment to support energy development throughout Africa.

The meeting is bringing together ministers from sub-Sahara and North African countries, as well as senior U.S. government officials, multilateral development partners, regional and sub-regional African energy organizations, academia, civil society, and U.S. and African private sector leaders.

It is providing opportunities for government-to-government, government-to-industry, and company-to-company informational exchanges, and networking on a variety of topics including clean energy technologies, increased power generation, rural electrification, regional integration, oil and gas development, policies and regulatory issues, investment opportunities, and financing.

The meeting will provide a showcase for energy development and explore strategies, detailing effective practices across Africa and the United States for accelerating the development of clean energy sources and the adoption of energy efficient technologies as well as reviewing best practices in oil and gas resource development, and highlighting progress on the President Obama’s Power Africa Initiative.

According to Ministry of Water, Irrigation and Energy the two day conference will dwell on making Africa’s energy supply reliable. The conference will be attended by Energy Ministers from around Africa and US officials, and representatives of US financial institutions and energy companies. Discussions will focus on improving Africa’s energy development capacity, networking African countries in energy export and sale, making Africa’s political and legal framework conducive and on financial alternatives for energy development along with investment on energy.

The African Energy Ministerial will also include panel presentations, high-level plenary sessions, break-out discussions, and a minister-level meeting as well as featuring a U.S.-Africa Energy Expo Center where U.S. and African companies can highlight technologies and business solutions.

http://www.waltainfo.com/index.php/editors-pick/13617-us-africa-energy-ministerial-conference-opens-tomorrow

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Fertilizer plant inaugurated

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A fertilizer blending plant built at a cost of 31 Million Birr was inaugurated on Sunday. The plant is located in the Oromia State Tulu Bulo town, Ethiopia.

The plant will make available to farmers an expanded range of soil nutrients. The products will be customized based on the specific soil types, crops and agro-ecologies, according to Ethiopian News Agency.

The plant, which has a capacity of producing 15,000 Quintals of blended fertilizers per day, will be run by the Becho Woliso Farmers’ Cooperative Union.

According to Dereje Hirpa, Head of the Union, the plant will start blended fertilizer production in the coming year.

During the inaugural ceremony Mtiku Kasa, State Minister for Agriculture, said the plant is intended to supply farmers with blended fertilizers that has different nutrients. He added the government is working with stakeholders to construct three additional plants in three different states.

A national fertilizer blending program by the Ministry of Agriculture and the Agricultural Transformation Agency was launched in 2013. The program aimed at introducing new high-yield blended fertilizers and to create Ethiopia’s first in-country blended fertilizer production facilities.

The program aims at constructing four fertilizer blending facilities in four different states, Amhara, South Nations Nationalities and Peoples, Oromia and Tigray. A compined 250,000 Tons of blended fertilizers production is expect when all four plants commence production.

According to the program the plants are going to be run by farmers’ cooperative unions. This includes Enderta in Tigray, Merkeb in Amhara, Becho Woliso in Oromia, and Melek Site in SNNPR.

Ever since fertilizer was introduced in Ethiopia, the nation’s fertilizer usage has been limited to Diammonium Phosphate (DAP) and Urea. Nonetheless, a research has revealed Ethiopian soils lack various compounds that could not be found in the two types of fertilizers.

http://www.2merkato.com/news/alerts/3005-ethiopia-a-fertilizer-blending-plant-inaugurated

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Nation Earns 90 million USD from Export of Agricultural Products

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Of the total 62,000 agricultural outputs exported during the specific period, sesame contributes 53.2 percent, while fava beans and white chick peas contribute 30.6 percent and 5.8 percent respectively.

The amount of agricultural products exported during the reported period has doubled compared to the previous year same time.

He attributed the success for the extensive activities undertaken by stakeholders to realize the growth and transformation plan by increase amount of agricultural activities the country is exporting.

Ministry Working to Enable Companies Export Value Added Minerals

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 Efforts are being exerted to improve capability of companies that supply value added ornamental minerals to local and foreign market, the Ministry of Mines said.

The State Minister Tewodros Gebre’egzabher told ENA that activities have started to increase number of companies that produce ornaments and improve their capacity.

Companies that are exporting valued added minerals are few in number, he added, amount of value added minerals the country exports is also small. The country is adding value to only 20 percent of the total mineral products.

The Ministry is working to increase variety of value added minerals during the coming year, he said. It has decided that rough opal export should be stopped in the coming year, the last year of the first growth and transformation plan period.

Activities are being undertaken to improve capability of exporting companies by helping them import the necessary technologies which enables them add values to rough minerals, he said.

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Enterprise to Construct Five Airports

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The Ethiopian Airports Enterprise announced that it has completed preparation to construct five new airports in various parts of the country.

The airports are going to be built in Semera, Robe, Shire Endasilase, as well as Hawassa and Jinka towns in Afar, Oromia, Tigray and South Ethiopia Peoples states respectively, said Wendm Teklu public relation and communication head with the Enterprise.

The construction of these airports will enable to realize the goal set in the growth and transformation plan to raise number of airports to 21.

In addition to constructing new airports, the Enterprise is also undertaking upgrading in existing airports to improve their capacity, Wendm said.

Expansion has carried out on six airports over the past years with an outlay of 205 billion Birr.

The expansion works were carried out in Jijjiga, Jima Aba Jifar, Assosa, Semera, Bahir Dar and Mekele airports.

The expansion includes construction of passengers’ terminals, taxiways and cold warehouses.

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Ethiopian Launches Direct Flight to Vienna

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Ethiopian has started direct flight to Vienna, the capital city of Austria, and its 82nd international destination.

Speaking at a ceremony organized in connection with the opening of the new route, Ethiopian Chief Operating Officer, Mesfin Tasew said the airline began flying to Vienna as it is a diplomatic seat of various nations and United Nations offices. In addition, it is named a heritages city by UNESCO and has huge flow of tourists, he added.

First Secretary and Deputy Head of Mission of Austria’s Embassy in Ethiopia, Lydia Ladurner, said on her part the direct flight will strengthen the socio-economic ties of the two countries.

Lydia noted that as Ethiopia and Austria are countries of huge tourist attraction and where diverse activities are undertaken, the air route would strengthen the people to people relations of the two countries.

The flight to Vienna has increased the destination cities of the airline to Europe to 9, it was indicated.

Above items sourced here:  http://213.55.98.22/enae/index.php?option=com_k2&view=itemlist&layout=category&Itemid=187

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Prime Minister Hailemariam Says Turkey Contributes to Ethiopia’s Development Narrative

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Prime Minister Hailemariam on Friday (May 30) opened the Ethiopia-Turkey Trade and Investment Forum in Addis Ababa. Welcoming a Turkish business delegation of 86 people representing 63 companies, he said the Government of Ethiopia strongly supported concrete initiatives for unimpeded trade and investment to achieve mutual benefit and win-win progress. He emphasized that the developmental state’s right mix of policies and strategies had placed Ethiopia on the roads to renaissance, rejuvenation and prosperity. He noted Ethiopia was committed to create an enabling business and investment climate to fast-track the momentum and resilience of its economic development. Its engagement with the Confederation of Businessmen and Industrialists of Turkey (TUSCON), he said, was an “edifying experience” allowing it to much experience from the development of Turkey.

He said Turkish companies had become major contributors to Ethiopia’s remarkable economic growth and its development narrative, adding that TUSCON’s c engagement with Ethiopia, the established market networks of Turkish companies and their immense experience in manufacturing and other priority areas would pave the way for collective rejuvenation and development of Ethiopia and Turkey. The Prime Minister also welcomed the establishment of Turkish educational institutes in Ethiopia and appreciated Turkey’s commitment to join hands with the Government of Ethiopia to improve and raise the quality of education. He said Ethiopia greatly valued the importance of quality education and considered it as a necessary and solid foundation to Ethiopia’s sustainable development. Mr. Rizanur Merel, President of TUSCON, described Ethiopia as “a shining star of Africa” and a state committed to maintain the momentum of economic development with large scale investment and business potential for international investors. He emphasized that TUSCON was ready to share successful experiences in the fields of manufacturing, agriculture, construction, and energy.

He suggested that both sides should advance and reinforce efforts to encourage people-to-people relations and cultural exchanges to enhance mutual understanding and expand further cooperation. Solomon Afework, President of the Ethiopian Chamber of Commerce and Sectoral Association (ECCSA), gave details of the continued growth in trade and investment relations, and noted that the total trade turnover between the two countries had reached over US$550 million last year, up from US$110 million in 2004. He said Turkey had become one of the five leading sources of investment in Ethiopia, and he called on both sides to strengthen existing ties and diversify and enhance economic cooperation. Aklilu Wolde-Mariam, Director of Information at the Ethiopian Investment Agency, explained that Ethiopia was now a champion of political and macro-economic stability, endowed with ample investment opportunities, incentives, services and transparent legal frameworks to protect investors from expropriation or nationalization. At the close of the forum, the Ethiopian Chamber of Commerce and Sectoral Association and the Confederation of Businessmen and Industrialists of Turkey signed a Memorandum of Understanding on ways to expand further economic and investment cooperation between the two business communities. The Forum was also attended by senior government officials and representatives of the Ethiopian and Turkish business communities here in Ethiopia.

http://allafrica.com/stories/201406022011.html

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PM – Ethiopian Aptness Improving to Foreign Investment

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Ethiopia’s suitability to foreign investment is improving, said Prime Minister Hailemariam Desalegn.

The premier opening theEthio-Turkey Trade and Investment Forum in Addis Ababa on 30 May 2014 indicated that the foreign investment is increasing in Ethiopia which testifies the country’ suitability to attract foreign investors.

From Turkish manufacturing sector, 70 investors discussed with Ethiopian government high officials on 30 May 2014 in Addis Ababa at the Prime Minister’s Office concerning investment opportunities in this country.

Hailemariam indicated that Turkish investors participating in Ethiopia are contributing to its development.

Though India and China investment projects are larger in number in Ethiopia, Turkish are superior in Capital amounting to more than 7 billion USD, he said.

In addition, trade exchange between Ethiopia and Turkey has grown to 550 m USD now where it was 110m USD 10 years ago.

Though the trade exchange between the two countries is encouraging, it needs more growth, the premier said.

Turkish Confederation of Businessmen and Industrialists president, Rızanur Meral told the participants that it is not rules and regulations which facilitate investment, but implementation.

In addition to incentives to investment, wide opportunities in export trade makes Ethiopia preferable, said Ethiopian Chamber of Commerce and Sectoral Association president, Solomon Afework.

http://allafrica.com/stories/201406022262.html

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Sufian Ahmed Likely Candidate for AfDB Presidency

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Sufian Ahmed, Ethiopia’s long serving Minister of Finance and Economic Development (MoFED), was among the six likely candidates whose names surfaced during the recently concluded annual summit of the African Development Bank (AfDB) as a potential candidate to run for the presidency of the African Development Bank (AfDB) group.

Donald Kaberuka, the current President of the Bank, will be leaving his post of the last ten years by the end of this year. The other candidates expected to run for the top job include: Birma Boubacar Sidibe, Vice President of the Islamic Development Bank (IDB), Samura Kamara, Sierra Leoone’s Minister of Foreign Affairs, Jalloul Ayed, Tunisia’s former Minister of Finance, Kordje Bedoumra, Chad’s Minister of Finance, and Akinwumi Adesina, Nigeria’s Minister of Agriculture and Rural Development.

Big shoes to fill

Donald Kaberuka is a Glasgow educated economist who was the Minister of Finance and Economic Planning for eight years from 1997 to 2005 in his native Rwanda and is globally credited for stabilizing the Rwandan economy in post 1994 genocide that deprived his country of its finest academicians, as well as its ordinary citizens.

In July 2005 Donald Kaberuka was elected president of AfDB and took office the next September. Under his leadership the pan-African institution, which will celebrate its 50th year Golden jubilee come November, was in 2013, rated “Aaa/Prime-1, with a stable outlook,” by Moody’s, which further said, “The Bank’s ratings reflect a combination of its intrinsic financial strength, prudent financial management and policies and very strong shareholder support.”

This is despite the bank operating from exile starting from two years prior to the coming of Donald Kaberuka as its president. AfDB moved its headquarters to Tunis, Tunisia, in 2003 following the civil war in Cote d’Ivoire, where it was housed since it was first established. In 2012 Donald Kaberuka announced the first group of staff will begin returning to Abidjan, Ivory Coast’s second-largest city, by the end of the year. “The AfDB will celebrate its 50th anniversary in November 2014 in Abidjan,” Kaberuka said in a statement.

Donald Kaberuka hosted the Bank’s annual summit, his last, in his country Rwanda in the third week of May this year and reassured the Ivorian government when he told his audience, “there is no doubt in my mind, and yours, that the safe return to Abidjan is the most important undertaking for us in the next year.”

‘Veteran’

In his position for more than 20 years, Sufian Ahmed is known to many as a ‘veteran’ who supervised his country’s finance through thick and thin. He is also credited for brining a galloping inflation that had picked a high of more than 50% in the aftermath of the 2005 disputed election to its current single digit. He is also the man who has helped Ethiopia achieve the double digit economic growth that put the country as one of the top five non-oil producing fast growing economies in the continent.

However, Sufian is known to many as a non-socializing individual and lacking in his grip of continent-wide dynamics of socio-political affairs. His lack of other languages widely used in the continent, particularly French, one of the working languages of the bank, is also considered a big minus for his candidacy if he decided to put through his name when the nomination for the post will be formally tendered this July. Sufian holds bachelor’s degree in economics and master’s degree in economic development and planning from the country’s grand university, the Addis Ababa University (AAU).

Along with the European Bank for Reconstruction and Development (EBRD), the Inter-American Development Bank (IAfDB), the Asian Development Bank (AsDB), and the World Bank (WB) AfDB brings the number of multinational development banks in the world to five.

http://allafrica.com/stories/201406020736.html

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Once known for its series of devastating famines that affected millions of people in the 1980s, Ethiopia is today portrayed as an attractive investment destination with immense potential. It is Africa’s second most populous nation with 91m people and one of the fastest growing economies in the region with a booming middle class.

Ethiopia is also well endowed with resources. One of its key attractions is the agriculture industry thanks to the country’s large and fertile tracts of land.

Investors and companies looking to expand in East Africa have their eyes set on Ethiopia, but many complain about the difficulties of entering and doing business in the country. For starters, Ethiopia is landlocked and relies on sea access from the port of Djibouti, described as one of the most expensive ports in the world. Investor concerns also include bureaucracy, difficulty in accessing foreign currency and government control on many processes.

The World Bank’s 2014 ease of doing business report ranks Ethiopia 125 out of 185 economies. According to the report, Ethiopia has adopted reforms in areas such as access to electricity and in the legal realm. However, it is still a difficult place in which to do business when it comes to accessing business licences, establishing a company and trading across borders.

Brooks Washington is the principal at business development fund Roha Ventures, which is setting up a glass bottle manufacturing plant in Ethiopia. For the last 18 months, Washington has been concentrating on setting up Juniper Glass Industries. He tells How we made it in Africa that Ethiopia was an attractive investment destination for the fund because the beverages industry there is “growing insanely”, driving demand for glass bottles.

A lot of curiosity

Washington says he sees more and more investors keen on doing business in Ethiopia, but there is a big gap between those who are curious about the country and those who actually invest.

He explains that there are a lot of unknowns about Ethiopia which make people “sceptical”.

“I have worked and set up businesses all over the continent. I don’t know if it’s harder or easier [to do business in Ethiopia compared to other African countries]. I would say it is just different,” he says.

“The government has a vision for where that country is going and I think their vision is exciting and it’s right, but it also means that they are very clear and prescriptive about what you do and how you do it. So wading through some of the bureaucracy can be challenging, but I think it is very rewarding at the end of the day.”

Worth the trouble  

Doing business in Ethiopia can be a “pain” because of the processes, but Washington says it is “worth” the trouble. For instance, he explains, the Ethiopian government owns all the land in the country and people have to lease it. Getting a lease can be a time consuming process that involves negotiations with the federal and local governments.

“It took us a long time to get the land… but now we have over 10ha in a great industrial area with a long-term lease and very attractive rates. So it is completely worth the process. If you follow the process and you have patience and you are very persistent, then I think it is completely worth it.”

The language barrier can also be a challenge for foreign investors. Washington explains that in other parts of Africa people speak English, French or Portuguese, languages that “westerners are more comfortable with”. In Ethiopia, however, people speak Amharic. Although a good number of the population is also fluent in English, Washington says communication can be difficult.

He advises people interested in doing business in Ethiopia to have “a change in mindset”.

“The rigidity of processes in Ethiopia is surprising to many people. There are no shortcuts [and] there is not a way to make [things] faster. I think that can be really challenging. You need a different perspective.”

Washington notes that many difficulties of doing business in the country are possible to work around with a little bit of “creativity and persistence”. On the plus side, he adds, Ethiopian authorities “really go out of their way to help” investors.

Also:  http://www.foreignpolicy.com/articles/2014/05/29/where_to_invest_around_the_world_2014_edition_bpi

Sourced here  http://www.howwemadeitinafrica.com/trouble-of-doing-business-in-ethiopia-worth-the-rewards-says-investor/40057/

A Walk Down Memory Lane—
BY LEYOU TAMERU, The Reporter

Addis Ababa is dubbed one of the emerging global cities in the world.

As young as it is, it certainly is a city with a lot of charm and interesting historical facts, it is the place where the Organization of the African Union was created 50 years ago. All this buzz about our city has made me want to share some interesting historical facts, which I’ve collected from various sources.

1. The first bank established was the “Bank of Abyssinia” in 1905

2. Dagmawi Menelik Hospital was in 1909 the first hospital built in Addis Ababa. It was built to accommodate 200 patients

3. Ethiopian Telecommunications Corporation was established on March 9, 1894, it included telegraph and postal services. It is the oldest public telecommunications operator in Africa

4. The first telegraph line was constructed between Addis Ababa and Harar in 1899

5. The first law requiring Addis Ababans to pay taxes to the municipality was enacted in 1942

6. In 1902 tap water was first installed in the Palace, it cost 7000 birr

7. TO.MO.CA. Coffee Shop was the first coffee company, it was established in 1953. The name stands for Torrefazzione Moderna Café, which means Modern Coffee Roasting

8. The first locomotive was brought to Addis Ababa in 1904 and it was used to transport construction material into the city to build houses and other structures

9. The first public toilets were built in 1975, there were 30 of them

10. The first Boeing jets landed in the city on December 3, 1962

11. The first Ethiopian stamps were printed and sold in 1908. They were printed in France

12. In 1905, the first school modeled after western education was opened with teachers who came from Alexandria, Egypt

13. Mercato, formerly known as mercato indigino is the largest outdoor market in Africa, it started off as a segregated Ethiopians only market during the 5-year Italian occupation, hence the term indigino for indigenous

14. The National Palace, located near the United Nations Economic Commission for Africa, was built to celebrate Emperor Haileselassie I’s silver Jubilee in 1955, hence its former name Jubilee Palace. It was modeled after the Buckingham palace in the United Kingdom

15. The old post office by Piassa used to be the home of Mohammed Ali, a very well known Indian merchant from Gujurat who introduced corrugated iron sheets and abujedi and much more to the city

16. There’s a Karl Marx monument located inside Debab Restaurant across the street from Addis Ababa University main campus. It’s a reminisce of the country’s communist past

17. Alembekagn, also known as cerchele, is the first western style prison built in the city in 1923. It was designed in an octagonal architecture to better monitor prisoners. It was demolished to make way for the new African Union Headquarters

18. Driving regulations required that cars drive on the left side of the road until it was changed in 1964 to right handed traffic

19. Itege Taitu proclaimed a law requiring every citizen to send their 7 to 21 year old children to school or get fined 50 birr

20. May 5th is the day that marked the beginning and the end of the Italian occupation of Ethiopia. On May 5th of 1936 the Italian army marched into Addis Ababa, and on May 5th 1941 Emperor Haileselassie and his army and allies marched into Addis Ababa ending the 5-year occupation

21. The present day Piassa used to be a segregated market place reserved for Italians during the 5-year occupation of Ethiopia

22. Mexico Square was built to recognize Mexico’s support for Ethiopia as it was the only nation in the League of Nations to have condemned Italy’s occupation. In return, Mexico named a metro station stop after Ethiopia

23. Addis Ababa University was first founded as the University College of Addis Ababa in 1950, it was then renamed Haileselassie I University in 1962, and in 1975 it was renamed Addis Ababa University

24. The first Ethiopian coins with Emperor Menelik II’s face and name were mined in 1897

25. The first time electric power and lights were introduced in 1923, it was mainly used in government offices, the Palace and certain houses.

Sourced here:  http://sodere.com/profiles/blogs/ethiopia-25-interesting-facts-about-addis-ababa

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Investment Agency to Report Direct to the Prime Minister

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-  New bill see the evolution of powerful investment board with composition not yet defined.

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Fitsum Arega, director general of EIA.

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The administration of Prime Minister Hailemariam Desalegn is soon to introduce a sweeping restructuring at the Ethiopian Investment Agency (EIA), hoping to transform it from a mere permit and licensing entity to a nucleus where the attraction of foreign direct investment (FDI) is directed, source disclosed to Fortune.

A bill has been tabled to Parliament last week, introducing amendments to the existing proclamation, which includes provisions that open industrial development zones to private investments. This has been an area that was exclusively given to the state or carried out in a joint venture with it.

The bill sees changes including the redrawing of the Agency’s governance structure from reporting to the Minister of Industry direct to the Prime Minister, these sources confirmed.

The flow of FDI to Ethiopia remains one of the lowest in the world, even when compared to Ghana and Kenya, as well as India’s six billion dollars and China, which had 10 times larger than India’s. And its share to the GDP is seen on a decline lately. At two percent, what Ethiopia gets from the inflow of foreign capital to its GDP was far less than China’s 3.9pc and Vietnam’s 5.7pc.

“It’s clear that there is an opportunity to improve the promotion of incoming foreign investment,” says a study carried out by the World Bank in 2012, surveying what impedes investment to Ethiopia.

One significant drawbacks is the federal agency entrusted with this task “has limited influence and autonomy in the investment promotion sphere, and there is limited coordination with regions,” according to a new study conducted by Monitor Deloitte, a subsidiary of Deloitte, one of the four largest global audit and consulting firms. Jointly commissioned by EIA and the Agricultural Transformation Agency (ATA), the firm has completed a 45-page study and presented it to the Prime Minister’s Office few weeks ago.

Many of the changes soon to come to the Agency led by Fitsum Arega, a young technocrat who climbed the stairs of power, is advised by recommendations from this study, according to those involved in the process. The study is seen as an icebreaker to roll the changes at the Agency, although there was a desire to do that earlier, according to an aide in the Prime Minister’s Office.

With its designation changed from “authority” under the Proclamation enacted in 1996 to “agency” under the yet to be amended law, and to “Commission” under the proposed amendment, the governance structure of the investment agency is one of the changes under the bill.

In a return to the trend under the investment law that was repealed and replaced by the recent one eight years ago, the bill includes three organs that comprises the investment administration with the addition of investment board to the list under the proclamation to be amended.

Nonetheless, details on the board composition, its powers and duties as well as meeting procedures are not included. These were present in the repealed proclamation years back. It was the Prime Minister who was chairman of the board, a practice which will soon see a comeback.

“EIA is unable to influence or take key decisions in the investment process, and is perceived to lack autonomy,” finds the study by Monitor Deloitte.

The Agency is not currently, “visible or influential enough, and requires more authority and power,” according to the study. It is a federal agency, with an old and shabby headquarters on Africa Avenue (Bole Road), undermined by uncoordinated decentralisation of the duty to chase foreign capital for the realisation of the nation’s potentials, the study finds. Besieged by poor logistics that limited its staff provide in-house services, the investment process at the Agency is not “sufficiently transparent and efficient.” Many of its 250 staffs are “lacking skill and expertise,” while they are paid an amount Monitor Deloitte finds “too low.”

“Employees have limited knowledge on the government’s policies, economic and sector priorities and the overall strategy of the Agency,” says the confidential study.

Neither has the Agency equipped with information technology infrastructure, which the study sees will take it more than a year to acquire.

The study strongly recommends that the federal investment agency should be made, “more visible in the national architecture, and requires backing from the highest government office in Ethiopia to execute its mandates in other states.”

The Administration appears to have bought these recommendations. In a separate brief presented to MPs, alongside the bill, authors of the restructuring suggest that “monitoring and supporting to directly administer the development of the industrial zones through a board that shall be led by the Prime Minister will speed up” and attract industrial investments within a short period of time and increase the manufacturing of export goods.

The board will have the authority to write directives outlining the duties and rights of investors in these industrial zones. The bill has introduced a significant change from the existing proclamation, granting the board powers – such as granting of new or additional incentives other than what is provided under any previously existing regulation – which are currently assumed by the Council of Ministers, the highest executive organ in the federal government, also chaired by the Prime Minister.

Under the bill, the investment board can authorise the opening up of investment areas for foreign nationals, otherwise exclusively reserved for domestic investors. Members of the private sector and those in the academia have been calling for a progressive investment regime that allows opening of restricted areas and additions of incentives.

This is a move from a relatively stringent and strict investment regime to a discretionary investment regime, for experts in the area. A lecturer at the Addis Abeba University (AAU) in public finance and investment sees the existing investment regulation as restrictive and highly technical.

“It micro-manages the sectors,” he told Fortune. “Foreign investors have had to tip toe through these restrictions.”

However, if the proposed amendment is to be ratified and become part of the law, it will enable the regime to be flexible enough to treat individual investment issues separately in accordance with the nation’s policy priorities. Such an open ended power scheme should not be left without caution, the lecturer reckoned.

“Anything discretionary can also be arbitrary,” he told Fortune. “As good as it may get, the decision making process should be anchored around the fundamental policy objectives of the country.”

He sees the evolution of a board overloaded and become bogged down in entertaining large number of investors’ claims and appeals.

However, the bill tabled to Parliament tries to emulate the experiences of Rwanda, where the president has so much say, as in Malaysia and Nicaragua.

http://addisfortune.net/articles/invest-agency-to-report-direct-to-the-prime-minister/

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KKR Makes Maiden African Investment

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Kohlberg Kravis Roberts has moved into, for it, uncharted territory with its first-ever investment in Africa.

The private-equity giant has taken a stake in Ethiopia’s Afriflora, which grows roses for sale in the European market. Nor is KKR alone: P.E. investment in sub-Saharan Africa jumped 43% last year, to US$1.6 billion.

KKR will invest about US$200 million from its European fund in Afriflora. The money will be used to increase the company’s size by two-thirds and to add some 5,000 employees. The farm’s founders, a Dutch family named Barnhoon, will continue to manage the operation and will remain investors in the company.

“We see Africa as a long-term attractive investment destination,” KKR’s head for the continent, Kayode Akinola, said. “The potential is astounding. But the work to get there is going to be considerable.”

KKR added Kayode from Helios Investment Partners last year. He will join Afriflora’s board, along with another KKR executive, Matteo Bozzo.

https://www.finalternatives.com/node/27234

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Minister of Agriculture visits Japan

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Ethiopian Minister of Agriculture, Tefera Derbew, visited Japan from 27 to 31 May upon the invitation of the Government of Japan.

According to a statement the Embassy of Japan sent to WIC today Tefera was accompanied by Fitsum Arega, Director General of the Ethiopian Investment Agency (EIA).

During his visit, Tefera met with several, Ministers and high ranking Japanese government officials, such as the Minister and the Senior Vice Minister of Agriculture, Forestry, and Fisheries, the Vice Minister of the Ministry of Foreign Affairs, the President of the Japan International Cooperation Agency (JICA), and the Executive Vice President of the Japan External Trade Organization (JETRO).

The main event during his visit was the Agro-Business Seminar and B2B Session on 29 May, which was co-organized by JETRO and the Embassy of Ethiopia in Japan.

More than 200 participants from related Ministries, private companies, business people, and Development Partners attended the Seminar. Tefera made a keynote speech at the Seminar, and also chaired one of B2B sessions.

The agenda included food value chains in Ethiopia, Trade and Investment potential in the Agriculture and Agro-Processing Sectors in Ethiopia, the status of private sector investment and future trends in Ethiopia, and B2B meetings.

Tefera also visited the suburbs of Tokyo to see Japanese style suburban farming, and made several visits to various agricultural laboratories, such as the National Agriculture and Food Research (NARO) center and the Japan International Research Center for Agricultural Sciences (JIRCAS).

Tefera, expressing his appreciation for the invitation from the Government of Japan, concluded that this visit was meaningful and successful for both countries, and that each program during this visit would further strengthen the bilateral economic relations between Ethiopia and Japan, through the enhancement of Agricultural relations. He also expressed his gratitude to the Japanese companies that showed interest in doing business in Ethiopia.

http://www.waltainfo.com/index.php/explore/13675-minister-of-agriculture-visits-japan

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Ethiopian, Japanese Companies Agree for Joint Venture

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Participants of the recent Ethio-Japan Agro Business Seminar held in Tokyo agreed for joint ventures in food and agro business areas, the Ministry of Foreign Affairs said.

Over 115 Japanese and Ethiopian companies engaged in agro business, flower and sesame production took part in the seminar, a press release the Ministry sent to ENA said.

Agriculture Minister Tefera Derbew said on the occasion that trade relation between Ethiopia and Japan is not as such strong.

But Ethiopia’s export of agricultural products to that country is showing progress over the past few years.

Japan is among the major development partners of Ethiopia, said Ethiopian Ambassador to Japan, Markos Tekle. The development endeavors supported by JICA demonstrated this fact.

The seminar helps to strength relation between companies of the two countries in food and agro business areas, he said.

http://www.ethiopiainvestor.com/index.php?option=com_content&task=view&id=5106&Itemid=88

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US-backed scheme lines up investors for African energy projects

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Private Sector Involvement on the Spot Light During Ministerial Meeting

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The US-Africa Ministerial Meeting focused on issues of private sector involvement, new approach for rural electrification, energy efficiency and how to continue working with Obama Power Initiative.

During a joint press conference Alemayehu Tegenu, Water, Irrigation and Energy Minister, said the Ethiopian government has highly benefited from hosting the meeting and further commented it was successful.

Alemayehu also spoke of the issues that were discussed during the meeting. He said discussions were made on the issues of private sectors’ participation, new approach for rural electrification and energy efficiency.

According to the Minister, participants of the meeting assessed and explored with US Secretary of Energy, Ernest Moniz, on how to continue working with Obama Power Initiative. He added, “Totally, I can say the objective of our conference is fully completed in a very successful way”.

On his part Moniz said, “We were very pleased that the collaboration was excellent. The meeting was extraordinarily successful. The Prime Minister’s presentation emphasizes the risks in Africa from climate change were well spoken”.

The meeting stressed on the tremendous resources in Africa- renewable resources, natural gas being developed strongly and oil as well.

Moniz further noted the issue of climate was well discussed for Africa’s clean energy resource should be developed.

http://www.2merkato.com/news/alerts/3013-ethiopia-private-sector-involvement-on-the-spot-light-during-ministerial-meeting

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U.S. Works With Ethiopia on Renewable Energy

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United States of America has disclosed that it wants to work on renewable energy production in cooperation with Ethiopia.

The country’s Energy Secretary, Ernest Moniz talking to Premier Hailemariam Desalegn in Addis Ababa, at AU Headquarters said that Ethiopia will be exemplary to Africa allowing the private sector to participate in renewable energy production.

He also expressed that Ethiopia has performed successfully on development projects carried out in cooperation with the United States.

Moniz said United States will continue working in providing finance which is the impediment for the private sector’s participation in renewable energy production.

Prime Minister Hailemariam Desalegn expressed that Ethiopia still needs the support of United States on rural electrification, capacity building and integrated infrastructure development.

Ethiopia has the capacity to generate 37 thousand megawatts of energy from water, wind, solar and geothermal sources by 2037.

http://www.ethiopiainvestor.com/index.php?option=com_content&task=view&id=5107&Itemid=88

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Import Solution as Malt Factory Faces Barley Shortage

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-  The rapid growth of Ethiopia’s beer industry has led to the increased demand for malt

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The newly expanded Assela malt factory, which is having a hard time getting malt barley from local sources, is turning its eyes towards the international market.

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The Assela Malt Factory’s investment of 300 million Br, intended to halt the import of malt, has ironically forced its management to import 260,000qls of barely at an estimated cost of 272.5 million Br, Fortune learnt.

Located on the outskirts of Assela town in the Arsi Zone, Tiya Woreda of the Oromia Region, the factory assumed that it would get its inputs from the surrounding areas, famed for their barley production.

However, the contemplated amount of barely supply in the expansion project is not flowing all year round. This has presented the Company with the risk of running out of stock in two months time.

“The domestic supply has basically stopped, yet the factory needs 40,000qls of malt barley every month to continue production,” said Amare Wakjira, managing director of the Assela Malt Factory. “We need to have a secured channel of supply; otherwise the situation is not sustainable.”

The factory normally gets more than 90pc of its domestic barley inputs through traders who collect the crop from smallholder farmers in the Arsi zone of Oromia Regional State and the Sidama zone in the Southern Regional State. Nonetheless, the factory tries to encourage farmers’ cooperatives and unions to supply it directly, according to its strategic plan.

But the domestic supply has not proven to be reliable, especially in recent years. Consequently, the factory has imported barley in the past, most recently last year.

Even though the extraction amount of imported barley is better, the locally produced barley also has its own merits in terms of better taste, experts in the industry agree.

The Company currently buys a quintal of local malt barley at a cost of 900 Br to 1,050 Br, depending on the quality of the product. Whereas, the management plans to import barley from abroad at around 1,048 Br a quintal, including transportation costs up to the factory gate, Amare said.

Officials from the Agricultural Bureau of Oromia Region have various reasons for the shortage of malt barley, according to him.

“They believe that there is a hoarded harvest by the farmers and we are looking into this possibility with them,” the manger told Fortune.

If the supposedly hoarded product does not materialise, the management has decided to order the import of around 260,000qls of barley, which will see it through until the next harvest season in January. But this will go ahead after the approval of the board of directors of the Company, which is expected to happen within a month.

The Malt Factory needs more than 600,000qls of raw malt barley to produce 360,000qls of malt in a year.

“If we didn’t import the barley and produce malt, the beer factories would import the malt directly, with which they are covering more than 60pc of their demand already,” the manager of the factory, which employs about 260 workers, noted.

According to data from the Ethiopian Revenue & Customs Authority (ERCA), 5,425tn of malt was imported in 2003 at a cost of 2.8 million dollars. This number had grown more than 15 fold by last year, forcing the country to spend 47.3 million dollars on the import of malt.

Established 30 years ago, the factory has been the sole supplier of malt to the local beer industry, the production capacity of which has reached about four million hectolitres. This, in turn, has raised the demand for malt by the industry to 99,540tns, in 2011/12.

This was before the coming of the Gondar Malt Factory of the Tiret Endowment Investment Organizstions (TEIO). Established with an investment of 670 million Br, in Gondar, in the Amhara Regional State, the factory has a production capacity of 16,200tns of malt a year. Close to three quarters of its produce is for its  sister company, Dashen Brewery.

There are five companies, namely – BGI Ethiopia, Harer Brewery Share Company, Bedele Brewery Share Company, Meta Brewery Factory and Beer Garden – that buy malt from the factory.

Assela Malt Factory sold close to 220 quintals of malt worth 345 million Birr to these five companies in 2011/12. BGI Ethiopia, producer of Saint George beer, was the main buyer, taking 56pc of the total sales in 2011/12.

Barley is the fifth most important cereal crop in the country after maize, wheat, teff and sorghum, and it is produced on about one million hectares of land. Of the total barley production of 1.7 million tonnes in 2010/11, Arsi and Bale contributed close to 20pc.

Yet, this has not resulted in a sustainable supply of barley to the malt factory in the locality. Nega Wubeneh, senior director of Value Chain Programs at the Agricultural Transformation Agency (ATA), criticises the uncoordinated value chain in crop production for this.

There are also farming differences between wheat and barley on the level fields of the Arsi and Bale lands, according to Nega.

Since the production of wheat is more economically reasonable, with higher yields in amount and price, farmers prefer to plant wheat. Therefore, high yielding malt barley seeds must be distributed and buyers should give a better price for the farmers with future market if possible, to change the trend.

There are at least two projects that have been initiated by two international brands operating in the country to help solve the malt barley shortages.

Deageo – owner of the Meta breweries and Heineken breweries, which acquired the Harar and Bedele beer factories – have started production improvement programs of malt barley on small holder farms in tthe Sebeta and Arsi areas of the Oromia Regional State. This has been done in collaboration with the Ministry of Agriculture and the ATA over the last two years, even though the results are not enough to satisfy the factory’s demand.

http://addisfortune.net/articles/import-solution-as-malt-factory-faces-barley-shortage/

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HPR Ratifies Loan Agreements

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The House of Peoples Representatives (HPR) ratified on Thursday (June 5) three draft bills.

The HPR , in its 36th regular meeting, endorsed the 50-million-Euro loan agreement between Ethiopia and France. The loan would be used for the implementing the project for installation of high electric power transmission lines.

The agreement, besides enhancing the social and economic development of the country by significantly increasing electric power  qualitatively and quantitatively, will hugely contribute toward achieving the power expansion and distribution goal of the Growth and Transformation Plan.

Furthermore, it would remarkably boost power supply to industrial areas and enable villages without power supply to access electricity.

The House also ratified over 20-million-Euro loan agreement for the execution of the dry waste disposal project of Addis Ababa city.

The agreement signed between Ethiopia and France would enable to construct dry waste disposal area for the city. The loan agreement will help move the over 50-year-old disposal site from Qoshe-Repi.

Similarly, the HPR approved the 208.5-million-USD loan agreement between Ethiopia and the International Development Association.

The loan would improve the program in road sector and support the organizational structure of the sector, it was indicated.

All the loan agreements were ratified after the House checked that they are consistent with the loan strategy of the country.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2161:hpr-ratifies-loan-agreements&Itemid=260

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Norway Extends 17.4 million USD to Ethiopia

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The government of Norway yesterday donated over 17.4 million USD to Ethiopia through UNICEF and UNFPA to support the adolescent and youth development program.

Norwegian Ambassador to Ethiopia Odd-Inge Kvalheim signed the agreement with representatives of UNICEF and UNFPA.

The finance is aimed to fund the second phase of the program being implemented by the government of Ethiopia and the two partners.

Over 400,000 at risk adolescents and youth between the age of 10-24 will be benefitted from the four year program being carried out in 30 selected woredas of Addis Ababa and five regional states, namely Amhara, Oromia, Tigray, Afar and South Ethiopia.

The Norwegian government extends this fund seeing the encouraging results gained from the implementation of the first phase of the program, said the Ambassador.

Director of the Federal HIV/AIDS Prevention and Control Bureau Birhanu Feyssa on his part said the fund will help to reduce vulnerability of at risk youth and adolescents for new infections.

UNICEF Representative for Ethiopia Peter Salama said Ethiopia has managed to reduce prevalence of new HIV infections to 1.3 percent, which he said is encouraging.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2159:norway-extends-174-mln-usd-to-ethiopia&Itemid=260

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Garment Growth With Middle Eastern Company’s $80m Deal

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-  With sector performance little over a half of GTP targets, continued growth is crucial

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Upon joining the growing textile sector of the country, the Company has been granted a loan amounting to a quarter of its establishment cost, by the Development Bank of Ethiopia (DBE).

The Company, which has already secured 100ha of land in Mekelle, the capital of the Tigray region, 780km north of Addis Abeba, in order to erect its factory, is expected to commence construction in a few months, according to Taddese Haile, state minister at the Ministry of Industry (MoI).

Delegates of the Company, which supplies its products to renowned international stores like Target, Gap and Wal-Mart, were in town last week for final talks with government officials from the Ministry and the Ethiopian Textile Industry Development Institute (ETIDI).

The construction of the integrated garment factory is planned to be undertaken in three phases. The first phase of construction, which will be dedicated to garment production, is expected to be finalised a year after its commencement. The finalisation of this phase will cost the Company 30 million dollars.

Established in 1990 with a turnover of 100 million dollars in 2013, the company secured the loan from the DBE two weeks ago. To secure the loan, it has provided the Bank with the necessary documents, including the 30pc equity from the total investment cost of the first phase of the project, Sileshi Lemma, director general of ETIDI, told Fortune.

The Company, which will export almost all of its products to its already established markets, has requested a bonded warehouse customs duty service when it becomes operational.

The government has accepted the request in principle, according to sources.

Ten new factories with a combined production capacity of 100tns a day are also expected to start production during this fiscal year. An additional three new projects are expected to start production by 2014/15, according to Sileshi. This is in addition to six ongoing expansion projects in the textile industry.

Among these, the most recent to join the sector wass SVP Textiles Plc, from India.

The Company have started the construction of a 10-billion Br textile plant on a 50ha plot within the Kombolcha Industrial Zone, in Kombolcha town of the Amhara regional state, this year.

Despite all this development, the industry that now comprises of 115 textile factories and 40,000 workers, was only able to earn 52pc of the 111 million dollars that it was supposed to achieve in the first half of the year, according to the Institute. The target for the year is set at 317 million dollars.

The underutilised capacity of existing factories is still a big problem in the industry, according to an expert, who talked to Fortune on condition of anonymity. Factories in the textile sector are currently only utilising around 60pc of their production capacity, he said.

Around 99 million dollars worth of textile products were exported in the last fiscal year. This number is expected to reach one billion dollars by the end of the Growth & Transformation Plan (GTP) period, which is only one year away.

With a per capita fiber consumption of roughly one kilogram – far below the world average of 8.7 kg and the African average of 3.2kg – the country has great potential, which needs to be used properly, according to a research conducted by the African Growth & Opportunity Act (AGOA), three years ago.

http://addisfortune.net/articles/garment-growth-with-middle-eastern-companys-80m-deal/

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Samsung’s First Printer Assembly in Africa Inaugurated

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Last Monday witnessed Tana Communication Plc and Samsung Electronics East Africa inaugurating Samsung’s first printer assembly plant in Africa.

During the inaugural ceremony Tana’s CEO, Sium Adugna, said that in addition to creating job opportunities the plant will facilitate Ethiopia’s efforts in knowledge and technology transfer.

Sium further noted the establishment of the plant will minimize the production of printers which in turn will make Samsung printers competitive in Ethiopia.

Through his representative Robert Nigeru, Iso Samsung Vice President, said the opening of the plant is a sign for Samsung’s commitment to build Africa’s information and communication technologies capacity.

Robert further noted, his company will bring printer assembly engineers from Korea in order to equip local talent with necessary skills for running the assembly.

The products of the assembly are the first printer models of ML-2160, SCX- 3405W, ML5015ND and SL-M3820D which are Mono and Multi function printers.

Currently the plant has the capacity of assembling 70 printers per day.

http://www.2merkato.com/news/alerts/3014-ethiopia-samsungs-first-printer-assembly-in-africa-inaugurated

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Ethio-South African Business Forum Opens in Addis

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A three day Ethio-South Africa Investment and Business Forum opened June 01 in Addis Ababa with representatives of over 25 South African companies involved in education, health, infrastructure, manufacturing and agro-processing taking part in the discussions on possible cooperation in trade and investment.

In his welcoming address, Endalkachew Simie, Deputy Secretary General of Ethiopian Chamber of Commerce and Sectorial Association, noted that Ethiopia and South Africa had a longstanding bilateral relationship which has been strengthened by bilateral agreements in different areas including education, tourism and agriculture. In addition, he noted, imports and exports between the two countries have been growing in value and in volume.

Endalkachew said the Forum would contribute towards increasing existing economic ties between the two countries.

Stanley Subramoney, Chairman of the NEPAD Business Foundation, said Africa was at a critical juncture and the continent currently provided a new edge of opportunities. He noted that intra-Africa trade was increasing and pushing back the frontiers of poverty.

Ethiopia’s Agriculture Minister, Tefera Deribew, stressed the Forum could help elevate existing Ethio-South Africa social, economic, and political relations to a higher level through fostering strategic economic alliances and solid business partnerships.

He underlined the Ethiopian government’s commitment to make the country a real destination for Foreign Direct Investment, emphasizing that the country enjoyed a conducive business environment, political stability, sound economic policies, and macro-economic stability.

Fistsum Arega, Director General of the Ethiopian Investment Agency also noted the government’s full support and the incentives available for investment in the priority sectors. He South African businesses to make use of Ethiopia’s quota-free and duty-free access to European and other markets.

http://www.waltainfo.com/index.php/explore/13647-ethio-south-african-business-forum-opens-in-addis-

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07 June 2014 Written by  Henok Reta

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Mahamoud el-Solh (Ph.D) is the director general of the International Center for Agricultural Research in Dry Areas (ICARDA), an organization dedicated to investing in agricultural research with a special focus on enhancing productivity in dry areas.

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Israel investment conference to showcase Ethiopia

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A high profile Ethio-Israeli investment conference is scheduled to take place next Monday in Tel Aviv. The conference, which will be held at the Dan Panorama Hotel, will be organized by the Ethiopian Embassy in Israel and headed by Ambassador Helawi Yoseph.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2089-israel-investment-conference-to-showcase-ethiopia

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Southwest Technologies, partners to launch data center in Ethiopia

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Southwest Technologies and its partners announced they are set to launch a data center in Ethiopia to make Ethiopia a hub for IT in Central Africa on Tuesday at the Sheraton Addis.

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Infrastructure coordination office to be established

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A new draft bill proposing the establishment of a federal coordinating agency for integrated infrastructure with a mandate of execution of infrastructure development works in accordance with road masterplans and the development of a formula for the assessment of compensation for properties has been presented to the House of People’s Representatives (HPR).

http://www.thereporterethiopia.com/index.php/news-headlines/item/2088-infrastructure-coordination-office-to-be-established

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Giant car dealers unite to voice common industry issues

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Some of the renowned car and machineries importers have sustained in the industry over half a century in Ethiopia.

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Power Africa goes off-grid in Addis Ababa

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Solar panels are installed in Rema, a village 150 miles northwest of Addis Ababa, Ethiopia, where many rural households still do not have access to electricity. U.S. President Barack Obama’s Power Africa initiative will invest in off-grid and small-scale energy projects to bring electricity to rural areas. Photo by: Stiftung Solarengie / Bread for the World / CC BY-NC

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The U.S. Department of Energy Tuesday announced a new framework for investment — “Beyond the Grid” — a partnership with 27 “investors and practitioners” who commit to direct $1 billion towards off-grid and small scale energy projects in sub-Saharan Africa, in support of President Barack Obama’s Power Africa initiative.

The announcement could help assuage some environmentalists’ and pro-poor advocates’ fears that Power Africa investments lean too heavily on conventional and grid-connected energy projects and threaten to increase carbon emissions while neglecting rural communities that are often the most impoverished and underserved.

U.S. Energy Secretary Ernest Moniz announced the new framework Tuesday at the U.S.-Africa Energy Ministerial co-hosted by the governments of Ethiopia and the United States in Addis Ababa. U.S. Agency for International Development Administrator Rajiv Shah, African Development Bank Director Alex Rugamba, U.S. National Security Council Senior Director Gayle Smith and other notable public figures are participating in sessions that span topics related to access to energy for women, governance and natural gas utilization, among others.

“With close to 600 million people without access to modern-day electricity, it is clear that centralized grid access is not a comprehensive solution for these countries in one of the world’s least urban continents. But through solutions including off-grid and small scale energy projects, we can bring electricity to these rural areas,” Secretary Moniz said in a statement.

Overseas Private Investment Corp. President and CEO Elizabeth Littlefield presented Wednesday a set of guidelines for power purchase agreements, intended to make them more “bankable” in the eyes of potential investors. A multi-agency effort to produce those guidelines — which Devex detailed in March — arrived at a set of “key elements for attracting financing to energy projects,” according to a statement from OPIC.

“Bankable power purchase agreements are key to unlocking private and public sector capital needed to build generation capacity across the continent — which is the goal of Power Africa,” said Littlefield in a statement released ahead of her address at the ministerial.

Read more on U.S. aid reform online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.

About the author

Michael Igoe

Michael Igoe is a Global Development Reporter for Devex. Based in Washington, he covers US foreign aid and emerging trends in international development and humanitarian policy. Michael draws on his experience as both a journalist and international development practitioner in Central Asia to develop stories from an insider’s perspective.

https://www.devex.com/news/power-africa-goes-off-grid-in-addis-ababa-83621

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Where to Invest Around the World, 2014 Edition

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Do you work at a company that does business overseas? Or maybe you’re an investor hoping to buy a chunk of the growth in emerging markets? Either way, you’re probably wondering where the right places are to invest for the next five years. It’s an especially tough question today, given the geopolitical and financial risks plaguing the global economy. But a detailed consideration of all the things that can happen between earning a return abroad and bringing it home can offer a useful place to start.

Last May, I presented the first edition of the Baseline Profitability Index (BPI), which brought together eight factors to predict the total pretax return investors might expect in countries around the world: economic growth, financial stability, physical security, corruption, expropriation by government, exploitation by local partners, capital controls, and exchange rates. (In the original article linked above, I list my data sources.) In each case, I estimated how likely a given factor was to affect an investment, and then how costly the effect might be.

The idea of the BPI is to see how all of these factors might affect a foreign direct investment — the kind a private equity firm might make — over five years.

To my knowledge, it’s the first publicly available tool that explicitly takes a holistic approach to forecasting investment returns. It’s not perfect, because it doesn’t account for the interactions between all of these factors; just looking at them individually already involves many layers of complexity. But it’s a start.

In just the past 12 months, quite a lot has changed in the global investing environment. Some struggling economies have found their feet, notably in Europe, while others around the world have fallen victim to conflict. A few have improved their economic institutions, too; neighbors Greece, Macedonia, and Turkey all bolstered legal protections for investors, and nearby Azerbaijan strengthened its property rights.

Thanks to the availability of new data, four countries joined the BPI this year: Cyprus, Ethiopia, the Democratic Republic of Congo, and the Republic of Congo. It also lost a few: Benin and Tunisia (whose sovereign debts are no longer rated by Standard and Poor’s); and Ukraine (whose economic forecast from the International Monetary Fund is currently in flux).

Before I get to the results, I have three notes: In the 2013 edition, I used the International Property Rights Index as a gauge of the likelihood of government expropriation. The index is valuable, but covers fewer countries and does so more idiosyncratically than other sources. This year, I decided to use the property rights component of the Heritage Foundation’s Index of Economic Freedom. In the rankings below, I have recalculated the 2013 numbers using last year’s edition of the Heritage index. Also, the World Bank changed its methodology slightly for measuring protection of investors and then revised all previous years of data; these changes are reflected in the 2013 rankings as well.

Finally, the Chinn-Ito index I used to evaluate capital controls has not been updated, so I’m using the same values as last year. Some countries did indeed change the ease with which money could be moved across their borders; Cyprus, Ghana, and notably Ukraine made it more difficult, while Argentina and Venezuela made it easier. Hopefully a future update will include the effects of these new policies.

Comparisons across the first two years of the BPI tell plenty of interesting stories. Botswana originally ranked second last year, but using the Index of Economic Freedom puts it in first place for two years in a row. Four other countries in sub-Saharan Africa join it in the top 20, with strong prospects for growth and, in Ghana and Rwanda at least, friendly business climates. East Asia performs even better, locking down seven of the top 20 places. India maintains its sixth position in large part because of the potential for real appreciation in the rupee; this may now be more likely than ever, thanks to Narendra Modi’s supposedly reform-minded government and the strong hand of Raghuram Rajan at the central bank.

China’s case is one where the switch to the Index of Economic Freedom is noticeable. It ranked 21 in the original 2013 BPI and slipped to 43 after the change. The index takes a dim view of Chinese property rights, perhaps because of the country’s nominally communist system. China’s expectations for growth dimmed significantly as well, pushing it still further down the rankings to 60th place in 2014.

Several countries made even wider jumps between the two years of uniform data. The biggest movers in the right direction were Jamaica, Japan, and the Philippines. Forecasts for faster growth, a better credit rating, and an increase in political stability helped the Philippines. In Japan, the 2013 BPI foresaw a real depreciation in the exchange rate, which indeed came to pass thanks to the huge expansion of the money supply encouraged by Shinzo Abe’s government; with this risk somewhat lessened going forward, Japan became more attractive for investment. Jamaica had a bit of both: a slight increase in its growth forecast and a suggestion that its currency was ripe for appreciation.

The deepest drops in the BPI were by Cape Verde, Egypt, Turkey, and Uruguay. Cape Verde suffered downgrades in both its economic forecast and its credit rating; Standard and Poor’s cited the country’s rising budget deficit — in part a consequence of lower growth and tax revenues — in cutting the rating. In Egypt, expectations for the economy worsened markedly as the army’s coup heightened the general level of uncertainty, while the likelihood of being shortchanged by a local partner rose. Turkey actually improved some protections for investors, but its security situation and its growth forecast both became gloomier. The political tribulations these economies have suffered in the past year did them no favors in terms of attracting investment. Meanwhile, peaceful, pot-smoking Uruguay also saw some erosion in the rule of law and a decrease in expected growth. I’ll let you draw your own conclusions.

Once again, the BPI suggests that not every fast-growing country is a perfect target for foreign investment. Many other factors determine just how much of that growth will be transformed into a cash return back home. Plenty of them are not included in the BPI, but it still contains much more information than a simple economic growth forecast.

We won’t know how predictive the BPI has been of investment returns until a few more years have passed. Even then, it might be tough to compare its forecasts to the profits earned by multinational corporations and private equity funds. But at the very least, the BPI synthesizes the many factors that can affect an investment; as a first approximation, it should at least help investors to ask the right questions.

http://www.ethiopiainvestor.com/index.php?option=com_content&view=article&id=5089:where-to-invest-around-the-world-2014-edition&catid=99:special-report-2

Full content original article (registration required) here:  http://www.foreignpolicy.com/articles/2014/05/29/where_to_invest_around_the_world_2014_edition_bpi

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Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Addis Ababa, Africa, African Development Bank, Agriculture, Business, East Africa, Economic growth, EEPCO F.C., Ethiopia, Investment, Sub-Saharan Africa, tag1

Najib Balala, Kenya’s Mining secretary and Seamic’s chairman (right) and the African Union Commission (AUC) senior industry adviser Frank Mugyenyi address the press during the Governing Council meeting of Southern and Eastern Africa Mineral Centre (Seamic) at the Intercontinental Hotel in Nairobi on June 4, 2014. 

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By NEVILLE OTUKI
Posted  Saturday, June 7   2014

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By Hailu Dagne
Tigrai Onlne – June 05, 2014

Last week at the concluding ceremony of the celebration of the 23^rd anniversary of the Victory of May 28 at the Addis Ababa Stadium, His Excellency Prime Minister Hailemariam Desalgne delivered the big news that Ethiopians and friends of Ethiopia have been expecting for long.

The Prime Minister disclosed that Ethiopia reached food self-sufficiency at national level, after two decades of work to augment production and productivity. Ethiopia’s annual crop production has reached over 25 million Metric tons (250 million quintals). Therefore, Ethiopian didn’t face much difficulty when a major drought struck the Horn of Africa three ago.

The Prime Minister pointed out that the success was made possible as the programs designed to ensure food security at household level have been realized during the last two decades, as farmers have shifted towards producing high income generating products and effort would next be exerted to boost the manufacturing and industry sector by creating strong local investors.

The stereotypical description of the country as destitute and an example of famine in publications such as the Oxford English Dictionary is now erased through the unstinting efforts over the last two decades, the Prime Minister noted.

Indeed, Ethiopia have come a long way in the past 23 years by bringing major changes in the agricultural sector that has been on decline for decades.

It is well known that, in order to engage in any kind of economic activity, one brings together the four factors of production, namely capital, labor, land and entrepreneurship or management. In Ethiopia, we observe that there is an acute shortage of capital. This is expected to remain a constraining factor over the short and medium term. By contrast, labor is abundant as Ethiopia has a large working population. Also, there is an adequate supply of land.

Rapid economic growth can be realized only if we can adopt a strategy that promotes the economic uses of our limited capital resources and more extensive application of our labor and land resources particularly the former. If we pursue a development strategy that does not make much use of labor and land resources in economic activity, the contribution of such factors of production to Ethiopia’s development will be forestalled, thereby causing a pace of development that is well below potential. If, on the other hand, we rely too heavily on capital as a basis of our development effort, then our efforts will be curtailed by the limited availability of this resource. Our development strategy that is centered on agriculture and rural development promotes a judicious use of factors of production.

Some eighty-five percent of Ethiopia’s population lives in rural areas and is engaged in agricultural production. Although capital is especially scarce in rural Ethiopia, the bulk of the land is in the hands of the rural population. Thus, strategies that promote the use of the country’s labor and land resources while relying less on capital should embrace rural development and agricultural production that provides the basic livelihood of most of Ethiopia’s rural population. Such a focus will allow the extensive and/or intensive use of both labor and land without the need for much capital. Agriculture is a sector in which our resource potential can be used to a high degree for rapid and sustained economic growth.

As various researches and reports of scholars and international institutions show, a large part of the economy is characterized by semi-subsistence agriculture with exceedingly low incomes and hand-to-mouth livelihoods. Agriculture, although the dominant sector of the economy, is constrained by age-old production practices and structural problems. It has failed to provide moderate and sustained incomes for many who are engaged in the sector. Nor, has it provided a basis for the accelerated development of other sectors. Indeed, it has even failed to satisfy national food requirements.

Decades of neglect and absence of appropriate development policies and strategies was one of the main reasons for the situation. Previous policies did not address the major structural constraints of the economy and in fact there even were all too many cases where policies were detrimental to economic development introducing imbalances that tended to impede rather than promote economic well being. The agricultural sector fared particularly badly and policies tended to exhibit a bias against this important sector of the Ethiopian economy. Clearly, in the absence of proactive and well thought out policies, it is not possible to attain accelerated development or to improve the condition of the Ethiopian people almost half of which subsist in absolute poverty. Due to the tragedy resulting from decades of inappropriate economic policy, although an agrarian economy, Ethiopia has failed to attain food self-sufficiency; forcing millions to seek food assistance.

One of the major indications of the downward path of the agricultural sector before 1991 is the performance in cereal production.

Cereal production per person has dropped by an average of 4 kilograms per year since the 1960s. Despite the existence pockets areas with above average production, the overall trend of cereal production has been down across the country. Since food availability in Ethiopia is strongly determined by the country’s own production of cereals (having little capacity to purchase food on international markets), cereal availability has been declining at an average of 3.3 kilograms per person per year.

In the late 1980s, the country was producing less than 150 kilograms of cereal per person. The level required for a minimum subsistence diet is approximately 240 kilograms per person per year (FAO 1990). For the sake of comparison, let’s take Niger: Only 20 percent of Niger’s land area receives enough rain for un-irrigated farming to take place, yet it produced an average of 330 kilograms per person per year between 1960 and 1990-at least double Ethiopia’s output in the early 1990s.

Of course, cereals are not all that matters. The cultivation of other kinds of food, such as pulses (varieties of beans) and root crops (such as cassava), serves to supplement cereal production. Unfortunately, these crops have fared little better than their cereal counterparts. Although few data exist on root crop production, pulse and oilseed production in 1989 stood at less than 75 percent of its 1979 level. As a result, the availability of cereals plus pulses and oilseeds still declined by an average of 2.7 kilogrammes per person per year up to the early 1990s.

Indeed, since 1977 there has generally been more cereals available than were domestically produced. But that was because of imports, both commercial and food aid. However, even that option was difficult, given chronic foreign exchange constraints, commercial imports only reached 215,000 tons during 1985. Food aid, on the other hand, increased significantly after 1984 and made an important contribution to food availability in the critical years of 1985,1988, and 1991. In each of those years aid deliveries reached roughly 1 million tons of cereal, representing more than 20 percent of national production.

However, it should be remembered that with a total population of over 45 million people, food aid contributed during crisis years cannot meet all need. Assuming that all of the 1.2 million tons delivered in 1985 reached the mouths of the 6.9 million most vulnerable people, then aid represented 175 kilograms of cereal per starving person. This would have been sufficient to keep each vulnerable person alive (albeit at a suboptimal level of food consumption) for almost 1 year.

That downward spiral started to change after May 28, 1991. The EPRDF-led Transitional government observed the level of foreign aid dependency and the root factors for the low level of growth in the agriculture sector.

In order to change this grim picture, the Transitional Government of Ethiopia (TGE) embarked upon the Economic Reform Program at the beginning of the transition period, recognizing the heavy dependence of the economy on agricultural production which has resulted in erratic GDP growth rates.

The Agricultural Development-Led-Industrialization (ADLI) strategy was a strategy based on broadening the agricultural production base through improved productivity and increased land utilization over the medium and long-term periods particularly in the lowlands.

Accordingly, several policies of adjustment were implemented based on the new policy framework. One of the major ones was Agricultural Reform.

The Government gave the highest priority to agricultural development. Measures were taken to improve ways of providing agricultural services, notably through extension and provision of modern inputs to the farmers. In the past, farmers were discouraged from increasing their output due to policies of forcible extraction of marketable surplus at fixed producer prices. That policy has been removed and a decentralized grain marketing system, has been introduced, where by farmers can sell their products in a competitive market.

The Transitional government economic direction have been successfully completed, signifying that the policy measures taken were suitable. According to the Ministry of Economic Development and Cooperation, Gross Domestic Product (GDP) growth, which in the year 1990/91 and 1991/92 fell to an even low level of -5.5 and -3.2 percents respectively, rose in 1992/93 to 12.3 percent and grew by 1.3 percent in 1993/94 in real terms in relation to the previous year.

The growth trajectory continued for most of the next decade. However, it didn’t bring about the needed level of change due to several factors. One of the major reasons was that the growth rate fluctuated highly. Moreover, the growth strategies and interventions were not sufficiently articulated, therefore there effectiveness was undermined. Therefore, after the renewal movement of the EPRDF in 2001, an elaborate scientific policy framework of Rural and Agricultural development was designed.

The policy laid down the fundamentals of the direction in a very clear manner. It has underlined that:

The world today is one where nations are economically interconnected. Whether it be through international trade, foreign aid or other resource flows, there is no country that is not economically linked with the world at large. Foreign aid, is the most dependent form of this global connection. Such nations as rely on foreign aid, can reduce this dependence. But the economic independence that this implies will remain within the context of global interconnectedness, not outside of it.

Different countries play varying roles in this integrated global economy. Some forge their economic relations with other countries on the basis of well-developed and self-reinforcing domestic markets, progressively improving technology and growing capital. Such countries tend to enjoy a prominent position and reap maximum benefits from being part of the global economy. Others, lacking large and self-reinforcing domestic markets, are vulnerable to external shocks. Still others lag behind their global partners, with neither a developed human and financial capital base nor a diversified economy, and limited if any technological developments. The result is that they are in a dependent position within the global economy relying on foreign aid for their very survival.

Therefore, it was pint out that in the current global environment; our country is one that depends on foreign aid. In order to improve our position within the global economy, eliminate dependency and more readily partake of the gains from global economic growth, we must ensure rapid and sustainable national growth; constantly improving the level of technology and capital formation within the country. Furthermore, in the process of national economic growth, the domestic economy should be consolidated and a large domestic market created. This would allow us to withstand external shocks that occur due to variable conditions in the international economy that are outside of our control. The rural and agriculture-centered development strategy will help us attain this.

The policy also explained that:

The rural and agriculture-centered development strategy is our best option for ensuring rapid and sustainable economic growth. It is a strategy that will continuously promote technological development and application as well as greater capital accumulation. Thus it will directly improve our position in the global economy and increase the gains we derive from the integrated world economy. It is a unique strategy that will extricate the country from reliance on external assistance for the most basic commodity; i.e., food, transforming our role from recipients of aid to participants in global economic development. As such it will strengthen our economic independence.

Our aim, through the rural and agriculture-centered development strategy, is to increase agricultural production rapidly and on a sustainable basis. Since some 85 percent of the population are engaged in agricultural production, the income of (output from) the vast majority of the population will increase.

The policy was immediately accompanied by detailed manuals and implementing agencies. To implement the Rural and Agricultural Development policy, 25 agricultural vocational training colleges (ATVT’s) have already been established all over the country and gradated more than 71,000 agricultural development agents are graduated in animal science, plant science and natural resource. Moreover, 8,780 farmers training centers (FTCs) have been built and many farmers are getting trained in various agricultural practices, extension services and on how to adapt new agricultural technologies that enhances agricultural productivity.

As a result, for the first time in centuries, the agricultural sector embarked on a virtuous circle of growth bringing dramatic changes in the lives of Ethiopian farmers.

The next seven years saw, the agriculture sector registered an 8 per cent average growth consecutively and the number of farmers who used agricultural extension packages reached more than 8 million. That was a direct result of the government’s strong commitment to agriculture and rural development as demonstrating by allocating more than 10 per cent of the county’s total budget.

Therefore, in 2009/2010, the total land covered by the main crops rose several folds to 11.25 million hectare, while agricultural productivity reached to 200 million Quintals.

The average productivity of the main crops has increased from 12.1 to 17 Quintals per hectare. The foreign currency required from both agricultural and industrial products reached $1.45 billon US dollar.

In 2011, the first year of the GTP, the overall growth rate of agricultural value added was 9 %. The total volume of production of major food crops (cereals, pulses and oilseeds) registered in 2010/11 was 221.8 million quintals. This exceeded the production level of the previous year by 19.36 million quintals. The average productivity of major food crops during the same period was 16.5 quintal per hectare, which is 1.12 quintal/ha higher than the productivity in 2009/10 and 1.0 quintal/ha less than the target for the same year. The land covered by these major food crops was 13.45 mln ha.

A total of 818,050 tons of chemical fertilizer and 1028.4 thousands improved seed have been distributed in 2010/11. In addition, 3034 thousands of hectares of land were covered with organic manure in the same period. Efforts were also made to improve the genetic potential of livestock through crossbreeding.

The recent report of the GTP confirmed that the progress is on track. In the last fiscal year, Ethiopia registered a 10 percent increase in crop. The Central Statistical Agency (CSA) report also stated that 254 million quintal yield is expected this fiscal year from 12 million hectares of land. That is another 23 million quintal increase from previous year’s produce on almost the same amount of land.

However, as the Africa Economic Outlook pointed out last year:

Despite all the progress in the past decade, the sector’s potential remains enormous. While the Agriculture sector’s share of the GDP is about 44%, accounts for about 80% of employment and 70% of export earnings; Ethiopia has only cultivated 15% of its arable land potential so far. And, the increased productivity in the past decade has not still reached the top in sub-Saharan Africa.

This indicates that there are still enormous untapped opportunities to increase both production and productivity of farmers by promoting labor-intensive modern farming practices. It also indicates the potential to put more land under cultivation both through re-settlement programs and large private commercial farms.

The report underlined that: Ethiopia’s double digit economic growth over the past eight years has defied standard thinking that it should significantly reduce reliance on agriculture.

Indeed, researches indicate that, with this trajectory of growth, the Agricultural crop production is projected to more than 71 million tons in 2030.

At that time, Ethiopia will truly be the bread basket of Africa!

Sourced here:  http://www.tigraionline.com/articles/ethiopia-food-sufficiency.html

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Lulu Life, the shea butter brand grown in Sudan and produced in Kenya, is emerging as a premium product in the western cosmetics market, following research revealing it as possibly the richest source in the world of skin nutrients that heal scars, burns and stretch marks, and keep skin young for years longer.

The shea butter brand is now supporting hundreds of employees in both Sudan and Kenya, but its newest success as a top-of-the-market luxury product in North America, follows years of lurking on Nairobi supermarket shelves, for little more than Sh300 a pot.

Nearly a decade ago, the French non-governmental organization MEDIC (Medical Emergency and Development International Committee) founded the Lulu Livelihoods program to help feed and support women affected by the conflicts in Sudan. It was not until 2005 that Lulu Works launched the Lulu Life skin care brand label, using the shea butter grown and harvested in Sudan to make body butter, soap, scrub, lip balm and recently mosquito repellents in Nairobi.

Building on the brand name “Lulu”, as the Arabic (and Swahili) for “treasured pearl”, Lulu Livelihoods has since succeeded in converting the traditional role of Sudanese women as the guardians of the lulu tree and producers of lulu oil, into incomes for more than 800 women in 40 different rural processing centers in Southern Sudan, and a livelihood for many more at the Nairobi formulation and marketing plant..

But the secret of the company’s latest successes lies in the type of tree it is harvesting from. Sudan is just one of 19 countries, stretching from Ethiopia to Senegal, that grows the shea butter tree. But only three, including Uganda and Ethiopia, grows a rare species of the tree, vitellaria nilotica.

In West Africa, the far more common Shea Butter tree, long-since used as the source of oils for a large shea butter business, is vitellaria paradoxa.

Shea butter has been known for its medicinal, cosmetic and nutritional properties since the days of the pharaohs and Cleopatra, and its production has been a well developed industry in west \Africa for over a century. In Sudan, by contrast, it was civil war that began to make shea oil important, as a main source of food security during the dry season.

The opportunity to develop the Sudanese oil into cosmetics coincided with the discovery by western researchers of an active ingredient in shea oil, Unsaponifiables, that helped counteract eczema, psoriasis, dry skin, scars, stretch marks, wrinkles, burns, rashes and wounds. At much the same time, scientists also discovered that the oil contained Stigmasterol, which helped relieve muscle aches, arthritis and rheumatism and contributed to cell growth and regeneration, leading to younger-looking skin.

With the Shea Nut grown only in Africa, the research led to surging interest in sourcing shea butter from the continent as a raw material.

Lulu Life is one of the only producers formulating the butter into cosmetics in Africa itself.

It has been a move into value-added production that has delivered a butter of far greater purity than is available under most western brands, for a cheaper price. The brand is additionally close to alone in producing the butter without bleaching, and chemical processing. The East African shea nuts used by Lulu Life are simply cold-pressed to extract the oil.

“The difference is that the West African shea nut butter is hard, while the Sudanese one is soft,” says Beatrice, from Lulu Works. The dark paradoxa nuts from West Africa are bleached and deodorized before processing into skin care products, striping them off nutrients found in butters made from nilotica oil, according to Lulu Works. However, other West African companies argue that the hard, unprocessed paradoxa variety is richer in nutrients.

Either way, Lulu Life is now selling the cream for up to $24 a pot in US stores (almost Sh2000), and will, in July, begin marketing the cream online via its own website.

The prospects for any rapid competition are limited. Although Lulu trees grow abundantly and last between 200 to 300 years on the plateau and the alluvial plains of Southern Sudan, they must grow for 15 to 20 years before they start producing nuts. Shea butter is no short-term crop.

But for East Africa’s own-brand shea cosmetics maker, 10 years of building production and livelihoods now looks set to pay off in the true prize of any specialist producer: the top of the market.

Written by Stella Kabura for African Laughter.

Sourced here:  http://www.farmbizafrica.com/index.php?option=com_content&view=article&id=7:east-african-shea-butter-becomes-cosmetics-gold&catid=25:global-niche&Itemid=144

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Ethiopia to fill Gibe III dam, rejects renewed calls for halt

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Ethiopia has rejected renewed calls for suspension of the construction of Gibe III dam as it prepares to start filling the reservoir of the hydroelectric dam being built in the lower valley of the Omo River

Ever since the country launched the Gibe III project, some groups have been calling for the halt of the construction citing environmental and social concerns. However, the construction has continued unabated with over 84 percent of the project so far completed

“We expect to start filling the reservoir in few months and begin dry commissioning afterwards,” Fekahmed Negash, boundary and transboundary rivers affairs director at the Ministry of Water, Irrigation and Energy, told WIC.
Fekahmed rejected a renewed call by the World Heritage Site Committee asking Ethiopia not to fill the dam ‘until a comprehensive social and environmental study of the developments is completed’.
“Building the dam is our sovereign right. Telling us to suspend the construction amounts to trampling this right,” Fekahmed said. He said five environmental impact assessment studies conducted on Gibe III project commissioned by independent organs support Ethiopia’s position that the project will cause no ‘significant harm’

The organs include the African Development Bank, World Bank, European Bank and two studies commissioned by the Ethiopian Electric Power Corporation.
Omo River contributes to 80 percent of the Turkana Lake, a rift valley lake whose large swaths are located within the Kenyan territory. Omo River joins the Turkana Lake, a UNESCO registered world heritage site, inside Ethiopia.
Last month the World Heritage Site Committee called for Lake Turkana, the world’s largest desert lake, to be listed as a ‘World Heritage Site in Danger’, a move that might put pressure on the Kenyan government.
Independent studies say the Lake level has declined 15 to 20 m during the last century. The lake’s water level indicate wide variations but evaporation poses the biggest loss of water.
“The level of water has been declining for years even before the launch of this project,” Fekahmed noted. “By storing and regulating the water in a cooler climate and inside a gorge, Gibe III dam reduces the amount of evaporation loss,” he added

The Ethiopian Ministry of Culture and Tourism has extended an invitation to heritage conservationists in Kenya who are expected to visit the dam site. In the past, a 26-member Kenyan delegation, including parliamentarians, had visited the project. Kenya has since expressed its support for the project

“Both Ethiopia and Kenya are working together to preserve the ecosystem of the Turkana Lake and jointly administer it,’ Fekahmed explained.
“Those calling for the suspension of the project could come and work with us instead of coming out with orders that defy our sovereign rights,” he added

The 1,870 MW Gibe III hydropower plant is expected to nearly double Ethiopia’s current power generating capacity. Ethiopia plans to export a portion of that electricity to Kenya with a power purchase agreement already signed between the two neighboring countries.
Gibe III is the tallest Roller Compacted Concrete (RCC) dam in the world standing 243 meters tall, which will have the capacity to hold as much as 14 billion cubic meters of water.

http://www.waltainfo.com/index.php/editors-pick/13777-ethiopia-to-fill-gibe-iii-dam-rejects-renewed-calls-for-halt

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Isareli Foreign Minister To Visit Ethiopia In Five-nation African Tour

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ADDIS ABABA, June 12 (BERNAMA-NNN-ENA) — Israeli Foreign Minister Avigdor Liberman will travel to Ethiopia during a 10-day “strategic visit” to five African countries, according to an announcement on the Israeli Foreign Affairs Ministry’s website.

It said Liberman will be meeting high-ranking government officials of Ethiopia, Rwanda, Ivory Coast, Ghana and Kenya. The minister began his tour on Tuesday.

During his stay in Addis Ababa, the Israeli foreign minister is expected to meet President Mulatu Teshome, Prime Minister Hailemariam Dessalegn and Foreign Minister Dr. Tedros Adhanom.

Liberman will hold collaborative financial-business seminars in the five countries, according to the website. The purpose of his visit is to develop economic ties between Israel and these countries.

The minister will be accompanied by a delegation from the Israel Export Institute, including representatives from some 50 Israeli companies and chairman of the African lobby in the Knesset, Simon Solomon.

Liberman was quoted as stressing the need to strengthen Israeli security and diplomatic, political and economic relations with Africa.

He has expressed commitment to further strengthen Israel’s relations with Africa in humanitarian assistance, investment and the fight against terrorism.

http://www.bernama.com.my/bernama/v7/wn/newsworld.php?id=1045631

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This is a generation that has to sacrifice – Ethiopian PM, Hailemariam Desalegn

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Ethiopian Prime Minister, Hailemariam Desalegn. Photo©Bruno Levy for TAR

Prime Minister Hailemariam Desalegn on the government’s pact with the youth to provide jobs, how to provide representation for opposition supporters, and South Sudan’s missed opportunities.

The Africa Report : What is driving industrialisation in Ethiopia?

Hailemariam Desalegn: We are using our comparative advantage. We have a young population. Land is abundant. We have cheap electricity, and we support priority industrial sec- tors in terms of financing, at least partially, from our policy banks.

The most important thing is changing the mindset.

Developmental states in Asia were very active in managing corporations. is there that administrative capacity here?

In Japan, you had one ministry of trade and industry which was very strong. But if you look at South Korea, there are a number of institutes that support this process. We have chosen the Korean model, as we don’t have the capacity to run things through one ministry. So we have institutes to push skills development and technology transfer, to support these priority sectors in textiles, leather, food and beverages, chemical industries and metals.

We are trying to have teams that are assigned to just a few industries that can follow them carefully from the beginning to the maturation of those indus- tries. Since we don’t have much capacity at this time, we opted for bringing professionals from outside. The Korean Development Institute is helping us. India is supporting us in textiles and leather. We have institutional links with those countries who have been successful.

In south Korea, a generation sacrificed itself for industrialisation. Are Ethiopians ready for this?

You don’t need to take all Ethiopians along with you, but you need a major portion, especially the young. Look at our education system. Our higher education enrolment is 70% in engineering and science, and 30% in social science. So 70% are going for industrialisation. Similarly, nearly all those who can’t get into higher education go to technical and vocational training. There is an indoctrination process about where Ethiopia has to go and how this generation has to sacrifice to bring productivity up. The most important thing is changing the mindset. We want to bring everybody into the movement where they think about productivity and quality, which is the basis of being competitive. And we will go further in this, to high schools later on, to bring the young people into this mindset as our national agenda.

Funding the state infrastructure drive is tough. What are your options?

Firstly, we are mobilising domestic finance. If you take China and the other recent develop- mental states, their main source of finance was domestic savings. We have an encouraging trend in Ethiopia. We thought that our savings would increase from 6% of GDP [gross domestic product] to 15% by the end of the Growth and Transformation Plan [GTP]. But, remarkably, it has already passed that figure, reaching 17.7% today, before three years of the GTP had elapsed. So we have revised our plan to make it 20% by the end of the GTP [in 2015]. This is the time to squeeze our people, to have more saving and less spending.

We are constructing the $4.6bn Grand Renaissance Dam from these savings. People wanted to contribute for free, but we said: ‘You have to build the culture of saving, and you have to buy bonds.’ But that is not enough. We still have a shortfall in terms of financing, so we are also attracting investment from Brazil, India, China, Turkey, Japan and Korea. We are getting their savings invested here at preferential rates. We also want to go for commercial loans. We have to get a credit rating, so we are working on that, which is going smoothly.

we are also attracting investment from Brazil, India, China, Turkey, Japan and Korea

Do you think soldiers are the best people to spearhead industrialisation, thinking of the Metals and Engineering Corporation (METEC) in particular?

In many countries, military organisations that have very good laboratories and workshops only use them for military use, not for development purposes. So we wanted to use the capacity we have in the military sectors for civil development. METEC is using that capability and discipline – in the history of mechanical engineering, much has come from the military. That doesn’t mean that METEC will be the only institution that does this, but it will be a leader. Then the private sector has to link with it. METEC is working now with big private sector engineering companies and also smaller ones, which helps spearhead the process.

Looking forward to the 2015 elections, are you expecting the opposition will gain more seats in parliament?

As far as the elections are concerned, we want to focus on the process. We have to make the process democratic, free, fair and credible in the eyes of our people. Then the result is up to the people. I cannot predict that this many seats are going to be given to the opposition or the Ethiopian People’s Revolutionary Democratic Front (EPRDF).

Do you feel that the process is democratic?

Our institutional process and our laws and regulations are perfect. It is not the law that hinders but the implementation of these laws. Therefore, we have put in place the code of conduct of all parties. Strictly abiding by this code of conduct will help the process to be more democratic, free and fair and also credible.

If there is a similar outcome to 2010, where only one opposition candidate won a seat in parliament, do you think that may affect the credibility of the government?

I don’t think so because if the decision is taken by the people, all of us have to agree to it. We have to accept it whether it is sometimes irritating to some of us.

Would it be useful to have an opposition in parliament that could give constructive criticism?

The code of conduct is designed in a way that it helps the shortcomings of the parliamentary election. In Addis, for example, the EPRDF has dominantly won. But out of the 3 million people in Addis, something like 400,000 voted for the opposition. The 400,000 have a voice that has to be heard, but how can you make it? In that sense, we have an inter-party dialogue mechanism. Those parties who competed in the election can come together before the parliament discusses bills or policy issues.

We always wish to have a strong opposition so that it will become a mirror to us. We need somebody from outside criticising us because that helps us to improve, but we are not lucky to have such an opposition.

They don’t have their own clear policy. They do not properly evaluate the basis of this government and what it has achieved so far, against all the odds in the region. They seek some kind of violent mechanisms to sweep the EPRDF away so that they will come to power. This is wishful thinking.

Are you concerned about the regionalisation of the conflict in South Sudan?

In the Intergovernmental Authority on Development (IGAD) region, we have already agreed that we are committed to avoid any regionalisation of the conflict. There will be a deterrent and protection force that is going to be deployed to South Sudan from the region. Sudan and Uganda also agreed not to be part of this force from IGAD. That avoids any kind of regional conflict. The only thing is we have to exped- ite the implementation of this deterrence and protection force.

What is Ethiopia’s position on the Ugandan intervention? Has it complicated the situation?

It has not complicated it. It has been helpful because had it not been for Ugandan intervention, you would not see a government standing now. It would have collapsed very quickly. There are views from both Sudan and Uganda, differing views that might lead to some problems on the ground, so we want to see a phased withdrawal of Uganda and the non-involvement of Sudan in the armed composition of IGAD.

We have deployed 100 technicians and bureaucrats to South Sudan.

There was much euphoria when South Sudan became independent. Are you disappointed with how things have turned out?

We were expecting this to happen. We are not disappointed. We have been suggesting to them that this might come because they have forgotten their direction. What their policy is towards a new state has not been properly spelled out. Who is going to lead the process has not been properly [put] in place and institution building has been ignored. We have deployed 100 technicians and bureaucrats to South Sudan. We have signed a number of agreements to support them in institution building. We have agreed and signed a number of agreements on common infrastructure development. We pushed them, but nothing has happened. We have learned our lesson from our mistakes. We wanted to share our experience with them. After rebels become a government, a proper transition has to take place.

How are the Ethiopian-led African Union Mission in Somalia (AMISOM) offensives going?

I think the game has changed since AMISOM troops and Ethiopia joined. In cooperation with other existing AMISOM troops, we have liberated a number of towns and villages from the yoke of Al-Shabaab. That is only a military achievement. We need to have humanitarian support to those liberated areas quickly. This is our demand. There is some movement, but it is not enough.

Are you concerned that because of the visibility of Ethiopian troops in this offensive there will be reprisals at home?

We were always a target for Al-Shabaab. The most important thing is that our people have to be vigilant. Our security sector also has to be active in this regard. This is our day-to-day business.

http://www.theafricareport.com/East-Horn-Africa/this-is-a-generation-that-has-to-sacrifice-ethiopian-pm-hailemariam-desalegn.html

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New Customs Proclamation Proposed

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A new customs proclamation aimed at establishing modern customs legal framework which encourages development of manufacturing industries and investment is proposed to the parliament.

The proclamation will help to provide effective and speedy service needed in the international trade, Muferihat Kamil Government Whip with the rank of State Minister told the parliament.

It will help to bridge gaps observed in the customs proclamation the country is currently using since 2001E.C. The need for more modern customs legal framework to support development of industries and investment make introducing new proclamation necessary, she said.

The MPs raised various question on the draft proclamation that need clarification and it referred to the Budget and Finance Affairs, and Law and Administrative Affairs Standing committees for further scrutiny.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2203:new-customs-proclamation-proposed&Itemid=200

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Authority to Launch Market Information System for Industrial Products

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Trade Competition and Consumers Protection Authority announced that it will launch a market information system for international industrial products.

Director of Market Information, Compilation, Interpretation and Dissemination with the Authority, Etissa Deme, told ENA that preparations are finalized to launch a market information system that will enable the Ethiopian business community to get market prices of all products elsewhere in the country.

He also stated that the proposed market information system will incorporate free SMS and a website to disseminate market information.

Currently the Authority provides market information on about 700 agricultural products.

The director said discussions are in progress with market information providers so as to deliver prices of international industrial products for the consumer.

According to him, the Authority gets market information from Addis Ababa, Amhara, Oromia, Tigray and SNNP regional states market information centers. It is currently working to access market information from other regions.

Etissa said the Authority will disseminate the daily market information of Addis Ababa market information centers and the weekly market data of the regional market centers through SMS and its official website, in addition to utilizing the media and cooperatives.

The director disclosed that the website will be developed with the support of Bahirdar University.

The website, in addition to providing current market prices of products for business communities, will also inform the public about levels of products and internationally-banned items.

To this end, the Authority is working together with Ethiopian Conformity Assessment Enterprise (ECAE) and Ethiopian Standardization Authority (ESA), it was indicated.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2204:authority-to-launch-market-information-system-for-industrial-products&Itemid=200

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Projects With Over 9.9 Billion Birr Capital Licensed in Amhara State

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Some 833 projects with over  9.9 billion birr combined capital have received licenses to undertake different investment projects in Amhara State during the current Ethiopian fiscal year, the State Industry and Urban Development Bureau said.

Speaking at a problem identifying consultative meeting in Debrebirhan, Bureau Deputy Head Ato Melaku Alebel said there were shortages of infrastructures in some towns and gaps in creating awareness on the abundant human resources available in the towns.

To encourage investors, the bureau has designed 19 investment alternative projects in all zones of the state and 11 industrial villages equipped with sufficient infrastructures are readied in 18 towns, he added.

In order to alleviate the existing problems, the bureau has even opened branch office in Addis Ababa to support investors after holding consultative meetings, Melaku said.

On the other hand, close to 1,800 hectares of land seized illegally in North Wollo Zone was taken away and distributed among 5,578 youth, according to Ato Wodaj Miskir, expert with the zone.

Similarly, 1,825 hectares of land illegally occupied in Lasta woreda was given to youth, elders and women last Ethiopian year, it was learned.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2202:projects-with-over-99-billion-birr-capital-licensed-in-amhara-state&Itemid=250

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Primary Education Net Attendance Reaches 94% in Gambella

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Primary education net attendance in Gambella State has reached 94 percent, the state education bureau said.

Activities carried out over the past four years enabled the state to increase access to primary education, according to Tut Jock, Bureau Deputy Head.

The villagization program being implemented in the state during the past few years has helped the regional government provide educational infrastructures for villages.

Construction of schools and raising awareness of parents about sending children to school helped to raise the rate to 94 percent from the 72 percent at the beginning of 2003E.C.

The state has also managed to narrow gender disparity in primary education, he said. Currently number of girls attending primary education is almost equivalent to boys.

The state is working to improve access to primary education and achieve the goal set for the growth and transformation plan, to reach primary education coverage 100 percent.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2190:primary-education-net-attendance-reaches-94-in-gambella&Itemid=251

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Great Lakes Private Sector Responsible Investment Roundtable Held in Addis Ababa

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Great Lakes Private Sector Responsible Investment Roundtable was held here on Wednesday to explore how responsible investment can contribute to inclusive business and sustainable development, and to share concrete examples of success stories from Africa.

Speaking on the occasion, Prime Minister Hailemariam Dessalegn said speakers are expected to share their perspective on the current context and investment climate in the Great Lakes Region.

A responsible private sector and its investment activities can greatly contribute to peace, stability and economic development in the region, according to him.

The PM explained that focusing investment on productive sectors like agriculture, manufacturing, ICT, energy and infrastructure sectors where the countries of the region have comparative advantage is of paramount importance.

Special Envoy of the UN Secretary-General for the Great Lakes Region, Mary Robinson, said on her part the aim of the roundtable is to exchange ideas on how to boost investment and economic opportunities in the Great Lakes Region in sustainable manner.

Supporting regional economic development and integration in the Great Lakes in a manner that respects and promotes human rights goes to the very heart of what thirteen governments of the region committed to doing when they signed the Peace, Security and Cooperation Framework for eastern DRC and the region here in Addis Ababa a little over one year ago, she elaborated.

She emphasized that women and youth should be involved and remain critical for any responsible investment in the region.

Female participation in economic life is a tool for empowerment and an essential component of building strong economies and stable and just societies, increasing stainable development, and improving human rights and quality of life for women and girls, Mary concluded.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2194:great-lakes-private-sector-responsible-investment-roundtable-held-in-addis-ababa&Itemid=260

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Nyota Minerals selling interest in Ethiopia gold project

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Nyota Minerals selling interest in Ethiopia gold project

Nyota Minerals (ASX:NYO) has entered into a conditional agreement to sell its remaining 25% stake in the Tulu Kapi Gold Project in Ethiopia to KEFI Minerals for £750,000 (A$1.34 million) in cash and 50 million KEFI shares.

Proceeds from the sale will be used to further evaluate the Northern Block Licences, including the potential for near term cash flow from mechanised alluvial mining, and on other opportunities in Ethiopia.

The company noted that KEFI had completed a new mineral resource estimation in March and it would have been required to contribute to Tulu Kapi pro-rata to its shareholding, or suffer dilution of its shareholding.

Financing options were insufficient to fund Nyota’s 25% of the new budget, or £325,492, its evaluation of the Northern Blocks as well as working capital requirements.

This led to the decision to sell its interest in Tulu Kapi.

http://www.proactiveinvestors.com.au/companies/news/55557/nyota-minerals-selling-interest-in-ethiopia-gold-project-55557.html

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Liu Zhen (pictured, above) / China News Service

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By David H. Shinn | June 11, 2014

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Ethiopia was never colonized and along with China has a long imperial history. China’s imperial period came to an end with the fall of the Qing dynasty and formation of the Republic of China as a constitutional republic in 1912. The overthrow of Emperor Haile Selassie in 1974 by a left-wing military junta ended Ethiopia’s empire. In 1970, four years before the end of Ethiopia’s empire, the People’s Republic of China established formal diplomatic relations with Haile Selassie’s imperial government.

Although China and Ethiopia have imperial backgrounds, they only became well acquainted after both of them became republics. In the early years, this relationship grew modestly and only began to surge in the mid-1990s when the government of Prime Minister Meles Zenawi encouraged closer ties with China to tap into its financial resources and balance close ties with Western countries, particularly the United States. Today, China is arguably Ethiopia’s most important bilateral economic partner.

While Ethiopia now exports few natural resources of strategic interest to China, it is important for other reasons. With a population of about 90 million people, Ethiopia is the second most populous country in Africa after Nigeria. It serves as the headquarters for the African Union. China provided $200 million in grant assistance and built the new African Union conference center, which came complete with a traditional Chinese-style garden. The New Partnership for Africa’s Development, which China supports, has moved to Addis Ababa and the UN Economic Commission for Africa has its headquarters there. Ethiopia has one of the strongest militaries in Africa and, although landlocked, serves as a regional center for the Horn of Africa.

Ethiopia Eventually Recognizes China

The Republic of China’s (ROC) Chiang Kai-shek government publicly supported Emperor Haile Selassie during the 1936-1941 invasion of Ethiopia by fascist Italy. The ROC was one of the few countries that did not recognize the Italian occupation. Although Ethiopia never recognized the ROC, it appreciated this support and was reluctant to recognize the People’s Republic of China (PRC) following the 1949 victory on the mainland by Mao Zedong. A close ally of the United States in the years following the end of World War II, Haile Selassie sent troops to Korea in the early 1950s. Ethiopian and American forces fought side-by-side with South Korea against Chinese troops who entered the war on the side of North Korea.

As Mao Zedong solidified control over China and the importance of the PRC became increasingly apparent, Ethiopia pursued an ambiguous policy on diplomatic recognition. It accepted agricultural assistance from Taiwan while a PRC cultural mission visited in 1956. The PRC and Ethiopia established trade relations the following year. Ethiopia supported Taiwan in the United Nations from 1950 to 1958, abstained in 1959 and supported Beijing thereafter. Ethiopia sent a cultural delegation to the PRC in 1961, signed an agreement to exchange journalists in 1962 and permitted China’s official news agency, Xinhua, to open an office in Addis Ababa. Premier Zhou Enlai visited Ethiopia in 1964, when China mistakenly thought Haile Selassie was prepared to recognize the PRC.

China’s support for the Eritrean Liberation Front (ELF), which beginning in the early 1960s agitated for independence from Ethiopia, complicated Beijing’s effort to obtain Ethiopian recognition. China provided the Eritrean insurgents covertly with weapons. Ethiopia and China had different policies on a rebel insurgency in neighboring Sudan. Ethiopia supported the southern insurgents while China backed the Arab government in Khartoum, which allowed the ELF to operate from its territory against Ethiopia. Ethiopia also suspected that the PRC backed Somali insurgents in efforts to take control of Somali-inhabited territory in southeastern Ethiopia. When Ethiopia finally recognized the PRC in 1970, it extracted a promise that Beijing would terminate support for the ELF.

Haile Selassie Visits China

In 1971, less than a year after recognizing Beijing, Haile Selassie visited Beijing where he praised both the progress being made in China and Chairman Mao’s “outstanding achievements.” They signed trade, economic, and technical cooperation agreements. China granted Ethiopia an interest-free loan of $84 million and sent several teams to help with Ethiopia’s development. Mengistu Haile Mariam led a left-wing military coup in 1974 that toppled the Haile Selassie monarchy. This development complicated China’s goal to strengthen relations with Ethiopia because the Soviet Union, seeing an opening after Ethiopian relations worsened with the United States, switched its support from neighboring Somalia to Ethiopia. This occurred at the height of the Sino-Soviet conflict; the Soviets promised the Mengistu regime more than China could offer. China made clear that it was ready to give moral support to Ethiopia’s new revolutionary government, but it was not prepared to compete with the Soviets in providing arms and financing.

Problems Develop during the Sino-Soviet Split

China began to criticize Soviet involvement in Ethiopia while Ethiopia’s new military leaders accused China of cooperating with the reactionary West and Ethiopia’s enemies in Somalia. In 1979, Ethiopia expelled the Xinhua representatives. By 1984, Ethiopia was heavily under Soviet influence and when prompted by Moscow, Mengistu would excoriate China. Nevertheless, China-Ethiopia economic development cooperation continued. In 1978, China completed construction of a diesel power station at Bonga. Between 1975 and 1982, it constructed a 185-mile highway between Weldiya and Werota that to this day is known as the China Road.

During the Mengistu government, no senior Ethiopian official visited China until the Sino-Soviet conflict came to an end in the mid-1980s. Ethiopia’s foreign minister visited in 1987 followed by Mengistu in 1989 and 1991. These visits occurred as the Mengistu government was under increasing pressure from Eritrean, Tigrayan, and other opposition groups and reflected the declining power of the Soviets in Ethiopia and the desperation of Mengistu for outside support. There were no senior visitors from China to Ethiopia until the vice premier/foreign minister came in 1989 and again in 1991. Throughout the Mengistu regime, however, China and Ethiopia maintained diplomatic and trade relations.

China continued to send medical teams to Ethiopia, a program begun in 1974, and offered ten scholarships annually beginning in 1988. Mengistu fell in 1991, opening the door for a return of more cordial Ethiopia-China relations.

The EPRDF Strengthens Ties with China

The coalition that overturned Mengistu, the Ethiopian People’s Revolutionary Democratic Front (EPRDF), revived interaction with China soon after it took power. Following mid-level visits, Ethiopia’s chief of the general staff went to Beijing in 1994. Prime Minister Meles Zenawi made his first visit to Beijing in 1995. President Jiang Zemin visited six African countries, including Ethiopia, in 1996. The two countries signed a series of new agreements, including an important one on trade, economic and technical cooperation. Premier Wen Jiabao visited Ethiopia in 1996 and 2003.

Xinhua signed a news exchange agreement with the Ethiopian News Agency. During the 1998-2000 Eritrean-Ethiopian conflict, China sold Ethiopia (and Eritrea) significant quantities of arms and ammunition. This led to an increase in high level military exchanges on a regular basis. Meles returned to Beijing in 2004, when he signed additional cooperation agreements and, in 2006, he co-chaired the Forum on China-Africa Cooperation in Beijing.

Loans and Government Contracts Highlight China’s Engagement

By 2005, China’s embassy in Addis Ababa hosted more high-level visits than any Western mission and Chinese companies had become a dominant force building highways and bridges, dams and power stations, cell phone networks, schools, and pharmaceutical factories. Ethiopia’s trade minister said that “China has become our most reliable partner.” China became involved in nearly every aspect of Ethiopia’s economy. One agreement in 2006 with three Chinese companies is valued at $1.5 billion in commercial suppliers’ credit at Libor (interbank lending rate) plus 1.5 percent to develop cellular and 3G services across Ethiopia.

Chinese companies built and largely financed the $365 million dam on the Tekeze River in northern Ethiopia. The Industrial and Commercial Bank of China is funding the Dongfang Electric Machinery Company to supply electrical equipment and turbines for the Gibe III dam on the Omo River. Environmental groups have expressed concern about potential damage to communities along the river and its impact on Lake Turkana in neighboring Kenya. Another Chinese company with Export Import Bank financing agreed to build a high-tension line for supplying electricity to Addis Ababa. These large loans contain a grant component, although the terms are not always transparent. The grace period for the two hydro projects is three years and the loans mature at the end of ten years. The interest rate is Libor plus 1.8 percent to 2.35 percent. China does not offer grant budgetary assistance to Ethiopia. China also won the contract for building power transmission lines from the Grand Renaissance Dam on the Blue Nile River.

In 2010, the China Road and Bridge Corporation signed a $67 million contract to expand the Addis Ababa airport. Chinese companies are building about 70 percent of the roads in Ethiopia, including the highly visible Addis Ababa Ring Road. Chinese soft loans often provide financing for bids below cost and sometimes with no bidding process. Chinese companies have largely displaced those from South Korea and Japan that had previously been important in road construction. Because these projects are seen and used by so many Ethiopians, they tend to create considerable good will.

In 2010, China and Ethiopia announced loans to cover the cost of a light rail system in Addis Ababa, the purchase of nine vessels for Ethiopian Shipping Lines, and the construction of 200 buildings for the Ethiopian Housing Corporation. The following year, the China Railway Group and Ethiopian Railway Corporation signed a $1.1 billion agreement for construction of the first phase of the Ethio-Djibouti railway project. By 2013, loans from China for this project reached about $3 billion. The two countries also signed a $100 million loan for the construction of deep water wells and $300 million memorandum of understanding for support of projects in Ethiopia’s master plan. By the end of 2011, China’s Export-Import Bank lending to Ethiopia had reached $1.8 billion. Ethiopia has become one of the largest recipients in Africa for credit lines from the Export-Import Bank.

Foreign Direct Investment

A Chinese investment group is providing $713 million to construct the first industrial zone in Ethiopia. Still under development, the Eastern Industrial Zone in Dukem anticipates an investment of $2 billion over the next ten years. China’s Huajian Group, which specializes in shoe production, is one of the principal investors. China is a major buyer of Ethiopian leather and is looking to expand its investment for the manufacture of shoes and leather goods in Ethiopia. President Mulatu Teshome inaugurated in May 2014 a Lifan Motors assembly plant in the economic zone for production of the Dukem 500 automobile.

A number of large Chinese companies are engaged in Ethiopia. They include ZTE Telecom, Huawei, China Construction Corporation, China Aviation Technology Exports and Imports Company, China Water Conservancy and Hydropower Engineering Corporation, and Sinohydro. Most of these companies are more interested, however, in winning contracts, which often result from Chinese government loans, than they are in investment.

China’s share of foreign direct investment (FDI) in Ethiopia, while still modest, has increased from only 1.5 percent of total FDI in 2000 to 16 percent in 2007. Total Chinese FDI in 2009 was $74 million and in 2010 $58.5 million. By 2012, China’s cumulative FDI reached more than $345 million according to its ambassador to Ethiopia. This placed Chinese companies as the third largest foreign investor in Ethiopia after Saudi Arabia and India. In 2013, China invested more in Ethiopia than any other country followed by Turkey. Cumulative Chinese investment in Ethiopia as of 2013 reportedly reached $1.1 billion.

China opened a branch office in Addis Ababa of the China-Africa Development Fund. The two countries have signed agreements on investment promotion and reciprocal protection as well as avoidance of double taxation. Some 316 Chinese investment projects are fully or semi-operational and more than 900 projects are in the pre-implementation phase.

Chinese Foreign Aid Is Modest but Growing

While the loan component of the relationship and commercial interaction has been intense in recent years, China’s foreign aid to Ethiopia has been modest. Compared to other donor countries, it was almost non-existent in 2006, when it constituted about $1 million or 0.14 percent of Ethiopia’s total aid. It has increased significantly since then.

China provided $12 million to fund a technical and vocational education and training program that resulted in the assignment of about ninety Chinese teachers throughout Ethiopia as of 2007. The same year, China increased its annual scholarship program for Ethiopians to forty annually. There were twenty-two Chinese vocational education teachers in the country as of the end of 2009. In 2011, China provided $55 million in emergency food aid for Ethiopia and other drought affected countries in the region. It also donated a fleet of 90 vehicles to the government.

Ethiopia was the first African country to receive young Chinese volunteers, a program similar to the U.S. Peace Corps. Twelve volunteers arrived in 2005. The following year, China sent fifty volunteers to Ethiopia, the largest group ever sent to a foreign country. China provides training for up to several hundred Ethiopian professionals each year. From the beginning of its medical cooperation program and until 2012, China sent sixteen medical teams comprising 255 personnel to Ethiopia. In 2012, China opened a $13 million hospital at Akaki, located south of Addis Ababa. China also built malaria prevention and agricultural demonstration centers.

In 2009, the Addis Ababa Confucius Institute (AACI) began teaching Mandarin at the Ethio-China Polytechnic College in cooperation with Tianjin University of Technology and Education. AACI also offers courses on Chinese culture, provides training for Ethiopian diplomats in the Ministry of Foreign Affairs and in 2011 signed agreements with Addis Ababa, Hawassa, and Mekelle universities to establish Chinese language learning centers.

Ethiopia Has a Significant Trade Deficit with China

In recent years, Ethiopia has consistently experienced a major, albeit declining, trade deficit with China. In 2004, Ethiopia imported $291 million in goods from China and exported only $16 million in value to China. Ethiopia imported eighteen times more Chinese goods than it exported. In 2011, according to International Monetary Fund statistics, Ethiopia imported $987 million in goods from China and exported $265 million in value to China. In 2011, Ethiopia imported almost three times more Chinese goods than it exported to China. The range during the intervening years was between five and seventeen times more imports from China than exports to China. In 2006, China became Ethiopia’s largest trading partner, passing Saudi Arabia, and has maintained that rank ever since.

Ethiopia’s major exports to China are sesame, coffee, cut flowers, textiles, and leather products. Its principal imports from China are transport and electronic equipment, consumer goods, and chemical products. In order to rectify the trade imbalance, China began in 2005 to accept up to 192 products duty free. In 2007, it expanded the list of duty free imports to 442. While the trade gap has narrowed, it continues to be an issue of concern. There have also been occasional trade disputes. In 2012, Huawei Technologies illegally imported $13 million of telecom equipment in the name of state-owned Ethio Telecom without the knowledge of the Ethiopian company. Ethiopia demanded that Huawei return the equipment to China, which Huawei did in 2014.

While Ethiopian consumers generally welcome Chinese products, some business persons have raised concerns about the entry of sub-standard merchandise, dumping by Chinese suppliers, unfair competition and displacement of small Ethiopian businesses. In one case, ZTE communications equipment sat in a warehouse because no government entity wanted it. The more common reaction, however, is a belief that although Chinese products are not the best they are adequate and much cheaper than their competition. There have also been issues concerning Chinese labor displacing Ethiopians, resulting in occasional complaints from members of Parliament. The Chinese embassy has acknowledged there are more than 10,000 Chinese working in Ethiopia. Other estimates put the number much higher. After a 2010 wage dispute at a cement factory in Mekelle, China sent home more than 300 Chinese employees.

While there are still relatively few Chinese tourists visiting Ethiopia, the air connections reflect the sharp increase in economic interaction. Ethiopian Airlines began flying between Addis Ababa and Beijing in 1973; it was the first African airline that connected China and Africa. Ethiopia now operates direct flights to five cities in China. This includes daily non-stop service to Beijing and Shanghai, ten flights a week to Guangzhou, five flights weekly to Hong Kong, and four to Hangzhou. It has code share agreements with Air China and a joint venture with Hainan Air and the China-Africa Development Fund to build a five-star hotel near the Addis Ababa airport.

Strong Ethiopia-China Political Ties

Although the strength of the Ethiopia-China relationship is in the economic area, political ties are also flourishing. In 2006, for example, the Ethiopian Parliament passed a resolution in support of China’s Anti-Secession Law. In 2007, Ethiopia joined other African countries in preventing a resolution in the UN Human Rights Commission that censored China’s human rights practices. In 2008, Prime Minister Meles said Tibet is an internal affair and external powers have no right to interfere. He added that “Ethiopia strongly opposes any external force’s attempts to destroy China’s national unity and create hatred among Chinese nationalities.” China’s ambassador to Ethiopia praised Addis Ababa’s “strong support” for China’s position on Taiwan and Tibet. For its part, China never criticizes Ethiopia’s human rights policies or comments publicly on internal conflicts.

Ethiopia not only has an embassy in Beijing, but it has a consulate general in Guangzhou, Chongqing, and Shanghai. To underscore the importance of its relationship with China, Ethiopia sent its sitting foreign minister and former EPRDF insider, Seyoum Mesfin, at the beginning of 2011 as its ambassador in Beijing. Mulatu Teshome, Ethiopia’s president beginning in late 2013 earned his PhD in international law at Peking University in the 1970s and subsequently served as Ethiopia’s ambassador to China. He speaks Mandarin.

The EPRDF has developed close ties with the Chinese Communist Party (CPC). In 2000, Dai Bingguo, then director of the CPC International Liaison Department, visited Ethiopia. In 2002, Kassu Ilala, who became a senior figure in the EPRDF, visited the CPC. China sent a delegation to the EPRDF’s Seventh Organizational Conference in 2008 and the Eighth Congress in 2010. The CPC International Department Vice Minister, Ai Ping, led a goodwill delegation to Ethiopia in 2010 when he signed a memorandum of understanding on Exchange and Cooperation between the CPC and EPRDF. During a visit to China by an EPRDF delegation, a senior CPC official said that growing ties between the two organizations “have helped form a solid foundation for the development of relations between China and Ethiopia.” There are also close links between Ethiopia’s Parliament and the China National People’s Congress. The two organizations have established a China-Ethiopia friendship group.

China’s deep commitment to Ethiopia has not been free of controversy. Chinese companies have a reputation for taking greater risks and occasionally putting their personnel in jeopardy. In spite of warnings to stay out of the disputed Ogaden region of Ethiopia by the Ogaden National Liberation Front (ONLF), which seeks self-determination for the area, China went in anyway. The Ogaden is rich in gas reserves and may have oil. Zhongyuan Petroleum Exploration Bureau, a subsidiary of Sinopec, operated an exploration base in the Ogaden that was heavily protected by Ethiopian soldiers. In 2007, the ONLF attacked the base, killing nine Chinese employees and sixty-five Ethiopian soldiers.

After the attack, the ONLF announced that it would not allow resources from the region to be exploited by the Ethiopian government or “any other firm that enters into an illegal contract.”

China subsequently pulled its team out of the Ogaden. In 2011, Hong Kong-based PetroTrans Company announced that it had agreed to invest $4 billion over twenty-five years to develop oil and gas reserves in the Ogaden and build oil and gas pipelines to Somaliland’s port of Berbera. Days later the ONLF announced that these deals constitute an act of war against the Ogaden people and vowed to take all necessary measures to prevent their implementation. PetroTrans failed to carry out its commitments and Ethiopia’s Ministry of Mines said in 2013 that it had awarded the concessions to another unnamed Chinese company. There has been no visible movement on this project in the Ogaden.

Premier Li Keqiang’s 2014 Visit to Ethiopia

Chinese Premier Li Keqiang visited Ethiopia in May 2014. On this occasion, senior Chinese officials and company executives signed 16 economic and development agreements with their Ethiopian counterparts. They included a comprehensive framework agreement for the period 2015-2024 and a loan release for the Addis Ababa-Djibouti railway project. China extended the $1.4 billion loan for the project and agreed to provide financial assistance for the Dire Dawa-Dewalle highway as well as the Welkait sugar development project in Tigray Region.

Ethiopia signed a memorandum of understanding with the China Civil Engineering Construction Corporation, China Railway Engineering Corporation, China Communications Construction Company, and China to Overseas Construction Group Company to develop special economic zones in Kombolcha, Hawassa, Dire Dawa, and Addis Ababa.

Following a feasibility study, Ethiopia will sign a contract for construction of the zones. Ethiopia has prepared land for the zones at Kombolcha, Hawassa and Dire Dawa. During the visit to Ethiopia by Premier Li Keqiang, Prime Minister Hailemariam Desalegn said that the “best days of vibrant partnership with China” lie ahead. There should be no doubt about the importance of the China-Ethiopia relationship.

Conclusion

China and Ethiopia are strategic partners. China provides technical assistance and jamming equipment to help Ethiopia’s Information Security Network block signals from anti-government radio stations and, from time to time, the Amharic-language programs of the Voice of America and Deutsche Welle. The two countries have established a Joint Ministerial Commission. China supplies artillery, light armored vehicles, and troop transport vehicles to Ethiopia’s army. Each year it trains a small number of Ethiopian officers. There are routine high-level exchange military visits. China’s embassy in Ethiopia is one of a small number in African capitals that has a resident military attaché.

Prime Minister Meles Zenawi, who died in 2012, commented that “China has been playing an irreplaceable role in our economy. It has unparalleled contribution towards funding infrastructure activities.” In 2010, The Economist reported that Hailemariam Desalegn, at the time deputy prime minister and foreign minister, was urging Ethiopia to follow China’s model. Following Meles’ death, Hailemariam replaced him as prime minister.

A senior official in the Ministry of Foreign Affairs commented that China has become “critical” to Ethiopia for economic reasons. Ethiopia understands, however, that China has its own interests in the country and close relations with China will not make relations with the West “redundant.” Then Deputy Prime Minister Hailemariam Desalegn emphasized that China is supporting with substantial loans Ethiopia’s growth program. He added that Chinese loans are preferable: “We like the Chinese way of doing things, because they don’t say ‘do this, don’t do that’—there are no preconditions.”

Ethiopia-China relations are strong and likely to get stronger. Increasingly, Ethiopia sees China as an alternative to the West and, especially, Western political conditionality. At the same time, as China’s presence and influence grow in Ethiopia it will become subject to many of the same suspicions that countries such as the United States and the former Soviet Union experienced in past decades.

Sourced here:  http://www.internationalpolicydigest.org/2014/06/11/ethiopia-china-former-empires-connected-20th-century/

Filed under: Economy, Opinion Tagged: Agriculture, Business, China, East Africa, Economic growth, Ethiopia, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1

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Market fluctuation delays gold production in Ethiopia

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According to the Trade Ministry, Ethiopia eyed to $774.5 million over the past ten months from gold exports. It only earned $369.31million during the reported period.

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http://www.worldbulletin.net/economy/139003/market-fluctuation-delays-gold-production-in-Ethiopia

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W/Bank provides $10m towards Ethiopia’s efforts to produce quality statistics

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The World Bank has provided a $10 million grant to help the Government of Ethiopia increase the quality of its official statistics, reports said on Saturday.The grant agreement for the project was signed by Mr. Guang Zhe Chen, World Bank Country Director for Ethiopia and Ato. Ahmed Shide, Ethiopia’s State Minister for Economic Development.

The World Bank said the project will help to meet Ethiopia’s rapidly increasing demand for good quality statistics, by enhancing the organizational, human and physical capacity of the Central Statistics Agency (CSA).

Furthermore, the project will improve the data management capabilities of key Government Ministries Departments and Agencies in the National Statistics System and help to accurately measure progress on Ethiopia’s Growth and Transformation Plan targets, the Washington-based lender added.

Speaking at the signing ceremony, Mr. Chen said improving Ethiopia’s ability to produce quality data will contribute to sustainable development because data accuracy is not only key to evaluating the impact of development programs, it will also help to identify gaps and prioritize investment.

The project is part of the World Bank’s efforts to promote evidence based decision making, in line with its twin goals of reducing extreme poverty and promoting shared prosperity.

http://en.starafrica.com/news/wbank-provides-10m-towards-ethiopias-efforts-to-produce-quality-statistics.html

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UAE, Sudanese JV to manufacture plastic poles

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Having inked a joint venture deal, the United Arab Emirates-based Falcon Chemicals Llc under the license of the Sudanese Albazz Industries Plc, is to manufacture construction chemicals and water proofing products in Ethiopia. 

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Ethiopia, Israel keen to deepen ties

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Ethiopia and Israel have agreed to further deepen all-round relations between the two countries.

Israel’s Foreign Minister Avigdor Liberman is in Ethiopia where he met with Ethiopia’s Foreign Minister Tedros Adhanom (PhD). He is also scheduled to meet Prime Minister Hailemariam Desalegn and President Mulatu Teshome (PhD) later today.

The two Foreign Ministers today signed a memorandum of understanding at the Ministry of Foreign Affairs in Addis Ababa.

According to Hilawe Yosef, Ethiopia’s Ambassador to Israel, the memorandum of understanding incorporates political, economic and security cooperation.
At a joint press conference held after the signing, Tedros said Israel’s Foreign Minister has reiterated the country’s readiness to strengthen its support to Africa in fighting terrorism.

The security cooperation between Ethiopia and Israel includes intelligence sharing, Tedros added.

“Today’s discussion is on how we can further deepen our cooperation,” Tedros said.

Liberman, for his part, said the two countries have agreed to hold regular consultations between their ministries.

“We are in the best page of our bilateral relations which goes as far back as two thousand years during the Solomonic era,” Liberman said.

The visit also aims to boost economic ties between the two countries. More than 40 Israeli private businesses from the Israel Export Institute also accompanied Liberman, who is visiting Ethiopia for the second time in that capacity.

The businesses are drawn from various sectors including agriculture and water technology, energy and mining, life science, information technology, banking, homeland security, infrastructure, consultancy and aviation.

Earlier the two foreign ministers opened an Ethio-Israel business forum at the Sheraton Addis. The two day forum, jointly organized by Israel’s embassy in Addis Ababa and the Ethiopian and Addis Ababa Chambers of Commerce and Sectoral Associations, are aimed at boosting business to business ties between Ethiopian and Israeli companies.

The Israeli foreign minister, who is on Africa tour, will also visit Rwanda, Ivory Coast, Ghana and Kenya.

http://www.waltainfo.com/index.php/editors-pick/13816-ethiopia-israel-keen-to-deepen-ties

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Ethiopian, Israeli Business Discussing

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The Israeli business delegation that accompanies the Foreign Minister Avigdor Liberman has started discussion with Ethiopian business persons on possible partnership.

Speaking on the occasion, Ethiopian Foreign Minister Dr Tedros Adhanom said in spite of the age-long relation, the trade and investment tie between the two countries is low.

A number of multinational companies are being attracted to Ethiopia because of the successive economic growth of the country over the past decade, he said.

The government will extend support for Israeli companies with the desire to increase their involvement in the economy, he said.

For his part Minister Liberman said the economic cooperation between the two countries doesn’t improve as desired.

Ethiopia is among the strategic partners of Israel in Africa and he affirmed that he will exert maximum effort to lobby on Israeli companies to be able them engage in Ethiopia.

The annual trade relation between the two countries has reached 112 million USD in 2013 from 46 million USD in 2004.

The trade balance is in favor of Ethiopia. Ethiopia has exported items valued at 93.6 million USD, while the balance is import from Israel.

Sixty four of the total 200 licensed Israeli companies with an aggregate capital of 7.1 billion Birr to do business in Ethiopia have so far started operation, according to Fitsum Arega Director-General of the Ethiopian Investment Agency.

The companies are engaged in agriculture, particularly in sesame, horticulture and floriculture production, he said.

Israel is the second largest destination for Ethiopia’s sesame production next to China.

Arava Power Company is among the 50 companies accompanied the Foreign Minister to identify investment and business opportunities in Ethiopia.

The company is conducting feasibility study to develop energy from geothermal and solar with 300 million USD, according to Company Co-Founder Yosef Abramowitz.

The Company is engaged in similar investment area in Rwanda, the Founder said.

Mekorot Development and Enterprise is another company desirous to invest in Ethiopia. The company is interested to invest in Ethiopia in water technology, said the company’s business development vice president, Zvi Pinczowski.

The company is assessing the possibility to partner with Ethiopian businesses working in the area, he said.

Israeli companies are coming to Ethiopia to search investment and business opportunities in the country, according to Kebede Abera, Business Diplomacy Director General with the Ethiopian Ministry of Foreign Affairs.

Similar business delegation has visited Ethiopia three months ago to identify business and investment opportunities in the country.

The delegation led by the Israeli Agriculture Minister has shown interest to engage in the agriculture sector, he noted.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2223:ethiopian-israeli-business-discussing&Itemid=260

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Liberman Says Israel Will Strengthen Trade, Investment Relations with Ethiopia

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http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2228:liberman-says-israel-will-strengthen-trade-investment-relations-with-ethiopia&Itemid=260

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President Says Ethiopia’s Membership to EITI Would Ensure Transparency

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http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2225:president-says-ethiopia’s-membership-to-eiti-would-ensure-transparency&Itemid=260

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EU – Ethiopia On Track to Meet MDG’s

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EU ambassador to Addis Ababa, Chantal Hebert told reporters that Ethiopia has become effective in eradicating extreme poverty, reducing child and maternal mortality; and making primary education accessible to children, controlling malaria, HIV/AIDS and other sexually transmitted diseases (STDs) and in sustainable environmental protection .

According to Ambassador Chantal Herbert, Ethiopia is on the right track to meet most of the Millennium Development Goals before 2015 .She also indicated that Ethiopia has become successful in job creation and in encouraging entrepreneurial ventures and improving lives of its people. Allocation of 70 percents of the nation’s budget to poverty reducing sectors such as education, health and infrastructure has helped to the achievement of the success; she added .

She also reminded that if the economic growth of the country continues with the current pace, Ethiopia will be able to achieve a middle income nation status by 2025. According to the ambassador EU had provided 680 million Euros worth development support to Ethiopia from 2008 to 2013. It has also approved a development support of 745 million Euros from 2014 to 2017. Accordingly, EU provides Ethiopia a development support of 200million Euros annually.

http://allafrica.com/stories/201406171355.html

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Minister Observes Big Improvement in Justice Organs

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The role of justice organs in building a democratic system and ensuring the prevalence of good governance has shown big improvement, according to Ministry of Justice.

A consultative meeting that evaluates the performance of the ministry and regional justice bureaus during the GTP and discusses the plan for the coming five years is underway here in the capital.

Speaking during the opening ceremony, Minister of Justice Getachew Ambaye said justice organs are helping create a stable system by ensuring the supremacy of law and respecting and ensuring the respect of the constitution and the constitutional order as well as reducing crime.

Improvements have been witnessed with respect to making the economic growth of the country and peace become reliable, and good governance prevail in the justice system, according to Getachew.

Justice organs are in particular showing improvement from time to time in providing fast and localized justice for the public, he noted.

Justice State Minister Birhanu Tsegaye said on his part that justice organs were able to register satisfactory results by involving citizens.

Though impressive achievements are registered in delivering efficient justice and in ensuring the supremacy of law, rent seeking is observed in some quarters, he pointed out. In this respect an integrated system should be put in place to stop the practice, Birhanu underscored.

According to him, building a justice army and introducing structural changes as well as establishing a nationally integrated justice system are the tasks ahead in the coming years.

The three-day consultative forum is expected to assess the performance of the strategic plan of regional justice bureaus.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2226:minister-observes-big-improvement-in-justice-organs&Itemid=260

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Over 5.6 Billion Tree Seedlings Readied for Planting Across Nation

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http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2227:over-56-billion-tree-seedlings-readied-for-planting-across-nation&Itemid=250

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Draft customs proclamation proposed

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A draft customs proclamation aimed at establishing a modern legal customs framework which encourages development of manufacturing industries and investment has been proposed to the House of People’s Representatives.
The draft proclamation replacing the current 622/2001 customs proclamation is expected to provide effective and speedy service in the facilities of the authority and give the Director General of the Ethiopian Revenue and Customs Authority (ERCA) more power.
The new proclamation will also introduce structural adjustments in the functions of the authority and its human resource management. It also ensures the ‘free movement of goods for those organizations identified as Authorized Economic Operators (AEO), eases Post Clearance Audits (PCA), and decentralizes the activity of the authority.
The amendment introduces new ways in which customs officers can go to inspect the place where the goods are. Such practice saves costs and time and will help to further fuel the booming economic achievements of the country reads the clarification of the proclamation.
The proposed proclamation also gives the director general of ERCA the mandate not to institute criminal charges based on various conditions. The draft proclamation states that if the alleged offender cannot follow the proceedings due to old age or chronic disease, if it is believed that the proceeding of the case in court will harm national interest or international relations, if instituting proceedings may cause an unbalanced side effect or if the charge has not been instituted in time and thus has lost its relevance the director general may decide that criminal charges not be instituted.
The proclamation will also help to bridge gaps observed in the customs proclamation the country has been using over the last five years. The need for a more modern customs legal framework to support development of industries and investment has made the introduction of the new proclamation necessary.
The draft proclamation was referred to the Budget and Finance Affairs, and Law and Administrative Affairs Standing committees for further discussion.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4364:draft-customs-proclamation-proposed&catid=35:capital&Itemid=27

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Sudanese factory in Ethiopia inaugurated

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A Sudanese factory worth $ UD 5million built in Addis Ababa was inaugurated (June 12). The factory is engaged in manufacturing of electric poles, adhesives, water tankers, and dishes among others and created employment opportunity for 300 peoples. Speaking at the inauguration of the factory, State Minister for Industry Dr. Mebrhatu Melese said the factory, built by Albaz Industrial Company, will have a big share to enhance infrastructure and construction works in the country. The state minister noted that with the establishment of the factory the country will save over 2 million USD foreign currency annually. According to Dr. Mebrhatu the Ethiopian government has been providing production sites and multiple forms of assistance for both local and foreign investors. On his part, the owner of Albaz Industrial Company, Mohammed Hassen expressed his plans to expand the factory.

http://www.mfa.gov.et/news/more.php?newsid=3234

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Kessem sugar project takes farmers, private sector under its wing

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Kessem sugar development project underway in Afar regional state is expected to boost Ethiopia’s sugar production when completed at the end of this year, but beyond that the multi faceted development project has taken local farmers and private businesses under its wing.

When completed, the sugar factory will produce 260,000 tons of sugar annually when it starts operating at full capacity. The projects will cultivate 20,000 hectares of sugarcane plantation in Kessem and Bolhomon areas.

So far over 5,500 hectares of land has been covered with sugarcane plantations, according to Miruts Weldai, deputy head of the project’s farm operations. They plan to cover another 7,000 hectares of land during second round plantations expected to commence this month.

The project has brought unique opportunities for local farmers and private farms. In March 2014, Ethiopian Sugar Corporation, who owns state financed sugar projects in the country, signed the first ever out-grower agreement with a private company – Amibara Agricultural Development plc.

Based on the deal, Amibara, a private agriculture farm, will supply sugarcanes to Kessem sugar development project for three years. The company, whose farm is located in close proximity to Kessem project, will cover 6,000 hectares of land with sugarcane plantations.

Since the deal was signed, over 3,300 hectares of land has been covered with plantations, Miruts told WIC.

Besides offering job opportunities for locals, the project is providing trainings in sugarcane farming skills to local farmers.

The training aims to equip local farmers with the required skills which to cultivate sugarcanes on their plot and supply them to project’s crushing plant in an out-grower deal.

Farmers are being organized in cooperatives with whom the Kessem sugar factory will negotiate out-grower deals.

Such arrangements are not new for the corporation, in February 2014, Wonji-Shewa Sugar Factory struck its ninth out-grower deal with farmers’ cooperatives agreeing to purchase a quintal of sugarcane for 50 birr.

Kessem sugar plant, whose construction is being carried out by the Chinese Complant Group Inc, is expected to start crushing in November 2014. The irrigation dam on Kessem River is also nearing completion. The state owned Federal Water Works Construction Enterprise is carrying out the construction.

http://www.waltainfo.com/index.php/explore/13807-kessem-sugar-project-takes-farmers-private-sector-under-its-wing

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Albazz to manufacture chemicals locally

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Joining hands with Falcon Chemicals LLC, Albazz Industries PLC plans to begin making construction chemicals primarily using local materials.
Albazz CEO Mohammed Hassan said most of the raw materials which will go into products like paint, coatings, adhesives and construction chemicals are found in Ethiopia. Producing these chemicals will create jobs, save foreign currency and reduce imports significantly.
He explained that the products can be used for factories such as Carpentry, Joineries, Furniture factories, Paper & Packaging Industry, Paper converting industries, Bottle labeling, Printing & Cigarette industry.
Mebratu Melesse, State Minister of Industry, said some of the products, like paint, will be used in the government housing program.
Falcon manager, Mitika Gocunlda also said that other products will be used as glass replacement plastics which will reduce costs of materials used in telephone poles by 50 percent.
Falcon Chemicals LLC was established in the United Arab Emirates in 1976. The company has diversified into several business sectors with a marketing network spread across the Middle East, Africa, India and the Far East.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4362:albazz-to-manufacture-chemicals-locally&catid=35:capital&Itemid=27

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Workshop Urged for Comprehensive National Logistics

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During National Logistics Strategy Study workshop Mekonnen Abera, Ethiopian Maritime Affairs Director, urged for a comprehensive national logistics strategy for Ethiopia to achieve the aim of becoming a middle income country.

Mekonnen during the workshop noted Ethiopia is still highly inefficient despite making remarkable efforts to alleviate challenges in the logistics system. He continued and said the sectors underperformance is holding back the nation’s competitiveness.

According to the Director, the study is aimed at reviewing the overall logistics system, developing blue print for a more efficient and effective system, identifying required for transformation and desgining the implementation approach.

The workshop focused on reaching consensus among key players in the sector on the major bottlenecks identified in the first phase of the study.

The study was sponsored by the United Nations Development Programme and conducted by NATHAN Associates Inc. the firm presented its findings in the transport and road operation, port and corridor performance, railway operations and terminals and air cargo operations.

The findings revealed truck fleet in Ethiopia is old, inadequate by modern standards, slow and expensive to operate. It added for the new standard gauge Addis Ababa-Djibouti railway succeed, there must be convenient and cost effective connections for the shippers.

The study also indicated the general air cargo terminal at the Bole International Airport suffers from delay in removing goods.

http://www.2merkato.com/news/alerts/3046-ethiopia-workshop-urged-for-comprehensive-national-logistics

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European banks to finance Ethiopian railway constructions

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European banks have decided to finance Ethiopian railway constructions.

According to the Reporter, Credit Suisse and the Turkish export and import bank (ExIm bank) are the two that have agreed to finance the railway lines.

Credit Suisse has helped in convincing and organizing the European banks to finance the constructions and on June 20, 2014 Credit Suisse is expected to sign an agreement with Ethiopian finance and economic development ministry.

The European banks have agreed to finance the 400 km railway line that stretches from Woldia to Awash which is part of the lengthy Mekelle to Djibouti’s Tajura port railway line.

The banks will finance 85% of the 1.7 billion dollar project cost and the remaining finance is expected to be covered by the Ethiopian government.

Some commented that the European banks agreeing to finance projects in Ethiopia have a huge significance for the country and such situations haven’t been seen in the country’s recent history.

The Mekelle-Djibouti railway line construction is divided into three parts. The first leg of the construction which stretches for 260 Kms from Mekelle to Woldia is to be constructed by the Chinese construction company CCCC with 1.5 billion dollar finance from the Chinese ExIm bank.
The second one being the Woldia-Awash line mentioned above and for the third and final leg of the construction from Awash to Tajura port of Djibouti finance hasn’t yet been secured.

http://www.waltainfo.com/index.php/editors-pick/13802-european-banks-to-finance-ethiopian-railway-constructions-

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DHL to build world class facility

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DHL announced its plan to build a world class facility inside the Addis Ababa Bole International Airport.

The logistics company is currently in negotiation with the Ethiopian Airports Enterprise and Ethiopian Airlines to build the facility within the premises of the airport.
“We are looking at a potential location. Once we do the necessary contracts, we then start the construction,” stated Charles Brewer, Managing Director of DHL Express Sub-Saharan Africa. Once completed the facility is expected to feature a service center and country office.
“We are very committed to investing in Ethiopia. It is taking longer than we expect but we have to respect the environment we work in,” Charles stated.
“Ethiopian Airlines and Ethiopian Airports Enterprise have their own stand of what they want and where they want us to be. We are trying to make sure we find a marriage that works. It is going to be a big investment, millions of dollars. We don’t put up that kind of money unless we are sure it is a good investment,” he added.
DHL is currently upgrading all our infrastructure in several countries in Africa and Ethiopia is part of the jigsaw puzzle.
DHL stated that East Africa and Ethiopia are key regions for growth within Sub-Saharan Africa. For the past three year, the East African community has sustained a high GDP growth, outpacing a number of Sub-Saharan countries. The International Monetary Fund (IMF) has forecasted a GDP growth of around 7.5 percent for Ethiopia in 2014.
“We have been very pleased with our progress over the last quarter, which is both a reflection of the country’s economic development but also of our employee’s passion for the business and taking it forward,” said Essete Gebriel, Country Manager for DHL Express Ethiopia.
She also stated that the company is doing significant work in increasing connectivity for Small and Medium Enterprises (SMEs), helping them to understand the paperwork, legislation and expertise needed to grow beyond Ethiopia’s borders.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4357:dhl-to-build-world-class-facility-&catid=35:capital&Itemid=27

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First Lady led Ethiopian women investors to Turkey

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An Ethiopian delegation led by First Lady, Mrs. Roman Tesfaye consisting of women business persons’ is on tour in Turkey to share experiences with Turkish investors and create market link. The delegation paid a visit to two leather producing factories in Istanbul called Tergan and DeRman which are in the business for over 40 years. On the occasion, First lady, Mrs. Roman briefed the Turkish investors about Ethiopia’s potential in leather input, government incentives and cheap human labor. Both factories said that the briefing was insightful. The owner of Derman factory, Mr. Ibrahim Aidewan said Ethiopia is now on top of his list for investment. The representative of Tergan leather producing factory said he sees the opportunity to directly import inputs from Ethiopian Tanneries. The visit organized by office of the First lady of Ethiopia and confederation of Businessmen and Industrialists of Turkey (TUSCON) aims to create market tie between Ethiopian and Turkish investors as well as enhance trade tie of the two countries.

http://www.mfa.gov.et/news/more.php?newsid=3236

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Half of Turkey’s African investment is in Ethiopia

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Ethiopia is now Turkey’s biggest African investment, Aykut Kumbaroglu who works with African Countries for Turkey’s Ministry of Foreign Affairs said. There are currently over 350 Turkish companies investing USD three billion in Ethiopia. This is half of the USD six billion the nation invests in sub-Saharan Africa.  Turkish officials say this has come as a result of their encouragement to invest in Ethiopia.
Aykut pointed out that the leaders of both nations have made reciprocal visits and their relationship is strong.
Ethiopia reopened its embassy in Ankara in 2006 and different Turkish offices have based their regional office in Addis Ababa including Turkey’s Anadolu News Agency.
Top diplomats in the Ethiopian Embassy at Ankara, told Capital that Turkish companies are now focusing on Africa. “Ethiopia is a gateway for their vision,” the diplomat explained.
The Ethiopian diplomat said that Turkey is now changing and they are transferring to the service sector from industry and because of this they are growing in Ethiopia.
“Our embassy and the government in Addis Ababa are aggressively lobbying Turkish companies to come to Ethiopia and this combined with the current Turkish investment in Ethiopia is creating a push, pull effect to enhance the already blossoming trade between the two nations,” the diplomat explained.
Ayalew Gobeze, Ethiopia’s Ambassador to Turkey, said even though economics is one of the main aspects of the two nation’s relationship there are other aspects as well.
Ayalew said that the number of Turkish investors asking to invest in Ethiopia is rapidly growing. “We are also working strongly to expand the number of Turkish investors in Ethiopia, because they will come into Ethiopia with benefits including new technology and knowledge,” the recently appointed ambassador and one of the top ruling party officials added.
“But when we encouraged the Turkish investment in the country we have to be responsible to facilitate the smooth bureaucratic process to expand the FDI,” he explained.
The interest of Ethiopian investors is also growing to work with the Turkish business community.
According to the 2013 data, the trade between the two countries has reached USD 420 million from USD 27 million in 2000.
Ethiopia is the first sub Saharan Africa country to begin modern diplomatic relations with Turkey at the start of the 20th century when Turkey opened its consulate in Harar.
Turkish officials say the two countries are working in many sectors including education, health and security.
Turkey has been training the Ethiopian Federal Police and several Ethiopian police officers are taking  training in Turkey.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4365:half-of-turkeys-african-investment-is-in-ethiopia-&catid=54:news&Itemid=27

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LG Hope College to open in November

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LG electronics announced that, LG Hope Technical and Vocational Education and Training College will begin operation in November this year.
Home and office equipment servicing, electronic communication and multimedia equipment servicing, and information communication technology are the subjects the colleges will give to its students. The college will also be supported by the Korean International Cooperation Agency and World Together NGO.
The three departments will have 25 trainers each and it will take three years to accomplish the training. Ten percent of the quota will be given to the Korean War Veteran decedents and low income groups for free of charge.
Executive VP of LG Kim Young said that the opening of the college will help the country by providing well trained personnel for the industry.
He also added, “the plan is to make the college one of the best academic and training centers of technology transfer and innovation.’’
The 12,000 sqm school is be located around the area commonly known as Summit and is expected to be completed in September.
In related news LG signed an MOU with the Foundation for Global Compact to strengthen its commitment to development challenges such as poverty, environmental degradation, and peace.
Kim said at the signing ceremony that “LG is committed to sharing its corporate social responsibility experience with the international community, and  encouraging other businesses to enhance their commitment to the UN Global Compact to tackle challenges to development through sustainable action.
LG is a global business enterprise with a 67 year history. It has played a significant role in the inception and development of Korea’s chemical and electronic industries. It has 200 offices around the world with 213,000 employees.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4356:lg-hope-college-to-open-in-november&catid=35:capital&Itemid=27

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GERD coordination office to launch SMS lottery game

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Office of the National Council for the Coordination of Public Participation on the Construction of the Grand Renaissance Dam said it will begin SMS lottery game soon to raise funds for the construction of the dam.
According to the office the lottery game is prepared for every Ethiopian to easily contribute to the dam.
Winners will be awarded a house, a car and other materials.
The car to be given for the winner has been provided by Nyala Motors, an exclusive distributor of motor vehicles and equipment.

http://www.waltainfo.com/index.php/editors-pick/13812-gerd-coordination-office-to-launch-sms-lottery-game

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eLearning comes as game changer for Africa’s education

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Challenging the norms in East Africa, many young women are tapping into their entrepreneurial potential. From developing apps and software, to founding non-profit organisations, women in East Africa are attracting African and global attention for  successfully changing patriarchal societies.
Women in East Africa are often the key home care providers, juggling working, maintaining the family home, cooking and importantly, helping their kids to learn. Whether doing their best to ensure their children have access to education, or actually taking on the role of teacher themselves, there is no doubt that women are playing a central role in raising eastern Africa’s young people. Reach out to the Wives of the Soldiers (ROWOSA) is a project by women, for women. The Uganda-based organization assists wives of soldiers who lack employable skills and opportunities to earn a sustainable income, thereby securing their financial independence. Through technology-supported programmes, these women can learn a variety of skills including sewing, computer science, baking and farming. With lifelong skills, these women can not only ensure the effective financing of a household with a double income, but also pass the skills onto their own children, improving their future prospects.
From startup accelerator Nailab in Kenya, mobile communications enterprise Text to Change in Uganda and then north to elearning centre Camara Ethiopia, East Africa has a plethora of innovative operations opening up and changing lives in communities.
“The initial idea for the e-learning events was sparked in 2004 when I heard about optical fiber cables being laid in Ethiopia,” says Rebecca Stromeyer, founder and CEO of Integrated Communications Worldwide Events, which runs the annual elearning Africa conference.
The eLearning Africa Report 2014, launched this week by Edward Ssekandi, Vice President of the Republic of Uganda, claims that eLearning opens window on Africa’s education future.
“The mood of optimism among Africans is unmistakable,”says the Report. “Our survey… confirms that African eLearning professionals are feeling confident about the future. This is more good news for the continent because the combination of education and technology is clearly a powerful driver for growth.”
The report repeats the late Nelson Mandela’s view that “education is the key to everything”. It emphasises, however, that the prospects for African education will depend increasingly on good communications and connectivity.
“If education is the key to everything, the key to the education of the future is infrastructure”.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4366:elearning-comes-as-game-changer-for-africas-education-&catid=54:news&Itemid=27

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PM inaugurates two roads

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Butajira-Gubre asphalt concrete road built with an investment of 800 million birr and Alaba-Alemgebeya-Welbareg that cost the government 712.7 million birr were both inaugurated by Prime Minister, Hailemariam Desalegn. Construction of the Butajira-Gubre road was done by cutting through the 1,300 metre high Zebider mountain ranges by a local company Sunshine Construction indicated that local contractors’ capacity is growing, said the premier during the inaugural ceremony.
Ethiopian Transport Minister, Workineh Gebeyehu also appreciated the efforts of local contractors in saving the nation’s foreign exchange by winning more similar contracts these days.
The road shortens the former Butajira-Addis Ababa-Wolkitie 250 km distance to 82 km. Previously it was compulsory to cover a distance of 250km through Addis Ababa and Alemgena to travel from the eastern town of Butajira in Gurage Zone to reach the zone’s capital, Wolkitie.
Sunshine Construction Company General Manager, Samuel Taffese urged the government to continue encouraging and supporting local contractors.  The 82 km Butajira-Gubre asphalt concrete road is expected to make the economic and social contact of formerly isolated east and west Gurage communities easier.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4360:pm-inaugurates-two-roads&catid=35:capital&Itemid=27

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Access to Potable Water, Sanitation Improving in Ethiopia

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The Ethiopian Ministry of Water, Irrigation and Energy announced that access to clean drinking water and sanitation is being improved through the concerted efforts exerted over the past years.

The activities helped the government to raise clean water and sanitation coverage to 68.5 percent and 67 percent respectively. Over the past five years, the country has been working for the improvement of access to drinking water and sanitation in rural and urban areas. Hygiene Coordinator with the Ethiopian Ministry of Health, Dagnew Tadesse said that more than 39,000 health extension workers deployed across the country are working to increase knowledge of households in handling liquid and solid waste.

Access to potable water, Sanitation improving in Ethiopia The Ethiopian Ministry of Water, Irrigation and Energy announced that access to clean drinking water and sanitation is being improved through the concerted efforts exerted over the past years.

The activities helped the government to raise clean water and sanitation coverage to 68.5 percent and 67 percent respectively. Over the past five years, the country has been working for the improvement of access to drinking water and sanitation in rural and urban areas. Hygiene Coordinator with the Ethiopian Ministry of Health, Dagnew Tadesse said that more than 39,000 health extension workers deployed across the country are working to increase knowledge of households in handling liquid and solid waste.

http://allafrica.com/stories/201406170216.html

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Vitamin-A Boosting ‘Special Banana’ To Undergo Human Trials In America.

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VENTURES AFRICA – Australian-grown genetically modified bananas, targeted at combating Vitamin-A deficiency among children in East Africa, is set to undergo its first human trials in the United States.

The banana, which has been modified to have high alpha and beta-carotene that converts to Vitamin-A in the body, will help prevent thousands of East African children from premature death and early blindness as a result of Vitamin-A deficiency.

According to reports on the project, the genetically-modified banana portrays a darker orange colour than the regular cream colour bananas are known to have.

The project, led by Queensland University of Technology (QUT) Professor James Dale, was supported by The Bill and Melinda Gates Foundation with $10 million.

Dale explained that although bananas grown in the highlands and East Africa usually posses largely reserves of Vitamin-A, this farm produce had low levels of micro-nutrients, particularly pro-vitamin A and iron.

Ugandan researcher Stephen Buah, one of the five Ugandan PhD students who has been working with other researchers at QUT says about 30 percent of children under the ages of 5 suffer from Vitamin-A deficiency.

“We’re aiming to increase the level of pro-vitamin A to a minimum level of 20 micrograms per gram dry weight,” Dale said.

If the experiment works out, there is a plan to start growing this special variety of banana in Uganda by the year 2020.

Farmers would start growing this special crop once constituted authorities stamp an approval for commercial cultivation. When field trials are in place, the same process could be applied to crops in other East African nations.

Researchers hope to get conclusive result on the project by the end of this year.

http://www.ventures-africa.com/2014/06/vitamin-a-boosting-special-banana-to-undergo-human-trials-in-america/

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U-Turn Over Transport Companies’ Privatisation Ban

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The deals will now be processed on the condition that priority is given to public projects

The Ministry of Finance & Economic Development (MoFED), last week, reversed its ban on the transfer of two state owned transport companies to private companies. The decision came on the condition that the new owners will give priority to public projects.

The ban came in response to the demand from the Ministry of Transport (MoT) to retain Bekelcha Transport S.C and Weyra Transport S.C under state ownership, in order to use their trucks for the transportation of imported equipment for ongoing government projects, including housing projects, according to Wondafrash Assefa, public relations head of the Privatisation & State Enterprises Supervising Agency (PPESA).

“Following the call from the MoFED to cancel the sale of the companies, the Agency wrote a letter requesting that the Ministry allow the transfer of the companies since the decision is not good for the image of the Agency,” said Wondafrash. “We invested in the auction of the companies; it would be a loss for the Agency.”

It was in response to this request that the MoFED agreed to lift the ban. The Agency’s legal department is now working to include the precondition in the deal. It will require them to give priority to transport cargo for ongoing state projects, Wondafrash said.

Tikur Abay Transport S.C, an affilate TIRET, had a successful offer of 325.9 million Br for the acquisition of Bekelcha, which the PPESA’s board approved on March 29, 2014. The approval for the acquisition of Weyra Transport by Trans Ethiopia Plc, an affilate of EFFORT, for 268 million Br was pending at the board when the process was halted by the MoFED.

“Tikur Abay paid 35pc down payment for the company some days before the MoFED cancelled the ban, while the reminder has just been sent to Trans after the ban was lifted,” said Wondafrash.

Both transfers could take place before the end of the fiscal year on July 7, 2014, according to Wondafrash.

There was no offer for two other state owned transport companies, Comet and Shebelle, both of which were offered for sale in the last round of tender for 2012/13.

In an unsuccessful privatisation year, the PPESA only managed to attract successful offers for five enterprises, including Weyra and Bekelcha, although its intention was to sell 20.

The PPESA is planning to make up for that through the aggressive promotion of the enterprises as a strategy.

A villa in the Bole District, owned by Batu Construction S.C, was also approved by the Agency to be sold to Abate Kone (MD), who offered 11.8 million Br. The Agency has also approved the transfer of Hamaressa Edible Oil S.C and Ethiopian Pharmaceutical Manufacturing S.C to buyers who have already made the down payment, although after a small delay,  Wondafrash said.

The Agency has another round of tender now in process, the fifth for the year, involving seven companies, five of which have previously failed to attract any buyers. Bilito Siraro Farm and the warehouse of the Ethiopia Fibre Products Enterprise are up for sale for the first time. The other five – the Ethiopian Mineral Development S.C, Bahir Dar Textile S.C, Kombolcha Textile S.C, Agricultural Mechanization Service Enterprise and Transport Construction Design S.C – are being offered for the fifth time within the same year. Financial opening will take place early in the next fiscal year, on July 23, 2014.

http://addisfortune.net/articles/u-turn-over-transport-companies-privatisation-ban/

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 Keeping Agricultural Revolution Mobile

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Opinion

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