Bilateral economic cooperation and security initiatives being discussed at the highest levels between nations at the G-20 Summit

Friday, 06 September 2013

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Line sowing of teff has brought tremendous change in production (pictured, above)

The government has been pursuing policies aimed at boosting agricultural production and productivity. Increasing the availability of improved seed, chemical fertilizers, and extension services for small scale, resource poor farmers has been taken as an important tool to improve agricultural productivity. These interventions have led to improvements in both agricultural outputs and yields. But there is still an urgent need for substantial progress as the country has yet to see payoffs in terms of higher and more stable cereal yields, lower consumer prices for food staples, and zero dependence on food aid. Tailoring ways to strengthen smallholder access to inputs, technology, and information is crucial and improving the incentives for their use and adoption is of crucial importance.

In the effort to make the vision of boosting productivity and ensuring food security a reality, the quantity of improved seed supplied to smallholders has been increasing during the last decade. In effect, agricultural extension services are meant to make available seed, chemical fertilizers, and credit services to the smallholder farmers. The agricultural sector has witnessed new packages to support other crops and livestock, improved post harvesting technology adoption and encouragement of natural resource management, mainly aimed at diversifying output and getting beyond a focus on cereals. As productivity is essentially regarded as a result of technological problem, the focus has been to widely diffuse the needed technological and technical inputs, particularly fertilizers and improved seed , mainly to areas with low productivity.

The government has tried to implement this technology-led extension programme during the last couple of decades. The acceptance and implementation of these programmes among the smallholder farmers is mandatory for its success and attainment of the final goals. The newly adapted line sowing of teff, the common food crop in Ethiopia, has shown significant improvements in the amount of production per hectare on lands of smallholders who implemented it during the last farming year.

Endale Gebre (PhD), Deputy Director of Seed Research Section with the Ethiopian Agricultural Research Institute says there is a room for optimism based on the outcomes of efforts made so far. teff is one of the crops on which the Institute has been undertaking research since many years ago. As the crop is produced only in Ethiopia, the researches conducted on it and use of the crop exist only in research centres of Ethiopia, although some European countries have since recently started to introduce it in their market. Dr. Endale says teff is not lucky enough to attract global fund and focus like maize and wheat, on which widespread research is underway in different parts of the world to improve production and productivity.

The research undertaken on teff so far has enabled the institution to introduce and distribute above 30 technological, information and system of production and other related outcomes to the country’s farmers, he noted. “Many kinds of improved teff seed varieties have been supplied during the last three or four decades. And the research activity is widening and getting stronger from its inception with very limited capacity. Most importantly, the recent years have witnessed provision of more new improved varieties,” he said. Compared with other crop varieties that are common among Ethiopian farmers, Teff is categorized under crops with very low yield. A decade ago, not more than 0.8 tonne of teff is produced per hectare by the smallholder farmers. However, the effort to introduce new technological and technical inputs for production and productivity have brought significant changes during the last few years, Dr. Endale said.

The average amount of national teff production per hectare has now reached about 1.2 tonnes. But in some areas especially which are favorable for the crop, the amount has reached from three up to five tones per hectare. According to him, the officially recorded amount by the Institute so far is 4.6 tonnes per hectare. “ The difference comes from individual farming performance in land use, implementation of newly introduced farming technologies and techniques and of course the agro- ecological scenario.” what is most important, presently, changed agronomic practices by the research institute have shown that it is possible even to increase the amount of teff production per hectare up to 8 tonnes, he noted.

There is a chance to boost the productivity further if it is possible to enhance the use of improved seed varieties and production systems in the near future, he exclaimed. However, the agro-ecological, soil, weather, land use and knowledge differences make the amount of production on each individual farm very different. “You may provide the technical and other supports equally to all farmers but the rainfall, soil and other natural and man-made reasons make the difference.” The next focus of the research institute should be to prepare improved seed varieties that can boost productivity in various agro-ecological zones and soil types so that, there would be significant growth in productivity in many areas of the country, he noted.

Moreover, the average growth of the overall amount of national production of teff has increased by about 20 per cent. These is a great leap forward as compared to the previous times and this is an opportunity for making the needed difference in teff production, he remarked. Dr. Endale emphasized the need for use of micro nutrients in addition to the common fertilizers(DAP and UREA)that are widely in use at present. The research institute is trying to get improved seed varieties for domestic crops in cooperation with many international research institutions. We are working in cooperation with various international institutions by providing them with different varieties and we also take from them what is important for us. For instance, we have to import improved varieties for wheat, sorghum, soyabean and others. As we undertake these tasks with mutual agreement and consensus, there is no fear of leak of unnecessary GMOs.” he explained.

Another researcher who requested to remain anonymous, and who commented on the issue said that the increasing role of the state may not provide the intended growth stimulus to the agricultural sector. Specifically, due emphasis should be given to building a dynamic private sector that could enable to promote fertilizer, seed, credit and market information system, he noted. According to him, greater flexibility in ways of providing inputs and services to smallholders can open up new market and technological opportunities in the agricultural sector. The extension system also requires deep reform in such a way that can tangibly change the knowledge and know-how of the farmers in the effort to boost productivity and production via using research outcomes.

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By Gabe Collins  -  August 23, 2013

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by Nadia Viswanath

Overview: illustrating the challenge in supporting producers and consumers through agricultural policies

A pressing challenge facing Ethiopia today is one that has long been a dilemma facing many African governments. This paper discusses the challenge of supporting smallholder farmers while ensuring benefits for consumers. Attaining a balance often involves a tradeoff when policy and economic decisions force a choice with no clear “pro-poor” solution – many of the rural farmers who produce staple crops are poor, yet many of the consumers who depend upon these crops are as well.

To illustrate the challenge facing Ethiopia, the example of tef export activities will be used. In January 2006, the government of Ethiopia banned the export of unprocessed tef grain. Tef is cereal crop that is indigenous to Ethiopia and has been produced in the Ethiopian highlands for thousands of years. Tef has high nutritional value and strongcultural significance. It is grown by6 million smallholder farmers, including both male and female-headed households, accounts for 15% of total calories consumed by Ethiopians, and is the dominant cereal grown in Ethiopia by area.[1]

The export banis a clear example of the difficult choices at hand. The ban enables the government to prioritize food security and domestic demand. However, this comes at a cost as the ban prevents Ethiopia from engaging in the growing global Tef market, which could boost GDP and benefit farmers. What does supporting smallholder farmers really mean? How does ensuring affordability for consumers affect the agriculture sector?

This paper aims to describe the tension in agricultural development solutions that aim to support both producers and consumers through the example of tef production in Ethiopia. It important to note, however, that this paper will not attempt to provide a clear policy recommendation but rather to illustrate the implications of both maintaining the tef export ban and lifting the tef export ban. As in many casesfor Ethiopia and Ethiopians, there is no clear correct answer. The author does not attempt to assert one. Rather, the Ethiopian policy that bans the export of tef grain represents a challenging question that promotes a continued debate amongst producers, consumers, and policymakers, as Ethiopia strives to successfully develop into a middle-income country.

History of Tef in Ethiopia and the 2006 ban on export of Tef

Tef is a hugely important crop to Ethiopia, both in terms of production and consumption.  In a country of over 80 million people, tef is the one crop that is most powerfully associated with Ethiopians. It is used to make the staple cereal product, called injera, an Ethiopian form of bread. Furthermore, approximately 6 million households grow tef and it is the dominant cereal crop in high-potential agricultural woredas[2]. In terms of production, tef is the dominant cereal by area planted and second only to maize in production and consumption.  However, it has been historically neglected compared to other staple grain crops, yields are relatively low, and some farmers under certain conditions sustain high losses which result in reduced quantity of grain available to consumers.

Agriculture is a major contributor to the national economy of Ethiopia, representing 41% of Ethiopia’s GDP.^[3] The tef value chain is of vital importance, as the grain sector comprises a large part of the agricultural sector. Specifically, tef is one of the most important cereal crops of Ethiopia and there are many reasons to focus agricultural development on the tef value chain, including opportunities to:

• Enhance the sustainability of the tef production process to increase the income of over 6 million smallholder farmers and so that the future potential of tef production in Ethiopia remains fruitful and intact.
• Improve the availability of tef grain and tef-related products so that Ethiopian consumers, both urban and rural dwellers, can benefit from additional consumption of a highly-nutritious, culturally significant grain.
• Create local economic multipliers resulting fromincreased tef-based employment that benefits the local economy through production and marketing activities.
• Develop and strengthen tef value-addition opportunities by making different products.Tefcan be used in innumerable food products and every product that is normally made from wheat can be made with tef.[4]

As Ethiopia’s population has increased so has the demand for tef. From 2007 to 2008, the price of tef soared, hitting above 1,000 USD per metric ton, which is four times more than the 2000-2008 average of 250 USD per metric ton.  In 2010, the tef price was still above 700 USD per metric ton, which created hardship for many Ethiopian families, who were forced to switch to other cereals as substitutes.^[5] Still, tef has remained the preferred staple cereal for Ethiopians, as evidenced by persistently high prices in recent years.

Annual tef production has been increasing year after year by about 11%. Increased productivity is believed to contribute about 6% of that 11% growth with 5% attributed to expansion in total area cultivated to Tef. During 2009-2010, it was estimated that 3.2 million tons of tef was produced on 2.6 million hectares of land.^[6] This is equivalent to 21% and 28% of the total cereal production and acreage in the country, respectively, making tef the leading crop among cereals and among other annual crops.

The composition of tef includes many chemical components that make it a highly nutritious cereal. In addition, since tef is a cereal, it is possible to use it to make products normally produced with other cereals such as wheat, for example, bread, pasta, pancakes, pizza and even some beverages. Given its composition, tef could play an important role as a “super food” in school feeding programs, as well as emergency food aid programs and a counteracting force to malnutrition in youth. Enhancing the industrialization of this crop will result in a more attractive and stable market for the producers and will incentivize the adoption of yield-enhancing investments.

Breaking down its nutritional content, tef has the highest amount of protein among the commonly consumed cereals in Ethiopia and its energy content is only surpassed by maize. In addition, tef has high levels of calcium, phosphorous, iron, copper, barium, and thiamin. It has a well-balanced amino acid composition, with lysine levels higher than wheat or barley and slightly lower than rice or oats.^[7]A major contributing factor totef’s nutritional value is the size of its grain: the grain is extremely small compared to the other components of the tef plant (the bran and endosperm). Thus, during milling, it is impossible to separate out the endosperm from the bran so the whole grain is milled into flour. This makes tef flour highly rich in fiber and nutrients, because the bran and germ are the most nutritious parts of the grain. Importantly, tef is also gluten-free so it is well-suited to addressing growing global gluten-free demand which is driven both by the existence of Coeliac disease as well as a general health-conscious trend. Moreover, tef flour can be artificially enriched with specific nutritional components at the time of milling the grain. This process could be used to create value-added products with even more nutritional content, such as enriched injera, cookies, bread or cakes.

Given the undeniable significance of tef in Ethiopian history, diet, and culture, it is unsurprising that tef has found its way into national policy. In January 2006, former Prime Minister MelesZenawi enacted a policy that banned the export of unprocessed tef grain. Interpretations of the motivations behind this ban vary, but consensus largely indicates that this move was intended to fight commodity price inflation that was taking place at an alarming rate in Ethiopia. Additionally, it was meant to focus tef production on addressing domestic food security to ensure that this highly nutritious, indispensable grain continued to serve domestic demand only.Arguably, this move was in favor of Ethiopia’s tef consumers, many of whom are poor and find tef increasingly unaffordable.

Despite the importance of these goals, the export ban has been less than successful at achieving them. Since 2006, tef prices continue to increase as domestic demand for tef outweighs production. In addition, domestic production of tef continues to be outmatched by supply. In fact, tef remains a luxury cereal and consumption is mostly an urban phenomenon. People in rural areas are unable to afford much tef and rely mostly on maize, sorghum, wheat and barley to make injera and other staple foods. The average urban Ethiopian derives 600 calories per day from tef (which comprises roughly 30% of total daily caloric intake), whereas for rural residents this figure is closer to 200 calories per day[8]. This disparity has nutritional consequences, since tef is the most nutritionally valuable grain in Ethiopia.

The struggle to support producers and consumers – why does it matter in Ethiopia today?

The tension between favoring producers and consumers in food policy is not a new one. African governments have struggled in the past to design policies that promote improved livelihoods and quality of life for their poorest citizens, but of course this is not an easy feat. In the case of West Africa, many food product boards designed initiatives targeted at stabilizing prices of commodities such as cotton and cocoa to increase access and affordability for urban consumers. However, this came at a steep price as these measures often decreased farmers’ income to provide this subsidy to its urban poor. Attempting to design policies and navigate agricultural development of a country that supports both producers and consumers is an ongoing struggle, and one that is particularly relevant for Ethiopia at this time.

Ethiopia is facing a number of changes. The Government of Ethiopia recently created and endorseda National Growth and Transformation Plan, whichis the blueprintintended to transform Ethiopia’s status from a low-income country to a middle-income country by 2025. Rapid industrialization and development is taking place across many sectors, particularly driven by international investment of states such as China and Korea.

In addition, for the first time in more than 20 years, Ethiopia finds itself with new leadership. Former Prime Minister MelesZenawi was a strong advocate for agricultural development and, in particular, stated food security for his country as one of his main goals, in the context of the country’s experience of major famines in the last 40 years. His government created an “acceleration unit” similar to those created Taiwan and South Korea. In 2010, a federal regulation was passed to establish the Ethiopian Agricultural Transformation Agency, dedicated to supporting the achievement of the Growth and Transformation Plan targets and sustainably improving the agriculture sector. In particular, an effort is currently underway, led by major stakeholders including the Ministry of Agriculture, the Ethiopian Agricultural Research Institute, and the Ethiopian Agricultural Transformation Agency, to create a National Tef Strategy aimed at doubling national tef productivity in five years through concerted efforts to disseminate new technologies that improve yield.

Should these efforts succeed, it is not clear how this increased tef productivity will be managed, and who the ultimate beneficiaries will be. Will Ethiopian consumers benefit, as tef is made affordable and more available, potentially even at a lower price than current market prices? Or will it be the Ethiopian smallholder farmers, who will experience a substantial increase in income as their sales volumes jump, supplying tef to more Ethiopians and potentially international  buyers? The new national leadership must determine the role and nature of Ethiopian agricultural activity and must specifically decide how Ethiopian agriculture will engage on the global trading floor.

The benefits of the Tef export ban

There are many strong benefits that support the maintenance of the 2006 ban. First, regardless of the specific motivations behind the initial policy enacted in 2006, the ban signals that domestic food security is the Government of Ethiopia’s key priority. It communicates to the country and to the world that Ethiopia is focusing its priorities on support its poor consumers, for whom affordability and availability of tef is almost a non-negotiable aspect of Ethiopian life. If the export ban was lifted, this could have undermine this assertion. Tef is already unaffordable for many Ethiopians and exportingcould have the potential result of raising prices further, making tef even more unaffordable at home.Given existing concerns of inflation and rising commodity prices, a policy shift could worsen conditions for Ethiopia’s lowest economic class if managed incorrectly.

Of further concern, enabling international export of tef grain could simply eliminate domestic supply if all tef production was used to supply international demand. Given the highly nutritious nature of tef, many experts believe that tef plays a vital role in promoting good nutrition for the average Ethiopian. The stable meal of injera and shirotwot (a stew made of chickpeas) has enough protein to meet daily requirements. In particular, the consumption of injera contributes to the prevention of many diseases and conditions that can result from an unbalanced diet, including anemia, obesity, osteoporosis, and diabetes.[9]Introducing exporting could contribute tomalnutrition, as Ethiopians would be forced to switch to cheaper substitutes such as sorghum, barley, or wheatas a staple cereal in their diet. Already, the continued price increase of tef has forced many Ethiopians, primarily its rural consumers and even tef smallholder farmers, to dilute injera with other cereals, such as sorghum.

Opening the doors to international trade would expose Ethiopia to additional risks. For example, land conflicts may ariseas tef-producing areas would become increasingly valuable particularly given limited tef land expansion opportunities. This predicament faces Bolivia today, as exports of its indigenous ‘superfood’ quinoa have soared and led to malnutrition in youth and violence over land ownership.[10]Finally, the ban limits Ethiopia’s exposure to international trade risks. This in turn limits the vulnerability of tef smallholder farmers who benefit strongly from a consistent, demand-driven tef market today. One of the new sources of agricultural finance risks is speculation, which may cause added price volatility, and end up hurting both smallholder tef farmers as well as Ethiopian tef consumers. There is also a risk of bio-piracy: by allowing the export of tef grain, Ethiopia is more vulnerable to foreign national or multi-national companies’ attempts to modify and patent its indigenous cereal.

On this point, theFridtjof Nansen Institute (FNI)created areport that investigated the disastrous effects of an 2005 agreement that provided access and benefit-sharing of tef genetic resources between two parties, Ethiopia and a Dutch company, HPFI. The agreement gave HPFI access to 12 Ethiopian tef varieties, which would be used for exploring tef-based food product development that could be marketed to the European and US food markets, given tef’s gluten-free and other highly nutritious properties. In return for access to these genetic resources, HPFI was to share both financial and other benefits with Ethiopia. FNI’s report describes the unsatisfactory outcomes for Ethiopia of this agreement. Specifically, Ethiopia only received 4,000 USD  financial return as HPFI went bankrupt, however other companies set up by the same owners were able to continue to exploit the benefits of Ethiopia’sgenetic resources without sharing further returns.[11]

The benefits of keeping an export ban in place to favor Ethiopian consumers and protect smallholder farmers in certain respects are significant. However, this policy decision comes at a large opportunity cost for Ethiopia as it continues to limit its involvement in the global cereal market. In particular, this ban seems to prioritize the plight of Ethiopian’s consumers over its smallholder farmers, who could stand to gain significantly from engagement in international trade.

The potential benefits of trading Tef internationally

Much like the agriculture sector of Ethiopia in general, the tef market is also changing; there is a growing global demand for tef and other countries are capitalizing on this through international trade of tef. Many countries around the world have begun to produce and export tef. The largest international sellers of tef include: South Africa, Cameroon, Canada, Netherlands, United Kingdom, India, USA, China and Uganda. While Ethiopia is the world’s largest producer of tef by volume, it cannot currently benefit from this trade by exporting its indigenous crop.

The ability to export tef could significantly impact smallholder famers’ incomes as well as spur Ethiopia’s agricultural development. In addition, involvement of international players in the tef market could serve to accelerate the development of what is now a relatively immature market, given its low volumes, fragmentation, and lack of significant value-addition and product development.

The tef export policy allows for international export of processed tef, largely in the form of tef flour or ready-to-eat injera. Presumably, this nuance in the policy is intended to drive value-addition of tef products in Ethiopia. However, while the export of fresh and dry injera is increasing, it remains limited. For example, in 2011, the export volume for fresh and dry tef for Ethiopia was 1,800 metric tons. This is 0.21% of the overall national tef market production (which is roughly 3.5 million tons) and represents only 56 million Ethiopian birr (which is roughly 3.1 million USD) of export revenue.[12]

By exploring opportunities to export tef grain, Ethiopia’s GDP stands to gain. Tef grain prices have increased annually by 12% from 2008 to 2012, driven by consumer preference for tef and population growth.[13] The benefits that tef market suppliers reap from this price trend are a strong indication of the great economic potential of international tef trade. If traded internationally, global demand for tef will raise prices further and incentivize production volume increases, which will directly drive economic growth. Exporting tef grain would therefore increase export earnings, increase GDP, and help achieve the goals of Ethiopia’s Growth and Transformation Plan.

The rapid development anticipated by opening the market to export would also benefit smallholder farmers. Farmers’ income could be significantly increased, as demonstrated by current tef market prices, for example, tef is currently traded in Ethiopia at about 800-1,000 USD per metric ton, compared with a price range of 2,300-2,600 USD per metric ton in the U.S.A. Thus exporting would directly increasing the income of farmers as well as benefitting the national tef market.

The current tef market is extremely underdeveloped, due largely to fragmentation and price variability. Firstly, the market lacks large-scale processing or purchasing to capture economies of scale. For example, Mama Fresh Injera, one of few large-scale buyers, purchased only ~0.12% of the market in 2012. Secondly, price volatility, caused by seasonal variation and a lack of standardization, negatively impacts farmer liquidity and consumer consumption patterns. Introducing international demand would drive efficiency through commoditization of tef.

Finally, this commoditization would be attained through the creation of large-scale activities that would be necessary to support exporting, such as processing, storage, and the addition of tef to the Ethiopian Commodity Exchange. These changes would increase farmer profitability by lowering high production costs and would also indirectly benefit Ethiopian consumers through long-term price stabilization (though equilibrium price is likely to be slightly higher than today). Rationalizing the tef industry would generate large wins for smallholder farmers – and the market overall – through lower production costs and increased revenues from domestic sale and international export.

If Ethiopia were to overturn this ban and allow tef grain to be exported, it is possible thatfarmers would benefit from higher international prices, there would be improved domestic availability of tef at affordable prices, and the Government of Ethiopia would receive export earnings. Regardless of the specific outcomes, lifting the ban would alleviate the opportunity cost incurred daily as Ethiopia limits its involvement in international tef trade, particularly as other countries (e.g., India, United States) produce and export Ethiopia’s indigenous crop. Enabling tef grain export with smart controls could help Ethiopia to attain its vision of preventing future famine. The question facing Ethiopia’s political leadership today is whether or not the potential benefits of such a decision outweigh the dramatic potential risks and setbacks of a policy that keeps tef affordable and available at home.

Deciding the direction of its agricultural development

As stated above, this paper does not attempt to design a policy recommendation either for or against the existing tef export ban. It is a situation fraught with complications and rooted in deep historical significance. This is a clear example of the all-too-common tension that African governments face between serving their poor consumers and supporting their producers, many of whom are also poor smallholder farmers. Ultimately, the case of tef export will be one of many tests facing Ethiopia’s new leadership. In order to drive agricultural growth in Ethiopia, its leadership must decide how it will proceedswith regard to engaging the international agricultural sector. This decision will prove significant for the future of a rapidly developing, internationally appealing country such as Ethiopia. It will signal the manner in which national leadership intends to deal with other economic and political decisions regarding agricultural development, and will have significantly impact Ethiopia’s mission to achieve its National Growth and Transformation Plan targets.

References

Andersen, R. & Winge, T. (2012). “How Ethiopia Lost Control of its Teff Genetic Resources,” Fridtjof Nansen Institute. Accessed December 30, 2012, http://www.fni.no/news/121112.html.\

Bekabil F., Befikadu B., Rupert S. & Tareke B. (2011). Strengthening Tef Value Chain: In: Tef Improvement: Achievements and Prospects. Proceedings of Second International Workshop.November 7-9, 2011. Dreamland Hotel and Resort, Debre-Zeit, Ethiopia.

Bultosa, G., Hall, A. N., &Taylor, J. R. N. (2002).” Physico-chemical Characterization of Grain Tef [Eragrostis tef (Zucc.) Trotter] Starch” In:Starch/Stärke 54.

CIA (2012). CIA World Factbook: Ethiopia.Accessed: November 14 2012: https://www.cia.gov/library/publications/ the-world-factbook/geos/et.html.

Central Statistics Agency, Federal Democratic Republic of Ethiopia, various years. Statistical Abstracts and Statistical Bulletins. Addis Ababa, Ethiopia.

Dijkstra,  A.(2008). TEFF “Survey on the nutritional and health aspects of teff (Eragrostis Tef)”. Hogeschool van Hall-Larenstein:The Netherlands.

Ethiopian Grade Trade Enterprise (EGTE). Various years. (website). Addis Ababa, Ethiopia.

Friedman-Rudovsky, N. (2011). “Quinoa’s Global Success Creates Quandary at Home,” New York Times,Accessed: December 28, 2012, http://www.nytimes.com/2011/03/20/world/americas/20bolivia.html?_r=0.\

Stallknecht (1997). In Dijkstra,  A. (2008). TEFF “Survey on the nutritional and health aspects of teff (Eragrostis Tef)”. Hogeschool van Hall-Larenstein.The Netherlands.

Sourced here:  http://africa.harvard.edu/apj/the-hierarchy-of-poor-the-tension-between-favoring-smallholder-farmers-or-domestic-consumers-in-ethiopian-agricultural-development/

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Carnallite: A Dual Market Opportunity

By Vivien Diniz² – Exclusive to Potash Investing News

In July, Potash Investing News took a look at the four primary types of potash⁵: sylvinite, polyhalite, langbenite and carnallite. In our exploration of these varieties of fertilizer nutrients, it was noted that when compared to sylvinite, carnallite was a less desirable variety of potash.

With both minerals able to meet the needs of the exact same market with production of KCl, or the standard variety of potash, the question remains: What’s wrong with carnallite?

The sylvinite process

In North America, the most common form of potassium-bearing salts is sylvinite, which is mined in abundance by Potash Corp of Saskatchewan (TSX:POT⁷) and Mosaic (NYSE:MOS⁸).

For sylvinite deposits, the most common method of potash mining is used: conventional mining⁹. In conventional mining, the potash is dug out and brought to the surface via one of two shafts. From there the ore is crushed, ground and deslimed before it is taken through flotation, sometimes this process is supplemented by heavy media separation. From here the concentrate is brought through centrifuges, separating the potash from the brine. It is then dried, and moved on to the final stages of compaction and crystallization before it is ready to be shipped off.

Conventional potash mining processes, as you can see, are not simple but are well understood and can process a an ore like sylvinite, which is made up of only two salts: potassium chloride (KCl) and sodium chloride (NaCl). When it comes to carnallite, however, the magnesium is treated like a contaminant because conventional potash mining just isn’t rigged to process magnesium.

Another reason conventional potash miners avoid areas carnallite is because of the mineral’s innate deliquescent–highly soluble – properties. As a result, carnallite dissolves faster than sylvinite, which renders conventional mining unstable.

The carnallite process

But what if a company is interested in exploiting carnallite’s three mineral components? In today’s tumultuous potash market, carnallite presents companies with a dual market opportunity. Providing access to a revenue stream completely detached from the agriculture industry.

Given that conventional mining is no good for carnallite, companies need to look at different potash mining methods to exploit deposits. Solution mining a good option when looking to mine a carnallite deposit. With this technology, holes are drilled into the ore body to serve as injection and extraction pipes where heated water – which in Saskatchewan can come from aquifers– is pumped into the ore body and dissolving the carnallite, and brine (dissolved mineral salts in water) is pumped out. Once it reaches the surface, the brine is sent through and evaporation phase where water and MgCl is removed and the KCl and NaCl are supersaturated.

Because salts go in and out of solution at different temperatures, the KCl and NaCl are placed in crystallizers where they are subjected to varying temperatures to separate the salts. From there, they are processed – much like in conventional mining –into their final products.

As for magnesium, because it is the last mineral to leave water, it was removed early in the process and treated separate it.

Advantages of mining carnallite

One of the ways in which carnallite is advantageous to sylvinite is that it responds well to 3D seismic modeling. While it can be argued that 3D seismic modeling does not come cheap, the magnesium makes the deposit easy to identify, resulting in fewer drill holes and cost savings down the road.

Furthermore, underground water formations, like those found in Saskatchewan, can provide companies with a greener way of meeting their water requirements.

Another important advantage of solution mining is that it is extremely low impact on the environment. Though caverns are created when the mineral salts are dissolved, any unnecessary portions of the salts are returned to their original locations, reducing the impact on surrounding lands.

When it comes to marketing the extracted minerals magnesium chloride is one of the most commercially important magnesium compounds. This product can be used anywhere from raw materials for steel refractories, to dust control on roads and even in some medicinal applications.  Furthermore, while potash will always remain one of the tried and true fertilizer ingredients, magnesium has expansion potential with new applications being researched.

The bottom line

With the argument of which is better, carnallite or sylvinite, the answer comes down to what you are looking for. If you are targeting a pure potash market with exposure to other markets, then sylvinite it is. But if you are looking for exposure to more than just the potash markets, carnallite can open that door.

Sourced here:  http://potashinvestingnews.com/9237-carnallite-a-dual-market-opportunity.html

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Summary

Editor’s Note: This is a four-part series on the development of transport infrastructure in East Africa as the region looks to expand its economy and increase international trade as it becomes a seemingly attractive destination for low-end manufacturing. Part 3 examines Ethiopia‘s plans to update and expand its rail and road networks to provide better access to ports and to other countries. Read more in Part 1 and Part 2.

While Ethiopia is a relatively large economy in East Africa, it is not as connected to the rest of the region as Kenya, Tanzania, Uganda and other countries in the Great Lakes region are. The country’s surface transport infrastructure is focused on sustaining internal economic activity, and even this has been limited as economic development has been concentrated in the center of the country. However, attempts are underway to better connect Ethiopia to other East African markets and to global export markets. Geography has led landlocked Ethiopia to focus primarily on infrastructure connecting it to seaports for imports and exports, however, potential investment in mining and in the development of a manufacturing sector within Ethiopia makes more efficient and cheaper internal transport options a high priority.

 

Analysis

Image: Existing and Proposed Transport Arteries of East Africa

 

Many projects are in the works to upgrade Ethiopia’s rail and road networks. Until recently, the country’s railway network was particularly limited and outdated. A single meter gauge railway connected the capital of Addis Ababa to a seaport in neighboring Djibouti. This railroad, built by French colonists, became operational in 1901 and has remained the only railway in Ethiopia. It is now being replaced with a standard gauge railway. Not only will the new railroad increase the attainable speeds on the route, but the use of heavier steel tracks will also allow heavier loads to be moved.

This single route is a notable artery for Ethiopia’s economy, since the country has not had its own coastline since Eritrean independence in 1993 and depends on Djibouti for all international trade. The completion of the new rail line connecting Addis Ababa to Djibouti will be a large step forward in Ethiopia’s attempts to become an attractive destination for foreign investment

Image: Surface Transport Infrastructure in Ethiopia

 

Expanding Ethiopia’s Rail System

Ethiopia is also planning the construction of many other railroads that will branch out into the separate corners of the country. This will allow industrial projects and investment to target the vast territory of Ethiopia outside of Addis Ababa. Ethiopia itself is unable to deliver the necessary financing for these large infrastructure projects. Most of the necessary investments have been offered by the BRICS countries – Brazil, Russia, India, China and South Africa. Contracts for construction and the delivery of construction material have also gone predominantly to the BRICS.

China in particular has been willing to provide funds for this major infrastructure overhaul and has been very actively pushing for the construction of the new Addis Ababa-Djibouti line. Chinese companies have a stake in the Ethiopian connection to Djibouti due to their partial ownership of the Djibouti port, as well as their involvement in the development of several other ports in Djibouti. Other BRICS countries are equally interested in helping Ethiopia expand its transport infrastructure due to the country’s potential as a manufacturing base. The need for cheap and efficient transport is one of the main constraints for Ethiopia to overcome to develop into a major destination for foreign investment in manufacturing.

As part of this infrastructure development, Ethiopia is putting down more than 2,000 kilometers (about 1,240 miles) of standard gauge track, 680 kilometers of which make up the Addis Ababa-Djibouti connection, and expects to complete this project by 2015. The $5.9 billion price tag, provided by loans from BRICS countries, includes the Addis Ababa-Djibouti connection as well as railroads to different corners of Ethiopia and two stretches of railroad intended to link up with the transport networks in other East African countries. Companies from Brazil have shown particular interest in the construction of a railroad running to South Sudan, while Russia has considered funding a rail line connecting to the proposed Lamu corridor that would be developed in Kenya.

The connections to South Sudan and Kenya would give Ethiopia separate advantages, although these are not as dominant in Ethiopia’s infrastructure development as the country’s access to global markets and the attraction of foreign investment in manufacturing. A connection to South Sudan could allow Ethiopia to function as a transit country for goods moving to and from South Sudan, and plans for an oil pipeline running from South Sudan through Ethiopia and into Djibouti have also been discussed. However, the possible development of the Lamu corridor as South Sudan’s main connection to the Indian Ocean could disrupt these plans. South Sudan has put forth many proposals to establish reliable transportation infrastructure that reduces its dependence on Sudan’s infrastructure. None have materialized, however, despite South Sudan’s and Kenya’s best efforts to raise funding for alternative pipelines, roads and rail. Juba has considered several different plans and has asked many outside parties for funding but has not raised any funds, so its pronouncements of new infrastructure routes lack credibility.

Ethiopia is also working toward its own direct connection to the Lamu corridor, through the construction of a railway and upgrading existing roads. This connection is unlikely to replace the Addis Ababa-Djibouti artery as Ethiopia’s main access to seaports, especially after the construction of the new railroad along that route. A direct connection to Kenya would more likely focus on regional trade, while also opening up a secondary access route to projects in southern Ethiopia.

Potential oil production in the country could benefit from a connection to the Lamu corridor. This connection would provide easier access by surface routes for the provisioning of the oil projects and the possibility of exporting oil through the Lamu pipeline if and when it is completed.

Ethiopia’s Planned Road Improvements

Ethiopia is also working toward the establishment of a reliable road network throughout the country. Many of the main roads in Ethiopia are still made of gravel, and China and India in particular have been showing support for the development of a network of asphalted roads and highways. More than 20,700 kilometers of road are to be upgraded at a cost of more than $1.5 billion during the current budget year. Last year, Ethiopia constructed and upgraded more than 19,500 kilometers of road. In total, the road construction efforts are meant to increase the road coverage of Ethiopia from the current 80,000 kilometers to 136,044 kilometers in 2015. The country has already improved its road coverage substantially, as it had a road network of only 48,793 kilometers in 2010.

Ethiopia may not be as interconnected with the rest of East Africa as other countries, but due to its own constraints and interests it has focused heavily on expanding its surface transport infrastructure. The country’s economic prospects have also helped it to secure funding from the BRICS countries, without which Ethiopia would not be able to afford such extensive developments. This coordinated foreign support, covering both the funding and construction aspects of the projects, has also boosted the efficiency by which Ethiopia is expanding its rail and road networks, making the 2015 completion deadline plausible.

Original article here:  http://us4.campaign-archive1.com/?u=74786417f9554984d314d06bd&id=d92048f33d&e=c5ec9c8427

 

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Capital Ethiopia Interviews Christian Yoka, Regional Director of the  AFD

November 12, 2013

The French Development Agency known as the Agence Française de  Developement (AFD) is involved in various sectors in Africa. It has  been operating in Ethiopia for almost 20 years and has financed projects  ranging from education to health, agriculture and energy. Capital’s Eskedar Kifle sat down with Christian Yoka, Regional Director of the  AFD to talk about the Agency’s past, ongoing and future projects. 

Excerpts:

Capital: Please tell us about your agency, the French Development Agency, its role, its mission? 

Christian Yoka: AFD is a financial institution. It is the main implementing body for  the French official development assistance policy towards developing  countries. It provides funding as well as technical assistance to  countries, and it can be for the government or it could be for private  enterprises, it can also be NGOs or even the banking sector. Our  main mission is to really help countries to develop themselves. For that  we have a wide range of financial tools; it could be a grant, it could  be loans or it could be direct investment. We are acting in different  sectors: education, health, infrastructure, energy and also agriculture  among others. We also work to help develop the private sector, and we  are involved in water and sanitation programs. In 2012, AFD’s total  disbursed loans were 7 billion Euros, of which 2 billion was just for  Africa, where our main focus is.

Capital: You are involved in different sectors, but what kind of projects do you tend to focus on, especially in Ethiopia?

Yoka: In Ethiopia, we have been active here since 1993, so we are not  completely new. The projects we finance are projects that are in line  with the Government’s priority. The Growth and Transformation Plan  focuses a lot on infrastructure, especially energy. So, energy is one of  our main activities in Ethiopia. For instance, we have financed a major  project in Ashegoda in the north part of the country near Mekele, a  wind farm that can produce 120 Mega Watts. It was financed with 45  million Euros. We also are currently working with Ethiopian Electric  and Power Corporation (EEPCo) to improve the transmission lines of the  company; mainly the line between Akaki and Mojo, which is a very  critical corridor for the country. We are also in the process of  finalizing a 50 million Euro loan to upgrade the complete network of  EEPCo. Last but not least, as you know the Government is really  focused on having a mix of sources of energy. With that regard, we are  currently working (with the government) to finance a geothermal project  in Tendaho with an overall finance of 21 million Euros. Energy is a key  sector for us as it is in line with the Government’s priority. Besides  this, we have also a strong partnership with Ethiopian Airlines. As you  know, the Government wants to increase the level of exports and  Ethiopian Airlines plays a key role in this. So we financed ET for two  loans with a total amount of 80 million Euros. One is to help Ethiopian  Airlines to increase its cargo capacity. Currently, I think it has a  180,000 metric ton capacity, the project is to help increase that number  to 600,000 metric ton capacity, which is really important because it  will have a direct impact on the export capacity of the country, in  terms of fruits and vegetables, meat, flowers etc… The other loan to  ET is to finance their training center. Now ET has one of the most well  performing training centers. There are many African companies that are  sending their pilots to be trained here in Ethiopia. The training center  is almost done. We have a close relationship with the Addis Ababa  City Administration. We are working on a project with the City involving  the construction of new abattoir. The existing one is quite old. We are  working to help improve the old abattoir in terms of up to date  technology as well as working to finance the construction of new  abattoirs. This will be done with a 40 million Euros loan. We are also  working in the transport sector with the City with the finance of 40  million Euros. The studies are ongoing and we hope to finance this  project by the end of 2014 or beginning of 2015. The other sector we  are strongly involved in is water. We are currently in the process of  financing the extension of the Legedadi water reservoir; we are  co-financing it with the World Bank. We also work on increasing the  water network of small towns. These are the sectors and the projects we are involved in. We do this with the object of transferring technologies and know how.

Capital: You mentioned some projects you are involved in with EEPCO, can you tell us more about that?

Yoka: As I was saying, the transmission line of electricity is really  critical for a country. A lot is being done to produce more electricity,  but at the same time we need to be able to deliver that electricity to  the public. With this regard, we need to invest more in transmission  lines. It is a loan agreement that will be signed with the government  and it will be passed to EEPCo. We hope to finish the process by the end  of 2014.

Capital: What would you say are the challenges you face while operating in Ethiopia? Yoka: The major challenges we have been facing is to have a proper financial  tool. Until 2012, we were unable to give loans to the Government; we had  to use other financial tools like grants. That was a major constraint  for us while working in Ethiopia. Our actions were limited because of  that, but it has all changed now. Capital: What are the biggest projects you are involved with in other Africa countries?

Yoka: We have been involved in so many projects in Africa. Like I said we  have committed two billion Euros to Africa.  We are financing major  projects in Africa including in similar sectors as we are working on in  Ethiopia. For instance, the Bujagan project in Kenya. We also finance  social housing in South Africa. There are many more…

Capital: You  stated that you tend to finance projects that are in line with the  government’s development priorities. Is that how you operate or does AFD  have its own interests as well?

Yoka: I can’t really say we have  our own priority. Of course we have a competitive advantage when it  comes to some sectors; there are sectors where we think we are  particularly strong, one of these is the energy sector. Basically what  we are trying to do, and this is important for a donor, is that not to  come to a country with our own priority.  The most important thing is to  focus on what the country needs. We have to look at the country’s  priorities and inside these priorities, there are different sectors. We  try to identify where we can work within those sectors. We try to focus  on projects that will have a major impact.

Capital: Maybe like you  stated, you do not have priorities of your own. But, do you think there  are sectors that have not been prioritized but should have been?

Yoka: That  could be possible but as far as we are concerned, I have to say that so  far, all the sectors we are involved in are those that are and should  be prioritized. But to answer your question, for instance here in  Ethiopia, the Government says that growth will come through public  investment, so you have major public investments. We work with the  private sector a lot in many countries, but it is not something we do a  lot here because it is not really a priority, if you look at the way  things are done. The private sector is booming here and I am sure we  will work in that area, and we are actually trying.

Sourced here:   http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=3745:in-line-with-ethiopias-priorities&catid=37:interview&Itemid=61

AFD at work in Ethiopia:  http://www.afd.fr/lang/en/home/pays/afrique/geo-afr/ethiopie/afd-ethiopie

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Conducting research and releasing improved seed varieties has a paramount contribution toward ensuring food self-sufficiency. It also enables to produce market competitive agricultural products which thereby increase nutrition quality and speed up the nation’s all rounded development. In relation to this, the Ethiopian Institute of Agriculture Research (EIAR) shoulders a huge responsibly.

What is more, food security, economic development and conservation of natural resources among others would be ensured with the support of EIAR’s multifaceted innovative research.

The Five Year National Growth and Transformation Plan that targets to double agricultural productivity and boost economic growth will highly benefit from the Institute’s research outputs. Moreover, the country’s current economic growth which is being witnessed by different international institutions and economists would be ensured through concreted research and study efforts.

Accordingly, the Pawe Agricultural Research Centre, under the EIAR, is discharging its responsibility by conducting researches on 220 crop varieties, soil and water as well as animal species in this fiscal year. It released 17 crop varieties, two types of bio fertilizer and two animal fodder species over the last five years.

As Metekel Zone environment is known to have conducive agro-climate for soybean cultivation, it has paramount importance in ensuring smallholder farmers’ food self-sufficiency. Currently 100 investors are engaged in commercial crop production including soybean in Guba Woreda alone.

In a recent field visit organized by the Centre aimed at expanding best practices, displaying farmers soybean production achievements and sharing experiences, among others, Centre Director Adane Melak said that the undertaking researches in the areas of crop, animal, soil and water, forestry. All research and study processes are targeted to releasing improved and new varieties which can be accessible to farmers, investors and other research centres. The Centre gives due attention to researches on crops specially, on warm climate cereals and oil seeds among others. Consequently, the centre has achieved commendable outcomes specially on soybean, haricot-bean, sorghum, millet and maize.

The Centre has also carried out researches on soil, water and released two varieties of bio-fertilizers to increase and sustain agricultural productivity of the soil. These bio-fertilizers have increased soybean production.

The animal research department released poultry technologies and introduced them to farmers. Besides, as there are a large number of animal resources in the zone, the Centre has been undertaking research on animal and animal related diseases. The Centre has also conduct researches on warm climate bamboo. As Pawe has been a national Centre to soybean research since 2011, it has carried out various advanced researches to boost soybean yield. Since its establishment, the Pawe Research Centre has carried out commendable research activities, helped the expansion of agricultural technologies, and provided professional support to farmers and investors. So far the Centre released six soybean species to beneficiaries.

Soybean is categorized as warm climate cereal. It can grow well in long-rain and warm climate states of the country. The most part of Benshangul-Gumuz, Gambella, Oromia, some parts of Tigray as well as the SNNPS have conducive environment for soybean cultivation. “Our research Centre is situated in an area suitable for soybean research and production,” Adane said.

According to the 2012 survey, nationwide about 28,000 hectares of land was covered with soybean, of which, about 26,000 hectares was in Benshanugl-Gumuz.

According to Adane, currently local and foreign companies are engaged in the cultivation of commercial crops including soybean in Metekel Zone.

Although soybean cultivation has a long history in the country, lack of agricultural technology, information, market access and awareness about its benefit were major hindrances limiting large scale production in the country. Adane further said in areas which have sufficient rain and conducive agro-climate for soybean cultivation, the research released two late mature species that can yield 28-30 quintals per hectare. Nowadays, the Centre is engaged in facilitating market chains, providing information and raising farmers awareness about the benefits of soybean at household level, he added.

Moreover, in its effort to expanding and familiarizing technology, it has enabled 4,486 farmers become beneficiaries of agricultural technology in seven woredas of the zone.

Centre soybean researcher Tadesse Gidey also said that the Centre is working to promote the benefits of soybean among farmers and investors. Apart from its nutritional value, soybean is also used as animal fodder and to maintain soil fertility.

Soybean research has been underway in Ethiopia since 1950s, E.C. Previously, it was conducted in Hawassa, however, due to favourability for soybean cultivation Metekel Zone has now become centre for soybean research.

Adane indicated that most Ethiopians are not well accustomed to food prepared from soybean as a result it is not common to see soybean in their daily meal.

Soybean does not only make people healthy, but also is used as animal fodder, and keeps soil fertility among others. Soybean contains 20 per cent fat, 40 per cent protein and 29 per cent carbohydrate. But, when we compare it with egg and meat in terms of its protein content, it is higher by twofold. Its cheapness, disease preventative nature, unmatched nutritional value makes soybean the most preferable food item, particularly for children. “Our society can get protein from soybean, which can also be a replacement of animal protein

Tizazu Degu, Pawe Agricultural Research Centre and National Soybean Research Coordinator said that although soybean has been cultivated in Ethiopia since 1950′s the country has been importing it from abroad. United States, Brazil and Argentina are the well-known soybean producers globally.

So far, the Centre has released species that can yield up to 26 quintals per hectare in research centres. But on farmers’ field, the yield is still between 18 and 19 quintals per hectare on average at national level. Thus, to fill the gap the centre has continued its research on pest management, disease control and other related activities.

The centre mainly conducts research and works on introduction of foreign origin species to farmers. So far, about 18 soybean species have been released at the national level.

Girma Arengo, Medin kebele Farmer at Pawe said he started cultivating soybean three years ago. “The researchers helped me how to harvest and use bio-fertilizer properly and get good yield. They have taught me that bio fertilizer renews the soil and increases farm productivity. Soybean cultivation has benefited me more than any other crops. However, lack of market access has limited me from profiting more.”

Sourced here:   http://www.ethpress.gov.et/herald/index.php/herald/development/4782-pawe-soybean-research-glimmering-new-hope-for-ensuring-food-security

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The United States Government, through the United States Agency for International Development (USAID), signed a partnership agreement on November 13 to improve urban emergency preparedness and response in Addis Ababa.

14 November 2013

USAID will provide technical assistance to the city government of Addis Ababa that will make a significant difference in minimizing the effects of a disaster, including saving lives, protecting property, and helping the city recover more quickly from a disaster.

USAID and the Government of Ethiopia are expanding their partnership to include a focus on urban disasters in Addis Ababa through the city’s Fire and Emergency Prevention and Rescue Authority (FEPRA).  The partnership will include training on the U.S. National Incident Management System (NIMS) for managers and first responders to increase capacity for preparedness and response for urban disasters including firefighting, urban search and rescue and earthquake scenarios.

NIMS, a framework for disaster response and preparation currently used in the United States, makes it easier for governmental and private sector agencies to work together to prevent, respond to, recover from, and mitigate the effects of disasters.  Through this agreement, USAID will help the city government of Addis Ababa to develop city-wide emergency operation plans, establish disaster management teams, develop standard operating procedures for effective resource management, and develop a more integrated communication system for city-wide emergency preparedness and response.

“We are extremely happy to see this expansion of our cooperation with the Ethiopian Government in disaster management,” said USAID Ethiopia Mission Director Dennis Weller.  “We believe that FEPRA will be a strong and capable partner in improving disaster preparedness and response, benefiting all residents of the City of Addis Ababa.”

NIMS uses the Incident Command System which is globally recognized as a best practice for emergency response, providing organizational structure and processes at the field level to help regional and local governments more rapidly and effectively respond to disasters.  The Incident Command System functions in disasters of any type or size, allowing personnel from a variety of agencies to fit rapidly into a common management structure.

Since 2008, USAID has supported a technical assistance partnership with the Government of Ethiopia to improve disaster response and preparedness capacity.  The U.S. Forest Service has been implementing the partnership in collaboration with Ethiopia’s Disaster Risk Management and Food Security Sector Early Warning and Response Directorate and this agreement expands the partnership to the City of Addis Ababa.

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Covering 6.5 million square kilometers of land in 55 countries in Sub-Saharan-Africa and Asia, the semi-arid or dryland tropics is inhabited by over two billion people, out of which some 644 million are the poorest of the poor. These regions are most vulnerable to climate change with very little rainfall, degraded soil and poor social infrastructure. The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) is an international agricultural research centre serving the dry tropics, together with its partners.

ICRISAT conducts agricultural research for development in Asia and Sub-Saharan Africa with a wide array of partners throughout the world and is one of the 15 centres of the Consultative Group on International Agricultural Research, (CGIAR) with a mandate to improve the livelihoods of poor farmers operating under difficult semi-arid environments. CGIAR’s science is carried out by the 15 research centers who are members of the CGIAR Consortium, a global agriculture research partnership for a food secure future, in collaboration with hundreds of partner organizations. ICRISAT conducts research on protecting the environment, empowers poor people to overcome poverty, hunger and a degraded environment through better agriculture.

Dry land agriculture has long been viewed with pessimism and hopelessness. Tropical dry land areas are usually seen as resource-poor and perennially beset by shocks such as drought, trapping dry land communities in poverty and hunger and dependent on external aid. The institute aims to challenges this pessimistic view saying that. Dry land farmers are ingenious and resourceful. By applying scientific innovations backed up with adequate policy, marketing and other support services, they are able to increase their crop productivity and incomes by several-fold, while improving the resilience of their lands and livelihoods. Hence, prosperity can be brought about in the tropical dry lands.

ICRISAT, headquartered in Andhra Pradesh, India, has two regional hubs and four country offices in sub-Saharan Africa. Recently, it opened its country office of Ethiopia inside the compound of International Livestock Research Institute (ILRI).

With over 116,000 km2 of dry sub-humid and semi arid areas, and with 27 million farmers in Semi Arid Tropical areas, Ethiopia is one of the priority countries for the institute.

Dr. K.P.C Rao, Principal Scientist in the area of soil science and who is recently appointed as Country Representative to establish ICRISAT’s office in Ethiopia told The Ethiopian Herald the institute has been working with collaborators here in Ethiopia for several years on many aspects which include some of the mandate crops that ICRISAT is dealing with like chickpea, sorghum and millet; and also on the management of natural resources in the agro-environments which are classified as semi-arid tropics.

“These are dry eco-regions where farming is constrained by lack of enough moisture in the soil and very short growing period. ICRISAT is focusing on some of these harsh environments to improve the sustainability of the farming systems and the livelihoods of the people,” he said.

“So, the past works has given us very good results in Ethiopia. For example, chickpea has improved a lot,” he said adding, “chickpea is one of our mandated crops and its production has almost doubled over the last ten year period.” It is growing and the area under this crop is also growing. But the production of these improved varieties of this crop is still low. Only 25 per cent of the total area under chickpea is covered by the improved varieties.”

According to Dr K.P.C Rao, the situation with sorghum is also similar. “We have very good sorghum varieties. We have been working with the EIAR (Ethiopian Institute of Agricultural Research). We developed some varieties and the EAIR also developed other varieties which are also using ICRISAT’s plasma.” However, he said the uptake and utilization of these varieties by farmers is low. “So, we want to improve the eruption of these things to scale up these technologies so that most farmers will get benefit out of it. We will not be able to do this if we are not here and that is why our management has decided to open an office in Ethiopia,” he added.

Nearly 50 per cent of the country is semi-arid. Sorghum is the third most important food crop in the country. The research crops that ICRISAT is dealing with are imported cash crops for the farmers in semi arid tropics. So the research organization wanted to move close to the action and work more closely to the partners it is working with so that it can scale up those technologies and benefit more farmers across the country, he said.

The country representative also noted that the country office would start its activities with four scientists, one of them are taking care of the sorghum and millet and the other the cereal breeding, while the other two will be working on the seed breeding the natural resource management respectively. “So, these people will be working together to scale up the technologies like the chickpeas, sorghum varieties and the integrated water shed development activities that we are undertaking in India and also here. Hence these technologies will be scaled up so that more farmers in Ethiopia will be benefited.”

According to him, in addition to the researchers, the institute is planning to recruit nine support stuff before the end of the year. For the time being, the office is planning to strengthen itself by bringing in more scientists as the programme develops in the future. “And also we want to involve a lot of MSc and PhD students to do their research on some of these crops and procedures. So, we will provide them with a platform to do their research,” Dr K.P.C Rao said.

Regarding the institute’s collaboration with the Ministry of Agriculture, he said, “the Ministry is one of the key partners for us and we are closely working with its research wing EIAR. He said all the chickpea breeding is done together with the Debrezeit Research Station staff ; and the sorghum and millet breeding were done in Melekasa research station. “We also have breeding programmes in other parts of the country, and we are working very closely with them. Our focus will be to address the constraints the Ministry of Agriculture is facing in scaling up some of these technologies.”

Dr. Fantahun Mengistu, Director General of EIAR on the occasion said that the significant proportion of the land of the country falls in semi-arid and arid areas. About 60 to 65 per cent of Ethiopia’s cultivable land falls within the semi arid, semi-humid lowland areas. These areas have great potential for agricultural production but are also affected by unreliable rainfall that makes the country still vulnerable to production shortfalls due to droughts and climate shocks especially in these areas. The major part of our economy is still dependent on rainfall” he said.

He also noted that the GTP gives great emphasis to science, technology and research findings as major inputs for the country’s agriculture. The strategy of the research system as stated in the GTP is to adopt improved agricultural technologies, test it and immediately transfer it to farmers to use it as an input in their agricultural production. “The research centres do not only conduct research for the sake of research but research for development. This is very much in line with our development and research strategies and ICRISAT could help a lot in this regard,” he said.

“We have been working with ICRISAT and other research centres for a long time now. The achievement we registered especially in crop agriculture, livestock and others as well as water has had strong inputs from the centers.” Dr. Fantahun said adding, “now ICRISAT has come closer to us means it would give us greater opportunity for collaboration and working towards achieving both our national goals and the research centers and ICRISAT”s regional and international goals. Cereal research centres have contributed in various technologies that betters our development but there are still a lot of opportunities to work together and hand out valuable technologies that increase productivity and change the face of Ethiopian agriculture and African agriculture in general.”

This partnership does not only provide opportunities for Ethiopians and other researchers in the region in terms of capacity building and research, but also gives a new vista for scientists in the research centers and ICRISAT system as much of the country’s landscape, agriculture and natural resources have not yet been researched well, the Director General underlined. There are many untouched areas where scientists can make use of their knowledge and generate technologies that contribute and add to science and knowledge. It also gives a good opportunity to international scientists that would come through the research centers and ICRISAT to contribute to science through their research findings, he added.

He also underlined that agriculture is growing fast in the country and food production and security are also improving. “Of course, drought is still there and food insecurity is still prevalent but we controlled the occurrence of famine,” he said.

Dr. William Dar, ICRISAT Director General on his part said that the institute has 40 years of partnership with EIAR and its presence in Addis will enable to work research on crops of Semi-Arid areas not only in Ethiopia but also in the Horn of Africa.The research engagement of the institute will be critical in the Horn of Africa and Ethiopia in particular as a result of the country office he said.

Besides the institute will support the country’s goal of achieving food security, reducing poverty and protecting the environment through research as agriculture is a major sector to get the country out of poverty.

He also noted that there are 11 research centres inside ILRI together working with the Ministry of Agriculture and EIAR and this is a big and new way of doing things. “ Because Ethiopia has the vision also to help the region, the horn of Africa, the prosperity that will come as a result of the inputs of science and technology will also bear the economic development of other countries in the region. “And ICRISAT would like to commit itself to the vision of the government of Ethiopia.”

Sourced here:  http://www.ethpress.gov.et/herald/index.php/herald/development/4831-revitalizing-agriculture-in-semi-arid-areas-role-of-research

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         12 November 2013  By Michael Elliott

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   11 November 2013  By Bono

On 8 November, Bono presented the ONE Africa Award, which each year honours an African civil society organisation, before an audience of media leaders and journalist at the conclusion of the African Media Leaders Forum in Addis Ababa. 

Incredibly I’ve been coming to Ethiopia for more than half my life.  I say “incredibly” because in truth I still think of myself as 25.  It’s a rockstar’s disease – we are encouraged not to grow up.

But I’ve been visiting here since the mid-1980s, and I really think there’s never been a more exciting time.  You can feel it.  It’s electric, and rockstars love electricity. I heard a local band last night with lots of electricity and talent – Jano.

It’s great to be here at a moment of transformation here in Addis, and here in Africa generally.  Economically, socially, culturally, medically, technologically.  Huge transformation.

And the rest of the world is starting to see it.  The world is waking up to how extraordinarily wealthy the continent of Africa is in terms of its people, not just its resources.  And that’s a big shift in the north, because all we heard for years and years was how poor you all were.

And being honest, I was complicit in this; dramatising the situation to make sure that the poorest people didn’t get forgotten. And again, to be brutally honest, to break through our own indifference.  Some used a kind of poverty pornography to break through the noise to get our own governments to do less of what hurt, and more of what helped.

We fought to cancel cold war debts. We fought for funding for HIV/AIDS. We thought it absurd that what was a manageable disease for rich people was a death sentence for poor people.

We weren’t remotely interested in charity by the way, we were interested in justice.  In our heads, you don’t need charity if justice is done. Now the meaning of justice in the 21st century may not have changed—but the ways of achieving it sure have.

Which is where we get to another transformation.  The transformation of the media, and the technology that’s turbo charging it.

None of this is news to you because—well, you write the news!  Traditional models of journalism are changing.  This is true not just in Africa, of course, but where I come from as well.  When almost everyone’s got a phone—and everyone with a phone is a broadcaster—what does it even mean to be a journalist today?

I know it’s a little early in the day to get existential on you, but bear with me a moment.  The demand for information and the flow of information are unstoppable.  We know this.  But what’s still in short supply is what you provide.  Analysis.  Intelligence.  Interpretation.

In other words: not just volume of information, but quality of information.

This, if you want to know my view, is what it means to be a journalist today.  Using your professional insight to turn information into knowledge.

People, citizens, fact-based activists, the “factivists”, are depending on that.  They’re demanding access to information that affects their lives.  Economic development, social progress, human health – all this depends on open data.  Not raw data, necessarily, but open data. Dug up in many cases by your efforts and made useful, made intelligible, by your analysis.

That’s how the transformation of media is helping drive the other transformations.  The quality of governance depends on the quality of civil society, and the quality of civil society depends on the quality—the accuracy, the relevance—of information.

I’d like to pause on an issue that ONE has been working on, with the great Mo Ibrahim, to make sure that at least some of the wealth under the ground in resource-rich countries like Ethiopia ends up in the hands of the people living above it.

We were responding to civil society groups over here demanding transparency – demanding that we join with them in tackling corruption north and south of the equator.

ONE, working with Publish What You Pay, were thrilled to get a law passed in the US and the EU that forced all oil companies on those stock exchanges to reveal who they’re paying, for what, and where. Project by project, no exemptions.

We were thrilled.  The oil companies were not. In fact the American Petroleum Institute has taken legal action to challenge this.  In the US, they sued the SEC, presumably because they want to carry on their dealings in the dark.  The court ruled in their favour. For the moment.

Are they blocking this because they understand a very simple equation?

Transparency plus insight equals transformation.

Why do oil companies not want the public to know how much they are paying for drilling rights?  Why is opacity so important to big business?

Capital flight is always at night, in the dark. Phantom companies, with more wealth than some governments, can’t stand the daylight that would unmask who owns them.

We now know corporate and government corruption is killing more kids than any disease. But guess what?  There is a vaccine and it is transparency.

We used to be known as the ‘get the cheque’ people.  We’re still that, but now we are also the ‘follow the money’ people. And by we, I really mean YOU.

Which brings me to another equation:  the relationship between freedom of information, stability and security. A little bit of a hot button topic at this conference.

I know where I stand on this, and over the week as I meet with the leadership I’ll be respectfully raising it.  As I did with Prime Minister Meles, whom I was honoured to call a friend. The great thing about friendship is you can agree on some things and disagree on others.  And we did.

Where I stand is that information, and the knowledge that flows from it, has enormous power to challenge inequality. Of course, it has enormous power to challenge everything—the whole order of things—which is why countries have often tried to control information.  And when that doesn’t work, governments have tried to control journalists.

This is not good politics. Actually this is just not good.  Full Stop. It’s also not the right thing to do.  And let’s face it, today it’s becoming a physical impossibility, wherever you are in the world.

To try and pretend the revolution in information technology isn’t happening is like King Canute putting up his hand to try and stop the waves. You can’t stop the waves, they are tidal waves.  I would encourage this government, which has done such incredible work on human development, to surf these waves. Not to fear journalism, but to encourage it.

Ethiopia has a story worth telling.  A story the rest of the world should hear.  The story of business leaders creating jobs, fighting and winning market share against the obstacles. The story of activists campaigning – and more and more succeeding – to keep their government honest.  The government’s story of incredible success in halving extreme poverty and hunger in the last twenty years.

This government needs all these stories to be told.

Thank you.

Sourced here:  http://www.one.org/international/blog/bono-information-and-the-knowledge-that-flows-from-it-has-enormous-power-to-challenge-inequality/

Having been assigned to head the World Bank’s country office in Addis Ababa, Guang Zhe Chen has spent two years frequently visiting sites where the Bank extends money for the projects of the government. Last week, he led a small team to one of the most productive parts of the country.

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For Alemetu Deme, a farmer who shook hands with the Prime Minister, everything is possible, and she expects more than a hundred quintals per hectare from her wheat harvest.

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The tripartite arrangement of the Common Market for Eastern and Southern Africa, East African Community and Southern Africa Development Community (COMESA-EAC–SADC) is the most exciting trade and infrastructure development in Africa at the moment.

It provides the foundation of the Continental Free Trade Area promoted by the Africa Union (AU) Commission and its partners.

The main reason why the three Regional Economic Communities (RECs), decided to launch the Tripartite Programme in 2006 was to remove some of the inconsistencies and costs in regional integration brought about through overlapping memberships.

Thus the Tripartite is not a new legal structure neither is it a new REC. It is an attempt to merge the Regional Organisations into the African Economic Community.

There are benefits which accrue from countries being members of more than one REC. Among them, is the achievement of economies of scale. Through developing its large internal market, Africa and producers in the continent will be in a position to compete globally.

Tripartite countries account for half (27) of the Membership of the AU with a Gross Domestic Product of $1.3 Trillion, a population of 565 million and a combined landmass of 17 million square kilometers.

COMESA alone brings to the tripartite table 19 Member States, a population of over 490 million, an annual import bill of around US$150 billion and an export bill of US$82 billion.

The tripartite strategy consists of designing and implementing the Tripartite FTA, the preparation of a Trade and Transport Facilitation Programme elaboration of a regional industrial development programme, the design and implementation of trade and transport infrastructure projects along corridors and free movement of business persons across the RECs.

The Tripartite Free Trade Area builds on the FTAs that are already in place in COMESA, EAC and SADC. Its roadmap presupposes that the countries will need to engage in negotiations.

It also recognises that there are Preferential Trade Areas and FTA trading arrangements already in place among them. This means that not all the countries will need to negotiate with each other.

Significant progress has been made in implementing the Tripartite FTA and negotiations are underway, although behind schedule. However, efforts are being made to catch up and complete negotiations within the 36 months set in the roadmap. Of the 27 countries in the Tripartite, 23 are already in a Free Trade Area, two (Ethiopia and Eritrea) are in a PTA and three (Angola, DR Congo and South Sudan) offer no trade preferences to their regional partners.

The proposal that has been adopted by the Tripartite Summit is that those countries that are in FTA should extend the preferences they offer to first, members of their regional FTA and secondly, to members of other regional FTAs.

For example, all COMESA members implement the COMESA FTA and offer the same preferences to non-COMESA FTA members on a reciprocal basis.

EAC and SADC States do the same; and COMESA Non-SADC and EAC members offer SACU (a customs union comprising of Botswana, Lesotho, Namibia, South Africa and Swaziland), Angola and Mozambique duty free, quota free market access for all originating goods on a reciprocal basis.

If this is done the TFTA will be arrived at for all 27 countries in the Tripartite in a relatively short period. It is also possible to implement the TFTA at variable speeds given that some countries may achieve a tariff phase-down to zero tariffs on originating goods faster than other countries, subject to negotiations.

It is safe to draw the conclusion that the Tripartite Free Trade Area is more of an opportunity than a threat. But to realise that opportunity we need to reject the “crab in a bucket” mentality and work together for the common good.

It is not a zero-sum game, what is good for our neighbour can be good for all of us. The challenge is to get this message across to the general public, civil servants and private sector.

The counterfactual to the Tripartite Free Trade Area is a steady spiral downward, another generation of missed opportunities and continuing to bump along the bottom.

Sourced here:  http://www.comesa.int/index.php?option=com_content&view=article&id=974:tripartite-free-trade-area-an-opportunity-not-a-threat&catid=26:other-news&Itemid=48

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Written by Yetneberk Tadele  (links added by cambodine)

Yetneberk Tadele  -  EBR Staff Writer.

 

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New Proclamation to Grant More Responsibility to Trade Practices Authority

The proclamation, which will also see the authority renamed, has been supported by the United Nations Conference on Trade and Development

The Trade Practices & Customers’ Protection Authority (TPCPA) is to see itself gain additional powers in two weeks, when a revised proclamation is enacted into law by Parliament.

According to the revised proclamation, the Authority will prosecute violations of trade practices and impose financial penalties. The revised proclamation, which includes a change in the name of the Authority itself, was approved by the Council of Ministers two months ago. It has now been sent to the Trade Affairs Standing Committee of the Parliament for further scrutiny.

Accordingly, the Authority will acquire the new name of ‘Trade Competition & Customers Protection Authority’. The rationale behind the change in name is that the term ‘trade practices’ includes a wide range of issues that may be beyond the mandate of the Authority.

“We are subsets within the larger trade practices,” Merkebu Zeleke, director general of the Authority, said while briefing journalists on the revised proclamation at the TPCPA’s headquarters, located inside the Fana Broadcasting Corporate (FBC)’s building near the Black Lion Hospital in Lideta District. “The term ‘trade practitioner’ covers the entire process, from registration to enforcement,”

When established back in 2010, the Authority was tasked with safeguarding the rights and privileges of consumers, inspecting traded goods and making buying and selling more efficient.

While its efforts over the last three years have focused on protecting the business community from unfair competition and market practices, as well as from misleading market conducts, the revised proclamation will give it additional powers. One of these will enable it to investigate cases related to unfair trade competition- a power that has been afforded to it as a representative of the Ministry of Trade (MoT).

The Authority established a court back in June, 2013. Its judges were appointed by Prime Minister Hailemariam Desalegn.

The court was authorised to deal with civil procedures within the trading disciplines, but had no power to impose financial penalties on those it found guilty. The revised proclamation has given it that power. The court started hearing the first cases three weeks ago.

“The court will begin dealing with financial penalties as soon as the revised proclamation is put into effect,” says Tesfaye Neway, a judge appointed by the Prime Minister.

The Authority has benefited from experience sharing with advisors from the United Nations Conference on Trade and Development (UNCTAD), according to the director general.

“This helped us in revising the proclamation,” Merkebu informed.

The Authority is also expected to deal with addressing the daily prices of commodities.

http://addisfortune.net/articles/new-proclamation-to-grant-more-responsibility-to-trade-practices-authority/

Uncollected Steel Imports Create Congestion Risk at Port of Djibouti

Up to 200,000tn of steel that Ethiopia imported within the last three months through the Port of Djibouti is yet to be retrieved by importers, which could lead to congestion, Fortune learnt.

Most of the steel, 180,000tn of which belongs to private importers, failed to be picked up because of financial problems encountered by importers, according to the Ethiopian Shipping & Logistics Services Enterprise (ESLSE).

The goods were imported through a uni-modal arrangement, where once the goods arrive at the port, importers are responsible for handling the paperwork and transportation into the country.

Though officials from the two countries are discussing the issue, they have disagreements on its seriousness.

While officials from the Enterprise are pushing importers to collect their steel ‘soon’, officials at the Port are insisting that not only is it not in danger of congestion, but that it has the capacity to handle even more steel.

“Congestion happened for the last time in October 2012 and we sorted it out,” said Aboubaker Omar, chairperson of the Djibouti Ports & Free Zones Authority. “The issue of congestion does not worry us.”

The Port, which has the capacity to serve about 150,000tn at a time, charges fees for each day that goods stay on its premises.

“They tell us that they can serve up to 500,000tn, but we know a large amount of steel is left on the soil near the water because they do not have enough space,” Mesfin Teferra, freight-forwarding deputy CEO at the Enterprise, told Fortune.

These kinds of snags in importing goods are not new to Ethiopia, with reports by international organisations, such as the World Bank (WB), indicating that poor logistics is severely hampering trade and foreign direct investment. The country ranks 141 in the world in the logistics sector, according to the WB’s latest assessment released in June 2013, which is a drop from the 104th ranking the country had just five years ago.

The Enterprise, which launched a multimodal system in mid-2010 to streamline shipments from Djibouti Port through a door-to-door service, aims to handle 80pc of cargo through this method by the end of the current fiscal year – up from the 56pc at the end of the 2012/13 year.

That system, which was supposed to help avoid warehouse fees in foreign currency and the confiscation of imported goods, has, however, also been subject to numerous reports of congestions and delays since the beginning.

These recurrent logistical problems are currently being studied by Nathan Associates Inc, consultants hired by the government for one million dollars in June 2012, to develop an in-depth logistics and trade strategy for Ethiopia.

The diagnostics analysis that the consultants submitted to the government in late September, which is the first of four reports due by March 2014, assessed institutions and stakeholders involved in the transport sector. These included the Modjo Dry Port and truck drivers that transport goods by land on the Ethio-Djibouti corridor. They found that much greater collaboration by different institutions in the logistics sector is needed to overcome the problem.

In the meantime, however, the problems remain unresolved.

On the Tuesday, November 13, 2013 edition of Addis Zemen – a state-owned Amharic newspaper where government announcements are published – the Maritime Affairs Authority (MAA), which is under the Ministry of Transport, warned importers that they have to pick up their goods within the next three weeks.

Though that is the extent of the measures the Enterprise has taken so far to solve the backlog of imports at the Port, depending on the reaction of the importers, serious measures may soon follow.

“The Djiboutians are not the losers when this happens,” said Mesfin. “It is rather Ethiopian customers that will face the price hike that is likely to come when the importers attempt to compensate what they lost.”

Previously, imported goods would be picked up within 15 to 20 days of their arrival, but 50pc of the steel imported and available at the Port currently has stayed for more than 90 days, according to available data at the MAA.

The part that belongs to the government is expected to be picked up from the Port and transported into Ethiopia within a month, according to officials at the Enterprise.

The government’s steel was mostly stuck due to a shortage in transporters. The fact that the steel is needed to help the ongoing construction projects is the major drive for the government to insist it be transported soon, according to them.

Following truck congestion that happened at the Port previously, the Enterprise signed a Memorandum of Understanding (MoU) a month ago with seven private transporters to transport goods from the Djibouti Port and Modjo Dry Port to Addis Abeba.

http://addisfortune.net/articles/uncollected-steel-imports-create-congestion-risk-at-port-of-djibouti/

ETE to Open Three New Cash-and-Carry Outlets

-  The new outlets are seen as a way of improving price competitiveness in the capital

The first three stores of the Ethiopian Trade Enterprise’s (ETE) new cash-and-carry chain will open in Addis Abeba in the first quarter of 2014, under the trading name Alle Bejimla.

The Amharic name Alle Bejimla, which will be known as just Alle in English, literally translates as “wholesale is available”. It will initially begin operations through a business-to-business model that focuses on providing goods to businesses like kiosks, cafes and hotels.

The three locations of the new wholesaler were all previously owned by the Merchandise Wholesale & Import Trade Enterprise (MWITE), another state-owned enterprise.

One store is located in Megnenagna, Bole District, close to the automotive company AMCE, while the second one is in Kaliti, Akaki-Kaliti District. The third one is what used to be the main MWITE store in front of Khelifa Building, in Merkato, Addis Ketema District.

The General Manager of MWITE, Gemeda Aleme, confirmed that the stores were taken from his enterprise some two months ago.

“They are currently renovating them,” he told Fortune.

The one billion-Birr project was initiated by the government over concerns that runaway inflation was caused by a lack of competition in the wholesale market of the country. In an attempt to tame the escalating prices on consumer goods, the administration of the late Prime Minister Meles Zenawi had even taken control of private wholesalers’ import distributions and warned them it would open the sector to the test of foreign competition.

Eventually it was decided that a new state-owned enterprise would be formed to increase competition in the sector.

The new cash-and-carry chain will be managed by a board, comprised of six members, Fortune learnt. The board members will be top officials from the Prime Minister’s Office, Ministry of Trade (MoT), the Ethiopian Revenues & Customs Authority (ERCA) and the Trade & Consumer Protection Authority at the MoT, according to sources.

The operation is going to be a purely Ethiopian affair, according to Joy Muchina who works at Cactus Ethiopia – the company retained as the public relations contact of the Enterprise.

However, Fortune confirmed from a source that A.T. Kearney, a consultancy firm headquartered in the American city of Chicago, will be involved as consultants on recruitment and the establishment process of the company. In addition, it will also develop a business plan capable of making the company profitable.

The involvement of the global firm, which was estimated to have earned in excess of one billion dollars in 2012, is not new. Its German office recently designed the ETE’s Enterprise Resource Planning (ERP) – a business management software that the company can use to manage business processes, including inventory and cash flow, after it won the seven million Euro (9.4 million-dollar) project in February 2013.

The management of the firm, however, is yet to be determined. The process of recruiting heavyweight staff members, including the positions of general manager, deputy general manager and finance director, has just began.

“In addition to the stores offering much more variety than is currently available, the management will also be more structured,” said Muchina.

Once the positions are filled, the stores will open for business, a process that the ETE plans to complete early next year.

The three locations in Addis Abeba, which are pilot stores, will form the basis for a nationwide expansion, said Muchina, who declined to disclose details of the planned timeline.

However, while previously talking to Fortune in late September, Ali Siraj, state minister for Trade, had indicated that 36 wholesale stores are planned across the country within 27 months.

This arrival of a state-owned giant enterprise had previously raised concerns it would not add much to the local market. A macroeconomist who previously spoke on the issue had stated that there was no use creating an enterprise that would be similar to the MWITE. Structural constraints in the supply chain were what needed to be resolved, was his message.

In addition, it could instead hurt local wholesalers.

However, Alle’s arrival is not a concern for Al-Sam Plc – one of the main wholesalers in the country, according to Saber Argaw, a major shareholder, who noted that the company is already handling competitors.

“Competition is healthy,” echoed Muchina. “Alle will not hurt wholesalers, we will complement each other.”

http://addisfortune.net/articles/ete-to-open-three-new-cash-and-carry-outlets/

Lion International Bank Almost Doubles-Up On Profits

-  A considerable increase in service charges and commissions influenced the growth, with foreign exchange dealings remaining more static

Lion International Bank recorded a 23.26pc increase in their non-interest income in the 2012/13 fiscal year, reaching 128.08 million Br.

A considerable increase in income earned from service charges and commissions – which grew from 45.03 million Br to 61.21 million Br – was the major factor for the growth, as the gains from foreign exchange dealings only increased by 4.9pc to reach 27.86 million Br. This modest result makes Lion the lowest achiever in foreign exchange among the banks that have released their financial reports so far.

Nonetheless, the Bank’s total revenue has increased considerably. Interest income has grown twice as fast as non-interest income – recording a 46pc increase over 2011/12’s figure. This saw it standing at 168.96 million Br by the year’s end.

As a result of this performance, profit after tax of 111.29 million Br was recorded by the Bank. This is a 47.6pc growth over the previous results.

Lion’s success in the year that ended on June 30, 2013 came in a demanding environment, where the cost of rent rose to staggering levels, coupled with operational constraints.

However, the Bank managed to show a restrained rise in its staff and general administrative expenses, which stood at 88.8 million Br. Expenses which rose by 27.4pc over the 2011/12 year, were eclipsed by the 35.25pc increase in total revenue during that same period.

“The Bank focused on reducing expenses as a strategy,” said Daniel Gebregziabher, director of Business Development & Corporate Planning at the Bank.

In addition, the introduction of its One Window Service – a streamlined service provision that improved efficiency – was also a factor in its successful year, according to the message of the Board chairperson, Birhanu Gebremedhin (PhD) printed together with the annual audited report.

Lion’s successful year is also seen in the significant reduction of its provision for doubtful loans, which plummeted to 2.06 million Br from 5.24 million Br. This is all the more notable since the Bank disbursed loans and advances of 1.3 billion Br – an increase of 36.13pc over 2011/12 figures.

“That is a considerable reduction and the management of the Bank should be applauded,” said Abdulmena Mohammed, who is an accounts manager for Portobello Group Ltd – a London-based holding company with subsidiaries in property investment and development.

Daniel attributes the reduction to the Bank focusing on increasing scrutiny prior to loan disbursement. This is in addition to a more decentralised system to follow up on these loans, by enlisting its 44 branches, which are due to rise by an additional three in the next week.

The rest of the Bank’s balance sheet showed that total assets rose by 19.5pc to 2.9 billion Br, and mobilised deposits reached 2.106 billion Br, up from the 1.7 billion Br in 2011/12. This is an increase of 21.26pc. The loan-to-deposits ratio of Lion has now soared to 61.73pc from 55pc.

Despite this performance, the balance sheet also revealed that Lion’s liquidity is showing signs of strain. Liquid assets-to-total assets plummeted to 27.2pc from 42.19pc, while liquid assets-to-deposits went down to 38pc from 59.83pc. Lion’s liquidity analysis further shows that liquid assets-to-total liabilities decreased to 32pc from 51.41pc.

This is most likely due to the Bank’s growing investments in five-year Nation Bank of Ethiopia (NBE) bonds, which have reached 523.21 million Br – up from the 346.5 million Br by the end of 2011/12. They now account for 17.78pc of total assets and 24.84pc of total deposits, while in the year ended June 30, 2012, they were at 14pc and 19.95pc, respectively.

“A further increase in the loan- to-deposit ratio is highly unlikely as the investments in NBE bond are building up,” cautioned Abdulmena.” If Lion tries, it will be at the risk of a liquidity squeeze.”

Striking a good balance between achieving a high loan-to-deposits ratio and maintaining reasonable liquidity levels should be on the agenda this year, he added.

Though Daniel agrees with the issue of maintaining reasonable liquidity levels, he argues that Lion’s asset quality is in good shape. Return on capital has risen to 21pc from 19pc in the previous year, he pointed out.

“We have  been able to efficiently utilise loan funds,” he said.

Lion, which increased its paid-up capital by 11.6pc to 374.94 million Br, can comfortably meet the 500 million Br threshold, which the NBE requires from banks, by 2016, according to the account manager. “Lion is a well-capitalised bank,” Abdulmena said, noting the Bank’s capital adequacy ratio of 34pc. “It can easily comply with the NBE directive by increasing its paid-up capital by 10pc per annum.”

http://addisfortune.net/articles/lion-international-bank-almost-doubles-up-on-profits/

Berhan Bank Sees Total Assets Leap to More Than Two Billion Birr

Berhan International Bank S.C. (BIB) saw its total assets increase by 71pc to 2.197 billion Br in 2012/13.

The Bank, which also managed to perform well in its financial intermediation operations, has doubled loans and advances to 964 million Br and mobilised deposits of 1.593 billion Br.

This came despite the fact that the Bank operated in a tight environment, marred by shortage of foreign currency, which negatively affected its operations. This has pushed the cost of doing business up to much higher levels.

The steep rise in competition for resources has also been among the main challenges faced by the Bank to maintain success in the fiscal year that ended on June 30, 2013.

“The Central Bank’s order to all private banks to maintain loan portfolios that are comprised of at least 40pc short-term loans has become a big challenge,” Daniel Gebremedhin, director of Planning & Business Development Division with the Bank, told Fortune.

Berhan has invested 348.85 million Br into NBE five-year bonds. This represents 15.88pc of the total assets and 21.9pc of the total deposits of the Bank.

At a time when deposit mobilisation sources are drying up for most of the private banks operating in the country, Berhan’s total deposit as of June 30, 2013, reached 1.6 billion Br. This is an increase of 661.4 million Br or 70.9pc compared to last year’s figure of 931.7 million Br. Berhan has managed to improve its loan to deposits ratio to 60.5pc from 53pc.

This achievement came against the prevailing competitive environment facing the sector.

“It shows the growing confidence of the public in our bank,” Daniel said.

Berhan, which held its annual assembly on Saturday, November 9, replicated this success in its profit, registering a growth of 55.21pc to 52.29 million Br. Growth in both interest and non-interest income helped the Bank to achieve this profit.

“Interest income and foreign commissions contributed greatly to reap greater profits,” Daniel said.

The Bank, nevertheless, incurred costs while increasing its income, with expenses in staff and general administration increasing considerably.

Interest expense has increased by 38.81pc to 39.2 million Br and staff and general administration expenses have soared by 70.58pc to 58.97 million Birr.

Further expansion in staff and general administration expenses is inevitable as Berhan is a newcomer to the industry, said Abdulmena Mohamed, who is an accounts manager for the Portobello Group Ltd – a London-based holding company with subsidiaries in property investment and development.

“The management of the Bank should maintain the income growth in line with the expansion in expenses,” said Abdulmena.

Where the Bank differed from several others in the industry is in its liquid assets, which have registered high growth. Berhan’s cash and bank balances have gone up by 37.47pc to 739.87 million Birr. The liquid assets to total assets ratio has declined to 33.67pc from 41.88pc and liquid assets to deposits ratio has dropped to 46.44pc from 57.76pc.

Despite this decline in the various liquidity measures compared to last year, the ratios are significantly higher than other private banks.

“This should give Berhan ample opportunity to expand its loan book in the coming years,” Abdulmena said.

Daniel agreed with Abdulmena, indicating that the loan expansion of the Bank has improved in the year that ended on June 30, 2013.

During the previous year, Berhan managed to open seven additional branches in Addis Abeba and other towns, pushing the total number of branches up to 22. Four sub-branches have also been opened during the year, increasing the number of sub-branches to five.

“We plan to open 20 new branches this year,” Daniel said.

Having achieved a capital adequacy ratio (CAR) of 35.25, Berhan is well-capitalised. It has increased its paid-up capital by 58.77pc to 313 million Birr.

Berhan needs to increase its capital by 17pc annually, in order to meet the NBE directive that compels private banks to increase their paid-up capital to half a billion Birr by 2016, recommended Abdulmena.

“We can comfortably meet the NBE’s requirement by 2016,” Daniel said.

However, the increase in paid-up capital last year, according to Abdulmena, is far higher than required. It has considerably undermined EPS and return on equity, which dropped slightly to 15.39pc from 16pc.

“The management of should increase capital gradually to reduce its impact on shareholders returns,” Abdulmena advises.

http://addisfortune.net/articles/berhan-bank-sees-total-assets-leap-to-more-than-two-billion-birr/

Habesha Breweries Sells Shares to Increase Capital

-  The income from the sale of the shares is to fund the construction of Habesha’s factory in Debre Berhan

Habesha Breweries S.C sold 66,301 shares on November 16, 2013, at its headquarters located in the Hayahulet Mazoria area, Yeka District. This came following the decision to sell the shares during the company’s eighth extraordinary general assembly meeting on July 6, 2013.

The Company had intended to sell 300,000 new shares to increase its capital to 550 million Br from its current 250 million Br.

Habesha’s existing shareholders were offered the chance to buy 200,000 of the new shares without the premium asked from new shareholders for buying the shares risk-free, according to Yonas Alemu, Marketing & Business Development manager of Habesha.

“They have been with us right from the day the Company first began operating,” said Yonas, explaining that now that the factory is being built, risk has reduced. “They took a risk in buying our shares then.”

After the decision to sell the shares, 127,539 were snapped up by existing shareholders at 1,000 Br a share during the 40 days from July 1, 2013.

However, this left 72,461 unsold shares, which were put up for a bid. Seven bidders submitted their documents up until November 15, 2013.

A current shareholder who bought 100 shares when the Company was setting up shop, however, is not concerned that the offer of the shares to the public would dilute his shares.

“I like looking at the big picture,” he told Fortune, adding that although he was offered 100 shares this time around, he opted not to buy. “Having more shares will mean we have more presence in the economy.”

While existing shareholders could buy just four shares, new shareholders were required to bid for a minimum of 10 shares, for at least 1,000 Br a share.

“We cannot divulge the amount of money offered by the leading bidders or the identity of the winner just yet,” said Eskinder Desta, vice chairman of the Board of Directors. “The Board has to validate the sale before we make an official announcement.”

The Company had no problem setting the price of shares, even though there is an absence of secondary share prices in the country, according to Zewdu Negate, general manager of Habesha’s factory.

“The price of the shares is the same as it was at the beginning of the Company,” Zewedu said. “This is the par value though.”

The income from the sale of the shares is to fund the construction of Habesha’s factory found in Debre Berhan – a town 125km north east of Addis Abeba – which started in September 2013. The factory, located on a 7.5ha plot of land, will have the capacity to produce 500,000 hectolitres a year. Construction, undertaken by Lehui Food Machineries Co Ltd – a contractor from China – and Yerer Construction Plc – a local civil contracting company – is expected to end within a year.

Habesha has 7,800 local shareholders and Bavaria N.V. Brewery – the foreign shareholder which owns 49.9pc of the Company, according to Eskinder, who added no shareholder is allowed to hold more than 50pc of Habesha.

The remaining shares will be put on the market at a later date, Fortune learnt. The Company plans to construct a malt factory in the near future.

Availing two types of beer, Premium and Lager, to the Ethiopian market, as of September, 04, 2014, is in the pipeline, according to Eskinder.

Habesha is set to enter a market that is still undeveloped. Ethiopia’s average annual beer consumption stands at five litres per person, while Kenya’s is 12 litres. According to research by the Kirin Institute in Japan, the Czech Republic tops the list with 131.7 litres a person.

BGI Ethiopia ranks first in the Ethiopian beer market with a 48.25pc market share. The Heineken and Dashen Breweries trail behind as second and third, with an 18.75pc and 18pc, respectively. Diageo Plc comes last with 15pc.

http://addisfortune.net/articles/habesha-breweries-sells-shares-to-increase-capital/

Ethiopia and Angola double number of girls in school in 10 years

NAIROBI (Thomson Reuters Foundation) - The number of girls enrolling in primary school has soared across Africa in the last decade, according to a report released on Monday, which also found a significant drop in the number of child deaths over the past five years.

With primary education now free in all but five African countries, there has been a boom in the number of children attending school, with Ethiopia and Angola showing the most dramatic improvements.

In Ethiopia, girls’ enrolment rose to 83 percent from 41 percent between 2000 and 2011, while Angola saw an increase to 78 percent from 35 percent, according to the African Report on Child Wellbeing produced by the African Child Policy Forum, a research institute based in Ethiopia.
The report looked at how child-friendly African governments were by measuring their performance in providing basic services for children, adopting laws and policies to protect children, and promoting child participation in decisions that affect them.

African governments are increasingly child-friendly,” former Mozambican president Joaqim Chissano said in the report. “Achievements on the education front – and particularly the dramatic increase in access to primary education, especially for girls – are commendable.”
However, girls continue to fare poorly at secondary school. In Angola, only 12 percent of girls attend secondary school, slightly below 15 percent of boys.
“Low levels of access to secondary education mean they will also not enter tertiary education, which effectively excludes them from the most gainful employment opportunities, thereby perpetuating systemic gender imbalance,” the report said.

Across Africa, 26 percent of girls and 30 percent of boys attend secondary school while 78 percent of girls and 83 percent of boys attend primary school.
South Africa is the best performing, with near universal access to secondary education for girls at 97 percent, and only a slightly lower level for boys at 93 percent, according to figures from the U.N. children’s agency UNICEF.

REDUCING CHILD DEATHS

The report found the greatest gains in Africa over the past five years were in reducing child deaths.
“The greatest good news of all has been the decline in under-five mortality rate, at a pace not observed or recorded by any other continent or country in the world,” the report said. “This may well be the fastest decline in child mortality the world has seen for at least three decades.”

Between 2008 and 2011, Rwanda reduced child mortality by more than 52 percent, and Liberia by more than 47 percent. Niger, Ethiopia, Guinea and Madagascar also recorded significant gains.

In Seychelles, Mauritius and Tunisia, child mortality rates are low as those of industrialised countries.
The major causes of child mortality in Africa can be prevented by simple measures such as women giving birth with skilled attendants, use of mosquito nets and access to antibiotics.
Child mortality is generally highest in countries with the lowest coverage of water and sanitation, such as Chad and the Democratic Republic of Congo.

Overall, the report found that political commitment, rather than the wealth of a country, was the key factor in improving the lives of its children.
“It is a matter of political commitment, manifested primarily in a government’s willingness to put children at the top of the policy agenda and prioritise budgets accordingly,” it said.
African governments spend on average about 11 percent of their budget on health, below the 15 percent they committed to in the 2001 Abuja Declaration. Education receives an average of 4.6 percent of Gross Domestic Product, half of the nine percent to which they committed in Dakar.
Mauritius, South Africa, Tunisia, Egypt, Cape Verde, Rwanda, Lesotho, Algeria, Swaziland and Morocco emerged as the 10 most child-friendly countries in Africa.

The 10 least child-friendly governments were Chad, Eritrea, São Tomé and Príncipe, Zimbabwe, Comoros, Central African Republic, Cameroon, Democratic Republic of Congo, Côte d’Ivoire and Mauritania.

http://www.trust.org/item/20131117183905-ueksn/

PM Hailemariam arrives in Kuwait for Africa-Arab Summit

Prime Minister Hailemariam Desalegn left for Kuwait on Monday to take part in the 3rd Africa-Arab Summit which will be held from 19-20 November, 2013.

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Gibe III hydro-electric dam 79% complete

The Gibe III hydro-electric dam currently under-construction on the lower course of the Omo River is nearing completion, according to the project manager.

Engineer Azeb Asnake, project manager, told WIC that the dam, whose construction is 79 percent complete, could start generating power from three of the ten turbines next year in Ethiopian calendar.

Gibe III is expected to start generating power in full potential after two years. Remaining tasks, including the installation of turbines are expected to be completed ‘soon’, according to the project manager.

“We can almost say, the complex and difficult construction phases of the dam have been successfully accomplished,” Azeb told WIC adding that remaining tasks would be finalized as per the schedule.

The project manager said considerable technological and technical skills of knowledge transfer have been gained during the construction process. She believes this would enable the country to realize such big projects by itself in the near future.

Out of the total 7,000 individuals working on the project, nearly 90 percent are Ethiopians with foreign nationals engaged mainly as consultants.

Gibe III hydro-electric project will have a total generating capacity of 1,870MW, almost twice the current electric power generating capacity of the country, and an annual energy production of 6,500 GWh.

But Azeb says the plant has benefits beyond generating power. “There will be a huge lake for fishing activities which would benefit the local community.”

“The project will also improve the life of the people living down the river by avoiding recurrent flooding of the past,” she added. A 160km road network that included bridges has also been constructed in the area which was previously largely inaccessible. With a height of 243 meters, Gibe III is tallest Roller-Compacted Concrete (RCC) dam.

http://www.waltainfo.com/index.php/editors-pick/11313-gibe-iii-hydro-electric-dam-79-complete-

Addis-Adama expressway over 82% complete

The six-lane Addis-Adama expressway, which has been under construction for the past three years, is now more than 82 per cent complete, according to the Ethiopian Roads Authority.
Authority Communications Director, Samson Wondimu said the expressway will be finalized and opened for traffic this fiscal year.
In addition to its socio–economic benefits, the road, estimated to cost over 8 billion birr, will significantly contribute to reduce traffic jam and road accident, he said.
The new expressway can handle 19,000 up to 20, 000 vehicles daily comfortably, Samson said, adding the expressway could be upgraded to an eight-lane if the need arose.
Some 43 per cent of the project cost will be covered by the government of Ethiopian, while the balance is covered by a loan obtained from Exim Bank of China.
The Addis-Adama expressway, the first toll road in Ethiopia, has been under construction since 2010.

http://www.waltainfo.com/index.php/explore/11312-addis-adama-expressway-over-82-complete-

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Over $ 135 million obtained from manufacturing sector

The Ministry of Industry said more than 135 million US dollars was obtained from manufacturing sector in the first four months of this fiscal year.

Ministry Communications Corporate Directorate Director, Melaku Taye, told WIC that the stated sum was generated from the exports of textile and garment, leather and leather products, meat and dairy products as well as food, beverage and pharmaceutical products.

The revenue earned in the reported period exceeded from the same period last fiscal year by 26.9 per cent, Melaku said.

He indicated that the government is working hard to expand the manufacturing sector with a view to making the sector the main engine of the country’s economy.
As part of the efforts to attract more investors to the sector, the government has been building various industrial zones, he said citing the Bole Lemi industrial zone a case in point.

According to Melaku, the first phase construction of the Bole Lemi industrial zone built at a cost of 671 million birr has been completed. Upon going fully operational, the industrial zone would create jobs for more than 5,000 compatriots, he added.

Ethiopia has set a target to secure 1.3 billion US dollars in revenue from the sector in this budget year, it was learnt.

http://www.waltainfo.com/index.php/explore/11299-over–135-mln-obtained-from-manufacturing-sector-

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Nation gives priority to tackle public health emergencies

Ethiopia has given priority to tackle consequences of public health emergencies in setting up strong system, the Ministry of Health said.

While opening the 5th African Field Epidemiology Network (AFENET), the Minister Dr KeseteBirhan Admasu said the system is being strengthened by training and deployment of health workers specialized in specific areas.

The Field Epidemiology Training Program (FETP), started in 2009 has brought about a significant change in surveillance, responding to outbreaks, analysis and interpretation of data in the country.

The country has also implementing One Health practice which is focused on building inter-disciplinary bridges across human, animal and environmental health to tackle public health emergencies.

Ethiopian Health and Nutrition Research Institute Director-General Dr Amiha Kebede on his part said Ethiopia has developed and implemented appropriate policies and strategies to tackle health emergencies.

Training personnel that undertake surveillance, outbreak investigation and emergency management is one of the results of the interventions of the government.

According to ENA, the program, FETP, helped the country to strengthen its disease surveillance and response system and retain highly skilled professionals of epidemiology into the system. The 5th AFENET conference is being held here under the theme: “Addressing Public Health Priorities in Africa through FELTPs”.

http://www.waltainfo.com/index.php/explore/11308-nation-gives-priority-to-tackle-public-health-emergencies

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A NON-PULSATING ECONOMIC MOMENT

Trade competitiveness is one facet that Ethiopian policymakers have failed to bring significant change to, despite their profound desire. The complex linkage between the economic factors that affect competitiveness – from access to finance to logistic integration – made the task of streamlining change all the more difficult. As change stays elusive, a mixed feeling of eagerness and hopelessness seems to sweep through the administration, as could be seen from the body language of Debretsion Gebremichael, centre, deputy prime minister for the economic cluster and minister of Communications & Information Technology (MoCIT). If there is one sector that continues to feel the heat of the high cost of transactions and prolonged logistics, and hence poor competitiveness, it is the pulses, oilseeds and spices sector. No doubt that Debretsion and his colleague, Kebede Chane, left, the minister of Trade (MoT), rightly understand this problem. Their presence at the third International Conference on Pulses, Oilseeds & Spices, held last week at the United Nations Conference Centre, clearly displays this. Both seem keen to see a push in exports in the sector, in order to meet the ambitious export target of the government. Much is expected from financial moguls, such as Bekalu Zeleke, right, president of the largest bank in the nation, the Commercial Bank of Ethiopia (CBE), in terms of facilitating enhanced trade financing. As the demand for the commodities increases in the global market, much of their future performance is dependent on what suppliers, like Ethiopia, do to boost their supply.

[PLEASE SEE THE FULL FEATURE STORY ON FEATURE PAGE]

http://addisfortune.net/articles/a-non-pulsating-economic-moment-2/

OnPoint Agreement Signed by GE and Ethiopian Airlines

Ethiopian Airlines signed a 10-year “OnPoint” maintenance agreement with GE Aviation for its GE90 engines. Under the agreement, GE (Pavilion A9) will maintain GE90 engines on 16 Ethiopian Boeing 777s. OnPoint agreements are customized service agreements tailored to the operational and financial needs of airline customers, GE said. The agreements are designed to help lower customers’ cost of ownership and maximize their use of assets.

http://www.ainonline.com/aviation-news/dubai-air-show/2013-11-19/onpoint-agreement-signed-ge-and-ethiopian-airlines

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China’s CNR to produce Ethiopia train coaches

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Dung cakes (above, pictured) are the most widely used biomass energy in Ethiopia

Although Ethiopia is endowed with a variety of alternative energy resources such as hydro, wind, geothermal, and solar, biomass fuel comprises the lion’s share of the country’s total energy expenditure. As in most sub-Saharan countries, Ethiopia’s energy sector is highly dependent on biomass (firewood, charcoal, crop residues and animal dung). The bulk of the national energy consumption is met from biomass sources. In 2010, it was estimated that biomass energy accounted for 89 per cent of the total energy consumption. And nearly 60 million tons of biomass is consumed for energy purposes with about 81 per cent of the estimated 16 million households using firewood of whom 11.5 per cent cooking with leaves and dung cakes. The total national consumption of wood (including charcoal ) is estimated to be 105.2 million tones per year with 5.7 million tons being charcoal. Total consumption of crop residues and dung are 19.7 million tones per year respectively.

On the other hand, the very high degree of dependence on wood and agricultural residues for household energy has impacts on the social, economic and environmental well-being of society. A growing demand for biomass together with an increased demand for agricultural output (land for crop production, livestock feed) has resulted in reduced access to wood fuels.

Ethiopia’s National Energy Policy which was issued in 1994 underlines the critical role of biomass energy in the country’s energy sector. It aims to address household energy problems by promoting agro-forestry, increasing the efficiency with which biomass fuels are utilized, and facilitating the shift to greater use of modern fuels. However, the successful development of the country’s biomass energy resources has been hampered by a combination of factors including poor institutional framework, inadequate planning and lack of coordination. In this regard, there was no biomass strategy to direct and coordinate actions.

Moreover, the strategies developed previously such as the Rural Biomass Energy Strategy Report (2004) which was developed by the Biomass Technology Group (University of Twente, the Netherlands); and the draft Rural Energy Strategy (2007) which was developed by the formerly Ethiopian Rural Energy Development and Promotion centre have not led to the required results due to lack of ownership by the key institutions and comprehensive approach including all related sectors.

Accordingly, Ethiopia has been preparing a new biomass strategy known as Biomass Energy Strategy (BEST) which aims to utilize its biomass resources efficiently. The strategy has been prepared by the Ministry of Water, Irrigation and Energy, and European Union Energy Initiative Partnership Dialogue Facility (EUEI PDF) provided the full financial support for the strategy development process and international consultants who guided and developed the strategy. Recently a final workshop on BEST was held where different stakeholders from various sectors took part.

On the workshop, it was noted that the preparation of BEST has been strongly process orientated with active involvement of all stakeholders at all stages of its development. BEST provides a summery of the findings of the baseline and scenario analysis focusing on biomass energy supply and demand in both urban and rural sectors. The scenario analysis comprises a business as usual scenario with one that examines the impact of implementing the main interventions on biomass energy supply and demand as outlined in the Climate Resilient Green Economy (CRGE). BEST also details the biomass energy strategy in terms of targets and actions required beyond the biomass energy sector and the action plan and sets out actions required on the demand and supply sides.

Speaking at a workshop which was organized recently Asres Wolde-Giorgies, Alternative Energy Technology Development and Promotion Directorate Director at the Ministry of Water, Irrigation and Energy said the very high degree of dependence on wood and agriculture residues for household energy has impacts on social, economic and environmental well-being of society.

According to him, the development of the country’s biomass energy resources has been hampered by a combination of factors including poor institutional framework, inadequate planning, and lack of coordination. “There was no as such a comprehensive biomass energy strategy to direct and coordinate actions in the past years,” the Director added.

He further noted that the availability of such strategy (BEST) will have a vital role in supporting the implementation of the government’s national programmes in the energy sector in particular and CRGE pillars in general by developing action plans and investment projects and will be an important instrument for proper management of the country’s biomass energy resources.

The Ministry of Water, Irrigation and Energy has been leading the process of developing the strategy since the inception by establishing a steering and technical committee which comprises representatives from the Ministry of Agriculture, Federal Protection and Forestry, Federal Micro and Small Enterprises Agency, Ministry of Finance and Economic Development, Ministry of Trade and Industry, and GIZ Energy Coordination Office.

It is clear that having the strategy document is not an end but a means Asres said. “The real task will be ensuring ownership by all concerned stakeholders, endorsement of the strategy document and getting direction from the government on the implementation of the strategy”, he underlined. “To this effect, our Ministry in cooperation with relevant sectors will continue its leadership to realize the successful implementation of the strategy. Asres further added that specifically, the current Biomass Energy Strategy Document tried to indicate a clear baseline situation of the biomass energy sector in Ethiopia; analyzed institutional challenges in the biomass energy sector and finally defined the major trends and implication which are helpful in building consensus and promote wider awareness among the stakeholders on the role of biomass energy in the country.

Ina de Visser, EU Energy Initiative Partnership Dialogue Facility (EUEI PDF) on her part told The Ethiopian Herald that EUEI PDF supported the development of BEST as per the resuest it recieved from the Ethiopian Ministry of Water and Energy as biomass supplies such a high share of energy and a formal holistic strategy was not in place.

“EUEI PDF acknowledged that Ethiopia would benefit from such a strategy. The cooperation formally started in 2012,” she said.

EUEI PDF also provided the fund for the international consultants who guided and developed the strategy. Since then, she said, the consultants have provided the development of the strategy with a sound information base . The information on biomass use and production was collected from different pasts of the country and presented in a concise report in the previous workshops.

Visser further added that based on the reports, scenarios were developed to demonstrate where the current practices are leading. “The use of biomass will be increasing further, in spite of the urban middle class shifting to electricity and LPG. Drives for further increase of biomass use are population growth and urbanization,” she said adding,” even with implementation of the CRGE that set ambitious plans for assimilation of improved stoves, the demand for wood will increase. This demonstrates the strong need for additional actions in the biomass sector.”

Sourced here:  http://www.ethpress.gov.et/herald/index.php/herald/development/4879-a-step-forward-to-properly-manage-biomass-energy-sources

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