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Made in Ethiopia: Fashion retailer H&M looks to sub-Saharan Africa for suppliers
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BY Jaco Maritz | 21 January 2014
Sub-Saharan Africa’s potential to become a global low-end manufacturing destination has come under discussion lately, especially with rising cost pressures in traditional markets such as China.
Swedish-based fashion retailer H&M is one of the latest global companies to experiment with sourcing its products from sub-Saharan African countries. It has placed test orders for garments from Ethiopian and Kenyan suppliers. Retailers such as Tesco and Walmart reportedly already source some products from Ethiopia.
“We are a growing global company and we need to constantly look at how we can ensure that we have the capacity to supply products to all our stores where we have expanded rapidly. We do that as we increase production on existing production markets but also by looking at new ones. This does not mean we will stop buying from existing production markets. We see great potential in Ethiopia, it is a country with a huge development and growth and we see that we can contribute to jobs and reduce the unemployment in the country,” Elin Hallerby, a spokesperson for H&M, told How we made it in Africa via email.
However, she emphasised that the company is still in the early stages of sourcing from Ethiopia.
H&M doesn’t own any factories, but instead works with hundreds of independent suppliers, mainly from European and Asian countries such as Italy, Turkey, Bangladesh and China.
So what does H&M look for in a new supplier?
“We place orders at suppliers that can live up to our high requirements when it comes to quality, prices and lead times, but another crucial aspect is our high sustainability requirements,” says Hallerby.
“We always do a risk assessment before we enter into a new purchasing market. In Ethiopia we made extensive such analysis where we looked at human rights and environmental conditions in the country. Dialogue with the International Labour Organisation, the Swedish International Development Cooperation Agency and local organisations were part of the analysis. We lean against authorities such as the UN and follow EU trade directives.”
Hallerby also confirmed to How we made it in Africa that H&M’s plans to open its first outlet in South Africa in 2015 are still on track. A number of European fashion brands, including Topshop, Zara and Mango, have expanded to countries such as South Africa and Nigeria in recent years.
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South Korean president to attend the 22nd AU Summit in Addis Ababa
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Caption: South Korean President Park Cheng-hye
Photo by: AP /Kim Hong-Ji
Summit kicks off today by the PRC
Mahlet Fasil
The African Union (AU) said Park Cheng-hye, President of South Korea, will attend the 22nd Summit of the AU which kicked off this morning. “Transforming Africa’s agriculture harnessing opportunities for inclusive growth and sustainable development” is the theme the AU said will be at the center of discussions during the assembly of head of states and governments of AU member states. The summit kicked off this morning with the 27th ordinary session of the Permanent Representatives Committee (PRC), a club of ambassadors of AU member states, which discussed items on the agenda in preparation of the summit to be submitted to the executive council for adoption.
Accordingly, the PRC will discuss for the coming three days specific reports including the reports of the advisory sub-committee on administrative, budgetary and financial matters, sub-committee on program and conferences, sub –committee on contribution, including the annual report of the AU Commission and that of human and peoples’ rights.
President Cheng-hye’s visit follows recent visits to Addis Ababa by Wang Yi, Chinese Minister for Foreign Affairs, followed shortly by Shinzo Abe, Japan’s Prime Minister, who visited three African countries.
According to Thomas White International, an asset management firm, “South Korea’s foreign direct investment in Africa jumped to $287 million in 2010, compared to a meager $24.3 million a decade back.” Bilateral trade between Africa and South Korea also reached $25 billion in 2011, a significant jump from just $6 billion in 2000.
In addition to President Cheng-hye, Haitian President Michel Martelly will also attend the summit, the AU said.
http://addisstandard.com/south-korean-president-to-attend-the-22nd-au-summit-in-addis-ababa/
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Forum Connects Investors to Opportunities in Sesame, Dairy and Honey Sectors
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More than 200 business leaders, domestic and foreign investors, and government officials attended the first Ethiopia Agribusiness Investment Forum today. Funded by USAID through its Ethiopia Sustainable Agribusiness Incubator activity, the Forum highlighted lucrative opportunities in the sesame, dairy and honey subsectors.
The fastest growing economy in Africa over the past decade, Ethiopia, has done well due to a development strategy, which builds up from its diverse agricultural base. Ethiopia is now the fourth largest exporter of sesame, the 10th largest honey producer and fourth largest beeswax producer in the world, as well as the largest livestock producer on the African continent. As the nation now seeks to transform itself from an agriculture-led economy into an industrial one, it is now seeking to add value to its rich primary production base. The opportunities created for private investors are immense in the areas of input supply and adding value to primary produce. The Forum laid out the basic economic conditions, which are likely to continue to drive businesses in the three sectors to increased profitability. It also created a platform for facilitating connections between emerging business opportunities, entrepreneurs and investors. 20 selected entrepreneurs with viable business proposals pitched their ideas to investors.
“Ethiopia’s current milk consumption per person is a very low 24 liters/year, far below neighboring Kenya’s which is still a modest 100 liters/year. Given rising income, population growth, increasing availability of production, and a growing culture of milk drinking, it is inevitable that the dairy market will grow quite large. According to our calculations, even if Ethiopia’s consumption levels reach that of Kenya’s sometime after 2020, the dairy sector will have grown into a more than 200 billion [ETB] per year industry,” said Henok Assefa, the chief of party for the USAID activity. “Similarly, Ethiopia could see its honey industry rake in up to 15 billion birr a year even if it only achieves half its potential. And value adding on current raw sesame production can fetch investors up to an 80 percent premium.”
Precise Consult International implements USAID’s Ethiopia Sustainable Agribusiness Incubator activity, as part of the U.S. Feed the Future Initiative. The activity’s goal is to transform Ethiopian agriculture sector-by-sector by enhancing the competitiveness of entire value chains. The Ethiopia Agribusiness Investment Forum will provide an analysis on the economics driving profitability in these sectors and create a platform to connect the opportunities the entrepreneurs and the investors.
Established in 2007 by returnees from the Ethiopian Diaspora in North America, Precise Consult International PLC (PCI) is a premiere management consulting firm specializing in the provision of business and investment advisory services to enterprises and private sector development and economic analysis to International Development Agencies and Governments.
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PM Hailemariam attends the World Future Energy Summit
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The Ethiopian delegation led by Prime Minister Hailemariam Desalegn attended the World Future Energy Summit which is being held in Abu Dhabi, today, (January 21).
While taking part in the panel discussion on renewable energy, Prime Minister Hailemariam noted that Ethiopia and the African continent had ample opportunities to develop renewable energy and investors should be strongly encouraged to engage in the sector investment and use the opportunity to develop this resource.
The Prime Minister also explained Ethiopia’s efforts to use and expand renewable energy resources including hydroelectric power as well as wind and geothermal power sources which would benefit the region and beyond.
He stressed that Ethiopia encouraged private sector participation in these efforts and called on investors from the Gulf region to invest in the sector.
The World Future Energy Summit is the world’s foremost event dedicated to renewable energies, energy efficiency and clean technologies. The occasion included a number of exhibitions depicting renewable energy and environmental displays.
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Scientists to create disease-resistant Ethiopian enset
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A research project for developing varieties of enset, a traditional Ethiopian crop which resembles the banana plant, resistant to the deadly bacterial wilt disease has been launched.
The project launched last month (16 December) in Addis Ababa, Ethiopia, is expected to address the perennial problem of the bacterial wilt disease that has remained a nightmare for scientists and farmers in the country.
The disease is caused by the bacterium Xanthomonas campestris pv. musacearum, and results in total crop wilt.
Adugna Wakjira, the deputy director of the Ethiopian Institute of Agricultural Research (EIAR), tells SciDev.Net: “Bacterial wilt is the major threat to enset, which supports the livelihoods of nearly 20 million smallholder farmers,” adding that lack of research capacity has partly contributed to inability to control the disease.
Adugna explains: “Since the disease is contagious, the farmers have been washing their tools such as knives, digging hoes and their hands when they come in touch with the crop to avoid passing the disease over to other enset plants”.
But these, he says, have little success, and the new varieties will completely replace the “sanitary measures”. According to Wakjira, the crop is tolerant to drought and can cushion smallholder farmers against the effects of climate change.
Leena Tripathi, plant biotechnologist at the International Institute of Tropical Agriculture (IITA), Kenya, who will lead the project, says IITA scientists have made major strides in banana transformation to develop varieties resistant to the disease using genes from sweet pepper.
“We will have one PhD student working on the project, which will be used to assist policymakers to formulate favorable policy to guide biotechnology research in the country,” she says.
The project, a partnership between IITA, EIAR and Biosciences eastern and central Africa– International Livestock Research Institute (BecA-ILRI) Hub, will also help build Ethiopia’s human and infrastructure capacity to conduct biotechnology research on enset.
The Kenya-based BecA-ILRI will provide tools, technologies and chemicals to be used in the project.
The Bill & Melinda Gates Foundation is funding the four-year project for US$2.59 million.
Skills learnt from the project will be used to handle similar problems in wheat, rice and potatoes in Ethiopia, according to Wakjira.
“[The project] will be an avenue for our scientist[s] to hone their skills in biotechnology research to solve other problems affecting crops,” says Wakjira
Maurice Bolo, the director of Nairobi-based Scinnovent Centre, which focuses on science and innovation, tells SciDev.Net that using modern biotechnology tools to improve enset in Ethiopia must be seen within the broader context of other traditional African crops that have long been neglected by research but which support millions of livelihoods in Africa.
“[That] funding agencies and international research organizations are beginning to focus on such neglected crops is most welcome,” he says.
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UK to provide £80 mln to Ethiopia to improve access to safe drinking water
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The United Kingdom (UK) has pledged to provide £80 million support to Ethiopia to improve access to safe drinking water, according to the Ministry of Water, Irrigation and Energy.
Water, Irrigation and Energy State Minister Kebede Gerba told WIC that the financial aid agreement is expected to be signed soon between UK and the Ministry of Finance and Economic Development (MoFED) of Ethiopia.
The support would help Ethiopia attain the Growth and Transformation Plan (GTP) in the water sector, Kebede said.
In addition to UK’s pledge, the government of Ethiopia has been endeavoring to solicit more than 450 million US dollars to further improve the access, he said.
Ethiopia has set a target of raising its potable water coverage to 98 per cent at the end of the Growth and Transformation Plan (GTP) period from 68.4 per cent now, he noted.
More than 21.2 million people across the country have got access to safe drinking water during the first three years of the GTP period, according to Kebede.
Activities are also underway to make over 15 million people (2.1 million in urban and 13.1 million in rural areas) beneficiaries of safe drinking water this Ethiopian budget year, he said.
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Dr.Tedros meets Foreign Minister of UAE
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Foreign Minister Dr Tedros Adhanom met today the UAE Foreign Minister H.H. Sheikh Abdulla Bin Zayed Al-Nahyanand.
The two ministers discussed on ways to strengthen the bilateral relations of the two countries and ties on various fields.
The UAE Foreign Minister thanked Dr. Tedros for visiting Abu Dhabi with Prime Minister Hailemariam Desalegn.
Dr. Tedros on the occasion said that Ethiopia is keen to bolster the two countries cooperation and works for its implementation.
Dr. Tedros has also briefed the UAE Foreign Minister on Ethiopia’s efforts in using renewable energy resources including Hydro power.
H.H. Sheikh Bin Zayed Al-Nahyanand on his part said Ethiopia has huge potential of renewable energy in which his country is desirous to work with.
He mentioned that UAE is interested to establish a strong partnership with African continent in the Energy sector and requested Ethiopia’s support for its implementation.
The two Foreign ministers also exchanged ideas on holding the joint ministerial meeting of the two countries in the near future.
http://www.waltainfo.com/index.php/explore/12048-dr-tedros-meets-foreign-minister-of-uae-
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Tigray obtains 241.5 million birr revenue from tourism
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Church of St Mary of Zion – Tsion Maryam
Over 241.5 million birr revenue was secured in Tigray State from tourists who visited attraction sites over the past six months, State Culture and Tourism Agency said.
Agency Tourism Development Work Process Owner Yemane Gedlu told ENA over the weekend that the stated sum was secured from 18,000 tourists who visited historic and natural sites in the state.
The tourism activities in the state created jobs for 9,375 youth during the reported period.
The Axum Obelisks, Church of St Mary of Zion – Tsion Maryam – The, rock-hewn churches of Abrha We Atsibiha, the Al-Nejashi Mosque and natural forests, among others.
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Farmers coffee sale income increases
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More than 176.4 million birr in revenue was secured from sale of coffee in Benchi Maji Zone of Southern Nations, Nationalities and Peoples State over the past six months, the Zonal Cooperative Unions Department said.
The Department said that the stated sum was secured from sale of 4,285 tons coffee which surpassed the target by 1,078 tons.
Some 14 associations and 251 investors in nine woredas of the zone have supplied the coffee to the market.
Similarly, farmers in Bale Zone of Oromia State earned over 53.7 million birr from the sale of honey over the past six months.
Zonal Livestock Office Planning and Evaluation Expert Taye Aga told ENA yesterday that the amount of honey supplied to the market surpassed the previous year same period by 1,000kg.
Some 89,200 farmers engaged in beekeeping earned the stated sum. Close to 21,700 of the farmers are women.
The number of women engaged in various income-generating activities has been increasing, he added.
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Hides, skin supplied to market
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More than 336,000 hides and skin were supplied to central market from North Wollo Zone in Amhara State over the past six months, the Zonal Agriculture Department said.
The Department said over the weekend that the stated amount of hides and skins supplied to the market surpassed the previous year same period by 47,816.
Experts are providing intensive awareness raising trainings for the public and merchants on ways of keeping the quality of hides and skin.
http://www.ethpress.gov.et/herald/index.php/herald/national-news/5675-hides-skin-supplied-to-market
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Fostering reliance on domestic resources and capabilities
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The Addis Ababa City Administration has just reaffirmed its commitment to the successful completion of the Grand Ethiopian Renaissance Dam (GERD) practically via an additional financial contribution amounting over 335 million birr. This was disclosed during the 2nd regular meeting of the city’s Public Participation Coordination Council held on Friday, Jan. 17, 2014. Opening the meeting, Deputy Mayor of Addis Ababa and Chairperson of the Council, Ato Abate Sitotaw, said that the financial contribution was an outcome of a serious effort unleashed over the last two years with an aim to raise funds for and provide support to the GERD project, now in its third year of implementation. According to the Deputy Mayor, the Administration has been using various fund-raising mechanisms and options, including pledges made by the city’s business community. With regard to the pledges, he said that the Administration is working vigorously to collect from the concerned business people the amount they promised for the purpose. This 2nd meeting of the Council has served as a venue at which the strength of the ongoing public mobilization efforts that are currently being carried out at both Addis Ababa and country levels. It has also served as an indication of how determined the Ethiopian people still are in seeing this grand project completed with whatever resources can be mustered domestically. (See further The Ethiopian Herald, Sunday, Jan. 19, 2014.)
An effective and practice-oriented reassurance like the one we have heard from the Addis Ababa City Administration and its GERD PPC Council can never be more timely. On the one hand, the GERD project has now gone past its most rudimentary phase, the laying down of the foundation for future, core activities. While the current and future phases are technically some of the difficult ones, it is essential that the major stakeholders of the project, the Ethiopian people, continue to respond to the moral and financial exigencies being made by the project and its actual implementers, including the government. After all, the interplay between the government’s role as an initiator and ultimate coordinator of the project, the domestic and foreign technical know-how in the actual implementation of the project, and the public as the ultimate provider of resources and financier has been the essence of the GERD from the very beginning. The Ethiopian government had no illusion about the necessity of mobilizing to the fullest extent, no matter what foreign circumstances there are as obstruction, the hearts, the minds and the purses of all Ethiopians—wherever they are—when it made the project public and unravelled the idea about how to finance it. From the very first day of its inception, the GERD has been in every way Ethiopian.
On the other hand, it is time that we told—without any equivocation and delay—those who do not tire of trying to sabotage the sacred project that nothing they do, directly or indirectly, can ever stop its completion, and that according to schedule, with just resources domestically developed or raised. It is time that they chose to desist so that they do not always play the roles of an enemy, to refrain from standing in the way of a nation whose sole enemy is regarded to be poverty and backwardness. For a position like these taken consistently and aggressively will not bring in the end any positive result especially to neighbouring people, especially now that circumstances have radically changed nationally, regionally and globally. That is, given situations like we have in Ethiopia, archaic methods like waiting at the corridors and doors of western donors and lenders in order to lobby against some other nation’s interest are a waste of time as seen from any perspective. Firstly, Ethiopia has always said that the GERD is unique in the fact that its construction has never been put to the mercy of lenders or donors. Secondly, where any such assistance becomes necessary, thanks to the emerging nature of international relation, there are always alternatives that do not give in to negative diplomacy too easily.
Above all, the ongoing GERD project is becoming a unique phenomenon in its own right. It is becoming a testing ground for both Ethiopians and other forces—especially forces that have found it difficult to swallow emerging trends. Let us focus on our part and capitalize on the many good things that are unfolding out of the ongoing tests. One such good thing is a reliance on indigenous resources and capabilities.
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GERD no financial, technical constraints
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Part II
The third thing would be hiring international consultants that would conduct the two assessments. So, we should not hire another international consultant for this purpose. This can also be undertaken by experts found in the three countries. The other thing is monitoring the international consultants while they conduct the study. For this purpose also, we do not need another international consultant. The final step is assessing and receiving the studies when the experts complete their tasks. The three countries’ experts have the capacity to do so .
However, Ethiopia has agreed on some conditions for the establishment of a new panel. For instance, if the technical experts fail to agree with the results of the assessment in the final report of the two studies, they can present the issues to the [water] Ministers of the three countries. And certainly, the Ministers can resolve these issues amicably. But again, if the Ministers fail to resolve the issues, it will be possible to hire a neutral international panel of experts which would give its technical opinion. We have also opened the door for this process in our recommendations.
In addition, they [Egyptian delegation] raised another proposal that was to establish the panel immediately. So, we did not accept it as the panel would only be necessary if there are differences on the final results of the assessments. Plus, the studies would be completed after a year. As a result, the proposal to establishing the panel immediately is not rational.
Consequently, the discussion was further postponed to January 4 and 5, 2014. And when we had met in Khartoum again, they were not ready to change their stance. Not only that, but they also come up with another document, a so called, – Principles of Confidence Building – which incorporates seven points. This document is not part of the recommendations given by the previous Panel of International Experts. Secondly, it has nothing to do with the implementations of the recommendations.
Again, the Ethiopian delegation had been there to discuss issues related to the implementation of the recommendations by the panel. It was not to discuss other issues. Moreover, some of the issues included in the principles contradict with the Cooperative Framework Agreement which Ethiopia is signatory to. Not only that, but negotiations have also been terminated regarding the Nile Cooperative Forum. So, there would not be another negotiation. More importantly, the Nile Cooperative Forum should be undertaken under the Nile Basin Initiative, not only between Ethiopia, Sudan and Egypt. Hence, when we say that discussions should not be held on such issues, they twisted the matter to wrong direction and they are saying that Ethiopia does not need cooperation and does not accept their cooperation plan. As a result, the discussion has been terminated.
But at the end of the discussion, the Ministers have agreed to continue the discussion. The time and place have not been decided. The Egyptian delegation have returned to have appointment for another discussion after meeting and discussing with their government. We know that they are currently transmitting various messages. We have also heard them say that unless Ethiopia accepts their proposals, they would not resume the discussion.
Last week again, they have said that they were ready for discussion and this is good. This is a good message because we also believe in negotiation and discussion. Because, if there is discussion, we can narrow our differences. Thus, we have the conviction that they would come to the discussion and cooperation.
But what we have understood is that the Egyptian delegation is deliberately proposing unacceptable ideas which harm the sovereignty of Ethiopia. And this is aimed at making Ethiopia to appear as if it does not accept any of the proposals of Egypt as if Ethiopia rejected the entire proposal.
And we can clearly foretell this fact to the international community as the ideas proposed by the Egyptian delegation did not go in line with the discussion agendas and they affect the sovereignty of Ethiopia. That is why Ethiopia automatically rejected them. Ethiopia is ready to accept the request for international panel of experts when ever it is necessary. Thus as a principle, it is because the panel is unnecessary that Ethiopia has said it does not accept it. This is what we want the people of Egypt and the international community to know.
Herald – What will be the future prospect of the discussion and what are the efforts Ethiopia are doing to bring the discussion to the right track?
Fekahmed- The recommendations of the International Panel of Experts is of two types. The first recommendation is to the government of Ethiopia. Ethiopia has already implemented the recommendation given to it and it is ready to implement the recommendations of the International Panel of Experts whenever it is necessary.
What remains is the recommendations given to the three countries. The recommendations given to the three countries are intended to build confidence among three states. And the two countries need these recommendations more than Ethiopia does. Thus, as the will is theirs, we have a conviction that they would return to the discussions.
Regarding trans-boundary river, it is a shared resource of the three countries. We can only utilize this resources in common when we can talk and discuss in good manners. Developing the water through cooperation is beneficial to the three of us. Be it as it may, still, the discussion would be more beneficial to the lower riparian countries. Thus, we believe that resuming discussion and consultation after carefully assessing the situation is salient. And, we are always ready for that. But this does not mean that we would hold discussion on issues which would harm our country’s national interest, sovereignty and development. But we will make all the necessary effort to bring them to the discussion table and our door is always open for negotiation.
http://www.ethpress.gov.et/herald/index.php/herald/editorial/5679-koo
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Filed under: Ag Related, General Economic Updates, Infrastructure Developments, News Round-up Tagged: Addis Ababa, Africa, African Union, Agriculture, East Africa, Ethiopia, Grand Ethiopian Renaissance Dam, Investment, Sub-Saharan Africa, tag1
