Republic of Korean Pledge to Boost Investment Ties with Ethiopia
Written by Meraf Leykun
Speakers of the Ethiopian and South Korean Parliaments expressed their commitment to further strengthen investment cooperation between the two countries.
During talks with with Korean Republic Parliament delegation headed by Speaker Kang Lee yesterday, House of Peoples Representatives Speaker Abadulla Gemeda said tthat at Ethiopia will create favorable conditions for Korean investors interested to invest here.
He also requested his counterpart to encourage Korean investors to explore investment opportunities in Ethiopia.
The Korean National Assembly Speaker Kang Chang Lee, said a number of Korean companies have already been engaged in Ethiopia while others are on the way.
According to Chang, Samsung is planning to establish a plant to manufacture refrigerators and other equipments in Ethiopia. LG is also planning to invest in joint venture with Ethiopian companies.
The Speaker pledged to encourage more companies to come and invest in Ethiopia to further consolidate investment relations between the two countries.
Source: Ethiopian Herald
Ethiopian Diaspora Business Forum focuses on investing in agribusiness
By Dorcas Appiah
The 8th edition of the Ethiopian Diaspora Business Forum organized by the Ethiopian American, an Ethiopian Diaspora business and investment group will focus on ‘Investing in agri-business: Opportunities and Challenges for Diaspora Investors.’
A press release issued on July 12, 2013, said the forum will among other things discuss specific investment opportunities in agri-business, agro-processing and financing and value chain development opportunities in select subsectors.
The Forum this year is also organizing an agri-business concept competition and the winning team will be rewarded with a round trip ticket to Ethiopia and technical support from the Forum and its sponsors as well as participate in a USAID-funded matching grant programme to support investments in select agricultural value chains, it adds.
The Managing Director of The Ethiopian American, Founder and Executive Director of the Forum, Yohannes Assefa said, “The Forum and Awards events will highlight the work of the Ethiopian Diaspora entrepreneurs and various business and investment opportunities available for Diaspora businessmen.”
The Forum will be held at the George Washington University’s Jack Morton Auditorium in Washington DC, on July 27, 2013, said the organizers.
Ethiopia Says Ties With South Sudan Continuing to Improve
Addis Ababa — Ethiopia’s newly-elect deputy prime minister, Demeke Mekonnen, on Thursday said relations between his country and South Sudan, since its independence from Sudan have improved in all aspects.
In an interview with state-run Ethiopia Radio and Television Agency (ERTA), Mekonnen, who has just returned from attending South Sudan’s second independence anniversary, said diplomatic, economic, political and social ties between Addis Ababa and Juba had grown steadily since 9 July 2011.
“We have strong cooperation in different areas including in capacity building and in infrastructure development” he said, noting the historic and cultural bonds between the peoples of Ethiopia and South Sudan.
As well as agreements on political and diplomatic relations, Ethiopia and South Sudan have agreed a series of cooperation agreements on a abroad range of subjects that the countries say have gained momentum over the past two years.
Among others, the two neighbours have signed agreements to work together to maintain peace and security along their common border, on trade, transport, education, communication, transit and exports as well as on cultural and social relations.
Mekonnen said Ethiopia and South Sudan have established a ministerial-level cooperation monitoring body to review and follow up the implementation of the raft of bilateral deals.
He said his country would do its best to further expand the relations with South Sudan in all fields and at all levels, based on the mutual respect between the two East African neighbours.
With regard to Sudan and South Sudan, the Ethiopian official said his country was working closely to push-start better diplomatic relations between the two countries in order to resolve their remaining post-secession disputes.
He went on to say that Khartoum and Juba have shown encouraging cooperation in narrowing existing differences between them.
Mekonnen reaffirmed that Ethiopia, which has hosted most of the discussions between the two sides, will continue to extend support until all the disputes between the two Sudans are completely resolved.
He further said the birth of Africa’s newest nation has laid a foundation to address peace and security problems in the volatile East African region and in the continent at large.
Chinese Bank To Invest $100m In Congo Potash Project
VENTURES AFRICA – The China Development Bank (CDB) has agreed to invest about $100 million in Hong Kong-listed Dingyi Group, to jointly develop a potash project in the Republic of Congo.
The funds will be channeled through the China-Africa Development Fund, a wholly owned subsidiary of China Development Bank (CDB).
Hong-Kong based Dingyi Group is an investment house focused on the natural resources sector and the investment is one part of its long-term strategy to invest in potash on the continent.
Potash or potassium minerals are the main ingredients used mostly in fertilisers.
China-Africa Development Fund, established in 2006, is a $5 billion Africa-dedicated fund.
The Dingyi Group is also in the last stage of acquiring Australia’s Elemental Minerals, which owns 93 percent of the Sintoukola potash project in the Republic of the Congo, also known as Congo-Brazzaville.
Mr Kevin Su, the Chief Executive of Dingyi said he expects its annual output to reach about two million tonnes once Dingyi starts to develop the project.
“The potash project in Africa will need big investments in the coming years and CDB will be a great partner to have to help us to finance the project,” Su said.
The early-stage cost for the potash project in the Republic of the Congo, including investments in local infrastructures and logistics, may be about $2 billion. The Beijing-based investment fund, Hopu Investment, led by Fang Fenglei, would also become an investor in Dingyi, Su said.
Despite the geographical distance, economic and diplomatic ties between Beijing and many African countries have rapidly strengthened in the past decade. Besides the government-backed China-Africa Development Fund, Beijing last year pledged $20 billion in credit to African governments over the next three years.
To meet her ever increasing demand for resources for its large population, the Chinese government has encouraged domestic companies and investors to invest in natural resources businesses abroad. Particular resources that have attracted investments have been oil, gas and potash, the three most-wanted resources assets by Beijing.
Su said: “For now, China doesn’t have the pricing power in the potash business because the potash market is mainly dominated by Canada, Russia and Germany.”
China currently relies heavily on imports of potash, which accounts for about 50 percent of annual demand.
Ethiopia, Djibouti agree on strategic integration plan
- Ethiopia proposes the establishment of joint port corridor management authority
The governments of Ethiopia and Djibouti have agreed to integrate their economies as an example to other African states.
Written by Yemane Nagish
The agreement includes a second electricity export arrangement and the establishment of a joint port corridor management authority, which will upgrade the port service.
During the 12th Joint Ministerial Commission Meeting held on Thursday at the Addis Ababa Hilton Hotel, the two parties signed the agreement and discussed various issues of high importance.
Points discussed during the meeting focused on three areas of cooperation and concern; political and security issues, trade and investment and port utilization. Ministers of both countries also discussed issues affecting the implementation of agreements signed during the 11th Joint Ministerial Commission Meeting, resolving some problems the two countries faced.
In his opening speech, Dr Tedros Adhanom, minister of Foreign Affairs, noted that the two countries continue to have excellent relations in all areas of cooperation.
“Historically and culturally we are interconnected. And now our destiny is intertwined,” he emphasized. “The two governments are working in this context.”
He added that minor misunderstandings in the implementation of agreements reached at the 11th meeting were resolved.
Mahmood Ali Yosouf, Foreign Affairs minister of Djibouti, said: “The cultural and historical affinity that the two brotherly countries have is very important in integrating their economies.”
“We are not only having bilateral cooperation. Our relations go beyond that; regional peace and security concerns like the Somalia crisis, the problem of the two Sudans, human trafficking and global terrorism are common areas of concern,” he said. “We all believe that we have a common feature and the same vision.”
After discussing for a couple of hours, the ministries of both countries reached agreements which both parties believe will lead take to a higher level of economic integration. The first agreement concerns the extension of a second Ethio-Djibouti power interconnection project. The planned power supply is thought to extend from Semera (Ethiopia) to Jabannu (Djibouti). In addition, the second agreement focused on cooperating in areas of education, health and communication. Here, both parties agreed to eliminate double taxation and avoid illegal human trafficking along the border. The Reporter learnt that the Ethiopian government asked its Djiboutian counterpart for the establishment of a port corridor management authority, to raise the service quality of the Djibouti Port.
Dr Tedros appreciated the Djiboutian delegation for bringing the idea of a long-term Strategic Integration Plan to their attention. In principle, he made it clear that the Ethiopian government and people welcome the proposal.
“I am hopeful that the document will be fully ready for endorsement at the next Ministerial Commission Meeting,” he said. He also confirmed that his government will immediately assign experts to work on this important strategy with their Djiboutian counterparts.
Currently, Ethiopia exports 35 MW of electricity a month to Djibouti, charging them USD 70 dollars per kWh. Apart from power exports, a major railway line connecting the two countries, financed by the Export-Import Bank of China, is under construction.
NBE to license Finance Lease, Hire-Purchase businesses
An amendment to the capital goods leasing business proclamation has set the stage for the emergence of the sector in Ethiopia, most significantly the system of Finance Lease and Hire-Purchase businesses under the supervision of the National Bank of Ethiopia (NBE).
Written by Yohannes Anberbir
The business of capital goods leasing, including any equipment or machinery used in the production or service rendering companies, was permitted under the proclamation No. 103/1998. The old proclamation mandated the Ministry of Trade (MoT) to license all equipment leasing business, which according to the preamble has led to the amendment. The equipment leasing business, as per the amendment, has three distinct categories: Operating leasing, Finance Lease and Hire-Purchase system. The first category, Operating lease, will still fall under the realm of MoT and is the standard equipment rental agreement, where the user of the machinery makes payment for the short-term use of the products.
However the second type, Finance Lease, will involve long-term leasing contracts where the user retains long-term rights in exchange for regular payment. At the end of the contract period, if the payment made by the user covers the cost of the product over the years after accounting for depreciation cost, he/she might retain ownership of the equipment or not upon termination of the contract, the proclamation stipulates. But, the ownership right remains in the hands of the leaser throughout the payment period.
As far as the Hire-Purchase system is concerned, the user will make payments towards eventual ownership of the capital goods in addition to the right to use the equipment. In effect, the Hired-Purchase system is a mortgage system, where the equipment user makes payments that increase his/her ownership rights until the payments are complete. All the other payment systems, however, remain the same as with Finance Lease. Hence, the mandate to license and control the last two in light of their close ties to the financial institutions has been given to the NBE.
According to the preamble, the primary purpose of the amendment is to provide the much-needed push for the small-scale manufacturing sector in the country. In the recent press briefing Prime Minister Hailemariam Desalegn stated that the small-scale manufactures are the core and backbone of the manufacturing sector. The growth of the sector in the previous year was pulled down to 13 percent because of the small-scale sub-sector, in face of the medium and large sub-sector recording 18.3 percent growth.
Currently, the Operating Lease business is big in Ethiopia. In fact, a lot of private sector members have made the shift to the construction material rental business in recent times motivated by the usurious rental prices, while construction companies suffered in the process. The amendment is aimed at making the small construction companies owners of the machineries they use.
Furthermore, the amendment tabled at the last day of the parliament also eliminated the repetitive value added tax (VAT) levied on the capital goods rental and lease business. The amendment said that since the leaser has already paid the VAT on the equipment it had imported to the country, the requirement of VAT from the transaction of equipment rentals would be repetitive taxation, hence is removed. The proclamation also gave further mandate to MoT and NBE to workout detailed directives to be implemented in the future.
Premier urges RoK to release loan for Hawassa-Modjo Expressway
Prime Minister Hailemariam Dessalegn urged the Republic of Korea (RoK) to release the 700 million USD loan for construction of the Hawassa-Modjo Expressway. While discussing with a RoK delegation led by the Speaker of the country’s National Assembly, Kang Chang Hee later on Thursday, urged the Speaker to strive in collaboration with concerned bodies towards the release of the fund to be used for construction of the Expressway and also installation of electric cables. The long-term loan is said to be given with low interest rate. PM Hailemariam also stressed the need to further enhance the existing bilateral relation between Ethiopia and Korea, which he said is cemented by blood. The Premier said the existing relation should be intensified in the economic and trade sectors. PM Hailemariam also called on Korea to support Ethiopia through technology and knowledge transfer. On the occasion the Premier sent invitation to the Korean President Park Geun-hye to visit Ethiopia, according to the Director-General of the Asia and Oceania Affairs Arega Hailu with the Ministry of Foreign Affairs. The Korean Speaker on his part expressed desire of his government to further strengthen existing relation between parliaments of the two countries. Kang Chang Hee said Korea is keen to boost economic and trade ties as well as enhance existing people-to-people relation with Ethiopia. The Speaker also vowed to strive to enable Korean investors engage in leather, textile and electronics sectors, among others, in Ethiopia and to further intensify relation among universities of the two countries. The launching of the new flight of the Ethiopian Airlines to Seoul will enhance Korea’s relation with Africa, the Speaker said.
Zone transplanting over 275.4 mln. tree seedlings
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