.
China-Ethiopia relations: an excellent model for South-South cooperation
.
.
China and Ethiopia have strengthened their bilateral relations, which be an excellent model for South-South cooperation, Ministers of Foreign Affairs of the People’s Republic of China said.
Fifty years ago, the first Premier of the New China, Zhou Enlai, visited Ethiopia during his first trip to Africa. He was warmly welcomed by the Ethiopian Government and people, and his visit provided a fresh start to friendly China-Ethiopia relations. Fifty years later, Chinese President Xi Jinping, during his first visit as President to Africa, made a point of arranging a meeting with Ethiopian Prime Minister Hailemariam Dessalegn. Chinese Premier Li Keqiang also chose Ethiopia as the start of his first trip to Africa as Premier. China and Ethiopia have, indeed, attached great importance to the development of bilateral relations. They regard each other as offering priorities for strategic foreign policy choices.
Ethiopia and China are both heirs of ancient civilizations and fifty years may only be a short phase in our long histories, but the fruitful achievements those years have given China-Ethiopia relations is something our two peoples can be proud of and cherish.
China and Ethiopia are natural partners. In the past we have both suffered foreign invasion and shared the same feelings towards invaders. We both follow an independent foreign policy and share the belief that development is the top priority for national renaissance. We have provided mutual support on major issues concerning each other’s core interests, and have shared ideas, learnt from each other’s experiences of governance and explored the paths of development suitable for our repective national conditions. Indeed, on the basis of the principles of equality, mutual respect and win-win cooperation, China and Ethiopia have developed multi-dimensional relations, with people-to-people, business-to-business, government-to-government and party-to-party relations as the cornerstones of the relationship. We are sincere friends, reliable partners and good brothers, sharing both happiness and adversity, rejoicing in successes that the other has achieved. In a nutshell, China-Ethiopian relations have become a real and excellent model for South-South Cooperation.
Since the establishment of diplomatic ties in 1970, and even more following the start of the Comprehensive Cooperative Partnership in 2003, China-Ethiopia relations have developed rapidly. They have now reached their highest qualitative level. The leaders of the two countries have established close working relations and a personal friendship. Last year, President Xi Jinping and Prime Minister Hailemariam Dessalegn met twice on different occasions. Prime Minister Hailemariam paid a very successful visit to China last year and in the same year there were also the visits of the Ethiopian Deputy Prime Minister to China and of two Chinese Vice-Premiers to Ethiopia. The fruitful official visit by Premier Li Keqiang to Ethiopia in May this year and the successful state visit by President Mulatu Teshome to China in July also injected strong momentum into the continued development of our bilateral relations.
This has been apparent in many areas. Between 2003 and 2013, the yearly volume of bilateral trade between China and Ethiopia increased by more than 13 times. China has become the biggest foreign investor and the largest trading partner of Ethiopia. Ethiopia is now one of the main markets in Africa for Chinese products, equipment, technology and investment. Since 2006, China, through various mechanisms, has provided a large amount of financial support for the construction of a number of Ethiopia’s mega projects. These include the first Express Toll Way and the first operative Wind Power Plant, the Addis Ababa Light Track Railway and other modern railways developments as well as the Tirunesh-Beijing Hospital and the Confucius Institute. They are vivid illustrations of our fruitful and comprehensive relationship.
On the international plane, China and Ethiopia work very closely to address global challenges including climate change, food insecurity, poverty and regional conflicts as well as the promotion of China-Africa relations within the framework of the Forum on China-Africa Cooperation(FOCAC), and in safeguarding the interests of developing countries generally.
Within the context of globalization, China unwaveringly pursues its “Chinese Dream” and has been deepening the comprehensive reforms involved in this. Ethiopia similarly is committed to its Ethiopian Renaissance, to fulfill its five-year Growth and Transformation Plan and achieve its Vision 2025 to become a middle income country. China is now the second largest economy in the world; and Ethiopia is emerging as one of the fastest growing economies in Africa and the world. Given our complementary needs, both countries are looking forward to greater opportunities of in-depth cooperation, and we will be expanding bilateral relations in a number of areas.
In the first place, we will be maintaining the momentum of high level exchanges as the driving force for deepening and upgrading our relationship. Secondly, we will continue to deepen cooperation in infrastructure construction and in the development of industry, establishing more special economic zones. For China, Ethiopia is a potentially large market and an important investment destination; for Ethiopia, China is a major source for the transfer of industrial capacity and technology. We will not only be able to improve the infrastructure facilities in Ethiopia, but we will also work together for regional connectivity, including establishment of transportation networks, electricity and telecommunication links. Thirdly, the two countries will be able to tap into the great potential for cooperation in the fields of agriculture and mining and energy, especially green, clean, sustainable energy, and upgrade our cooperation to a fully-fledged strategic partnership. In the fourth place, we will be promoting cultural and people-to-people exchanges, and a Chinese Cultural Center will soon be established in Ethiopia, enhancing mutual understanding between our two peoples, and promoting the knowledge of our impressive and important civilizations. Fifthly, we will continue to strengthen coordination and cooperation on international issues and promote China-Africa relations healthfully and steadily through our joint efforts. We will continue to make new contributions to maintaining the peace, stability and prosperity of Africa and the world, and promote the establishment of a new, more rational and fairer international political and economic order. We will contribute towards the realization of the goal of a peaceful and prosperous Africa.
China and Ethiopia will continue to join hands to bring about an expanded and upgraded model of bilateral relations. We have no doubt, the China-Ethiopia relationship will certainly benefit and provide a brighter future for both our peoples and for us all.
.
Ethiopia issues USD 1 billion sovereign bond
.
.
Following the decision that was passed by the Government of Ethiopia to dip into the international money market, it announced to investors on Wednesday that it has issued a sovereign bond amounting one billion dollar, sources told The Reporter.
Sources also disclosed that the sovereign bond that Ethiopia offered for the first time is revealed to investors in London, where the team is also scheduled to travel other European cities and the US to make the offer known to investors there. According to sources, the certificates offer six to seven percent interest rates with a maturity date of ten years.
High-level delegation led by Sufian Ahmed, minister of Finance and Economic Development (MoFED), including Teklewold Atnafu, Governor of the National Bank of Ethiopia (NBE), Fisseha Abera, International Financial Institutions Cooperation Directorate Director at MoFED, Wasihun Abate, Director of Legal Division at MoFED and Mezgebu Ameha, Macro-economy Policy and Management Directorate Director have traveled to Europe for this purpose.
The move was expected after the House of Peoples’ Representatives (HPR) discussed in a closed session and gave the responsibility to MoFED to issue a sovereign bond.
Though The Reporter approached Ahmed Shide, state minister of MoFED, on the event of the signing ceremony of a loan agreements between the Government of Ethiopia and the World Bank and African Development Bank, he declined to disclose the amount of the bond issued in London. However, he did say that “the interest rate that the bond got was quite reasonable.” According to the state minister this is mainly because the bonds were offered at the right time.
The move to issue an international sovereign bond came after Ethiopia got a B+ rating by renowned credit rating agencies in May 2014 namely, Moody’s, S&P and Fitch. Last month MoFED selected J.P. Morgan and Deutsche Bank Group from America and Germany, respectively, to organize and facilitate meetings with potential investors with Ethiopian delegation across Europe and the US.
Sources also said that the delegation will conclude its tour next week in the US and they are expected to reveal the amount they were able to sell to investors.
Redwan Hussein, head of Government Communication Affairs Office with a ministerial portfolio, while briefing local journalist two weeks ago said that the foreign currency that would be obtained from the sales of sovereign bonds will be used to finance mega government projects which are grappling with severe hard currency shortage.
.
Ibdar Bank’s landmark USD 100 million lease agreement with Ethiopian Airlines pays first dividend
.
.
Manama – Bahrain-based Islamic Investment bank, Ibdar Bank successfully concludes the structuring of a 12-year agreement expiring in 2026 for acquiring four brand new Bombardier Q400 Next Gen aircrafts and leasing them to the Ethiopian Airlines.
The deal that was structured under a joint venture with Dubai-based operating lessor Palma Holding, marked the first ever Sharia-compliant transaction in Africa’s aviation sector. The agreement includes options for an additional four Q400 NextGen aircraft, which Ibdar Bank intends to exercise in the near future.
The announcement was made yesterday during a press conference by the recently joined, Mr. Basel Al-Hag-Issa, Chief Executive Officer of Ibdar Bank, who highlighted that the Bank has received its first dividend from the Ethiopian Airlines following this milestone transaction .
Valued at USD 100 million, Ibdar Bank contributed as investor with USD 22 million, while an amount of USD 78 million was secured through a funding agreement with Canada’s Export Credit Agency “EDC”, the export finance agency of Canada.
The Aircrafts, equipped with two engines each, have been delivered over a period of three months, with the first Aircraft delivered on 19 June 2014 and the last Aircraft was delivered on 29 August 2014.
“This opportunity comes at a time when Ethiopian Airlines, an award winning African airline with strong financial and operating track record, is embarking on an ambitious fleet expansion program amidst strong growth in African air travel,” said Mr. Al-Hag-Issa. Adding that the aviation industry in Africa and the MENA markets continue to report some of the strongest growth rates of any region.
Mr. Al-Hag-Issa said that Ibdar Bank is providing select investors with the opportunity to acquire an indirect stake in the four Bombardier Q400 NEXTGEN Aircraft. Investors can expect to receive returns of 10% cash yield per annum, payable on a quarterly basis.
For Ibdar, this is its second aircraft leasing transaction. The first was concluded with Emirates Airline in 2011 whereby the Bank acquired a Boeing 777-200ER from Emirates and leased it back to the airline for a fixed six year-term. The Bank also participated in a syndicated financing facility of USD five million for the Bahrain-based carrier Gulf Air in 2009, which has been fully repaid.
Mr. Al-Hag-Issa pointed that Ibdar is focused on originating new and innovative transactions that allow the Bank and its partners to excel. “We have a strong pipeline of opportunities in other sectors where equally we intend to build on growth in consumer patterns across our markets of focus and in industries where we have the experience and know-how to deliver solid returns,” he said.
Ibdar Bank is active in private equity in the GCC and MENA markets, in regional and global real estate and has extensive experience in sectors including infrastructure, oil & gas, maritime and retail, among others.
In addition to financing and leasing in the aviation sector, Ibdar is focused on originating new and innovative transactions that allow the Bank and its partners to excel. We have a strong pipeline of opportunities in other sectors where equally we intend to build on growth in consumer patterns across our markets of focus and in industries where we have the experience and knowledge to deliver solid returns.
.
Sub-Saharan Africa face decline in soil fertility
.
.
Empirical assessment of Sub-Saharan Africa’s soil fertility has confirmed that the region faces a significant decline in soil fertility, which could further aggravate food insecurity if no appropriate action is taken.
The finding of the assessment has been the point of discussion at a regional workshop, conducted in Nairobi, Kenya last week. The workshop, with a theme “Advancing Integrated Soil and Water Management for Climate-Adapted Land Use in Low-Fertility Areas of Sub- Saharan Africa”, was organized by the United Nations University Institute for Integrated Management of Material Fluxes and of Resources (UNU-FLORES), in partnership with the United Nations University Institute for Natural Resources in Africa (UNU-INRA), World Agro forestry Centre (ICRAF) and Technische Universitat Dresden, Germany.
An initial mapping study was conducted to review the current condition of soil and land use management in different African countries including Ethiopia, Kenya, Tanzania, Botswana, Namibia, Nigeria, Mozambique in order to facilitate the discussion at the workshop.
The objective of the workshop was to discuss and develop a joint research project across the Sub-Saharan African region to help mitigation of impact of climate change on soil fertility.
Reflecting on the assessment reports, Effiom Oku (PhD), Senior Research Fellow of UNU-INRA, confirmed that decline in soil fertility and erosion, water scarcity, and inappropriate farming practices are part of the major challenges hindering food production in the region.
“Results from the mapping assessment serve as a testimony that majority of countries in Africa need an extensive monitoring program to determine the impact of climate change on soil fertility, soil moisture and land degradation” he said.
Oku also noted that, in a region like sub Sahara, where large number of the population depends on agriculture, a decline in soil fertility and land degradation farming activities would have a significant repercussion on food security.
UNU-INRA, whose focus is enhancing the capacity of African researchers and institutions in natural resources management, is optimistic that the final outcome from the joint regional research project would produce substantial climate adaptive measures that can mitigate the effect of climate change on soil fertility in Sub-Saharan Africa.
Among organizations represented at the workshop are Food and Agriculture Organization, United Nations Environment Program, Mekelle University,University of Botswana, University of Namibia, Jomo Kenyatta University of Agriculture and Technology, Sokoine University of Agriculture in Tanzania, Bayero University in Nigeria, Eduado Mondlane University in Mozambique, and International Water Management Institute (IWMI).
Research findings show that Ethiopia’s soil is deficient in essential nutrients. Similarly, according to the Ethiopian Agricultural Transformation Agency, low soil fertility and crop nutrient imbalances are major challenges of agricultural production in Ethiopia. Thus to help tackle this, the Ethiopian Agricultural Transformation Agency has identified a set of soil fertility management interventions, such as new fertilizer formulations and new agronomic management practices and these interventions expected to be practical in the near-term.
.
Sheep leather to become the new Ethiopian brand
.
.
Dubbed as champion product approach, Ethiopia is set to brand its leather and leather products made of sheep skin to Japanese market and beyond.
.
Sponsored by the Japan International Cooperation Agency (JICA), the champion product approach movement is something which is said to seek and improve Ethiopia’s image and brand the country’s finest sheep leather and finished leather products abroad.
Noriyuki Nagai, one of the four consultants hired by JICA to undertake the job of championing sheep leather to become a brand product, told The Reporter that the short term target of the champion product approach is to introduce Ethiopia’s hi-end sheep leather and leather goods to the Japanese market.
To that end, stakeholders held the second phase of the champion product approach meeting on Thursday at Harmony Hotel located behind Edna Mall. The second phase meeting deliberated on branding issues such as logo and motto, which are expected to be finalized early 2016.
Among the candidate sectors and products which the project looked at, sheep leather has become the alternative product to go with, Nagai said. “Ethiopian coffee beans exist in Japanese market. Hence, there is no way to brand coffee there. We are trying to promote sheep leather after we have checked out that the feasibility and the potential to supply the Japanese market and others,” he said.
Kimiaki Jin, chief representative of JICA Ethiopia office, said that the sheep leather has been chosen to represent Ethiopia as a new branded product for the Japanese market due to its the accessibility because of the country’s huge potential.
According to Fistum Arega, director general of the Ethiopian Investment Commission (EIC), the branding and improving the country’s image via the sheep leather is where the government is gearing up towards.
EIC coordinates the branding project with the Ministry of Foreign Affairs, Ministry of Industry, Leather Industry Development Institute, Ethiopian Leather Industries Association and the Ethiopian Chamber of Commerce and Sectoral Association also taking part.
Currently, branding Ethiopia’s sheep leather project has involved three local businesses which are said to be “partner companies”. Leather Exotica and Enzi and ELICO Awash Tannery are the local firms which are selected for the champion product project due to their designing and production qualities respectively, according to the consultants.
Fistum said that the branding project will be scaled up further to the mass production stage after succeeding on market penetration and image building tasks. According to Fistum, champion product approach has been successful in countries like Indonesia where they had become the famous producers of Indomie noodles worldwide. He also recalled that the Office of the Prime Minister of Japan has recently sponsored the promotion of Kaizen – a renowned Japanese management philosophy to improve productivity and quality – and how the philosophy has become the norm of the manufacturing sector in Ethiopia.
Currently, Ethiopia has three coffee brands internationally recognized after years of relentless battle with international giants like Starbucks. The fine coffees of Harar, Yirgachefe and Sidama are registered as trademarks of Ethiopia.
.
Gov’t contemplates beefing up investment commission
.
.
The recently-restructured Ethiopian Investment Commission (EIC) is anticipated to oversee two essential government activities, industry zone management and export promotion, which are considered to be critical for the transformation of the country to industrialization.
According The Reporter’s sources, the commission is set to bring under its wings the industrial zones development corporation of the Ministry of Industry and Export Promotion Directorate General which was under the Ministry of Trade. Sources also said that these two government offices have been prioritized by the government to scale-up Foreign Direct Investment (FDI) activities and the export earnings of the country. Most of the FDIs coming to Ethiopia are preferred to be export-oriented. Hence, the Office of the Prime Minister is considering the commission to be best suited to manage these two governmental agencies, sources said.
Getahun Negash, public relations officer of the EIC, confirmed to the The Reporter that there are certain moves to muscle up EIC, but said that there are no official assignments given to the commission so far. Attempts made by The Reporter to get a response from the Office of the Prime Minister to further explain and comment as to why such the restructuring was required was unsuccessful.
The House of Peoples’ Representatives has amended the proclamation which constituted the EIC a few months back. The amended proclamation (Proclamation No. 849/2014) stated that Industrial Zone Development Corporation, a body that is assigned to oversee the development of industrial parks in Ethiopia, will be under the investment board, which is also a supervisory body to EIC and is chaired by Prime Minister Hailemariam Dessalegn. However, the recent move, according to sources, is intended to give more functioning power to EIC.
Similarly, the Ministry of Trade, which three years ago was part and parcel of the Ministry of Industry, was heading the export promotion directorate general. Sisay Gemechu, state minister of Industry was appointed in 2013 to head the industrial zones development.
The definition of the industry zone further elaborated to include the development of urban centers, special economic zones, industrial parks, technology parks, export processing zones, free trade zones and the likes which are to be designated by the investment board. The previous proclamation was contained to define industrial development zone as it is “an area with distinct boundary designed by the appropriate organ to develop identical, similar and interrelated industries together or to develop multi-faceted industries based on a plan fulfilling infrastructures such as road, electric power, and water and having incentive schemes with purposes containing industrial development, mitigating the impacts of environmental pollution as administering urban areas with plan and system”, it stated. Besides the industrial development zones are to be developed either by the government, by the joint venture with the private sector or by the private sector alone.
The export promotion directorate general on the other hand, led by Assefa Mulugeta, has also been restructured recently to oversee both agricultural and manufactured commodities of the country and to seek ways which would promote the exports of the country.
The recent commitment of USD 250 by World Bank to finance the state-owned two-phased Bole Lemi Industrial zone has encouraged 22 factory units to come to Ethiopia. Among the stationed factories, the Taiwanese, Hong Kongese and South Koreans are some worth mentioning.
.
Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Agriculture, Business, China, East Africa, Economic growth, Ethiopia, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1
