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Ethiopia: If the shoe fits, build zones

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

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

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

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

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

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

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Leather, textile zones

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

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

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

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

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

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

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

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

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

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

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

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Trading hurdles

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Trade logistics in this landlocked country are also problematic.

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

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

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

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

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

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

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Djibouti and Ethiopia Pursuing Geothermal Power Schemes

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

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

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

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

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

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

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

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

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

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

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

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Large Foreign Presence at Ethiopia’s Second Hotel Show

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

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

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

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

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

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

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

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

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

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

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Multi-Donor Initiative to Support Private Sector Development

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

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

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

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

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

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

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Celebrated Ethiopian entrepreneur behind soleRebels reveals her next big idea

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BY Kate Douglas

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

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

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

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

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

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

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

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

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

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

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

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

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From Track to Highway

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

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

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Ethiopia receives nine new vessels in Djibouti

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By Mohammed Taha Tewekel

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

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

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

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

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

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

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

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

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

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

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

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

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

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Thought for Food

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Ministry Registers Impressive Gains in Irrigation Works

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Highlights from the opening session of the 2020 Conference

Source: M. Mitchell/IFPRI

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

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

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

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

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

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

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Speaker videos and summary notes

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

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

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Posted on Friday, May 23, 2014 

by Fetsum W. Berhane

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

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

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

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

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

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

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

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

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

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

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

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

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Related Posts

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

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

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

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Ethiopia, Israel keen to deepen ties

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Ethiopia and Israel have agreed to further deepen all-round relations between the two countries.

Israel’s Foreign Minister Avigdor Liberman is in Ethiopia where he met with Ethiopia’s Foreign Minister Tedros Adhanom (PhD). He is also scheduled to meet Prime Minister Hailemariam Desalegn and President Mulatu Teshome (PhD) later today.

The two Foreign Ministers today signed a memorandum of understanding at the Ministry of Foreign Affairs in Addis Ababa.

According to Hilawe Yosef, Ethiopia’s Ambassador to Israel, the memorandum of understanding incorporates political, economic and security cooperation.
At a joint press conference held after the signing, Tedros said Israel’s Foreign Minister has reiterated the country’s readiness to strengthen its support to Africa in fighting terrorism.

The security cooperation between Ethiopia and Israel includes intelligence sharing, Tedros added.

“Today’s discussion is on how we can further deepen our cooperation,” Tedros said.

Liberman, for his part, said the two countries have agreed to hold regular consultations between their ministries.

“We are in the best page of our bilateral relations which goes as far back as two thousand years during the Solomonic era,” Liberman said.

The visit also aims to boost economic ties between the two countries. More than 40 Israeli private businesses from the Israel Export Institute also accompanied Liberman, who is visiting Ethiopia for the second time in that capacity.

The businesses are drawn from various sectors including agriculture and water technology, energy and mining, life science, information technology, banking, homeland security, infrastructure, consultancy and aviation.

Earlier the two foreign ministers opened an Ethio-Israel business forum at the Sheraton Addis. The two day forum, jointly organized by Israel’s embassy in Addis Ababa and the Ethiopian and Addis Ababa Chambers of Commerce and Sectoral Associations, are aimed at boosting business to business ties between Ethiopian and Israeli companies.

The Israeli foreign minister, who is on Africa tour, will also visit Rwanda, Ivory Coast, Ghana and Kenya.

http://www.waltainfo.com/index.php/editors-pick/13816-ethiopia-israel-keen-to-deepen-ties

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Ethiopian, Israeli Business Discussing

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The Israeli business delegation that accompanies the Foreign Minister Avigdor Liberman has started discussion with Ethiopian business persons on possible partnership.

Speaking on the occasion, Ethiopian Foreign Minister Dr Tedros Adhanom said in spite of the age-long relation, the trade and investment tie between the two countries is low.

A number of multinational companies are being attracted to Ethiopia because of the successive economic growth of the country over the past decade, he said.

The government will extend support for Israeli companies with the desire to increase their involvement in the economy, he said.

For his part Minister Liberman said the economic cooperation between the two countries doesn’t improve as desired.

Ethiopia is among the strategic partners of Israel in Africa and he affirmed that he will exert maximum effort to lobby on Israeli companies to be able them engage in Ethiopia.

The annual trade relation between the two countries has reached 112 million USD in 2013 from 46 million USD in 2004.

The trade balance is in favor of Ethiopia. Ethiopia has exported items valued at 93.6 million USD, while the balance is import from Israel.

Sixty four of the total 200 licensed Israeli companies with an aggregate capital of 7.1 billion Birr to do business in Ethiopia have so far started operation, according to Fitsum Arega Director-General of the Ethiopian Investment Agency.

The companies are engaged in agriculture, particularly in sesame, horticulture and floriculture production, he said.

Israel is the second largest destination for Ethiopia’s sesame production next to China.

Arava Power Company is among the 50 companies accompanied the Foreign Minister to identify investment and business opportunities in Ethiopia.

The company is conducting feasibility study to develop energy from geothermal and solar with 300 million USD, according to Company Co-Founder Yosef Abramowitz.

The Company is engaged in similar investment area in Rwanda, the Founder said.

Mekorot Development and Enterprise is another company desirous to invest in Ethiopia. The company is interested to invest in Ethiopia in water technology, said the company’s business development vice president, Zvi Pinczowski.

The company is assessing the possibility to partner with Ethiopian businesses working in the area, he said.

Israeli companies are coming to Ethiopia to search investment and business opportunities in the country, according to Kebede Abera, Business Diplomacy Director General with the Ethiopian Ministry of Foreign Affairs.

Similar business delegation has visited Ethiopia three months ago to identify business and investment opportunities in the country.

The delegation led by the Israeli Agriculture Minister has shown interest to engage in the agriculture sector, he noted.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2223:ethiopian-israeli-business-discussing&Itemid=260

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Liberman Says Israel Will Strengthen Trade, Investment Relations with Ethiopia

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http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2228:liberman-says-israel-will-strengthen-trade-investment-relations-with-ethiopia&Itemid=260

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President Says Ethiopia’s Membership to EITI Would Ensure Transparency

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http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2225:president-says-ethiopia’s-membership-to-eiti-would-ensure-transparency&Itemid=260

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EU – Ethiopia On Track to Meet MDG’s

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EU ambassador to Addis Ababa, Chantal Hebert told reporters that Ethiopia has become effective in eradicating extreme poverty, reducing child and maternal mortality; and making primary education accessible to children, controlling malaria, HIV/AIDS and other sexually transmitted diseases (STDs) and in sustainable environmental protection .

According to Ambassador Chantal Herbert, Ethiopia is on the right track to meet most of the Millennium Development Goals before 2015 .She also indicated that Ethiopia has become successful in job creation and in encouraging entrepreneurial ventures and improving lives of its people. Allocation of 70 percents of the nation’s budget to poverty reducing sectors such as education, health and infrastructure has helped to the achievement of the success; she added .

She also reminded that if the economic growth of the country continues with the current pace, Ethiopia will be able to achieve a middle income nation status by 2025. According to the ambassador EU had provided 680 million Euros worth development support to Ethiopia from 2008 to 2013. It has also approved a development support of 745 million Euros from 2014 to 2017. Accordingly, EU provides Ethiopia a development support of 200million Euros annually.

http://allafrica.com/stories/201406171355.html

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Minister Observes Big Improvement in Justice Organs

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The role of justice organs in building a democratic system and ensuring the prevalence of good governance has shown big improvement, according to Ministry of Justice.

A consultative meeting that evaluates the performance of the ministry and regional justice bureaus during the GTP and discusses the plan for the coming five years is underway here in the capital.

Speaking during the opening ceremony, Minister of Justice Getachew Ambaye said justice organs are helping create a stable system by ensuring the supremacy of law and respecting and ensuring the respect of the constitution and the constitutional order as well as reducing crime.

Improvements have been witnessed with respect to making the economic growth of the country and peace become reliable, and good governance prevail in the justice system, according to Getachew.

Justice organs are in particular showing improvement from time to time in providing fast and localized justice for the public, he noted.

Justice State Minister Birhanu Tsegaye said on his part that justice organs were able to register satisfactory results by involving citizens.

Though impressive achievements are registered in delivering efficient justice and in ensuring the supremacy of law, rent seeking is observed in some quarters, he pointed out. In this respect an integrated system should be put in place to stop the practice, Birhanu underscored.

According to him, building a justice army and introducing structural changes as well as establishing a nationally integrated justice system are the tasks ahead in the coming years.

The three-day consultative forum is expected to assess the performance of the strategic plan of regional justice bureaus.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2226:minister-observes-big-improvement-in-justice-organs&Itemid=260

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Over 5.6 Billion Tree Seedlings Readied for Planting Across Nation

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http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2227:over-56-billion-tree-seedlings-readied-for-planting-across-nation&Itemid=250

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Draft customs proclamation proposed

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A draft customs proclamation aimed at establishing a modern legal customs framework which encourages development of manufacturing industries and investment has been proposed to the House of People’s Representatives.
The draft proclamation replacing the current 622/2001 customs proclamation is expected to provide effective and speedy service in the facilities of the authority and give the Director General of the Ethiopian Revenue and Customs Authority (ERCA) more power.
The new proclamation will also introduce structural adjustments in the functions of the authority and its human resource management. It also ensures the ‘free movement of goods for those organizations identified as Authorized Economic Operators (AEO), eases Post Clearance Audits (PCA), and decentralizes the activity of the authority.
The amendment introduces new ways in which customs officers can go to inspect the place where the goods are. Such practice saves costs and time and will help to further fuel the booming economic achievements of the country reads the clarification of the proclamation.
The proposed proclamation also gives the director general of ERCA the mandate not to institute criminal charges based on various conditions. The draft proclamation states that if the alleged offender cannot follow the proceedings due to old age or chronic disease, if it is believed that the proceeding of the case in court will harm national interest or international relations, if instituting proceedings may cause an unbalanced side effect or if the charge has not been instituted in time and thus has lost its relevance the director general may decide that criminal charges not be instituted.
The proclamation will also help to bridge gaps observed in the customs proclamation the country has been using over the last five years. The need for a more modern customs legal framework to support development of industries and investment has made the introduction of the new proclamation necessary.
The draft proclamation was referred to the Budget and Finance Affairs, and Law and Administrative Affairs Standing committees for further discussion.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4364:draft-customs-proclamation-proposed&catid=35:capital&Itemid=27

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Sudanese factory in Ethiopia inaugurated

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A Sudanese factory worth $ UD 5million built in Addis Ababa was inaugurated (June 12). The factory is engaged in manufacturing of electric poles, adhesives, water tankers, and dishes among others and created employment opportunity for 300 peoples. Speaking at the inauguration of the factory, State Minister for Industry Dr. Mebrhatu Melese said the factory, built by Albaz Industrial Company, will have a big share to enhance infrastructure and construction works in the country. The state minister noted that with the establishment of the factory the country will save over 2 million USD foreign currency annually. According to Dr. Mebrhatu the Ethiopian government has been providing production sites and multiple forms of assistance for both local and foreign investors. On his part, the owner of Albaz Industrial Company, Mohammed Hassen expressed his plans to expand the factory.

http://www.mfa.gov.et/news/more.php?newsid=3234

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Kessem sugar project takes farmers, private sector under its wing

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Kessem sugar development project underway in Afar regional state is expected to boost Ethiopia’s sugar production when completed at the end of this year, but beyond that the multi faceted development project has taken local farmers and private businesses under its wing.

When completed, the sugar factory will produce 260,000 tons of sugar annually when it starts operating at full capacity. The projects will cultivate 20,000 hectares of sugarcane plantation in Kessem and Bolhomon areas.

So far over 5,500 hectares of land has been covered with sugarcane plantations, according to Miruts Weldai, deputy head of the project’s farm operations. They plan to cover another 7,000 hectares of land during second round plantations expected to commence this month.

The project has brought unique opportunities for local farmers and private farms. In March 2014, Ethiopian Sugar Corporation, who owns state financed sugar projects in the country, signed the first ever out-grower agreement with a private company – Amibara Agricultural Development plc.

Based on the deal, Amibara, a private agriculture farm, will supply sugarcanes to Kessem sugar development project for three years. The company, whose farm is located in close proximity to Kessem project, will cover 6,000 hectares of land with sugarcane plantations.

Since the deal was signed, over 3,300 hectares of land has been covered with plantations, Miruts told WIC.

Besides offering job opportunities for locals, the project is providing trainings in sugarcane farming skills to local farmers.

The training aims to equip local farmers with the required skills which to cultivate sugarcanes on their plot and supply them to project’s crushing plant in an out-grower deal.

Farmers are being organized in cooperatives with whom the Kessem sugar factory will negotiate out-grower deals.

Such arrangements are not new for the corporation, in February 2014, Wonji-Shewa Sugar Factory struck its ninth out-grower deal with farmers’ cooperatives agreeing to purchase a quintal of sugarcane for 50 birr.

Kessem sugar plant, whose construction is being carried out by the Chinese Complant Group Inc, is expected to start crushing in November 2014. The irrigation dam on Kessem River is also nearing completion. The state owned Federal Water Works Construction Enterprise is carrying out the construction.

http://www.waltainfo.com/index.php/explore/13807-kessem-sugar-project-takes-farmers-private-sector-under-its-wing

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Albazz to manufacture chemicals locally

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Joining hands with Falcon Chemicals LLC, Albazz Industries PLC plans to begin making construction chemicals primarily using local materials.
Albazz CEO Mohammed Hassan said most of the raw materials which will go into products like paint, coatings, adhesives and construction chemicals are found in Ethiopia. Producing these chemicals will create jobs, save foreign currency and reduce imports significantly.
He explained that the products can be used for factories such as Carpentry, Joineries, Furniture factories, Paper & Packaging Industry, Paper converting industries, Bottle labeling, Printing & Cigarette industry.
Mebratu Melesse, State Minister of Industry, said some of the products, like paint, will be used in the government housing program.
Falcon manager, Mitika Gocunlda also said that other products will be used as glass replacement plastics which will reduce costs of materials used in telephone poles by 50 percent.
Falcon Chemicals LLC was established in the United Arab Emirates in 1976. The company has diversified into several business sectors with a marketing network spread across the Middle East, Africa, India and the Far East.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4362:albazz-to-manufacture-chemicals-locally&catid=35:capital&Itemid=27

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Workshop Urged for Comprehensive National Logistics

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During National Logistics Strategy Study workshop Mekonnen Abera, Ethiopian Maritime Affairs Director, urged for a comprehensive national logistics strategy for Ethiopia to achieve the aim of becoming a middle income country.

Mekonnen during the workshop noted Ethiopia is still highly inefficient despite making remarkable efforts to alleviate challenges in the logistics system. He continued and said the sectors underperformance is holding back the nation’s competitiveness.

According to the Director, the study is aimed at reviewing the overall logistics system, developing blue print for a more efficient and effective system, identifying required for transformation and desgining the implementation approach.

The workshop focused on reaching consensus among key players in the sector on the major bottlenecks identified in the first phase of the study.

The study was sponsored by the United Nations Development Programme and conducted by NATHAN Associates Inc. the firm presented its findings in the transport and road operation, port and corridor performance, railway operations and terminals and air cargo operations.

The findings revealed truck fleet in Ethiopia is old, inadequate by modern standards, slow and expensive to operate. It added for the new standard gauge Addis Ababa-Djibouti railway succeed, there must be convenient and cost effective connections for the shippers.

The study also indicated the general air cargo terminal at the Bole International Airport suffers from delay in removing goods.

http://www.2merkato.com/news/alerts/3046-ethiopia-workshop-urged-for-comprehensive-national-logistics

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European banks to finance Ethiopian railway constructions

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European banks have decided to finance Ethiopian railway constructions.

According to the Reporter, Credit Suisse and the Turkish export and import bank (ExIm bank) are the two that have agreed to finance the railway lines.

Credit Suisse has helped in convincing and organizing the European banks to finance the constructions and on June 20, 2014 Credit Suisse is expected to sign an agreement with Ethiopian finance and economic development ministry.

The European banks have agreed to finance the 400 km railway line that stretches from Woldia to Awash which is part of the lengthy Mekelle to Djibouti’s Tajura port railway line.

The banks will finance 85% of the 1.7 billion dollar project cost and the remaining finance is expected to be covered by the Ethiopian government.

Some commented that the European banks agreeing to finance projects in Ethiopia have a huge significance for the country and such situations haven’t been seen in the country’s recent history.

The Mekelle-Djibouti railway line construction is divided into three parts. The first leg of the construction which stretches for 260 Kms from Mekelle to Woldia is to be constructed by the Chinese construction company CCCC with 1.5 billion dollar finance from the Chinese ExIm bank.
The second one being the Woldia-Awash line mentioned above and for the third and final leg of the construction from Awash to Tajura port of Djibouti finance hasn’t yet been secured.

http://www.waltainfo.com/index.php/editors-pick/13802-european-banks-to-finance-ethiopian-railway-constructions-

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DHL to build world class facility

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DHL announced its plan to build a world class facility inside the Addis Ababa Bole International Airport.

The logistics company is currently in negotiation with the Ethiopian Airports Enterprise and Ethiopian Airlines to build the facility within the premises of the airport.
“We are looking at a potential location. Once we do the necessary contracts, we then start the construction,” stated Charles Brewer, Managing Director of DHL Express Sub-Saharan Africa. Once completed the facility is expected to feature a service center and country office.
“We are very committed to investing in Ethiopia. It is taking longer than we expect but we have to respect the environment we work in,” Charles stated.
“Ethiopian Airlines and Ethiopian Airports Enterprise have their own stand of what they want and where they want us to be. We are trying to make sure we find a marriage that works. It is going to be a big investment, millions of dollars. We don’t put up that kind of money unless we are sure it is a good investment,” he added.
DHL is currently upgrading all our infrastructure in several countries in Africa and Ethiopia is part of the jigsaw puzzle.
DHL stated that East Africa and Ethiopia are key regions for growth within Sub-Saharan Africa. For the past three year, the East African community has sustained a high GDP growth, outpacing a number of Sub-Saharan countries. The International Monetary Fund (IMF) has forecasted a GDP growth of around 7.5 percent for Ethiopia in 2014.
“We have been very pleased with our progress over the last quarter, which is both a reflection of the country’s economic development but also of our employee’s passion for the business and taking it forward,” said Essete Gebriel, Country Manager for DHL Express Ethiopia.
She also stated that the company is doing significant work in increasing connectivity for Small and Medium Enterprises (SMEs), helping them to understand the paperwork, legislation and expertise needed to grow beyond Ethiopia’s borders.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4357:dhl-to-build-world-class-facility-&catid=35:capital&Itemid=27

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First Lady led Ethiopian women investors to Turkey

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An Ethiopian delegation led by First Lady, Mrs. Roman Tesfaye consisting of women business persons’ is on tour in Turkey to share experiences with Turkish investors and create market link. The delegation paid a visit to two leather producing factories in Istanbul called Tergan and DeRman which are in the business for over 40 years. On the occasion, First lady, Mrs. Roman briefed the Turkish investors about Ethiopia’s potential in leather input, government incentives and cheap human labor. Both factories said that the briefing was insightful. The owner of Derman factory, Mr. Ibrahim Aidewan said Ethiopia is now on top of his list for investment. The representative of Tergan leather producing factory said he sees the opportunity to directly import inputs from Ethiopian Tanneries. The visit organized by office of the First lady of Ethiopia and confederation of Businessmen and Industrialists of Turkey (TUSCON) aims to create market tie between Ethiopian and Turkish investors as well as enhance trade tie of the two countries.

http://www.mfa.gov.et/news/more.php?newsid=3236

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Half of Turkey’s African investment is in Ethiopia

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Ethiopia is now Turkey’s biggest African investment, Aykut Kumbaroglu who works with African Countries for Turkey’s Ministry of Foreign Affairs said. There are currently over 350 Turkish companies investing USD three billion in Ethiopia. This is half of the USD six billion the nation invests in sub-Saharan Africa.  Turkish officials say this has come as a result of their encouragement to invest in Ethiopia.
Aykut pointed out that the leaders of both nations have made reciprocal visits and their relationship is strong.
Ethiopia reopened its embassy in Ankara in 2006 and different Turkish offices have based their regional office in Addis Ababa including Turkey’s Anadolu News Agency.
Top diplomats in the Ethiopian Embassy at Ankara, told Capital that Turkish companies are now focusing on Africa. “Ethiopia is a gateway for their vision,” the diplomat explained.
The Ethiopian diplomat said that Turkey is now changing and they are transferring to the service sector from industry and because of this they are growing in Ethiopia.
“Our embassy and the government in Addis Ababa are aggressively lobbying Turkish companies to come to Ethiopia and this combined with the current Turkish investment in Ethiopia is creating a push, pull effect to enhance the already blossoming trade between the two nations,” the diplomat explained.
Ayalew Gobeze, Ethiopia’s Ambassador to Turkey, said even though economics is one of the main aspects of the two nation’s relationship there are other aspects as well.
Ayalew said that the number of Turkish investors asking to invest in Ethiopia is rapidly growing. “We are also working strongly to expand the number of Turkish investors in Ethiopia, because they will come into Ethiopia with benefits including new technology and knowledge,” the recently appointed ambassador and one of the top ruling party officials added.
“But when we encouraged the Turkish investment in the country we have to be responsible to facilitate the smooth bureaucratic process to expand the FDI,” he explained.
The interest of Ethiopian investors is also growing to work with the Turkish business community.
According to the 2013 data, the trade between the two countries has reached USD 420 million from USD 27 million in 2000.
Ethiopia is the first sub Saharan Africa country to begin modern diplomatic relations with Turkey at the start of the 20th century when Turkey opened its consulate in Harar.
Turkish officials say the two countries are working in many sectors including education, health and security.
Turkey has been training the Ethiopian Federal Police and several Ethiopian police officers are taking  training in Turkey.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4365:half-of-turkeys-african-investment-is-in-ethiopia-&catid=54:news&Itemid=27

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LG Hope College to open in November

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LG electronics announced that, LG Hope Technical and Vocational Education and Training College will begin operation in November this year.
Home and office equipment servicing, electronic communication and multimedia equipment servicing, and information communication technology are the subjects the colleges will give to its students. The college will also be supported by the Korean International Cooperation Agency and World Together NGO.
The three departments will have 25 trainers each and it will take three years to accomplish the training. Ten percent of the quota will be given to the Korean War Veteran decedents and low income groups for free of charge.
Executive VP of LG Kim Young said that the opening of the college will help the country by providing well trained personnel for the industry.
He also added, “the plan is to make the college one of the best academic and training centers of technology transfer and innovation.’’
The 12,000 sqm school is be located around the area commonly known as Summit and is expected to be completed in September.
In related news LG signed an MOU with the Foundation for Global Compact to strengthen its commitment to development challenges such as poverty, environmental degradation, and peace.
Kim said at the signing ceremony that “LG is committed to sharing its corporate social responsibility experience with the international community, and  encouraging other businesses to enhance their commitment to the UN Global Compact to tackle challenges to development through sustainable action.
LG is a global business enterprise with a 67 year history. It has played a significant role in the inception and development of Korea’s chemical and electronic industries. It has 200 offices around the world with 213,000 employees.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4356:lg-hope-college-to-open-in-november&catid=35:capital&Itemid=27

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GERD coordination office to launch SMS lottery game

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Office of the National Council for the Coordination of Public Participation on the Construction of the Grand Renaissance Dam said it will begin SMS lottery game soon to raise funds for the construction of the dam.
According to the office the lottery game is prepared for every Ethiopian to easily contribute to the dam.
Winners will be awarded a house, a car and other materials.
The car to be given for the winner has been provided by Nyala Motors, an exclusive distributor of motor vehicles and equipment.

http://www.waltainfo.com/index.php/editors-pick/13812-gerd-coordination-office-to-launch-sms-lottery-game

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eLearning comes as game changer for Africa’s education

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Challenging the norms in East Africa, many young women are tapping into their entrepreneurial potential. From developing apps and software, to founding non-profit organisations, women in East Africa are attracting African and global attention for  successfully changing patriarchal societies.
Women in East Africa are often the key home care providers, juggling working, maintaining the family home, cooking and importantly, helping their kids to learn. Whether doing their best to ensure their children have access to education, or actually taking on the role of teacher themselves, there is no doubt that women are playing a central role in raising eastern Africa’s young people. Reach out to the Wives of the Soldiers (ROWOSA) is a project by women, for women. The Uganda-based organization assists wives of soldiers who lack employable skills and opportunities to earn a sustainable income, thereby securing their financial independence. Through technology-supported programmes, these women can learn a variety of skills including sewing, computer science, baking and farming. With lifelong skills, these women can not only ensure the effective financing of a household with a double income, but also pass the skills onto their own children, improving their future prospects.
From startup accelerator Nailab in Kenya, mobile communications enterprise Text to Change in Uganda and then north to elearning centre Camara Ethiopia, East Africa has a plethora of innovative operations opening up and changing lives in communities.
“The initial idea for the e-learning events was sparked in 2004 when I heard about optical fiber cables being laid in Ethiopia,” says Rebecca Stromeyer, founder and CEO of Integrated Communications Worldwide Events, which runs the annual elearning Africa conference.
The eLearning Africa Report 2014, launched this week by Edward Ssekandi, Vice President of the Republic of Uganda, claims that eLearning opens window on Africa’s education future.
“The mood of optimism among Africans is unmistakable,”says the Report. “Our survey… confirms that African eLearning professionals are feeling confident about the future. This is more good news for the continent because the combination of education and technology is clearly a powerful driver for growth.”
The report repeats the late Nelson Mandela’s view that “education is the key to everything”. It emphasises, however, that the prospects for African education will depend increasingly on good communications and connectivity.
“If education is the key to everything, the key to the education of the future is infrastructure”.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4366:elearning-comes-as-game-changer-for-africas-education-&catid=54:news&Itemid=27

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PM inaugurates two roads

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Butajira-Gubre asphalt concrete road built with an investment of 800 million birr and Alaba-Alemgebeya-Welbareg that cost the government 712.7 million birr were both inaugurated by Prime Minister, Hailemariam Desalegn. Construction of the Butajira-Gubre road was done by cutting through the 1,300 metre high Zebider mountain ranges by a local company Sunshine Construction indicated that local contractors’ capacity is growing, said the premier during the inaugural ceremony.
Ethiopian Transport Minister, Workineh Gebeyehu also appreciated the efforts of local contractors in saving the nation’s foreign exchange by winning more similar contracts these days.
The road shortens the former Butajira-Addis Ababa-Wolkitie 250 km distance to 82 km. Previously it was compulsory to cover a distance of 250km through Addis Ababa and Alemgena to travel from the eastern town of Butajira in Gurage Zone to reach the zone’s capital, Wolkitie.
Sunshine Construction Company General Manager, Samuel Taffese urged the government to continue encouraging and supporting local contractors.  The 82 km Butajira-Gubre asphalt concrete road is expected to make the economic and social contact of formerly isolated east and west Gurage communities easier.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4360:pm-inaugurates-two-roads&catid=35:capital&Itemid=27

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Access to Potable Water, Sanitation Improving in Ethiopia

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The Ethiopian Ministry of Water, Irrigation and Energy announced that access to clean drinking water and sanitation is being improved through the concerted efforts exerted over the past years.

The activities helped the government to raise clean water and sanitation coverage to 68.5 percent and 67 percent respectively. Over the past five years, the country has been working for the improvement of access to drinking water and sanitation in rural and urban areas. Hygiene Coordinator with the Ethiopian Ministry of Health, Dagnew Tadesse said that more than 39,000 health extension workers deployed across the country are working to increase knowledge of households in handling liquid and solid waste.

Access to potable water, Sanitation improving in Ethiopia The Ethiopian Ministry of Water, Irrigation and Energy announced that access to clean drinking water and sanitation is being improved through the concerted efforts exerted over the past years.

The activities helped the government to raise clean water and sanitation coverage to 68.5 percent and 67 percent respectively. Over the past five years, the country has been working for the improvement of access to drinking water and sanitation in rural and urban areas. Hygiene Coordinator with the Ethiopian Ministry of Health, Dagnew Tadesse said that more than 39,000 health extension workers deployed across the country are working to increase knowledge of households in handling liquid and solid waste.

http://allafrica.com/stories/201406170216.html

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Vitamin-A Boosting ‘Special Banana’ To Undergo Human Trials In America.

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VENTURES AFRICA – Australian-grown genetically modified bananas, targeted at combating Vitamin-A deficiency among children in East Africa, is set to undergo its first human trials in the United States.

The banana, which has been modified to have high alpha and beta-carotene that converts to Vitamin-A in the body, will help prevent thousands of East African children from premature death and early blindness as a result of Vitamin-A deficiency.

According to reports on the project, the genetically-modified banana portrays a darker orange colour than the regular cream colour bananas are known to have.

The project, led by Queensland University of Technology (QUT) Professor James Dale, was supported by The Bill and Melinda Gates Foundation with $10 million.

Dale explained that although bananas grown in the highlands and East Africa usually posses largely reserves of Vitamin-A, this farm produce had low levels of micro-nutrients, particularly pro-vitamin A and iron.

Ugandan researcher Stephen Buah, one of the five Ugandan PhD students who has been working with other researchers at QUT says about 30 percent of children under the ages of 5 suffer from Vitamin-A deficiency.

“We’re aiming to increase the level of pro-vitamin A to a minimum level of 20 micrograms per gram dry weight,” Dale said.

If the experiment works out, there is a plan to start growing this special variety of banana in Uganda by the year 2020.

Farmers would start growing this special crop once constituted authorities stamp an approval for commercial cultivation. When field trials are in place, the same process could be applied to crops in other East African nations.

Researchers hope to get conclusive result on the project by the end of this year.

http://www.ventures-africa.com/2014/06/vitamin-a-boosting-special-banana-to-undergo-human-trials-in-america/

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U-Turn Over Transport Companies’ Privatisation Ban

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The deals will now be processed on the condition that priority is given to public projects

The Ministry of Finance & Economic Development (MoFED), last week, reversed its ban on the transfer of two state owned transport companies to private companies. The decision came on the condition that the new owners will give priority to public projects.

The ban came in response to the demand from the Ministry of Transport (MoT) to retain Bekelcha Transport S.C and Weyra Transport S.C under state ownership, in order to use their trucks for the transportation of imported equipment for ongoing government projects, including housing projects, according to Wondafrash Assefa, public relations head of the Privatisation & State Enterprises Supervising Agency (PPESA).

“Following the call from the MoFED to cancel the sale of the companies, the Agency wrote a letter requesting that the Ministry allow the transfer of the companies since the decision is not good for the image of the Agency,” said Wondafrash. “We invested in the auction of the companies; it would be a loss for the Agency.”

It was in response to this request that the MoFED agreed to lift the ban. The Agency’s legal department is now working to include the precondition in the deal. It will require them to give priority to transport cargo for ongoing state projects, Wondafrash said.

Tikur Abay Transport S.C, an affilate TIRET, had a successful offer of 325.9 million Br for the acquisition of Bekelcha, which the PPESA’s board approved on March 29, 2014. The approval for the acquisition of Weyra Transport by Trans Ethiopia Plc, an affilate of EFFORT, for 268 million Br was pending at the board when the process was halted by the MoFED.

“Tikur Abay paid 35pc down payment for the company some days before the MoFED cancelled the ban, while the reminder has just been sent to Trans after the ban was lifted,” said Wondafrash.

Both transfers could take place before the end of the fiscal year on July 7, 2014, according to Wondafrash.

There was no offer for two other state owned transport companies, Comet and Shebelle, both of which were offered for sale in the last round of tender for 2012/13.

In an unsuccessful privatisation year, the PPESA only managed to attract successful offers for five enterprises, including Weyra and Bekelcha, although its intention was to sell 20.

The PPESA is planning to make up for that through the aggressive promotion of the enterprises as a strategy.

A villa in the Bole District, owned by Batu Construction S.C, was also approved by the Agency to be sold to Abate Kone (MD), who offered 11.8 million Br. The Agency has also approved the transfer of Hamaressa Edible Oil S.C and Ethiopian Pharmaceutical Manufacturing S.C to buyers who have already made the down payment, although after a small delay,  Wondafrash said.

The Agency has another round of tender now in process, the fifth for the year, involving seven companies, five of which have previously failed to attract any buyers. Bilito Siraro Farm and the warehouse of the Ethiopia Fibre Products Enterprise are up for sale for the first time. The other five – the Ethiopian Mineral Development S.C, Bahir Dar Textile S.C, Kombolcha Textile S.C, Agricultural Mechanization Service Enterprise and Transport Construction Design S.C – are being offered for the fifth time within the same year. Financial opening will take place early in the next fiscal year, on July 23, 2014.

http://addisfortune.net/articles/u-turn-over-transport-companies-privatisation-ban/

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 Keeping Agricultural Revolution Mobile

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Opinion

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Dr Maximilian Martin, exclusive for Addis Standard

Ethiopia is part of a new set of high-opportunity countries with exceptional potential for modernization, the “EMICs” (Ethiopia, Myanmar, Iran, and Colombia). All are high-stakes countries with a history of expansion and empire, conflict, a considerable proportion of young and educated job seekers, high potential for growth and turnaround, strong foreign direct investment (FDI) and trade promotion strategies, and broad regional importance.Ethiopia’s success in modernization could have far-reaching positive geostrategic implications and further synergistic effects with development efforts in the Horn of Africa, and impact investors can contribute to make this preferred future happen.

With double-digit growth between 2004 and 2010, averaging 8.7 percent annually over the past five years mainly thanks to the expansion of agriculture and services, Ethiopia has recorded impressive economic growth rates and emerged as the “African Tiger.”Given the country’s geostrategic importance, its largely untapped reserves of coal, gold, oil, and gas, inherent richness in renewable resources, immense potential for agricultural production, a 93-million population with a young labor force, Ethiopia’s ambition to become a middle-income economy by 2025 is in principle achievable.

The country is thus pursuing an ambitious Growth and Transformation Plan that has the purpose of poverty eradication, and has started laying the corresponding building blocks, in particular the physical and institutional infrastructure to transform the economy and address the low levels of human development. This is also needed: Ethiopia’s ranking in the World Banks’ Trade Logistics Index has slipped from 104^th in 2007 to 141^st in 2012; 67 percent of the population lacks access to electricity; 61 percent of the population is illiterate and 37 percent undernourished, reducing the workforce by 8 percent.

Most of the economic growth of the country in the past decade has been driven by ‘big push’ public investment though, and the current opportunity for modernization can only be seized if the private sector and capital markets are developed in ways that manage to attract capital and drive wider positive impact for the country.

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Transitioning from public to private funding is needed in other parts of the world as well

While the specifics differ, Ethiopia is not alone in facing the challenge how to best fund and graduate from public investment. In several G7 countries, for example, a study by Accenture and Oxford Economics projected a public services expenditure gap between expected demand for services and the ability to pay through the year 2025. The results were startling: for Canada, the gap was USD 90 billion; France, USD 100 billion; Germany, USD 80 billion; Italy, USD 30 billion; the UK, USD 170 billion; and the US, USD 940 billion. Private capital will be critical to addressing this emerging gap, and at the level of the G7, active steps are being taken to engage capital intentionally investing for both social impact and financial return.

The amounts are smaller, but capital is needed to deliver on the country’s middle-income ambitions in Ethiopia as well. One of sub-Saharan Africa’s fastest growing non-petroleum based economies over the past decade the country has one of the world’s lowest rates of GDP growth to foreign direct investment (FDI). FDI inflows to Ethiopia have kept steadily increasing, responding to long-term growth opportunities in sectors such as agriculture, infrastructure, consumer goods, manufacturing, or oil and gas.Between 2005 and 2011, FDI in Ethiopia more than doubled to USD 1.2 billion, mostly originating in India, China, Europe, the Middle East and the US, including the Ethiopian diaspora.

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Does it make sense to welcome impact investment?

For the G7, the so-called market for social impact investments—defined as investments made with the intention to generate measurable social and environmental impact alongside a financial return—holds great promise as a tool to grow the economy and fund the provision of public goods. The practice of impact investing has grown into a USD 42 billion market since the inception of the foundational term “impact investment” in 2007—of which 70 percent are currently invested in emerging markets. The market is estimated to advance to USD 400-1000 billion by 2020. At a time when the reputation of mainstream finance has been called into question around the world in the aftermath of the global financial crisis, impact investing could provide a major opportunity to demonstrate a new role for finance and financial innovation to enable sustainable growth and the stewardship of society’s assets in the twenty-first century.

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The fundamental impact case is sound

For Ethiopia, the question is, how can impact investing help removing the roadblocks on the way to becoming a middle income country. In terms of fundamentals, the country offers exciting opportunities for impact investors to create economic as well as social value. Its economy still dominated by agriculture, the country is looking to diversify and will need to raise the added value on its main exports while at the same time improving the performance of its transport and logistics system, as well as finding a way to further modernize and expand the industrial sector.

To locate the capital needed to develop the country, Ethiopia has been generally creating a more investment friendly environment and is opening up some sectors for investors, including agriculture and horticulture and the textiles and garment industry. The fruit of several years of efforts, with increasing investments in to the industry, the garment and textile industry is now gradually emerging as a new source of growth. For example, Swedish multinational retail-clothing firm H&M and British retailer Tesco are opening sourcing offices. Recently, the India-based Shri Vallabh Pittie (SVP) Group has started setting up a USD 550 million spinning mill in Amhara and that could employ up to 13,000 Ethiopians, targeting exports to Germany, Italy, Sweden, Turkey and the United States.

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There is work ahead on improving the investment climate

Today, the overall Ethiopian investment climate is mainly limited by three bottlenecks: governmental restrictions, a fairly undeveloped banking sector and macroeconomic instability. As the World Bank and the International Monetary Fund (IMF) have recently commented on the role of the industry in Ethiopia, the country would need to adjust policies to expand the private sector in order to meet the goal of reaching middle-income status by 2025.Due to declining scores for investor protection, taxation, contract enforcement, and resolution of insolvency, the World Bank’s Doing Business report for 2013 ranked Ethiopia at 127 out of 185 countries. The process for receiving business licensing has been described as “labyrinthine” by the Economist and a potential bane for investors. While bureaucratic corruption is much less of an issue compared to many of Ethiopia’s neighbours in sub-Saharan Africa, and the regulatory system is generally fair, structural inefficiencies, state monopolies and oligopolistic wholesale sectors need to be tackled to raise foreign investment. As for the banking sector, liquidity issues have become apparent as debt sales are highly regulated and high levels of collateral are required on all loans, thus limiting access to capital for small and middle enterprises.

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Several pathways to driving impact could complement each other

At the G7 level, there is consensus that different groups of investors play a role in the emerging impact investing market, ranging from philanthropic investors such as foundations, angel and venture stage investors, private and institutional investors, financial services institutions, and—importantly—government, which can provide a guiding hand. Next to large-scale projects such as the two major hydro power investments, or capital intensive projects such as the development of a high speed train to facilitate import and export, impact investors with their longer-term investment outlook and desire to achieve both financial and social returns have the potential to play a benign role in the investment landscape. The realities of the small and medium enterprise and social business landscape in Ethiopia matter though. Besides Oliberté, which has recently opened its own ethically responsible textile and garment factory in Addis Ababa, there are still few examples of impact investments and track record is limited. Impact investors moreover need to come to terms with the perception that social enterprises present a trade-off between impact and financial sustainability.

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The endgame is inclusive growth

Next to agriculture—accounting for nearly 50 percent of GDP, 85 percent of employment and most of the export earnings—, helping ensure that social and environmental performance in the emerging textile and garment industry will aim higher than in sourcing hotspots such as Bangladesh will be a key theatre to assess real progress. As Ethiopia transitions from a largely public to a more private investment strategy, government can play an important role in enabling and stimulating the impact investment market. Just like in other markets, this can take many forms, including government co-investing or sharing risk with private investors, creating investor requirements for impact investing, or even making impact investments directly in enterprises or intermediary funds. In addition, government can leverage its own procedures and expenditures to drive market development, for example through internal procurement and investment policies, or by providing resources to encourage the development and investment readiness of the social enterprise sector. If we are serious about inclusive growth, we need to use all pathways—it’s now time to make impact investible in Ethiopia.

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Maximilian Martin, Ph.D. is the founder and global managing director of Impact Economy, an impact investment and strategy firm based in Lausanne, Switzerland, with overseas operations in North and South America out of New York and Buenos Aires, working with professional investors and companies. Impact Economy provided the report Status of the Social Impact Market: A Primer, which was prepared to provide a shared baseline for the participants of the inaugural 2013 G8 Social Impact Investment Forum and to anchor members’ work on new market-building efforts for social impact investing.

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Editor’s Note: Identified by Dr Martin, the EMICs were unveiled at the fourth edition of the Impact Economy Symposium & Retreat in Switzerland on June 13-15, 2014 where a group of key influencers, thought leaders, and practitioners from the worlds of investment, business, government, and philanthropy explored the most effective solutions, innovations, and opportunities that have surfaced in the promotion of impact.In this exclusive Addis Standard series, Impact Economy’s Dr Maximilian Martin covers content covered at the conference. Addis Standard is one of the seven global official media partners of the symposium.

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Sourced here:  http://addisstandard.com/making-impact-investible-key-to-removing-roadblocks-on-the-way-to-middle-income/

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Europeans finance the Awash – Weldya railway project

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Seven financial institutions along with the Ministry of Finance and Economy Development (MoFED) and the Ethiopian Railway Corporation (ERC) are going to sign a loan agreement to construct the railway project that has been awarded to a Turkish company.
The signing ceremony was consecutively postponed, though it has been set to be held here in Addis Ababa in the presence of top government officials.
The signing ceremony will take place in the beginning of the coming budget year that will start on July 8. It will enable the Turkish construction giant, Yapi Merkezi to commence the 400 km railway project connecting Awash to the northern town of Weldya (Hara Gebeya), a section of the larger railway network running from Mekele via Weldya and Semera, to Port Tadjourah in Djibouti.
The Turkish EXIM Bank already has approved USD 300 million for the railway. It is the largest ever amount the bank has provided for one project in a country. “It is the first time one project has received this big a loan in Ethiopia from the side of Turkish and European financial firms,” Emre Aykar, chairman of Yapi Merkezi, told Capital at his head office in Istanbul.
The total amount that will come from Europe for the stated project is USD 1.4 billion.
He said that his company has created a link between European financial institutions and Ethiopia.
“We have managed to convince different European financial sources like SACE Group, Italy, EKF (Eksport Kredit Fonden), Denmark and others from Sweden, Austria and two from Switzerland,” Aykar said.
He said that during the current rainy season the company will focus on the establishment of camps, soil investigation and other related works and the ground work will commence in September.
The company has signed a USD 1.7 billion contract with the corporation to undertake the project.
The loan agreement ceremony was expected to take place in May, but some procedures with the banks and MoFED contributed to the delay, the chairman said.
Yapi Merkezi has handled big projects in places like Dubai, Saudi Arabia, Morocco, Algeria and Sudan.
The company officials stated that the current railway project in Ethiopia is a breakthrough for the company as they hope to expand their activity.
“We have big interest to be part of the country’s development,” Aykar said.
The project is expected to end within 40 months.
The China Communication and Construction Corporation (CCCC) will build the Mekele to Weldya part of the rail line. The estimated USD 1.5 billion cost is financed by the Chinese EXIM bank and covers some 260kms.
The section that stretches from Mekele to the Port of Tadjourah, Djibouti, covers a total distance of 675kms, and is expected to link the northern part of the country. The Indian EXIM Bank has also pledged USD 300 million for the Asayita to Port of Tadjourah segment of the Mekele-Port of Tadjourah railway line.
The Chinese contractors, China Railway Engineering Corporation (CREC) and China Civil Engineering Construction Corporation (CCECC) are currently constructing the Sebeta-Mei’so-Dewele railway line. For the 657km project, the Chinese Export Import (EXIM) Bank has provided the majority of the USD 2.3 billion needed.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4434:europeans-finance-the-awash-weldya-railway-project-&catid=35:capital&Itemid=27

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Djibouti Scraps DP World Port Concession Citing Corruption

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Djibouti’s government said it rescinded DP World (DPW)’s concession at the Doraleh Container Terminal after finding evidence of corruption and has begun arbitration proceedings.

The agreement was canceled after an investigation that showed an accord signed with the company “unfairly favored” Dubai-based DP World, according to a statement e-mailed by Consulum, a London-based communications consultancy, on behalf of the government. Talks aimed at resolving the matter have broken down and the state will seek damages for losses it has incurred, it said.

DP World rejected the accusations and will “vigorously defend our position during arbitration,” the company said in an e-mailed response to a request for comment. “We are disappointed that the government has chosen to take this action after working so closely with us as partners over the past 14 years.”

Djibouti’s $1.2 billion economy relies on services related to the country’s location on the Red Sea, one of the world’s busiest shipping lanes. Transport accounts for a third of gross domestic product in the Horn of Africa nation, which is targeting doubling capacity at Doraleh to 3 million containers a year by 2015. DP World is the world’s third-biggest ports operator.

The government will take “all necessary steps to ensure the continued smooth running of its ports,” it said in the statement. The terminal is the country’s largest employer.

30-Year Concession

DP World and Djibouti’s government established a joint venture in 2006 with the signing of a 30-year concession to operate the container terminal, which the company describes as “the most technologically advanced” depot in Africa. The facility, inaugurated in 2009, has a 1.05 kilometer-long (0.66-mile) quay and the capacity to handle eight super-post-panamax cranes, according to its website.

The government offered DP World the opportunity to continue running the port until the arbitration tribunal ruling.

“Whether or not DP World accepts that offer, Djibouti has measures in place to avoid any disruption to the increasing number of customers using its facilities,” it said.

Djibouti, slightly larger than New Jersey, hosts a U.S.-led military task force at Camp Lemonnier, a base and staging area for tracking and launching assaults on al-Qaeda militants in Yemen and Somalia.

http://www.bloomberg.com/news/2014-07-08/djibouti-scraps-dp-world-terminal-concession-citing-corruption.html

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UN Report Finds African Growth Lacking, Unsustainable

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-  Development of productive capacities and structural transformation, two key components of poverty reduction and job creation, are lacking

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Taffere Tesfachew (right), director for Africa, least developed countries & special program presenting the report prepared under his overall supervision, which was commanded by Mekonnen Mayazewal (middle), commissioner of the national planning commission of Ethiopia with Samuel Bwalya (left), UNDP, country director to Ethiopia.

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A report about Economic growth in Africa released on Thursday July 3, 2014, by the Conference on Trade & Development (UNCTAD) – a UN economic think tank- revealed that the growth narrative of Africa over the past decade is lacking two of the vital elements for generating productive employment and laying the foundation for sustained poverty reduction.

To the delight of Mekonnen Manyazewal, commissioner of the national planning commission, who is also working on the second generation of the Growth and Transformation Plan (GTP 2), the report also calls for priority to be given to a substantially increased allocation to the public sector.

Characterising the nature of the recent growth in Africa as contributing to the slow progress in poverty reduction, the report says that “Africa’s recent growth has not led to the development of productive capacities and structural transformation”, which are the two vital aspects of poverty reduction and employment generation.

Structural transformation is a shift of resources and policy focus from traditional sectors to modern sectors, from traditional activities to modern activities and from low productivity and limited technology to high productivity and advanced technology, according to Taffere Tesfachew, director of the UNCTAD division for Africa, least developed countries and special programs, who presented a summary of the report last Thursday.

The fast growing economy of Africa is basically consumption driven, which makes it import dependent and difficult to sustain, according to Teffere.

“Consumption driven growth is difficult to sustain,” Taffere said, during his presentation of the findings of the report at the launching ceremony. “It is time to shift to investment driven growth.”

Given the fact that the continent is in the early stages of its development, the structural change observed in Africa defeats the normal expectations, according to the report. The high and steady growth of the continent is not backed by a shift from low productivity activities to high productivity activities, it says.

The structural transformation concern of the report has, however, overlooked an important element that precedes it, for Eyob Tesfaye (PhD), a macroeconomic analyst who was also in attendance on the launching of the report.

“Intra-transformation within the sectors has not been undertaken yet,” he told Fortune. “For instance, the agricultural sector, which is still backwards, rain fed and powered by low technology, needs to be transformed.”

The share of manufacturing has declined, with the services sector dominating African economies, it states. It has declined from an average of 14pc for the period between 1990 and 1999 to 11pc during the period between 2000 and 2011, according to the report.

“The continent has experienced a deindustrialisation over the past two decades, as evidenced by the fact that the share of manufacturing in total value added fell from 13pc in 1990 to 10pc in 2011,” it reads.

Highlighting the problem on the supply side in the African growth narrative, the report considers the dominant role played by the services sector as unusual. This is worrisome because it is mostly driven by low productivity activities in informal and non-tradable services, it claims.

“Africa’s recent growth is fragile and is unlikely to be sustained in the medium to long term if current trends continue,” it concludes, calling for investment driven growth backed by high productive and tradable services.

In what Taffere has called “the untold story” in the African economic growth trend, the degree of inefficiency in the use of the capital accumulated in the economy has declined in Africa.

Measured by the incremental capital-output ratio (ICOR), Africa’s capital productivity increased significantly from the 7.4pc it was for the decade between 1990 and 1999 down to 4.1pc after the following ten years.  An economy with a higher ICOR has lower efficiency or productivity of capital, in economic terms.

Ethiopia has also benefitted from this untold story, according to the report.

Ethiopia is in third place in the list of countries where the accumulated capital had a very high productivity in the period between 2000 and 2011, the report identified. Angola and Equatorial Guinea are the first and the second, while African countries, such as Liberia, Mozambique, Nigeria, Rwanda and Sudan, are also among those with high productivity of capital.

This is neither for all African countries nor for the public investment areas, though.

“Although there has been an improvement in the efficiency of total investment in Africa, more works need to be done, particularly in the area of public investments,” it comments.

The inability of the economic growth to generate jobs has led to Taffere concluding that the growth narrative of Africa is in essence a “jobless growth”.  The African economies are not absorbing the 15 million new entrants every year, he said. The growth of employment in the predominantly youth populated Africa is 2.8pc, with many of the new jobs created coming from the informal sector, which is difficult to sustain and less productive.

Here again, Ethiopia is singled out by Taffere in his presentation. Ethiopia has created about 1.4 million new jobs over the past decade, registering a 3.4pc growth in employment – 0.6 percentage points more than the average growth for Africa, he said.

The employment growth account of Ethiopia, however, is due to the casual employment opportunities being created by the booming construction sector in the country, according to Eyob Tesfaye (PhD), a macroeconomic analyst who was also present at the launching of the report.

The report person at the helm of Ethiopia’s national planning commission, Mekonnen, commended the findings of the report in many respects. Highlighting what Africa should take from the report, underlines the need for the provision of institutional support to domestic investors, which the report considered as an aspect not accorded with adequate attention in the growth of Africa.

Mekonnen, rather questions the nature of the leadership and the state in Africa as a challenge to the implementation of the recommendations of the report. He calls for the developmentalist model of state and government for the proper mobilisation and channelling of resources to the appropriate directions.

“The UN system is serving as the intellectual voice for Africa,” he said. “We will give the report adequate weight and eternalise in our future plans.”

http://addisfortune.net/articles/un-report-finds-african-growth-lacking-unsustainable/

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MIGA Vice President Visits Ethiopia

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Michel Wormser, Vice President and Chief Operating Officer of the Multilateral Investment Guarantee Agency (MIGA) the political risk insurance and credit enhancement arm of the World Bank Group will visit Ethiopia from July 8-11. Wormser s visit underscores MIGA s continued support to the country s development goals through private sector investment.

The aim of Wormser s visit is to identify areas where MIGA can help the country mobilize capital for important projects including those in the infrastructure, energy, agribusiness, and manufacturing sectors and other job-creating enterprises that can help the country meet its development objectives. Wormser will meet with government ministries and private sector entities.

MIGA has supported private sector investment into Ethiopia in agribusiness and manufacturing. The purpose of my trip is to underscore our willingness to continue to support foreign direct investment in Ethiopia and identify priority areas where MIGA s support can be the most helpful in advancing the country s development agenda, said Wormser.

http://www.hispanicbusiness.com/2014/7/8/united_states_miga_vice_president_visits.htm

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Canadian Investors with 367 million CAD Engaged in Ethiopia

Canadian investors with a total capital of 367 million Canadian dollars (CAD) have secured licences to invest in Ethiopia, according to the Canadian Ambassador to Ethiopia.

The trade exchange between Ethiopia and Canada has also reached 141.3 million CAD.

In an exclusive interview with ENA, Ambassador David Usher said the investors are engaged in importing machinery, leasing construction equipment, education, health, consultancy, tourism and information technology.

In addition, 12 Canadian companies have secured mineral exploration licenses in the country, of which two have substantial assets, he said.

Many Canadian investors are also showing huge interest to engage in the various investment sectors in Ethiopia, according to Ambassador Usher.
The trade flows are, however, modest despite the half-a-century old relationship of the countries, he said.
According to the ambassador, joint consultative forums are being organized with the Ethiopian Ministry of Foreign Affairs to boost the trade exchange between the countries.

Ethiopia imports aircraft and parts, machinery, precious stones, metals (coin) electrical machinery from Canada. Canadian merchants, on the other hand, import mainly coffee, tea and spices, oil cereals and other agricultural products, it was learned.

The direct flight of Ethiopian airlines three times a week to Toronto has highly contributed toward raising investment and cultural ties, according to Ambassador David Usher.

Canada applauds Ethiopia for its open door policy towards refugees on all its borders alongside showing great effort to bring stability in the Horn of Africa, he pointed out.

Canada has raised its developmental support to Ethiopia to 210 million CAD in the current year, it was indicated.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2333:canadian-investors-with-367-mln-cad-engaged-in-ethiopia&Itemid=260

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Chinese premier vows closer cooperation with Ethiopia

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BEIJING, July 8 (Xinhua) – Chinese Premier Li Keqiang met with Ethiopian President Mulatu Teshome in Beijing on Tuesday, vowing closer cooperation.

Li recalled his trip to Ethiopia in May, during which he reached broad consensus with the Ethiopian side on friendly cooperation.

China hopes to help with Ethiopia’s transportation and power infrastructure through a regional aviation center, manufacturing center and a demonstration center of development and poverty reduction, Li said.

He proposed more projects including economic and industrial zone, expanded energy exploration, personnel training and agricultural cooperation, to set an example for China-Africa cooperation.

Hailing cooperation between China and Africa, Li said China hopes to work with African countries and the African Union to build railway, highway and aviation networks.

Mulatu, on his first China trip since taking office last October, said Li’s Ethiopia visit has promoted bilateral ties to a new level.

Ethiopia-China relations are based on mutual understanding, trust and mutual benefits, he said.

Calling China a best cooperation partner, he vowed joint efforts with China to implement the achievements of Li’s visit to promote greater progress of bilateral ties as well as Africa-China cooperation.

http://www.globalpost.com/dispatch/news/xinhua-news-agency/140708/chinese-premier-vows-closer-cooperation-ethiopia

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COMESA Member States Provide Greater Clarity with New Guidelines

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-  The draft document has now been tabled for approval by the board of commissioners

Member states of the Common Market for East & Southern Africa (COMESA) have finalised a draft document entitled “Merger Guidelines”, after a validation workshop held on July 1-2, 2014. It has now been tabled for approval by the board of commissioners in August of this year.

Aimed at providing merger guidance for companies within the common market, the guidelines have been prepared in response to calls for greater clarity and legal certainty in the supranational merger control regime of the regional competition law dubbed COMESA Competition Regulations. The enforcement of said law was announced in January 2013, following its ratification by the council of ministers established under the treaty that established the common market, according to the guidelines document.

The regulation has established a separate entity, named the COMESA Competition Commission, which has the power to apply the part of the regulation that deals with trade between member states and promotes competition within the common market. The commission has a board as its supreme policy body. Launched in December 2008, the commission officially commenced operations on January 14, 2013. It is composed of the secretariat, headed by a director, which is responsible for investigation; the Committee of Initial Determination (CID), responsible for making initial determinations on notification and complaints, and a Board of Commissioners also mandated with the adjudicative functions.

The board shall consist of not less than nine and not more than 13 Commissioners appointed by the council of ministers of the common market on the recommendation of the secretary general. The first board was appointed in the year 2011.

It was through this commission that  the current guideline was prepared with financial assistance from the International Finance Corporation (IFC) of the World Bank (WB).

The first draft of the guideline was publicised in April 2013, in order to collect  comments from stakeholders. The draft is designed to clarify parts of the COMESA competition regulations, in force since 2004, which deal with mergers and acquisitions.

Following the submission of the initial deliverables by the consultants, which included the revised draft merger control guideline, the Commission, in collaboration with the IFC, organised a regional workshop, which took place in April 2014, in Johannesburg, South Africa. Here, the Member States deliberated on the guidelines produced by the Consultants.  Since then, the consultants, in collaboration with a steering committee, have been working to perfect the document taking into account inputs from the member states and other stakeholders.

The draft was finalised last week during a workshop organised by the commission in collaboration with the Ethiopian Trade Practices & Consumer Protection Commission (TPCPC). The draft has now been sent to be approved by the supreme policy organ of the commission, the board of commissioners, who are scheduled to meet in August this year, according to George K. Lipimile, director and chief executive officer (CEO) of the Commission.

In addition to the representatives from the national competition authorities of the COMESA member states, the workshop was attended by a cross section of competition law experts and practitioners from the region and beyond, according to Lipimile.

“The merger control guideline is expected to be in line with international best practices and should meet the expectations of the users,” he said.

Among the detailed clarification on the regulations provision concerning merger is the meaning attached to merger control by the regulation. Accordingly, the merger control mandate of the commission – based in Lilongwe, Malawi – concerns those mergers capable of having a regional dimension, with an appreciable effect on trade and which restricts competition.

It also provided much more detailed clarifications on the control of merger, notification of a proposed merger, merger proceedings and considerations of a merger, which are generally provided in the competition regulations. Further detail clarifications and explanations are made under the guideline on the matter of what constitutes a merger to territorial nexus; from pre-notification consultation and comfort letters to the notification process; from assessment of the merger and merger assessment considerations to analytical approaches and methodologies.

http://addisfortune.net/articles/comesa-member-states-provide-greater-clarity-with-new-guidelines/

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Ethiopia Defies IMF Warning In New Budget

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VENTURES AFRICA – Ethiopia’s parliament Monday, approved a 178.6 billion-birr ($9.2 billion) budget for 2014-2015 in which more than 64 percent of the total amount is earmarked for development spending against the advice of the International Monetary Fund (IMF) to cut its public spending.

The 2014-2015 budget- a 15 percent rise from the previous year- which will boost spending on education, health and road building defies the IMF’s warning that Ethiopia’s huge spending is suffocating private lending. In 2013, the IMF warned that the expanding public expenditure as well as the government’s tight monetary policy, to bring down inflation, could imbalance macroeconomic development by depriving the private sector access to credit and foreign currency.

However, Ethiopia’s intervention over the past decade has boosted the economy with the IMF forecasting that its economy will grow to 8.5 percent in 20014/15 from 8 percent in 2013/13. The government embarked on Infrastructural projects like hydro-electric dams and other power projects to offer cheap electricity and also focused on expanding the network of roads and railways.

With its latest budget, the East African country, which is second in population to Nigeria in Africa, aims to expand its road network to 136,000 km (84,500 miles) by 2015 from less than 50,000 km in 2010.

There are also plans to build 5,000 km of railway lines by 2020. The capital will soon have its own metro, a rarity in Africa.

The budget, which was unanimously passed by the parliament, also sees a 6.7 percent rise in Defence spending, from 7.5 billion birr in the previous budget to 8 billion birr. Ethiopia has the largest army in the Horn of Africa, it is also a key U.S ally in the region and is fighting al Qaeda-linked insurgents in Somalia as part of an African Union mission. It has also deployed peacekeepers in South Sudan.

http://www.ventures-africa.com/2014/07/ethiopia-defies-imf-warning-in-new-budget/

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ECX to Launch Commodity Traceability, Online Trading Projects

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The Ethiopia Commodity Exchange (ECX) said it would implement commodity traceability and online trading projects this Ethiopian fiscal year.

ECX Interim Chief Executive Officer, Shimelis Habtewold, told a press conference on Tuesday July 8, 2014 that the traceability project will be realized with an outlay of 1.3 million USD in collaboration with USAID.
The traceability project is expected to provide buyers with origin and processing information on commodities traded, in addition to creating market access to ECX members and clients.
Similarly, the online trading project will be implemented with an outlay of 3.8 million USD in collaboration with Investment Climate for Africa (ICA).

According to the CEO, “when the project begins service, it will enable market actors to participate directly in trading from remote online trading centers established in different parts of the country, including Humerra, Gondar, Adama, Hawassa and Jimma.”

Online trading is envisaged to increase access to ECX and its service. In addition, it will build the capacity of various stakeholders groups and increase efficiency, it was pointed out.

Meanwhile, the total value of the traded commodities in the just-ended fiscal year reached 26.2 billion birr from the sale of sesame, coffee and white pea beans during the last budget year, it was learned. The amount exceeded that of the previous year by 7.3 billion birr or 38 percent.

The number of ECX members which was 100 upon its establishmnet has now reached into346, and 14,725 clients as well as 10 percent farmer cooperative unions reaching out to 2.7 million small farmers.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2330:ecx-to-launch-commodity-traceability-online-trading-projects&Itemid=260

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Kenyan Exchange to Sell Shares in Africa’s Second Bourse IPO

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Kenya’s stock exchange will become the second publicly traded African bourse with a share sale that was planned at least five years ago.

Nairobi Securities Exchange Ltd. will hold an initial public offering from July 24 to Aug. 12 and list stock on the market, it said today in an e-mailed statement. The FTSE NSE Kenya 25 Index has climbed 15 percent this year, compared with a 17 percent gain in the MSCI FM Frontier Markets index.

“We are putting our money where our mouth is,” Head of Market and Product Development Donald Ouma said by phone today. “We are saying capital markets are the best place to raise long-term capital.”

Kenya’s stock exchange first announced plans for selling shares in 2009. The market has been seeking ways to deepen trading and attract listings from companies in East Africa’s largest economy. The 62-member all-share index has a value of 2.14 trillion shillings ($24 billion), according to data compiled by Bloomberg.

“We are also looking into new products and services such as derivatives and real-estate investment trusts, and we are better suited to do so as a listed entity,” Ouma said.

JSE Ltd. (JSE), the operater of the Johannesburg Stock Exchange and Africa’s first listed exchange, gained 11 percent this year, compared with a 12 percent increase in the FTSE/JSE Africa All Share Index.

http://www.bloomberg.com/news/2014-07-08/kenyan-exchange-to-sell-shares-in-africa-s-second-bourse-ipo.html

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Malfunction at factories creates severe sugar shortage

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A sugar shortage hit major manufacturing industries, including soft drink manufacturers after two of the nation’s three sugar factories ceased production of sugar due to mechanical and sugar cane failure. Wonji Shoa and Finchaa Sugar factories stopped production slashing the quotas of manufacturing industries by two thirds forcing them to stop or minimize production significantly.
Sources told Capital that, machines at Wonji Shoa Sugar Factory were broken and are currently under maintenance. The other sugar factory Finchaa, also faced a crop failure, forcing the factory to stop production.
Soft drink companies are also slashing working hours as the corporation is not providing them with enough sugar for production.
Sources at one of the soft drink companies told Capital that their company is reviewing a plan to lay off some of their employees if the problem persists.
The country has faced a shortage of sugar from time to time. The shortages have led to the price of sugar increasing over the limit set by the Sugar Corporation in recent years.
The three state-owned sugar factories Wonji Shoa, Metehara and Finchaa produce 2.8 million quintals of sugar per annum, while the demand has reached 4.6 million quintals per year.
However, as part of the five year Growth and Transformation Plan (GTP) 12 new factories are to be constructed making the country a sugar exporting state.
Ethiopia expects seven of the sugar factories to start operating by end of 2015.
The Sugar Corporation said that once commissioned the seven factories will significantly boost the country’s sugar production capacity to 1.58 million tons – a five-fold increase. This is however lower than the 2.25 million tons the country would have produced if all 10 sugar factories came into operation.
Sugar production has been one of the cornerstones of the government’s plan to increase the country’s competitive advantage in agro-processing sub-sector.
The factories that are expected to be fully operational by the end of next year are Tendaho – 1 and 2, Omo-Kuraz-1, Kesem, two of the Tana Beles factories and Arjo- Dedesa.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4444:malfunction-at-factories-creates-severe-sugar-shortage-&catid=54:news&Itemid=27

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Government urged to foster sugar development endeavor

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Native residents of the Omo-Kuraz Sugar Development Project surrounding areas requested the government to foster the sugar development effort so that they can significantly benefit from the development.

In the discussion held at Jinka town of South Omo Zonal Administration between clan leaders, elders, women and the youth of the project surrounding areas comprised of Boddi, Murssi and Mieinnit nationalities and the leaderships of Sugar Corporation as well as the SNNP regional government, the resident participants requested the government to foster the sugar development activities in order to maximize their social and economic benefits.
Some of the participants of the discussion represented from South Omo Zone disclosed that they are eagerly waiting to see the sugar factories under construction in their area commence sugar production like that of Wonji Shoa Sugar Factory which they have paid a visit to earlier.
According to the Bodi community just from the outset of the development process they have got access to infrastructures and social services. Moreover, the project has enabled them introduce themselves with farming so that they have started enjoying their own harvest.
On the other hand, the Murssi nationalities from South Omo Zone and the Mieinnit nationalities of Keffa and Bench-Maji zones who came from areas where the project activities have not reached yet asked the government to accelerate the sugar development activities which will enable them improve their living condition like those residents of other areas where the project’s activities are already underway.
Disclosing their firm commitment to overcome whatever challenges they might face in the process of realizing the late Prime Minister Meles Zenawi’s development vision which he shared them while he had visited the area, they declared their readiness to contribute their part for the realization of the sugar development effort.
Moreover, the participants noted that the development endeavor has brought all nationalities which were used to view one another as enemies rather than friends stand together in fostering the development effort.
The sugar development work has, therefore, brought about a strong social link to them, they also mentioned.
Director General of Sugar Corporation at the level of Minister, Sheferaw Jarsso, while presiding over the discussion forum, on his part, said that the points raised in the meeting showed the encouraging results achieved in the sugar development activities.
In addition to creating access to canal schemes, the government’s effort to ensure infrastructures and social services accessibility to all areas irrespective of the command areas clearly demonstrates the government’s firm commitment in benefiting the local community, he further added.
He at last called up on the native residents to play their part in facilitating the sugar development endeavor.
On the other hand, Tagesse Chaffo, Vice President of the SNNP Regional Administration, reminding the government’s effort in making the natives the first beneficiaries when diverting the Omo River, disclosed that both the federal and regional governments execute any development activity at any area giving priority to the benefit of the natives.
Moloka Webneh, Head Chief of South Omo Zone, on his part, said that the reflections of the participants during the discussion showed the evasion of suspicions and fears which were used to be noticed earlier on similar discussion forums. The villagization program under execution has native residents to access various infrastructures and social services.
The Omo-Kuraz Sugar Development Project is found at South Omo, Keffa and Bench-Maji zones of SNNP Regional State in which five sugar factories in total will be constructed with 175 thousand hectares of sugarcane plantation field.

http://www.waltainfo.com/index.php/explore/14071-government-urged-to-foster-sugar-development-endeavor-

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Major shoe company comes to Ethiopia

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US based footwear producer, Brown Shoe Company, will establish an office in Ethiopia to buy domestic footwear products for its international market.
Recently large shoe makers have seen Ethiopia’s potential and invested in the country and there are some international garment companies like H&M but this is the first time a global shoe company has entered the Ethiopian market.
Wendu Legesse, Director General of the Leather Industry Development Institute (LIDI), told Capital that the company is expected to open its office in the coming fiscal year which starts next week.
Wendu said Brown Shoe mainly exports to China but now is encouraging Chinese firms to produce footwear in Ethiopia.
Leather industry experts are hopeful this will bring more leather technology and experience into Ethiopia.
“This is a good example of how international producers can contribute to Ethiopia,” Wendu added.
According to LIDI’s head, the Brown Shoe’s investment will not only increase production but will also bring international knowledge and standards.
He said that the company will not only open an office here, but will also provide laboratory service and capacity building.
“Brown Shoe has provided scholarships for seven experts who worked at LIDI and four of them are already taking the training,” the director general said. LIDI is the government institution responsible for overseeing the leather industry. It also has a training center that provides higher education in leather technology.
The government’s goal is to bring in half a billion dollars from leather exports by the end of the Growth and Transformation Plan (GTP). Currently that target is not on track to be met because experts explain that the number of companies expected to invest in Ethiopian leather has been less than expected.
Even though the GTP ends in a year government officials are hoping that as more large companies enter the market they will still be able to meet the leather earnings target. The government is not only encouraging footwear producers to invest in the country, but companies who have the potential to export the products.
For example international footwear companies like Huajian Shoe Company, and Gorge Shoe Corporation are coming to Ethiopia and joining the sector and they have the potential to produce a large amount of leather products.
According to Wendu, another global footwear producer, Stella, which makes 52 million pairs of shoes every year has demonstrated an interest in investing in Ethiopia.
“Stella paid two visits to the country and is interested in investing here. We are also encouraging synthetic leather shoe producers, who produce sneakers and sports footwear, to invest in the country,” he added.
Brown Shoe Company, based in Missouri, is a USD 2.6 billion footwear company with worldwide operations. It owns the 1,100-store Famous Footwear chain, 100 specialty retail stores in the United States, Canada and China under the Naturalizer name, as well as Shoes.com, the Company’s e-commerce subsidiary. Brown Shoe’s wholesale divisions own and market leading footwear brands including Naturalizer, LifeStride, Via Spiga and Sam Edelman. The company also markets licensed brands including Franco Sarto, Etienne Aigner, Dr. Scholl’s, Carlos by Carlos Santana, Fergie Footwear and Vince branded footwear.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4438:major-shoe-company-comes-to-ethiopia-&catid=35:capital&Itemid=27

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New Nile Petroleum Company Headquarters in Ethiopia

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Nile Petroleum Company announced that new headquarters of the company will be inaugurated soon in Addis Ababa, the capital of Ethiopia.

The placement of the headquarters for the leading petroleum company indicates that the company is keen on benefiting from the Ethiopian market and marketing its petroleum products in the Horn of Africa.

“The idea of opening a branch for Nile petroleum in Addis Ababa refers back to 2005,” said Manager of Nile Petroleum Company-Addis Ababa, Eng. Mohammad Azhari.

According to Azhari, the shopping centre owned by the Nile Petroleum Company in Addis Ababa is considered one of the largest centres in the continent.

Azhari also told Sudan Vision that Nile Petroleum ranked as the fourth biggest petroleum company in Ethiopia.

“Our company is the only one that produces ethanol in Africa,” said Azhari.

He added a product has been developed called, Nile Ultra-Ten, which consists 90 percent of benzene and 10 percent of ethanol.

Nile Petroleum

Azhari clarified that around 90 percent of benzene consumed in Ethiopia comes from Sudan – namely from Shajara Repository – pointing out that the total monthly amount loaded to Ethiopia totals 16,000 tonnes of benzene.

He said that the company has twelve petrol stations in Ethiopia, announcing that it is preparing to construct 24 more stations in different parts of Ethiopia.

Azhari asserted that the Nile Petroleum Company is providing cement, ceramic and textile factories with fuel.

He announced that he has met with the Ethiopian Investment Minister to investigate the appropriate approaches to facilitate Sudanese investment in Ethiopia.

The Ethiopian minister disclosed that Sudanese investment in Ethiopia totals $3.5 billion.

http://news.sudanvisiondaily.com/details.html?rsnpid=238362

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Ethiopia grants oil exploration concession to Russian firm

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Ethiopian Mines Minister Tolosa Shagi and GBP Global Resources have agreed to an exploration agreement.

http://www.worldbulletin.net/africa/140916/ethiopia-grants-oil-exploration-concession-to-russian-firm

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IFC Trade Facility Supports Petroleum Imports in Ethiopia

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IFC, a member of the World Bank Group, today announced that it will participate up to $150 million in a $450 million trade finance facility arranged by Natixis to finance Ethiopia’s import of refined petroleum products.  The facility will support the supply of critical energy products in Ethiopia; powering the country’s economic growth.

Under the agreement, IFC, Natixis, Standard Bank and other lenders will help finance Independent Petroleum Group’s import of petroleum products into Ethiopia over one year. The Group maintains a strong relationship with Ethiopia Petroleum Service Enterprise, being one of the main suppliers of petroleum products to the country for the last four years.  Independent Petroleum Group recently secured the 2014 annual tender to supply over half of Ethiopia’s imports of refined petroleum products.

The second-most populous country in sub Saharan Africa; Ethiopia imports all of its petroleum products, which are critical for transportation, industrial and household uses.

“Natixis has a longstanding experience with Ethiopia for over 30 years”, said Felipe Lopez Cruz, Natixis Regional Head of Global Energy and Commodities Dubai branch.  “Our expertise in commodities, our presence in the Middle East, as well as the partnership with IFC and Standard Bank has allowed Natixis to finance Ethiopian oil imports successfully. We are proud of this achievement given the strategic nature of this flow to Ethiopia and to our client, Independent Petroleum Group”.

“The established facility will provide flexibility and support to the Ethiopian Petroleum Supplier Enterprise by extending the credit period for importing petroleum products and introducing new financial institutions and banks to the country”, said Abdullah Al-Khandari, the Chief Financial Officer of IPG.

Ethiopia’s economy has experienced strong growth over the past decade, reaching 7% in 2013.  Still, almost 30% of the country’s population continues to live below the poverty line of $1.25 per day.  A landlocked country; Ethiopia relies on road transport to move critical goods such as construction materials and agricultural commodities.  Imports of petroleum products are thus crucial for several key sectors of the economy.

Oumar Seydi, IFC Director for East and Southern Africa said, “Ethiopia depends on imported petroleum products to meet its infrastructure, agriculture and energy needs. IFC is committed to encouraging trade that supports economic growth and job creation in Ethiopia.”

IFC’s strategy in Ethiopia involves working closely with the private sector to support infrastructure, agriculture and entrepreneurs.

http://africabusinesscommunities.com/index.php/rss-abc-news/204305-ifc-trade-facility-supports-petroleum-imports-in-Ethiopia

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Ethiopia’s loan reimbursement capacity growing: WB

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The World Bank said that the growing capacity of Ethiopia to pay back loans has helped it secure huge supply of loan.

The Debt Sustainability Analysis of the World Bank indicates that the challenge the country faces in securing loan is simple as its debt burden is low.

World Bank Country Director Guang Z. Chen told ENA that the reimbursement capacity of Ethiopia is growing from time to time.

The growth of foreign direct investment and the relative increase of export trade are also among the factors cited.

Some eight projects were launched in Ethiopia last year by utilizing the 1.6 billion USD loan given to Ethiopia, it was indicated. This has raised the total number of projects supported by the bank to over 35.

It is possible to further increase foreign trade by adding export items and diversifying products, the Country Director said, adding that encouraging the manufacturing sector is essential to this.

The success attained in utilizing loans for the targeted objects has ensured the continuity of supply of credit, he added.

According to Chen, loans extended for agriculture, roads, safe water supply and similar programs are being finalized as per the schedules.

According to ENA, data obtained from the bank state that 20,000 hectares of land has been readied for irrigation development and WB has provided 2 billion USD in loan and donation for the expansion of roads since 1991.

http://www.waltainfo.com/index.php/explore/14213-ethiopias-loan-reimbursement-capacity-growing-wb

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Ethiopia Seeking for Indian Bank

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Even if the Ethiopia’s banking industry is close to foreign banks, it is now seeking the Indian banking system, State Bank of India, to engage in it’s economy and open a representative office.

Ethiopia’s Minister for Industry, Ahmed Abetew, said “Previously the Ethiopian government tried to support (investment funds) by availing investment finance with 70:30 ratio – 70 percent loan and 30 percent equity”.

Ahmed added, “But nowadays, the demand for loan is higher than available loanable funds”. “That is why the presence of SBI presence is very crucial here in Ethiopia for availing investment funds for Indian companies as well as other companies.”

SBI is expected to deliver assistance to private investors with feasible project ideas, the Minister added.

Subramanian Venkataraman, country head and CEO of SBI, commented “Ethiopia’s economy is predominantly agriculture-based and India is also per se the same but the banks in India have done a tremendous job in promoting agriculture and modernizing agricultural activity by providing soft loans to agriculturalists.”

Venkataraman furthered, his company would like to discuss with the Ethiopian government and work with the Ministry of Finance and Economic Development (MoFED) or National Bank of Ethiopia (NBE)., if there is any opportunity.

He also advised the Ethiopian government to work with it’s Indian counterpart in order to understand how the banking industry has enhanced India’s economic development.

Other banks are can also extend their support to the Ethiopian government to bring changes in the Ethiopian banking industry, Venkataraman noted.

“Ethiopia has the opportunity and India has the potential if the two governments work together in the financial sector. Our governments could ensure access to our people appropriate financial products and services needed,” he added.

He further asserted NBE should encourage expansion of bank branches, in particular in rural areas and semi urban areas for their significant proportion of household.

Ahmed answering the CEO’s questions said, the Ethiopian government would give any support to have the presence of SBI as it has learned from the results achieved from the ExIm Bank of India, which also has a representative office in Ethiopia.

http://www.2merkato.com/news/alerts/3138-ethiopia-seeking-for-indian-bank

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UK Ambassador: Economic development in Ethiopia very impressive

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UK Ambassador to Ethiopia Greg Dorey said the consecutive economic development registered in Ethiopia over the past years is “very impressive”.

In an exclusive interview with ENA, the Ambassador said the development in Ethiopia is “very impressive” and “potentially sustainable” as well if the government continues to take the right decisions.

“I think it is very impressive whether you take the government’s figures or you take IMF figures … in terms of GDP growth. That is very very impressive and its potentially sustainable growth as well if the government takes the right decisions on the economy then that growth can continue into the future.”

The economic growth in Ethiopia has been accompanied by a huge social investment in human development.

The Ambassador appreciates the strides that have been taken in improving the health, education and social wellbeing of the people.

“Of course this has been accompanied by a huge social investment in human development which is equally important. And you can see the tremendous strides that have been taken in improving the health, education and social wellbeing of the people in Ethiopia really is very acknowledgeable what has been done in a relatively small space of time.”

“Ethiopia is still a poor country so that work needs to continue.” he added.

“So I have to say everything is moving in the right direction it just needs the right decision” to be taken to continue those achievements.

He expressed hope that the economic growth in Ethiopia will continue to benefit the people through job creation and sustainable development.

The bilateral relation between Ethiopia and UK is ‘very diverse, mutually beneficial and very good’ according to the Ambassador.
“Our bilateral development cooperation is the biggest such program in the world for Ethiopia it has been for some years and I expected to continue to be.”

UK provides over 300 million pound sterling annually to Ethiopia in connection with development programs.

Trade and investment relationship is also taking off from a ‘low base’. UK imports of goods from Ethiopia have grown by 48 percent from 48 million pound sterling in 2009 to 70 million pound sterling in 2013. In the same period UK exports to Ethiopia have also grown by 29 percent from 77 million pound sterling to 99 million pound sterling.

Climate change is one of the areas the two countries are working together.

The Ambassafor recognizes the efforts of the government to create a climate resilient green economy by 2025 and achieving a middle income status with zero carbon emissions.

Ambassador Dorey said the Climate Resilient Green Economy Policy of Ethiopia can be a model to other countries.
“It is an absolutely adorable policy. I could recommend it highly enough not just for Ethiopia but it’s a model to other countries as well.’

The UK government is putting 45 million pound sterling into this area partly into creating or enhancing institutions which deal with climate change both public and private.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2379:uk-ambassador-economic-development-in-ethiopia-very-impressive&Itemid=219

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Enterprises designed to serve the smallholder farmer

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By Waktola Wakgari

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For 70 percent of the developing world, agriculture is the main source of income and employment. In Ethiopia, agriculture accounts for almost half of the country’s gross domestic product and 90 percent of its exports. It’s the main source of income for more than 85 percent of the population, which these days is nearing 100 million people.

Despite its mass importance, agriculture in Ethiopia is characterized by low productivity, with most smallholder farmers having limited access to inputs, information and services. Smallholders also suffer from a lack of training on the productive benefits of quality inputs and improved cultivation practices. Unfortunately, this makes for an uphill plight if one wants to rise out of poverty.

Imagine you are one of these smallholder farmers. Imagine you know that an improvement in the quality of your life — your ability to better feed your family, to send your children to school, to access proper health care — depends on what you are able to harvest and sell at the market.

But what if you could access the inputs you need at a store that guarantees high quality and fair prices? What if you could talk to an expert agronomist or veterinarian when you have a question or concern? What if there was a place to learn about how to change the way you manage your farm and livestock so that the land you cultivate and animals you raise yield a higher quantity and quality range of products?

Well, if you are a smallholder farmer in the Oromia Region of Ethiopia, things may be looking up. As part of a two-year pilot program funded by the U.S. Agency for International Development, the Commercial Farm Service Program is establishing what agriculture and livestock producers need most: an Ethiopian-owned one-stop shop where smallholder farmers can access the inputs, consultation and trainings they need to increase their yields and eventually improve their livelihoods.

The program is part of U.S. President Barack Obama’s Feed the Future initiative, which aims to help vulnerable households participate in economic activities and bring jobs and income opportunities for rural households. The program is implemented by CNFA, a U.S.-based international development organization that focuses on stimulating economic growth through enterprise-based agricultural initiatives. CNFA has developed a series of input supply models, all of which are driven by and adapted to local production, markets, entrepreneurs and context.

Having had great success setting up businesses with this enterprise model in Georgia, Moldova and Afghanistan, CNFA and USAID are adapting this model to Africa for the first time.

The enterprises, known as farm service centers, are currently operational in six towns throughout Oromia: Ambo, Bishoftu, Dodola, Fiche, Nekemte and Shashamane. The enterprises were selected following a competitive application and business plan development process. Each FSC has uniform branding and logo usage and maintains a similar floor plan that includes a crop showroom, veterinary showroom, community training room, environmentally sound storage facilities and office space.

To build business and technical capacities, farm service center staff — which includes an agronomist and veterinarian — have received trainings on topics that range from business management and integrated pest management to environmental mitigation, marketing and communications. The program is also working to establish a wholesale buying PLC, or private limited company, that will be owned by and dedicated to serving the inventory needs of FSCs by linking them to national and international suppliers.

For each farm service center, USAID has dedicated $40,000. To promote buy-in and sustainability, the program also asked that, at the minimum, each selected grantee “match” USAID’s investment to the dollar. This means that by leveraging private sector investment, each FSC will have a minimum initial value of $80,000, a first for an Ethiopian business dedicated solely to serving the needs of smallholder farmers. How’s that for investment in a start-up?

But let’s get back to the customer here, the one I was asking you to imagine yourself as: the smallholder farmer.

So far, the positive reaction from customers has been astounding. Chaltu Senbetu, a customer of the Nekemte farm service center, said she had “never seen any other place in town that is as appealing to shop in, that is very clean and safe for medicines and that provides quality products on a timely basis.”

When describing the immense value of accessible expert advice, Atsede Abate, a customer of the Ambo FSC, said: “I bought a calf and it became so sick and very close to death. I lost all my hope before I came to this center and got treatment for my animal. Now my calf is more than well and is even running around. I believe this center brings hope to many of us in the town as it is accessible, knowledgeable and welcoming.”

These two testimonies, and others like it, suggest that these farm service centers have quickly become a place where farmers access a diverse product line and the expert consultations and training they need to improve their crop and livestock yields. FSCs are enterprises designed to serve the smallholder.

Now, imagine yourself as that same farmer. Would you agree with Atsede that a farm service center can bring you hope of not just a better harvest, but of a better future?

https://www.devex.com/news/enterprises-designed-to-serve-the-smallholder-farmer-83748

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DANONE : Major shift expected after Danone buy-in at market leader Brookside

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The entry of French firm Danone into Kenya through the acquisition of a 40 per cent stake in Brookside, the country’s biggest milk processor, is likely to cause a significant change in the local dairy sector landscape.

The firm, which deals in fresh dairy products, early life nutrition, water, and medical nutrition, announced on Friday it had entered into a deal to acquire shareholding in Brookside as it seeks to expand its operations in Africa.

The manner of its entry gives Danone control a major share of the growing local and regional market for dairy products without having to start from scratch.

The Paris-listed company has been actively exploring opportunities to extend its footprint on the continent, and the partnership with Brookside will be beneficial as it targets a share of the East African market.

Brookside already has a presence in Tanzania, Uganda and Ethiopia, and there has been talk of the company launching operations in Rwanda and Nigeria. “This partnership will enhance the platform Danone is currently building in Africa,” the firm said in a statement.

Brookside spokesman Wilson Okong’o declined to disclose the value of the transaction.

Last year, Danone bought a 49 per cent stake in Fan Milk International, a frozen dairy products and juice maker in West Africa, as well as a controlling interest in Morocco’s top dairy firm, Centrale Laitiere.

The Kenyatta family, which previously held a 90 per cent stake in the milk processor, will now control 50 per cent, with the Dubai equity firm Abraaj Group retaining 10 per cent. Abraaj’s Africa Fund bought the stake in 2009 for Sh1.6 billion.

Locally, the deal will be a big boost to Brookside Dairy’s ongoing expansion and will help it tighten its grip on the Kenyan market. Experts expect that the processor will ride on the financial muscle and the extensive experience of Danone to increase production and execute growth strategies.

Brookside has been on an expansion drive over the past year that has seen it buy out rival processors, making it as the dominant player in the dairy products market.

Last year, Brookside acquired Buzeki Dairy, the producers of Molo Milk, in a deal estimated to be worth at Sh1.2 billion. It had previously acquired other local dairy brands including Ilara, Tuzo and Delamare.

The acquisition of Buzeki automatically gave Brookside a presence in South Sudan, thereby enlarging its regional reach. The processor currently controls over 44 per cent share of the dairy products in the Kenyan market.

PUT UP A POWDER PLANT

As part of its growth plan, Brookside has put up a Sh3 billion milk powder plant, expected to double the capacity of milk processed at the plant to 2.4 million litres daily.

“By uniting Danone’s international expertise in fresh dairy products with Brookside’s regional expertise and robust supply chain, the partnership will enable Brookside’s growth acceleration by expanding its product portfolio and strengthening its geographical presence in key markets in the East African region, including Uganda and Tanzania,” Danone said on Friday.

There are, however, concerns about the impact on the local dairy industry and Kenyan dairy farmers if Brookside entrenches its market dominance. By buying out its competitors, Brookside, whose CEO is President Uhuru Kenyatta’s brother, Muhoho, has limited farmers’ choice of where to sell their milk. Brookside’s biggest competitor is state-owned New KCC which lacks the financial muscle to battle it out in the market in terms of prices.

This could leave Brookside with the prerogative of setting milk prices, for both farmers and end consumers.

Danone joins a growing list of French firms that have ramped up investment in the Kenya over the years as more western companies eye a piece of the African consumer market.

http://www.4-traders.com/DANONE-4634/news/DANONE–Major-shift-expected-after-Danone-buy-in-at-market-leader-Brookside-18763539/

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House speakers sign deal to build new parliament complex at cost of 2 bln birr

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The new parliament complex

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Speakers of the House of Peoples’ Representative (HPR) and the House of Federation (HoF) signed a design deal on Wednesday at Jupiter International Hotel to build a new parliament complex estimated to cost some two billion birr. 

Sex workers are a focus for free condom programmes, though Piller notes surveys conducted have illustrated how sex workers are happy to pay for affordable, quality retail condoms, which are already easily accessible at kiosks, grocery stores, pharmacies and the like.

“Everyone involved could do with being a little more data driven,” Pillar says. “Free condoms have a role for the poor and those in most need, but don’t flood the system.”

And too often, free condoms don’t actually reach those for whom they’re intended, and instead permeate the private sector, Piller notes.

DKT’s condoms used to be the ones that Ethiopian hotels habitually stocked in rooms and receptions. I remember finding packs of Hiwot Trust, DKT’s oldest brand, regularly in bedside drawers in hotels during previous travels. But nowadays it’s not DKT’s brands found in hotels but free condoms, much to Piller’s chagrin.

“We could be the distributary core, and what we do is more cost efficient,” he argues.

Tough choice inside his room on the Addis Ababa University campus, 23-year-old Bereket reached into a cupboard and showed me a pack of Sensation Honey condoms. He prefers this brand because it’s “modern”, adding that he avoids free condoms because he cannot be sure of their quality.

On the other hand, 26-year-old Negede, a graduate student at the university, said she remembers visiting the university clinic and seeing four male students turn up and start collecting handfuls of free prophylactics.“They’re my regular customers!”, a nurse told her.

Ethiopians have become much more aware of condoms during the past five to 10 years due to advertising, media messages and health concerns, Negede says. The use of condoms, whether free or paid for, seems to have worked well in helping stem the spread of HIV in Ethiopia; the infection rate is relatively low, estimated at between 1.3% and 2.4%.

So which is the better approach – to price condoms just like any other product, and encourage free market development, or to treat them as potential life-savers which should be available to anyone, anywhere, free, at any time? It’s a dilemma for all involved.

Ethiopia’s condom situation appears emblematic of the wider policy debate that has dominated aid and the question of how best to encourage economic growth in Ethiopia and Africa: the merits – or lack of them – of giveaway – aid culture versus
capacity building.

Western governments have responded to the debate by increasingly endeavouring to tie aid to business opportunities. The US-Africa Leaders Summit this August is intended to “advance the administration’s focus on trade and investment in Africa”, according to the White House.

In January of 2014, British International Development Secretary Justine Greening announced that the UK would be devoting £1.8bn to growth-boosting investments in 2015–2016. “Economic development is, without question,” Greening said, “the only way countries can leave behind enduring and chronic poverty for good.”

DKT’s goal is to be fully participant in Ethiopia’s economic development, and emerge with a business model that is mutually beneficial to its profitability and to Ethiopia, where condoms clearly still have a vital role: World Bank projections predict Ethiopia’s current population of about 91m will grow to 134m by 2030.

So far Members Only condoms make up just 1% of DKT’s sales. But it still early days, Piller points out; he’s hopeful that within the next eight to 10 years, DKT can achieve its goal of transforming itself into a profitable business operating within a more flourishing Ethiopian economy.

“I like to be optimistic even though there’s lots of variables that we can’t control,” Piller says. “But if things remain steady we should get there.”

http://africanbusinessmagazine.com/africa-within/countryfiles/can-free-expensive/

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Indian manufacturers stride to join local investment landscape

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- Construction firm interested in railway, airport, industry zone projects   –  Giant tractor manufacturer willing to assemble here

The Confederation of Indian Industry comprising 15 Indian business delegates spent three days in the capital looking at opportunities that will enable them to take part in Ethiopia’s industry sector.

The delegates met with public officials and posed questions.

From July 14 to 16 the group was busy meeting officials and local businesspersons to grasp what can be tapped in Ethiopia. Tanmony Bhattacharya, head of Africa initiatives at Larsen & Toubro Limited (L&T) was one of the vocal persons from the group. A USD 14 billion conglomerate, L&T is interested in technology, engineering, construction, manufacturing and financial services across the globe. According to Bhattacharya, the company will venture on three major areas in Ethiopia. The company expressed interest in joining the railway sector. Bhattacharya said that L&T would bring in its own finances from the State Bank of India. If intentions are realized, the 670 km stretching Woldia-Mekelle railway project will be handled by L&T, to which the Ethiopian government is required to agree on terms for concessional loans.

Bhattacharya expressed keen interest in areas of airport expansion projects where the firm is waiting for announcements by the Ethiopian Airports Enterprises for bid results. If needed, L&T will avail its own finances for such projects too. The emphasis the government currently is giving is developing industrial zones across the nation. Some projects are pending lacking funds.

During the discussion held at the offices of the Ministry of Industry in Kasanchis, near the UNECA headquarters, Ahmed Abitew, the minister and all his minister d’états were present. Ahmed was eager and gave some accounts of the incentives the Indians may tap into. Minister d’état Sisay Gemechu, in charge of the development of industry zones asserted that he would be available to cooperate and provide the technical details required.

The other Indian giant willing to situate itself here is TAFE, the major manufacturer and seller of tractors and farm equipment. According to Sukhdeep Sing Grover, general manager for exports at TAFE, it will see the assembly line of Ethiopia. He gave his companies details that according to him generate USD 1.6 billion a year. TAFE has a record figure as the third in the world for tractor sales. Yearly it exports some 20 thousand tractors and manufactures, some 180 thousands. India’s major exporter, TAFE will soon establish a business relationship with the Metal and Engineering Corporation (MetEC).

A member of Confederation of the Indian Industry however raised concerns over access to finance, customs clearance, investment license fees, and availability of raw materials such as pig iron and others.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2260-indian-manufacturers-stride-to-join-local-investment-landscape

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Ethiopian flower market in bloom

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The Ethiopian flower market is blossoming.

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Between 2007 and 2011, the number of flower stems Ethiopia exported quadrupled to more than 2 billion stems, according to the Ethiopian Horticulture Development Agency. The EHDA is a government agency that aims to make Ethiopia a leading African country in exporting horticulture, including flowers.

After Kenya, Ethiopia is the second largest exporter of roses out of Africa, says Dawit Woubishet, director and owner of Tradepath International Plc., which began flower transport operations in 2007.

Tradepath is a freight forwarder, airline representative, trucking company and distributor based in Addis Ababa, Ethiopia.

Every week, Tradepath operates an average of 10-12 freighters full of flowers, says Woubishet (pictured right). During holidays such as Mother’s Day and Valentine’s Day, that number can jump to 15 freighters, which is about 900 tonnes of flowers per week. The majority are roses, but carnations and azaleas are also in the mix, Woubishet says.

Tradepath uses trucks to collect flowers from farms and then puts them in a refrigerated warehouse space operated by Ethiopian Airlines. The flowers fly to Liege, Belgium, and then are trucked to Amsterdam for auction. After that, the flowers go to customers in Scandinavia, Russia, Japan and parts of Western Europe.

“The cool chain is very important because the temperature has to be controlled,” Woubishet says. “If that’s not the case, if we kept all the flowers all together for a longer time, the flowers breathe. So when they breathe, they will touch all the other flowers, and then the heat will come out of them, and this will affect all the other flowers. They’re going to have a bad quality.”

http://www.aircargoworld.com/Air-Cargo-World-News/2014/07/ethiopian-flower-market-bloom/6641

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Washington Hotel opens in Addis

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The former Addis Ababa Restaurant in Washington DC on 18th street has now become Washington Hotel in Addis Ababa. An estimated 180 million birr has been invested to realize the concept of from capital to capital as the owners aim at fostering the sisterly cities’ cultural and people to people connection.

For over 30 years Asfaw Amde and his family have resided in Washington DC promoting Ethiopian cuisine and traditional lifestyle on 18th street. “A time has just come to get here,” he said. According to the family, Addis Ababa Restaurant in Washington DC has served the country in promoting the authentic religious and cultural values of the country. 

Washington Hotel is located off Cape Verde Street in the commercial district of Addis Ababa in Bole Sub City on the road to the European Union (EU) Ethiopia office. “We have dealt with global hospitality companies to realize a distinct service,” Girum Legesse sales and marketing manager said. “We had sold our restaurants in DC and Silver Spring in 2005 to fully focus on Washington Hotel in Addis,” Meraf Asfaw, creative director told The Reporter.

After seven years of construction, the hotel is now open creating jobs for 135 citizens. It typically features a penthouse for presidential guests at a price of USD 950, which is hardly available in other hotels in Addis. It also offers prices ranging from USD 95 -160 for its 65 rooms designated as standard single rooms, twin bed rooms, and Washington suites. The hotel is laid down in on area of 1200 sq meters from which ground parking is secured for 50 vehicles and “a terrace that helps guests observe the city at 360o,” Girum added.

Because it lacks a swimming pool to claim a spot in the five-star hotels, it has now opened as a four-star luxury hotel waiting for an expansion to construct a swimming pool and other facilities, the owners explained.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2259-washington-hotel-opens-in-addis

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Government Creates Conducive Environment to Investors – Premier

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Prime Minister Hailemariam Desalegn disclosed that government provides every support possible for companies and business people interested to invest in Ethiopia. The premier held talks in Addis Ababa with Chinese business delegates having big share of investment in China on Thursday.

Hailemariam briefing the delegates said that government creates conducive environment for those committed to invest in Ethiopia. After the talks with the premier number one linen producing, Chinese Kingdom Holdings Textile Company has signed a memorandum of understanding with the Ethiopian Ministry of Industry.

Company’s owner Mr. Wimen Pen said that provision of land and other incentives is encouraging to invest in Ethiopia.

His Textile Industry in Ethiopia will fall on 300,000 square meters of land at Lebu with investment capital of 50 million USD.

Ethiopian Investment Agency Head Fitsum Arega the Coming of such larger companies to invest in Ethiopia will play a great role in knowledge and skill transfer, and job creation as well.

Kingdom Holdings is expected to create up to 5,000 jobs in Ethiopia.

This Company has a capacity of producing 11 thousand tons of textile to date and has been a leading in generating foreign currency in China for the last 11 years.

http://allafrica.com/stories/201407181444.html

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New Procedures for Share Company Registration

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Document Authentication & Registration Office (DARO) announced it launched new registration and authentication method for share companies which only require the presence of half of the shareholders plus one.

Previously it was demanded all the founding shareholders should present themselves in order to establish a share company.

According to Fortune the shift was made after DARO concluded a MoU with Federal Investment Agency (FIA), Ministry of Trade (MoT) and Ethiopian Chamber of Commerce & Sectoral Association (ECCSA), two weeks ago.

Communication Director at DARO, Alemayehu Debassu, said his office got to work after the conclusion of the MoU in order to avoid the extended time it was taking to establish share companies.

The topic was brought up during the Public Private Consultation Forum of the ECCSA which witnessed the Trade Minister Kebede Chane.

According to a presentation that was made, the system was culprit for a huge expenses and a desperate wastage of resources.

After forum MoT organized a team electing its members from itself, DARO, ECCSA, Ministry of Justice and the Investment Agency. The committee studied the problems and made some suggestions.

On Saturday, May 19, 2014, the committee tabled a study which stipulates nine solutions, out of which five are going to be implemented by DARO, and the rest by MoT and FIA.

Commenting on this Alemayehu said, “The improvement is going to be done in the process of work implementations, without amendments to the law”.

According to Fortune, the new system will enable founding share holders to make legitimate minutes and decisions with only 50 plus one percent of the total share holders. DARO will attend the meeting and collect the signatures of those who are present and approve the minutes and decisions on the spot. Election for board of directors will also be approved the office if six of the total 11 directors are
present.

Almayehu noted, “The new implementation system became operational from the day we signed the agreement”.

Ford drives plans for expansion in Africa

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By Roy Cokayne

Ford has aggressive plans to expand its business in Africa and will be launching 25 new vehicles into the Middle East and Africa region by 2016, with 17 of these models launched into sub-Saharan Africa.

Jim Benintende, the president of Ford Middle East and Africa (MEA), said yesterday Ford had launched earlier this year its fifth business unit, MEA, comprising 67 markets that represented “the final frontier for growth within the global automotive industry”.

“The MEA automotive region is expected to grow by 40 percent to 5.5 million vehicles by 2020. By creating sub-regions within Fords MEA’s business unit – South Africa and sub-Saharan Africa, as well as the Middle East and North Africa – Ford is strengthening its presence in this dynamic region, which is recognised as one of the fastest growing regions in the world,” he said in Sandton at the first Ford Go Further event in Africa.

Benintende said Ford recognised the massive growth potential of the African continent and the opportunities it presented and by the end of next year would have refreshed more than 50 percent of its product line-up in South Africa and 20 percent of its line-up in sub-Saharan Africa.

He said Ford was also supporting its dealer network throughout the region to better serve customer needs, which included expanding its parts and service capability throughout the Middle East and Africa to ensure the shortest possible delivery times.

Jeff Nemeth, the president and chief executive of the Ford Motor Company of Southern Africa, said South Africa remained Ford’s engine of growth for the continent going forward and its vision was to become the first choice for mobility in Africa.

Nemeth said Ford launched a total of six new products into the South Africa last year, which contributed to its exceptional 40 percent year-on-year growth to 64 500 units over 2012 and the improvement in its market share to 10.4 percent.

He said the same growth trend had continued this year and Ford’s sales were 26 percent higher in the first half of this year compared with the corresponding period last year.

Nemeth stressed that for Ford to ensure its sales growth in Africa, it was vital to provide an affordable product offering.

“Africa is one of the youngest markets in the world and presents a huge business opportunity.

“The buying power of African consumers is on the rise as the continent’s middle class increases exponentially. Despite the infrastructure challenges, Africa has demonstrated an impressive return on foreign direct investment, which led to a 5 percent increase in foreign direct investment across sub-Saharan Africa last year alone,” he said.

Nemeth added that Ford sales had grown by almost 60 percent in sub-Saharan Africa in the past four years, with Nigeria and Angola its largest markets and accounting for 50 percent of its total sales in the region.

But he said Ford only participated in 24 of the 46 markets in sub-Saharan Africa, which meant there was a massive opportunity for growth.

Nemeth said Ford would become an even stronger contender in the commercial vehicle segment by expanding the Transit brand family across the region.

http://www.iol.co.za/business/news/ford-drives-plans-for-expansion-in-africa-1.1721628

Anna Rosenberg, Head of Sub-Saharan Africa at FSG, is currently on a research trip to Kenya, Uganda and Ethiopia. Here are her latest insights:

As I sit on the plane from Addis Ababa to London, I am gathering my thoughts and impressions of Ethiopia. My trip made me realize just how complex a place it is. Ethiopia is different. Or at least, that’s what everybody keeps telling me. “The first mistake foreign businesses make, is to think that Ethiopia is part of East Africa. Ethiopians are not really Africans, nor are they Arab,” a leading distributor for the healthcare industry told me.

Ethiopians count time differently. It is currently the year 2006. Midnight is 6pm according to “Habesha time.” Unlike its neighbors, Ethiopia has long been closed to foreign exposure. It was famously never colonized, if one ignores the 5 years of Italian rule in the 1930s and 1940s – enough to introduce pasta to the national cuisine. From 1974 to 1991, Ethiopia was under communist influence. Today, Ethiopia is only at the very beginning of opening up to the world.

Yes, Addis Ababa has been the capital of international diplomacy in Africa since the early 1960s. Home to the African Union headquarters and other international organizations, Addis also hosts diplomats from around the world in its swanky hotels and remarkable Chinese-built AU building. Diplomats are easily spotted – they drive big cars and wear expensive suits.

The Chinese-built headquarter of the African Union is nothing less but a remarkable piece of architecture

The two sides of Addis include swanky buildings and impoverished areas

It seems odd. The majority of the population earns about US$60 per month and cars have a 240% import duty. The result is a stark contrast between rich and poor, diplomat and local. Most shops sell cheap Chinese imports or second-hand clothing. As a result, you can find the odd Ethiopian walking around in a Marks and Spencer shop assistant jacket. Russian Ladas from the socialist area, today widely used as taxis, contrast with the diplomat’s 4x4s. The high import duty means that cars, no matter how old, appreciate in price!

The real economy can be seen in the city’s vast market place Merkato, but Westerners rarely come here

The shop-owners in the Merkato are collectively investing in real estate to move their shops from their little shacks into proper buildings 

However, not all Ethiopians have low income levels. The number of dollar millionaires rose from 1,300 in 2007 to 2,700 people last year. GDP grew by 7.1% in 2013 and the government is implementing reforms to improve the operating environment. Ethiopia is therefore increasingly attractive for multinationals that want to tap into a large population estimated at around 90 million people.

This population figure is nonetheless misleading. Local distributors in the FMCG keep telling me that, “the addressable market is more like 10 million when you count the people living in cities.” Some argue that the addressable market is even smaller. Contrary to other African countries, urbanization is not very pronounced in Ethiopia as about 85% of its citizens live in rural areas. Despite low urbanization, consumer goods companies present in the market are experiencing dramatic growth rates of between 20% to 50%. It seems that growth, while from a low base, is happening fast.

I have come to see that doing business in Ethiopia is a long-term game. Companies must understand it will take time for income levels, and consequently consumption, to grow. It will take time for the government to build the required infrastructure to connect rural to urban areas, so that the addressable market will approach 90 and not 10 million people.

The government’s main objective is to transform Ethiopia first and foremost into an export market before it becomes a consumer market. Industrialization, job creation and poverty reduction are also major priorities – and indeed, it has already made major strides in reducing poverty. The government also wants to tackle the recurrent problem of Forex shortages, which is only possible by having more US dollars come in through exports rather than by importing more. For example, the high import duty on cars has been implemented because the country spends a large amount of its export earnings on importing fuel. The government wants to change this trend.

According to many local and international business leaders, the government differs from other African governments in that it delivers on many of its promises. It has created various industrial zones, given preferential treatment to investors keen on producing locally, such access to land and tax exemptions. The amount of infrastructure being built across the country is nothing less than remarkable.

The railway currently under construction in Addis will provide a much-needed improvement to public transport

This image vividly represents Ethiopia’s ongoing transformation

The government also wants to keep a tight grip on the economy. It will only allow foreign companies to invest in sectors that have a true need. As the minister of Foreign Affairs Tedros Adhanom Ghebreyesus told me, “Multinationals need to bring something we don’t already have, either technology or innovation.”

As a result, some sectors are still closed to international companies. These include retail, telecommunications and banking, among others. The government wants to protect local industries and strengthen them before international players come in. There is nonetheless mounting pressure for these sectors to open up and as many say, it is only a matter of time.

The Commercial Bank of Ethiopia is one of the few banks allowed to operate in the country

Some companies are in fact already sneaking in through the back door. Leading international telecommunication providers are allegedly acquiring stakes in Belcash and M-Birr, two companies that provide the technology infrastructure for mobile banking. Telecom giants are therefore already positioning themselves for preferential access to the market.

Ethiopians want international brands, and they want them now. The odd coffee shop uses a similar logo to Starbucks, and I saw several shoe shops that call themselves Aldo and Clarks.  “But Ethiopia was long closed to foreign influence, and they don’t have a direct association with international brands. So, a no-name brand from Turkey for example, can become very successful here, because consumers don’t know the multinational brand. Companies are on a level playing field, and it all comes down to marketing,” a distributor whose Turkish nappies enjoyed a much larger market share than P&G’s pampers, told me.

International brands are much aspired to, as can be seen from this Apple logo on a bus

Local brands are widely popular, and for a good reason. I quite enjoyed St. George’s beer 

Understanding the “local code” is crucial when trying to reach the consumer, as I have been told repeatedly. To give you an example, an international FMCG company endorsed a local musician. However, it turns out this local musician was not well-liked by the 30 million strong Oromo tribe because of his praise of a former Emperor who committed manslaughter of the Oromo many decades ago. The company had planned to send this musician on a tour into the Omoro tribal area, which caused a massive outcry. The marketing mishap reveals how companies must understand cultural sensitivities to succeed in Ethiopia.

Several international companies are already tapping into Ethiopia’s opportunity very successfully. They include the typical pioneers for doing business in Africa; namely Coca-Cola, Pepsi, Diageo and Heineken. GE already paid various visits to the country and is planning to set up an assembly factory. Coca-Cola has a long history of being in the country. Apparently Emperor Haile Selassie owned shares in the company – and at a time, Coca Cola was traded for gold!

The pioneers are already here. Their success partly rides of the back of what the head of GE for East Africa described: “in Africa, we are working backwards, we create the infrastructure that will lead to the demand for our products.”

The pioneers of FMCG companies are already present in the market: Heineken, Pepsi and Diageo

I can see that this approach takes time and is expensive, but ultimately, the “working backwards approach” leads to success not just for the companies, but for the socio-economic development of countries.

Given the realities I have seen in Ethiopia, this model makes perfect sense to me.

For additional insight from Anna’s research trip in East Africa, be sure to read her earlier posts: Kenya – A Regional Trendsetter, Notes from the Field: Kenya, Nairobi – African Cities Need Urban Planning, Kenya – Let the pictures speak for themselves, and The Uganda Trap. 

Sourced here  http://blog.frontierstrategygroup.com/2014/04/ethiopia-cracking-the-local-code/

By Asrat Seyoum and Wudineh Zenebe

New foreign policy direction has been in the works in Ethiopia during the past few years. It is a slow evolution to the so-called ‘economic diplomacy’ and by now, the focus of the Ethiopian diplomatic mission abroad is one matter and one matter alone: attracting investment.

By Toddy Thairu
Posted  Sunday, August 24   2014

Holetta central Biotech Laboratory

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Genetically modified organisms are created by the scientific intervention of man, mixing the genes of different organisms to get certain qualities in one. For example, Bt cotton, a popular GMO crop, has the genes of a bacteria added to it so that the cotton plant can produce toxins that kill pests. As with cotton, the same technology has been employed in different food crops as well. There is also the Golden Rice, which has been engineered to be rich in vitamin A.

GMOs are shrouded in controversy, however, with those in favour arguing that they could transform the food security of the world, while those against speak of the risks to the environment and biodiversity, as well as the exploitation of farmers who will be dependent on expensive seeds from companies such as Monsanto.

Ethiopia’s bio-safety proclamation of 2009 did not close the door on GMOs, but made entry very difficult. It required that the government of a GMO’s country of origin was responsible for any damage caused in Ethiopia – a guarantee that no government wanted to give, say sources. These sources declined to say how or why, but there has been a strong pressure from government to amend the law fast.

The push to change Ethiopia’s stringent proclamation and to ease the environment for access to the controversial GMOs came from the highest level in government, according to sources. Government agricultural researchers, who found it hard to partner with “sister institutions from foreign countries” under the existing law, also see the amendment as something that needed to happen.

The existing law had very strict rules for GMO transportation and storage in Ethiopia. Someone involved in the transport, storage or processing of GMOs must have adequate insurance to cover any possible harm caused by GMOs and can only transport the GMOs after special training by the Environmental Protection Authority (EPA) and with a license for drivers or pilots. After release to the environment and commercialisation, one has to monitor and present an annual report to the EPA for (Directive No.3/2009) at least 150 years for GM trees, 30-150 years for GM perennial crops and 30 years for annual crops. A researcher who recommends the use of a GMO could be imprisoned for up to 15 years if it is imported for research and study, and commercial release causes any problem to the environment or the general public. In addition, the proclamation treats low risk activities, like contained use for research and teaching, in the same way as commercial planting/environmental release. The jurisdiction to administer issues in relation to GMOs is also given to the EPA, now a Ministry, under the law.

This law did not allow Ethiopian researchers to collaborate with researchers in other countries on GMOS, said Endale Gebre (PhD), Director of Biotechnology Research at the Ethiopian Institution of Agricultural Research (EIAR).

The amendment states that any person can engage in transactions destined for the release of GMOs to the environment by obtaining an Advanced Informed Agreement from the MoFEP. Any applicant can engage in any contained use transaction with a special permit from the Ministry. This bill, which was submitted to Parliament’s Forest and Natural Resource Standing Committee at the end of July 2014, was drafted by the Ministry of Forest & Environmental Protection (MoFEP), Ministry of Agriculture (MoA), Ethiopian Institution of Agricultural Research (EIAR) and the Ministry of Science & Technology.

Allowing the use of GMOs is not a choice, but a necessity, argues Endale, stating that Ethiopia’s population is projected to reach 140 million in 2025, although he adds that only 20pc of arable land is cultivated in Ethiopia. The current law disappointed researchers, foreign exporters, investors and NGOs, says Endale.

“Enter the age of BT in Ethiopia,” says Maryam Mayet, who reviewed the amendment on behalf of a local NGO, Melka Ethiopia.

GMOs are the only solutions to mitigate food insecurity, which might occur as the population grows, says Abay Yimer (PhD), a researcher at the Institution for Science & Sustainable Development (ISSD). Abay downplays the risks, saying that 400 European researchers have undertaken studies at a cost of 200 million dollars over the past 10 years, proving that risks from GMOs were no different from the risks posed by the use of pesticides, herbicides and fertilisers.

“Currently, there is shortage of cotton production in Ethiopia and Ethiopian imports cotton from Tanzania and China every year,” says Endale. “Applying biotechnology in cotton production would minimise cost and save foreign currency.”

And the most common technology in cotton, as well as other food crops, is adding some genes of a bacteria, Bacillus thuringiensis, to produce the so-called BT crops, with the ability to produce the bacteria’s natural toxin. In cotton, the pest that is the target of the toxin is the bollworm.

It was in 2009/2010 that the Ethiopian Institution of Agricultural Research stared constructing a Central Biotech Laboratory in Holetta town, complete with a molecular lab, plant biotech, livestock biotech, microbial biotech and genetic engineering facilities. All laboratories are now working except the Genetic Engineering, which has not been able to do so because of the stringent laws. The research institute, a government body, built the genetic engineering lab, complete with most facilities except a green house which will be completed in six month, despite the government’s own law making it nearly impossible to dabble in the practice through its stringent requirements, which put the researchers at risk of harsh punishment.

Research conducted in the other labs included such crops as cassava, sweet potato, cowpea, groundnut, banana, rice, sorghum, wheat, plantain and millet, as well as fruits and vegetables, such as citrus fruit, grape, mango, plum, cucumber, tomato, eggplant and peppers. Cash crops, like sugarcane, cacao and coffee, are also included. The institutes are conducting research on GMO enset (false banana) – a source of the staple food, kocho, for many in Ethiopia’s south – in Nairobi, Kenya, in collaboration with other researchers at the International Institution of Tropical Agriculture Laboratory (IITA).

When Ethiopia drafted its stringent bio-safety law in 2009, the Ethiopian consumer association was one of those involved in the process. However, during the production of the new draft, the association was excluded, despite efforts to be part of the process, said Gebremedhin Birega, the Assocation’s director.

Consumers should be aware of what they consume and have the right to get organic and GMO free products, he says, adding that Ethiopia is making the amendment in the interest of other countries, such as the United States, China and India, who are home to the world’s largest GMO company, Monsanto, and the largest producers of BT cotton.

More in line with that argument is the interpretation of the amendment given by Maryam Mayet, who believes that the government had some foreign exporters to Ethiopia in mind when drafting the new amendment. The amendment has inserted a definition for foreign exporters, and she thinks that “a special definition for such an actor must denote some intention that such an actor – a foreign exporter – will play a key role in this shift towards an openness to GM experimentation” in Ethiopia.

Her argument is enhanced by another element in the amendment which says that the objective of the amendment is to “enhance access to and transfer technologies, including modern biotechnology, that serve for conservation and the sustainable use of biological diversity.”

“And we know that the main arguments of industry as to the benefits of GMOs on the environment especially is insect resistant GM crops. Enter the age of Bt cotton for Ethiopia.” She said

The amendment includes several articles where the definitions and requirements, as well as risks and accountabilities, have been made more lax and where licenses to operate will be easier to obtain in Ethiopia. A possible interpretation of the phrase “into the environment” could mean “cultivation”, which would eliminate the need for an Advanced Informed Agreement for “food, aid food, greenhouse experiments, aqua-culture, animal feed or other inputs for animals, and medicines for humans or animals”, according to Maryam.

“The overriding imperative of these amendments are to signify a major shift in Ethiopia’s policy on GMOs, from a precautionary approach to an openness to, at the very least, experimentation in contained use conditions,” she said.

The United States government, through the US Agency for International development (USAID), is already working to build “the leadership capacity of the Ministry of Agriculture and Regional Bureaus” to harness “biotechnology for agriculture in collaboration with the Ethiopian Academy of Sciences, the Ethiopian Institute of Agriculture Research, the USDA Mission in Ethiopia and the Institute for Science & Sustainable development”, according to a press communiqué from USAID.

Attending the meeting, which was held at the Hilton Hotel on August 21 and 22, 2014, was Diran Makinde (Prof), Director of the AU-NEPAD African Bio-safety Network of Experts (ABNE), who spoke of the success of BT cotton farming in several countries, including the neighbouring Sudan. He argued that national regulations could be harmonised with international regulations for bio-safety, adding that the full range of potential risks needed to be assessed and managed.

Ethiopia’s state minister for Science & Technology, Mohammed Ahmed, told the meeting of his government’s recognition of the role of science and technology, and that “biotechnology alone cannot solve the Ethiopian agricultural challenges.Public policy should appeal more to pragmatism and less to ideology when seeking solutions to Ethiopian agricultural challenges”.

The Ministry of Agriculture believes that “Biotechnology should be a big project, in order to improve the economic growth of the country” and that it “will be a solution for low and insufficient agricultural productivity and also for economic growth”, according to Aster Stifanos, an advisor at the Ministry, who spoke on behalf of minister Teferea Derebew.

The Ministry of Forest & Environmental Protection (MoFEP) is expected to defend the amendment before Parliament sometime in October.

It was in 2009/2010 that the Ethiopian Institution of Agricultural Research stared constructing a Central Biotech Laboratory in Holetta town, (above) complete with a molecular lab, plant biotech, livestock biotech, microbial biotech and genetic engineering facilities.

Sourced here  http://addisfortune.net/articles/biosafety-bill-to-open-door-to-gmos-in-ethiopia/

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U.S. farmers latest to sue Syngenta over GMO corn rejected by China

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(Reuters) – Farmers from the biggest U.S. corn-growing states have sued Syngenta AG over sales of genetically modified corn seed not approved by China, joining global exporters in pursuing damages from the Swiss-based company.

In coordinated lawsuits filed on Friday in federal courts in Iowa, Illinois, Nebraska, Kansas and Missouri, farmers accused Syngenta of being reckless when it launched U.S. sales of Agrisure Viptera corn seed in 2011 without obtaining import approval from China, a major buyer.

The farmers, who did not plant seed containing the unapproved trait, claimed they suffered losses because the price of U.S. corn dropped when China began rejecting boatloads of crops containing Viptera corn last year.

In April, the National Grain & Feed Association estimated that U.S. farmers had lost more than $1 billion due to trade disruptions linked to the rejections.

The lawsuits seek to open the complaints to all U.S. farmers who grew non-Viptera corn since China began rejecting the trait in November 2013.

Viptera corn, known as MIR 162, was planted on about 3 percent of U.S. corn acres during the past two years, according to court documents. Still, industry members have said the trait can be found throughout the supply chain because it is difficult to segregate one variety from another.

“There are a lot of angry farmers out there who really feel like Syngenta needs to step up and do the right thing, and that is compensate farmers for all the losses that occurred as a result of Syngenta prematurely rushing the product to market,” said James Pizzirusso, a partner with law firm Hausfeld LLP, which is coordinating the farmers’ lawsuits.

Last month, agribusiness company Cargill Inc and another exporter separately sued Syngenta for selling Viptera corn seed before Beijing approved imports. The companies said they suffered combined damages of more than $131 million linked to China’s rejections of U.S. crops containing the trait.

Syngenta had no immediate comment on the farmers’ lawsuits. The company has said the exporters’ complaints are without merit.

The U.S. Department of Agriculture is negotiating with China to synchronize its regulatory review of new traits with the United States in a bid to reduce approval times, Agriculture Secretary Tom Vilsack told reporters on Monday after a speech in Chicago.

According to the lawsuit, farmers felt misled about the prospects for China to approve imports of Viptera corn because Syngenta Chief Executive Michael Mack said in an April 2012 earnings call that he expected Beijing to clear the trait “within a matter of a couple of days.”

Beijing still has not approved Viptera corn.

“We don’t mess with China,” Deb Volnek, a Nebraska farmer who is among those suing Syngenta, told Reuters. “When China buys something, the markets go up. When they don’t, the markets go down.”

Her case is Volnek Farms Inc v. Syngenta Corporation et al, U.S. District Court, District of Nebraska, No. 14-cv-00305. (Reporting by Tom Polansek; Additional reporting by Karl Plume in Chicago)

http://uk.reuters.com/article/2014/10/06/syngenta-seed-farmers-idUKL2N0S12KF20141006

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Ethiopian Airline gets 10th Dreamliner

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Tewolde Gebremariam, CEO of Ethiopian Airlines says the company has chosen the 787 as its core fleet

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Africa’s largest airline, Ethiopian Airlines has taken delivery of a a new B787 Dreamliner, bringing its fleet of the world’s most technologically advanced planes to 10.In 2012, Ethiopian airlines became the second airline in the world, after Japan Airlines, to receive and operate the B787 Dreamliner.

The airline, which took delivery of the new plane on 2 October, said it had chosen the B787 as its core fleet for its mid- and long-range African routes, such as Johannesburg, Lagos, Abuja and Harare.

“We have chosen the 787 as our core fleet on our mid and long range routes as part of our commitment to our esteemed customers to give them the best possible travel experience,” Ethiopian CEO Group, Tewolde Gebremariam, said.

Ethiopian Airlines serves 83 destinations across five continents.

The latest Dreamliner, which the airline has named “Niagara Falls”, will serve international routes like London, Beijing, Toronto, Washington D.C. and Brazil, among others.

In line with its long term growth strategy, Vision 2025, Tewolde said the airline plans to phase-in new and modern aircraft such as the B787s, B777s, A-350 and the B-737-8 MAX to support the carrier’s fast expanding global network.

http://www.theafricareport.com/East-Horn-Africa/ethiopian-airline-gets-10th-dreamliner.html

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Ethiopia to issue international bond

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Ethiopia announced its plan to issue international bond at the end of this year, the first of its kind move by the country to join the international capital market.

The announcement came following the sovereign credit ratings given to the country by three top international rating agencies last May.

Ethiopia had secured a credit rating from Standard & Poor’s and Fitch assigned a rating of “B” to the country’s sovereign treasury bonds, while Moody’s gave a “B1″ (B+).

“On the basis of the ratings, the government of Ethiopia has decided to issue a 10-year international bond and access international capital market,” Sofian Ahmed, Finance and Economic Development Minister told journalist today.

“The bond sale would serve as a potential means for the government to know the risk premium,” he said. This, according to him, will help Ethiopian business to access international capital markets by providing a benchmark for risk assessment.

He further said that the fund to be obtained from the sale of bond would be utilized to finance infrastructure projects.

All the necessary preparations have been done to issue the bond, including selection of world top banks that will issue the bond on behalf of the Ethiopian government, he said.

An agreement would be signed soon with three banks to issue the bonds. Hiring of International law firms that provide legal advice is also underway, he added.

Asked about devaluation of Ethiopian birr, Sofian said, “The government has no intention to devaluate birr. There is no economic reason to devaluate birr. Ethiopia’s economy is now stable.

http://www.waltainfo.com/index.php/explore/15305–ethiopia-to-issue-international-bond

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Agricultural products export projected at USD 2.5 billion

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The Ministry of Trade (MoT) plans to earn USD 2.51 billion or 16.6 percent more than they targeted last fiscal year, from exporting non-manufactured or agricultural products.

The office’s biggest target item is no surprise as they plan to rake in USD 862.5 million from coffee, the item that has been historically the nation’s highest foreign currency earner. This year plans are for coffee to bring in a whopping 20 percent more than last year’s earnings.
A document released by the ministry forecasts that the nation will export 235,950 tons of coffee during the 2014/15 budget year, a significant increase from 190,876 tons during the 2013/14 fiscal year. The current year’s target has a 23.6 percent higher volume compared with the previous year. In the past budget year the country generated USD 718.8 million from coffee exports.

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During the previous fiscal year Ethiopian coffee growers and exporters suffered at the hands of the international coffee market as prices plummeted. However this year coffee prices are expected to increase as other countries that export coffee have suffered from crop damage and their production may decrease. Despite the fact that MoT has set a higher target for coffee this fiscal year it is still less than the GTP target that was set about four years ago. This is largely because during the past four years, coffee did not bring in as much revenue as the GTP predicted it would. The plans of the GTP called for revenue from coffee to be over USD two billion by the end of the plan, which is this fiscal year. It targeted for coffee’s export volume to be 600,970 tons for the current fiscal year. The goal for the past year of the GTP was to be USD1.6 billion with a volume of 468,052 tons.

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The lower than expected results are largely being blamed on the international market.
Coffee is now forecasted to earn nearly USD 4,268.68 per ton this fiscal year whereas last fiscal year it earned an average of around USD 3,765.75 per ton.

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One thing the government wants to do to improve results is to establish a strong institution to fully follow the harvest (plantation), marketing and exporting of coffee beans with the goal of getting more from coffee. The office would be at the ministerial level and would exclusively follow coffee. Currently, different offices like the MoT and Ministry of Agriculture are responsible for coffee.
Experts said that this should help coffee earn more.

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“For instance very few individuals are responsible for the coffee sector at MoT,” the expert said. Even though the Ethiopian coffee has a high premium compared with international brands, it is still not gaining its value.

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The other major sector that MoT is looking after is the export of oil seeds. During the current budget year the ministry has targeted to expand the export earnings by 12.77 percent compared with the past fiscal year’s achievement. During the current year USD 725 million is expected to be earned, an increase from USD643 million during the 2013/14 budget year. The GTP target indicated that the revenue from oil seeds should be USD 1.12 billion.

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Despite the fact that some have mixed feelings about khat, the stimulant leaf brings in a lot of hard currency.  According to the ministry’s target, khat should generate USD 332 million through 60,435 tons of exports. Khat is the third highest earning export crop and in the past fiscal year its 52 thousand tons export brought in USD 297 million to the country. The export of pulses for the current year will be USD 307 million with the export of 409,287 tons of the crop. The projection is a 22 percent higher value and 16 percent higher volume compared with the past fiscal year.

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From livestock exports the country expects to earn USD 222 million from 808,747 live animals. In the 2013/14 fiscal year the country earned USD 187 million from exporting 647,713 animals, mainly cattle, sheep and goats.

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According to the GTP Matrix, the government had projected to earn USD 4.04 billion from exporting coffee, oilseeds and pulses in the 2014/15 budget year. But according to the latest plan the ministry office plans to earn half of the original GTP target which is USD 1.9 billion.

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The other sectors that MoI follows are cereal, natural gum, tea and spices. From these items the ministry has targeted to earn USD 58 million in the current budget year.
This is the final year of the five year Growth and Transformation Plan (GTP).

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4598:agricultural-products-export-projected-at-usd-25-billion&catid=35:capital&Itemid=27

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Coffee Futures Soar to 32-Month High, Signal Retail Jump

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By Marvin G. Perez and Luzi Ann Javier

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Coffee futures surged to a 32-month high as persistent drought curbs harvest prospects in Brazil, increasing the odds for higher retail prices.

Dry weather was forecast for the next 10 days after no “meaningful” rain fell over the weekend in Brazil’s main growing regions, Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas, said yesterday in a telephone interview. Arabica-coffee prices have almost doubled this year as drought cut 2014 output and dimmed the outlook for 2015 in Brazil, the world’s top producer and exporter.

Some U.S. retail prices will increase as soon as mid-November, says Ross Colbert, a global beverage strategist at Rabobank International. Brazil’s National Coffee Council has estimated that farmers may collect less than 40 million bags in 2015, creating the longest output slump in five decades. Options show that some investors are betting that futures will climb to $3 a pound, up 36% from yesterday’s settlement.

“At the price level we are in futures, I would expect we’ll see maybe a 10 percent to 12 percent price increase” in certain outlets, New York-based Colbert said in a telephone interview yesterday from Utretch, the Netherlands. “By Thanksgiving, you’re taking in the holiday season, and coffee retailers will use this opportunity to nudge pricing up before the holiday traffic builds.”

Arabica coffee for December delivery climbed 6.9 percent to settle at $2.208 yesterday on ICE Futures U.S. in New York, the biggest gain for a most-active contract since April 22. The price reached $2.255, the highest since Jan. 20, 2012.

Aggregate futures trading was 56 percent above the average for the past 100 days, according to data compiled by Bloomberg.

Options Trading

Calls giving owners the right to buy December futures at $3 traded an estimated 947 contracts yesterday, the third-most active option. The price more than doubled to 2.4 cents, the highest since June 16.

December calls with a $2.50 strike price traded 1,021 contracts, the most-active. The option price almost doubled to 8.83 cents.

Starbucks Corp. and J.M. Smucker Co. raised retail prices this year after futures surged 61 percent in the first quarter.

Companies including Kraft Foods Inc. and Smucker, the maker of Folgers, the top-selling U.S. brand, “have shown a willingness to raise prices” as green-coffee costs increase, Colbert said. “They are early movers.”

Flowers for the crop that blossomed from August to late September may fall off before developing further, Cepea, a University of Sao Paulo research group, said on Oct. 1.

‘More Premium’

“Now, trading is all about the weather,” Fain Shaffer, the president of Infinity Trading Corp. in Indianapolis, said in an e-mail. “Since the chances of rain have been pushed back another week, we are seeing more premium being built into prices.”

Production this year may be down as much as 18 percent to 40.1 million bags, the National Coffee Council estimated, after a 3.1 percent slide last year. Prospects for the next crop are worsening as spring starts and temperatures rise in the Southern Hemisphere.

“The situation is going to get rather dire if there is no rain for another two weeks,” Judy Ganes-Chase, an industry consultant in Panama City, Panama, said yesterday in an e-mail. “There is no ‘if’ any more regarding sparing the crop from harm. Rains will simply keep this disaster from being even worse.”

Real Rally

Coffee rose as Brazil’s real strengthened against the dollar in the past two sessions. President Dilma Rousseff faces a runoff election with Aecio Neves, who has appealed to investors by pledging to slow inflation. A stronger real erodes the appeal of export sales of the commodity priced in dollars.

Coffee has posted the biggest gain this year among 22 raw materials in the Bloomberg Commodity Index of 22 raw materials. The broad gauge has dropped 4.9 percent in 2014.

Yesterday, robusta coffee for November delivery rose 4.1 percent to $2,165 a metric ton on ICE Futures Europe in London. The price reached $2,169, the highest since May 2. The commodity has climbed 29 percent this year.

The arabica premium to robusta jumped 9.3 percent to $1.226, the highest since Feb. 10, 2012. The ratio has more than tripled this year. Arabica is brewed by specialty companies including Starbucks, while robusta beans are used in instant coffee.

Brazil is the biggest grower of arabica, and Vietnam is the top producer of robusta. A bag weighs 60 kilograms (132 pounds).

http://www.bloomberg.com/news/2014-10-06/coffee-futures-soar-to-32-month-high-signal-retail-jump.html

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Dangote Industries (Ethiopia) Ltd., Muger, Ethiopia

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Dangote Cement PLC has commenced project works of US$ 400 Million green field cement plant of 2.5 million tons/ annum capacity at Muger in Ethiopia. Mobilization of men and machinery is done and project execution is underway in full pace. The Plant is scheduled to be commissioned by the Q1 of 2015.

Dangote Cement’s foray into Ethiopia in the Oromia region close to Addis Ababa, comes at a time when the Horn of Africa nation is grappling with a severe cement deficit amidst rising demand as a result of substantial investments in infrastructure like roads, dams, bridges and railways. Currently, Cement demand in Ethiopia is around 7 to 8 MTPA, while production stands at 2.4 MTPA forcing the nation to import the deficit for several years. Over the next five years, demand is expected to soar to 13.8 MTPA, while local supply will reach 8 MTPA when existing manufacturers complete the upgrading of their factories. This provides Dangote Cement an ideal investment opportunity to bridge the deficit and consolidate its operations.

Key Features

Name of the Plant : Dangote Industries (Ethiopia) Plc, Muger, Ethiopia
Capacity : 2.5 million tons/annum

Raw Material Sources

Limestone : Muger Mines
Shale : Muger Mines
Red Soil : Muger Mines
Gypsum : Muger Mines
Power Source : 1 x 30 MW Coal Based Captive Power Plant
Fuel Source : Coal, LPFO
Cement Packing : 3 Roto Packers of 2400 Bags/hr Capacity
Cement Loading : Auto Loading of 8 Trucks simultaneously

http://dangcem.com/index.php?page=98

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East African Cement Industry Production and Investment Forecast

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- The low per-capita consumption of cement within the enlarged East African region offers scope for growth

http://www.companiesandmarkets.com/Market/Industrial/Market-Research/East-African-Cement-Industry-Production-and-Investment-Forecast/RPT1264365

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European businesses plead for urgent improvement in business licensing, taxation

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Ahmed Shide

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“We are here to listen to you and make swift improvements,” Ahmed Shide, MoFED

The European Union Business Forum Ethiopia (EUBFE) pleaded for an urgent improvement of the business climate in Ethiopia on Thursday during an event held at Addis Ababa Hilton.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2595-european-businesses-plead-for-urgent-improvement-in-business-licensing-taxation

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Ethiopia, Switzerland Sign Memorandum of Understanding

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Ethiopia and Switzerland signed on Monday, October 06, 2014 a memorandum of understanding that strengthens their bilateral relations.

The memorandum of understanding was signed by Foreign Affairs State Minister Ambassador Berhane Gebrekristos and Yves Rossier, Swiss State Secretary for Foreign Affairs.

According to Ambassador Berhane, the MoU would help the countries collaborate on political issues at bilateral and international forums.

Switzerland would also provide training on federalism and extend technical assistance in science and technology as well as other spheres, it was learned.

Switzerland State Secretary for Foreign Affairs, Yves Rossier, expressed his appreciation for the role Ethiopia is playing in the Intergovernmental Authority Development (IGAD).

”The strength of IGAD is only the strength of its member states and the role of Ethiopia is determinant,” he said.

Rossier added that the agreement helps the two countries to work closely in various issues.
Ethiopia and Switzerland are expected to sign agreements in economic and technical areas soon, it was learned.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2371:ethiopia-switzerland-sign-memorandum-of-understanding&Itemid=260

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Ethiopia’s economy shows 10.1 per cent growth

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President Mulatu Teshome said Ethiopian economy has shown a 10.1 per cent growth on average during the past four-year implementation period of the Growth and Transformation Plan (GTP).

The President made the remark here today while opening the fifth term joint session of the House of Peoples’ Representative (HPR) and the House of Federation (HoF).

He further said the county managed to register 10.3 percent growth last Ethiopian fiscal year. He also predicted the economy to show 11.4 percent growth this budget year.

According to President Mulatu, agricultural productivity grew by 21.7 quintals per hectare on average, while tax revenue has surge by 17.6 per cent.

More than 18,800 kebeles (districts) have become beneficiaries of telecom services, thereby attaining 96 per cent of the target set out in the Growth and Transformation Plan (GTP), he said.

He further said that more than 26 million people have participated in the watershed development and natural resource conservation activities carried out across the country
The mega project being carried out in the country has created jobs for 2.7 million people, he said.

The president also told the parliament about the activities to be carried out in this budget year.

He said efforts would be made to maintain the single digit rates of inflation as well as improve education quality in this budget year.

He said the government is doing to solve the current power interruption and alleviate problems facing the manufacturing industry sector.

Efforts would also be made to make the upcoming general election fair, free and participatory, he noted.

He said the country would consolidate its efforts to bring about durable peace in the region, especially in Somalia and South Sudan.

http://www.waltainfo.com/index.php/editors-pick/15307-ethiopias-economy-shows-101-per-cent-growth-

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Rwanda seeking 400MW electricity from Ethiopia

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Faced with a high cost of energy, Rwanda is planning to import 400MW of electricity from Ethiopia in the medium term.

Kigali is exploring other avenues that will enable it achieve its ambitious second Economic Development and Poverty Reduction Strategy (EDPRS II) target of 70 per cent access rate to energy and an electricity generation capacity of 563MW by 2017.

For it to achieve its desired access rate, the government is planning to supply 1.7 million customers with electricity. Currently, the country’s total energy generation stands at 119MW.

Rwanda has designed a five-year electricity strategic plan in which it projects to deliver about 232MW of hydropower, 310MW geothermal power and 300MW from methane gas, as well as strengthen and expand transmission lines by an additional 2,100km.

Hydropower projects in the pipeline include Rusumo falls, Rusizi III and Nyabarongo II.

However, because most of them are in their infancy, the rising demand for energy will partly be met through significant energy imports, which is cheaper than generating energy from costly thermal projects.

Currently, 50 per cent of Rwanda’s energy is generated via thermal means which is expensive largely due to fuel costs.

Fuel – in particular diesel and heavy fuel oils – account for approximately 40 per cent of the country’s 119MW installed energy capacity. Hydropower accounts for 59 per cent and methane gas 1 per cent.

Last year, for example, the energy sector requested the government for $46.7 million for buying fuel to be used in thermal power generation but received only half the amount.

This cost is passed on to consumers; hence Rwandans pay higher per unit cost for power than their neighbours in the region.

Rwanda’s current generation portfolio stands at $0.24/kWh compared with Kenya’s $0.15/kWh, Uganda’s $0.17/kWh and Tanzania’s $0.05/kWh.

Rwanda’s energy deficit is hampering its plan to achieve a middle income status by 2020 by empowering the private sector.

As part of plans to boost its capacity, Rwanda has signed a memorandum of understanding with Ethiopia.

However, the expression of interest is not a guarantee that the flow of electricity from Ethiopia will be immediate, as Rwanda must first sort out infrastructure and regulatory challenges.

http://www.ertagov.com/news/component/k2/item/3316-rwanda-seeking-400mw-electricity-from-ethiopia.html

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Kessem to commence sugar production

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Kessem will commence production by the coming December, according to general manager of Kessem sugar development project.

The factory is under construction in Afar Regional State, 50 kilometers far from Metehara sugar factory.

“The factory is now 90 per cent complete and it will begin trial production after three months,” Kaba Merga, general manager of Kessem sugar development project told WIC.

The factory is being built mainly by Complant Group Inc., a Chinese construction and engineering company, he said.

Two Chinese sub-contractors and SATCON Construction Plc, a domestic construction firm, are also participating in the construction activities of the factory, he noted.

He said based on the agreement signed between Ethiopian Sugar Corporation and Amibara Agriculture Development P.L.C, the latter is developing sugarcane on 6,000 hectares of land.

The Corporation and Amibara Agricultural Development plc signed an out-grower agreement on March, 2014, – the latter to develop sugarcane on 6,000 hectares of land and supply it for the factory.

Kessem sugar development project itself is developing sugarcane on 1,800 hectares of land, he noted.

Factory division deputy general manager at Kessem sugar development project, Worku Chekol, on his part said the factory will use improved sugarcane crushers and modern technology to alleviate contamination.

Pastoralists, who were benefited from the villagization program carried out in connection with the sugar development project, are currently engaged in crop production, it was noted.

Kessem sugar development project is part of the government’s drive to increase the country’s sugar production capacity to 2.25 million tons during the Growth and Transformation Plan (GTP) period.

http://www.waltainfo.com/index.php/explore/15280-kessem-to-commence-sugar-production-

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Chinese company plans to produce gas by 2018

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- Prepares bid documents

The Chinese company that acquired the Calub and Hilala gas fields in eastern Ethiopia, POLY GCL Petroleum Investment Limited, this week announced that it plans to start extracting natural gas from the gas fields by 2018.

On November 16, 2013, the Ethiopian Ministry of Mines and POLY GCL Petroleum Investment Limited signed petroleum exploration and development agreements in Addis Ababa.

The agreement enables Poly GCL to develop the Calub and Hilala gas fields found in the Ogaden basin in Eastern Ethiopia. The agreement also allows Poly GCL to prospect for oil and gas in Blocks 3&4, 11&15, 12&16, 17&20 exploration blocks in the Ogaden basin.

According to Li Wei, general manager of Poly GCL, since signing the PSA, Poly GCL organized a competent project team and set up a management system in accordance with international petroleum industry practice. “We have submitted the 2014 work program and budget, finished the comprehensive geology and geophysical study, signed the contract with a company to begin the Environment Impact Assessment (EIA) study,” Wei told The Reporter via email.

According to Wei, Poly GCL is in the process to hire a company that would undertake a seismic survey and drill exploration wells for additional discovery. “We are preparing bidding documents for seismic and drilling work tender,” Wei said.

According to the current plan, the first stage of the project will produce around 3 million tons of LNGs (Liquefied Natural Gas) annually and is expected to go into production in 2018. According to the exploration and development plan, 4 billion cubic meters of natural gas will be produced each year from Calub and Hilala block and option is to transport the gas northward through a pipeline of 800 km long to Djibouti port and finally market the products in the international market.

As to the figure of total investments, the company said it can only be estimated after certain exploration work and the completion of the Master Development Plan.

“Empirically, we have started both the exploration and construction work, for instances, the site survey, the bidding process for different packages, the Preliminary Front End Engineering Design (Pre-FEED) studies, the renovation and construction of the camp site, etc.”

The company said it is planning to start the seismic acquisition of exploration in 2015 and the construction and the installation for surface engineering in 2016.

The Calub gas field was first discovered by an American oil company, Tenneco, in 1972. The Hilala gas field was discovered by Soviet Petroleum Exploration Expedition (SPEE) in the 1980s. The total gas reserve is estimated at 116 billion cubic meters. (4TCF). Eight gas production wells were made ready for production by Zhongyuan Petroleum Exploration Bureau (ZPEP), a Chinese petroleum exploration company.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2598-chinese-company-plans-to-produce-gas-by-2018

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Ethiopia Main Beneficiary of Hotels Forum

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Left to right Wayne Trouhton, CEO of HTI Consulting, Michael Wale of the Star Wood Hotels, Simon Vincent, from Hilton World Wide, Wolf gang from Rezidor Hotel, Oliver Jacques of the Mangalis Hotel Group, and Jean-Jacques of the Accor Hotel Group on the discussion of Africa’s hotel market.

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If the third African Hotel Investment Forum (AHIF) has proved propitious for any of the participating countries, one might well earmark Ethiopia. The burgeoning nation now has the prospect of seeing its international hotel brands growing to 10, with the signing of six agreements between international hotel management groups and Ethiopian real estate owners.

Playing a major role in all of these agreements was Calibra Hospitality Consultancy & Business Plc, whose managing partner, Yonas Moges, remembers an international company moving a conference four years ago from Ethiopia, where it was intended to take place, to Dubai, because it wanted to find a hotel able to accommodate all 500 of its guests. The two international standard hotels at the time, Hilton and Sheraton, had 100 rooms each.

“This forced them to change the meeting to Dubai,” he said.

The AHIF was officially launched on Tuesday, September 30, 2014, at the Sheraton Addis Hotel, by Prime Minister Hailemariam Dessalegn. It drew 500 participants, including international branded hotels, consultancy firms and hotel developers, from around the world.

The Forum, organised by Bench Events, was intended to take place at the Intercontinental Hotel in Nairobi Kenya, but, ironically, had to be moved to Addis Abeba because of space limitations. It had more than 37 sponsors, including ACCOR, Carlson Rezidor Hotel Group, Hilton Worldwide, Mangalis Hotel Group, Marriott International, InterContinental Hotels Group (IHG), Starwood Hotels & Resorts International and the Wyndham Hotel Group. The event is organised at a time when Addis Abeba has only three internationally-branded hotels in business – Sheraton Addis, Hilton Addis and Radisson Blu – with 869 rooms. These numbers pale in comparison to some major African countries, such as Nigeria and Morocco, with 40 and 29  international hotels, respectively, with 6,514 and 4,828 rooms, according to data from World Hospitality Group. Egypt has 21 such hotels, according to Yonas.

However, tourist flows to Ethiopia continue along an upwards trajectory, reaching 724,000 during the 2013/14 fiscal year – a 12pc growth. It is, however, still lagging behind Kenya’s 1.5 million tourists and Tanzania’s 1.2 million.

Prime Minister Hailemariam, in his speech at the Forum, said that his government was aware of the problems and had set up the Tourism Transformation Council, which he chairs, with 16 members, including ministers, regional state presidents and industry stakeholders.

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Haile Gebresillasie, Olympic gold medalist and hotel owner (left) explaining about Ethiopian hotel industry for Patric Fizgibbon, senior vice president development, Europe and Africa of the Hilton World Wide (right), and Yonas Moges, managing partner of Calibra Hotel Hospitality & consultancy business.

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The shortage of international hotels in Africa, especially Ethiopia, where diplomats are coming for African Union (AU) and United Nations (UN) conferences, is what is driving the development of such hotels, according to David Tarsh, managing director of Tarsh Consulting and head of media at the AHIF. Addis Abeba stands at third position globally with 118 diplomatic missions, following Brussels with 185 and Washington with 176.

The two-day forum, which attracted 115 hotel development investors, with half of the 500 participants from Africa – mainly Kenya, South Africa, Nigeria and Ethiopia – saw a flurry of talks and deals among stakeholders, with several hotel groups signing deals with counterparts in Ghana, Nigeria and Uganda, in addition to Ethiopia, in the days before, during and after the Forum. At the conference venue itself, a management agreement was signed between the Wyndham Hotel Group’s Ramada Brand and Ethiopia’s ADM Business Plc for the development of a four star hotel, with 136 rooms. It was also announced that Radisun Blu, of the Mangalis Hotel Group, had agreed to sign contracts with two businesses from Uganda and Ghana.

The other cooperation agreement signed during the event was between World Hotels, which has 500 hotels worldwide, and the African Azalai Hotels Group, with 20 hotels.

There were six agreements in all for international hotel brands in Ethiopia. Marriott has had a deal with Sunshine Construction for the past four years, and their hotel, located on Cameroun Street, is expected to begin operations in 2015. The latest deals, however – signed between Saturday, September 27,2014 and Tuesday, September 30, 2014 – included Aschalew Belay Hotel Projects and the Louvre Hotel Groups to open the Golden Tulip Addis; Tsemex and Intercontinental Hotels Group to open the Crowne Plazza Addis; Wyndham Hotel Group and ADM Business Plc for the Ramada Addis Hotel; Accor Hotel Group with Enyi General Business for the Pullman Addis Hotel and Best Western International with Great Abyssinia Plc and Noah Real Estate for the Best Western Plus and Best Western hotels. All these hotels are expected to be opened between 2015 and 2017, with the next year seeing Crowne Plaza-Marriott and Ramada Addis coming into business. Last on the list will be Pullman Addis in 2017.

“All of these deals are taking place in Africa at this time because the economic tourism growth of Africa is four percent, while it is just 2.5 percent on other continents,” said Tarsh.

According to data obtained from the Ministry of Finance & Economic Development (MoFED), the contribution of tourism in income revenue to Ethiopia’s economy has increased over the last three years – from 17 billion Br in 2010/11, to 18.7 billion Br and 22.2 billion Br, respectively, over the next two years.

Investors want to invest their money where the returns are high, and in countries where there are efficient local partners to work with; this attracts international hotels to come and invest in Ethiopia, said Trash. However, David Grossnikalus, Starwood Hotels representative, operating with 1,200 hotels in 100 countries, including the Sheraton, feels that architectural designs in Ethiopia fail to meet the standards of international hotels.

On the other hand, inbound tourist arrivals and planned events and conferences are growing faster than the supply of international standard hotels and accommodation in Addis Abeba, with the gap expected to widen, according to a 2011 study by Awash International Bank. Awash estimates that the gap will increase from 1.3 million hotel nights in 2015 to 3.1 million in 2020, the research use the number of the rooms for all sample years is same with the 2011.

Amin Abdulkadir, Minister of Culture & Tourism, says that the Tourism Transformation Council, Ethiopian Tourism Board and the Ethiopian Tourism Organisation will solve all problems in the sector starting from the next fiscal year, citing as evidence that his ministry will finally be able to implement the long awaited hotel standardisation by the end of this fiscal year. He also believes that graduates from government training institutions will address the lack of skilled human resources.

“Within the coming two years, international branded hotels will be common in Ethiopia,” said Tarsh. “So, the old hotels should be refurnished, relaunched and reflagged, in order to balance the hotel development of the country.”

So far, three additional international brand hotels will join the Ethiopian sector soon and make the total number six, along with the Hilton, Sheraton and Radison Blu. The management companies who have signed agreements to join the sector are the Marriott, Golden Tulip Addis Abeba and Crowne Plaza Addis.

In addition to the 209-room Courtyard by Marriott Addis Abeba, opening in 2016, there will also be a 104-unit Marriott Executive Apartments Addis Ababa, opening in 2015.

The government is ready to amend policies that are bottlenecked for the development of the whole tourism value chain, creating problems related to customs and logistics, said Solomon Tadesse, chief executive officer (CEO) of the Ethiopian Tourism Association.

http://addisfortune.net/columns/ethiopia-main-beneficiary-of-hotels-forum/

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Credit Suisse delays USD 1.4 bln loan for railway project

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Credit Suisse, a syndicate of banks and Export Credit Agencies, has delayed a USD 1.4 billion loan, which it has agreed to extend to the Government of Ethiopia  for the financing of the Awash-Woldiya railway project, due to the Environment Impact Assessment (EIA) report, The Reporter learnt.

According to reliable sources approached by The Reporter, the reason that prompted the bank to withhold the anticipated loan is in connection with the impact assessment that was carried out and submitted by the Ethiopian Railways Corporation (ERC) that is said to have failed to meet the Equator Principles up on which the bank considers it as a guiding principle for evaluating EIA. Equator Principles is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects and is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making.

The Corporation has been planning to build the second longest railway line in the country that stretches from Awash to Woldiya/Hara Gebeya passing through Kombolcha town. The planned 447-km-long railway also includes an underground tunnel which is some 25 KM long.

Credit Suisse had hired Pricewaterhousecooper (PwC) as its main consulting firm with a responsibility of reviewing and evaluating the EIA conducted by the corporation.

This railway project, which is estimated to cost of some USD 1.7 billion, demands a strict EIA, already undertaken by a couple of companies in four lots. The findings of the impact assessment was provided to Credit Suisse earlier and was expected to draw the required project finance under long-term loaning scheme.

The Equator Principles and the International Finance Corporation (IFC) Performance Standards are crucial requirements set by the bank to meet the issues raised in the EIA. From a total of 37 subheadings that are expected to be met under the Equator Principles the EIA have failed in 17 subheadings, according to sources.

Meanwhile, sources said that if the concerns raised in the EIA could be rectified then the Corporation would be able to get the financing for the project.

However, Dereje Tefera, communications directorate director at the ERC, denied the report and claimed that the loan has already been secured.

However, The Reporter has learnt that the required loan, which was expected from the Turkish EX-IM Bank has not been earmarked until last week. Ethiopian Foreign Minister Tedros Adhanom (PhD), who was in New York last week to attend the 69th UN General Assembly, twitted from from the Big Apple that he had a “fruitful” meeting with his Turkish counterpart and discuss on possible ways of securing the loan.

The Ethiopian government awarded the turnkey project to a Turkish company – Yapi Merkezi – two years ago while the Turkish EX-IM Bank agreed to lend some USD 300 million.

However, an official of the Ethiopian Railways Corporation, who requested anonymity, told The Reporter that the project may commence this week. Asked about the source of finance the official declined to comment on the issue.

The project connects the northern and eastern economic and traffic corridors of Ethiopia and provides a vital link to Addis Ababa and the Djibouti Port – the main import and export terminal for the region. The railway will connect the lines from Mekele to Hara Gebeya and then Addis to Djibouti.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2599-credit-suisse-delays-usd-14-bln-loan-for-railway-project

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 A Recipe for Success: Introducing fertilizer blends to farmers in Ethiopia

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Moving bags of fertilizer at the new blending facility in Becho-Woliso.

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On June 1, 2014, the first fertilizer blending facility in Ethiopia was inaugurated in the Oromia region at the Becho-Woliso Farmers’ Cooperative Union. The facility, along with four more under construction, will play a leading role in supplying farmers with fertilizer blends that target missing nutrients in their soil. The years leading up to the inauguration included many actors to make the concept of a blending facility into a reality.

It started with a simple observation. The soil types in Ethiopia vary considerably throughout the country. It is evident when driving through the countryside where variations in the soils’ color and texture are visible to the naked eye. But traditionally, all soil has been treated the same. Farmers typically apply two types of fertilizer and disperse the same amounts, regardless of the crop or soil needs.

Back to basics

In 2009, the International Food Policy Research Institute (IFPRI) conducted a soil diagnostic study in Ethiopia. Key recommendations included creating a tailored soil fertility plan that attends to local soil conditions and a national soil information infrastructure. When the Ethiopian Agricultural Transformation Agency (ATA) was formed in 2011, soil became a priority for the agency. There was added momentum because within the Ministry of Agriculture, Professor Tekalign Mamo, State Minister of Agriculture, who is also a soil scientist, was very interested in pushing the agenda forward and had been for some time.

“There are a number of studies showing that farmers in Africa are harvesting more nutrients from the soil than they are putting in. As a result, there is a depletion in nutrition, which will be reflected in [the] food and in human health,” says Shahidur Rashid, IFPRI Senior Research Fellow and Project leader of the IFPRI-led Research for Ethiopia’s Agriculture Policy (REAP) project.

Fertilizer blends—a novel concept in Ethiopia

“Ethiopia has not really changed its fertilizer policy, probably in 30 years, and was just importing and distributing DAP and Urea,” says Vanessa Adams, Project Director of the USAID Agribusiness Market Development Project that is funding the bulk of the new facility in Becho- Woliso. Making the switch to blended fertilizers is a big change from the norm in both “operations and types of fertilizers.”

Creating fertilizer blends means that farmers will now have the right mix of ingredients to replenish missing nutrients in the soil. “Blending fertilizer enables the country to introduce specific nutrients that the soil is lacking, and the crops need in order to grow,” said Tim Durgan, Project Coordinator for the Blending Facility Initiative at the ATA. “In combination with the soil mapping and the soil testing that the ATA has done, we now know what nutrients are deficient, and we know what nutrients the crops need to achieve maximum yields.”

Choosing Becho-Woliso Cooperative Union as the site for the first blending facility was a strategic decision. “The area is highly productive,” says Dejene Hirpa, General Manager of the cooperative union that will run the blending facility in Becho-Woliso. He explained that during the planting season, the demand for fertilizer in the area is high. Additionally, management at the union is top-notch – Becho-Woliso is “one of the top five cooperatives in the country,” according to Adams. Lastly, the location of the facility is “optimal,” according to Adams, as it is close to Addis Ababa and not far from Adama, a transportation hub in Oromia. This location makes it ideal for distribution.

Jeff Ivan, VP from Yargus Manufacturing, has been working with the ATA and International Fertilizer Development Center (IFDC) for two years to design a fertilizer blending system for the first facility. During a field visit in May, Ivan was on-site to inspect crates full of state-of-the-art equipment that would be installed by the company later that week. Ivan explained the easy-to-use automated blending system where “operators can simply enter in each nutrient that is required, and the kilograms of each product,” which will be blended with “a high-level of accuracy.” At full operational capacity, the facility will crank out 50 to 60 thousand tons of fertilizer each year. Another design feature is that as business grows, blending capacity can be stepped up.

According to Durgan, Ethiopia will need at least 18-20 blending facilities to address the nutrient deficiencies throughout the entire country. “The success of the first facilities will determine how soon the others will get up and running,” he says.

Already, the private sector is eager to get involved, and encouraging private sector investment will increase the strength and resilience of the country’s economy. But Adams points out, “In order for the private sector to come in and invest more in a country like Ethiopia, they have to see facilities that are working. So really, this fertilizer blending factory should be one of many to come.” When discussing private sector investment and looking at model facilities, such as the Woliso blending unit, Adams continued, “It’s important because…already people [in the private sector] are coming in and saying, I want to do this too.”

This article originally appeared in Volume 2 of REAP’s project Newsletter. Read the full newsletter here. Download a PDF of Volume 2. 

http://reap.ifpri.info/2014/09/29/a-recipe-for-success/

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By Bereket Gebru – Oct. 30, 2014

Anyone who gets a chance to visit the Grand Ethiopian Renaissance Dam (GERD) is envied by everyone around them. Even those who have travelled well across the country and around the world long for the chance to pay a visit to the project that symbolizes the prosperous future that awaits Ethiopia. Considering the high excitement and anticipation all Ethiopians have associated with the dam, their longings are all understandable and positive in intent.

It was twenty-one months ago that I first got the chance to visit what is set to be the biggest dam in Africa. As expected, my friends tried to contact me and give them an account of the progress in construction while I was still there visiting. I did the best I could to give them a sense of what it is like to be there and supplemented that with pictures when I got back. What I understood at the time was that I would have asked for the same thing from someone who had been there, had I not got the chance. So, I wrote an article entitled “Hope in the making” incorporating a comprehensive account of the tremendous work I witnessed a sling shot away from the Ethio-Sudanese border.

I am now very glad I wrote that article because it has led the way for me to get back to the GERD project site. Twenty-one months on, I have been given a chance to be part of a team put together to report on the progress of the construction of the dam. My previous article on my then visit played a pivotal role in my nomination for the assignment.

As can be expected, my friends were almost pissed that I got a second chance to report on the project before they could see it even once. But in all fairness, one of the major requites of working in the media is the presence of opportunities to report on some of the most fascinating and highly regarded stories. Although this obviously comes as an issue they would also like to witness, I also have aspects of their jobs that I would love to experience.

With that in mind, I have prepared this article for all those out there who have not come across the chance to witness the progress in the construction of the GERD. To give a clear picture of how far along the project has come in the last twenty-one months, I have used comparative analysis of some aspects of the construction process.

To give a clear picture of the vast activities being carried out by the project, I have classified activities into groups and reported on the changes over the time gap between my two visits. When I first went to the project site, all there was to see of what is to become the foundation of the dam was a small rectangular sample of small height with the rest of the area going through some serious digging and explosion. There were frequent dynamite explosions with numerous boring machines and dump trucks swarming the area. At the time, engineers working on the project told us that all efforts were geared towards reaching at the bedrock on which the foundation would be laid.

Nowadays, the area that was marred with explosions and digging is occupied by two sets of huge structures on the left and right side of the river. According to the briefing we had, the explosion and digging sections of the project are nearly over with only two to three months of it remaining. The structures on either side of the river make up the foundation of the dam.

Foundation of the RCC GERD dam

The bigger of the two structures located on the right bank of the river harbors ten huge stair like bodies that would be used to bury penstocks. These structures make up the ten protruding sections on the famous GERD plan. Not noticeable from the back of the dam where administrative offices are located, the top of the dam spanning quite a number of football fields comes as a surprise for someone going on top of it for the first time.

Getting on top of the huge structure on the right of the river, one comes across teams of humans and machines piling on the Roller Compacted Concrete (RCC) from which the dam is made. Activities taking place here build on the height of the dam and human accounts of the activities claim that visible changes are evident on a daily basis. Considering the technique use to construct the dam does not involve iron reinforcements, piling on batches of RCC held together by bidding mortar is said to take a much shorter time. Moreover, the fact that the dam’s width goes narrower from 125m at the foundation to just 8m at its peak means its construction speed would pick up momentum as its height goes up.

Another feature of the top of the dam’s right section are the inspection galleries. Located at the upstream, middle and downstream sections of the dam are three tunnels running from the right end of the dam all the way to the back of the dam where the power houses are being built. These three tunnels are used for monitoring the dam and correspond to the dam’s three zonings that have different mixes.

Yet another of the structures being built on the right bank of the river is the power house for that side of the dam. Expected to be fitted with two of the ten generators set for that side of the dam this year, the power house is tipped to be able to produce 108 MW of electricity in less than a year. The start of production of electricity from the dam would no doubt be a huge milestone in the whole process of realizing the project and it is exciting to know that we might be just under a year away from it.

Going on to the left side of the river’s bank, various activities have also taken place within the twenty-one months it took me to get another chance to visit the project. On my first visit, there was a big hype about diverting the course of the Blue Nile within the near future and how it would be a significant step in building the dam. This time it has been quite a long time since that has been accomplished and the fuss has shifted to yet another diversion – diverting the river to its natural course.

With the diversion of the river to a new course set artificially, what used to be the river’s bed has gone dry making it easy for the builders to carry out their activities. Accordingly, various diggings and explosions have taken place on the former river bed to get to the bed rock up on which the foundation of the dam is situated. The six protruding structures depicted on the dam’s plan which are used to bury penstocks are being built on this side of the dam.

The other noticeable structure on this side of the dam includes the four box culverts fitted to its upstream end. These box culverts are gateways fitted at the front end of tunnels running across the width of the dam’s left side. Once the construction of this side of the dam gets to a certain point, the re-diversion of the Blue Nile to its natural course would follow in order to make room for construction activities that would connect the two sides of the dam which are presently separated by the river’s adopted artificial course. As has been pointed out above though, the dam has been erected on the river’s natural course. That is when the box culverts would come in handy by allowing the river to go through them and maintain its flow.

Saddle dam

Another one of the structures in the project to be included in my observational accounts is the Saddle dam – a 5.2 km long, 50m high and 17.2 million m³ volume rock filled dam being built to close the only route of escape for water to be accumulated by the GERD. During my previous visit, the location was marred with long and deep stretches of digging accompanied by a heavy traffic of the machineries transporting the huge amount of soil and rock.

This time around, I was pleasantly surprised to see that the dam is gaining height over the surrounding land especially at its right end. On its left end, a modern approach is being implemented. This modern approach is called curtail grouting and it has been used at Gilgel Gibe I in Ethiopia. The technique as applied at the GERD involves 80cm wide dig to the bed rock that would be filled with a plastic diaphragm wall to prevent water from penetrating through. According to Engineer Semegnew Bekele, the project manager, one million m³ of the 5.7 million m³ rock and soil needed to complete the Saddle dam foundation has already been filled. The Saddle dam is also fitted with emergency spill way. The overall change in the construction of the Saddle dam within the twenty-one month gap was impressive.

The power transmission line from Beles

Yet another one of the changes I observed was the new power transmission line at the project site crossing over the mountains nearby. The Grand Ethiopian Renaissance Dam project has been using diesel generators ever since its onset. However, their remaining days seem to be numbered as the giant power transmission lines hovering over them clearly indicate.

We were briefed that the huge power lines are part of the 240km 400kv power transmission line drawn from Beles. The 400kv capacity of the lines is also proof of the tremendous advancements in the carrying capacity of the power transmission lines in our country. Those lines would help replace the diesel generators at the project site by bringing electric energy from Beles while upon the generation of electricity by the GERD, the same lines would be used to transmit electricity out of the hydro-electric power project.

The 500 kv power transmission line

Although not part of the project site at Guba, the 500kv power transmission line extension project spanning nearly 600km including cities like Dedessa and Holeta is also part of the GERD project aimed at transmitting the power generated by the GERD to various parts of the country and other neighboring countries. The two power transmission lines stated above obviously mark the dawn of a better day for electric energy transmission in Ethiopia as they enable the country transmit energy over long distance to our neighbors without energy wastage.

Housing

Still another section of the changes I have observed during my recent trip to the GERD project has to do with housing. The last twenty-one months saw the construction of numerous housing and service provision units at the project site by the Metal and Engineering Corporation (Metec). With various sorts of designs accommodating different forms of services, the houses cater to the needs of the vastly increasing number of workers at the site. Equipped with Air Conditioners, ventilators and toilets with showers the houses are cozy homes providing relief from the suffocating heat of Guba’s harsh outdoors. The fact that the houses have malaria nets fitted to their beds also helps protect workers from malaria infections.

With the lowland vicinities of Guba characterized by suffocating heat and threats of malaria infection for most of the year, activities to identify and develop alternative settlement spots for those who would take the responsibility of running the dam once its construction is over have been underway.

Accordingly, ten kilometers away from the construction site of the dam at Guba, a site on the adjoining mountains has been identified and numerous housing and service provision units have already been built with more along the way. Situated at the top of a huge mountain overlooking the project site and the future dam along with a section of the lake to be formed in front of it, the permanent housing site is immensely picturesque. Rising up to 1500m above sea level, according to experts working on the project, the mountainous permanent housing curbs the suffocating heat and malaria threats of the Guba valley which is located just 500m above sea level. With these facilities in place, those who would operate the Grand Ethiopian Renaissance Dam once it starts functioning fully would live under better conditions.

Tree clearing activities

In a bid to make the future reservoir free from trees that might have a toxic effect on the water, a vast tree clearing activity has been carried out between the time gap of my two visits. According to Semegnew Bekele, project manager, the Metal and Engineering Corporation (Metec) took on the project under whose sub-contracting schemes were involved various micro and small enterprises that mustered over thirty thousand workers. The efforts of such a huge work force are evident a long way from the project area as we saw fields and mountains as far as eighty kilometers away stripped of their tree cover on the Asosa-Guba road.

Resettlement

Engineer Semegnew Bekele stated that the environmental and social impact assessment researches have indicated a sparsely populated settlement in what would become the reservoir in front of the dam. He further explained that the Resettlement Action Plan (RAP) of the GERD project was discussed with local authorities and local residents.

The resettlement activities would settle people into villages and provide them with various social services they have been deprived of. Accordingly, settlers would be provided with electricity, schools, health facilities, clean water and other social services. The result of discussions with local authorities and residents, according to Engineer Semegnew, were positive as they have understood the developmental package the resettlement is accompanied by.

Other major changes

In addition to the above stated bundle of activities, there have also been other major changes with significant implications on the project and even the country as a whole. These major changes include:

Work force and machineries

Twenty-one months ago, Engineer Semegnew Bekele told us that there were about 5,000 employees with more than 1,200 machineries operating on the project site. This time around, he stated that there are about 9,000 workers including 400 expatriates. He further explained that the number of expats has gone down now that the 400 kv power transmission line work from Beles has been completed. Regarding the machineries, he pointed out that there currently are 2,300 of them operating on the project.

Local capacity building

While briefing us on various issues related to the construction of the dam, Engineer Semegnew duly noted that cost-reduction is at the centre of the construction activities. He further explained that cost–reduction entails building on the capacity of local construction and industrial establishments to produce imported materials locally.

One of the most notable import substitution successes achieved over the past twenty-one months has been the production of the formerly imported low heat of hydration cement locally. In addition to the two other types of cement used, low heat of hydration cement is currently being produced and supplied to the project by Mesebo and Derba cement factories – Ethiopian cement factories. The quality of cement produced in these factories is once again checked at the project’s laboratory upon arrival prior to its use in the construction process.

The other major capacity building success has to do with the box culverts. The box culverts used in other Ethiopian dams have always been supplied by foreign companies but the GERD has changed that reality as the Ethiopian Metals and Engineering Corporation (Metec) has produced those at the left end of the dam.

In addition to the above stated milestones in national capacity building, the GERD project has immensely pushed up the capacities of local engineers. By creating awareness and familiarizing local engineers with state of the art technological methods such as curtail grouting and roller compact concrete (RCC) building, the project is contributing a lot towards human development. As the project also accepts university fresh graduates from all over the country on apprenticeship basis, its contribution as a technological gallery and knowledge transmission platform is tremendous.

As the project has also created the necessity for the construction of roads and other business establishments, the capacity of local contractors has hugely been affected positively by the dam project. The increased activity along towns on the way to the GERD has also helped build the capacity of various business establishments. With time passing by, the GERD has increasingly realized its potential as a great capacity building tool.

Conclusion

As I have tried to depict above, there have been significant progresses made within the twenty-one months time between my two visits to the GERD. Some of these changes could have separately been taken as huge project undertakings on their own, had they not been part of the Grand Ethiopian Renaissance Dam (GERD) project.

The already completed work on the 240km long 400kv power transmission line from Beles is one of such significant undertakings which could have been taken as a huge project on its own. The work on the 500kv power transmission line is another. The housing units built by the Ethiopian Metal and Engineering Corporation and the permanent housing on the mountains nearby being built by Salini can also be cited.

Finally, I would like to remind others who have read this article to come up with their own accounts of the progress they have witnessed on the GERD. As clearly put by Engineer Semegnew Bekele, “it is the project of the people.” He also noted that visitors to the project site are warmly welcomed as they help raise workers’ morale with their genuine concern and appreciation for the project and those involved besides helping express the grandeur and significance of the project to their fellow Ethiopians up on their return. Therefore, I say let’s report on the progress for all those who have got the chance to visit the project that has marked Ethiopia on the international arena. For all those who have not yet got the chance, I hope it comes soon enough.

Sourced here  http://aigaforum.com/articles/GERD-round-two.php

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Posted on Friday, November 14, 2014

By Fetsum Berhane

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Highlights:

- Ethiopia’s is 132nd of the 189 economies, 4 points above the 136th Kenya, in the overall global ranking of ease of doing business.

- Ethiopia also ranks 14th of the 47 Sub-Saharan Africa economies while Kenya is right next her at 15th.

- Ethiopia has slipped 3 points from the 2014 ranking while Kenya improved its ranking by 1 point.

- Ethiopia has got a better ranking than Kenya in five indicators: Dealing with Construction Permits, Getting Electricity, Registering Property, Enforcing Contracts and Resolving Insolvency.

- Kenya ranks better in five indicators: Starting a Business, Getting Credit, Protecting Minority Investors, Paying Taxes, Trading across Borders.

The time of reports has now arrived. “Doing Business 2015”, the flagship report of The World Bank, compares business regulations for domestic small to medium sized firms in 189 economies. Economies are ranked from 1 to 189 by the ease of doing business and are evaluated based on how business regulations are to the best global practices.

The “Doing Business” report aims to illustrate the ease or difficulty of opening and running a small to medium-size business with respect to relevant regulations. The report provides an aggregate ranking on the ease of doing business based on indicator sets that measure and benchmark regulations relevant to domestic small to medium-size businesses.

The ten indicators used in this ranking are: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The report emphasizes that the ranking and the indicators “do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business”.

The report also presents the indicators and rankings of Ethiopia in comparison with the indicators of a good practice economy, or those of comparator economies in the region.

Six economies were selected by the report as comparator economies. These are (with global and regional ranks, respectively): Eritrea (189, 47), Kenya (136, 15), Rwanda (46, 3), Uganda (150, 22), South Africa (43, 2) and Egypt (112).

In light of their comparable GDP and ranking level, HornAffairs opted to provide you a comparison table of these two nations of the Horn. The full list of the ranking and the report can be found here and here.

Indicators measure the ease of:

*Starting a Business – all procedures (officially required or commonly done in practice) to start up and operate —as well as the time and cost required to complete these procedures.

*Dealing with Construction Permits – the procedures, time and cost for a business in the construction industry to build a warehouse in the largest business city, connect it to basic utilities and register it so that it can be used as collateral or transferred to another entity.

*Getting Electricity – All procedures to obtain a permanent electricity connection and supply for a standardized warehouse, as well as the time and cost to complete them.

*Registering Property – procedures necessary for a business to purchase property from another business and transfer the property title to the buyer’s name.

*Getting Credit – assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions

Protecting Minority Investors – measures the protection of minority investors from conflicts of interest through one set of indicators and shareholders’ rights in corporate governance through another.

*Paying Taxes – measures the taxes and mandatory contributions that a medium-size company must pay in a given year as well as the administrative burden of paying taxes and contributions.

*Trading Across Borders – the time and cost (excluding tariffs and the time and cost for sea transport) associated with exporting and importing a standard shipment of goods by sea transport, and the number of documents necessary to complete the transaction.

*Enforcing Contracts – the efficiency of the judicial system in resolving a commercial dispute before local courts.

* Resolving Insolvency – the time, cost and outcome of insolvency (bankruptcy) proceedings involving domestic legal entities.

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Turkey to invest in Ethiopia’s hydropower

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Turkish President visiting Ethiopia on January 22, 2015 at national palace of Ethiopia

BY ANDUALEM SISAY GESSESSE

The Turkish President Recep Tayyip Erdogan, who began his official visit in Ethiopia this morning, announced that his country is interested to invest in generation of electricity from hydro power.

“A new era is incepted between Ethiopia and Turkey. We want the energy field to be part of our cooperation. We encourage our energy companies to invest in this sector as Ethiopia has over 45,000 megawatts hydroelectric generation potential,” President Erdogan said after attending science and technology cooperation agreement signing between the two countries with Prime Minister Hailemariam Desalegn of Ethiopia.

Prime Minister Hailemariam Desalegn on his part indicated that his government is ready to sign the power purchase agreement from the Turkish when they are ready to be engaged in power generation.

When the Turkish began producing hydroelectric power, the Ethiopian government will buy from them and resell it to the public for only power generation is allowed for foreign companies according to the law of the land.

Ethiopia is currently generating a total of slightly over 2,000 megawatts of electricity from various hydropower plants and is also undertaking construction of the 6,000 megawatts Great Ethiopian Renaissance Dam with only local financing. In addition the 1700 megawatts Gibe III hydropower undertaken with external financing is also expected to be completed this year.

Having total area of 1.1 million km 2 , 122 billion m 3 of water resource per annum and 75.8 Million populations in the Horn of Africa, Ethiopia is often referred to as the water tower of Africa Ethiopia.

Trade and WTO accession

Appreciating Turkish companies’ investment in Ethiopia so far, “We want more Turkish investment and will be working very hard with Turkish government and companies,” Prime Minister Hailemariam said expressing his hope that the currently $400 million trade between the two countries will increase by the end of 2015.

“With a total population of 170 million in the two countries, the trade volume is insufficient. By the end of 2015 we want to increase it to 500 million,” President Erdogan said.

Ethiopia as part of its accession journey to the World Trade Organization (WTO), Ethiopia will start bilateral discussion with Turkey.

Currently Turkish companies are the major investors in Ethiopia with around $2.3 billion. The investment could triple if Ethiopia allowed Turkish banks to operate in Ethiopia making international money transfer of Turkish companies easy, Erdem Karal, Second Secretary at the Turkish Embassy told newBusinessEthiopia.com reporter in Addis Ababa.

Turkish president at the National Palace of Ethiopia on January 22, 2015

During the bilateral WTO talks Turkey, which is the member of WTO, among others is expected to request Ethiopia to open its doors for Turkish banks to operate.

As part of the principle of open your market first before accessing the WTO members market, when a country applies to WTO membership, a member country who has specific business interest in the applicant country usually demands the applicant to open a certain sector or industry for its investors.

Investment financing

Currently Turkish Eximbank has also financed a section of Ethiopia-Djibouti route under construction. In addition, Turkish companies so far have created jobs to around 8,000 Ethiopians in the areas of textile, construction materials production and railway, among others.

Apart from economic cooperation the heads of the two countries have also expressed their interest to deepen relation in supporting the Government of Somalia. Beyond infrastructure trade and investment, the two sides have agreed to work closely in military training and defence as well as cultural areas, according to President Erdogan who also visited Somalia and Djibouti after Ethiopia.

Sourced here  http://www.newbusinessethiopia.com/index.php/component/k2/item/211-turkey-to-invest-in-ethiopia-s-hydropower/211-turkey-to-invest-in-ethiopia-s-hydropower

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Semera – Tadjoura Railway Tender Postponed Again for the Fifth Time

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CEO points at the need to give more time and more information to bidders

Ethiopian Railway Corporation (ERC) postponed the tender it had announced to hire a contractor for Semera -Tadjourah, railway project for the fifth time.

Initially, the tender was announced on August 7, 2014 requesting the bidders to submit their technical and financial proposals by August 22, 2014, for the construction of a 280Km rail project connecting Semera with the Djibouti port at Tadjourah. Totally, 11 companies purchased the bidding documents. But the Corporation postponed the bid submission date to October 13, 2014 and subsequently changed the dates to November 2, 2014, and January 30, 2015.

The recent submission date was meant to take place by this week on January 30, 2015, but according to a letter sent to the bidders on January 15, 2014, the ERC stated that the bid document submission date is again extended to March 3, 2015.

“We received the letter with the changed submission date for the fifth time without specifying the reason why the Corporation is changing the date,’’ said one of the bidders.

The project is part of the national project that extends form Mekele – Weldya/Hara Gebeya – Semera-Tadjourah Port Railway Project. But the 268.2Km Mekele-Woldiya/Hara Gebeya Railway project was awarded to the China Communications Construction Company (CCCC) for 1.6 billion dollars in 2012 after obtaining the financing from (EX-IM) Bank of China. The project is expected to take three and half years to complete.

The Corporation has changed the requirements in the tender, which could lead to the exclusion of some of the bidders, said one international bidder. These changes included a requirement that bidders should previously have worked on a project worth 200 million dollars as well as undertaken 180Kms of road project and 180Kms of rail project.

The tender was postponed for two reasons, says Getachew Betru (PhD), chief executive officer (CEO)of ERC.

“One is because of requests from the bidders for more time to prepare financial and technical proposal. The second reason is that we needed to provide some explanations to some bidders who were not clear about some points in the bid document.’’

The ERC facilitated and took the bidders for sight visits to the place of the construction on September 2014 and December 2014.

This project will be a 280Km railway connecting Afar Regional State and Djibouti with the aim of transporting potash, metals and other products from northern part of Ethiopia to Djibouti’s Port Tadjourah for the international market.

The detailed feasibility study of the project was conducted by Overseas Infrastructure Alliance Plc (OIA), an Indian firm, in 2012 with the financing of the government of Ethiopia. OIA also prepared a bidding document and detailed engineering design for the project that is expected to be finalized in five years with a 300 million dollar financing that is secured from Indian government.

The ERC is undertaking the construction of railways in two schemes – Light Railway Transit (LRT) and National Railway Network of Ethiopia (NRNE). The LRT project which has a 31Km length was awarded to China Railway Engineering Corporation (CREC) with 475 million dollars in 2011. The project is expected to start operation by May 2015. For the NRNE, the ERC has identified eight railway corridors for study, design and subsequent implementation, the total estimated length of which is 5,060km. Semera to Tadjourah rail project is part of the national project that was planned to be constructed as phase one.

From the NRNE projects, another Chinese company, China Railway Eryuan Engineering Group Co. Ltd. (CREEC) is constructing the first lot of the 317Km Addis Ababa-Me’eso railway lines. The second lot of the 340Km Me’eso-Dire Dawa-Dawale electric railway project was awarded to another Chinese state owned enterprise China Civil Construction Corporation (CCECC) in 2011 and progressing well.

http://addisfortune.net/articles/semera-tadjoura-railway-tender-postponed-again-for-the-fifth-time/

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Danakil DFS to potentially uplift value of Premier’s interest in Circum

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23rd January 2015

http://www.miningweekly.com/article/danakil-dfs-to-potentially-uplift-value-of-premiers-interest-in-circum-2015-01-23

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Why Investors Should Consider These Three Developing Countries

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-  Ethiopia one of three developing economies given the nod due to a perceived United States – friendly bias

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By Andrew L. Peek,

The Fiscal Times

January 25, 2015

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Even in boom times, investing in the developing world is a risky business. In the Middle East, for example, there was no indication that the Arab world’s somnolent and seemingly permanent autocracies would be undone by the Arab Spring when a single street vendor in Tunisia setting himself on fire in 2010.

There were likewise few indications that the Yemeni government of Abd-Rabbu Mansour Hadi would collapse this week under the guns of its Houthi rebels, which seemed like an irritating but non-existential threat until about 96 hours ago.

Political uncertainty, of course, is why investments in the developing world pay a premium. But not all uncertainty is created equal. In places like South America, where countries have industrialized under the shadow of the North America, the reliable populist currents will be anti-American. The same goes for the Arab League and the same for Russia, though for different reasons.

Since the United States waged the Cold War alongside the imperial remnants of France and Britain, the same also goes for many of their former colonies.  There is almost always a political advantage to scoring points off the Americans, and nobody is more exposed than their companies — but not everywhere.

In certain places, for reasons of state or some quirk of their historical experience, some nations default to American friendship.  Outside of all other factors, that should be the litmus test for investment in risky areas: when push comes to shove, how much does the government want to make Americans happy?

If there’s a problem – usually a combination of local security problems coupled with a limited range of options for political reform – can the deck be stacked in our favor? Three unlikely states in particular stand out:

1. Vietnam – It is no secret that Vietnam is experiencing an economic boom with the first flush of its modernization, like Japan in the 1970’s and China in the 1980’s. But even if it weren’t, it is the best possible developing country to invest in. Virtually alone among the continental Asian states, Vietnam has set itself against China’s drive for regional dominance. Some of the island nations have also, of course: Japan, Australia, and the other fortunate offshores who have a freedom of movement that China’s land neighbors do not. For a variety of reasons, though, Vietnam has decided not to accommodate China. To do that successfully over a long period of time, Hanoi must build a closer relationship with the United States – particularly since Vietnam is currently outside of America’s regional security infrastructure. To stay its current course, Hanoi needs to make Washington happy.

2. Azerbaijan – Outside of Korea, Azerbaijan probably has the most unfortunate geopolitical situation in Asia. It is perched between a hostile Iran and Russia and locked into a two-decade-long frozen conflict with Armenia. Azerbaijan has responded since the end of the Cold War by aggressively courting the West, particularly the United States. It has been an instrumental part of supplying the NATO forces in Afghanistan, as well as a stout U.S. supporter in its conflict with Iran, which itself has a sizeable Azeri population. But Baku is in a difficult place. The Afghan war is ending – it has ended, officially – and a potential US-Iran rapprochement keeps hovering around the diplomatic margins. A complete thaw seems unlikely, however, since none of the non-nuclear differences between the US and Iran has been settled. Azerbaijan’s leaders are eager to solidify their positive relationship with Washington. They will be looking to accommodate Americans.

3. Ethiopia – Ethiopia has its unlovely spots. The NGO Freedom House rates the Addis Ababa government as “not free,” — the same score as Iran. But Ethiopia is also strategically situated, jammed between Sudan, Somalia, and across the Bab el-Mandeb from the collapsing state of Yemen. It’s also an avowedly Christian nation – by legend, the second in history – and doesn’t have many friends in the region. Like Vietnam, Ethiopia is also outside of the U.S. security architecture in the region, such as it is. No real friends, but plenty of conflicts. It has fought the al-Qaeda aligned rebels in Somalia and has a long-running dispute with neighboring Eritrea. If the threat from Islamist radicalism increases – and it may well, spreading from places like Libya, Yemen, and Somalia – Ethiopia will be increasingly eager to cooperate with the United States.  And like Vietnam and Azerbaijan, that means treating American investors with kid gloves.

In all of these countries, political instability isn’t totally absent, but is dampened by a desire to build stronger relationships with the United States. In addition, because their friendliness stems from geopolitical concerns, they would probably weather a change in government. There are few enough countries where Americans can count on being seen as the good guys, out of range of the mob. Investors should value it.

http://www.thefiscaltimes.com/Columns/2015/01/25/Why-Investors-Should-Consider-These-Three-Developing-Countries

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Turkish President Seeks to Boost Bilateral Trade from $400m to $500m

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Ayka Addis- a textile factory that employs 8,000 people under one roof.

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Ayka Addis, the largest textile factory in the country was established with 140 million-dollar investment in 2010 being an ice breaker to the entrance of Turkish investors in Ethiopia.

Since then, Turkish companies especially in the textile sector have been flowing to the country reaching more than 150 and employing 50,000 Ethiopians currently. These Turkish companies invested more than three billion dollars in the country. The number of the Turkish investors in the country in 2004 was only one with jobs created standing at five. The number of the investors grew to 155 within the following 10 years.

The country geared its focus to Africa adopting the African initiative in 2003 following the 1998 African Action plan; and declared 2005 as the year of Africa. And Ethio-Turkish business forum was also established in 2009 with a mission of serving as a business platform for bringing business people together.

In 2003, the Turkish investment in Africa was only four billion dollars while this number grew to 25 billion in 2013.

The overall volume of foreign trade has increased from 742 million dollars in 2000 to four billion in 2010 and 7.5 billion dollars in 2011. The volume of Turkey’s foreign trade with all African countries has increased from nine billion dollars in 2005 to 14.1 billion dollars in 2010 and 17.1 billion dollars in 2011.

With the visit to Ethiopia of Recep Tayyip Erdogan, the 60 year old president of Turkey, hope was laid in the investors both in the country and others intending to invest in the country.

“We would like to become Ethiopia’s partners and we have to promote and protect companies on both sides,” said Erdogan.

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President Erdogan and Prime Minister Hailemariam Desalegn at the press briefing.

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Although Turkey is among the 10top destinations for Ethiopia’s exports, the trade balance between the two countries still remains in favour of Turkey. In the 2013/14 fiscal year, the export to Turkey earned 84.6 million dollars standing at the ninth rank accounting to 2.6pc of the total earnings from export. And the trade gap between the two countries stands at 100 million dollars.

Among the top 10 destinations of Ethiopian exports are China, Somalia, Germany, Saudi Arabia, Netherlands, Switzerland and US.

But the Ethiopian government seems to be comfortable with the existing relations between the two countries as Hailemariam Desalegn, Ethiopian Prime Minister stated during a joint press briefing with President Erdogan at the national palace.

“Although the trade balance is in favour of Turkey, the growing foreign direct investment (FDI) from turkey will fill this gap,” he said.

Turkey is the number one investor in the country having 115 projects with an investment of 69.2 million dollars within the time January 2010 and October 2014. Out of these projects, 26 projects are under the implementation stage investing 3.6 million Br and employing 3,384 permanent and 2,492 temporary employees, 35 projects are in operation with a capital of 18.4 million Br and creating 1,627 permanent and 1,798 temporary jobs. The remaining 54 projects are in the pre-implementation stage creating 26,708 jobs permanently and 12,180 temporarily. India and China follow with investments of 38.9 million Br and 25 million Br respectively. Saudi Arabia and Sudan take the fourth and the fifth stages with investments of 14.2 million Br and 13.6 million Br.

The total trade turnover between the two countries stands at 400 million dollars in the first 11 months of 2014 growing from the 110 million dollars in 2004. And there is an interest in the two parts to increase the figure to half a billion.

“The first target is to bring this number to 500 million and then we will proceed to establishing a free trade agreement, which we have discussed and is a must to sign,” stressed Erdogan.

The major export items of Ethiopia are coffee, oil seeds, pulses, spices, khat, livestock, meat, flower, fruits and vegetables, textile and skin and hide products.

The human resource of Ethiopia, a country with the second largest population in Africa after Nigeria puts it at the primary focus of his country, according to Erdogan.

Erdogan, who expressed the financial bureaucracy problems of Turkey’s investors stressed that this has to get its end by the opening of Turkish Bank in Ethiopia which, as he said were discussed between the two leaders.

“Our Bank should come here and it will be a good leap to Ethiopia as well,” said Erdogan.

Turkey came to ninth rank as export destination for Ethiopia in 2013/14from 15th in 2012/13. China came to first place from its second rank; Saudi came to fourth from fifth, and Israel came from 10th to eighth position, while Somalia went down from first to second.

Turkey was a destination of Ethiopia’s oil seed that generated 38.4 million dollars, pulses that generated 15.6 million dollars, meat that generated 349.5 million dollars, and textile that generated 27.4 million dollars in the 2013/14 fiscal year.

Believing to transform this relationship to a higher stage as both the leaders were pronouncing, the two nations have launched a new relationship project for the years 2015 to 2018.

“Africa is going to be the next growth pool of the world,” said Hailemariam Desalegn. The two governments signed a memorandum of agreement to cooperate in the fields of science and technology. The Addis Abeba University, which will be linked to universities in Turkey for cooperation, conferred an honorary doctorate degree on the president

The president, who made his first visit to Africa making his first start from Ethiopia since he assumed the position of the presidency in 2014 promised that Ethiopia is going to be the central place or headquarter for the Turkish investment in Africa.

http://addisfortune.net/articles/turkish-president-seeks-to-boost-bilateral-trade-from-400m-to-500m/

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Norway to place Ethiopia among six focus countries for development cooperation

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Foreign Affairs Minister Dr Tedros Adhanom received on January 25 a Norwegian delegation led by Foreign Minister, Borge Brende.

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The bilateral discussions of the two Foreign Ministers dwelt on numerous issues of common interest. Both Ministers exchanged views on the promotion of Ethio-Norway partnership and expanding the depth, breadth and scale of the relations of the two friendly countries.

Dr Tedros gave a briefing on Ethiopia’s renaissance journey, the ongoing IGAD-led peace talks as well as IGAD’s role in supporting the South Sudanese warring parties end conflict and advance the cause of peace and stability. Dr. Tedros noted that Ethiopia will remain committed to advancing peace and stability in the region and attaches special importance to dialogue to resolve disputes.

He also recalled the successful conclusion of the 53rd Extraordinary Meeting of the IGAD Council of Ministers held in Mogadishu on January 10, adding that the very fact that meeting was held in Mogadishu tells a lot about the improving security situation in Somalia.

Foreign Minister Borge Brende on his part noted that his visit to Addis Ababa is a demonstration of Norway’s commitment for the further strengthening of the bilateral ties with Ethiopia.

He also underscored that Norway stood committed to step up its cooperation with Ethiopia. The Foreign Minister underlined the need for further consolidation of the bilateral partnership of the two countries.

Borge Brende noted that Norway’s Foreign Affairs Ministry is prposing placing Ethiopia among the six focus countries for development cooperation program.

Dr Tedros expressed his gratitude to Norwegian Foreign Affairs Ministry’s decision to make Ethiopia as one of the six priority countries in the country’s development cooperation program. This, he said, would help Ethiopia’s efforts to realize a carbon-free middle- income country status by 2025.

Both sides reached a consensus in jointly pushing cooperation forward in many areas including climate change, education, private sector engagement, trade and investment.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=17244:norway-to-place-ethiopia-among-six-focus-countries-for-devt-cooperation-&catid=71:editors-pick&Itemid=396

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Industry Ministry Deliberates Draft Strategy for Construction Inputs

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Draft vies for domestic production substituting imports of nine input categories

The Ministry of Industry (MoI) received first draft of an industry strategy which the Addis Abeba Institute of Technology (AAiT) produced with Korean experts and a hired consultant, with a team travelling to several countries across the world for experience sharing.

The MoI gave the job to Institute in July 2014 to produce a Construction Input Development Strategy for 2015-2025. The strategy considers nine construction inputs with the aim of increasing the country’s construction input manufacturers within a decade, according to a senior official at the Ministry. The input sectors included in the strategy are marble, plastic, aluminium, wood products, gypsum, glass, adhesives, ceramics, and pints. The strategy vies to make production of these inputs competitive enough to substitute imports.

The draft has been discussed with stakeholders three inputs at a time, with the draft for the last three input items being discussed on January 10, 2015, according to Abubeker Yimam (PhD), project engineer of the strategic plan from AAiT.

The draft strategy explores the problems of the sectors and suggests solutions for the problems such as enabling industries to improve actual production to their capacities; to increase the number of factories in a sector, such as ceramics production, where there has been only one factory for a long time, with a new one coming soon; as well as beginning aluminium manufacturing in Ethiopia. It also suggests local production of inputs for flat glass manufacturers.

“The strategy will help the plan of increasing the manufacturing industry’s contribution to the Gross Domestic Product (GDP) to 17pc from five percent currently,” says an official.

This strategy is part of the ministry’s current engagement with Addis Abeba University, AAiT, Adama Science and Technology University and Industrial Training Services (ITS) working on the design of plans for the industry sector in three platforms; feasibility study, strategic plan and man power study. Recently, Adama Science & Technology University finalized a draft Cement Industry Development Strategy, with the aim of increasing the country’s cement consumption by more than threefold and had a discussion with the stakeholders’ manufacturers of cement in December 2014.

AAiT conducted the research with Korean experts and external consultant. The process involved 24 people in groups of four, each travelling to one country including China, Turkey, United Arab Emirates (UAE), Spain, Italy and Korea, for best experiences, according to Abuberker.

The strategic plan was conducted with the assistance of a steering committee organized by the MoI having six members chaired by Haile Assagide, chief executive officer (CEO) of Derba Cement Factory, Mesfin Abi, CEO of Habesha Cement Factory, two from Chemical & Construction Inputs Industry Development Institute and additional two representatives from the industry.

Comments from participants included problems to be reconsidered such as access to finance, problems related to lack of infrastructure such as road, water and electricity, the establishment of industrial bank, according to Abubeker.

The strategic plan included budget for the implementation, but both the Institute and MoI declined to disclose the budget saying it needed revision as the draft came up with lower implementation cost.

http://addisfortune.net/articles/industry-ministry-deliberates-draft-strategy-for-construction-inputs/

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Local company to export bamboo chopsticks to China

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Bamboo Star Agro-Forestry, a company established in 2007, is set to produce bamboo chopsticks and other products that will be destined for the Chinese market. 

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House Ratifies Three Proclamations to Deal with Corruption

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Anti-Corruption Commission gains more power, while financial fines are enhanced

The house ratified the three proclamations in view of the deterrent effect the previous punishments could have on the corrupt ones

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The first anti-corruption law that is made in separation to the 1994 criminal code of the country was ratified by the parliament. The new proclamation included new provisions in addition to those in the criminal code.

Among the new provisions that the proclamation brought into light are the punishment to the improper disclosure of secret codes and keys in order to get personal benefits, licensing or certifying unqualified persons, disclosing military secrets- as punishable both by the criminal code and corruption proclamation, and the bribing of mediators.

The new proclamation that strengthens the punishments to be effected on the corrupt has also included monetary punishment on every imprisonment. Therefore, if an enterprise that has got legal personality is found to be involved in corruption, for those actions punishable by simple imprisonment, less than five years imprisonment, from five to 10 years of imprisonment, and more than 10 years of imprisonment, it will be punishable by 20,000 Br, 30,000 Br, 50,000 Br, and 80,000 Br respectively.

This amount of money was set on the public hearing process of the Law, Justice and Administrative Affairs Standing Committee of the parliament. The former punishments were 30,000 Br, 50,000 Br, 100,000 Br and 200,000 Br respectively.

“This is because monetary punishment has a better deterring effect in the eyes of the corrupt than imprisonment,” states the proclamation.

Although many governmental and nongovernmental organizations were put into consideration while making the law, there are some that are excluded from being questioned by the law. These are corruption cases that are committed by religious organizations, political organizations, international organizations, small and micro enterprises and other religious or cultural institutions.

This is because, the income collected in religious institutions, which is based on faith, does not follow proper controlling mechanisms, which is done to comply to the believers’ faith as the believers do not question the use of the money. International organizations have immunity not to be questioned by the law and the expense is higher than the result to be found by the trial process to question small and micro enterprises.

Together with the proclamation, the parliament also ratified other two proclamations, a proclamation to amend the revised anti-corruption special procedure and rules of procedure of evidence proclamation, and revised anti-corruption commission establishment proclamation.

The proclamations were necessitated because of the need to include public organizations and ensure speedy and effective gathering of information, investigation, prosecution and hearing of corruption offenses and the injunction and retrieval of property obtained thereof.

As a result of the new proclamation, other provisions in the criminal code are revoked and corruption cases are to be seen using the new proclamation. But those that have been committed before the ratification of the new proclamation are to be tried using the provisions in the criminal code.

http://addisfortune.net/articles/house-ratifies-three-proclamations-to-deal-with-corruption/

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Reprieve for firms as Comesa favours lower merger fees

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Companies eyeing the regional market through mergers and acquisitions may get a reprieve as Comesa considers lowering by up to 60 per cent the fees charged to approve such deals.

By ALLAN ODHIAMBO

http://www.theeastafrican.co.ke/business/Comesa-favours-lower-merger-fees/-/2560/2654272/-/p4m1g5/-/index.html

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Ethiopia mines ministry gives go ahead for Tulu Kapi development

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Addis Ababa, 16 March 2015 -

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Aim-listed gold explorer and developer Kefi Minerals has received approval from Ethiopia’s Ministry of Mines to develop its Tulu Kapi project.

The company’s application for the 86 000-oz/y mine was now before the Council of Ministers for approval to execute a mining agreement and to issue the mining license and full permitting to develop and operate the project for 20 years.

Further, Kefi Minerals on Monday said the estimated development expenditure for the mine had been reduced from $150-million to $120-million, based on initial bids received from mining contractors and on terms on offer to the company for the acquisition of the identified suitable process plants.

The development funding plan would be a combination of debt and equity finance, drawn down in the second half of this year and comprising $100-million of project debt, with the balance of $20-million being financed by one of a number of possible sources currently being assembled, including financing from contractors and equity at the project or parent company level.

“It is an exciting period for Kefi, with a great deal of progress occurring across the board. As we rapidly move towards the receipt of the mining license and advance our funding plans, we remain on track to start development at the project this year, [aiming] for production in 2017,” Kefi executive chairperson Harry Anagnostaras-Adams said.

The company also planned to conclude its definitive feasibility study and start construction of the 1.2-million-ton-a-year processing plant, during this year.
The Tulu Kapi project had a probable ore reserve of one-million ounces of gold and mineral resources of 1.9-million ounces of gold.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=18177:ethiopia-mines-ministry-gives-go-ahead-for-tulu-kapi-development&catid=52:national-news&Itemid=291

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House Standing Committee Sees Industrial Park Bill

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Bill lets federal government build industrial parks at the national level

The House Industry Affairs Standing Committee is reviewing the Draft Industrial Parks Bill which gives the federal government the task of developing parks at the national level.

The bill, which will officially end the term “industrial zones”, a term that has been abused, according to an official, has seven sections, including establishment of organizations within the park, recruitment of foreign employees to work in the park, treatment of international park developers, acquisition of land and other immovable properties as well as conflict resolution.

The bill was referred to parliament on March 10, 2015, when the Standing Committee began looking at it. The first Industrial Parks Proclamation prepared by the Ethiopian Investment Commission (EIC)was referred for parliamentary review at the first meeting of the House after a month’s recess.

“The name industrial zone is an internationally used common name but its name has been abused in our country where some collection of manufacturing sheds or five to six factories are being referred to by the name industrial zone. Therefore, we have intentionally avoided the name industrial zone in the proclamation,” Fitsum Arega, director general of the EIC said.

Although industrial parks was an area of the government’s focus in the first Growth & Transformation Plan (GTP), the intention was not implemented through laws that defined what industrial parks are, institutional structure, and responsibilities of developers, administrators and enterprises, states the explanation on the draft proclamation that was presented to the parliament. Due to the absence of these legal documents, development of the Eastern Industrial Zone and Bole Lemi Industrial Zone failed to have full services required, such as connection roads, electricity, telephone, water as well as banking and customs services, according to Fitsum.

The bill claims that it will be vital to decrease environmental pollution, organise city dwelling, enhance export of manufacturing products and ensure sustainability.

“The works to make the existing zones fit the standards of parks will be done; these could be establishing one-stop services for Customs and other governmental services,” Fitsum said.

The preparation of the bill by Ethiopian Investment Commission had inputs from the Ministry of Industry (MoI) and the newly established Industrial Parks Development Commission (IPDC), regional government as well as a Chinese group that conducted a study and forwarded recommendations on its own. “The government is the one that builds the parks, supports for the construction and carries out issues related to that such as selling and renting plots,” said Fitsum.

An official from the IPDC states that the proclamation will enable the administration of the parks to be better than it has been so far.

The federal government acting as custodian will take land from the regional governments and build the parks, fulfilling the necessary infrastructure and rents to developers, said the same source. The IPDC recommends the establishment of the parks centrally in the federal level but the regions can also develop their own parks, the source added.

The producers in the parks are given more advantages than those outside. Such advantages include selling their products, all of which are expected to be exported, with tax exemption, which does not hold true for those outside. And the producers in industrial parks need to export all of their products to the foreign market.

There are four operational parks in the country and two are in the process of establishment. The operational ones are Bole Lemi 1 and 2, Eastern Industrial Park and George Shoe. The ones in progress are Ayka Addis, a Turkish textile factory and government’s joint project and Huagian industrial park. Industrial parks in Kombolcha and Mekelle will be constructed with Prime Minister Hailemariam Desalegn having laid the cornerstones for their construction.

“We are doing all the necessary preparations for the implementation of the proclamation after it gets passed by the parliament and we will immediately make the directives and implementation manuals to make the implementation take no more than three months from now,” Fitsum affirmed.

Seventy percent of industrial parks area will be factories while the rest will be residences and green areas as well as service giving sites and offices.

http://addisfortune.net/articles/house-standing-committee-sees-industrial-park-bill/

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Israeli construction suspected of tax evasion

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Tidhar Excavation and Earth Moving Ltd., an Israeli company taking part in the 2.6 billion birr road project that is expected to supplement the ongoing Light Railway

Transit (LRT) project, is suspected of illegal tax evasion activities worth some 52 million birr, The Reporter learnt.

Investigators of the Federal Ethics and Anti-Corruption Commission (FEACC) told the Federal High Court Second Criminal Bench on Wednesday that three employees of the Ethiopian Revenues and Customs Authority (ERCA) Large Taxpayers Office suspected in the alleged tax evasion charges were arrested the same day while the owner and general manager of Tidhar, Menashe Levy, who is also suspected of the same charges, was banned from leaving the country but not arrested.

The investigators explained that the alleged tax evasion happened when Tesfa Hadush, leader of the tax audit team, and a two-member team, Muhammad Agmass and Anteneh Gezehagn, were assigned to do Tidhar’s tax audit for the business operation between the periods of 2008 to 2012. The audit, conducted in December of 2013 for one month, ended with auditors finding out that the company owed some 52 million birr in back taxes and notified it of its obligations.

According to the FEACC investigators, the story does not end there. The three soon approached Levy with another proposal, to reduce the 52 million to 6.1 million for a price of 3 million. After negotiations, the Menashe allegedly reached an agreement with the three to pay 1.8 million, 600,000 each, and have the taxes reduced to the proposed amount. Hence the four personalities were said to have evaded some 46 million birr in taxes and damaged the country.

Investigators asked for some 14 additional days to complete their investigation, during which time the suspects were ordered to remain in custody. In addition to that, they asked the court to issue a travel ban on the general manager until such time that he is placed under arrest. After hearing the justification, the court rejected the suspects’ right to make bail and granted the investigators 10 days to complete their investigation and institute charges.

http://www.ethiopianopinion.com/israeli-construction-suspected-of-tax-evasion/

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Some 1 million TV owners to pay fees via digital system

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Addis Ababa, 16 March 2015  -

A trio agreement among two public entities and a private company, the Ministry of Communication and Information Technology (MoCIT), the Ethiopian Broadcasting Corporation (EBC), a state-owned TV station, and Kifiya Lehulu, a financial technology private company, envisaged the way to start an electronic system to collect registered and license fees from a million TV owners in Addis Ababa this year.

The new electronic payment system seeks to collect fees from one million television owners from March 16 to the end of this year. According to the contract that was made public this week, Kifiya Lehulu would collect fees from TV owners across the capital annually on the station’s behalf.

According to Berhane Kidanemariam, general manager of EBC, previously, TV license and registration fees were collected by dispatching employees to customers’ homes. However, the GM noted that this system remained quite difficult to manage for the TV station for long time.

To that effect, EBC decided to outsource the fee collection jobs to Kifiya Lehulu. EBC is entitled to collect annual fees from each and every TV owner which is around 60 birr per annum. In return to the services that Kifiya Lehulu provides, the public TV station will pay 10 birr per customer, the GM told journalists.

The state broadcaster had the authority by proclamation, enacted since the 1960s, when there was only one public TV station, to collect license and registration fees from TV owners.
The fate of private TV stations, if they would ever to appear in the air waves, would depend on the permission of the government. When that day comes, amending the existing laws is no doubt going to take place, Berhane told The Reporter.

According to Senait Haile, marketing and promotion director at EBC, the year-long process of outsourcing has finally come through. Based on the Central Statistics Agency’s and EBC’s data, around one million TV owners would be accessed to pay their registration and license fees this year.

Based on the existing laws, TV owners who fail to pay the annual dues face measures which include fines and confiscation of their TV sets. Senait told reporters that some 13 million birr was generated from license and registration fees just last year. And this year, the station has set a target of collecting some 60 million.

Kifiya Lehulu currently handles utility bills on behalf of public enterprises. Munir Duri, Chief Executive Officer (CEO) of Kifiya Lehulu, said that there are some 34 collection centers which are handling electricity, telephone and water bills in Addis Ababa, reaching some 600 thousand customers across the board. Per month, 1.2 million birr transactions are taken care of via this digital company. These are the very centers destined to collect TV registration and license fees, CEO explained.

Kifiya Lehulu is branching out further to cover mobile banking activities in the country. Munir said that some 20 thousand safety net beneficiaries were selected to receive monthly vouchers via an e-payment systems. Currently, this pilot project is serving the Amhara credit and saving microfinance institution customers.

A television license or broadcast receiving license is an official record of payment required in many countries for the reception of television broadcasts, or the possession of a television set where some broadcasts are funded in full or in part by the license fee paid.
The license is sometimes also required to own a radio or receive radio broadcasts. A TV license is therefore a hypothecated tax for the purpose of funding public broadcasting, thus allowing public broadcasters to transmit television programs without, or with only supplemental, funding from radio and television advertisements.

Whilst TV licensing is rare in the Americas, half of the countries in Asia and Africa, and two-thirds of the countries in Europe use television licenses to fund public television.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=18175:some-1-mln-tv-owners-to-pay-fees-via-digital-system&catid=52:national-news&Itemid=291

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CBO to launch interest free banking

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Cooperative Bank of Oromia (CBO), who currently is celebrating its Tenth year anniversary, announced it is carrying out final minute’s preparation to launch interest free banking.

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The bank’s proposal got an acceptance by the National Bank of Ethiopia. The bank said the service is launched after some technical adjustments are made.

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Wondimagegnehu Negera, President of CBO said at a March 10 press conference, the service will be offered on separate windows.

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The interest free bank service targets individual customers, government institutions and non-governmental organizations (NGOs). Services offered under the interest-free banking include deposits, foreign exchange and money transfer services and will be available for customers who are engaged in trade, agriculture, freight forwarding, construction, manufacturing, and import-export trade.

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Interest-free banking mainly targets individuals and institutional customers that do not want interest on their deposits because of reasons such as religion and it is becoming a competitive factor for local banks. The bank is also getting ready to build a 35-storey headquarter building around National Theater and another facility in Debrezeit.

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“We went through a lot  of ups downs but thanks to the banks’ shareholders and our committed workers the paid up capital is increased from 156 million birr to 856 million in 10 years time.’’

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“Boosting our service, we will focus on helping farmers to produce more by supporting them to invest in value added assets, and by lending more money.” The president further added that the bank will begin ATM and Point of Sale services in a short time.

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CBO gave out a loan of 1.2 billion birr to its customers in the first six months of this fiscal year.
Last year, CBO made a net profit of 475.85 million birr. CBO currently has 133 branches across the country and it has 1,705 employees.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=5038:cbo-to-launch-interest-free-banking&catid=54:news&Itemid=27

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Cooperative Joins Dairy Processing Industry with 28m Br Brand New Factory

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The Union, which was established in 2001, joined the market three weeks ago with its new pasteurized milk

Tigis Amanuel, finance administration of Selale Dairy Cooperative Union (SDCU) promoting the Union’s new product, Selale milk at the second National Cooperative Exhibition, Bazaar and Symposium that was held from March 4, 2015 to March 9, 2015.

Selale Dairy Cooperative Union (SDCU) has joined the dairy-processing business in Ethiopia with a new brand of milk and yoghurt at its new factory, which was built at a cost of 28 million Br.

The Union brought its pasteurized milk to the market, with yoghurt to follow in the coming two weeks.

The milk processing plant is located in Sululta, 40Km North of Addis Abeba. It took approximately three years to finalize the construction as well as the procurement and installation of machinery for the factory, said Hailu Tadesse, SDCU’s director. The Union exploited its stronger financial capacity to benefit more from the raw milk it collects by opening this plant, which was built after a five- month feasibility study, he said.

The Union used 13 million Br of its own, borrowing the remaining 15 million Br from the Cooperative Bank of Oromia.

The new facility can process 20,000lt of milk daily, while the Union collects 10,000lt to 12,000lt from its members. The Union expects to get the balance from increased supply by its members as well as from new members, explained Hailu.

The Union is now focusing on the Addis Abeba market, with emphasis on pricing as a penetration strategy, Hailu said. It is selling its milk to retailers for seven Birr per half-litre packages, whereas the retail price of other milk in the market ranges from 10 Br to 11 Br for the same half-litre.

SDCU was established in 2001, having nine cooperatives, with a total of 512 members in North Shewa Zone, Oromia Region. Presently, the union is an umbrella for 31 cooperatives, which have 3,000 members. Thirty five percent of the profit is always kept in reserve while the rest is divided among the members as dividend.

Currently, in Ethiopia, the demand for dairy products is met through domestic production and through imports. In 2014, around 2,544,579 Kg of dairy products were imported at a cost of 15,156,394 dollars, which shows a tremendous increase as compared to the previous budget year.

The big mark-up in imports is due to the diminishing amount of supply that fails to meet the existing demand, explained a study by Precise Consult International, a local firm. Data from the Central Statistics Agency indicate a decrease from 3.8 billion litres in 2012/13 to 2.9 billion litres in 2013/14.

The growing population,expansion of urbanization and urbanized lifestyles, as well as the income growth in Ethiopia are expected to increase the demand for dairy products, said Amanuel Assefa (PhD), deputy chief of party at Precise Consult International.

Currently, there are 32 registered dairy-processing companies in Ethiopia. In 2011, there were 22 dairy processing companies with nine of them operating in Addis Abeba and the rest in other major regional cities, according to the Food and Agriculture Organization of the United Nations (FAO) survey.

http://addisfortune.net/articles/cooperative-joins-dairy-processing-industry-with-28m-br-brand-new-factory/

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Algeria, Ethiopia ink three cooperation agreements

Addis Ababa: March 16, 2015 –

Algeria and Ethiopia have signed three cooperation agreements on Sunday in Algiers.

The agreements include a memorandum of understanding (MoU) between Foreign Affairs ministry’s Institute of Diplomacy and International Relations and the Diplomatic Institute of Ethiopia’s ministry of Foreign Affairs.

The Algerian and Ethiopian governments also signed an agreement on animal health and another on professional and technical training.

The MoU between the diplomatic institutes and the health animal agreement between the two governments were signed by Foreign Minister Ramtane Lamamra and his Ethiopian counterpart, Tedros Adhanom Ghebreysus.

The agreement on professional and technical agreement was inked by Deputy Minister for Maghreb and African Affairs Abdelkader Messahel and State Minister for Education Wondwossen Kiflu Woldmichael.

The agreements were signed in the presence of the prime ministers of the two countries, namely Abdelmalek Sellal and Hailemariam Desalegn.

http://www.fanabc.com/english/index.php/news/item/2438-algeria,-ethiopia-ink-three-cooperation-agreements

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Airport Expansion Project Cost Rises by $115m

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The project, which was supposed to be completed in two phases, has now joined together the two

The airport that is now being constructed by CCCC will accommodate 25 million passengers a year when completed after three years.

The Bole International Airport expansion project, which was planned at a cost of 225 million dollars, is now costing up to 340 million dollars as the scope of the construction has been stretched.

The construction, which was first planned to be completed in two phases, began with 225 million dollars secured by loan from the Export Import Bank of China (Chinese ExIm Bank), to finance the first phase of the project.

The plan for the first phase of the expansion was to enable the airport to accommodate up to 14 million passengers a year and the expansion construction was designed accordingly. The second phase was planned to raise the capacity from 18 million to 20 million passengers a year.

“The existing airport was constructed in 2003 to accommodate passengers for twenty years but it reached its limit after just 10 years,” Tewodros Dawit, chief executive officer (CEO) of Ethiopian Airports Enterprise (EAE) told Fortune.

After evaluating the demand for the airport facility for the coming 20 years, the first and second phases of construction were integrated so as to enable the construction to accommodate the estimated 20 million to 25 million passengers a year, according to Tewodros.

The Addis Abeba Bole International Airport, which used to accommodate less than a million passengers a year, can now handle over seven million passengers a year, according to Haylay G/Tsadik, deputy CEO of Airport Operations at EAE speaking at the Airport Infrastructure and Maintenance, Repair and Overhaul MRO meetings press conference.

The expansion construction that is now being carried out by China Communications Construction Company (CCCC) forced the Enterprise to integrate the two phases instead of embarking on a new expansion project in the near future. The design work of the expansion project was undertaken by a Singapore company, CPG Corporation Pte. Ltd., a building development and management services provider in the Asia Pacific region.

CCCC is the company that constructed the Addis-Adama Expressway and on June 25, 2014 it also won a bid to construct roads worth 2.57 billion Br. along the Omo River in the Southern Nations Nationalities and Peoples Region. CCCC is a subsidiary of the China Road & Bridge Corporation (CRBC), after the latter took it over in 2005. It has a presence in 50 countries

“When we decided the exact cost of the construction after the completion of the design after three years since it began in 2011/12, we saw that the demand had been increasing from time to time so we studied it again and integrated the first and the second phases of the construction,” stated Tewodros.

Although the additional cost of the construction is known, the source of the financing has not yet been determined and the Enterprise will request the Ministry of Finance and Economic Development (MoFED) to look for the finance, stated Tewodros.

“The contracting body might depend on the financing,” Tewodros stated.

The new expansion project is said to allow the airport to have the capacity of accommodating up to 20 million passengers a year in 15 to 20 year’s time.

“Thinking of another expansion after three or four years following the completion of the current expansion is not feasible,” Tewodros stated. “We will also work to finish the construction of the integrated phases within the first time-frame.”

In accordance with the changed design and cost of the expansion project, the physical work has also increased by 150pc, according to Hailu G/Mariam, EAE airport project head.

“The construction was expected to begin immediately after the plan was made three years ago and completed within five years; but as the designing took three years by itself, the demand increased more than the planned 14 million passengers a year,” Hailu told Fortune. “By the integrated expansion, at least we will have a breathing time until the demand exceeds that number.”

The total international aircraft movement at Bole International Airport between 2001 and 2010 grew by more than 240pc while the domestic aircraft movement grew by 12pc for the same period.

Currently, the EAE operates 20 airports, four of which provide international flight services while the rest provide services for domestic flights.

The deal with the construction company is based on a turnkey level in which the contractor constructs and submits the finalised project.

“The country’s tourism sector is still well untouched and the airport expansion facilities are one of the major requirements in the industry, which will facilitate the growth of the tourist industry,” Haile stated.

The expansion of the airport is also related to the Ethiopian Airlines’ 2025 vision, which includes increasing revenue to 10 billion dollars, increasing destinations from 104 to 126 and increasing fleet from 77 to 140, according to Tewodros.

The expansion project includes the construction of a new passenger terminal as an extension of the existing Terminal 1 (domestic and regional terminal) and Terminal 2 (international terminal) with related equipment. The new terminal will house boarding areas, lounges, recreation centers, shopping malls, offices and other facilities. New boarding gates, boarding bridges, and a new parking area for passengers and airport staff are parts of the expansion project as well. The other major component of the expansion project is the construction of a new VIP passenger terminal.

http://addisfortune.net/articles/airport-expansion-project-cost-rises-by-115m/

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Ethiopia: The Schulze Global Investments level with Those of Singapore

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Addis Ababa March 14, 2015  –

The Ethiopian Foreign minister Dr. Tedros has talks with Gabriel Schulze, Chairman and CEO of Schulze Global Investments

Dr. Tedros met with Mr. Gabriel Schulze, founder, Chairman and CEO of Schulze Global Investments. Discussions covered sector-specific investment opportunities, the maximizing of investment inflows and future regional trade and investment opportunities in the East African region.

Dr. Tedros discussed developments in Ethiopia’s industrial parks, its health system and the overall development of the country as well as its investment opportunities. He also detailed the future market and trade potential of the region pointing out that the ground had been laid for economic integration between Ethiopia and Djibouti during the recent High Level Joint Ministerial Commission Meeting.

The Ethiopian Foreign minister Dr. Tedros said Ethiopia and Djibouti are building telecom, rail, power, water infrastructures and other links as well as developing the integration of customs clearance visas and other areas. Mr. Schulze said that Ethiopia was a most stable and highly recommended country for private equity investment.

He noted the similarities of the development of the Ethiopian industrial parks with those of Singapore’s and expressed his wish to work in collaboration with the government to build more such parks for investors coming to Ethiopia, which, he said, offered a large potential market for investment.

http://www.geeskaafrika.com/ethiopia-the-schulze-global-investments-level-with-those-of-singapore/8297/

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IFC expresses readiness to support Ethiopia’s economic development 

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Addis Ababa, 16 March 2015 -

The International Finance Corporation (IFC) expressed its readiness to identify opportunities and further support the economic growth being registered by Ethiopia.

Following a discussion held with President Mulatu Teshome, IFC Executive Vice-President Jin Youg Cai told journalists that, as Ethiopia is due to start the Growth and Transformation Plan (GTP-II), there are a lot of requirements for capital thus the IFP delegates are here to learn the government’s plans and identify opportunities to support the economic growth.

He said Ethiopia has been registering the fastest economic growth in Africa as well as in the world with a very disciplined leadership and hard work people. “Because of this, we are encouraged to see the progress, be part of the economic development and a good partner,” he added.

In his discussion with IFP delegates, President Mulatu appreciated the IFC’s support and readiness to take part in the country’s economic development having prepared strong concept papers focusing on their specific areas of participation.

President Mulatu expressed Ethiopia’s readiness to receive support from the corporation particularly in the areas of the garment, textile processing, and leather industries. President Mulatu also called up on the IFC to keep up its role in the economic growth and assured the delegate that there will be other discussions.

Furthermore, the delegates were here to discuss how to strengthen the financial and technical support to the private sector and evaluate the status of the corporation’s assistance during the last two years during which the IFC gave support to private companies engaged in agriculture, consultancy, hotel and tourism and the like.

IFC, established in 1956 and a member of the World Bank Group, is the largest global development institution focusing exclusively on the private sector in developing countries. It is owned by 184 member countries.

Its work in more than a 100 developing countries allows companies and financial institutions in emerging markets to create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities.

http://www.waltainfo.com/index.php?option=com_content&view=article&id=18163:ifc-expresses-readiness-to-support-ethiopias-economic-devt-&catid=52:national-news&Itemid=291

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Polish companies seek business partners in Ethiopia

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Members of the Ethio-Polish Parliamentary Group

14 March 2015  –  Written by  Kaleyesus Bekele 

- METEC to inaugurate polish tractor assembly line

Polish manufacturing, construction and IT companies are looking for business partners in Ethiopia with the view of forging joint ventures.

Up on the invitation of the Ethiopian parliamentary group (Ethio-Polish parliamentary Group) Polish parliamentarians and business people this week visited Ethiopia. The delegation comprising two parliamentarians and six business people led by Killian Munyama (MP), chairman of the Ethio-Poland parliamentary group in the Polish parliament, met Ethiopian parliamentarians, senior government officials and members of the Ethiopian business community. The delegation also held meetings with officials of the African Union.

The Polish business delegation comprising manufacturing, construction, coffee importer, IT and energy companies on Wednesday met Ethiopian businesses at Hilton Addis Ababa. Some 50 Ethiopian companies, who have shown keen interest to do business with Polish companies, held one-to-one meetings with the six polish companies representing more than sixty polish companies.

The business to business meeting was co-organized by the Polish Embassy in Addis Ababa and Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA). In his welcoming remark secretary general of ECCSA, Gashaw Debebe, said that Ethiopia’s relations with the Republic of Poland are far more solid than ever before. “Though the economic linkages between the two countries has been improved in recent years, mainly due to the encouraging achievements of economic reforms in Ethiopia and the enhanced bilateral relations between them, the trade and investment relations between the two countries is still lagging behind compared to the unexploited opportunities existing in them.

According to Gashaw, the total turnover between the two countries was only 23 million dollars in 2013, signifying the fact that much work is still needed to further enhance their trade and investment ties through the unrelenting efforts of the governments and business communities of the two countries.

Munyama, head of the Polish delegation, told The Reporter that most of the Polish companies are looking for Ethiopian partners. “Their line of interest is to put up joint ventures because we want the local community to be involved.  We want to create jobs.  We want to have a mutual benefit. We are not only after trade. We are looking at cooperation,” Munyama said.

Munyama said the business forum enables the companies to find a common ground to push forward to the relationship.

With the view of boosting trade and investment relations with Africa the Government of Poland in 2013 launched a trade initiative dubbed “Go Africa”. The Go Africa program enabled Poland to boost trade volume with African countries by up to 150 percent.  Polish export to Ethiopia increased by 106 percent in the last two years.

“We do believe that Ethiopia is one of the biggest markets in Africa we can be able to cooperate with,” Munyama said.

Polish companies are entering Ethiopian market. A prominent tractor factory, Ursus, is supplying tractors to the Ethiopian Metals and Engineering Corporation (MetEC). MetEC is assembling the tractors in Adama Tractor Assembling Factory. Ursus is delivering 3000 tractors to MetEC worth 90 million dollars. The company began exporting the first 1500 tractors last year at a cost of 50 million dollars. Ursus tractors assembling line in Adama Tractor Factory will be inaugurated in four weeks time.

One of the largest IT companies in Europe, Asseco Poland, has set its foot in Ethiopia. Asseco Poland is closely working with the Information Network Security Agency (INSA).  Munyama said that Poland wants to maximize the trade and investment relationship with Ethiopia.

“We are aware of the fact that some of the Polish products has entered Ethiopia though other European countries we want to change the trend, we want to establish a direct trade link between the two countries” he said.

Polish Ambassador to Ethiopia, Jacek Jankowski, told The Reporter that there is an increasing interest from Polish companies to do business with their Ethiopian counterparts. Jankowski said that there is a great potential between the two countries. “After my arrival in Ethiopia in November 2012 I have seen that the relation is getting stronger and stronger both politically and economically,” he said.

However, the ambassador said the level of bilateral economic relation between the two countries does not meet his expectation. “I see a great room for improvement and for bringing our countries closer and closer.”

According to Jankowski, polish software companies are cooperating with INSA, polish sugar factories are working Ethiopian Sugar Corporation. The biggest Polish chemical factory, the second biggest chemical company in Europe, will come to Addis Ababa to hold talks with the Ethiopian Chemical Corporation, Ministry of Agriculture and Agricultural Transformation Agency. Executives of the company will discuss the possibility that they can supply fertilizer and chemicals to the Ethiopian market.

“More Polish companies are showing interest to do business with Ethiopia,” Jankowski told The Reporter.  “Some in Poland thought that Ethiopia is not a good place to do business but this is now changing. Many Ethiopian companies have shown interest to establish contact with Polish companies. “It takes two to tango. We have Ethiopian business people and Polish business people who are both interested to do business, he added.

Jankowski also told The Reporter that at the end of this year the president of Poland is scheduled to visit Ethiopia.

Last year the Ambassador received an award from the Polish Ministry of Foreign Affairs called “Friend of Economy” (Amigos Economy) for boosting trade relations between Poland and Ethiopia.

The Polish embassy is closely working with the Ethiopian Chamber of commerce and Investment commission in strengthening trade and investment between the two countries.

http://www.thereporterethiopia.com/index.php/news-headlines/item/3278-polish-companies-seek-business-partners-in-Ethiopia 

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Ethiopia dam, Gibe 3, project could start power generation by June – official

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The project should be fully operational by early 2016, an official said on Thursday.

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Gilgel Gibe 3 will nearly double the country’s energy output, helping to resolve chronic power outages and sustain a booming economy. Work started in 2008 and was due to be completed around three years later, but the project has faced funding shortages over concerns about its environmental impact.

“88 percent of the work for the Gibe 3 hydropower projecthas already been completed,” Azeb Asnake, chief executive officer of the Ethiopian Electric Power Corporation, told Reuters. Two of ten units would be ready by June, Azeb said, while one additional unit would come on line each month after that. Upon completion the project will generate 1,870 MW of power.

Ethiopia plans to spend a total of 12 billion dollars to tap the rivers that cascade down its craggy highlands over the next two decades in a bid to beat energy shortages and become Africa’s biggest power exporter.
The country’s economy is expanding by 9 per cent a year, and the dam is part of an infrastructure plan aimed at sustaining that growth. A bigger project, the 6,000 MW Grand Renaissance Dam, is being developed along the Nile.

Power outages are common in this country of over 90 million, where a majority still rely on subsistence agriculture. Addis Ababa’s nascent manufacturing sector is also attracting firms from China, Turkey and India to produce clothes, shoes and other basic goods, but frequent blackouts hamper economic activity.

Ethiopia already exports power to neighbouring Kenya, Sudan and Djibouti, and it has signed agreements with Tanzania, Rwanda and South Sudan, as well as Yemen.
Critics of Gilgel Gibe 3 say it will reduce water flow and devastate the fisheries of Lake Turkana, which is fed by the Omo. Ethiopian officials admit criticism led the European Investment Bank and the African Development Bank to turn down a request to disburse funds.

The Industrial and Commercial Bank of China stepped in four years ago with a loan of 500 million dollars to pay for turbines.

Azeb dismissed the concerns, saying Ethiopia’s research suggests regulating river flow will stabilise fluctuating water levels. “If they read these studies, they would not continue with their arguments,” she said.

http://hahudaily.com/ethiopia-dam-gibe-3-project-could-start-power-generation-by-june-official/

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Intellectual Property Office Gets New Director

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The office has been under an Acting Director since Berhanu Adelo’s removal in January

Ethiopian Intellectual Property Office (EIPO) is established in 2008. It is located along Tito St. around Kazanchis area.

A new Director General has been appointed for the Ethiopian Intellectual Property Office (EIPO) by decree from the Prime Minister’s Office as of March 6, 2015. Teshale Yona took the position on March 10, 2015, as per the appointment letter.

The EIPO had been under an Acting Director, Girma Bejiga, after the sudden removal of Berhanu Adelo by Prime Minister Hailemariam Dessalegn on January 2, 2015.

Teshale started his career in 1993 as a primary school principal. In 2006, after receiving a Bachelor’s degree in Law (LL.B) from the Ethiopian Civil Service University, he worked for one year as Sidama’s Zone prosecutor. He was then appointed to the Southern Regional State’s Justice Bureau, where he simultaneously served as Head of Bureau and Prosecution administration. After five years on that job, he studied for his Master’s degree in Law and his new assignment is his first after being awarded his second degree.

The letter sent from the Prime Minister’s office on January 2, 2015, removed Berhanu from his post and assigned the then Director of Patents Girma Bejiga, as Acting General Director effective the very same day.

Berhanu first started working as a teacher at Teacher Training Institute (TTI) in Bonga and worked his way up to head the Prime Minister’s Office. He also served as Assistant Chief of Justice for the Southern Regional State, lecturer at Civil Service College and Minister of Cabinet Affairs. Among the 36 members of the politburo of the EPRDF, where there were nine representatives from the South, Berhanu was one of them along with Prime Minister Hailemariam and Shiferaw Shigute since 2010.

At the fourth general election in 2010, Berhanu ran against independent candidate Ashebir Woldegiorgis, for the seat in the parliament of Bonga, representing Southern Peoples’ Democratic Movement (SPDM) and lost.

With the appointment of the new General Director, Girma is back to his former post as Director of Patent. Girma joined the office in 2005 and worked as Junior Trade Mark Examiner, Patent Team Leader and Patent Director through the years, until his latest assignment as Acting Director General. Girma has a Bachelor of Arts degree in Physics from Addis Abeba University (AAU) and a Master’s degree in Intellectual Property from the Italian Turin University. Before joining the EIPO, he was a teacher at different high schools in the Oromia Regional State.

The EIPO was established in 2008 to facilitate the provision of legal protection against exploitation of intellectual property in the country and has been collecting, organizing and disseminating technological information contained in patent documents. It also encourages its utilization, study, and analysis and makes recommendations for intellectual property policy and legislation. The office is accountable to the Ministry of Science and Technology (MoST), headed by Demitu Hambisa.

http://addisfortune.net/articles/intellectual-property-office-gets-new-director/

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1.6 million Jobs created in the past six months

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Addis Ababa: March 14, 2015  –

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Minister of Urban Development, Housing and Construction Mekuria Haile disclosed that 1.6 million jobs had been created in the past six months in several ordinary and mega projects of the country.

In addition to creating millions of job opportunities, efforts to reduce poverty and improve livelihoods in urban areas had been successful, the Minister added.

The 9^th Urban Development, Housing and Construction Sector summit begun yesterday in Adama. Manufacturing, construction, service, urban agriculture and trade were identified as the main areas where most of the jobs were created.

All rounded support, provision of loan, improved land administration and development saw progress while limited capacity and implementation problems proved a challenge, it was noted.

A progress report noted that there is a significant lack of capacity and gaps in performance.

The summit is expected to conclude tomorrow after regions exchange best practices.

http://www.fanabc.com/english/index.php/news/item/2433-1-6-million-jobs-created-in-the-past-six-months

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Home Grown Leather Holds Sway at District Level

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A square feet of leather that is sold in rolls at Merkato can make out seven pieces of shoes.

Visitors to the regularly held exhibitions in the sub city level everywhere in Addis Abeba would have their attention grabbed by the number of booths occupied by producers of leather products. shoes, belts, wallets, and sandals, all made of leather are the major products that occupy the spaces in the booths. These exhibitions provide market access, for the walk-in customers who buy the products.

TY, Fekade, Azenagash & Friends Shoe Work Union is a small enterprise that produces leather goods in one of the rooms in a condominium located in Ginfille Textile Production and Display Centre past Queens College in Arat Killo.

Fekade Woldeyes, the chairman of the Union, was sewing the leather pieces for shoes on a sewing machine. Two other members were also putting glue on the edges of the shoes and cutting the measured pieces of hide to suit their shoes.

Fekade Woldeyes showing the square feet of leather that is sold in rolls at Merkato

There were 10 members of the Union when they started in 2013 and five of them left not long after it was established, losing hope in the business as it lacked access to the market. Fekade’s Union was established with a start-up capital of 5,000 Birr. with each member contributing 500 Br.

“One of the major challenges in the business is the shortage of inputs that we use for the production,” Fekade said.

The inputs that are used for manufacturing leather products are fully processed hides that the producers cut into measured pieces and make the material that they want.

The hides, about 12 sq. feet each, are sold in bundles of 10 for 3,000 Br to 4,000 Br at Merkato’s Shera Tera by middlemen who buy from processing factories. One piece of these hides can make up to seven pairs of shoes. The other kind of leather that is used for the internal lining and tongue of the shoes is sold for 40 Br to 50 Br a kilo. It is very smooth, faint in texture and thinner than the leather used for the outer parts of the shoes. One kilo of this hide makes two dozen shoes according to Fekade. A synthetic lining that is used for the insole is sold at 90 Br a meter and this quantity makes one dozen shoes.

“The price in the market fluctuates over time, which limits our production capacity,” laments Fekade.

Fekade believes that it would be very nice if he could buy the raw material directly from the producers, which unfortunately does not happen for small-scale buyers like him as the producers prefer those that buy their products in bulk.

“I plan to grow big and export our products to the foreign market and we can do that as long as we maintain the quality of our products,” says Fekade. “The only thing that is hindering us is the lack of market linkage and the problem in the input market.”

Fekade Woldeyes, the chairman of TY, Fekade, Azenagash & Friends Shoe Work Union sewing the leathers to make up shoes at Ginfille Leather Textile Production and Display Centre

Salegziabher Fanta is a producer of such hides in Kality who operates on a rented plot of 4,500 sqm. He started producing in 2011 by buying semi-processed wet blue skins from bigger factories and upgrading them to a usable level. Before coming into the business, Salegziabher worked for Walia Leather and Leather Products Plc as a production manager. He studied Industrial Chemistry and joined the firm in June 2009 immediately after graduating from university.

He then invested his savings, totalling 5,000 Br, on machinery rental, which marked the beginning of the business, named Salegziabher Leather Production. Now he has bought six machines, five used machines and one new imported machine, each worth 1.5 million Br. Each machine has the capacity of producing 500 ox skins and 3,500 sheep skins a day.

Because of the lack of space for the processing, Salegziabher is limiting his capacity of production to 500 oxen skins a day. But he has the capacity of processing 6,000-oxen skin a week, receiving up to 2,000 skins a day from factories. One processed ox skin sells for 250 Br.

Established with such a small-scale production, Salegziabher now has capital value of 1.5 million Br and employs 15 permanent as well as seven temporary employees. He is planning to expand the plant to a level that can process skins from the beginning on 1,500 sq. m. of land with 34 machines. He has applied to the city administration for the plot of land that he requires.

“It requires us to spend up to 150,000 Br. for the installation of one machine. Therefore, we need to have one stable place to work,” Salegziabher told Fortune.

Salegziabher’s customers are both wholesalers and producers of leather products. But he prefers to sell to the wholesalers because of their financial capacity.

“Although the producers give me better price compared to the wholesalers, I sell mainly to the wholesalers as they take most of my products at a time,” Salegziabher said. “We give priority though to shoe producers as they give us better prices.”

According to data from the Federal Small & Micro Enterprises Development Agency, there are 564 small and micro level leather product producers in Ethiopia registered between the years 2010 and 2014 not including the regions Gambella and Afar.

Another small scale producer of leather products is Hussein Edris, manager of Hussein Leather Production Enterprise, who started out repairing shoes and now wants to buy machines and enter the export market. He had been in the business of making shoes out of finished skin for 20 years before establishing his enterprise in 2004 with 2,000 Br.

He started by producing sandals with one of his brothers and two relatives, then transformed to making covered shoes.

“We now make every kind of shoe and our customers are those who know our workshop,” says Hussein. “The only way we contact new customers is through bazaars held at the district.”

Although confronted by these challenges, the capital and the production capacity of these enterprises is increasing over time with some even reaching export level.

Bermero, a shoe producing private firm owned by Berhanu Isayas, is located at Piazza. He established the business in 2012 in 40 sq. m. of rented space but is moving from Piazza to Ginfille Textile Production & Display Center where he acquired a 400 sq. m. production space and a store. He plans to increase production five-fold as he has adequate production space that is separated from his shop. The shop was named Bermero, blending his name Berhanu with that of his wife’s, Meron.

“The market is very nice and I have started export of the products that we have made,” said Berhanu.

Once, a walk-in customer from Marseille in France ordered 500 leather bags but as it is the first time, he only sent 50 bags as a trial. He earned 4,500 dollars from that and is planning to open Bermero representative shops in Washington DC and in Zambia.

http://addisfortune.net/columns/home-grown-leather-holds-sway-at-district-level/