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Inclusive & sustainable industrial development key to African prosperity

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African countries should adjust to a new model of industrialization, an inclusive and sustainable development, based on their own national conditions to bring prosperity for their people, Ethiopia’s minister of industry said Wednesday.

After the industrialization of many European and Asian states, African developing countries are now striving hard to achieve their own inclusive and sustainable development, a new path to industrialization, which, compared to the old model of growth, in long term, would cause less environmental problem while significantly promoting poverty reduction and employment.

“African leaders have to commit themselves for industrializing their country to bring prosperity for its citizen, so if that is the only way, they have to adjust themselves to inclusive and stainable development.” Ahmed Abtew, minister of industry in Ethiopia, told Xinhua during an UN forum.

In the past 20 years, his country has created capacity for industrialization in urban area, he told Xinhua.

“Now is time to give more focus for industrialization,” he said, adding that “without the industrialization development, no one bring prosperity for its citizens.”

There is no doubt that industrialization is the strongest momentum of the economy growth for developing states in the world, however, in the past, industrialization often comes with some negative effects on the increasingly vulnerable environment.

In the context of the UN post-2015 agenda, high level officials, experts gathered in Vienna from Tuesday to Wednesday, discussing the implementation of inclusive and sustainable industrial development(ISID), a new model of growth for developing counties, also the United Nations Industrial Development Organization(UNIDO)’s new mandate.

UNIDO is an UN organization which provides assistance for developing economies to achieve industrialization.

Abtew told Xinhua, his county has years of experience in developing sustainable industrialization, a strategy in line with the ISID program.

Together with partners, including UN agencies and private sectors, UNIDO is trying to scale up the investment for the ISID to meet the demand of its member states, the main thrust behind the partnership business model is the mobilization of external partners and resources.

“Industrialization will promote employment, one of the big issues you are facing, really very tough.” He said.

Ngouille Ndiaye, Senegal Minster of industry and Mining, told Xinhua, his country currently is faced with tough employment pressure, especially among the youth.

“Industrialization will promote employment, one of the big issues you are facing, really very tough,” he said, adding that Senegal has just started implementing the ISID program.

When asked his view of the industrialization of African states, he said: “I think they (African states) need to follow, they have no choice…we are in the global market, and there are a lot of global and regional policies.”

UN Secretary-General Ban Ki-moon on Tuesday said at the forum’s opening that “the overarching imperative for our planet’s future is sustainable development. We have a vision of a just world where resources are optimized for the good of people. Inclusive and sustainable industrial development can drive success,” adding that “For industrial development to be sustainable it must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources,” he said.

http://www.globalpost.com/dispatch/news/xinhua-news-agency/141105/inclusive-sustainable-industrial-development-key-african-pro

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http://www.iede.co.uk/news/2014_5569/unido-forum-expresses-cautious-optimism-ethiopia%C3%A2%E2%82%AC%E2%84%A2s-economic-strides

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Update: Allana Potash Releases Optimization Update

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Ethiopia striving to improve transparency in extractive industry: President

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http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2457:ethiopia-striving-t-improve-transparency-in-extractive-industry-president&Itemid=260

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Mining renewable energy systems 70% cheaper than diesel power

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Mining companies were not traditionally considered a good fit for renewable energy. A closer look shows that this is not true anymore. Numerous renewable energy systems already power mines today, and experts from both worlds – mining and renewables – agree that a boom in this field is ahead.

Mining companies have been facing price pressure for the last few years. Many high-yield mining locations are already exhausted, the material that is extracted today is more difficult to access and it also requires more energy in reduction and purification processes afterwards. The amount of energy per unit is increasing, and so are electricity and diesel prices, whereas the prices for renewable energy, wind and solar, have been falling considerably during the last few years. This is why mining companies are paying more and more attention to renewable energy topics. There is a big demand for information on both sides.

“The objective of THEnergy is to accelerate the application of renewable energy in the mining sector by providing missing information,” points out Dr. Thomas Hillig, founder of THEnergy. One of the key elements of the platform “Renewables & Mining” (www.th-energy.net/mining) is a plant database for renewable energy systems near mines. It contains wind, PV, CPV, CSP and solar thermal plants. “Successful examples in the same industry are very often the catalyst that lays the basis for a breakthrough. They eliminate existing doubts to a large extent,” explains Hillig. By using the platform mining companies also get to know which renewable energy players are already experienced in this field. For renewable energy companies the platform is a good source to discover who the progressive first movers are in the mining industry.

The platform also collects background information such as technical overviews and business models. On a monthly basis, reports and white papers will be published. Finally, a blog allows for discussions among experts and players that are new to the field.

The best business case can be observed for hybrid power plants. In mining, these are solar or wind power systems that are combined with or integrated into existing diesel power plants. Wind and solar energy are often more than 70 percent less expensive than electricity from diesel, especially in remote areas where transportation makes up a large share of the total diesel cost.

http://www.miningreview.com/mining-renewable-energy-systems-70-cheaper-than-diesel-power/

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 Ppc Limited – Ppc Increases Stake In Ethiopia To 51%

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PPC is pleased to advise of the successful acquisition of the Industrial
Development Corporation’s 20% stake in Ethiopian based Habesha Cement Share
Company (“HCSCo”) for a purchase consideration of USD 13 million
(“Acquisition”). PPC’s initial 27% stake in HCSCo, acquired in July 2012,
now rises to 51% while the balance of the shareholding in HCSCo is held by
over 16 000 local shareholders.

HCSCo has begun the construction of a 1.4 million tonnes per annum facility
35 km north-west from the bustling city of Addis Ababa. Project costs for
this factory are approximately $135 million and commissioning of the plant
is anticipated in 2016.

“We are very excited about our increased investment in Ethiopia; a country
with a population of 91 million people that is set to reach 100 million by
2018 and having a growth rate that is expected to remain above 8% in the
medium term.

“This Acquisition will provide further momentum to our growth strategy on
the continent. PPC has, in addition to the HCSCo project, signed EPC
contracts for projects in Rwanda, the Democratic Republic of the Congo and
Zimbabwe; all with construction underway,” commented Bheki Sibiya,
Executive Chairman.

Financial close of this Acquisition is expected in December 2014
once all conditions have been satisfied.

http://www.sharenet.co.za/v3/sens_display.php?tdate=20141105070500&seq=2

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Ethiopia strengthens its information and communication technology policies with UNCTAD support

On 23-25 September 2014, UNCTAD delivered a workshop hosted by the Ministry of Communication and Information Technology (MCIT) of Ethiopia in the capital Addis Ababa on the production of information economy statistics, which was attended by 20 participants from the national statistical office and the MCIT.

With the objective of increasing the availability and quality of data that can support national information and communication technology (ICT) policy making, Ethiopian stakeholders agreed during the workshop to join efforts to develop official information economy statistics and to include such statistics in the national statistical plan.

“At this time, national coordination of ICT statistics [in Ethiopia] is very important“, one of the participants said.

Recognizing the importance of ICTs as tools for economic development and social inclusion, Ethiopia has put in place a National ICT Policy and Strategy and is drafting legislation to facilitate e-commerce. The (MCIT) of Ethiopia is being assisted in these endeavors by UNCTAD, which is reviewing Ethiopia’s cyber-legislation and developing statistics to measure progress in the information economy.

In May 2014, UNCTAD reviewed drafts of the Ethiopian Electronic Transactions Proclamation (ETA), the Ethiopian Electronic Signature Act (ESA), the Ethiopian Computer Misuse Proclamation, and the Ethiopian Data Protection Proclamation. The government has expressed its appreciation to UNCTAD for having helped to incorporate new ideas, and reorganize and validate the documents. The drafts are currently under consultation and will be finalized with the Ministry of Justice.

UNCTAD’s work on ICT and Law Reform is financed by the Government of Finland. The statistical workshop was supported by the Swedish International Development Agency (Sida), through a trust fund project building the capacity of developing countries to benefit from ICT.

Quick link:   Information and Communication Technology for Development

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http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=874&Sitemap_x0020_Taxonomy=Information and Communication Technologies;#1450;#Technology and Logistics;#20;#UNCTAD Home

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Demand for second-stage land certification in Ethiopia: Evidence from household panel data

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Author:

Sosina Bezu & Stein Holden

Publication date:

Saturday, 1 November 2014

Type:

• Research paper

Producer:

External to ACUI

Project theme:

Urban Land Tenure and Markets

Full document download:

demand_for_second-stage_land_certification_in_ethiopia.pdf

Abstract:

Ethiopia has implemented one of the largest, fastest and least expensive land registration and certification reforms in Africa. While there is evidence that this ‘first-stage’ land registration has had positive effects in terms of increased investment, land productivity and land rental market activities, the government is now piloting another round of land registration and certification that involves technically advanced land survey methods and computer registration.

This ‘second-stage’ land registration differs from the registration system employed in the first round that used field markings in conjunction with neighbors’ recollections to identify plot borders. We use panel data from 600 households in southern Ethiopia to investigate household perceptions of and demand for such a new registration and certification.

Our study revealed relatively low demand and willingness-to-pay (WTP) for second-stage certificates. The WTP also decreases significantly from 2007 to 2012. Our findings indicate that farmers do not believe that the second-stage certificate enhances tenure security relative to the first-stage certificate except in instances in which first-stage certification was poorly implemented. The demand for second-stage certificates appears to come primarily from governmental authorities, as it can provide a better basis for land administration and produce accessible public documentation of land-related affairs.

By Sosina Bezu & Stein Holden in Land Use Policy, Volume 41.

http://urban-africa-china.angonet.org/content/demand-second-stage-land-certification-ethiopia-evidence-household-panel-data

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Post-harvest losses are estimated to remove as much as 50% of crops from the food supply in developing countries. Moisture, infestation and rotting are major problems for farmers and processors, leading to reduced income and aggravating hunger.

Research and private sector organisations are coming up with solutions to combat post-harvest losses. These are a few of them:

Pics bags

Up to 50% of cowpeas, an important food crop in west and central Africa, are lost to weevil infestation. The Purdue Improved Cowpea Storage (Pics) bag – first developed in 2007 by Purdue University – provides a cheap solution.

The bag consists of two inner polyethylene plastic bags and an outer nylon sack. This reusable triple layer bag sells for $2 and seals the contents from oxygen, killing insects inside.

More than 3.2m Pics bags were sold across west and central Africa between 2007-2013, and farmers have started using them for other crops too.

“This technology has also contributed to price stabilisation,” says Sara Farley, chief operating officer and co-founder of the Global Knowledge Initiative (GKI), which researches post-harvest opportunities.

“Where consumers used to purchase cowpeas for as little as $20 per 100kg bag, the market price has stabilised at $40,” says GKI report Reducing Global Food Waste and Spoilage.

Solar bubble dryer

Farmers often depend on drying crops in the sun. Variable weather conditions make this risky, and crops may be exposed to vermin or contaminants.

In September 2014, GrainPro, the International Rice Research Institute and Germany’s Hohenheim University launched the solar bubble dryer. With a transparent polyethylene cover over a plastic floor, it’s like a bubble that traps solar radiation, with moisture expelled through mains power or solar-powered ventilators.

At $1,700 for the version, or $2,200 for the solar-powered version, the dryer is not cheap but will be a worthwhile investment for some.

“It’s especially beneficial to smallholders in developing regions where rapidly changing weather is contributing to massive food losses,” says Victor Dela Casa, a spokesperson for GrainPro

C:AVA

Cassava is a staple crop in Africa, but has a short shelf life after harvesting. One way of reducing losses is to process it quickly into high-quality cassava flour (HQCF).

The C:Ava project, led by the Natural Resources Institute (NRI), is working with partners in Ghana, Tanzania, Uganda, Nigeria, and Malawi to both improve yields and develop processing capacity for more than 90,000 cassava growers. It has trained farmers to grow different cassava varieties, and introduced graters and presses for on-farm pre-processing of raw cassava roots into wet cakes with a longer shelf life.

“We think it is important to consider post-harvest losses both from a physical loss perspective and from an economic loss perspective,” says Andrew Westby, director of the NRI. “The project has focussed on skill development to enable farmer enterprises to process products for higher value markets.”

Mud silos

These have been used in some parts of Ghana for hundreds of years, but are still not widespread. Constructed of local grasses and mud, these storage units contain several compartments for crops, and can store up to about 1.5 metric tonnes of grain. If well maintained, they can last up to 50 years.

Recently, a project led by the US-based Opportunities Industrialisation Centers International (Oici) has been introducing the silos to parts of Ghana where they are not traditionally used. Oici’s research has found that mud silos reduce losses to almost zero, provided grains are well dried and treated before storage to prevent rotting or infestation.

To date, Oici has constructed almost 6,000 mud silos in Ghana, costing less than $25 each. But while cheap and effective, further scaling up depends on raising awareness and acceptance in communities, and identifying appropriate local materials.

Intervention modelling tool

Development organisations or other actors trying to reduce post-harvest losses need to work out where to invest their efforts. A tool launched in July, also by the NRI, may help.

The graphical modelling tool identifies which interventions will be most effective for losses along a whole value chain. Users can experiment with investments in loss reduction, and a panel displays corresponding changes in loss values.

“It’s intended as an imaginative way of getting people to think about key factors affecting investment in loss-reduction projects,” explains Rick Hodges, visiting professor of grain post-harvest management at the NRI.

“It doesn’t make decisions for the user, but shows how three important factors – efficiency, adoption rate and investment – interact.”

Gum arabic coating

Modified atmosphere packaging slows decay, but is relatively expensive. Researchers at the Centre of Excellence for Post-harvest Biotechnology (CEPB) at the University of Nottingham Malaysia have come up with a cheap alternative: edible coatings, made of gum arabic.

CEPB’s research found that applying a solution with a 10% gum arabic edible coating delayed tomato ripening and meant the fruits could be stored for up to 20 days without deteriorating.

Gum arabic is derived from acacia trees native to the Sahel. This makes it a potentially sustainable tool for farmers in that region to use in post-harvest handling, though widespread use depends on the development of production and distribution channels, and raising awareness among smallholder farmers.

Read more like this:

• 10 ways development can support family farmers

• Six innovations revolutionising farming

• Three practical steps to go from hunger to abundance in Africa

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Sourced here  http://www.theguardian.com/global-development-professionals-network/2014/oct/27/farming-post-harvest-loss-solutions-developing-world

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Kenya – Ethiopia highway to be ready next year

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Road construction in progress. A 505-kilometre highway linking Kenya and Ethiopia is expected to be ready next year.

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The tarmacking of the main road linking Kenya with Ethiopia is expected to be completed by end of next year, official said.

Marsabit Governor Ukur Yattani said the 505-kilometre Isiolo-Marsabit-Moyale road was 60 per cent complete and that work was continuing well.

“Construction is ongoing. By the end of next year, we will have connected Addis Ababa to Nairobi on tarmac road, a thing that will change the economy of this place,” Mr Yattani, whose county is the largest and occupies 15 per cent of Kenya’s landmass, said.

The road is expected to cost $517 million (Sh46 billion) and is funded by the African Development Bank, the European Union and the Kenya Government.

The Governor said the road would ease travel to Nairobi, which used to take four days but has since been reduced to one.

Create jobs

“Petrol stations will come up. We also have lodges, cottages, banks and other institutions. The road will be a game changer,” Mr Yattani told journalists at his office.

Mr Yattani said: “Our worry now would be how to control the influx of people.”

“We will open ourselves to competition. We encourage it. People should come and create jobs to our people,” Mr Yattani said.

Separately, Laisamis MP Joseph Lekuton told the Press he was happy with the road construction progress.

“The contractor has done a great part. We are hopeful it will be completed on time. We need it like yesterday,” Mr Lekuton said by phone.

http://www.africareview.com/Business—Finance/Kenya-and-Ethiopia-highway-to-be-ready-next-year/-/979184/2513430/-/dk0g64z/-/index.html

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Ethiopia targets $1bn coffee yield

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By Tinishu Solomon

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Ethiopian President Mulatu Teshome says the country’s coffee industry has to increase exports to reach a $1 billion annual revenue target.

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Despite a steady increase in coffee production in recent years, Ethiopia’s supply to the global market has not exceeded a target of 200,000 metric tonnes.

Speaking at the 3rd International Ethiopian Coffee Conference, Teshome said in 2013/2014 exports were lower than in 2010/11 where coffee exports reached 196,118 metric tonnes and the country earned close to $842 million.

Official statistics show that the amount of coffee exported in the 2013/14 Ethiopian fiscal year was 190,837 metric tonnes.

“We must now break this one time export income record by supplying more quality to the global market surpassing the near 200,000 metric tonnes registered so far and generating export income reaching $1 billion,” he said.

The annual conference is focusing on how to promote and increase the quality of Ethiopian coffee.

Research shows that about 10 percent of Ethiopia’s coffee production comes from the age old practice of gathering wild coffee beans in forests, while 35 percent comes from partially tended wild bushes, and 50 percent is produced in small plots as a secondary crop.

While the growth of Ethiopia’s coffee industry in the past few years has largely been attributed to its modernisation, only five percent of the East African country’s coffee is produced on plantations dedicated to coffee production.

Officials of United States say they are keen to support the cofee sector in Ethiopia.

“The U.S. is working to help identify new markets and private sector partners and investors, including from the U.S.,” US deputy chief of mission, Peter Vrooman, said.

“Our dual purpose is to not only ensure the expansion of the coffee industry in Ethiopia but also the greatly improved livelihoods of a legion of small coffee growers whose entire families will benefit.

Ethiopia exports 24 Arabica coffee varieties to a limited number of foreign destinations. Seven countries, including Japan, Georgia, Germany, Saudi Arabia, USA, Belgium and France, alone buy over 70 percent of Ethiopia’s coffee.

http://www.theafricareport.com/East-Horn-Africa/ethiopia-targets-1bn-coffee-yield.html

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Chinese Company Interested in Building Huge Factory in Ethiopia

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The Chinese company, Media Group, which is engaged in producing electronics and household goods disclosed that it wants to invest in Ethiopia.

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Representatives of the company are on a two-day visit here in Ethiopia to identify sectors in which they could engage and carry out feasibility study.

Prime Minister Hailemariam Dessalegn held discussions with the leader of the delegation and former World Bank Chief Economist, Professor Justin Lin.

During the discussion, the PM said his government will provide all the necessary support for the company, including establishing industrial parks, if it starts work in the country.

The company will be profitable if it invests in Ethiopia since the country has abundant labor force and market opportunity in addition to the prevalent peace and security, the premier noted.
The manufacturing sector should be the motor of the economy in enabling the nation to become a middle-income country, he further indicated.

Professor Lin on his part said Media Group is one of the leading Chinese electronic and household goods manufacturers and has the desire to invest in Ethiopia.

The company has plans to build a huge factory in Ethiopia and to export its products to African and other countries, the professor added.

Upon going operational, the company will contribute to the transformation of the manufacturing sector in Ethiopia, according to Professor Lin.

Media Group is the second huge private company in China with sales exceeding 25 billion USD in a year.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2474:chinese-company-interested-in-building-huge-factory-in-ethiopia&Itemid=260

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Ethiopia, South Africa sign cooperation agreement in science, technology

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Ethiopia and South Africa signed here today a cooperation agreement in science and technology.

During the signing ceremony, Science and Technology Minister, Dammitu Hambessa, said the collaboration of the two countries would enable them to boost their capacity in science and technology and enhance their growth.

The agreement will also contribute to the success of the agricultural led industrial policy of Ethiopia, according to her.

Ethiopia and South Africa will cooperate in poverty reduction, agriculture, animal and plant research, health research and training, it was indicated.

According to Dammitu, such agreements will have huge contribution to the enhancement of the slow science and technology growth in Africa, besides the benefits the countries draw from them.

South Africa’s Minister of Science and Technology, Naledi Pandor, said on her part the countries will work to fill the gaps in human resource and technology by exchanging students and researchers.

The collaboration will have its own contribution to the building of the capacity of Ethiopian researchers and the technology as South Africa has organized science agencies, many researchers and research works, the minister pointed out.

http://www.waltainfo.com/index.php/explore/15946-ethiopia-south-africa-sign-cooperation-agreement-in-science-technology

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 Kigali, Addis Build Cooperation Framework

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By Collins Mwai

The management of the cities of Kigali and Addis Ababa, Ethiopia, are in the process of signing a framework of cooperation between the two cities.

The Ambassador of Ethiopia to Rwanda, Gegefe Bula Wakjira, told The New Times that discussions on the agreement are at an advanced stage.

He said the agreement intends to strengthen the working relations and mutual ties of the two countries at City administration level as well as benchmarking opportunities and interests.

Amb. Wakjira said he had held discussions with the City mayor Fidel Ndayisaba on progress on the issue.

“We want Addis Ababa to learn from Kigali and they (Kigali) could learn from us too,” the envoy said.

The agreement comes at a time when the country is building its profile to become a reputable host for international meetings, conferences and exhibitions through a marketing strategy has been designed to market the country at an international level, highlighting the availability of the infrastructure and services such as exhibition spaces and hotels.

The initiative, dubbed “Meetings, Incentives, Conferences and Exhibitions,” is in line with diversifying the current tourism product offering while complementing existing gorilla tourism, eco-tourism, cultural and community-based tourism products that are the mainstays of Rwanda’s economy.

Hosting global events:

A Convention Bureau has since been created to the effect to get in touch with international conference organisers and centres to see how to Rwanda can host events.

The Ethiopian capital is a major host of numerous international organisations, and is United Nations third largest duty station after New York and Geneva, as well as the African Union host city.

“Almost every day, there is a conference hosted there which has caused a boom in the hospitality sector, Kigali can draw lessons and best practices in this area to add to the ongoing efforts,” Amb. Wakjira said.

He added that the city was on the right track to achieve these goals going by the rapid development in recent years.

Ndayisaba referred to the agreement that is being drafted as a formalisation of cooperation mutual ties as the two countries have had a close relationship over the years.

“Though the agreement is still being drafted, in principle, we have agreed. It will provide a formal platform to share our best practices with the Ethiopian capital in different areas,” Ndayisaba said.

The development trajectory of the two cities have similarities and challenges, hence the importance of the close cooperation, he added.

http://allafrica.com/stories/201411060329.html

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Djibouti Plans LNG, Oil Terminals to Develop Regional Trade

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Ethiopia’s Prime Minister Says Natural Resources Can Catalyze Africa’s Development

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http://www.afdb.org/en/news-and-events/article/ethiopias-prime-minister-says-natural-resources-can-catalyze-africas-development-9866/

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China Mounts Business and Technology Expo in Addis Ababa

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Chinese ambassador to Ethiopia Xie Xiayon talking with Chinese Premier Li Keqiang regarding the details of the latter’s visit to Africa in May.

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The Chinese Ministry of Commerce is currently holding a business and technology expo in Ethiopia’s capital Addis Ababa, Xinhua News Agency reported.

The 2014 “(Africa) China Commodities, Technology and Services Expo,” which began on Monday and will run until Wednesday, features more than 100 Chinese companies showcasing their products.

The expo is aimed at enhancing business cooperation among China, Ethiopia and other African nations, according to the Xinhua report.

The showcase is geared toward creating opportunities for businesses and buyers to personally interact, as well as allow for discussions on information and technology dialogues.

Xie Xiayon, Chinese ambassador to Ethiopia, said during the opening that the expo is an effort to further promote the exchanges and cooperation within the business communities where China, Ethiopia and other African countries belong.

The officials also spoke of the growing relationship between China and Ethiopia.

“Our countries have made many fruitful achievements through cooperation in politics, economy, trade, culture, education, science, technology and other areas. Ethiopia is China’s important strategic partner in Africa,” Xie said.

The ambassador reiterated the six areas Chinese Premier Li Keqiang mentioned during an African visit in May which should be pursued in order to strengthen cooperation between China and Africa.

Industry, finance, poverty reduction, environmental protection, cultural exchanges and peace and security are these six areas, according to the ambassador.

Meanwhile, Tadesse Haile, Ethiopian minister of industry, said that Ethiopia and China are benefitting from great bilateral relations.

The two countries, the minister said, share many ideas that can be used to promote accelerated and sustainable economic development.

http://en.yibada.com/news/china-mounts-business-and-technology-expo-in-addis-ababa-7855

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Dalol begins supplying coal, pet coke

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Dalol Oil SC, which is one of the four Ethiopian owned oil companies, announced that it will begin supplying alternative energy products for the manufacturing sector. The company that began operating in the beginning of 2012 has stated its intention to begin importing coal and petroleum coke (pet coke) in the current budget year.

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Currently, National Oil Ethiopia (NOC) is the only supplier of these two products, and now Dalol will be the second.
According to Serkalem G.Kirstos, CEO of Dalol Oil, the company began importing bitumen/asphalt last fiscal year in addition to the usual lubricant and petroleum (fuel) import.
During its second year of operation the oil firm registered significant profit even though it is usual to take a loss for five years in that industry.
The CEO said that the new energy supplies that the company introduced in the past budget year has played a major role in the company’s success.
In the past budget year the company has supplied bitumen for the Ethiopian Road Construction Corporation (ERCC), Addis Ababa City Roads Authority (AACRA) and Tidhar Group, an Israeli company that constructs roads in Addis Ababa and some other parts of the country.
The product of coal and pet coke is an alternative energy source for the manufacturing sector, like cement factories, which require a significant amount of energy for their production.
The annual report that the oil company released at the general assembly indicated that Dalol supplied 7,500 barrels (1,463 metric tons) of bitumen for its clients.
In the past budget year the company distributed 37.4 million liters of petroleum, which is an increase of 210 percent growth compared with the 2012/13 budget year.
The company that imports the lubricant from Saudi Arabia’s Petromin, a sister company of Saudi Aramco, a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia, has also shown significant growth in terms of the supply compared with the preceding year.
The total volume of lubricant that the company supplied in the past budget year was 206.7 metric tons, which is 750 percent higher than the 2012/13 achievement.
As of the end of the past fiscal year the non-current assets of the company reached 22.1 million birr and the current assets are set at 198.2 million birr.
According to the annual report, the oil company has undertaken 700 million birr in sales. Despite financial constraints the company has been very successful.
The external audit report stated that the company has registered about 10.5 million birr in profits before tax. The net profit after tax for the year was 8.5 million birr, which accounted for a loss during its first year of operation.
The CEO told Capital that even though the company registered good performance for the stated year, financial constraint has been a challenge for the company’s growth. He said that the company should expand its capital to go through on big capacity projects. To accomplish this, the company has decided to expand its capital.
The annual report indicated that the company has plans to put 22.5 million birr worth of subscribed but unpaid shares for interested buyers.
It stated that it has begun negotiations with interested companies and individuals to sell  the stated amount of shares.
The total paid up capital reached 41.7 million birr, while the subscribed shares are 64.1 million birr.
At the general assembly held at Global Hotel, the board of directors chaired by Dereje Walelegn proposed that the expansion of the company’s capital to 400 million birr aiming to boost the company’s operation, which is highly capital inducement.
Currently, ten oil station are operating under Dalol, and out of this two are company owned dealer operated (CODO), which are owned by Dalol and operated by investors, while the other eight stations are controlled under a dealer owned dealer (DODO) arrangement or fully owned by investors.
Serkalem expects this will expand to 15 stations and four CODO stations this year including one in Addis Ababa.
Serkalem was the general manager of Continental Petroleum and the Managing Partner of Habitable Business Solutions which works on the environment. He was also commercial manager of NOC. His contribution in introducing alternative sources of energy like Petroleum Coke in Ethiopia, for the first time when he was at NOC, is considered to be a huge success. He is the second CEO of Dalol since it began operating.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4699:dalol-begins-supplying-coal-pet-coke&catid=35:capital&Itemid=27

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We are open for business: Previously closed Ethiopia flutters eyes at African investors

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Ethiopia’s construction boom is a visible part of its fast-growing economy. (Photo/File)

ETHIOPIA is now courting new investors from as far as South Africa to participate in the growth story of one of the continent’s emerging economic success stories. 

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ZTE at Risk of Losing Ethiopia Telecom Contract

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Ethiopia Already Giving Pieces of ZTE’s Business to Huawei Amid Pricing Concerns

http://online.wsj.com/articles/ethiopia-warns-zte-it-could-lose-telecom-contract-1415899137?tesla=y&mg=reno64-wsj&url=http://online.wsj.com/article/SB11151172388113754324204580274711861476610.html

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Israel Chemicals CEO: We’ll fire 600 in Israel, invest overseas

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Will the  Israeli cabinet and the Knesset call Borgas’ bluff, and how serious is ICL really about it’s Ethiopian interests? Minimal financial commitment in Danakil indicates little more than posturing thus far.

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The threats follow the Sheshinski 2 Committee’s recommendations for increasing government revenue from natural resources.

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AUC and KfW Sign a Financing Agreement for the Geothermal Risk Mitigation Facility

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East Africa Targets Cross-Border Debt Sales to Fund New Railways

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By Emily Bowers Nov 13, 2014

The East African Community plans to allow bond sales across four markets in the bloc as investors look to fund projects such as railways that will link up the region.

The framework will allow for the sale of “multi-jurisdictional, multi-currency” debt from within or outside the four-country group, Paul Muthaura, acting chief executive officer of the Capital Markets Authority in Kenya, the region’s biggest economy, said at a conference in Cape Town today.

The group that also includes Uganda, Tanzania and Rwanda is set to expand 6 percent this year, faster than the sub-Saharan African average of 5.1 percent, according to the International Monetary Fund, as governments in the region invest in roads and energy projects. Kenya sold infrastructure bonds last month for the first time in a year.

A railway linking Mombasa, Kenya with Kigali and Kampala is project that may be funded with debt, Muthaura said. Another is the Lamu Port and New Transport Corridor Development to Southern Sudan and Ethiopia project, which will include an oil pipeline and refinery, he said.

‘‘As we see many domestic issuers in any one of the EAC markets moving into the others, they want to be able to capital raise relevant to their pipeline of projects in different countries,’’ he said. One ‘‘regional entity’’ has been approved for a bond sale, Muthaura said, without giving details.

‘‘They’re just looking at the markets to find the right timing for the issuance,’’ he said. ‘‘There are ongoing engagements with other potential issuers. We’re hoping to see that once an actual issuance hits the market, we hope it will have a very catalytic effect.’’

Kenyan shilling sovereign debt returned 0.8 percent this quarter, compared with a loss of less than 0.1 percent among 16 emerging markets tracked by Bloomberg indexes.

http://www.bloomberg.com/news/2014-11-13/east-africa-targets-cross-border-debt-sales-to-fund-new-railways.html

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Ambassador Sinknesh Ejigu presents credentials to the president of Brazil

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The newly appointed Ambassador of Ethiopia to Brazil, Chile and Argentina, Ambassdor  Sinknesh Ejigu presented  her  credentials to the president  of Federal Republic of Brazil, Dilma Roussef  on Monday , November  10, 2014.

On the occasion of presenting her credential, Ambassdor Sinknesh convey the good wishes of Ethiopian President Dr. Mulatu Teshome for the well being of the president of Federal Republic of Brazil and  prosperity for its  people.

Ambassador Sinknesh also congratulated president Dilma for re –election as the president of Brazil and emphasized her appointment will bolster the existing bilateral relations between the two countries.

Ambassador Sinknesh appreciated Brazil’s pro-poor policies and its dramatic economic growth and development, which has positive inspiration in sharing the best practices of Brazil to eradicate poverty for many developing countries like Ethiopia.

President Dilma on her part admired Ethiopia’s role in promoting peace and security within the horn Africa and African continent using IGAD and AU.

During their conversation both parts agreed to work hard in the areas such as technology transfer, investment, tourism and culture further strengthen the relationship between the two countries.

http://www.waltainfo.com/index.php/explore/16050-ambassador-sinknesh-ejigu-presents-credentials-to-the-president-of-brazil

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ABB to power new railway line in Africa

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Zurich, Switzerland, November 12, 2014 – ABB has won orders worth around $16 million to supply traction substations and auxiliary power supply for a new rail corridor in Ethiopia. The Awash-Kombolcha-Weldia line is part of a five-year growth and transformation plan being implemented by the Ethiopian Government to provide efficient mobility, facilitate trade and strengthen the economy. The order was booked in the third quarter.

The contract was awarded by Yapı Merkezi Construction and Industry Inc., a leading Turkish transportation infrastructure company. The project is scheduled for completion in 2017.

ABB will design and supply engineered equipment packages for five 230/25 kilovolt (kV) traction substations, eight section posts and about 30 auxiliary substations. Key products to be supplied include a range of high and medium-voltage switchgear, traction transformers rated at 25 megavolt-ampere (MVA), power factor correction (PFC) transformers, FSK II+ railway circuit breakers and auxiliary power supply equipment.

The 400-kilometer Awash-Kombolcha-Weldia railway line will connect the northern and eastern traffic corridors of Ethiopia via Kombolcha and Weldia/Hara Gebeya in the north. The line will also connect to the line linking Addis Ababa, the Ethiopian capital, to the port of Djibouti. This will enhance passenger travel and trade, reducing travel time to the port by 50 percent.

“These substations will enable the efficient supply of electricity to power the network’s expansion and ensure reliable operation and performance of this rail network,” said Claudio Facchin, head of ABB’s Power Systems division. “ABB has a wide range of technologies and a strong track record of providing innovative solutions for the rail sector, serving communities all over the world. This order also shows our increased focus on expanding in Africa.”

ABB has a range of power and automation products and solutions for the rail industry and a vast global installed base. Increasing concern for the environment, rapid urbanization, the need to move more people and freight faster, and volatile fuel prices make rail a strategic focus sector for the company.

ABB (www.abb.com) is a leader in power and automation technologies that enable utility, industry, and transport and infrastructure customers to improve their performance while lowering environmental impact. The ABB Group of companies operates in roughly 100 countries and employs about 145,000 people.

http://www.abb.com/cawp/seitp202/50f9170821686424c1257d8d004d5ff1.aspx

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President urges Ethiopian professionals to adapt technology, effect knowledge transfer

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President Mulatu Teshome said Ethiopia will work hard to get out of foreign dependency by gradually making transformation in technology and knowledge.

The president made the statement while visiting the Adama I and II wind power generating projects along with China’s Ambassador to Ethiopia Xie Xiaoyan and other officials.

He noted on the occasion that the main objective of the visit is to witness the ongoing constructions that ensure that the country can build green economic development and nation building by utilizing renewable resources.

According to Mulatu, Ethiopia has the potential to generate 1.3 million megawatt electric power from wind. Even if the country currently produces 100,000 megawatt from the sector, this will hugely speed up the growth of the country, he added.

Commenting on the relatively short height of the stand of the windmills in Ethiopia, the president pointed out that it was due to the difficulty in transporting them.

Attention should therefore be given to the problem and Ethiopian professionals have to produce those locally, he stressed.

Ethiopian engineers should not only design and produce similar components but adapt those to produce better items, Mulatu stated.

As it was possible to substitute big construction equipment that require huge foreign currency for the construction of the GERD, the production of wind power generating materials should also be given due attention, President Mulatu said.

China’s Ambassador to Ethiopia Xie Xiaoyan on the occasion said the longstanding Ethio-China relationship has been consolidated in all spheres.

Wind power generating projects play a vital role in supporting the effort in building green economy by using renewable power source, he added.

Head of  Adama II Wind Power Electric Generating Project, Solomon Tadesse on his part said 83.6 percent of the project is finalized. The project, which is expected to generate 153 megawatt, costs 345 million USD.

The Chinese government covers 85 percent of the cost and the rest is covered by the Government of Ethiopia, it was indicated.

According to ENA, the project is expected to get finalized by the end of the current Ethiopian budget year.

http://www.waltainfo.com/index.php/explore/16049-president-urges-ethiopian-professionals-to-adapt-technology-effect-knowledge-transfer

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Sub-Saharan Africa will overtake Europe as second-largest mobile internet market by 2020

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A new forecast nominates 2020 as the year that half the world’s population is connected to mobile internet, and the forecaster, GSMA Intelligence, says Sub-Saharan Africa will lead the boom.

The number of mobile internet users globally is set to reach 3.8 billion by 2020, up from 2.2 billion total users in 2013.

Sub-Saharan Africa is set to lead the boom, having been the world’s fastest-growing mobile region for the last five years. 49% of the population in this region will be accessing the internet via mobile by 2020, overtaking Europe to become the world’s second-largest mobile market after Asia Pacific.

As 3G and 4G connections gain availability in developing regions such as Sub-Saharan Africa, the number of 2G mobile internet subscribers is set to shrink from 900 million to 800 million, while the number of mobile broadband users doubles.

Communications technology provider Ericsson expects mobile data traffic in Sub-Saharan Africa to grow 20-fold between 2013 and 2019, twice the expected global growth rate over the same period (from 37,500 terabytes a month in 2013 to 764,000 terabytes a month by 2019).

The six largest markets of the total 46 countries together account for over half the region’s unique mobile subscriber base. In order of size, these are: Nigeria, South Africa, Ethiopia, Kenya, Democratic Republic of Congo and Tanzania.

The GSMA’s ‘Digital Inclusion’ report states the following four challenges as being critical for mobile operators, governments and NGOs to deal with this mobile internet boom:

• Extension of network coverage into remote areas,
• lowering the cost of mobile ownership by not imposing heavy fees,
• improving illiteracy and a lack of internet awareness, and
• ensuring availability on a variety of devices in many languages.

The GSMA has released a Code of Conduct for Mobile Money Providers, outlining how businesses can provide safe and responsible digital financial services. Mobile network operators to have endorsed the code represent money deployments in 51 countries and include Airtel, Avea, Axiata, Etisalat, Millicom, MTN, Ooredoo, Orange, Telenor, Vodafone and Zain.

GSMA director general Anne Bouverot described mobile as “the gateway to the internet” for billions of people across the world who are currently unable to get online.

“Mobile technology is already playing an invaluable role in the social, economic and environmental development of the developing world; the mobile internet has the potential to trigger a new wave of growth and innovation if we can remove the barriers to digital inclusion.”

http://sodere.com/profiles/blogs/sub-saharan-africa-will-overtake-europe-as-second-largest-mobile

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Israel Chemicals posts 8% rise in Q3 sales

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The company has earmarked $435 million for investment in its Catalonia potash works.

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http://www.globes.co.il/en/article-israel-chemicals-posts-8-rise-in-q3-sales-1000985711

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Ethiopia earns close to $1 Billion US from pulses, oilseeds

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The President of Federal Democratic Republic of Ethiopia Dr. Mulatu Teshome said Ethiopia has earned close to 1 billion USD from pulses, oilseeds and spices in the 2013/4 fiscal year.

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Addressing the participants of t the 4th International Conference on Pulses, Oilseeds and Species, the president said   the sector contributed 920 million USD to the export earnings of the country with a share of over 28 per cent.

The growth trajectory that we have had observed in the last four years is very encouraging, notwithstanding that the country earns from the sector is still below what it would have potentially endowed, he added.

The president also said that Ethiopia has endowed with untapped and immense investment opportunities in the areas of agriculture with favorable climate which is suitable for the production of Pulses, Oilseeds and Spices.

He urged stakeholders to participate in the sector and do their level best in contributing to Ethiopia’s strong economic performance through value addition of Ethiopian pulses, oilseeds and spices.

He also called up on investors to invest in Ethiopia where there is availability of vast, virgin, fertile and cultivable land, abundance of trained and easily trainable labor force.

Ethiopia’s trade performance has improved since the commencement of GTP I in the 2010/20111 fiscal year. However, our exports remained dominated by agricultural primary commodities, and the observed performance was substantiated by increasing the volume of export, and not through value addition, the president underscored.

According to the president, the government is fully committed not only to boost the sector’s potential but also its operational capacity by making it more vibrant to meet the needs of international markets.

The conference is organized under the theme of “Global Partnership for Sustainable Market Growth” with the objective of boosting the sector and make benefit more the economy and all the stake holders in the value chain.

Ministers, ambassadors, stake holders and Ethiopian business partners were in attendance in this a two days conference.

http://www.waltainfo.com/index.php/editors-pick/16046-ethiopia-earns-close-to-1-bln-usd-from-pulses-oilseeds-

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Doing Business in most parts of the world becoming easy

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Ethiopia is placed 132 out of 189 countries for ease of doing business, according to a new report.

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Singapore and New Zealand took the top spots, while Libya and Eritrea are labeled as the worst in the Doing Business Report, published by the World Bank and International Finance Corporation.

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Joining Singapore and New Zealand on the list of the top 10 economies with the most business-friendly regulatory environments are; Hong Kong, China; Denmark; the Republic of Korea; Norway; the United States; the United Kingdom; Finland; and Australia.

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The report finds that 85 percent of economies in Europe and Central Asia implemented at least one regulatory reform aimed at making it easier for local entrepreneurs to do business in 2013/14, a larger percentage than in any other region.

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“Since 2004 the Doing Business report has captured more than 2,400 regulatory reforms making it easier to do business. In the year from June 1, 2013, to June 1, 2014, 123 economies implemented at least one reform in the areas measured by Doing Business” the report reads.

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Doing Business 2015: Going Beyond Efficiency shows that in the past year, economies in Europe and Central Asia further improved the regulatory environment for local entrepreneurs, adding to the gains recorded in the past decade. For example, 10 years ago, starting a new business took a Macedonian entrepreneur 48 days. Today, the process can be completed in 2 days.

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The report further said that 21 economies, including 6 in Sub-Saharan Africa and 6 in the OECD high-income group, implemented 3 or more reforms reducing burdensome bureaucracy or improving legal and regulatory frameworks. Globally, more than 80 percent of the economies covered by Doing Business had an improvement in their distance to frontier score, “it is now easier to do business in most parts of the world” according to the report.

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“Sub-Saharan Africa, the region with the largest number of economies, accounted for the largest number of regulatory reforms in 2013/14, with 39 reducing the complexity and cost of regulatory processes and 36 strengthening legal institutions.

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Sub-Saharan Africa had the second largest share of economies implementing at least one reform and the second largest average improvement in distance to frontier scores. Latin America and the Caribbean and South Asia remain the 2 regions with the smallest share of economies implementing regulatory reforms as captured by Doing Business.

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The report also stated that online access to credit reporting systems is growing in the developing world. “Ethiopia’s central bank established a credit information center to allow banks to submit data and inquiries electronically. A pilot program was launched in August 2011 with 3 commercial banks, and by April 2012 the online system was fully implemented.”

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“Today 17 Ethiopian banks are registered as data users and provide monthly updates. The objective for the online system is to preserve and distribute 5 years of historical data on the repayment status of all loans.”
Among the 21 economies with the most reforms making it easier to do business in 2013/14, 10 stand out as having improved the most in performance on the Doing Business indicators: Tajikistan, Benin, Togo, Cote d’Ivoire, Senegal, Trinidad and Tobago, the Democratic Republic of Congo, Azerbaijan, Ireland and the United Arab Emirates.

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“Together, these 10 top improvers implemented 40 regulatory reforms making it easier to do business. Among these 10, only Cote d’Ivoire featured among the 10 top improvers in last year’s report.”
However the report states that being recognized as top improvers does not mean that these economies have exemplary business regulations; instead, it shows that these economies have placed serious efforts in regulatory reform in the past year and made the biggest advances toward the frontier in regulatory practice. “Many of the 10 top improvers still face many challenges on their way to international best practices in business regulation, including high bureaucratic obstacles, political instability and weak financial institutions” the report reads.

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This year’s Doing Business report launches a 2-year process of introducing important improvements in 8 of the 10 sets of Doing Business indicators. These improvements provide a new conceptual framework in which the emphasis on the efficiency of regulation is complemented by an increased emphasis on its quality. In the area of dealing with construction permits, for example, Doing Business will measure the quality of building regulations and the qualifications of the people reviewing the building plans in addition to the efficiency of the process for completing all the formalities to build a warehouse.

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Doing Business 2015 is the 12th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. The report presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies. Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: 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.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4697:doing-business-in-most-parts-of-the-world-becoming-easy-&catid=35:capital&Itemid=27

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 Strategic Document Prepared to Make Ethiopia Major Fruits, Vegetables Exporting Country

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A strategic document that envisages making Ethiopia a major fruits and vegetables exporting country in the coming ten years by consolidating irrigation development is readied, according to Ministry of Agriculture. 

Small Farmers Horticulture Development Head, Solomon Dagne, said studies have proved that Ethiopia can attain impressive achievements in irrigation development by utilizing its suitable farm land, reliable water resources and productive human resource.

According to him, the Ministry of Agriculture has prepared a strategic document that enables the country to become fruits and vegetables exporting nation by using its potential resources in irrigation development within ten years.

The head, who noted that the demand for Ethiopian fruits and vegetables has been growing at the international market, added that its annual income from the products has jumped from ten million to 30 million USD.

Regional states that require special support would be made to extensively engage in irrigation development and to supply their products directly to foreign markets and local industries in the coming years, according to Solomon.

Ethiopia has 4.2 million hectares of irrigable land, out of which only half is utilized to produce annually more than 203 million quintal produces in the sector, he indicated.

http://213.55.98.22/enae/index.php?option=com_k2&view=itemlist&task=date&month=11&year=2014&limitstart=30

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By William Davison Nov 13, 2014

Horizon Plantations Ethiopia Plc, majority-owned by Saudi billionaire Mohamed al-Amoudi, plans to almost double annual revenue at coffee projects within three years as part of a $500 million agricultural investment program.

The company will spend $25 million to train workers, improve roads and replace washing units at the Limmu and Bebeka coffee plantations, which together have over 18,000 hectares (44,479 acres) under coffee, General Operations Director Kemal Mohammed said in a Sept. 17 interview in Addis Ababa, Ethiopia’s capital.

The development is part of a five-year investment program in al-Amoudi’s agriculture projects, which also include Upper Awash Agro-Industry Enterprise, the country’s largest orange grower with 1,200 hectares of citrus, and the 10,000-hectare Saudi Star Agricultural Development rice farm, he said.

“We are sure because of the initiatives we have now, because of the inputs and techniques we’re applying, the productivity will increase to the maximum at the end of the five years,” Kemal said about the coffee plantations.

Ethiopia, Africa’s biggest coffee producer, may see earnings from shipments of Arabica coffee rise 25 percent to about $900 million in 2014-2015 as prices rise because of shortage caused by a drought in Brazil, an exporters’ association said last month. Horizon bought the two coffee farms for 1.6 billion birr ($80 million) last year from the Ethiopian government, which is seeking investment in projects that process agricultural products.

Coffee Estate

Bebeka, in southwest Ethiopia, is the world’s biggest unfragmented coffee estate with 10,030 hectares under plantation, according to the company’s website. It was established in 1975 when the former socialist government nationalized land and also produces black pepper, cinnamon, cardamom, ginger and turmeric.

Limmu, 350 kilometers (218 miles) southwest of Addis Ababa in the Oromia region, has 8,000 hectares under coffee and produces 5,000 tons a year of the beans.

Al-Amoudi, born in Ethiopia in 1946 to an Ethiopian mother and Saudi father, is one of the country’s largest foreign investors and operates its biggest cement factory and only large-scale gold mine. He also runs construction and oil operations in Saudi Arabia, Sweden and Morocco and is the 143rd richest person in the world with a net worth of $8.6 billion, according to the Bloomberg Billionaires Index.

Investment in Limmu may help double production to about 1.5 tons a hectare by 2018, Kemal said.

Bebeka Coffee Estate doubled production to about 1.4 tons of coffee last year, according to Kemal. Around 90 percent of the company’s coffee last year was directly sold to buyers in countries including the U.S., Germany, South Korea and Japan, Kemal said.

Sourced here  http://www.bloomberg.com/news/2014-09-21/al-amoudi-to-invest-500-million-in-ethiopian-coffee-oranges.html

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Consumers pay a premium for specialty products, in theory supporting higher wages for farmers. But it will take more to make these markets truly sustainable

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Your cup of coffee is probably even less sustainable than you might think

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When you pay $20 for a bag of coffee or $10 for a chocolate bar the general assumption is that you are paying for a higher quality product, and that some portion of that higher-than-normal price is making its way into the pockets of farmers.

That belief is underscored by stories and photos lining the walls of the shops that sell such goods, or stamped onto packages, depicting subsistence farmers who have been given a lifeline out of poverty by your addiction to medium-roast Yirgacheffe. Similarly, socially conscious consumers will often opt to purchase products that are certified organic or fair trade, believing that these products go farther to support farmers than their non-certified counterparts.

Unfortunately, the emergence of specialty product segments in commodity markets like coffee and chocolate has not dovetailed with a rise in the quality of life of farmers producing the raw materials of those products. That’s not to say that specialty products are not helping at all, just that various market forces need to shift in order to make these markets work better for farmers.

“I’m not convinced that there is yet a model that works comprehensively,” said Simran Sethi, an expert on agricultural biodiversity and author of the forthcoming book “Bread, Beer, Chocolate: The Slow Loss of Foods We Grow and Love.”

“The ones that support superior quality are good from the perspective of sustaining heirloom varietals that support biodiversity and sustain unique flavor profiles, but that means a significant amount of a crop will be rejected in order to sustain that quality. Farmers have bumper seasons and they’re subjected to every variability – weather, climate, politics, transportation. Most of the cost and risk is still going to be absorbed by the farmer.”

Peter Giuliano, director of the Specialty Coffee Symposium, an industry conference put on each year by the Specialty Coffee Association of America, says the specialty coffee industry is generally concerned about this issue. “At a recent symposium, one of our members stood up and asked: ‘We pay farmers more money for quality, but does that actually translate to a bottom-line better livelihood for them?’” he said.

“The answer we came up with was maybe not, we don’t know, more research is necessary. And that’s essentially where we’re at as an industry. We believe in the idea that better quality coffee, better sustainability, and a better life for farmers can go hand in hand, but systematizing it is a challenge.”

Once a commodity, always a commodity

A big part of the challenge for these markets is the fact that their prices are more or less set by commodity markets. Coffee is priced according to the coffee commodity market price (“the C market” as those in the industry refer to it). That price was set about 100 years ago to help stabilize the price of coffee, which had historically been fairly volatile, for coffee roasters.

“It did a really good job of that and it has been the dominant pricing mechanism for coffee ever since,” Giuliano said. “And that can be useful for farmers, too, because they can theoretically buy coffee futures and hedge like anyone else. So market theorists tend to think it’s good that the commodity price drives the coffee market.”

According to Giuliano, problems arise out of the underlying assumption inherent to commodity pricing: that all products within the market are interchangeable. Those problems are compounded by the fact that what’s driving the commodity price up and down may have nothing to do with the coffee market itself.

“Theoretically a specialty coffee company could work with the C price and just say this higher quality coffee is worth the C price plus a dollar,” Giuliano explained.

“But the things driving the commodity market are not necessarily the same things driving high-quality coffee farming. Then, there’s been a lot more activity in the C market recently from people not in the coffee trade at all, who are just using the market to speculate, and they benefit from market ups and downs that aren’t necessarily reflective of supply and demand or beneficial to those of us in the coffee trade.”

While the coffee and chocolate markets are not at all the same thing, commodity pricing has wreaked similar havoc on producers in both industries. On the chocolate front, the issue is how poorly the commodity market reflects retail supply and demand. Even when the commodity price does reflect what’s happening on the ground, it can unfairly affect some more than others.

According to Shawn Askinosie, founder and CEO of Missouri-based craft chocolate company Askinosie, the current Ebola outbreak in West Africa will affect the price of cocoa if it reaches Ghana or the Ivory Coast, where roughly 70% of the world’s cacao is grown. “It will affect the global price even though there’s no direct effect of supply in Ecuador or the Philippines.”

Beyond these sorts of issues – inherent to any sort of global commodity market – is the fact that demand for chocolate has been increasing rapidly over the past several years, with demand for dark chocolate at a 20-year high, but the commodity price has remained low.

“You look at that situation and you think: what the heck is gonna make that price go higher if higher demand doesn’t?” said Askinosie. “That’s where you get to thinking it’s never going to change, because you’ve got Cargill, Mondelez, Nestle, Hershey’s, Mars – all the big players want to keep that low price, and yes, you will find discussions and conferences and papers written about sustainability plans and efforts to help the farmers and that’s great. But really the market just needs to pay more.”

Weathering market forces

Breaking free of commodity pricing, however, is not simple. In the coffee industry, even specialty roasters who deal directly with their suppliers have to take the C price into account when they’re crafting those deals. “If the market goes sky-high, it can be very tempting for a producer who has a fixed rate locked in with a roaster to ‘lose’ some product in order to sell it at the higher price to someone else,” Giuliano explained.

“And it happens in the reverse too: if the market drops, suddenly a roaster might be rejecting product for quality reasons so that they can replace it with a lower-cost option. In most cases that won’t happen, but it’s important to include mechanisms in your contract that eliminate the temptation.”

Moreover, specialty coffee roasters still base the price they pay some producers on the C market price, and even if they’re paying 200% higher, the farmer may be barely eking out a living.

On the chocolate side, it’s more a question of the market’s willingness to pay for quality product at scale. Despite the craft chocolate boom, the poorer quality but higher volume-producing cacao plants are a safer economic bet for producers.

“The crops with the highest yield of cacao can transform the life of a farmer, but it tastes nothing like chocolate,” Sethi said. “Some of it is OK, a lot of it is awful. But the market doesn’t reward quality, so even the farmers growing heirloom cacao plants tend to also grow a commodity crop as a back-up, or they are farmers who had capital to begin with and can afford to just grow heirloom.”

The commodity chocolate crops are also typically less sustainable. They’re often grown in full sun to increase volume, but this also increases the potential for weeds and disease, which in turn increases pesticide use. Until the market rewards sustainability, social responsibility and quality, however, that’s not likely to change.

“I used to be such a very strong proponent of fair trade and organic, but now after visiting farms in Africa and South America, and speaking with a lot of people involved in specialty coffee and craft chocolate, I’ve realized that it’s more nuanced,” Sethi said. “You see it in Central America with ‘la roya’ – coffee leaf rust – and there are these cases where a farmer has paid for organic certification and then they’re in danger of losing their whole crop to this disease if they don’t spray. They have to decide whether to save the crop or save the certification.”

“These aren’t people who went to Ivy League schools and later decided to get into farming, these are people who can’t afford medicine for their children,” Sethi added. “There are very real concerns right now about hunger in these communities, and there is no fallback profession.”

The road forward

Although the experts agree that fair trade certification initially helped to raise awareness around the injustices suffered by farmers, particularly those in developing countries, no expert interviewed said they thought the label is effectively addressing the problem it set out to solve. Nor does either certification or direct-trade alone seem to be the solution.

“There are people closing these gaps through direct trade efforts but there is no oversight there so, ultimately, the consumer has to trust the story on the label or website,” Sethi said. “Areas where certification schemes do exist are laden with bureaucracy which means that farmers or co-op managers are forced to re-allocate resources (time and money) toward achieving and maintaining that certification which is, for many smallholder farmers, an impossibility.”

Askinosie said that while he appreciates what fair trade standards did to bring awareness and change around social and environment issues for farmers, at this point the label has become “a victim of its own good marketing.”

“Consumers buy it and feel like they’ve done a good deed, and the unfortunate reality is that the farmer doesn’t end up with a lot more money because of the intended goodwill of consumers,” he added.

Instead, those hoping to change these industries are betting on a mix of direct relationships between farmers and manufacturers, and new business models that help to distance specialty products from commodity prices.

Michael Jones, co-founder and CEO of coffee collective Thrive Farmers, is the architect of one such model. Jones jumped ship from the biotech industry into coffee 10 years ago when a trip to Costa Rica opened his eyes to injustices in the coffee industry.

“It was amazing to me that you’d have coffee selling for $80 a pound in Japan and yet the farmer was only making $4 a pound,” he said. “As a guy who didn’t come from that industry I couldn’t get away from the fact that coffee is worth more now than it’s ever been, there’s more consumption of and more demand for coffee than ever in history, and yet the farmers are in some cases making less per pound than it costs them to produce.”

In an attempt to fix that model, Thrive has signed on a network of small farmers whose beans it sells to various roasters and retailers throughout the world. Thrive pays producers a fixed percentage of the wholesale price it gets for selling their beans (75% if they sell the beans green and 50% if the beans are sold roasted), and Jones said that price stays relatively stable year over year, so farmers can better predict what their income will be.

Thrive has also helped to tackle another key issue with the coffee market: the fact that many producers don’t know exactly how much it costs them per pound to produce coffee. Giuliano said that has made it difficult to determine what the wholesale price (and thus the retail price) per pound needs to be in order for specialty coffee to be sustainable. But perhaps the most important shift in the Thrive model is the fact that it ties quality to compensation and enables farmers to sell quality product at scale.

“Beyond pricing stability, the most powerful outcome of the Thrive model is the alignment that is created between the farmer and retail consumers,” Jones said. “Increased quality allows sales at higher price points, and with predictable pricing structures, it is now worth farmers making investments of time and money to learn more about farming, which can increase both yield and quality. These both translate into more income, which entirely changes the paradigm they have historically been tied to.”

Various companies in both the specialty chocolate and specialty coffee realms also are working on getting both retail and wholesale customers to adjust their price expectations and to stop thinking of “farmers” as a homogenous group.

“What’s best for the farmers I work with in the Philippines may not be the best for the farmers in Tanzania or the farmers in Ecuador,” Askinosie said. “They’re not the same people. They’re not the same culturally, they’re not experiencing the same degree of poverty, they may have different religious backgrounds that affect what they want and need. Of course we can make some basic assumptions – people need clean water, for example – but it’s a mistake I think to not include farmers in the discussion about what’s best for them.”

Both Askinosie and Giuliano point to the need to educate the consumer market and push retail prices up further, too. “One thing everyone agrees on in coffee is that it’s too cheap,” Giuliano said. “And no consumer feels that way. The $20 bag of coffee from Blue Bottle is probably, in the long term, an unsustainably low price.”

Coffee already saw a shift in consumers’ willingness to pay more for coffee when Starbucks took the industry by storm, and Askinosie is hoping for a similar phenomenon in chocolate. “You can say what you want about Starbucks, but they had the wherewithal to do some things that moved the needle in the coffee market,” he said. “I firmly believe that in my lifetime we’ll see a $25 chocolate bar that the specialty consumer market will be willing to pay for.”

At the same time, specialty manufacturers are intensely aware of creating an access issue on the consumer side as they balance the cost of production with sales prices for farmers. The ultimate solution is likely a mixture of growth in the specialty markets and more realistic pricing in the commodity markets.

“There are a lot of people doing great things,” Sethi said. “We just haven’t developed a model that captures everything. We can’t. We prioritize in any given moment what’s important to us. If you’re saving the rainforest, you can’t also be hyper-focused on taste. You can try, but one priority will edge out the other. It has to.”

Sourced here  http://www.theguardian.com/sustainable-business/2014/oct/16/chocolate-coffee-fair-trade-certification-price-ebola-starbucks-ghana-philippines-ecuador

Filed under: Ag Related, Economy Tagged: Africa, Agriculture, Business, Coffee, East Africa, Economic growth, Ethiopia, fair trade, Investment, Sub-Saharan Africa, tag1

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Africa Economy to Grow 50% by 2019 on Demand Jump, Deloitte Says

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By Amogelang Mbatha Nov 18, 2014

Africa’s gross domestic product may expand by 50 percent to $3.7 trillion by 2019, boosted by an emerging middle class and increased household demand, according to Deloitte.

“Rising consumer demand, aligned with annual growth of around 8 percent is likely to add around $1.1 trillion to African GDP by 2019, with Ethiopia, Uganda and Mozambique among the fastest expanding markets,” the auditing company said in an e-mailed report today.

Sub-Saharan Africa is forecast to grow 5 percent this year, driven by infrastructure investment, a buoyant services sector and strong agriculture production, the International Monetary Fund said last month. Middle-class households in 11 leading economies in the region are set expand to about 40 million by 2030, with the biggest growth seen in Nigeria, the continent’s largest economy, according to a report by Standard Bank Group Ltd.

While growth in demand for consumer products, including luxury items and smartphones offered opportunities, different regulations in individual markets were hurdles to set up businesses and companies need long-term strategies for investment in Africa, Deloitte said.

“Where there are challenges, there are also opportunities to innovate,” it said. “Given the potential for growth the continent offers, the business opportunities in Africa could outweigh the risks.”

Mobile-phone penetration is set to rise to 97 percent by 2017 from 72 percent, with about 334 million smartphone subscribers, the company said.

http://www.bloomberg.com/news/2014-11-18/africa-economy-to-grow-50-by-2019-on-demand-jump-deloitte-says.html

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Ethiopia and Somaliland Sign Trade and Infrastructure Agreement

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Ethiopian and Somaliland governments have signed trade and infrastructure agreement after a high level Ministerial delegation from Ethiopia led by the Minister for Finance arrived in the country on Thursday.

The ministerial delegation accompanied by a number of Somaliland ministers including; Ministers for Foreign Affairs, Finance, Presidency, Trade and International Investment have jointly paid visit to areas including; the Port, Oil Storage Tanks and the Airport of Berbera city and the road between Wajaale and Jigjiga.

Minister for Finance of Ethiopia Sufyan Ahmed who signed this agreement stated that this bilateral agreement will enhance the economy of the 2 countries Somaliland and Ethiopia and that the appointed technical committee will make sure the accomplishment and the realization of the provisions of the signed agreement.

The leader of the Ethiopian delegation has also told that the Somaliland and Ethiopia have long and historical relation.

Somaliland Foreign Minister and International Cooperation Mr. Mohamed Younis Bihi who signed this bilateral agreement for Somaliland explaining the aim of this bilateral agreement between Somaliland and Ethiopia to the media has noted, “We have agreed to cooperate together and in the issues pertaining the construction project of the Berbera Corridor –the road between Berbera and the border town Tog-wajaale. We have also discussed how Ethiopia will implement electricity project aiming at expanding its hydro-electricity to Somaliland regions.”

“We have also discussed on how Ethiopia will partake in using and developing Berbera Port and use its business and trade activities through Berbera Port. We both discussed on issues related to the security, trade and investment.”

He added that the parties have nominated a joint technical committee which will commence their operation on 8th December, as FBC reported.

http://www.waltainfo.com/index.php/editors-pick/16110-ethiopia-and-somaliland-sign-trade-and-infrastructure-agreement

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Road Links Gojjam to Wollo for the First Time

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Two phase project is completed unveiling new 319Km road despite delays due to weather fluctuations

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New 319km road connecting Gojjam & Wello for the first time.

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A new 319Km road, connecting Gojjam and Wollo for the first time was inaugurated yesterday, November 15, 2014. The road shortens the former road distance to the Port of Djibouti through Mille, with nearly half the area crossed getting its first road access.

The project was beset by characteristic problems. A recent report claimed Ethiopian government projects, including water, road and building projects were affecting it.

The report by the Construction Sector Transparency Institutive (CoST), of which Ethiopia and several other countries are members, was presented at the Elilly Hotel a few weeks ago. It indicated that the redesigning of projects after they had already been started was one of the main reasons accounting for Ethiopia spending more and taking longer to finish projects than other countries. The report raised concerns about “the feasibility and design stage, as well as the tender evaluation process and contract implementation” aspects of various projects examined in Ethiopia.

The Gojjam-Wello road project started as a gravel road to be completed in four years. However, the traffic flow in the area led to a redesigning into asphalt concrete, extending the project period to seven years, according to Dereje Hailu, Communication officer at the Authority. Other reasons for the delay of the project included weather fluctuations, claims Samson Wondemu, communications head of the Ethiopian Roads Authority (ERA).

The Komobolcha – Mekaneselam – Gindewoyne project was undertaken by the Chinese contractor, CGC Overseas Construction Group (CGCOC), with a joint consultancy by Li International Limited, a local firm, and Indian firm LEA Associates South Asia.

As Fortune went to print, the road was expected to be inaugurated by Deputy Prime Minister Demeke Mekonnen, in the presence of Workneh Gebeyehu, Minister of Transport, as well as parliament members and representatives from the city administrations. The total cost of the road project was 1.9 billion Br, paid for by the government.

The construction took place in two phases. The first phase saw the completion of 189Km of road extended from Kombolcha to Mekaneselam. The second phase comprised 139Km connecting Mekaneselam to Gidewoyne. It included a 260 metre high bridge, located 270Km from Komolcha town, which is expected to serve for the coming 60 years. The road also includes drainage pipes, bridges, and other structural works.

“The main advantage of the road is linking Gojjam, known for its crop production, and Wollo, a place designated for the industrial zone,” said Samson.

The road will link the road that currently extends from Addis Abeba to Mekelle, through Dessie, with the road from Addis Abeba to Bahir Dar, through Dejen and Mota. It will also cut the road distance by half from Dessie to Gojjam, avoiding the detour through Addis Abeba or Woldiya.

CGC Overseas has been operating in Ethiopia since 2003. It has completed five projects and is working on nine others, including a 220Km asphalt road from Dire Dawa to Dewalle. The Dire Dawa to Dewalle project will cost 3.99 billion Br in financing from the EX-IM bank of China.

The CGC Overseas completed projects include a 22Km asphalt road from Chole to Magna, the Dodola Junction to Goba road and the Dera to Gololcha Mechara road, all in the Oromia region.

http://addisfortune.net/articles/road-links-gojjam-to-wollo-for-the-first-time/

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COMESA Experts Discuss Agriculture, Environment and Natural Resources

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Technical experts on agriculture, environment and natural resources from COMESA Member States began meeting today in Kinshasa, D R Congo.

The three days meeting will discuss among others, the Food Security Situation in the COMESA Region including the regional food balance sheet.

A report on Implementation of the COMESA Comprehensive Africa Agriculture Development Programme (CAADP) will be presented. So far 14 COMESA countries have signed CAADP Compacts and eight have finalized their National Agriculture Investment Plans.

Others programme reports to be discussed includes, the Implementation of Livestock and Fisheries, the Cassava Custer, Sanitary and Phytosanitary issues, Gender Mainstreaming in Agriculture, Natural Resources, Climate Change and Environmental Programmes and the Alliance for Commodity Trade in Eastern and Southern Africa.

A report on Fertilizer in the COMESA Region will be presented and a ceremony to launch the Joint Fertilizer Harmonization Programme conducted. Heads of Delegation from Member states will present reports on the status of implementation of the Agricultural development programmes at country level.

The key cooperating partners with COMESA on agriculture and environmental programmes will also present their reports as well. The consolidated report of the technical committee will be presented to the Ministers responsible for agriculture; environment and natural resources meeting that will take place on 14 and 15 November 2014.

The meeting of technical officers was opened by the Permanent Secretary in the Ministry of Agriculture and Rural Development in D R Congo Mr Ali Hubert Ramazani on behalf of the Minister H.E. Jean Chrisostome Mukesyayira. COMESA Director of Investment Promotion and Private Sector Development Mr Thierry Kalonji addressed the delegates on behalf of the Assistant Secretary General Amb. Kipyego Cheluget.

http://www.comesa.int/index.php?option=com_content&view=article&id=1372:comesa-experts-discuss-agriculture-environment-and-natural-resources&catid=5:latest-news&Itemid=41

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MetEC to Deliver Five Spare Part Factories to Southern Regional Government for 235m Br

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Factories to form part of 42 similar workshops for four regions and Dire Dawa

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The MetEC which was established 20 years currently has 15 semi independent and integrated manufacturing companies operating in more than nine sectors including vehicle assembly and plastic and machinery manufacturing.

The Metal & Engineering Corporation (MetEC) is preparing to hand over five spare part manufacturing workshops to the Southern Regional State. The factories cost the regional government 235 million Br.

The Corporation made a deal last year with five regional governments to convert them into factories producing spare-parts for flour mills and vehicles. The five regional governments include; Oromia, Harari, Ahmara, the South, and Dire Dawa City Administration, according to Michael Desta, head of public and foreign relations at MetEC.

The Southern regional government will transfer the workshops, each of which will employ 100 workers, to the Small & Micro Enterprises (SME).

“We will fully transfer the workshops to the region in the coming two months,” said Michael.

MetEC is currently installing machinery at these workshops, located at Dilla, Hawassa, Hosaena and Arbaminch.

As part of the deal with the five administrations, MetEC will deliver a total of 42 workshops, at a total cost of close to two billion Birr. To date it has transferred 20 workshops to the Amhara, Tigray, and Oromia regional states.

“We are currently only receiving the commitment to pay the money from the regional states in order to hand over the workshops,” said Desta. “The regions will pay the total money for the MetEC in five years.”

The MetEC provides mechanical and technical training to employees at the workshops, says Michael. The machines are manufactured by Hibret Manufacturing & Machine Building Industry (HMMBI), one of the MetEC companies engaged with manufacturing industrial machinery and spare parts.

The remaining workshops currently under construction will be delivered to the regions before the end of the current fiscal year, says Desta.

He went on to explain that the MetEc has three aims in the construction of the workshops: increasing the country’s manufacturing industry, creating job opportunities and to manufacture spare parts locally.

Established 20 years ago, MetEC currently comprises 15 semi-independent and integrated manufacturing companies. These companies operate in more than nine sectors, including the assembly of vehicles, plastic and machinery manufacturing.

“Phase two of the construction of additional work shops will be begun as soon as the current phase has been completed,” Michael told Fortune.

http://addisfortune.net/articles/metec-to-deliver-five-spare-part-factories-to-southern-regional-government-for-235m-br/

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PM appoints new Minister of State for Ministry of Mines

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Alemu Sime

- Asfaw Dingamo to lead Ethiopian Petroleum Development Enterprise  

Prime minister Hailemariam Desalegn recently appointed a second minister of state for the Ministry of Mines, Alemu Sime.

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Nation Working to Realize Digital TV Transformation

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Preparations are well underway in connection with the one billion Birr project to institute digital TV in Ethiopia.

Speaking at a consultative meeting between broadcasters and other stakeholders on a draft action plan for transition into digital TV, Zeray Asgedom, Director of the Ethiopian Broadcast Authority said the meeting is crucial in facilitating the transition and exchanging information.

According to FBC, he added the government is supporting the installation of technological inputs to enhance the transition and is working in collaboration with the private sector in this regard.

http://www.waltainfo.com/index.php/explore/16115-nation-working-to-realize-digital-tv-transformation-

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Chinese consortium to operate LRT

 

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A consortium of China Railway Engineering Corporation (CREC), a Chinese contractor currently building the Addis Ababa Light Rail Transit (LRT) system, and Shenzen Metro Group, operators of the railway system of the Chinese city Shenzen, has been selected by the Ethiopian Railways Corporation.

(ERC) to handle the operation and maintenance of the LRT for the next five years.

Head of public relations at ERC, Dereje Tefera, told The Reporter that the new consortium has won the limited international bid that the corporation floated to hire an experienced rail operator for the flagship LRT project which is currently under construction in Addis Ababa. In return, ERC will pay the consortium USD 116 million for these services over the next five years, according to Dereje. The deal also covers the regular maintenance of the LRT system apart from its day-to-day operations.

“The formal contract signing ceremony is expected to be held soon,” Dereje said. Initially, the consortium is expected to bring 290 Chinese professionals to Ethiopia to work with 396 Ethiopians on operation and maintenance. However, this number is agreed to slowly decline over five years where, in the second year of the project, the 48/52 ratio of Chinese professionals to Ethiopians is expected to go down to 24/76. Further down the road, in the third year of the project, for instance, the ratio is expected to slide to 13/87 marking a gradual take over by Ethiopian professionals by the  end of the fourth year. Dereje also said that by the fourth year the role of the Chinese should be minimized to an advisory level making way for Ethiopians to handle operation of the rail system completely.

According to the terms of the contract, Shenzen Metro is expected to implement all the technology that it is currently employing to operate the rail system of the city of Shenzen. On the other hand, the USD 475 million LRT project, which according to the contract terms is expected to be completed after two months, looks to be on its way to outlive its project time. Had it been for the contract, the project should be completed in January and currently the project should have been on its last stages. However, since the project has not yet used all its alloted time, officials of the corporation still assure that the project would be completed on schedule and that there will be no delays. And, it is also noted that ERC reserves the contractual right to ask for compensation if indeed the project was not completed in the scheduled time frame.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2786-chinese-consortium-to-operate-lrt

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Ethiopia, Kenya and Somalia agree on mega projects on River Dawa

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Ethiopia, Kenya and Somalia have agreed to construct a multipurpose dam and a hydro power station on River Dawa in Mandera County, which is aimed at harnessing and promoting sustainable use of the resource.

The three countries also proposed construction of a bridge to link Kenya and Ethiopia on the river, which will promote cross-border movement across the seasonal river.

The countries representatives who met at Sarova Panafric hotel in Nairobi during a three day meeting organized by IGAD also called for cooperation in the management and sustainable use of River Dawa.

Kenya was represented in the forum by Mandera County Governor Ali Roba, who said the projects will help utilise the river to the benefit of citizens. “Harnessing the water from the river can solve the persistent drought that the region has been experiencing. We are optimistic that the process will be successful since each of the States is very positive about the proposal,” Roba said.

The meeting was called to discuss the cooperation in the management and sustainable use of River Dawa.

During the meeting, which ended on Thursday, the three countries formed a technical team which will conduct a feasibility study of the proposed projects and share its finding. The process will be steered by IGAD.

River Dawa is a seasonal river which flows cumulatively for nine months, and traverses through the three countries.

 http://www.waltainfo.com/index.php/explore/16078-ethiopia-kenya-and-somalia-agree-on-mega-projects-on-river-dawa-

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Sesame exporters warned of price speculations

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The price of sesame dropped to USD 500 from 1,200 per ton in one month. Following the turn of events, exporters have been hesitant to supply, preferring to wait for the price to improve.

However, for industry players like Philippos Philippas, president of the UK-based Huyton Inc. Group, exporters are trending unhealthy. If they persist to do so, he told The Reporter that they will face loss in waiting and speculating for the price to rise up. 

Philippas, who attended the 4th international conference organized by the Ethiopian Pulses, Oilseeds and Spices Producers and Exporters Association (EPOSPEA), said that Ethiopian exporters should be cautious not to replicate the same mistakes of the Sudanese – the third largest producers in the world. It is to be recalled that last year the Sudanese ended up exporting about 285,000 tons of sesame, which was way lower than what they originally planned.

“The global consumption is about 1.4 million metric tons and the availability is going to be about 1.7 million tons. Hence, there will be a surplus and that surplus will pressure the prices. The point I want to emphasize is that last year the sellers pushed the prices up. As a result, consumption was reduced worldwide. I don’t want the buyers to do the same now”, Philippas warned.

Following the delayed rain and drought in China, which stands the 40 percent buying nation of Ethiopia’s sesame, some exporters are not worried by the current low market price. In September, sesame was sold at USD 2,200 per ton. However, in October the price went down to USD 1,700. Philippas estimated that the latter price will remain to be the market price of Ethiopia for the year. However, Haile Berhe, president of EPOSPEA, differs in opinion. The prices are known to be fluctuating for years and exporters will behave accordingly, he argues.

The orchestra of the sesame market seems to get louder when China said that it will ship close to 850,000 tons for the year. That again annoys Philippas who strongly criticized the Chinese side for not providing the realistic volumes they will buy. For Philippas, the best China will buy is set at a maximum of 650,000 tons. The Sudanese production for this year also was questioned. It intends to bring some 600,000 tons of sesame this year. Yet, half of the total produce is destined for local consumption in Sudan.

Ethiopia this year expects to harvest 350,000 tons of sesame. Previously, the government was bullish to produce and export 500,000 tons. Realizing the unrealistic plan, the target was reset to 350,000 or less. The concluded budget year production stood at 270,000 tons. According to Assefa Mulugeta, director general of the export promotion directorate general, this year harvest will be challenged due to the heavy rainfall and windy weather condition witnessed affecting the major producing regions in northern Ethiopia.

Huyton Inc. Group was associated in supplying coal to the Ethiopian Petroleum Enterprise (EPE) since 2011. The contract was terminated after the government had bought 800,000 tons of coal form Huyton in three years. However, the group sticks on supplying in wheat and barley for the beer industry. Huyton mostly is known for being one of the major buyers of sesame, shipping out some 40,000 tons a year.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2776-sesame-exporters-warned-of-price-speculations

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DSGE says it received a wide variety of proposals to deliver funds

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This year diplomatic bazaar lands on November 22nd

Formerly called The Ambassador’s Heads of Missions Spouses and Diplomatic Spouses Group, The Diplomatic Spouses Group Ethiopia (DSGE) said it has received a number of project proposals to deliver funds.

Announcing that the annual bazaar is to take place at the Millennium Hall on November 22. Announcing the date at the residence of the Brazilian Ambassador on Wednesday, Leelie Selassie, president of DSGE said that last year the group raised 200,500,000 birr for the project proposals submitted.

Despite the number of proposals presented to the group, some are selected on the basis of having a direct relationship with the mission of the group. “Our primary target groups are women, children and most vulnerable citizens in Ethiopia,” Selassie, wife of the US Ambassador to the African Union (AU), said. According to the group, the diplomatic bazaar has extended its way of funding projects while the number of proposals being presented to the group grows year after year. Every year, the DSGE holds a fundraising event showcasing handicrafts, national dishes and products from participating diplomatic missions. “We keep our efforts to the end as much as the number of requests from the charities keeps growing,” Erica Usher, chair, project matrix and wife of the Canadian Ambassador, said.

Releasing 100 percent of the funds to the charity organizations registered in the country, the group has financed more than 25 charities found in parts of the country. Moreover, more than 800 vulnerable children receive school supplies to attend class. Sangeeta Verma, wife of the Indian Ambassador on her part said that the capacity of the group is gaining strength as the cultural exchange between participating countries is also deepening towards better understanding. As a result, reaching out the charities that need support.

Funds include equipment, furniture, and small-scale constructions and rejects funding salaries, rent, utilities, transportation, food and running costs. According to the committee, DSGE has been active in organizing similar events in the country for over 25 years in embassies and the AU compound before moving to the Millennium Hall in 2009. Tickets are available at Addis Ababa Hilton.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2771-dsge-says-it-received-a-wide-variety-of-proposals-to-deliver-funds

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City’s Housing Construction Projects Booms, Gravel Suppliers Struggle to Meet Demand

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Nana’s trading gravel production site, located in Akaki Kaliti district.

A Loader is putting rocks to be processed into the crushing machine.

A crushing machine imported from China, crushing rocks into gravel.

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As part of its plan to solve housing shortages Addis Abeba City Administration (AACA) is building 120,000 condominium houses. Building materials are vital, especially gravel. In fact, the material was the subject of discussion in a meeting, chaired by Abate Sitotaw, deputy mayor of AACA, which took place at the Ghion Hotel on October 21, 2014. Gravel producers and suppliers for the city’s housing projects also attended.

The city needs 1.3 million cubic metres of gravel this fiscal year for its housing projects, excluding necessary supplies for the 40/60 housing scheme. Total demand for the next five years amounts to between five and six million cubic metres, the meeting was told. Currently this supply comes from only a few of the 260 gravel suppliers in Addis Abeba, and adjacent Oromia towns. The meeting was attempting to find a solution for the lack of gravel supply for its projects.

The AACA held suppliers responsible for not providing its housing projects with enough of the right quality of gravel, despite their agreement to do so. Meanwhile, suppliers blamed the administration for not paying them in time, as well as raising issues with the accessibility of gravel production sites.

Adugna Kebede, general manager of gravel supplier Nana Trading Plc, has been working with the Addis Abeba Housing & Construction Agency (AAHCA) for the past three years. The company’s production site is located in Akaki-Kaliti District, Debre Zeit Road, seven kilometres west of Tirunesh Beijing Hospital.

It owns two excavators, one loader, four freight track vehicles and a crasher machine, and has a production capacity of 650 cubic meters to 700 cubic meters per day. However, as a result of problems, ranging from the lack of finance to limited production area, the company is not producing as much as it potentially could, Adugna claims. Nana now produces 320 cubic metres of type 02 gravel per day, which it supplies to the Agency. It also produces other kinds of gravel, used for building construction and cobblestone roads.

Currently the company has a deal with the AAHCA to deliver 20,000 cubic metres to 25,000 cubic metres of gravel over two months for three projects, which Adugna says they may not be able to deliver. One contractor at the site of Project 16, near where Nana operates, says he is unable to meet the delivery deadline because of input shortages.

The project, which has approximately 240 blocks of G+4 and G+7 buildings, is planned to reach 70pc by the end of the fiscal year.

“We are now receiving 80 cubic metres of gravel a day, which is 48 cubic metres less than we need,” said the contractor.

The project site has quarries surrounding it, but Nana uses another quarry three kilometres away from where It transports the rocks to the crushing site. Four to five truck loads of rocks make one truck load (16 cubic metres) of gravel. So crushing machines should be installed near quarries. However, it takes six months to a year to move the machines and install them at a new site, Adugna says.

Adugna also wants the city to pay him in advance or give him a loan. However, he says “they are not even making timely payments for gravel already delivered; sometimes we even have to wait longer than a week.”

The imbalance between demand and supply of gravel production is a problem acknowledged by the AAHCA, as well as by producers. However, the Agency believes there are enough producers around the city, but that they are not providing enough.

“Most of the suppliers who get incentives from the Agency, in terms of access to land and machinery, are not helping to overcome our problem,” said Negus Tekelaye, AAHCA’s construction input project office head.

This happens for various reasons, he says. Primarily, those producers who get direct support prefer to sell their gravel to the private sector. Others simply pass the land they get from the administration, as an incentive, to third parties, without ever going into gravel production. The private sector preference instead of working with the government could be due to the fact that private companies pay promptly and cut a better bargain, says Adugna.

The AAHCA pays 250 Br to 300 Br for 16 cubic metres of gravel. The fact that the Agency transports the gravel itself the price ranges according to the distance between the gravel production site and the construction area: the farther the distance, the cheaper the price.

Private company prices range from 300 Br to 350 Br for 16 cubic metres, based on the distance between the construction area and the production site; the farther the distance, the higher the price.

A businessman, requested anonymity, who has 10 years experience in the sector, and co-owner of a gravel producer company in Addis Abeba, Gulelle District and Sululta town, 40Km north of Addis Abeba, complained that his company has the capacity to crush 250 cubic metres an hour, but now does that in a day because of problems such as electricity shortages, delays in payment and lack of credit facilities. He cites these as major challenges for the sector.

“Previously, I used to supply the Agency as they use larger quantities than private customers; however, due to the lower price they offer, compared to private developers, I now supply only private customers,” he said.

The price currently offered by the Agency was set five years ago. He believes it no longer suits current production costs.

Despite the complaints of suppliers, Negus says they receive all necessary direct assistance from the Agency, yet still fail to deliver. The Agency says it will solve the problem by identifying those actors and penalising them.

http://addisfortune.net/articles/citys-housing-construction-projects-booms-gravel-suppliers-struggle-to-meet-demand/ 

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Somalia Reaches River Water Sharing Agreement with Ethiopia, Kenya

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A conference that took days and held in Sanova Panafric Hotel in Nairobi, Kenya, in which the agenda was spearheaded by the Intergovernmental Authority on Development (IGAD), an agreement was struck between Somalia, Ethiopia and Kenya to device mechanisms to share the waters of the rivers that run through those countries. The agreement also includes building dams. However, the final details of the agreement have not been released to the media.

Kenya’s Mandera district commissioner Ali Koba said the agreement notably pertains river water sharing, especially draught seasons when the water flow of the rivers is low.

A technical committee consisting of the three countries has been set up to oversee the river water sharing project and its implementation.

This is the first time the three countries reached an agreement of this kind.

http://www.raxanreeb.com/2014/11/somalia-reaches-river-water-sharing-agreement-with-ethiopia-kenya/

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When Kohlberg Kravis Roberts invested roughly $200 million in a rose farm in Ethiopia this summer, many in the market were surprised.

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The investment itself made sense – Afriflora grows more than 700 million flowers to export to Europe each year, making it an important part of the east African nation’s cut flower industry – but large private equity deals outside of South Africa, Nigeria and Kenya remain rare in sub-Saharan Africa.

Kayode Akinola, a director at KKR, said: “Few people expected us to make our first African investment in Ethiopia. But when you look at Ethiopia, you realise its scale, its population and its potential, you can see some of the attractions.”

KKR is not the only big buyout firm to notice opportunities beyond Africa’s main economies. In January, Carlyle Group and Investec Asset Management teamed up to invest in J&J Transport, a logistics company in Mozambique, while in 2012 Blackstone Group commissioned a hydroelectric dam in Uganda.

But the major economies still dominate. The value of private equity deals in Nigeria, Kenya and South Africa in the year to date makes up 82% of the value of private equity deals across all of sub-Saharan Africa, according to Dealogic. Three quarters of sub-Saharan Africa private equity deals over the same period were done in those three countries.
Dushy Sivanithy, a principal at private equity investor Pantheon, said: “The reason people spend so much time in Nigeria, South Africa and Kenya is because they are scalable and sizeable markets.

“Once you start going down to other markets, you’ve got to find businesses that can take the kind of capital we’re talking about. But some of the local firms have been investing successfully right across the continent for a long period of time. KKR’s recent investment in Ethiopia is evidence that [firms] are willing to invest in other markets. We know some [firms] are currently looking at opportunities in Mozambique, Ghana and even Zimbabwe now.”

Some emerging markets-focused private equity firms are now looking to open offices in some of these less-developed economies.

Helios Investment Partners and the Abraaj Group are both considering opening offices in Ivory Coast, which will act as platforms to capture deals in French-speaking Africa, according to the firms.

Abraaj is also considering opening offices in Ethiopia and Angola and setting up teams there in the next three years.

But big businesses can be hard to find in the wider region. Speaking at a recent conference and referring to data from S&P Capital IQ, Diana Noble, chief executive of emerging markets-focused investor CDC Group, said that there are 3,186 companies on the continent that have revenue above $50 million, 1,326 of which are in South Africa, 99 of which are in Nigeria and 58 of which are in Kenya. In sub-Saharan Africa, outside of North Africa and South Africa, there are 1,014 such companies across 46 countries, or 22 per country. She said: “That’s an incredibly shallow pool.”

Financial News spoke with some of the top firms to see which relatively unexplored countries hold the most appeal for private equity.

Angola

Rich in resources but suffering from years of underinvestment, Angola is set to overtake Nigeria as Africa’s biggest oil producer by 2016. After South Africa, Angola holds the highest number of companies with revenues of more than $50 million of any sub-Saharan nation, according to S&P Capital IQ. Years of economic and political instability following a 27-year civil war have deterred many investors from venturing into the country. One investor said: “A lot of people have looked at it because it has interesting growth prospects but how you play it from a private equity perspective is more difficult.” However, Sev Vettivetpillai, a partner at Abraaj, added: “Angola has historically been a very difficult market in terms of getting approval to do deals, but there’s a sense that the government is trying to make it easier for investors to invest.”

Democratic Republic of Congo

Years of ongoing conflict and other humanitarian crises including several outbreaks of the Ebola virus have not deterred some private equity firms from investing in the DRC, one of Africa’s poorest countries. Henry Obi, a partner at private equity firm Helios Investment Partners, said: “We are seeing a number of opportunities in DRC. We own a telecom towers company there and we’re looking at some other businesses. It’s an interesting space, but the political situation doesn’t lend itself to everybody coming in at the same time. It’s not everyone’s cup of tea.”

Ethiopia

Africa’s second most populous country behind Nigeria has received a huge amount of foreign direct investment in recent years, including from China and Turkey. While there is still phenomenal poverty, Ethiopia is enjoying a period of political stability and investing heavily in infrastructure. It also has some of the lowest power costs in the world due to its hydroelectric dam, while a lack of a stock market means that private equity is one of the only routes to investment in the country.

Ghana

Oil-rich Ghana is a country that many a private equity firm has spent time prospecting in recent years, with deals such as the Abraaj Group and Danone’s roughly $350 million acquisition of frozen dairy product and juice maker Fan Milk International last year proving that large deals in the country are possible. Vettivetpillai at Abraaj, which has an office in Ghana, said: “It’s very easy to do business there, you have OK capital markets and there are good-quality businesses you can pick up at very good valuations.” The country also has its challenges. In August, Ghana said it would seek assistance from the International Monetary Fund as the country’s budget deficit and inflation rate soared into double digits and its currency fell sharply. Pantheon’s Sivanithy said: “Ghana, once it sorts out its near-term problems, could be interesting, and I think it’s one of the key markets that we’ll focus on.”

Ivory Coast

Regional lender African Development Bank’s recent return to its Abidjan headquarters after 11 years in exile due to civil war was a sign to many investors that the Ivory Coast was once again open for business. Seen as one of Africa’s major markets pre-conflict, the world’s top cocoa exporter has kick-started its economy and is once again establishing itself as a prosperous gateway to the rest of French-speaking Africa, attracting firms such as Helios and Abraaj in search of deals. Abraaj’s Vettivetpillai said: “It’s challenging but it has opportunity.”

Mozambique

After years of post-independence suffering, Mozambique is hoping to become one of the world’s biggest energy producers following the discovery of large natural gas fields off its coast. The country also benefits from its position on the Beira corridor, a road and rail network that links Zambia, Malawi, Zimbabwe and Mozambique to the port of Beira on the Indian Ocean. One investor said: “People are excited about what’s going to happen in Mozambique. There’s a lot of money going in to support that build-up of an oil and gas industry and people are building things like temporary housing for local expats and hotels.” But investors still face hurdles in the country. “If you look at the Mozambique bond issuance, there have been some question marks over what they’ve been raising capital for,” said the investor.

Rwanda

Two decades on from the 1994 genocide that killed nearly one million people and ravaged the country’s economy, Rwanda has gone through an impressive turnaround. The country is trying to position itself as one of the easiest places to do business on the continent, particularly for foreign investors, and is seen as a respectable base for east African consolidation. Obi at Helios said: “Rwanda seems to be everyone’s darling. It’s stable, it’s got good governance and it takes like two days or less to set up a business there.”

Tanzania

Home to pan-African agribusiness Export Trading Group, Carlyle Group’s first deal on the continent, Tanzania is seen as a business-friendly market with large deposits of natural gas. While there may still be a dearth of sizeable deals in the country, finding one can provide a platform for investments in east Africa outside of Kenya, which industry figures describe as frothy due to increasing competition for deals. Agri-processing, fast-moving consumer goods and financial services are sectors to watch, according to Maty Ndiaye, a director at alternative asset manager Duet Group. Ndiaye said: “We believe there is a huge opportunity in the banking sector in Tanzania. Banking penetration is only 17% in Tanzania. In Kenya, it’s 42%, yet if you compare the GDP per capita, Tanzania is two thirds of what Kenya is.”

This article first appeared in the print edition of Financial News dated November 17, 2014

http://www.efinancialnews.com/story/2014-11-20/buyout-firms-explore-africas-frontier-markets?mod=home-toppicksmod=home-toppicks&ea9c8a2de0ee111045601ab04d673622

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Power Development Plan to Receive 20bn Dollars Injection

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Powering Africa: Ethiopia meeting sees government announce intention to build 10 to 12 new power generating projects.

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Power Development Plan to Receive 20bn Dollars Injection

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The Ethiopian government plans to spend 20 billion dollars on its power development program in its second generation of the, Growth & Transformation Plan (GTP-II), from 2015 to 2020.

This figure is consistent to the country’s annual spending track record of two billion dollars annually for the past three years, according to Mekuria Lemma, head of Strategy & Investment Division at the Ethiopian Electric Power (EEP).

Mekuria disclosed this at the “Powering Africa: Ethiopia Meeting” organised by the UK-based company, Energy Net Ltd, held at the Radisson Blu Hotel last week. The two-day event aimed to connect governments with local and international power infrastructure developers. It brought together various stakeholders interested in investing in Ethiopia’s green energy, including leaders from the Energy & Environment power (EEP) and the Ethiopian Power Utility (EPU). Representatives of the two organizations have presented the country’s power demand and investment opportunities in the power-generating sector.

Besides government officials, foreign investors have also presented project proposals.

Ethiopia’s government planned budget will be spent on building an additional 10 to 12 new power generating projects, Mekuria disclosed. He hopes to see the government generate the finance from domestic sources, which is to be supplemented with loans.

The projects will utilise local resources as their main input for construction materials. Although Mekuria and the government hope to garner 60pc of the inputs locally, for the remaining 40pc of construction materials, foreign investors interested in investing power generating projects in Ethiopia will be sought according to Mekuria.

The government will offer tax cuts to foreign investors as an incentive, he disclosed. Except for power distribution, which is reserved for the state utility monopoly, investors are encouraged to build, own and operate power generating plants in the country.

Recent data on ongoing construction from the EEP shows that construction completion rates are 40pc for Ethiopia’s signature dam on Abay; the Grand Ethiopian Renaissance Dam (GERD), 87.6pc for Gilgel Gibe III Hydroelectric, 61pc for Genale Dawa Power Plant, 80pc for Adama II wind power generating farm, and less than 50pc for Reppi (Koshe) Waste to Energy Power Plant Project.

When all these projects in the pipeline come to completion, there is hope that the country will achieve a generation target of close to 10,000Mw. It will be five times larger than the 2,090.4Mw electric power generated from its 15 hydropower stations, and 51Mw from Adama I Wind Farm. Commencing operation in 2011, the Adama I Wind Farm was built with a total cost of 117 million dollars.

During the second generation of GTP, the government aims to increase the energy generation capacity to 15,000Mw. It also aims to expand its total electricity coverage of the country from its current 55pc to 99pc. If achieved, it will be a monumental success compared to the 41pc coverage four years ago.

The government will promote a mix of energy by developing renewable wind and geothermal sources to achieve the intended goals, Mekuria disclosed at the meeting.

Hosted in Ethiopia for the first time, the two-day meeting was attended by 66 international business delegates and government representatives. Powering Africa Summit will be held in Washington, D.C., in January 2015.

http://addisfortune.net/articles/power-development-plan-to-receive-20bn-dollars-injection/

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Oldest Hydro power plant reincarnated

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Aba Samuel Hydroelectric Power Plant is to commence operation within two years after sitting idle for four decades.

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Although its debatable, the power plant is considered to be the first hydro electric plant in the country and it is now being rehabilitated by the Chinese Hydrochina Haudong Engineering Corporation.

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For the rehabilitation, the Chinese government has provided a USD 15 million grant.

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According to Azeb Asnake, CEO of Ethiopian Electric Power (EEP), the project is expected to be finished within 24 months.

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The current rehabilitation includes dam maintenance, installation of four units of turbines and generators, a new penstock and civil engineering work.
After the rehabilitation the power plant is expected to generate 6.6mw of electric power. The Ethiopian government will add 10 million birr for a transmission line and maintenance of an access road.

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The former Ethiopian Electric Power Corporation (EEPCo) that recently split into two, has been trying to rehabilitate the plant for the last decade.
The Akaki River and the lake are now contaminated due to citizens’ utilization of the river system.  “Through this process of plant rehabilitation, the contractor is expected to mitigate the problem and enhance green and clean environment,” Azeb said.

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She said that the rehabilitation of the Aba Samuel plant will also help promote tourism around the lake.

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Aba Samuel Dam located on the Akaki River began first phase construction in 1936 with a capacity of 3.3mw and started production in 1941. In 1953 the power plant generated 3.3 mw with one turbine and then 6mw after they installed one additional unit.

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However, in 1974 the plant stopped generating power when the turbines failed.

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http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4743:oldest-hydro-power-plant-reincarnated-&catid=35:capital&Itemid=27

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Ethiopia Plans Debut Dollar-Bond Joining Ghana, Kenya.

By Lyubov Pronina Nov 25, 2014

Ethiopia plans to sell its first dollar bond as Africa’s fastest-growing economy exploits record demand for the continent’s debt.

Ethiopia picked Deutsche Bank AG and JPMorgan Chase & Co. for fixed-income investor meetings in Europe and the U.S. beginning tomorrow, according to a person familiar with the matter, who asked not to be identified as the information is private. The proceeds of the sale will be used to fund electricity, railway and sugar-industry projects, Finance Minister Sufian Ahmed said Oct. 8.

The Horn of Africa nation is joining issuers, including Ghana, Kenya, Senegal and Ivory Coast, who sold what Standard Bank Group Ltd. says is a record $15 billion of Eurobonds this year. Government and corporate issuers are seeking to benefit from investor appetite for higher returns before the Federal Reserve raises interest rates as soon as next year.

“There is an incentive to issue before U.S. rates start to gradually edge up from next year,” Samir Gadio, head of African strategy at Standard Chartered Plc in London, said today by e-mail. “The market seems to expect that Ethiopia will price among the highest-yielding African sovereigns.”

African government and corporate Eurobonds sales this year beat 2013’s record $14 billion, Standard Bank said on Nov. 13. Sovereigns accounted for about 71 percent of issuance, according to the Johannesburg-based lender.

African Returns

The yield on Kenyan dollar bonds due June 2024 was at 5.91 percent today, down from 6.88 percent when it was sold in June. Zambian dollar bonds returned almost 17 percent this year, while Ghanaian debt earned 9.5 percent, according to the Bloomberg USD Emerging Market Sovereign Bond Index. (BEMS) Ivory Coast returned 1.3 percent as neighboring countries battled an outbreak of Ebola, while Gabon earned about 11 percent.

Emerging-market assets have benefited from record-low interest rates in developed nations that pushed investors to seek out higher returns elsewhere. The end of quantitative easing by the Fed and the prospect of its first interest-rate increase since 2006 is drawing some of that money back to the U.S.

Almost 30 years after pictures of Ethiopian children with distended stomachs were used to raise money by Bob Geldof and Live Aid, the country is growing faster than any other African economy, at an average of 10.9 percent over the past decade, International Monetary Fund data shows.

Credit Rating

Ethiopia was assigned its first credit ratings in May. Moody’s Investors Service rates it a non-investment grade B1 with a stable outlook, while Standard & Poor’s gave the East African country a B rating. The country is Africa’s biggest coffee producer and the continent’s second-most populous nation after Nigeria.

Ethiopia’s planned issue could be assisted by technical factors, such as scarcity, as the Eurobond will be the only tradable asset for international investors wanting access to the African nation, Standard Chartered’s Gadio said.

State Minister of Finance Abraham Tekeste and Haji Ibsa, a spokesman for the Finance Ministry, didn’t answer their mobile phones when Bloomberg called each of them seeking comment today.

Ethiopia is building the continent’s biggest hydropower plant on the Blue Nile River, known as the Grand Ethiopian Renaissance Dam, that will probably increase electricity supply five-fold by 2020. It may need to invest about $50 billion in infrastructure over the next five years, of which $10 billion to $15 billion may come from foreign investors, the finance minister said last month.

http://www.bloomberg.com/news/2014-11-25/ethiopia-plans-debut-foreign-currency-bond-joining-ghana-kenya.html

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Answer still no for privatizing banking, telecom, power

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Ethiopia will not open up its telecommunications, banking and power sectors any time soon, according to Dr. Debretsion Gebremichael, Deputy Prime Minister and Minister of Communication and Information Technology.

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In an exclusive interview with Capital, Debretsion said that Ethiopia is not yet ready to open those sectors partially or fully any time soon. “We have to develop all the areas in the country. The rural population should get access to electricity and telecommunications infrastructure. Before we accomplish this we will not open them up,” Debretsion told Capital.

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The country will open up those sectors to international competition when it is ready. “When our capacity increases, then we will open up, because then we can compete,” Debretsion added.

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Ethiopia is at the early stages of development, the deputy prime minister went on to explain, adding that strong control from the government should be applied to protect these services.

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However international organizations such as the World Bank disagree. “Ethiopia needs to open its financial sector in order to maintain the fast economic growth the country has registered for the last ten years. There are some necessary risks, and financial integration is a necessary risk. Ethiopia currently does not have a financial sector that has integrated with the rest of the world,” states the World Bank’s 2014 World Development Report.

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“Other countries that have been growing at the same rate as Ethiopia have been able to sustain the level of growth only by integration. The question is how you manage the integration and that is where some of the lessons from international experiences can be used,” the report further suggests.
Debretsion argues this saying that the country maintains its growth because it was not part of the world’s financial system. “If we were part of the international financial system we would have collapsed during the financial crisis,” he said.

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A French high official also agrees with Debretsion. “The country should first build its muscles on these sectors, then it can allow outside markets to these sectors. Otherwise they will be swallowed by the much stronger international companies,” the French official who commented on conditions of anonymity said.

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Debretsion also said that international companies always look for their benefits, “multinational companies want profits; they are not bothered about connectivity, they don’t care about developing the rural areas, but we care about developing the rural areas that’s why we don’t open them,” he added.

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http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4747:answer-still-no-for-privatizing-banking-telecom-power-&catid=35:capital&Itemid=27

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United Expenditure up in Bid to Lead Banking Sector Technological Development

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Chairman of the Board of Directors, Fasil Asnake, shakes hands with the a former board director, Ayele Belachew, majority shareholder of Smayaz Transport. Behind them the gleaming faces of the board members can be seen.

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United Bank is investing massively to snatch the lead in technological edge from its competitors, hoping to introduce a paperless bank active in the market.

Such a drive is partly behind a significant increase in United’s expenditure last year, up by 148.6 million Br, from the previous year, reaching 680.5 million Br. It was a point on which shareholders who met inside the Addis Abeba Hilton on November 13, 2014, and demanded explanations.

Explanations came from the Bank’s President, Taye Dibekulu, who attributed the increases to the strategy designed to make the bank paperless.

“We want to be on the lead in the technological development of the banking sector,” Taye told shareholders.

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The Bank’s board of directors chairman Fasil Asnake (left) smiling and whispering to the Bank’s President Taye Dibekulu (right) after the gathering.

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United Bank S.C. has registered a net profit of 278.17 million Br in the fiscal year 2013/14, one per cent lower than last year’s. However, the significant drop was seen on Earnings Per Share (EPS), which has decreased by 28.45pc, to 34.13 Br.

“The reason behind the decrease in EPS is our decision to increase the Bank’s capital,” said Taye. “We had discussed that the decrease in the EPS was to come.”

Nonetheless, it remains to be an amount higher than what its peers in the industry offered to their shareholders during the same period. Nib International Bank has offered 28.5pc in EPS, followed by Wogagen Bank’s 26pc, and Zemen Bank’s 24pc.

The paid-up capital of the Bank has increased to 898.3 million Br, which is up by 298.3 million Br from the previous fiscal year.

The staff and administrative costs have also soared, from 151.47 million Br to 198.92 million Br. Although the Bank has managed to control its expenses on interests, its operating costs have expanded considerably. They went up to 400.75 million Br, from 284.6 million Br in the preceding year.

“This has to stop somewhere,” says Eshetu Woldekidan, a shareholder of the Bank with 3,823 shares. “With the interjection of the National Bank of Ethiopia (NBE) we cannot imagine where it is going.”

He calls on the regulatory hands of the central bank to do something similar in imposing limits to compensations paid to board of directors of banks. The NBE has limited the maximum annual remuneration of directors to be 50,000 Br.

Taye, however, defends his record in compensating his staff numbered 2,424, which he said cannot be stopped from increasing, as the staff needs benefits and salary increases every year, in accordance with the Bank’s development plans.

United Bank has made impressive advances in several key areas, including its total income, which has exceeded a record of one billion Birr, showing a growth of 15pc from last year. The income from interest loans, advances and investments in the NBE bonds increased to 716.23 million Br, showing a growth of 19pc from 2013/14.

The assets of the Bank have also increased by 19pc, reaching 11.8 billion Br and the loans and advances disbursed in the reporting year have reached 4.99 billion Br, an increase by eight per cent. The liquid assets of the Bank too increased significantly. The total cash and bank balances held by United Bank have increased by 64pc, to 3.38 billion Br, and the cash and bank balances to total assets ratio has increased from 25.57pc to 36pc.

This is not necessarily a development which should comfort those responsible for the management of the Bank, according to Abdulmena Mohammed Hamza, financial analyst and accounts manager at London-based Portobello Group Ltd.

“The building of liquidity has deprived its interest income, which could have been generated had these resources been used in revenue generating activities,” Abdulmena said.

Taye acknowledged the high concentration of liquidity during the reported year, but attributed it to economic slowdowns in the country over the summer.

“But this is not true with our Bank as we have disbursed loans to the traders, taking advantage of winter trading activities,” Taye told Fortune.

United Bank has increased its subscribed capital to 1.6 billion Br, showing an increase of 374.1 million Br on the previous year.

“We’ll work to increase the paid-up capital in order not to affect the EPS,” Taye told Fortune.

Although critical on United Bank’s mounting administrative expenditures, Eshetu, a shareholder, is pleased to see United perform better than its peers where he also has shares.

“I see a brighter future for United than the other banks I own shares in, in terms of EPS and other developments,” Eshetu told Fortune.

By contrast, the income from foreign exchange dealings failed to exceed 81.35 million Br, showing a drop of 13pc.

“Bank management needs to investigate why United’s industry position is being eroded, and develop a strategy to reverse this downward spiral,” comments Abdulmena.

The President disagreed.

“Income has shown an increase from the previous year, but it is not up to expectations,” he told Fortune. “This is because of the decline in the international market of coffee, as most of our customers are coffee exporters.”

http://addisfortune.net/articles/united-expenditure-up-in-bid-to-lead-banking-sector-technological-development/

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Misys updates core banking system for Ethiopian bank

Misys has implemented a core banking system for Ethiopia’s second largest private bank, Awash International Bank, which has enabled it to reduce its IT costs while introducing new services.

Ethiopia is Sub-Saharan Africa’s fifth biggest economy and is expected to record GDP growth of approximately 10.6% this year according to CNBC Africa. Awash International Bank is keen to tap into growing demand for financial services as the country moves towards middle-income status over the next decade.

The new system uses Misys’s FusionBanking Essence product, which includes componentised solutions for retail and small business banking and was named a ‘leader’ in the 2014 Gartner Magic Quadrant for international retail core banking. It will enable Awash International Bank to offer new services to its customers in internet banking, mobile banking, agent banking, portal transaction and point of sale.

“Misys has been our strategic technology partner for almost two decades,” said Ato Tsehay Shiferaw, president of Awash International Bank. “Core banking replacement is a high risk activity, but Misys took full responsibility for risk around implementation, ensuring absolutely no disruption to our customer service – most vendors would not take such measures.”

Awash International Bank has also deployed FusionBanking Essence Teller, Misys’s browser-based teller application, across 97 branches in Ethiopia. “Awash International Bank has a strong history of pioneering new technologies to maintain its competitive edge and market leadership,” added Nadeem Syed, CEO Misys.

http://www.waltainfo.com/index.php/explore/16227-misys-updates-core-banking-system-for-ethiopian-bank

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Wegagen Bank profits 414mln birr

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Wegagen Bank amassed 414 million birr in pre-tax profits last year.
During the 21st general assembly held at the Addis Ababa Hilton Hotel, Wegagen Bank announced that it earned 318 million birr in net profits after tax during the 2013/14 fiscal year. Last year it registered 340 million birr net profits.

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In the 2012/13 fiscal year the bank’s paid up capital reached one billion birr, which is double the National Bank of Ethiopia’s (NBE) requirement, and it has expanded it to 1.3 billion birr in the past fiscal year.

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The total capital including the reserve has reached 2.1 billion birr, according to Araya Gebre Egziabher, president of Wegagen; its total assets reached 11.5 billion birr, which is a 1.1 billion birr growth compared with the 2012/13 fiscal year figures.

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According to the bank’s statement that was released to the general assembly the total deposit mobilization has grown compared with the previous year.
The annual report indicated that Wegagen’s total deposits reached 8 billion birr, from 7.5 billion birr in the 2012/13 fiscal year.

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According to the report, the 2013/14 fiscal year’s loan and advances disbursed to the bank’s customers was similar with the 2012/13 performance, which is 4.5 billion birr.

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Two years ago the bank disbursed 3.4 billion birr in loans and advances to interested borrowers.

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According to the bank statement the number of shareholders in the past fiscal year has reached 2,203; a figure that amounted to 2,157 a year ago.
Meanwhile, Wegagen Bank’s leaders are enthusiastic about the construction of a 23 floor headquarter building in the heart of the city around National Stadium.

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Bank officials announced that work of the 805 million birr project was progressing and they expect the building to be completed by April 2016.

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Currently, Wegagen has 98 branches throughout the country; along with  89 ATM and 136 PoS machines. The bank is currently using the Agar Visa Card and is in the process of introducing Master Card, one of the three largest credit card companies.

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Recently the bank launched a mobile and Internet banking system. “The new technological banking service particularly mobile banking is significant because it allows bank access for 24 hours,” the bank report stated. The new mobile service offers customers greater flexibility and convenience and the ability to receive SMS alerts every time there is activity in their bank accounts which provides enhanced security.

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In addition, the bank’s corporate Internet banking makes it possible for organizations to make bulk payments for expenditures like salaries, announced the bank, which is currently using 17 international money transfer companies.

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The bank, established in 1997 with 15 founding shareholders and 30 million birr in capital now has 2,203 shareholders.

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http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4744:wegagen-bank-profits-414mln-birr&catid=35:capital&Itemid=27

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Nyala Insurance to double its capital

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The general assembly of Nyala Insurance SC (NISCO) announced plans to more than double their paid up capital from the current 125 million birr.

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This past year has been good for one of the strongest insurance companies in Ethiopia as their growth remained strong.

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At the general assembly, held on Tuesday November 18, at the Sheraton Addis, NISCO’s shareholders agreed to expand the company’s paid up capital to 300 million birr, which will make it one of the leading insurers in terms of capital strength.

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A year ago the company decided to expand its capital to 125 million birr, from 35 million birr the preceding year. This decision came about as a result of actions the company took to increase the firm’s capability to bring in more money.

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NISCO has significantly increased its market share to 6.2 percent in the past fiscal year. The company earned 77.8 million birr in pre-tax profits during the 2013/14 fiscal year. Their net profits (after tax) stood at 66.1 million birr for the past fiscal year and the earning per share stood at 1,396 birr.

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Last fiscal year, the insurance firm provided 98.5 billion birr worth of life and general insurance. This means that their coverage for these two types of insurance grew by four billion birr or four percent when compared with 2012/13.

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The total amount of money NISCO earned from premiums was 307.3 million birr, which is a growth of 14 percent compared with the preceding year.
The gross written premiums in the general insurance sector stood at 266.3 million birr, which registered a growth of nine percent compared with the previous year.

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Auto insurance took the majority of that with a 42 percent share of the market. This was followed by engineering, marine and fire insurance at 13, 12 and 11 percent respectively.

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Meanwhile, incurred claim increased by 31.5 percent from 69.5 million birr to 91.4 million birr in the 2013/14 fiscal year.

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The company’s life insurance grew by 53 percent which is significant because that type of insurance has not been performing well recently, say pundits. “Based on our strategic plan for the current fiscal year life insurance is expected to grow significantly,”  Yared Mola, CEO of NISCO, said at press conference held after the general assembly.

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From the total 181 million birr in expenses, 62 percent of that went to pay claims. Car accidents and the price of spare parts have been on the upswing and that has affected insurance. Still for NISCO their loss ration for auto insurance did not exceed 54 percent. The industry average loss ratio for auto insurance is 65 percent.

Currently the insurance firm is offering micro insurance coverage for farmers in Oromia, Amhara, Tigray and SNNP regions.

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“During the current fiscal year we have a plan to expand micro insurance in one another region and expand the coverage into livestock,” Yared added.

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The total assets of the company reached 618 million birr which is a growth of 142 million birr or 30 percent.

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NISCO is adding and renovating service centers (branches). It has 16 in Addis and 9 in other regions. There are plans to open 15 new service centers based on its strategic plan that will end within 5 years.

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http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4746:nyala-insurance-to-double-its-capital&catid=35:capital&Itemid=27

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World’s power producers flock to Ethiopia

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The Power Africa meeting, a continental energy talk held for three consecutive years in Addis Ababa, has been attracting interest from energy industry representatives.

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Experts who attended the two day meeting at Radisson Blu from November 20 have attracted international financiers, contractors, investors and international organizations, eager to be part of the exciting developments in the energy sector.

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The number of private sector participants is increasing, indicating that companies want to be involved in developing the energy sector on the continent.

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“Around 70 private sector participants showed up and that is a dramatic increase from the 50 last year,” experts in the energy sector said.

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“I talked with every participant in my office before they came to the conference, which will provide insight in selecting the most appropriate and enthusiastic developers,” Mekuria Lemma, plan and program head of Ethiopian Electric Power (EEP), told Capital.

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“We have a huge interest in expanding the private sector’s involvement in power development and because of that this is a good opportunity for us to attract potential investors,” Mekuria who presented his enterprise’s strategy and future projects at the meeting, added.

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He said that several applications are coming from the private sector to be part of the renewable energy development in the country.

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Recently Ethiopia ratified a law mandating private sector development of  electric power from wind, solar, geothermal and hydro.

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EEP and Reykjavik Geothermal (RG) also signed an agreement allowing the company to sell electricity to EEP. Currently, RG is developing the Corbeti Geothermal project that will generate 1,000MW when completed.

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Ethiopia wants to use both the private and public sectors to expand power generation. According to the country’s law, power developers have to sell the energy to EEP, which has a state monopoly on power distribution.

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http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4735:worlds-power-producers-flock-to-ethiopia&catid=35:capital&Itemid=27

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Logistics Strategy Report Draft Expected this Week

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In-depth study of existing logistics and full logistics strategy in fourth phase, final draft of the report is expected to be submitted to the Committee on November 27, 2014.

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The previous report from the Nathan Associates Incorporated found problems on the clearing time of the dry ports in the country.

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Nathan Associates Inc. (NAI), the American company hired by the Ethiopian government to conduct a detailed study of the country’s logistics system and develop a national logistics strategy, is expected to submit its fourth findings of the project to the Ethiopian Maritime Affairs Authority (EMAA), on Monday October 24, 2014.

Ethiopia ranks 141 in the world in the logistics sector, according to a 2013 Ethiopia Economic Update II report published by the World Bank. It is a drop from the 104th ranking the country had five years ago. Reports published by the organization indicate that poor logistics is severely hampering trade and foreign direct investment.

Importing a single 20ft container costs 2,400 dollars, whereas export costs 200 dollars more, the report states. In Tanzania, imports cost just 1,090 dollars, and exports in neighboring Kenya require 2,000 dollars. While in Ethiopia importing a container takes 41 days and exports 40 days, in Kenya exports only take 21 days.

This has forced the Ethiopian government to develop a more in-depth detailed strategy for the logistics sector.

Hired by the government to complete the strategy in March 2014, and follow-up on its implementation, the consultant submitted its third draft report in the one million dollar project, in mid October 2014. The new strategy being developed aims to slash the time it takes to import and export by half, according to a source involved in the project.

The latest report of the third stage of the study, dubbed ‘the blue print’, will be the country’s future logistics strategy. It was submitted to a committee formed by the Authority under the directorship of Mekonnen Abera, which is responsible for the follow up of the progress on the study.

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Mekonnen Abera, general director of Ethiopian Maritime Affairs Authority (EMAA)

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The Committee, after the submission, sent the draft for comment to various institutions that have a stake in the implementation of the strategy.

These institutions include the Technique Committee, composed of representatives of the Office of the Prime Minister, Ethiopian Shipping & Logistics Services Enterprise (ESLSE), Ethiopian Freight Forwarders & Shipping Agents Association (EFFSAA) and others, such as the Ethiopian Revenues & Customs Authority (ERCA), Federal Transport Authority (FTA), the Ministry of Transport (MoT) and financial institutions, such as the Commercial Bank of Ethiopia (CBE).

“There is a logistics transformation unit established at the Authority that will be the implementing entity of the strategy,” Liyuwork Amare, the national logistic strategy study follow up contact person at the Authority, told Fortune. “The unit will follow the logistics and strategy affairs and will compile the comments of these parties to send it to the consultant.”

This unit also had a video conference with the NAI for further refinement after the submission of the first draft report.

Comments from the industry mainly focused on the implementation of the strategy in accordance with the country’s context, such as the landlocked nature of the country, according to Liyuwork.

The first two reports of the NAI study, submitted consecutively to the committee, were the inception and the diagnostic reports. The former dealt with the conditions of the logistics sector and identified the areas where the sector could be improved. The latter assessed the institutions involved in the logistics sectors and identified the hindrances to the logistics service through the supply and value chain, taking some export and import items into consideration.

There was a great deal of dissatisfaction on the scope of the study Nathan carried out during its first presentation in Harmony Hotel back in September 2013, where many criticized its experts for focusing on Ethio-Djibouti corridor and not on the national logistics roadmap.

“The implementing bodies know what can be achieved and what cannot, as the nature of the strategies and the implementation depends on the context in the country,” Liyuwork says.

After the corrections, in light of comments made, the next step of the project is to draft the implementation methodology. This is called the intervention stage and will show how the strategy needs to be implemented. It is expected to be delivered to the committee at the Authority on Monday, November 24, 2014.

The final draft of the report is expected to be submitted to the Committee on Thursday, November 27, 2014, after the corrections are made.

After the submission of the final draft, a steering committee of the government, especially designed for the reviewing of the reports by NAI, headed by the Prime Minister, will see the report to check the implementation of recommendations, officials at the Authority disclosed to Fortune. The final step will be the implementation stage that is to be conducted under the supervision of NAI.

http://addisfortune.net/articles/logistics-strategy-report-draft-expected-this-week/

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Number of Turkish companies visiting Ethiopia increasing

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Number of Turkish companies visiting Ethiopia because of their desire in investing in the country has been increasing, Ethiopian Ambassador to Turkey Ayalew Gobeze announced.

In an exclusive interview with ENA, the Ambassador said 120 Turkish companies visited Ethiopia last year. Of these investors some have already got licenses and others are planning their projects.

The number is expected to increase this year. Some 10 Turkish investors, who are interested to invest in Ethiopia, have visited the country in the month of September, he added.

These companies have shown interest to engage in textiles and leather industries and cotton cultivation, he said.

Noting the share of Turkish investment in Ethiopia is large, Ayalew said, number of companies that are desirous to invest in Ethiopia is also increasing.

A total of 350 projects owned by Turkish companies are licensed so far, of which 90 are already operational.

In addition to textiles, leather and agro processing, Turkish companies are also engaged in the construction sector.

The bilateral relations between Ethiopia and Turkey have been growing over the past years, according to Aykut Kubaroglu East African Affairs Deputy Director at Turkish Foreign Ministry.

Turkey has created strong investment tie with Ethiopia, which is one of the fast growing economies in the world, he added.

The favorable investment atmosphere, fast economic growth and peace and stability of the country are helping Ethiopia to attract more Turkish investment, the Director said.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2538:number-of-turkish-companies-visiting-ethiopia-increasing&Itemid=260

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Senior CPC leader vows stronger ties with Ethiopia

A senior leader of the Communist Party of China (CPC) said on Monday the CPC is willing to strengthen exchanges with the Ethiopian People’s Revolutionary Democratic Front (EPRDF).

Liu Yunshan, member of the Standing Committee of the Political Bureau of the CPC Central Committee, made the remarks while meeting with Demeke Mekonnen, EPRDF vice chairman and vice prime minister of Ethiopia.

Hailing the fruitful cooperation between both countries since they forged an all-round cooperative partnership in 2003, Liu said China hopes to work closely with Ethiopia to implement the consensus reached between both state leaders, respect each other and learn from one another, to promote bilateral ties.

This year marks the 20th anniversary of the official relationship between the CPC and the EPRDF. Liu said the CPC hopes to share experience with the EPRDF in governance, and make joint efforts to facilitate stronger China-Ethiopia and China-Africa ties.

Applauding the comprehensive substantial cooperation between Ethiopia and China, Demeke Mekonnen said the EPRDF is ready to cement cooperation with the CPC and learn from China’s experience, to push forward stronger bilateral ties.

http://www.waltainfo.com/index.php/explore/16228-senior-cpc-leader-vows-stronger-ties-with-ethiopia

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Ethiopia, Portugal to Boost Trade, Investment Ties

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Yemen Keen to Strengthen Relations with Ethiopia: Speaker Yahya Ali Al-raa’e

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Speaker of Yemen’s Parliament, Yahya Ali Al-raa’e said his country is keen to strengthen its long-standing relations with Ethiopia.

The speaker delivered today a letter sent to President Mulatu Teshome from President Abd Rabbuh Mansur Hadi.

According to the speaker, Yemen wants to particularly strengthen relations in investment and trade.

The country especially wants to share Ethiopia’s experience in its inclusive development, he added.

President Mulatu said on his part Ethiopia is ready to support Yemen and to strengthen the long-standing sisterhood relationship of the two countries.

He stated that Yemen will be one of the beneficiaries of the Grand Ethiopian Renaissance Dam (GERD). This will open another chapter in boosting further the friendship of the countries.

Diplomatic relations between Ethiopia and Yemen started in 1935, it was learned.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2540:yemen-keen-to-strengthen-relations-with-ethiopia-speaker-yahya-ali-al-raa’e&Itemid=260

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Ethiopia succesfully holds out climate change crisis: Dr. Tewoldeberhane

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Ethiopia has successfully withstood  serious climate change impacts, which  is a severe threat for  human existence.

In his exclusive interview with WIC, Advisor in the Ministry of Environment and forest Dr. Tewoldeberhan  Gebreegzabher said that Ethiopia has been effectively implementing the robust policies designed to reduce the hazards of climate change crisis.

He said that Ethiopia has been achieving encouraging results  in its efforts against  the impacts of climate changes.

One of the  successes of the nation is its capability of  reducing carbon emissions, which is the main causes  of crisis of climate changes, he said, adding that this is  taken as  a model by other  countries.

According to Tewoldeberhan, Ethiopia  is  constructing  carbon emissions  free  Hydroelectric  Dams  and  Railway systems  that  this environment friendly development  has emanated  from the viable economic  policy  of country.

Efforts are exerted to plant billions of  seedlings  all over the country that  have rased the 3 per cent  forest  to 10 per cent  in the past ten years,   said  Dr Tewolde Berhan.

He alsao added that the development  of green  economy  is underway to  reduce  the carbon pollution in the country.

Millions of Ethiopians are participating in the rural soil and water conservation programs in all regions, said  Tewoldeberehan,  adding the activities not only contribute  to  protect   climate  change crisis but also raise  agricultural productivity.

Dr. Tewoldbrhan, a former Director General of Ethiopian Environment Protection Authority is among the few scientist of the world who is tirelessly working to protect the human being from the crisis of climate change.

http://www.waltainfo.com/index.php/editors-pick/16229-ethiopia-succesfully-holds-out-climate-change-crisis-dr-tewoldeberhane-

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Ethiopia harnesses sewage to cut climate emissions, pollution

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Sewage in Ethiopia’s capital could soon be turned into cylinders of compressed biogas as part of an effort to clean up the city, cut climate-changing emissions and find new sources of clean energy.

Currently the Addis Ababa Water and Sewage Authority (AAWSA) estimate that it collects and treats only 12 percent of the city’s liquid waste. But a new effort to trap sewage and use bio-digesters to turn it into biogas and fertilizer could help lower energy costs, reduce methane emissions from sludge and cut spills, its backers say.

The 18 million US dollars project is a joint effort of the city’s water and sewage authority, a non-governmental environmental monitoring firm and 4R Energy, an Ethiopian firm that focuses on recycling and reusing municipal waste for renewable energy.

Benjamin G. Sishuh, 4R Energy’s project manager, said he sees the effort as a way of scaling up small-scale biogas projects that have proliferated in Africa and elsewhere.

“I saw that biogas use in rural or urban area was very small, so I came up with a plan for biogas development that can be used by the majority of the population (and) which can be affordable” said Sishuh. He said his company wants to put the project into effect at two large waste dumps in the city.

The project could be operational as soon as early next year, he said. If successful, it could supply as much as 30 percent of Ethiopia’s compressed natural gas needs, AAWSA estimates.

Ethiopia currently meets its gas demands by importing liquefied petroleum gas (LPG) from countries including Yemen, Sudan and Libya, Shishuh said.

The project is a public-private partnership with environmental non-profit Lem Ethiopia carrying out environmental monitoring and impact assessment, he said.

Sishuh’s company hopes that gas produced by the project will be sold to households for cooking and heating, at prices lower than those families now pay for imported gas. Fertilizer produced from the waste also could be sold to farmers inexpensively, he said.

REDUCING CLIMATE CHANGE, POLLUTION

But city officials are most interested in the project’s ability to reduce methane emissions and local pollution, which is worsening as the capital grows.

Nuri Mohammed, a wastewater treatment manager at AAWSA, said lack of sewage treatment today leads to problems with the safety of drinking water, and could spell outbreaks of diseases such as cholera if not properly dealt with.

AAWSA, which is struggling to keep up with the city’s waste disposal needs, is currently expanding Kaliti wastewater treatment plant in order to increase its capacity by 90 percent, to around 1,000 cubic meters of waste per day by 2016, he said.

Nuri said that as the city tries to cope with a growing number of homes and businesses, the need for proper sewage disposal is paramount and his authority is working on expanding sewer systems to accommodate the flow.

Currently some of Addis Ababa’s sewage is deposited at several dump sites where it is converted into fertilizer for non-edible crops, such as flowers.
Moges Worku, the executive director of Lem Ethiopia, the organization that will carry out environmental monitoring of the project, said it will have “great impact in cutting greenhouse gases being evaporated from the landfill sludge to the atmosphere”.

Ethiopia aims to become a net zero carbon emitter by 2025 through the use of renewable energy, biofuel and reforestation programs.

Gebreegzabhir Gebremeksel 33, who owns a small restaurant that employs three staff, said cheap gas is a major attraction of the project. Today he spends on average 20 percent of his income on liquefied petroleum gas, he said.

Each month he spends on average 1,630 birr ($81) on gas cylinders to run his restaurant and his home, a cost on top of feeding his family, paying his workers and paying his rent, he said. Any reduction in the cost of energy would produce welcome savings, he said.

http://www.waltainfo.com/index.php/explore/16199-ethiopia-harnesses-sewage-to-cut-climate-emissions-pollution

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Government Considering to Pull ZTE Off ethio telecom Deal

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800 million dollars deal on the brink of collapse, Sony Ericsson ready to step in

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Debretsion Gebremichael (PhD), minister of CIT, in the rank of Deputy Prime Minister.

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ZTE is going to lose the project within a few weeks if it does not agree to swap the old network with the one to be newly installed, according to Debretsion Gebremichael (PhD), minister at the Communication & Information Technology, in the rank of Deputy Prime Minister.

The project was signed in August last year, when ZTE and its other Chinese competitor, Huawei Technologies, won these contracts. The contract was to provide fourth generation (4G) technology, a broadband technology allowing browsing speed of 100mb per second in Addis Abeba, and to enable third generation (3G) services across the country, with a total investment of 1.6 billion dollars, which was to be obtained from the Chinese government through these companies.

Huawei finds itself in good footing with the project, moving now into testing its 4G network in the capital, with individuals selected by ethio-telecom experiencing the service. Its fierce competitor faces a snag.

ethio-telecom, the Ethiopian state monopoly, divided the country into 12 infrastructural zones, allowing one sole vendor within each to undertake swift maintenance services. The ZTE contract was to set up a network in Addis Abeba, where there have been other networks set up by Nokia, Siemens and Ericsson.

“We requested a new commitment from ZTE to include the swapping of the old network, along with the optimisation they are working on according to the former agreement” said Debretsion. “But their response to our demand was negative, reasoning that it is an extra service requiring additional payment.”

ZTE’s officials in Addis Abeba deny the government’s decision to pull out from the deal although confirmed the existence of discussion over the dispute.

“We are still negotiating stage,” ZTE’s public relations officer by the name Pise, told Fortune.

She has declined, however, to speak further on the subject, claiming non-disclosure clause in the contract with the telecom monopoly.

Under this contract, the three-phase project was finalised three months ago. The first phase involved replacing the old Nokia network, set up in 75 areas including Bisrate Gabriel, Mekanisa, Ayer Tena, Alem Bank, and Alem Gena, with a new Huawei network. The second phase involved 239 further areas.

In the third phase, ethio-telecom built the capacity for providing the 4G service for 400,000 customers, by completing civil works, erecting antennas and installing service equipment in an additional 410 sites. In these sites, there will be 210 antennas supporting 4G. A total of 722 antennas were installed bringing the city’s service coverage reach to 100pc.

The expansion project, which is to be completed by the end of the Growth & Transformation Plan (GTP) period, in 2014/15, is supposed to increase the mobile service capacity from 23 million to 50 million, with 40 million subscribers.

Following the completion of these three phases, ethio-telecom was expected to offer 4G services in Addis Abeba and begin the countrywide optimisation by the beginning of this year, but this has yet to happened.

“As an alternative, and as a back-up, we have planned two deals that we are discussing with Sony Ericsson, which seems fruitful,” Debretsion disclosed to Fortune.

ZTE also fell into a tax row with the Ethiopian Revenues & Customs Authority (ERCA), as the Authority required 920 million Br in tax from the company, as well as interest and penalties, which was finalised by administrative measures reducing the tax by nearly half.

Ericsson agreed to come up with the financing, as ZTE has done before, and will also work on the full swapping, according to Debretsion.

The first overseas firm to install mobile networks in Addis Abeba for 19,000 subscribers while still Ericsson AB, Sony-Eric is a multinational mobile phone manufacturing company headquartered in Tokyo, Japan, and Lund, Sweden.

http://addisfortune.net/articles/govt-considering-to-pull-zte-off-ethio-telecom-deal/

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First Contract for Bombardier in Ethiopia

Rail technology leader Bombardier Transportation has won a contract to deliver the main-line signalling solution for Ethiopia’s new 400km Awash-Weldia line.

The order has a value of approximately 36 million euros and was awarded by Turkish construction company Yapi Merkezi.

Part of an investment programme by Ethiopian Railways to extend the country’s rail network, the new link is to be equipped with the proven Bombardier Interflo 250 system; this is based on the European Rail Traffic Management System (ERTMS) — a globally standardised signalling system that will ensure the new railway’s high utilisation.

Erdem Arioglu, board member of Yapi Merkezi, said: “This is one of the longest lines tendered as a turn-key project in Sub-Saharan Africa. Yapi Merkezi went through a very detailed selection process to determine its suppliers and sub-contractors and Bombardier was selected due to its proven track record and successful long-term co-operation with us on similar projects world-wide.”

Bombardier’s advanced rail control solutions have already been selected across Africa, including the Gautrain Rapid Rail Link and Durban’s main rail corridors in South Africa, plus Zambia’s north–south connection between Livingstone and Chingola — plus the upgrade of Morocco’s Casablanca to Tangiers line. Bombardier is also providing Algeria.

http://www.waltainfo.com/index.php/explore/16216-first-contract-for-bombardier-in-ethiopia

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States, Investors Pledge 357 Million Birr for Dev’t of Zone

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A pledge of 375 million birr was made to sustainably solve the problems and the development of Wag Himra Zone.

The money was raised by a fund raising campaign organized by Wag Himra Development Association, regional states, and local investors.

Speaking on the occasion, President Mulatu Teshome said the peoples of the country are working effectivey in speeding up the prosperity of the country by making use of the favorable national environment created to fight poverty and accelerate the renaissance of Ethiopia.

Yet there are still students in some parts of the country that attend classes under trees and people who do not have health services, he added.

The challenges these compatriots face is not to be taken lightly, the president stressed.

According to Mulatu, since developing any part of the country is beneficial to all Ethiopians, the government and all stakeholders should strive hard to develop Wag Himra Zone.

House of Federation Speaker Kassa Teklebirhan said on his part the fund raised demonstrates that the federal system we established is not only competitive but also where regional states support one another to solve their problems and develop the country together.

According to Kassa, there are some indications that Wag Himra Zone could possibly be a source of wealth for the country, even if the zone was devastated by famine and war.

Coffee and sesame exporter Belayneh Kindie stated that investors have national responsibility to support localities lagging behind in development along with the government as the country is on the road of development.

The investor pledged over 1 million birr and added that he would further consolidate his support.

Out of the total amount of money pledged for Wag Himra Zone, 30 million birr was by Amhara regional state, 20 million birr by Tigray, 10 million birr by Gambella, 5 million birr by Afar, 4 million birr by Oromia, and 3 million birr by Southern Nations, Nationalities and Peoples states.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2541:states-investors-pledge-357-million-birr-for-dev’t-of-zone&Itemid=260

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Government Strengthens Copyright Proclamation for Right-Holders

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Collective Management Society to be established to manage copyright payments.

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Brehanu Adelo, general manager of EIPPO

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Ethiopia’s Parliament has ratified the bill for the amendment of the existing Copyright & Neighboring Rights Protection Proclamation first issued in 2004, on November 18, 2014.

The original proclamation lacked some specific issues which are now included in the amendment, according to its authors. The first of these is royalty-fees payable to the owner of a work protected under the proclamation, which includes writings, audio recordings, pictures and photographs. It is to be collected by the Collective Management Society (CMS) from those who use the works for commercial purposes.

“The Society will be responsible for the collection of the royalties from the users of the works,” Brehanu Adelo, the general manager of the Ethiopian Intellectual Property Protection Office (EIPPO), told Fortune.

The Society, which will comprise different right-holders in the copyright arena, is to be established and recognised by Brehanu’s Office through an application letter.

The Society will be formed for non-profit purposes, according to the proclamation.

After the establishment, the mandates of the Society are to collect royalties from users and distribute them to the right-holders, preparing royalty schemes and submitting them to the Office for approval and implementation, preparing a working manual to submit to it and withhold income tax to pay it to the Ethiopian Revenues & Customs Authority (ERCA).

“The redistribution of the royalty is also the mandate of the society,” said Brehanu. “The Office is not going to intervene in this system; we only identify if the scheme is reasonable or not, in accordance with the paying capacity of the users.”

The establishment of an Intellectual Property Tribunal is also included in the new amendment. Tribunals are not new in the Ethiopian legal context. There are some, like the tax appeal commission which looks into cases related to tax valuation, and the Federal Trade Competition & Consumers’ Protection Appellate Tribunal.

“There is a tribunal now in the Office which has been operating on the cases of trademarks and we only need to reorganise the structure,” Brehanu said. “There are legal areas that require some expertise in the field and this is one of them.”

The establishment of the tribunal also helps solve the traffic at courts by taking some of the claimers, according to Brehanu.

The amendment encountered controversy during the process of the ratification, especially based on the Marrakesh Treaty, which favors those with disabilities, as they will need to use the works produced by others after changing it into another form. This means those who are seeing impaired have the right to access books and change it into an audio recording.

Even though Ethiopia signed the Marrakesh Treaty in June 2013, the Parliament has yet to ratify the treaty which could have become the law.

“We have asked some questions on the amendment during the public hearing, but now the amendment has been ratified,” Gebre Teshome, the public relations branches and membership affairs head at the Ethiopian National Association of the Blind (ENAB). “Now, after the ratification, I will not comment on the law.”

The Association expects the treaty to be ratified within two months as it is tabled by the Council of Ministers at present, according to Gebre.

But Brehanu argues the Marrakesh Treaty is not considered in the amendment, as the treaty is not the law of the country.

“But when it becomes the law, there might be a need for more amendments,” Brehanu explains.

The proclamation also discusses the issue of works without masters. The length of time a work is protected for a specific kind of work is for the lifetime of the right-holder and an additional 50 years after he or she dies. The 50-year period begins from the beginning of the following January after their death. Royalty collected from such works is to be collected by the Society and is to be reinvested in the protection of copyright and related works, the Proclamation declares.

Punishment on the transgression of the rights was five to 10 years of imprisonment if it is made intentionally; and if the transgression is made in negligence, the guilty party will be punished by one to five years of imprisonment. But considering the low deterrent effect it would have, the punishment was improved to have a 5,000 to 25,000 Br penalty for negligent transgressions. And for intentional transgressions, there is a 25,000 to 50,000 Br penalty.

http://addisfortune.net/articles/govt-strengthens-copyright-proclamation-for-right-holders/

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Cereal productivity in Tigray reaches 28 quintal per hectare

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Sustainable follow up and capacity building provisions has enhanced the productivity of cereal, which mounted to 28 quintal per hectare from 26.6 the same period last year, Tigray Region Agriculture and Development Office said.

Crop Development and Soil Fertility coordinator Solomon Hailu told WIC that the continues capacity building and development army building efforts exerted by the Regional State have enhanced productivity.

Following continues capacity building offered to farmers, 45 million quintal compost, 62 thousand quintal modern fertilizer and 178 thousand quintal selected seed have used.

According to the coordinator, 35.3 million quintals of cereal was harvested from 1.3 million hectares of land.

According to Solomon, during the assessment program 40.8 million quintals of crop is targeted to harvest but the assessment shows that 46 quintals of cereal from 1.3 million hectare of land will be harvest.

http://www.waltainfo.com/index.php/explore/16235-cereal-productivity-in-tigray-reaches-28-quintal-per-hectare-

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Netafim in Ethiopian talks to sell $200m irrigation systems

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Irit Avissar and Ron Stein

The project is complex, and its terms, including the financing question, have not yet been finally closed. Netafim, managed by CEO Ran Meidan, is carrying out the work in Ethiopia in cooperation with Global Africa Industries, owned and managed by Itai Terner. In addition to the complex deal itself, one of the interesting things about it concerns the question of financing. The bank’s customer is Netafim, but the party receiving credit from the bank is an Ethiopian company controlled by the Ethiopian local government, with the money being paid to Netafim as payment for the project. The finance transaction is a complicated scheme called buyer credit, in which the bank is actually financing the company receiving services from its customer. Credit granted to an Ethiopian company, however, is considered high-risk credit, because it involves a company operating in a country defined as an emerging market, and which does not have large foreign currency reserves. This loan is therefore designed to be secured through a credit insurance company. The parties have apparently not yet settled the question of the insurance, and it has not yet been determined whether the party providing it will be the government credit insurance company or a foreign credit insurance company.

The advantage of the deal for Bank Hapoalim is that the risk is being transferred to the credit insurance company (these companies have high debt and financial strength ratings), which means that Bank Hapoalim’s risk is determined by the credit risk of the insurance company insuring the loan, which is low, rather than by the Ethiopian company’s risk.

Quite a big deal

The negotiations for putting together a financing package have reached an advanced stage, although they have not yet been finally approved. The deal is a rather large one, and the bank is therefore expected to recruit other financial institutions to take part in it, apparently mainly foreign institutions specializing in this type of transactions. Bank Hapoalim is also providing credit to Netafim directly through a consortium that includes Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), Harel Insurance Investments and Financial Services Ltd. (TASE: HARL), Amitim (the older pension funds for which an arrangement has been made), Mizrahi Tefahot Bank (TASE:MZTF), Israel Discount Bank (TASE: DSCT), Union Bank of Israel (TASE: UNON), and HSBC. Some of these institutions may also participate in financing this contract.

Netafim, controlled by the Permira private equity fund, uses drip irrigation that saves water and reduces erosion and soil exhaustion. Netafim exports $800 million annually. The company has 16 plants in 11 countries, and 13 of its plants are outside of Israel. The company has 4,000 employees.

http://www.globes.co.il/en/article-netafim-in-ethiopian-talks-to-sell-$200m-irrigation-systems-1000967346

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By Yonas A. Yimer 

Within the last few months Addis Ababa hosted a number of conferences on agriculture the latest one of these being the ‘African Land Policy Initiative Conference (LPI) held at the African Union Commission (AUC) from November 11-14.

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China-Ethiopia relations: an excellent model for South-South cooperation

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China and Ethiopia have strengthened their bilateral relations, which be an excellent model for South-South cooperation, Ministers of Foreign Affairs of the People’s Republic of China said.

Fifty years ago, the first Premier of the New China, Zhou Enlai, visited Ethiopia during his first trip to Africa. He was warmly welcomed by the Ethiopian Government and people, and his visit provided a fresh start to friendly China-Ethiopia relations. Fifty years later, Chinese President Xi Jinping, during his first visit as President to Africa, made a point of arranging a meeting with Ethiopian Prime Minister Hailemariam Dessalegn. Chinese Premier Li Keqiang also chose Ethiopia as the start of his first trip to Africa as Premier. China and Ethiopia have, indeed, attached great importance to the development of bilateral relations. They regard each other as offering priorities for strategic foreign policy choices.

Ethiopia and China are both heirs of ancient civilizations and fifty years may only be a short phase in our long histories, but the fruitful achievements those years have given China-Ethiopia relations is something our two peoples can be proud of and cherish.

China and Ethiopia are natural partners. In the past we have both suffered foreign invasion and shared the same feelings towards invaders. We both follow an independent foreign policy and share the belief that development is the top priority for national renaissance. We have provided mutual support on major issues concerning each other’s core interests, and have shared ideas, learnt from each other’s experiences of governance and explored the paths of development suitable for our repective national conditions. Indeed, on the basis of the principles of equality, mutual respect and win-win cooperation, China and Ethiopia have developed multi-dimensional relations, with people-to-people, business-to-business, government-to-government and party-to-party relations as the cornerstones of the relationship. We are sincere friends, reliable partners and good brothers, sharing both happiness and adversity, rejoicing in successes that the other has achieved. In a nutshell, China-Ethiopian relations have become a real and excellent model for South-South Cooperation.

Since the establishment of diplomatic ties in 1970, and even more following the start of the Comprehensive Cooperative Partnership in 2003, China-Ethiopia relations have developed rapidly. They have now reached their highest qualitative level. The leaders of the two countries have established close working relations and a personal friendship. Last year, President Xi Jinping and Prime Minister Hailemariam Dessalegn met twice on different occasions. Prime Minister Hailemariam paid a very successful visit to China last year and in the same year there were also the visits of the Ethiopian Deputy Prime Minister to China and of two Chinese Vice-Premiers to Ethiopia. The fruitful official visit by Premier Li Keqiang to Ethiopia in May this year and the successful state visit by President Mulatu Teshome to China in July also injected strong momentum into the continued development of our bilateral relations.

This has been apparent in many areas. Between 2003 and 2013, the yearly volume of bilateral trade between China and Ethiopia increased by more than 13 times. China has become the biggest foreign investor and the largest trading partner of Ethiopia. Ethiopia is now one of the main markets in Africa for Chinese products, equipment, technology and investment. Since 2006, China, through various mechanisms, has provided a large amount of financial support for the construction of a number of Ethiopia’s mega projects. These include the first Express Toll Way and the first operative Wind Power Plant, the Addis Ababa Light Track Railway and other modern railways developments as well as the Tirunesh-Beijing Hospital and the Confucius Institute. They are vivid illustrations of our fruitful and comprehensive relationship.

On the international plane, China and Ethiopia work very closely to address global challenges including climate change, food insecurity, poverty and regional conflicts as well as the promotion of China-Africa relations within the framework of the Forum on China-Africa Cooperation(FOCAC), and in safeguarding the interests of developing countries generally.

Within the context of globalization, China unwaveringly pursues its “Chinese Dream” and has been deepening the comprehensive reforms involved in this. Ethiopia similarly is committed to its Ethiopian Renaissance, to fulfill its five-year Growth and Transformation Plan and achieve its Vision 2025 to become a middle income country. China is now the second largest economy in the world; and Ethiopia is emerging as one of the fastest growing economies in Africa and the world. Given our complementary needs, both countries are looking forward to greater opportunities of in-depth cooperation, and we will be expanding bilateral relations in a number of areas.

In the first place, we will be maintaining the momentum of high level exchanges as the driving force for deepening and upgrading our relationship. Secondly, we will continue to deepen cooperation in infrastructure construction and in the development of industry, establishing more special economic zones. For China, Ethiopia is a potentially large market and an important investment destination; for Ethiopia, China is a major source for the transfer of industrial capacity and technology. We will not only be able to improve the infrastructure facilities in Ethiopia, but we will also work together for regional connectivity, including establishment of transportation networks, electricity and telecommunication links. Thirdly, the two countries will be able to tap into the great potential for cooperation in the fields of agriculture and mining and energy, especially green, clean, sustainable energy, and upgrade our cooperation to a fully-fledged strategic partnership. In the fourth place, we will be promoting cultural and people-to-people exchanges, and a Chinese Cultural Center will soon be established in Ethiopia, enhancing mutual understanding between our two peoples, and promoting the knowledge of our impressive and important civilizations. Fifthly, we will continue to strengthen coordination and cooperation on international issues and promote China-Africa relations healthfully and steadily through our joint efforts. We will continue to make new contributions to maintaining the peace, stability and prosperity of Africa and the world, and promote the establishment of a new, more rational and fairer international political and economic order. We will contribute towards the realization of the goal of a peaceful and prosperous Africa.

China and Ethiopia will continue to join hands to bring about an expanded and upgraded model of bilateral relations. We have no doubt, the China-Ethiopia relationship will certainly benefit and provide a brighter future for both our peoples and for us all.

http://www.waltainfo.com/index.php/editors-pick/16328-china-ethiopia-relations-an-excellent-model-for-south-south-cooperation

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Ethiopia issues USD 1 billion sovereign bond

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Following the decision that was passed by the Government of Ethiopia to dip into the international money market, it announced to investors on Wednesday that it has issued a sovereign bond amounting one billion dollar, sources told The Reporter.

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Ibdar Bank’s landmark USD 100 million lease agreement with Ethiopian Airlines pays first dividend

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Manama – Bahrain-based Islamic Investment bank, Ibdar Bank successfully concludes the structuring of a 12-year agreement expiring in 2026 for acquiring four brand new Bombardier Q400 Next Gen aircrafts and leasing them to the Ethiopian Airlines.

The deal that was structured under a joint venture with Dubai-based operating lessor Palma Holding, marked the first ever Sharia-compliant transaction in Africa’s aviation sector. The agreement includes options for an additional four Q400 NextGen aircraft, which Ibdar Bank intends to exercise in the near future.

The announcement was made yesterday during a press conference by the recently joined, Mr. Basel Al-Hag-Issa, Chief Executive Officer of Ibdar Bank, who highlighted that the Bank has received its first dividend from the Ethiopian Airlines following this milestone transaction .

Valued at USD 100 million, Ibdar Bank contributed as investor with USD 22 million, while an amount of USD 78 million was secured through a funding agreement with Canada’s Export Credit Agency “EDC”, the export finance agency of Canada.

The Aircrafts, equipped with two engines each, have been delivered over a period of three months, with the first Aircraft delivered on 19 June 2014 and the last Aircraft was delivered on 29 August 2014.

“This opportunity comes at a time when Ethiopian Airlines, an award winning African airline with strong financial and operating track record, is embarking on an ambitious fleet expansion program amidst strong growth in African air travel,” said Mr. Al-Hag-Issa. Adding that the aviation industry in Africa and the MENA markets continue to report some of the strongest growth rates of any region.

Mr. Al-Hag-Issa said that Ibdar Bank is providing select investors with the opportunity to acquire an indirect stake in the four Bombardier Q400 NEXTGEN Aircraft. Investors can expect to receive returns of 10% cash yield per annum, payable on a quarterly basis.

For Ibdar, this is its second aircraft leasing transaction. The first was concluded with Emirates Airline in 2011 whereby the Bank acquired a Boeing 777-200ER from Emirates and leased it back to the airline for a fixed six year-term. The Bank also participated in a syndicated financing facility of USD five million for the Bahrain-based carrier Gulf Air in 2009, which has been fully repaid.

Mr. Al-Hag-Issa pointed that Ibdar is focused on originating new and innovative transactions that allow the Bank and its partners to excel. “We have a strong pipeline of opportunities in other sectors where equally we intend to build on growth in consumer patterns across our markets of focus and in industries where we have the experience and know-how to deliver solid returns,” he said.

Ibdar Bank is active in private equity in the GCC and MENA markets, in regional and global real estate and has extensive experience in sectors including infrastructure, oil & gas, maritime and retail, among others.

In addition to financing and leasing in the aviation sector, Ibdar is focused on originating new and innovative transactions that allow the Bank and its partners to excel. We have a strong pipeline of opportunities in other sectors where equally we intend to build on growth in consumer patterns across our markets of focus and in industries where we have the experience and knowledge to deliver solid returns.

https://www.zawya.com/story/Ibdar_Banks_landmark_USD_100_million_lease_agreement_with_Ethiopian_Airlines_pays_first_dividend-ZAWYA20141201090006/

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Sub-Saharan Africa face decline in soil fertility

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Empirical assessment of Sub-Saharan Africa’s soil fertility has confirmed that the region faces a significant decline in soil fertility, which could further aggravate food insecurity if no appropriate action is taken. 

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Ethiopia’s bond offering rated by Moody’s and S&P

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Africa’s Infrastructure Proving Attractive For Local, Global Investors

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VENTURES AFRICA – Africa’s infrastructure deficit unveils an array of opportunities for investments, and these opportunities are been snapped up both by local and global investors. By 2025, the amount of money spent on infrastructure in the Africa is projected to reach $180 billion per annum, according to a new report by PwC.

“The shallow economic recovery in most developed markets has shifted the focus to faster-growing regions. This is also true for the infrastructure development sector,” said Jonathan Cawood, Capital Projects & Infrastructure Leader for PwC Africa.

Cawood noted that the continent’s abundance of natural resources and recent mineral, oil and gas discoveries, demographic and political shifts, as well as a more investor-friendly environment has beamed investor spotlight on Africa.

In the survey for the report titled ‘Capital Projects & infrastructure in East Africa, Southern Africa and West Africa,‘ more than half of respondents indicated that their planned spending on infrastructure – both new projects and refurbishment of assets – would increase by more than 25 percent from the previous year. They said much of their spending would be focused on new development – 51 percent of all respondents planning to spend more than half of their budgets on new assets. 58 percent of respondents from West Africa are planning to increase their spending on infrastructure by more than 25 percent, followed by those in East Africa (53 percent) and Southern Africa (40 percent).

Interviews were conducted among 95 key players in the infrastructure sector, including development finance institutions, private financiers, government organisations and private construction and operations companies across East, West and Southern Africa. The sectors surveyed included water, transport and logistics, energy, mining, telecoms, and real estate, with the main focus being on economic infrastructure.

“While respondents are clearly committed and optimistic about the continent’s infrastructure development, there are a number of obstacles they recognise must be dealt with,” says Cawood.

He noted that resolving these quickly and creatively will attract other project developers, owners and investors to enter the African market.

Many projects across sub-Saharan Africa have been affected by the lack of funding or insufficient funding, the report notes, stressing that funding from sources such as sovereign wealth funds, bonds and pensions funds is becoming increasingly important. It however notes that these types of investors are typically more interested in projects that are fully operational and tend to shy away from greenfield projects and their construction risks.

The continent’s resource wealth have been enticing some of these investors such as China, Japan, India and other Asian countries whose investments in infrastructure in Africa is linked to one resource or the other. Local players are also increasing investments.

Interviews were conducted among 95 key players in the infrastructure sector across East, West and Southern Africa. The sectors surveyed included water, transport and logistics, energy, mining, telecoms, and real estate, with the main focus being on economic infrastructure. The report highlighted the different stages of development and uniqueness of each country and provides insights into the world of infrastructure delivery across African countries and regions in sub-Saharan Africa (SSA).

More respondents in Southern Africa than other regions expect projects to be fully funded internally or through government funding, the report notes, while those in East and West Africa are counting on a mix of private-sector and government financing.

“The need to improve infrastructure to drive economic development is undisputed. The survey makes it clear that the availability of funding is a common and critical challenge,” said Mohale Masithela, PwC Partner in Capital Projects & Infrastructure Financing.

Mohale however notes that private capital does not track needs, it tracks opportunities. Therefore, to ensure the need for infrastructure to be viewed as an opportunity to provide capital by funders, some of the other challenges identified in the survey such as political risk, policy and regulatory clarity and the availability of appropriately skilled resources must be addressed.”

The report notes that South Africa and Nigeria have the most ambitious infrastructure programmes and together make up almost 60 percent of the money spent on infrasture across SSA. Kenya follows as the third largest in planned spend. Transport and Utilities (including power/energy and water) will account for approximately 70 percent of this spend in Southern Africa.

Having suggested ways by which the continent’s infrastructural needs can be addressed, Cawood notes that infrastructure plays a crucial role in economic growth and poverty reduction, with a 5-25 percent per annum return on investment as an economic multiplier.

He noted that countries that have been most successful in developing and maintaining infrastructure have established programmes of prioritised investment opportunities with a number of features, including clear political support, a proper legal and regulatory structure, a procurement framework that can be understood by both procurers and bidders, and credible project timetables.

http://www.ventures-africa.com/2014/12/africas-infrastructure-proving-attractive-for-local-global-investors/

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Saudi Billionaire to Invest $100 Million in Ethiopian Rice Farm

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By William Davison December 02, 2014

Employees of Saudi Star rice farm work in a paddy in Gambella. Photographer: Jenny Vaughan/AFP via Getty Images

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Saudi Star Agricultural Development Plc, an Ethiopian company owned by billionaire Mohamed al-Amoudi, said it plans to invest $100 million in a rice farm in western Ethiopia next year to kick-start its stalled project.

The company leased 10,000 hectares (24,711 acres) in the Abobo district in the Gambella region, where it’s based, in 2008 and bought the 4,000-hectare Abobo Agricultural Development Enterprise from the government 18 months ago for 80 million birr ($4 million). After delays caused by unsuitable irrigation design and contractor performance issues, Saudi Star wants to accelerate work in 2015 after a change of management, a redesign of the farm and a successful trial of rain-fed rice on 2,000 hectares at the formerly government-owned, Chief Executive Officer Jemal Ahmed said in a phone interview.

“We have a very aggressive plan,” he said on Nov. 26 from Jimma, about 260 kilometers (162 miles) southwest of the Ethiopian capital, Addis Ababa. “If we’re able to do that we’ll be able to produce more.”

Story: At OPEC Meeting, Saudi Arabia Stares Down Texas and North Dakota

The project is part of a government plan formalized in 2010 to establish commercial farms on 3.3 million hectares of fertile land in sparsely populated parts of the country such as Gambella. Ethiopia expected to earn $6.6 billion a year from agriculture exports in 2015, according to a five-year economic plan published in 2010, though total goods exports last fiscal year brought in $3.3 billion.

Prime Minister Hailemariam Desalegn said in October 2013 that progress on the program had been “very slow.”

Billionaire Investor

Ethiopia-born al-Amoudi is worth $8.1 billion, according to the Bloomberg Billionaires Index, which ranks him as the world’s 157th richest person. His company built underground oil-storage facilities in Saudi Arabia and he owns Preem AB, Sweden’s largest crude oil refiner. Al-Amoudi is increasingly investing in formerly government-owned farms in Ethiopia, a nation where companies under his Midroc group operate the only commercial gold mine and built the largest cement plant in 2011.

Story: India’s Farming Women Use Cameras to Share Lessons

Saudi Star’s $100 million investment will focus primarily on building irrigation infrastructure, including finishing the main canal from the more than 25-year-old Alwero Dam built by Soviet engineers, as well as a rice de-husking plant, storage silos and land clearing, according to Jemal.

An initial plan to have the farm divided into 3.75-hectare plots to produce rice from submerged paddy fields has been shelved as unworkable, he said. Only 350 hectares has been developed since 2008 on the land leased for 300,000 Ethiopian birr ($14,908) a year.

Economically Unviable

“It was not environmentally and economically viable, that’s why they were struggling, so we stopped that,” Jemal said. “We want to make it large-scale flood irrigation, not small ponds.”

Video: Can Iran and the West Strike a Nuclear Deal?

Saudi Star’s revenue is forecast to be about $60 million in 2016 once the irrigation system is developed, with 60 percent of the aromatic rice exported mainly to Arab nations on the Persian Gulf, Jemal said.

Hampering current harvesting are late rains and, for two days in October, unrest in Abobo town after violence between ethnic Anuak, who are indigenous to Gambella, and other Ethiopians. The company has Ethiopian soldiers guarding its compound and about 100 stationed nearby. Two Pakistanis and three Ethiopians employed by Ghulam Rasool & Co., a closely held Pakistani engineering company building the irrigation canal, died in April 2012 after an attack by a group of gunmen.

The government has “taken care” of security issues, farm manager Bedilu Abera said while seated in one of the air-conditioned trailers that are now Saudi Star’s headquarters after they were moved from Addis Ababa.

Story: The American Oil Boom Won’t Last Long at $65 Per Barrel

Land Conflict

Anywaa Survival Organization, a Reading, U.K.-based rights group, said in an Oct. 14 statement that land leases in Gambella have fueled conflict.

“The rush for land, water and other essential natural resources has become a curse for indigenous and minority peoples who barely have legal protection and redress,” it said.

Saudi Star says only two Anuak villages of huts with sweeping grass roofs lie just outside the project’s boundaries in deep forest. Some local residents complain they’ve not benefited from the investment and that they suffer collective punishment by the military.

Story: Crowdsourcing Comes to the Booming World of ‘Litigation Finance’

“They used to kill people from the village,” Akea Ojullo, a 27-year old teacher, said in a Nov. 23 interview in Perbong village. “It got worse after the attack on Saudi Star,” he said.

The company plans to work with local residents by investing in workers, distributing rice and plowing land for them. “We know we’re creating job opportunities, transforming skills, training local indigenous Anuak, but there’s a campaign to have people perceive it as a wrong project,” Jemal said.

The farm still has the backing of officials, even though progress has been slow, Jemal said.

“The government wants the project to be a success and see more Gambella people be able to work and produce more,” he said. “That’s the big hope.”

http://www.businessweek.com/news/2014-12-02/saudi-billionaire-to-invest-100-million-in-ethiopian-rice-farm

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Ethiopia, Icelander firm negotiate geothermal power generation

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The Ethiopian government and Reykjavik, a joint venture of U.S.-Icelandic geothermal development company, are negotiating on a detailed power purchase agreement to generate geothermal energy, an Ethiopian spokesperson has said.

“The negotiation is expected to be finalized by December 2014,” Bizuneh Tolcha, spokesperson for the Ministry of Water, Energy and Irrigation, told The Anadolu Agency on Saturday.

Reykjavik will generate the geothermal power in Ethiopia’s rift valley region, 200 kilometers south of Addis Ababa and supply the power to the national grid.

The negotiation focuses on the mode of power provision and sell.

“So far the construction of access roads and camps is undertaken in the area, where the geothermal plant will be built,” Tolcha said.

The project, which will be undertaken in two phases within eight to 10 years, is expected to generate 20 megawatts in 2016 and 500 megawatts in 2018, he said.

The two sides had agreed to generate 1000 megawatt geothermal energy with an estimated $4 billion.

Ethiopia has the potentials to generate more than 7,000 megawatt geothermal energy.

http://www.portturkey.com/energy/7479-ethiopia-icelander-firm-negotiate-geothermal-power-generation

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Gov’t Reviews $1.4b Petrol Pipeline Proposal

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- The project would take two years to complete

Ethiopia’s government is going over a proposed project to build a petroleum pipe-line from the Port of Djibouti, which could cost 1.4 billion dollars and take two years to construct.

The news was disclosed during the “Powering Africa: Ethiopia Meeting,” which took place at the Radisson Blu Hotel, on November 21, 2014. The meeting was organised by the UK-based company Energy Net Ltd, which “organises a global portfolio of investment meetings, conferences and energy forums, focused specifically on the power and industrial sectors across Africa,” according to its website.

Officials at the Ministry of Water, Irrigation & Energy (MoWIE), confirmed that the proposal had been submitted and they would look at it before deciding to discuss it further with other stakeholders, such as the Ministry of Finance & Economic Development (MoFED), the Ministry of Foreign Affairs (MoFA), and Ministry of Transport (MoT).

The proposal was made by Black Rhino Group and MOGS (Mining, Oil & Gas Services). Black Rhino Group is owned by Blackstone, a large Wall Street private equity fund, and MOGS is owned by Royal Bafokeng Holdings, a South African investment group.

Brian Herlihy, CEO and founder of Black Rhino, made a presentation of the proposal at the Powering Africa meeting.

The companies are proposing building around 550Km of pipeline, carrying oil directly from the vessels at the port to a storage facility in Awash, by-passing the congested port and road from Djibouti. The trucks would then distribute fuel from Awash to the rest of the country, including Addis Abeba.

The proposal was submitted six months ago to the governments of Ethiopia and Djibouti. The government of Djibouti was happy, Brian said. If the Ethiopian government gives a green light to the project the company will proceed to study the environmental and engineering condition of the construction, according to Brian.

The Djibouti government has told Black Rhino and MOGS that the current port infrastructure is not big enough to meet Ethiopia’s long term needs. Currently, the demand for refined fuels in Ethiopia is growing at 10pc a year.

The project is expected to reduce the supply problem caused by truck shortages, as well as reduce the cost of transport.

Using trucks for oil transport is very expensive, not the least of which is because of the fuel consumption by the trucks themselves, says Demelash Alamaw, assistant to chief executive at Ethiopian Petroleum Supply Enterprise (EPSE).

Last year Ethiopian Petroleum Supply imported 2.6 million tonnes of fuel. On the current budget year it has plans to import 2.9 million tonnes, according to the EPSE. As demand for petroleum grew by an average 10pc, an expert in petroleum logistics says that the transport supply has not grown accordingly, suggesting that it is important to use alternative transport.

http://addisfortune.net/articles/govt-reviews-1-4b-petrol-pipeline-proposal/

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Ethiopia ‘a Nation Under Construction’

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-  Ethiopia plans to build 960,000 houses in the next 10 years, besides thousands of kilometres of roads and railways.

Everywhere you turn in Ethiopia, construction is ongoing — roads, railways, and thousands of houses — all led by the government with local or external funding. What are the short and long-term implications for the private sector?

From thousands of kilometres of railways and highways to mega dams to tens of thousands of partially government-sponsored houses to cobblestone roads, Ethiopia is a nation under-construction.

About a fifth of the 10.3 per cent growth registered in the 2013/14 budget year was attributable to construction activity, according to the World Bank. Over the same period, the total investment rate rose from 32.1 per cent of GDP to 40.3 per cent.

Some $1.5 billion from the $8.5 billion budget of the country this year is earmarked for construction of roads. In addition to the government, there is huge investment by the private sector in real estate.

For the 13th most populous country in the world, with 90 million plus people, of which the majority are young, the huge investments by the government in infrastructure and construction by private sector are the major source of jobs.

Today tens of millions of Ethiopians are working on various construction sites.

“Ethiopia is indeed a nation ‘under construction,’ the construction boom is increasingly supporting economic growth,” said Lars Christian Moller, lead economist and programme leader at the World Bank Ethiopia office, which is currently involved in 25 projects in Ethiopia with $6 billion in commitments, making it the largest country programme in Africa.

Railway

Out of the total 4,744km of railway line the country planned to construct, about 2,000km was built during the first Growth and Transformation Plan period 2010/11-2014/15.

Currently, 50 per cent of the 800km Addis Ababa-Djibouti railway is complete while the 700km Mekele-Awash line is set to be launched this year.

While 70 per cent of the cost of the $3 billion Addis Ababa-Djibouti railway is secured from the Chinese government, the remaining is financed by the government. The construction and consulting is being undertaken by Chinese companies CREC and CCECC.

“A $1.7-billion soft loan has been secured from Swiss Bank by Turkish company Yapi Merkez for the construction of the 389km Awash-Weldiya railway,” according to Dereje Tefera, head of communications at the Ethiopian Railway Corporations.

“The electric railway will save Ethiopia hard currency that would have been spent on fuel imports,” Mr Dereje said, adding that 254 professionals including the rail master have already trained in China.

About 80 per cent of the 34km Addis Ababa light railway is completed. A $470 million loan was secured from China’s Eximbank for the project. CREC of China is carrying out the construction while SweRoad of Sweden handled the consulting.

http://www.welkessa.com/ethiopia-nation-construction/

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South African investors urged to use investment opportunities in Ethiopia

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Addis Ababa, 2 December 2014 

The Ministry of Foreign Affairs (MoFA) has called on South African investors to utilize the investment opportunities in Ethiopia, a country endowed with vast resource, cheap labor and hard working people.

The call was made at the Ethio-South Africa Investment and Business Forum held today at Elilly International Hotel in the presence of representatives of South African companies from the sectors of construction, banking, infrastructure, manufacturing and agro-processing.

“Now is the time for South African investors to look at the prospect and opportunities of investment in Ethiopia,” MoFA State Minister, Dawano Kedir said while opening the meeting.

Ethiopia has everything that you need to invest, including conducive business and investment environment, political stability, sound economic policies, macro-economic stability, abundant natural resource and a sizable market, he said.

Moreover, the Ethiopian government is developing industrial zone to help companies engage in manufacturing, he said, urging the investors from South Africa to participate in building their own industrial zone.

The Forum will deepen the existing Ethio-South Africa relations to the uppermost levels through fostering strategic economic alliance and solid business and investment partnership, he said.

Representative of South Africa’s biggest winery, on the occasion said that his company has already received 1,000 hectares of land to invest in Ethiopia.

During the day long Forum, other companies have also expressed their interest to engage and exploit the investment opportunities available in Ethiopia.

http://www.waltainfo.com/index.php/editors-pick/16365-south-african-investors-urged-to-use-investment-opportunities-in-ethiopia-

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French Firm to Work on Wind Power Expansion up North

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Vergnet hopes to increase energy generation capacity to up to 40Mw

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Vergnet was established in 1976 and employs 700 people. In 2013, it had an annual turnover of 57.5 million Euros and operates in 35 countries. The company installed 900 wind turbines in different countries, including in Nigeria, with a generating capacity of 10Mw, and 4.5Mw in Mauritania.

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French power firm Vergnet Group SA is conducting a feasibility study for the extension of the Ashegoda Wind Farm. The farm will have the capacity of generating 10Mw to 40Mw of electric power in Tirgay Regional State.

The feasibility study started in October 2014 and Lodovic Dehondt, Ashegoda project director for the first phase of the project, said the project was expected to be finalised by January 2015.

Ashegoda is one of 11 sites experts identified in Ethiopia for the potential to generate power from wind, with a total size of 20,000Km² coverage. However, Ashegoda, 20Km south of Meqelle, seat of the regional state, is considered to be the windiest place in the country after Adama (Nazareth), 99Kms east of Addis Abeba in Oromia Regional State.

In 2008, the power utility monopoly, under the defunct Ethiopian Electric Power Corporation (EEPCo), had signed a deal with the French firm. The project was launched a year later, at a cost of 210 million Euros.

Vergnet was established in 1976 and employs 700 people. In 2013, it had an annual turnover of 57.5 million Euros and operates in 35 countries. The company installed 900 wind turbines in different countries, including in Nigeria, with a generating capacity of 10Mw, and 4.5Mw in Mauritania.

Vergnet installed 30 turbines, each with a capacity of one megawatt. Altsom, another french firm, installed 54 turbines, each with a capacity for 1.67Mw of electric power.

“After the place we reserved for the wind farm was taken over for the construction of a Civil Aviation training facility, we changed the plan and it was then that Alstom entered discussions,” Lodovic told Fortune.

The wind farm project, billed as the biggest in sub-Saharan Africa, was finalised and inaugurated in October 2013 by Prime Minister Hailemariam Dessalegne. It has supplied the national grid ever since.

A subsequent agreement has been reached for a study to expand power generation with Alemayehu Tegenu, minister of Water, Irrigation & Energy (MoWIE), and Debretsion Gebremichel, (PhD), minister of Communication and Information Technology with the rank of Deputy Prime Minister, according to Jerome Douat, CEO of Vergnet Group. Debretsion was in Paris two weeks ago, attending a bilateral business delegation between France and Ethiopia.

The agreement was a turnkey contract, also known as Engineering, Procurement and Construction, to be financed with a loan of 210 million Euros from the French Development Agency (AFD), indicating a change in approach of the government of France in providing vendor financing to its companies involved in infrastructural projects abroad.

German-based company Lahmeyer International GmbH has been hired by the government to provide project consultancy services and contract supervision and administration works, sources told Fortune.

A group of experts, including the former project manager of the Ashegoda wind farm, is expected to visit Ethiopia for the feasibility study detail. The project is anticipated to be finalised by the end of 2016 if the procedures work as scheduled.

“We will raise financing from European banks and the AFD,” says Douat.

Ashegoda wind farm is part of the government’s plan, which also includes Adama wind farm, to generate 10,000Mw electric power from water, wind and geothermal sources during the conclusion of its five-year growth plan. From wind sources alone it wants to see 890Mw of electric power generated, including 300Mw from Ayesha, in Somali Regional State, Debre Berhan and Assela, which are set to produce 100Mw each, and Messebo wind farm, with a capacity of 51Mw.

While many of these are still at the drawing board phase, the Adama Wind Farm was completed by Chinese companies, CGCOC Joint Venture and Hydro China, with a 117 million dollar loan of financing from the Export-Import Bank of China. It has a capacity of generating 51Mw electric power.

http://addisfortune.net/articles/french-firm-to-work-on-wind-power-expansion-up-north/

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Ethiopia adopts Israeli day/night solar power system

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Powered primarily by the sun, AORA’s Tulip energy system works 24/7 – even at night and when it’s cloudy

BY DAVID SHAMAH

Solar energy is an ideal solution for the power needs of the developing world – except for one problem: It stops working when the sun goes down, at precisely the time power is needed to turn the lights on. The solution, according to Zev Rosenzweig, CEO of Israeli energy technology company AORA, is a hybrid system – one that utilizes solar to the fullest, and supplements it with a “backup” system to keep the power flowing when the sun is not high in the sky, using scant resources, with an operating cost of next to nothing.

It’s perfect for developing countries, said Rosenzweig – and after six years of research and pilot projects, and an investment of $40 million, AORA is ready for prime time, he said.
The company announced Tuesday that it had signed a deal to build one of its Tulip solar-hybrid power plants in Ethiopia. “We are transforming our Green Economy Strategy into action and are pleased to partner with AORA to help achieve our vision,” said Alemayehu Tegenu, Minister of Water, Irrigation and Energy for Ethiopia. “AORA’s unique solar-hybrid technology is impressive and well-suited to provide both energy and heat to support local economic development in off-grid rural locations in Ethiopia.”

“Off-grid rural locations” are exactly the places Rosenzweig wants to see more Tulips installed. “Our hybrid system uses both solar power and biogas to operate a turbine, with the hot air moving the turbine to generate electricity.”

Video: Ethiopia adopts Israeli day/night solar power system

Enhancing the sunlight are a series of mirrors to heat compressed air to over 1800 degrees Fahrenheit and drive a turbine. When the sun goes down, the system moves seamlessly from solar to biogas in order to power the turbines, with the biogas derived from animal waste, biodiesel, natural gas – just about any material that can be burned for fuel.

For villages in places like Ethiopia, the best part of the system, said Rosenzweig, is that it doesn’t even need water to operate. In essence, Tulips are like perpetual energy machines; when the sun is out, solar power is converted into power to run the turbines and create electricity; and when the sun is in, the system turns to biogas, created by an AORA conversion system.

There are Tulips in Israel, Spain, and the US, but those are test programs; Ethiopia will be the first country to deploy the system commercially. Construction of the first plant is expected to begin by mid-2015. Following a trial, the Ethiopian ministry intends to expand deployment of AORA installations for rural economic development to off-grid communities in selected areas of the country.

Each Tulip station is small and modular, producing 100kW of electricity in addition to 170kW of heat, while occupying less than 3,500 square meters (0.86 acres), requiring much less land per kWh to generate usable power and heat than other systems, like photovoltaic, said Rosenzweig. “Each Tulip can generate enough electricity for 30-40 homes in Western countries, and should be enough to cover all the power needs of villages in the developing world,” with each system costing between $500,000 and $750,000, depending on size.

The Tulip technology was developed at the Weizmann Institute, and AORA has the worldwide rights to commercialize and distribute it, with Rosenzweig one of the leaders of the research. “I got the idea for this in India, where they lose a lot of their harvest because they have no place to store fruits and vegetables in rural areas,” he said.

Existing solar systems in rural areas could only operate part of the time – not at night, and not during the rainy season – so they weren’t usable for refrigeration, without which produce would start to rot within a few days, long before most of it could get to market. “Electricity can change the lives of people in the developing world, and the Tulip system can provide an effective solution to any community anywhere,” said Rosenzweig.

“We are pleased to partner with the ministry and look forward to bringing our technology to Ethiopia to provide the population with affordable access to power,” added Rosenzweig. “Such access will have significant social and economic impact on off-grid communities, helping to provide power to schools and medical facilities, refrigeration for food processing and post-harvest storage, groundwater pumping and much more.”

http://sodere.com/profiles/blogs/ethiopia-adopts-israeli-day-night-solar-power-system

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First Quarter Brings Profit Bonanza to Telecom Monopoly

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Fiber hacking, fraud stand as prime challenges of ethio telecom as it grosses 3.6b Br in profit

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ethio_telecom_headquarters

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Ethiopia’s state-owned telecom monopoly has seen first quarter operations bring its books 3.64 billion Br gross profit, from an operating revenue of over five billion Birr. Its profit, described by its corporate communications head, Abdurahim Ahmed, as “remarkable results”, represents an 11pc growth compared to the same period last year.

However, ethio telecom’s operating revenue is five percent short of its plan, yet experienced a 20pc growth in comparison with the same period last year. Of this, about 70pc was earned from mobile services. International call service, data and internet accounts about 10.5pc and 13.3pc of the general revenue, respectively.

Though the report shows increases in profit, the quarter year also witnessed several network malfunctions, upsetting many of its customers who have no other alternative. The company has recently entered into a 1.6 billion dollar service expansion agreement, under a vendor financing scheme with two international companies, Huwaei and ZTE.

Huwaei and ZTE were granted a two year contract dividing the country’s telecom network into 13 zones. However, the Ethiopian government has considered handing ZTE’s contract to Sony Ericsson, a Tokyo based company and a subsidiary of Sony Corporation.

The telecom expansion project contract aims to take the country’s mobile service capacity to 50 million, to expand third generation (3G) technology across the whole country and to provide customers in Addis Abeba with fourth generation (4G) services.

The expansion project is very important in attaining ethio telecom’s objective of increasing telecom service access and coverage across the nation, as well as to upgrade the existing network to the new technology, according to Abdurahim.

“Through the telecom expansion project contracts, ethio telecom will be able to increase its overall network coverage to 85pc across the nation,” Abdurahim said.

Mobile service performance stands at 73.3pc. Data and internet stands at 176pc, while regular call services is at 26.2pc. National telecom coverage is at 81pc and international linkage capacity is at 61.3pc.

In the first quarter of the fiscal year the number of customers jumped to 30.45 million, in comparison with last fiscal year’s ending, which saw 29.36 million customers, a 3.7pc increase. Of this, around 22.5 million are active customers.

In the current fiscal year, the company’s priority areas include the improvement of quality of service and making the telecom expansion project roll-out a success, Abdurahim told Fortune. Repetitive hacking of fiber cable lines and the ever increasing ‘telecom fraud’ have been mentioned as major setbacks for the quarter year.

http://addisfortune.net/articles/first-quarter-brings-profit-bonanza-to-telecom-monopoly/

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 Ethiopia issues unfamiliar investor warning over war and famine

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Javier Blas, Africa Editor

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Every country tapping the global sovereign bond market details the dangers investors face in its prospectus, often in a boilerplate section enumerating possible problems – such as fiscal deficits or taxation issues – that is largely ignored.

But the document sent by Ethiopia to international investors ahead of its foray into the global sovereign bond market is somewhat different. Far from a boilerplate, it includes a list of unfamiliar hazards, such as famine, political tension and war.

The document, seen by the Financial Times, is a sobering reminder of the risk of investing in one of Africa’s less developed nations. With gross domestic product per capita at less than $550 per year, Ethiopia is the poorest country yet to issue global bonds.

In the 108-page prospectus, issued ahead of its expected $1bn bond, Ethiopia tells investors they need to consider the potential resumption of the Eritrea-Ethiopia war, which ended in 2000, although it “does not anticipate future conflict”.

There is also the risk of famine, the “high level of poverty” and strained public finances, as well as the possible, if unlikely, blocking of the country’s only access to the sea through neighbouring Djibouti should relations between the two countries sour.

Addis Ababa, Ethiopia’s capital, also warns that it is ranked close to the bottom of the UN Human Development Index – 173rd out of 187 nations – and cautions about the possibility of political turmoil. “The next general election is due to take place in May 2015 and while the government expects these elections to be peaceful, there is a risk that political tension and unrest . . . may occur.”

But the long list of risks is not deterring investors, as ultra-low interest rates in the US, the UK, eurozone and Japan push sovereign wealth funds and pension funds into riskier countries in search of higher-yielding bonds.

Instead, some investors are focusing on the danger of a currency crisis. Addis Ababa has devalued its currency, the birr, twice over the past five years – by 23.7 per cent in 2010 and 16.5 per cent in 2011 – in an effort to win export competitiveness. Since then, the Ethiopian central bank has managed to slow the currency’s depreciation by intervening regularly in the market.

Addis Ababa has now told potential investors that “it may not be possible for the National Bank of Ethiopia to manage the exchange rate as effectively in the future as it has in the past” because of reduced hard currency reserves.

The country has reserves to cover only 2.2 months’ worth of imports – almost half the 4.3 months it had in 2010-11. “Failure to manage a steadily depreciating exchange rate may adversely affect Ethiopia’s economy . . . [and its] ability to perform obligations under” the bonds, it says.

The prospectus also reveals for the first time details of Ethiopia’s heavy dependence on Chinese loans to finance its infrastructure investment. Credit lines from China and Chinese entities accounted for 42 per cent of all external loan disbursements in 2013-14, and for 69 per cent in 2012-13.

“China has emerged as a key development partner,” the prospectus says, “often providing sizeable financing tied to infrastructure projects undertaken by Chinese firms.” Among those, telecoms groups ZTE and Huawei and a company the prospectus names as China Electric Power have lent Ethiopia more than $2bn over the past few years.

Lazard, the investment bank advising Addis Ababa on financial matters, declined to comment. The Ethiopian government did not respond to a request for comment. Investors said the bond was expected to price later this week at between 6 and 7 per cent.

http://webcache.googleusercontent.com/search?q=cache:2XuCbLxNzHUJ:www.ft.com/cms/s/0/c8691100-7a07-11e4-8958-00144feabdc0.html+&cd=2&hl=en&ct=clnk&gl=us#axzz3KnAXTgk9

Debretsion Gebremichel (PhD), Deputy Prime Minister of Ethiopia, Finance, Economic cluster Coordinator and minister of Communication and Information Technology(2nd right) and Matthias Fekl, state minister for French foreign trade (2nd left) and French nationals abroad, with other officials in a closed session on policy issues before the Forum.

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Debretsion Gebremichel (PhD), deputy prime minister of Ethiopia and Finance and Economic cluster Coordinator and minster of Communication and Information Technology and Matthias Fekl, state minister for French foreign trade, the promotion of tourism and French nationals abroad joining the forum after their policy discussion.

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On Monday November 17, 2014, Patrick Labatut, Alstom Transport’s business development director for Africa, was at the second France Ethiopia Business Forum in Paris. He was looking for an Ethiopian partner for his company which is involved with energy production, grid, railway and transport.

His company has found out that Ethiopia could meet 75pc of its electricity demand from solar power.

“We realised that Ethiopia was a potential for our projects,’’ Labatut told Fortune.

The Forum was organised by UBIFrance and the French embassy in Addis Abeba, as a follow-up to a similar event held in Addis Abeba in December 2013. It was attended by 169 French and 32 Ethiopian companies, similar figure that attended the first event. UBIFrance is the French Agency for the International Business Development and is under the control of the French Ministry of Economy, Finance and Industry.

Official relationship between the two countries dates back to 1897, when the two governments agreed to recognise the border with French Somaliland (later Djibouti) which led them for the construction of the 781Km Ethio-Djibouti railroad.

The two countries signed the Bilateral Investment Promotion and Protection Agreement in July 2004. This was aimed to encourage and protect investments and to avoid double taxation. In June 2011 and 2013 the agreement on the partnership framework was renewed for an additional three years.

For the past several years, however, French companies’ presence in Ethiopia has been limited to a stagnant 50, whereas Chinese presence has been growing by leaps and bounds.

The number of Chinese companies operating in Ethiopia reached 124 in the 2013/14 fiscal year. These Chinese companies’ investments at implementation and pre-implementation stage was 2.18 billion Br and 16.5 billion Br, respectively.

The emergence of China in the continent has become a headache for most European countries, including France. This has to led policy makers to focus on a new strategy, named the Economic Diplomacy with Africa, according to an official from the French Ministry of Foreign Affairs and International Development.

“This forum is also part of the economic diplomacy,” added this official.

“We believe Africa, especially Ethiopia, is the hub of emerging economic development and we want to regain our position of previous years,” said Matthias Fekl, state minister for French foreign trade, the promotion of tourism and French nationals abroad, in his forum opening speech.

The forum had 23 Ethiopian Business delegates under the umbrella of the Ethiopian Chamber of Commerce and Sectoral Association (ECCSA). These private businesses included: Technostyle Plc, General Motors, South West Energy, Bless Agro Processing, and new businesses such as Gratus International Trading Plc and Mazel Trading. State owned companies, including ethio telecom, Ethiopian Airlines, Ethiopia Electric Power (EEP) and the Metal & Engineering Corporation (MetEC) were also present at the event.

“We realised Africa is the fastest emerging continent and we picked Ethiopia as a major destination for our investment, and organised this forum with the main aim of increasing our economic partnership with Ethiopia,” said Fekl.

Parallel with the decision to organise the event, the French government finances projects in Africa by French companies through the French Development Agency (AFD). In 2014 the Agency allocated an extra 20 million Euros for investment in Africa, mainly on infrastructure development and in the energy sector. The AFD has an annual budget and is working to send French companies to Africa, and Ethiopia, where the economies are growing at 5.5pc and double digits, respectively, Fekl said.

From the total financing of the Agency in 2013 only 113 million Euros was invested in Africa.

“Our main challenge in Ethiopia and Africa is the Chinese undercutting prices on projects. That makes our presence a mere shadow in projects,” said an official from the Ministry of Foreign Affairs and International Development.

Established back in 1941, the AFD has financed 700 projects in 2013, 40pc of which were in Africa, however Asia had the largest number of projects. Projects in Ethiopia financed by the AFD include the 210 million Euro Ashegoda Wind Farm, the 80 million Euro construction and expansion of Ethiopian Airlines, and the five million Euro solid waste disposal project. The Agency provides 20 year loans at an annual interest rate of 1.2pc.

“Currently there are 600 world class international companies in Ethiopia,” said Debretsion Gebremichel (PhD), deputy prime minister of Ethiopia and Finance and Economic cluster Coordinator and minster of Communication and Information Technology. “But there are only 50 French companies in the country, which is too few and should be increased.”

Currently 50 French companies are operating in Ethiopia, including Total, BGI Brewery, Castel Winery, BRL and Masson.

“We want to see French companies in Ethiopia engaging in leather and textile production, agro processing, and chemical industries,” said Debretsion.

But the French companies at the forum were mainly from the energy sector, including geothermal and electricity companies. During the Business-to-Business discussion session some of these companies discussed business challenges with the representatives from the MetEC.

“The French companies at the event were giants compared to the Ethiopian companies, and discussion was mainly with the state-owned enterprises rather than the private companies,” Solomon Afework, president of the ECCSA, told Fortune.

“We do not rush in expecting Ethiopian companies to sign deals with the French companies on this occasion, but we want to have a strong foundation that could lead to further economic and investment relations in the near future,” Debretsion said.

Ethiopia got 2.5 million people out of poverty in the last 10 years, which is why France chose Ethiopia as a major destination for investment, Fekl said. That was followed by a policy decision to support French companies through financing to work on projects in Ethiopia, he added. Until 2011 the AFD had only one office in east Africa, located in Kenya. It has since gone on to add one in Ethiopia. It has also opened another office in Zambia.

“We are seeking more projects to engage in Ethiopia, and we are working on securing the financing from the AFD,” said Jerome Douat, CEO of Vergnet Group, which was also at the Forum.

Labatut and the ministry official share some concerns that investing in Ethiopia is bottlenecked by the bureaucratic process which is difficult for foreign companies to pass through.

Furthermore, the French official claims that Ethiopia has been reluctant to join the World Trade Organization (WTO) for many years, which discourages French companies from investing in Ethiopia. Established in 1995, the WTO has 159 member countries; Ethiopia and 22 other countries have observer status.

“But these all cannot be constraints for our companies to invest in Ethiopia, following our policy decision to penetrate the continent as a destination,” said this official.

Fourteen French companies are already scheduled to visit East Africa including Ethiopia in June 2015 to explore more potential.

Sourced here  http://addisfortune.net/columns/building-economic-bridges-between-ethiopia-and-france/

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Ethiopia eyes record coffee exports

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The head of Ethiopia’s exporters association says the East African country expects coffee exports for its 2014/15 crop to hit a record high because of drought and disease stifling crops in Latin America.

An unprecedented drought early this year reduced the 2014/15 crop in the world’s biggest coffee producer Brazil.

we are expecting the international market to go up

The International Coffee Organization forecast in September that global coffee production will fall short of demand.

In the four months from July this year, Ethiopia – Africa’s biggest producer of the bean – exported 54,000 tonnes of coffee worth $231.9 million, compared with the $172.5 million it earned from 51,000 tonnes over the same period last year.

Hussein Agraw, chairperson of the Ethiopian Coffee Exporters’ Association, said he expected the amount of coffee exported to rise to 235,000 tonnes by the end of 2014/2015, generating $862 million in revenue.

Ethiopia exported around 190,000 tonnes in 2013/14, earning $841 million, he said.

Exports hit a previous record high of 193,000 tonnes the year before, he said.

“We are making these expectations because of the fall in production in Brazil,” he told Reuters.

“Because of this, we are expecting the international market to go up,” Hussein added, referring to demand.

Total coffee production in Ethiopia amounted to 450,000 tonnes over the 2013/14 period, according to official figures.

Officials expect a similar output by the end of 2014/15.

Ethiopia prides itself on being the birthplace of coffee. Some 15 million people are involved in its production, mostly in smallholder farms in the misty forested highlands in the country’s west and southwest.

http://www.theafricareport.com/East-Horn-Africa/ethiopia-eyes-record-coffee-exports.html

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Coffee Exports: Brazil’s Loss Is Ethiopia’s Gain

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VENTURES AFRICA – Ethiopia says it expects coffee exports for its 2014/15 crop to hit a record high because of drought and disease stifling crops in Latin America, Hussein Agraw, the Chairperson of the Ethiopian Coffee Exporters’ Association said on Wednesday.

http://www.ventures-africa.com/2014/12/cocoa-exports-brazils-loss-is-ethiopias-gain/

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Ethiopia Starts Marketing Debut Eurobond for Projects

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By Robert Brand, Paul Wallace and Lyubov Pronina

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Ethiopia raised $1 billion in a debut international bond issue today, taking advantage of record demand for high-yielding African debt to fund electricity, railway and sugar-industry projects.

The 10-year bonds priced to yield 6.625 percent, at the lower end of the 6.625 to 6.75 percent price guidance, according to a person familiar with the matter, who isn’t authorized to speak publicly and asked not to be identified. Kenya’s $2 billion of bonds due June 2024 yielded 5.89 percent at 5:21 p.m. in London.

Africa’s fastest-growing economy and biggest coffee producer is joining issuers, including Ghana, Kenya, Senegal and Ivory Coast, who sold what Standard Bank Group Ltd. says is a record $15 billion of Eurobonds this year. Government and corporate issuers are seeking to benefit from investor appetite for higher returns before the Federal Reserve raises interest rates as soon as next year.

Ethiopia’s bond yield is “decent value for the deal given the limited knowledge and different nature of the Ethiopian economy and the challenges it faces compared to peers in the region,” Kevin Daly, a senior portfolio manager at Aberdeen Asset Management Plc, said by e-mail.

The country made a strong case for infrastructure development and financing needs at investor meetings, “which suggests they will be looking to come back to the market in near term,” Daly said.

Ethiopia will probably need to invest about $50 billion over the next five years, of which $10 billion to $15 billion may come from foreign investors, Finance Minister Sufian Ahmed said on Oct. 7. Most of the capital raised will be used to develop sugarcane plantations, a 6,000-megawatt hydropower dam on a tributary of the Nile River and the country’s railway network, he said.

“It is certainly a good time for them, market wise,” David Cowan, an Africa economist at Citigroup Inc., said at a conference in London. “Ethiopia is still one of the most closed economies, although it has a very strong developmental vision. They have to think about how they use that money to drive that development.”

Band Aid

Almost 30 years after pictures of Ethiopian children with distended stomachs were used to raise money by Bob Geldof and Band Aid, the country is growing faster than any other African economy, at an average rate of 10.9 percent over the past decade, International Monetary Fund data shows.

African government and corporate Eurobonds sales this year beat 2013’s record $14 billion, Standard Bank said on Nov. 13. Sovereigns accounted for about 71 percent of issuance, according to the Johannesburg-based lender.

Ethiopia was assigned its first credit ratings in May. Moody’s Investors Service rates it a non-investment grade B1 with a stable outlook, while Standard & Poor’s and Fitch Ratings awarded the East African country B, one grade lower.

Moody’s said the nation’s economic prospects, while favorable in the long term, were constrained by political risks and dependence on volatile agricultural commodities. Deutsche Bank AG and JPMorgan Chase & Co. managed Ethiopia’s sale.

http://www.bloomberg.com/news/2014-12-04/ethiopia-starts-marketing-debut-eurobond-for-railways-sugar.html

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LG Opened TVET College in Ethiopia

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LG-KOICA Hope TVET College has finished its preparation to provide trainings in the areas of IT (Hardware and Network Servicing) and Electronics which contains two streams of Home and office Equipment servicing and Electronic and multimedia communication servicing.

In each training stream the departments only accepted 25 qualified trainees so recently the college has a total of 75 students based on the criteria set by Addis Ababa TVET Agency and the entrance exam set by the college.

Initially a total 221 trainees has applied for the college and only 75 trainees are selected for the three training streams by way of various requirements set by the college including entrance exam. In the application and selection process descendants of Korean War Veterans has been given special consideration. During this project students will not be requested to pay anything so the training is provided is for free. In addition LG also provides lunch service for all 75 students during their stay in the training years.

Even though the college uses the curriculum designed by the TVET agency, LG has inserted some important courses that can facilitate the transfer of LG’s core technologies and competencies. Beyond the technological transfer the college will also provide innovative course so that the young generation will craft income generation initiations and Skills of entrepreneurship.

As part of its CSR program, LG currently runs five major projects in Ethiopia which are pertinent and supportive of the country’s development routes. These projects are: LG Hope Village, LG Hope TVET College, LG Hope Descendants, Vaccination Program and Elementary school supporting Program. The corner stone for all these projects has been and it will always be self-reliance and sustainability.

Among these programs the one that focuses on fostering young middle level technician that can positively contribute for the Ethiopian Industry is the LG-KOICA Hope TVET College.

Currently the Ethiopia Educational system has given ample attention in creating skilled human power that can fill the gap in the labor market. The TVET project has the principle concept of establishment, operation and transfer. Since April, 2014 LG has been constructing the building, drafting the legislation and the manuals, reviewing the Occupational Standards and hiring qualified trainers and trainees.

Each of LG Hope Projects focuses on specific needs of the local population in Ethiopia and attempt to address the causes, not just their effects, with creative, multifaceted solutions. The College also fills the gap in the labor market in securing skilled human power which is the basis for the industry of any country. LG Electronics; hence, will further strengthen its support and be fully committed to the Ethiopia’s development objectives.

The college is located in Summit condominium of Bole sub city and the training provided in both fields runs from Level I to Level IV.

http://www.waltainfo.com/index.php/explore/16426-lg-opened-tvet-college-in-ethiopia

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Technology: An Internet connection that blocks power cuts

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Courtesy photo©http://www.brck.com/

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BRCK, a portable Wi-Fi router and a backup power generator for the internet, is expected to alleviate problems that African Internet users face daily such as high communication costs and unreliable electricity.

Ushahidi, a not-for-profit technology company based in Kenya, has invented a cloud-managed, portable Wi-Fi router that consists of a mobile modem, which can also be used as a backup power generator for the Internet during electricity blackouts or in situations of limited network coverage.

Out of adversity can come innovation

Called BRCK (pronounced as “brick”), experts are already recognising it as an ingenious solution to Africa’s intractable power problems.

The BRCK is rugged and water-proof and compatible with any device that requires between 3 and 17 volts power supply.

It weighs 510 grammes and it is ideal for use in particularly rural areas. It can be charged on readily available power sources such as a car battery or a solar panel. When the electricity goes off, BRCK automatically switches to battery mode, which can then last for eight hours.

In addition, currently available modems in Africa don’t meet local needs.

They are designed primarily for use in more developed regions, particularly the West and Asia, where there is mostly uninterrupted access to electricity and Internet.

The gadget can switch between Ethernet, Wi-Fi and mobile broadband connections, and deliver connectivity for up to 20 devices at the same time through multiple sim cards, thereby allowing users to stay connected at a relatively low cost.

Ushahidi is optimistic about the device’s potential to help small business owners in Kenya and other parts of Africa.

“Out of adversity can come innovation,” said Juliana Rotich, Ushahidi’s executive director, at a presentation at the TED Global Conference in Scotland last year.

Rotich emphasized the importance of connectivity and entrepreneurship for Africa’s digital economy, and highlighted the BRCK’s role in keeping Africans connected.

Last July, BRCK’s creators were invited by eLimu, a Kenyan tech company, to consider delivering an e-learning to schools in remote locations.

The BRCK has also been stress-tested successfully in rural Kenya and during the Rhino Charge, an annual off-road motorsport competition.

Launched last July in Nairobi, each BRCK sells for $199. Africa’s ongoing information and communication technology (ICT) transformation makes BRCK a potentially popular device.

Ushahidi (meaning “testimony” or “witness” in Swahili) was originally founded in 2008 as a website to map reports of violence in Kenya in the aftermath of the disputed 2007 presidential election.

Since then, the company has evolved into a leader of the technology community in East Africa.

http://www.theafricareport.com/East-Horn-Africa/technology-an-internet-connection-that-blocks-power-cuts.html

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Vitol places lowest offer in Ethiopia oil product tender: sources

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in Freight News 04/12/2014

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European oil trader Vitol is likely to clinch a term deal to supply nearly 1.2 million tonnes of oil products into Ethiopia for next year, industry sources said.

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Vitol placed the lowest offer out of seven into a tender by Ethiopian Petroleum Supply Enterprise (EPSE) to buy 1 million tonnes of gasoil, 45,000 tonnes of gasoline and 120,000 tonnes of jet fuel for 2015.“Vitol had the lowest offer in terms of weighted average price so they came out in favour, but the tender is still under validity,” one of the sources said.If awarded the tender, it will charge a premium of $3.85 a barrel above Middle East quotes for the gasoil cargoes, a $6 a barrel premium for the gasoline cargoes and a $14.20 a barrel premium for the jet fuel cargoes, the source added.

The other companies who participated in the company include Glencore, Independent Petroleum Group (IPG), Lukoil, Trafigura, Bakri, BB Energy and Socar Trading, the source said.

The credit period will be for 150 days, the source said.

http://www.hellenicshippingnews.com/vitol-places-lowest-offer-in-ethiopia-oil-product-tender-sources/

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Italian firm to invest in Ethiopia’s textile

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Calzedonia, Italian Garment Company is to invest in textile industry in Ethiopia.

The nation’s population size, huge potential resource, investment incentives, among others, attracted the company to engage in textile industry in the country.

The Company is expected to open its first Ethiopian branch in Mekelle town next year, the Ministry of Foreign Affairs said.

In his meeting with the company delegates at the Ministry yesterday, State Minister Dawano Kedir said that Ethiopia has ample investment opportunities and huge potential for textile industry and others.

Given the country’s strategic location at the crossroads of three continents, the peaceful investment climate and incentives, among others, have attracted investors to come and take advantage of the business opportunities in Ethiopia, he added.

Dawano also invited the delegates to explore new avenues of engagement in the manufacturing sector, in agro-processing and tannery.

Briefing journalists on their discussion with the State Minister, Company President Sandro Veronesi said that this is his second visit to Ethiopia.

Our meeting with the State Minister was fruitful as we have been able to identify the advantages and conditions prevailing in the country. We want to establish a factory for the production of night wear capable of employing some two to three thousand people. But we are still assessing the appropriate location and suitable conditions for the establishment of the factory. We are hopeful to start with the investment by next year,” he said.

http://www.waltainfo.com/index.php/explore/16410-italian-firm-to-invest-in-ethiopias-textile-

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ERC inks contracts with Chinese companies for AA-LRT management

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Ethiopian Railways Corporation (ERC) yesterday concluded an agreement with China Railways Group and Shengen Meter Group for the maintenance and management of Addis Ababa Light Rail Transit (AA-LRT).

The contract sets out three to five year periods for the Chinese companies to maintain and manage the AA-LRT.

ERC Board Chairperson and Adviser to the Prime Minister with the Rank of Minister Dr. Arkebe Equbay said at the signing ceremony that there is no local company with the desired knowhow and experience to shoulder the administrative and maintenance of the rails.

He added the Chinese companies will conduct the testing of the tram and commence full operation.

Dr. Arkebe said the contract sets out a mechanism where technological transfer takes place and Ethiopian staff gain experience in the three to five year period.

After the five year, administering and maintaining the rails will be conducted by Ethiopians, it was noted. As such, the contract involves training Ethiopians in China.

The performance of the companies will be measured, among others, with the number of Ethiopian experts they have trained and by indicators of facilitating the city’s tram service.

Chief Executive Officer (CEO) of ERC Dr Getachew Betru (Eng) disclosed the 106 million US dollars deal will pave the way for international experience in managing trams to enter Ethiopia.

http://www.waltainfo.com/index.php/editors-pick/16380-erc-inks-contracts-with-chinese-companies-for-aa-lrt-management-

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Intra-COMESA Trade now at US $20.9 billion

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Intra-regional trade in COMESA has steadily risen from US $3 billion to US $20.9 billion since the establishment of a Free Trade Area in 2000.

This however, excludes the informal trade across the borders that currently goes largely unrecorded but which has been estimated at over 30% of formal trade.

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According to the 2013 status report presented to the COMESA Intergovernmental Committee (IC) in Lusaka, Zambia (4-6 December 2014) intra-COMESA trade is still low partly due to the similar products that compete for the same market within the Member States and the existence of Non- Tariff Barriers (NTBs).. For example in 2013, intra-COMESA trade was recorded at 7% as compared to other regions such as the ASEAN that have recorded 25% intra-regional trade.

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In his address while opening the IC meeting, Zambia Minister for Commerce and Industry Hon. Bob Sichinga said that focus should now be place on addressing the bottlenecks to intra-regional trade, such as NTBs, supply side constraints, border measures that affect and impact on volumes and values of intra-trade.

“It is incumbent upon all the stakeholders to address these bottlenecks to sustain the momentum thus far achieved, deepen COMESA’s integration agenda beyond the FTA, and attain a fully functional common market by 2018,” the Minister told the IC meeting which is comprised of Permanent Secretaries from Member States.

He appreciated that COMESA’s had developed draft NTB Regulations that would enable the region to address barriers related to intra-regional trade under a legal framework such as the arbitrary imposition of NTBs.

“The Annex on NTBs that also includes enforceability through the invocation of Article 171 of the Treaty is before this Committee, and the expectation is that pursuant to past Council decisions, you will now recommend the same for adoption by the Council of Ministers to facilitate its implementation,” the Minister urged the PSs.

COMESA has focused on industrialisation to address part of the supply side constraints and has subsequently put in place the Clusters Programme initiatives in the cassava, textiles and leather sectors. These clusters aim at establishing linkages between the SMEs to the particular cluster value chain; for instance, the cassava cluster links the small scale farmer to the market, through the making of industrial starch.

“Such initiatives go a long way in addressing the supply side constraints, but more importantly, increased value addition, leading to diversification of intra-regional exports,” the Minister said.

http://www.comesa.int/index.php?option=com_content&view=article&id=1401:intra-comesa-trade-now-at-us-209-billion&catid=5:latest-news&Itemid=41

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UNCTAD and Luxembourg join forces to strengthen competition policy and consumer protection in Ethiopia

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H.E. Mr Jean-Marc Hoscheit and Dr. Mukhisa Kituyi

In response to a technical assistance request from Ethiopia and in consultation with its government, UNCTAD developed a project proposal based on the needs of the Ethiopian Trade Competition and Consumer Protection Authority.

The Grand Duchy of Luxembourg provided financial support for the three-year project, set out in an agreement signed in Geneva on 5 December between UNCTAD Secretary-General Mukhisa Kituyi and Ambassador and Permanent Representative of Luxembourg to United Nations at Geneva Jean-Marc Hoscheit.

The project aims to reinforce the capacities of the authority in implementing competition and consumer protection laws.

During the signing ceremony, Dr. Kituyi expressed his appreciation to Luxembourg in supporting this project, and said that UNCTAD looked forward to its work in Ethiopia.

Mr. Hoscheit said that his country was happy to support the project in partnership with UNCTAD, an organization with which Luxembourg has had a long-term relationship.

The project, which starts in December 2014, will cover four broad areas; the policy and legal framework, the institutional framework, enforcement capacity building, and advocacy for competition and consumer protection.

http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=896

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A Paradigm Shift: Entrepreneurship Taking Precedence Over Public Jobs In Ethiopia

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VENTURES AFRICA – In Ethiopia, a country of 90 million the main and almost the only source of employment was the government. Previously many young graduates dreamed of joining a government offices and becoming a public servant. But these days this attitude has been replaced by the idea of becoming an entrepreneur or self-employed.

Getahun Ekyawu is one of these new thinkers. He graduated six years ago from Hawassa University in Hawassa City, 268km south of Addis Ababa. He began thinking about starting his own business even when he was student at the university. After graduating, he started his first business, establishing a mushroom farm with an initial capital of $450.This business has blossomed into a $10,000 entity and employs over 15 people. Gethaun’s learnt about entrepreneurship from a course he took at the university. However, there are now a number of private training institutes for young or prospective entrepreneurs. These institutes offer short and long term courses ranging from three to nine months. The average cost of such trainings is between $45 and $110.

Dr. Werotaw Bezabeh owns a training centre. He established Genius Entrepreneurs Training Center 10 years ago with an initial capitalization of $2250. It currently generates more than $25,000 in revenue annually. “We have trained students for 413 rounds and our plan is to train one million entrepreneurs,” said Werotaw. Identifying business opportunities, how to prepare business plans and business ethics are some of the courses offered at Genius.

http://www.ventures-africa.com/2014/12/a-paradigm-shift-entrepreneurship-taking-precedence-over-public-jobs-in-ethiopia/

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Ethiopia’s $1bn eurobond oversubscribed on debut

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Ethiopia has declared that its debut on the Eurobond market was a success after its $1 billion bond was oversubscribed by 260 percent last Thursday.

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The East African country debuted with a 10-year- $1 billion Eurobond at a coupon rate of 6.625 percent.

According to the Finance and Economic Development ministry, the success of the bond “affirms widespread positive receptivity to Ethiopia’s track record of significant economic growth, prudent fiscal management and targeted reform agenda”.

Investors remained engaged throughout the process

“The transaction successfully crystallised the positive momentum generated from Ethiopia’s international roadshow, during which over 80 institutional investors were visited in the United States and Europe,” the ministry added in a statement.

Ethiopia attracted high quality investor interest despite a challenging environment in the market.

“Investors remained engaged throughout the process and reflected sizeable appetite to participate in the deal,” the Finance ministry said.

Initial price projections for the bond were put at a yield level of around 6.750. The government eventually settled for 6.625 percent for the $1 billion bond.

Ethiopia focused on a 10-year maturity rate to create a strong benchmark, which matched its preference for duration given its infrastructure-driven use of proceeds.

The transaction was distributed primarily to United State investors who accounted for 50 percent of the subscribers, followed by those in the United King (35 percent), Europe (14 percent) and others (1percent).

Fund managers dominated allocations (receiving 96 percent), underscoring the high calibre of demand.

A company from France acted as a financial advisor to the Finance and Economic Development ministry.

Deutsche Bank and J.P. Morgan acted as joint lead managers for the transaction.

Ethiopia has said the funds would be used to finance new infrastructure for the Horn of Africa nation, which battled against famine three decades ago and now boasts some of the fastest economic growth rates in Africa.

Ethiopia’s success follows that of Kenya whose $2 billion Eurobond in June was heavily oversubscribed.

http://www.theafricareport.com/East-Horn-Africa/ethiopias-1bn-eurobond-oversubscribed-on-debut.html

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A new frontier for yield

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With developed market bonds yielding record low returns, fund managers are venturing into frontier and emerging markets – notably in Africa, the fashionable destination for intrepid investors.

Ethiopia, for instance, is seeking to raise up to $1bn (£630m) with a 10-year bond, following a recent roadshow to European and US investors. The aim is to build roads, railways and hydroelectric dams.

Rated B1 by Standard & Poor’s and B by Moody’s and Fitch Ratings, Ethiopian sovereign debt is well into junk bond territory. Yet this has not deterred pension funds, insurers and sovereign wealth funds from subscribing to the issue.

The bonds are expected to generate a yield of approximately 6-7 per cent a year, compared to consensus forecasts for emerging market debt of 4 per cent (down from 9 per cent), according to Amin Rajan, chief executive of Create Research.

Meanwhile, former Barclays chief Bob Diamond is targeting Africa’s banking sector through his Atlas Mara vehicle, and private equity group KKR recently took a $200m stake in a Kenyan flower farm.

Retail fund managers are also eyeing esoteric plays. One is Mary-Therese Barton, an emerging market debt manager at Pictet Asset Management, who plans to take advantage of higher-yielding markets such as Lebanon and Vietnam. Unlike the debts of China, Malaysia and Mexico – which move with US Treasuries due to their dollar peg – these countries’ debts move in relation to domestic issues, she says.

Martin Harvey, deputy manager on the Threadneedle Global Opportunities Bond fund, says he has increased exposure to “quality markets” such as Mexico and Columbia. At the same time Zsolt Papp, who works on the emerging market debt team at JPMorgan Asset Management, says it has taken tactical trading positions in Brazilian debt after the price fell and the yield rose correspondingly.

The team is also reviewing the Ethiopian bond issue. “Like with any emerging market debt investment, if it carries a strong growth story and good valuations, then it is something we would consider gaining exposure to,” Mr Papp says.

Anthony Gillham, who co-manages multi-asset funds at Old Mutual Global Investors, thinks emerging market government bonds issued in local currencies are currently among the best value assets across the entire fixed income spectrum.

“Yields are above 6 per cent, which compares very favourably with developed market government bonds, particularly when you risk-adjust these yields,” he says.

“A 10-year gilt offers just 25 basis points in yield per year of duration, whereas Brazilian 10-year government bonds offer approximately 2 per cent yield per year of duration.”

He thinks many of the factors that have held back emerging market currencies since 2013 are abating, which will boost bonds denominated in those currencies. Indonesia has stabilised its balance sheet in terms of imports versus exports, he says, while weaker commodity prices have been a tailwind for nations such as Turkey.

“Given such reasonable valuations in the more mainstream parts of the asset class at the moment, I question whether it is necessary to move into frontier markets such as Ethiopia, particularly at a time when market makers are structurally pulling back from providing secondary market liquidity,” adds Mr Gillham.

Mr Papp argues esoteric corporate bonds are not necessarily less safe than esoteric government bonds, since their issuers recognise they could be shunned by the capital markets if they fail to meet their debt service obligations.

This pressure is perhaps more potent where companies are concerned, he says, because governments can rely on financial support from supranational lenders such as the International Monetary Fund.

He adds that investors should differentiate between fundamentally sound sovereign issuers and those facing a deteriorating or vulnerable macro backdrop.

“One of the main factors is the ability to absorb potential contagion from global financial market events, such as higher bond or foreign exchange market volatilities or a hike in US Treasury rates,” he says.

Mr Papp favours countries with strong solvency and foreign currency reserves, low debt ratios and no problems refinancing their budget or current account deficits.

“As commodity and energy prices look likely to stay under pressure, we believe commodity importers are better positioned than exporters, including central-eastern European issuers such as Hungary or Slovenia, but also South Africa, India and Panama,” he predicts.

Mr Papp says average emerging market debt yield and spread levels look attractive, with the company’s index of emerging market government bonds trading at approximately 350bps, implying an average yield of roughly 5.7 per cent.

Even with the recent rises in Russian, Brazilian and Venezuelan yields, he thinks emerging market debt offers attractive relative value, but cautions that risk-averse investors should maintain a broadly diversified portfolio.

This does not necessarily mean developed market debt should be substituted for emerging market debt, he says, but that it might suffice to add some emerging market debt to an existing portfolio to improve its Sharpe ratio.

“If investors decide to replace developed with emerging market debt, we would suggest maintaining a similar rating and duration distribution in the new portfolio, in order not to radically change underlying portfolio risks and interest rate sensitivities,” Mr Papp says.

http://www.ftadviser.com/2014/12/09/investments/a-new-frontier-for-yield-avjD9kyK3PXByqLLoT8nON/article.html

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Unlocking East African businesses’ access to Indian markets

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by ITC News

• Pranav Kumar of the Confederation of Indian Industry shares information about the Duty-Free Trade Preference Scheme with participants of SITA’s second Partnership Platform meeting
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East African businesses are set to trade more with India by learning to take advantage of the country’s duty-free market access scheme, facilitated by the Supporting India’s Trade Preferences for Africa (SITA) project of the International Trade Centre (ITC).

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Following an amendment two years ago to India’s Duty-Free Trade Preference Scheme, least developed countries will receive preferential zero-duty access on 98% of Indian tariff lines. This means goods exported from least developed countries should have a competitive edge when entering the Indian market.

However, the five SITA countries – Ethiopia, Rwanda, Uganda, the United Republic of Tanzania, and Kenya, the only non-least developed country – have not seen trade with India increase to the expected levels since the scheme went into full effect in October 2012.

‘For beneficiary countries to reap the most benefits from the scheme, they just have to send letters of intent and meet the rules of origin requirement as specified in the scheme,’ said Pranav Kumar, Head of International Policy and Trade, Confederation of Indian Industry. ‘Much needs to be done to raise awareness of the scheme among members of the Indian private sector, as they have yet to fully understand how to source products from less familiar trading partners, and also invest in least developed countries to export products to India.’
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Representatives of business, government and international organizations gather at SITA’s second Partnership Platform meeting in Kigali, Rwanda, to discuss priority sectors for development in East Africa

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Tackling trade obstacles

To promote such awareness and understanding, African and Indian entrepreneurs, policymakers and members of international organizations will discuss ways to make better use of the scheme at SITA’s third Partnership Platform meeting in Addis Ababa, Ethiopia, on 4-5 December, following previous meetings in Nairobi, Kenya, and Kigali, Rwanda.

‘Further investments from India would certainly help Tanzania make better use of the scheme,’ said Adam Zuku, Director of Industry Development, Tanzanian Chamber of Commerce, Industry and Agriculture. ‘It would help address the country’s limited capacity to meet export demands, and Indian investors would be better placed to source the right products and access the right buyers.’

‘Building productive capacities, market linkages and enhancing investment attractiveness in the selected sectors will be a key way to ensure that SITA delivers impact and provides a sustainable template for similar South-South trade and investment projects,’ said Govind Venuprasad, SITA Coordinator. ‘It will also allow companies working in these sectors to become export ready to supply other markets.’

At the meeting, members of the East African public and private sectors will learn about the Duty-Free Trade Preference Scheme’s compliance and market requirements, particularly in sectors with high untapped export potential. Representatives of the Indian private sector will learn to make better use of the scheme to source products from Africa. The discussions will also focus on addressing procedural and regulatory obstacles to trade, in part through governments creating a more business-friendly environment through effective policies.

The stakeholders, representing business, government and civil society, will work together to finalize SITA’s intervention plan, focusing on specific activities in the selected sectors in each of the five East African countries. The sectors, selected through a series of consultative meetings, reflect demands in international markets as well as the capacity of African suppliers, and are selected in line with national and regional trade development goals.

The goal of SITA (2014-2020) is to enable East African enterprises to enhance their competitiveness to produce high-quality goods that match overseas market requirements. Indian businesses will partner by providing technology, skills know-how and investment to build capacities in SITA African countries for value-added production in sectors such as cotton, coffee, pulses and beans, oilseeds, and information and communications technology. SITA is funded by the United Kingdom of Great Britain and Northern Ireland’s Department for International Development.

http://www.intracen.org/news/Unlocking-East-African-businesses-access-to-Indian-markets/ 

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Non-Tariff Barriers in Focus at COMESA Ministers Meeting

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COMESA Council of Ministers held their 33rd meeting in Lusaka yesterday with a call to address the Non-Tariff barriers inhibiting intra-COMESA Trade.

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The most frequently reported NTBs, reported through the online system are customs and administrative procedures, transport, clearing and forwarding issues. Currently intra COMESA trade stands at only 7% and has slowly been rising since the establishment of a Free Trade Area in 2000.

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Acting President of Zambia Dr Guy Scott who opened the Ministers meeting cited the Sanitary and Phytosanitary measures imposed by regional states on agriculture and tourism as major bottlenecks to trade.

“I have received complaints from the industry all the time on the non-tariff barriers that they can’t move their products because of Sanitary and Phytosanitary requirements by importing countries”, Dr Scott said.

He added; “It was disappointing to note that some countries had continued to request for the certification of Yellow Fever despite the low prevalence levels of the disease in our countries. This has made the tourism industry to suffer because it restricts movement of people.”

Dr Scott cited Zambia as one of those faced with tremendous difficulties in exporting or importing their products as a result of the NTBs. He called on the secretariat to come up with harmonized rules and regulations that will allow member states to trade freely a scenario, which will result in, reduced cost of doing business.

In their last meeting held in February this year, the Council of Ministers had directed that the COMESA Secretariat undertake an audit and impact assessment of existing NTBS in order to come up with a schedule of their removal.

Article 49 of the COMESA Treaty provides for the elimination of NTBs and prohibits Member States from introducing new ones.

The report presented to the Ministers showed that NTBS have a negative impact on trade flows and were mainly responsible for the high cost of doing business in the region.

The meeting of the Council which was held under the theme of “Consolidating intra-COMESA trade through Micro, Small and Medium Enterprises development” ends Tuesday 9 December 2014. It is expected to come up with a raft of policy decision to be implemented by the Secretariat and Member States including those aimed at eliminating non-tariff barriers.

http://www.comesa.int/index.php?option=com_content&view=article&id=1402:non-tariff-barriers-in-focus-at-comesa-ministers-meeting&catid=5:latest-news&Itemid=41

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Ethiopia’s development throws in to regional economic integration: Djibouti emphasizes

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Djibouti, 9 December 2014 (WIC) -

The past ten years witness that the overall development in Ethiopia has brought a huge possibility to regional economic integration of the Horn of Africa, Djibouti Ports & Free Zone Authority said.

The Chairman of the Djibouti Ports & Free Zone Authority,  Aboubaker Omar Hadi,  told journalists the double economic growth in Ethiopia has played greater roles in economically integrating the countries in the region.

The chairman said that Djibouti is at a point where Africa, Europe and Asia are intersected that about 50 per cent of world shipping passes in part of the country’s maritime routs.

Due to the boosting infrastructure in Ethiopia, Djibouti is connected to Ethiopia by road and rail via which Djibouti will reach to the heart of Africa.

Ethiopia has now a huge and fast growing economy with a large market and population, 80 per cent of the goods handled by Port of Djibouti belongs to it, the chairman said.

Ethiopia has also been transporting 95 per cent of its oil through Port of Djibouti, the chairman said, adding that Djibouti has modernized and developed Horizon Djibouti Petroleum Terminal with storage capacity of 371, 000 cubic meters, he added.

Djibouti had made an additional 20 ha of dry yard area available so as to particularly accommodate the growing demand of Ethiopia, WIC learnt.

According to the chairman, the fast economic development and boosting of road infrastructure in Ethiopia has come with a bright future, which is mutual development and economic integration of countries in the region.

The sustainable development of Ethiopian market has paved ways for the expansion of port of Djibouti and the development of new ports like the Lac Assal and Tadjourah.

The newly under construction Export Terminal Project at Lake Assal with a coast of about 64 million USD is expected to load 6 million tones of salt per year extracted from the Assal lake, Engineers at the site pinpointed.

According to Djibouti Officials, the plan is to export salt extracted from Lake Assal to china and Japan and European countries.

The Tadjourah Port is also under construction with a cost of about 70 million USD and is designed for the export of potash. 25 percent of the construction has already completed, according to the site Engineer.

http://www.waltainfo.com/index.php/explore/16463-ethiopias-development-throws-in-to-regional-economic-integration-djibouti-emphasizes 

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Ethiopia’s Economy Expands By 9% Annually

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Ethiopia said on Friday it had completed raising $1 billion with its debut Eurobond with a term of 10 years and coupon of 6.625 per cent, adding that the offer had been oversubscribed.

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Ethiopia is the latest African sovereign to receive a strong response on its first foray into the international debt markets. Investors have been eyeing Africa’s sturdy growth rates and Ethiopia’s economy is now expanding by about 9 per cent a year.

“Ethiopia attracted high quality investor interest despite a challenging market environment,” the Finance Ministry said in a statement, adding the 10-year maturity aimed to create a benchmark and proceeds would be invested in infrastructure.

Deutsche Bank and JP Morgan were the lead managers. The ministry said a French firm had acted as financial adviser but did not name the company.

Despite strong growth rates, analysts said Ethiopia had limited hard currency earnings, making its debt-servicing capacity weaker than some African states. It will also be more difficult for Ethiopia to build foreign reserves, which now cover little more than two months of imports, they said.

Kenya, Ethiopia’s southern neighbour which issued its debut Eurobond earlier this year, has reserves to cover around four months of imports

http://www.spyghana.com/ethiopias-economy-expands-by-9-annually/

See also  http://www.borkena.com/2014/12/09/ethiopia-inflation-rises-5-9-pct-year-november/

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Expansion of Ashegoda Wind Farm to help Ethiopia add 40MW of power

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Vergnet Group SA is conducting a feasibility study in Tirgay Regional State for expansion of the Ashegoda Wind Farm, a project that will help the country add to the grid a total of 40MW in Tirgay Regional State. Lodovic Dehondt, Ashegoda’s project director for the first phase has said the project is expected to end in 2015.

Ashegoda is considered to be one of the windiest places in Ethiopia and its one of the 11 sites that had been identified by experts with the potential to generate power from wind. Feasibility studies in the area commenced in October this year. The wind farm has capacity to produce 10 – 40 MW of electricity once it becomes operational.

German-based company Lahmeyer International GmbH has been hired by the government to provide project consultancy services and contract supervision and administration works. The funds for the project will be sourced from European banks and the French Development Agency (AFD).

The Minister of water, Irrigation and Energy (MoWIE) Alemayehu Tegenu, and the Minister of Communication and Information Technology, Debretsion Gebremichel have also entered into another agreement to expand power generation.

Ethiopia aims at generating 10,000Mw electric power from water, wind and geothermal sources through the Ashegoda wind farm and Adama wind farm during the conclusion of the government’s five-year growth plan.

Vergnet Group SA is based in French firm and deals with power generation from  wind,  solar  and  hybrid  sources. It has installed 900 wind turbines and operates in nearly 35  countries. Ethiopia has recently announced setting aside US$20bn for energy projects in a bid to construct 10-12 new power generating projects between 2015-2020.

http://constructionreviewonline.com/2014/12/05/expansion-ashegoda-wind-farm-help-ethiopia-add-40mw-power/

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GERD progressing well

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Addis Ababa, 9 December 2014 (WIC) -

Ethiopia’s mega hydroelectric power project being built on the Blue Nile River, known by the Great Ethiopian Renaissance Dam (GERD), is progressing well, Ethiopian officials have said.

The project in the East African country will generate 6000-MW of electric power upon completion.

The dam is being constructed in Benishangul Gumuz Regional State of Ethiopia, western part of the country, about 40 km east of the border with Sudan.
Engineer Simegnew Bekele, Project Manager of the GERD, told Xinhua on Saturday that the project is progressing well in all its activities.
All the activities on the project “are progressing healthily in order to realize the project.

“We are mobilizing all the people, nations and nationalities of Ethiopia, including the Ethiopian Diaspora,” said Simegnew.

Ethiopia is now harnessing its potential for renewable energy to fight against poverty and improve the lives and livelihoods of its people, said Simegnew.

“This is a green energy; and this supports other renewable energy; and Ethiopia is the power hub; we have tremendous natural resources.
“So, we are now exploiting; we are now harnessing this potential to improve lives and livelihoods of individuals,” he noted.

“This is our primary agenda, number one agenda for our country; this is a project which is equipping us to fight poverty, our common enemy.
“The government has devised a strategy to improve the lives and livelihoods of individuals, the citizens.

“And we have already started developing such kind of infrastructures that allow us to fight poverty,” he said.

He said, “On Nov. 28, 2014 we already booked world record with a daily average of 16,949 m3 roller compacted concrete.

“At the Great Ethiopian Renaissance Dam hydroelectric project on the Nov. 28, 2014 we have already placed 16,949 m3 of concrete, which is roller compacted concrete.”

Bereket Simon, Policy Study and Research Advisor Minister to the Prime Minister, told Xinhua on Sunday that the project is progressing on the schedule.
“It is amazing; right now it has reached around 40 per cent.

“We are right on the schedule in all fronts; the clearing of the bushes, the forest has been done well; construction, filling of the Dam have been done also according to plan,” Simon said.

Ethiopia celebrates Nations, Nationalities and Peoples Day on December 8 annually to commemorate the Day on which the country’s constitution was adopted about 20 years ago.

This year the Day is marked under the theme, “Constitutionally Embellished Ethiopianess for our Renaissance,” in Asosa, capital of Benishangul Gumuz Regional State. (Xinhua)

http://www.waltainfo.com/index.php/explore/16472-gerd-progressing-well

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Ceramics Factory to Launch in 10 Months

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Medtech is going to be the second ceramic manufacturer to join the sector

Medtech Ceramics Manufacturing Plc (MCM), a ceramic and sanitary ware manufacturer, is expecting the delivery of two ceramic manufacturing machines in three months, for the factory which could begin operation in 10 months. MCM was established jointly by Medtech Ethiopia Plc and Sheikh Faisal bin Al Qasimi, chairman of Julphar Gulf Pharmaceutical Industries, and Star Group Holdings.

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The Company, established six months ago with a capital of 450 million Br, has finished construction of its factory building on a 20ha land. It is situated in Butajira, Southern Regional State, 132Km south of Addis Abeba, according to Mohammed Nuri (MD) general manger of the ceramic factory.

Medtech Ethiopia, a local pharmaceutical products manufacturer, has a 30pc share. The two United Arab Emirates (UAE) based shareholders, Sheikh Faisal and Star have 30pc and 40pc shares in the ceramics and sanitary products company, respectively.

“The main aim of the factory is to substitute imported ceramics,’’ said Mohammed.

Ethiopia imported ceramic products worth four billion Birr during the 2012/13 fiscal year; imports mainly come from China and the United Kingdom (UK), according to ceramic importers in Merkato.

Medtech says its goal is to produce 30,000sqm of floor and wall tiles on a daily basis when production begins in September 2015. It could employ 500 people, some of them coming from India and Arab countries.

The company and the Ministry of Mines (MoM) have identified an area adjacent to the factory site, where the company will mine red ash. It will only receive a mining license from the Ministry when it has finished the factory, according to a Ministry source.

The Company will get 98pc of input locally and the remaining two percent will be imported, including dices, mixers and colouring materials, according to Mohammed.

“We decided to establish the Company because thanks to the recent construction boom there is high demand for ceramic products which cannot be met by current production,’’ says Mohammed.

The only local ceramic manufacturer currently is Tabor Ceramic Products S.C, which was founded in 1989 on a 206,259sqm plot of land in Hawassa, in the Southern Regional State. It manufactures ceramic electrical insulators, table ware products, sanitary products and tiles.

Medtech made the order for the two machines three months ago from Caravan & Marine Equipment Company (CAMEC), a machinery equipment manufacturer, for 10 million dollars, according to Mohammed.

“The Medtech that is already planted in Butajira is at phase one. We are in phase two, getting land for the project in Addis Abeba,’’ Mohammed told Fortune.

Medtech-Ethiopia and Julphar Gulf Pharmaceutical Industries were inaugurated in February, 2013. It is a 170 million Br pharmaceutical manufacturing factory in Bole District, Addis Abeba, and has a production capacity of 25 million bottles of suspensions and syrups, 500 million tablets and 200 million capsules annually.

http://addisfortune.net/articles/ceramics-factory-to-launch-in-10-months/ 

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Ethiopia seeks Indian help to revitalise higher education

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As the Ethiopian government works towards revitalising higher education to meet growing demand by boosting investment in education under the country’s Growth and Transformation Plan (GTP), India, with its long experience in the education sector, could help invest in Ethiopia, officials state.

This was stated at a three-day international seminar on “India and Africa: Developmental Experiences and Bilateral Cooperation”, and the Sixth Doctoral Scholar International Conference in African Studies that started here Monday.

The three-day seminar is being organized by the Wolkite University of Ethiopia in collaboration with the Policy Research Institute of African Studies Association (PRI-ASA) of India and the Centre for African Studies, Jawaharlal Nehru University (JNU).

“This seminar can contribute ideas or innovations in this field so that we can incorporate this officially to the second phase of the GTP that we are now preparing”, Admasu Shibru, president of Wolkite University, told IANS.

“It is very important for us to realise the educational vision and transform the socio-economic situation of this country even as we are trying to benchmark all possible innovations in terms of developing each sector.”

The seminar under the theme of “Development, Diaspora and International Relations of African Countries” is being attended by academicians from India as well as the business community, civil society organisations and NGOs from Ethiopia.

“The very important thing that we are doing today is establishing the collaboration so we are just starting and once it is established we have to continue strengthening by shaping the partnership strategies that we are going to have,” Shibru further stated.

“This conference that has brought experts from across the world will explore the various faces of their bilateral cooperation from different paradigms,” said Aparajita Biswas, president of ASA, Mumbai.

“It is not only contributing to the global discourse on India and Africa but it will hopefully alter the existing narratives of this complex relation,” she said.

“This initiative is certainly the beginning of a fruitful relationship between ASA India and Wolkite University as we can work together for an enriching partnership to promote the exchange of the knowledge and people across the Indian ocean.”

India is known for its knowledge economy, it is known for its contribution to the world economy in areas of knowledge in modern science and technology and in social science and literary writing, says Dubey, director of Centre for African Studies, University of Mumbai.

“Exposing them to African countries and establishing interaction with them will enrich their own experience as well as give access to African academics and help postgraduate students link up and see developing countries’ academics how they are seeing the world and how the situations are in similar paradigms,” he said.

“Different countries were confronting almost similar issues of development, proper action in healthcare and negotiating globalisation from a developing country’s perspective”.

According to Dubey, India’s policy on Africa needs to first look at the basic educational sectors. “As a knowledge-based economy, our scientists, our academicians, and our literary writers are making a difference all over the world. Therefore, it gives an opportunity to share this experience with Africa and the world”, he asserted.

This seminar that has so far been organized every two years was previously held in Kenya along with the University of Nairobi and in Durban, South Africa.

“Seminars like this have the power to fill the serious lack of academic interaction amongst academicians and scholars of India and Africa,” a participant of the seminar told IANS.

“This seminar is expected to come up with long term and sustainable partnership with India and Ethiopia and Africa in general. Then this will bring about sharing of all sorts of technologies, skills, innovations of all kinds which could help us improve our education quality.”

 http://www.bignewsnetwork.com/index.php/sid/228370077

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Meta Abo Brewery to source all cereal raw materials in Ethiopia locally

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Meta Abo Brewery S.C., a Diageo company, announced last week that it will source 100% of all cereal raw material needs in Ethiopia locally in time for Meta’s 50th Anniversary, by the end of 2017. This local sourcing strategy will serve as a commitment across the entire Meta business and will not be limited to specific products or brands.

According to a statement from the company, currently, more than half of the brewery’s raw materials are sourced locally. It also said that for the past three years, Meta has pioneered local sourcing in the Ethiopian beer industry, being the first multinational brewery to engage in the contract farming of barley through its “Partnership for Agricultural Growth in Ethiopia.”
“Together with partners such as the Ethiopian Agricultural Transformation Agency, the Oromia Bureau of Agriculture, Technoserve, Syngenta, BASF, Nyala Insurance, and local distributors, Meta has contracted 6,113 farmers across Arsi, West Arsi and South West Shewa Zones of Ethiopia and works with 5 farmer unions and 39 farmer cooperatives as part of this contract farming agreement.”
By 2016, the brewery plans to engage 10,000 smallholder farmers, increasing this number to 20,000 by 2017.
Francis Agbonlahor, Meta Abo Brewery’s Managing Director, stated that, “’Diageo continues to demonstrate its long term commitment to the socio-economic development of Ethiopia. Locally sourcing 100% of our raw material needs is a major milestone on this journey and I am deeply proud about the phenomenal progress we have made thus far.” I am looking forward to continuing to partner and collaborate with the Government of Ethiopia, our numerous farmers, and our key partners to deliver even greater successes in the years to come.”
The scope of Meta’s work in local sourcing addresses many aspects of the supply chain, including barley varieties, seed availability, input sourcing and mechanization. All farmers that Meta contracts receive a comprehensive “Meta Package” that includes seeds, DAP and Urea fertilizers, herbicides, fungicides, training and crop insurance which is pre-financed by Meta and repaid by farmers after they sell their harvested barley. In addition to these inputs, capability building is carried out for farmer groups, cooperatives and unions in the areas in which farmers are contracted.
Meta’s local sourcing work is part of Diageo Africa’s strategy to source at least 70% of raw materials locally by 2015 and an even greater percentage by 2017.
“The brewery’s pledge to sourcing locally is a key piece of Meta’s overarching strategy of growth and sustainability in Ethiopia. One pillar of this strategy is investment in the communities in which it operates,” the company said. The business is also committed to promoting responsible drinking, most recently launching the first fully-fledged Don’t Drink & Drive campaign in Ethiopia, Shoom Shufair. On a global level, Diageo was one of the 13 leading global producers of beer, wine and spirits to sign the “CEO Commitments” to implement the World Health Organization’s global strategy to reduce the harmful use of alcohol.
Diageo is the world’s leading premium drinks business with a collection of beverage alcohol brands across spirits, wines and beer categories. These brands include Johnnie Walker, Crown Royal, JεB, Buchanan’s, Windsor and Bushmills whiskies, Smirnoff, Cîroc and Ketel One vodkas, Baileys, Captain Morgan, Tanqueray, Meta Beer, and Guinness. Diageo is a global company, with its products sold in more than 180 countries around the world. The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE).

http://addisstandard.com/meta-abo-brewery-to-source-all-cereal-raw-materials-in-ethiopia-locally/ 

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Ethiopia to invest US$1.4bn in petroleum pipeline project

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Ethiopia would spend US$1.4bn to build a petroleum pipeline from the Port of Djibouti to a storage facility in order to reduce the cost of transportation in the country

The petroleum pipeline project is expected to take two years to construct.

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According to the government of Ethiopia, the 550 km of pipeline would carry oil directly from the vessels at the port to a storage facility in Awash. The trucks would then distribute fuel from Awash to the rest of the country including Addis Ababa.

The Ethiopian Ministry of Water, Irrigation and Energy (MoWIE) confirmed that the proposal had been submitted and they would look into it before discussing it further with the Ministry of Finance and Economic Development (MoFED), Ministry of Foreign Affairs (MoFA) and Ministry of Transport (MoT).

Demelash Alamaw, assistant CEO at Ethiopian Petroleum Supply Enterprise, said, “In 2013 Ethiopian Petroleum Supply Enterprise imported 2.6mn tonnes of fuel. In 2014 it has plans to import 2.9mn tonnes.”

The Djibouti government noted that the current port infrastructure is not big enough to meet Ethiopia’s long-term needs. Currently, the demand for refined fuels in Ethiopia is growing at 10 per cent per year.

http://www.oilreviewafrica.com/downstream/downstream/ethiopia-to-invest-us-1-4bn-for-pipelines

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 Press 4 for fertilizer – M-farming in Ethiopia

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Not like that…. Three million Ethiopian farmers have dialled 8028 to learn how to do it better

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ADDIS ABABA, 3 December 2014 (IRIN) -

One reason farmers in Africa mostly produce so much less than those in other parts of the world is that they have limited access to the technical knowledge and practical tips that can significantly increase yields. But as the continent becomes increasingly wired, this information deficit is narrowing.

While there are other factors, such as poor infrastructure and low access to credit and markets, that have helped keep average yields in Africa largely unchanged since the 1960s, detailed and speedily-delivered information is now increasingly recognized as an essential part of bringing agricultural production levels closer to their full potential.

In Ethiopia, which already has one of the most extensive systems in the world for educating the 85 percent of the population who work the land for a living, this recognition has driven the development of a multilingual mobile phone-based resource centre.

The hotline, operated by the Ministry of Agriculture, the Ethiopian Institute of Agricultural Research, and Ethio Telecom, and created by the Ethiopian Agricultural Transformation Agency (ATA), has proved a huge hit. Since its July launch and still in its pilot phase, more than three million farmers in the regions of Amhara, Oromia, Tigray and the Southern Nations, Nationalities, and Peoples’ Region (SNNPR) have punched 8028 on their mobiles to access the system, which uses both interactive voice response (IVR) and SMS technology.

“On average we get approximately 226 new calls and 1,375 return calls per hour into the system,” Elias Nure, the information communication technology project leader at ATA, told IRIN. When the number of lines doubles from the current 90, he said, “these numbers should significantly increase.”

More than 70 percent of users are smallholder farmers, he said.

Timely, accurate information

Ethiopia has the largest agricultural extension system in sub-Saharan Africa, the third largest in the world after China and India, according to the UN Development Programme.

This system has led to the establishment of about 10,000 Farmer Training Centres, and trained at least 63,000 field extension workers, also known as development agents. It facilitates information exchange between researchers, extension workers and farmers.

However, the reliance on development agents means that sometimes agronomic information reaches farmers too late or is distorted.

Push and pull factors

The agriculture hotline was proving popular due to its “pull” and “push” factors, according to ATA’s chief executive officer, Khalid Bomba.

Farmers could pull out practical advice, while customized content could be pushed out, such as during pest and disease outbreaks, to different callers based on the crop, or geographic or demographic data captured when farmers first registered with the system.

Recently, it warned registered farmers about the threat posed by wheat stem rust.

“These alerts and notifications were not available to smallholder farmers in the past and could greatly benefit users of the system by getting access to warnings in real-time,” said ATA’s Elias.

According to Tefera Derbew, Ethiopia’s minister of agriculture, ATA should boost its content to meet more needs.

“The IVR system offers users information relevant to the key cereals and high value crops, but I envisage that in the near future there will be the opportunity to upscale the service to include content relevant to all of the major agricultural commodities in the country, including livestock,” said Tefera.

The hotline currently focuses on cereal crops such as barley, maize, teff, sorghum and wheat, but plans are under way to provide agricultural advice on other crops, such as sesame, chickpea, haricot beans and cotton, while incorporating farmers’ feedback on needs.

For Ayele Worku, a teff farmer in Gurage zone of Ethiopia’s SNNPR State, the system’s benefits outweigh the frustrations of a patchy mobile network.

“The way of farming, especially for row-planting for teff is kind of new for me although I heard rumours about its advantage a while ago,” he told IRIN.

This break with tradition in the way teff is sown has seen yields increase by up to 75 percent.

An agricultural extension and rural development expert working at Addis Ababa University, Seyoum Ayalew, said: “The new service could build a synergy with the previous approaches of the public extension system, which is largely based on trickle down approach of communication.”

Seyoum noted that within the traditional extension system, “where information passes through different channels before reaching the farmers, [it] is subjected to distortion through filtering and translation errors.”

http://www.irinnews.org/report/100911/press-4-for-fertilizer-m-farming-in-ethiopia

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Eurobonds and potash will boost Ethiopia and Africa’s food security

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Posted on December 8, 2014 by Alessandro Bruno

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Ethiopia issued a dollar based bond to fund its development goals focused on increasing agricultural production, power generation and transportation infrastructure including the 6,000 megawatt Millennium Dam hydroelectricity project on a Nile river tributary. Deutsche Bank and JP Morgan will be handling the sale of the ten year bond (yielding 6.75%).

Ethiopia has been Africa’s fastest growing economy for the past few years; it follows in the lead of other African countries that have issue similar bonds (Eurobonds) recently, including Kenya, Ivory Coast, Senegal and Ghana. Ethiopia’s bond issue reflects both the scope of its development ambitions – needing to raise at least USD$ 50 billion before the end of the decade to complete its development targets – and foreign investors’ growing interest in the country and Africa in particular. The Millennium Dam is seen as crucial to boosting agriculture in Ethiopia as well as some of its neighbors such as South Sudan, Kenya and Uganda. Indeed, Ethiopia has taken full responsibility for funding the Millennium Dam in order to establish greater control over the flow of the Nile waters and its power will allow Ethiopia to become a regional hydro-electricity hub.

It was exactly 30 years ago when the world learned of a terrible famine in Ethiopia, which also included present day Eritrea at the time prompting worldwide relief campaigns punctuated by songs like ‘Do they know it’s Christmas’ and ‘We are the World’. Much has changed today: Ethiopia is home to the third largest agricultural industry on the African continent and it is on track to achieve food security. Despite the huge challenge of expanding agriculture in a country that was not long ago on the brink of famine to ‘Africa’s bread basket’ is a huge challenge but thanks to farming method innovations and research, the country will, in the very near future, achieve food security. But Ethiopia’s ambitions reflect the wider agricultural growth phenomenon that has been occurring throughout Africa, which have been fueling the enthusiasm of local populations and private investors alike. With increasing urbanization and an exponential growth of the middle class, the African food market just waiting to grow and is expected to triple by 2030 according to a study by the World Bank in 2013. There is also a growing food deficit between demand and regional supply, which has contributed to interest in agriculture. Ethiopia and Africa will gains benefits in development and wealth creation along with agricultural best practices, better yield per hectare, and more intense trade links to developed countries. Recently a US private equity fund (KKR & Co) has made its first investment in Ethiopia.

The international investment and financing such as today’s aforementioned bond issue will help to address the technical challenges to agriculture throughout Africa as multiple land expansion projects are being planned all over the continent.  Thus, the enthusiasm of the private equity companies for Sub-Saharan Africa is accelerating, agriculture appears as a natural investment sector. An international law firm, Freshfields, has pointed out that agriculture investments in Africa have increased by 137% in the first half 2014 compared to the same period in 2013, facilitated by improving political risk and easier transactions. It should be reminded that Africa is huge, covering the second largest area after Asia, holing the second largest population. Moreover, the UN has noted that Africa has 17% of the world’s arable land and agriculture accounts for more than 20% of the Continent’s GDP. Farming now occupies 60% of the workforce in Africa.

African agriculture has tremendous growth potential because the continent still has many reserves of uncultivated land, counting 226 million arable land but being able to reach almost 500 million. Much of Africa is well irrigated and the climate is favorable to the production of maize, soya and sugar cane. The Chinese are well aware of this potential and have signed leases in the long term, using already 2-3% of the resources and Ethiopia is one of their leading targets. Africans will need more arable land and implement agriculture to increase food production yields. Production costs are low and the workforce is young and plentiful. If over the past 15 years, it has been Brazilian agriculture’s turn to shine, now is the time of Africa and it is estimated that the continent will become a net exporter of corn and soybeans in the next ten years. Other cereals include barley, sorghum, cotton, sugar cane, groundnut, millet and cassava. However, investment in infrastructure is not enough. African agricultures needs the right soil and productivity to flourish.

Potash and other mineral fertilizers are one of the keys to the Continent’s agricultural growth strategy. To this effect, Allana Potash (TSX: AAA | OTCQX: ALLRF) could become one of the largest potash producers in Africa thanks to a promising project in Ethiopia, addressing domestic, African and Asian potash demand. The Horn of Africa, from where Allana’s potash will be shipped, is strategically located to serve India, China and more importantly, all of the markets where potash demand is rising fastest such as Indonesia, Malaysia and Laos – all countries featuring potash intensive palm oil production. But it is Africa, where potash consumption, now among the lowest in the world, is slated to increase the most. Ethiopia alone will guarantee significant sales for Allana. Indeed, Ethiopia, which is home to some 90 million inhabitants, has ambitious economic growth plans and agriculture is its highest priority given that some 85 percent of the people work in that sector.

There is room for growth because most agricultural production revolves around a vast number of small rural areas with operations smaller than one hectare. Now, there are 12.5 million hectares of arable land in Ethiopia but the potential is 50 million hectares. The country has already sought international cooperation to help improve land productivity and make fallow land available for farmers. There is no more effective way to achieve this process than through a greater use of potash, which is essential to increasing yields and providing the kind of nutrients that African soils are known to lack. In the 1960’s-70’s, the use of mineral fertilizers grew considerably in Latin America while dropping in Africa. Not surprisingly, those decades (and until now) saw various famines in Africa, while food production increased in Latin America. Now, the International Fertilizer Industry Association suggests that African potash use could reach five million tons over the next few years. It is now not even close to a million tons. Allana is edging ever closer to production phase having been granted all relevant mining permits from the Ministry of Mines of Ethiopia; its strategy is to help develop and expand the mineral fertilizer market in Ethiopia and Africa in general – even if the initial focus will be East Africa. The African continent presents tremendous market potential for mineral fertilizers and potash in particular, given that it has the potential to attract 880 billion dollars of investment in agriculture by 2030, which will drive demand for products such as fertilizers, seeds, pesticides and machinery as Africa develops its own production of biofuel, grain refinement and food.

http://investorintel.com/potash-phosphate-intel/eurobonds-potash-will-boost-ethiopia-africas-food-security/ 

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Will A Eurobond Boost Ethiopian Food Security?

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By Dana Sanchez Published: December 8, 2014

Teff field, Ethiopia Thinkstock

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Deutsche Bank and JP Morgan will handle the sale of a 10-year, dollar-based Ethiopian bond yielding 6.75 percent to fund increased agricultural production, power generation and transportation infrastructure, InvestorIntel reports.

Agriculture investments in Africa increased by 137 percent in the first half of 2014 compared to the same period in 2013, thanks in part to improved political risk and easier transactions, according to international law firm, Freshfields,

Ethiopia has been Africa’s fastest growing economy for the past few years, according to InvestorIntel. It follows the lead of other African countries that issued similar bonds (Eurobonds) recently, including Kenya, Ivory Coast, Senegal and Ghana.

Ethiopia’s bond issue reflects both growing interest of foreign investors in the country and Africa, and the scope of its development ambitions, according to the report. The country needs to raise at least $50 billion USD before the end of the decade to complete its development targets.

Ethiopia has taken full responsibility for funding the Millennium Dam, considered crucial for boosting agriculture in Ethiopia as well as some of its neighbors such as South Sudan, Kenya and Uganda. This will give Ethiopia greater control over the flow of the Nile. Its power will allow Ethiopia to become a regional hydro-electricity hub.

Ethiopia is home to the third largest agricultural industry on the African continent, according to InvestorIntel. Not long ago the country was plagued by famine. Now it’s on track to achieve food security thanks to farming method research and innovation.

But Ethiopia’s ambitions reflect the wider agricultural growth occurring throughout Africa, which has been fueling private investors. The African food market is expected to triple by 2030 with exponential growth of the middle class and increasing urbanization, according to a 2013 World Bank study.

U.S. private equity fund KKR & Co recently made its first investment in Ethiopia.

International investment and financing such as the bond issue will help address the technical challenges to agriculture throughout Africa, according to InvestorIntel. Enthusiasm is growing among private equity companies for Sub-Saharan Africa. Agriculture appears to be a natural investment sector.

 http://afkinsider.com/81039/will-eurobonds-boost-ethiopian-food-security/

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Insurance for Ethiopian herders aims to combat drought, conflict – TRFN

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By E.G. Woldegebriel

YABELO, Ethiopia - Nomadic livestock herders in Ethiopia have received their first payout from an insurance scheme that tracks poor pasture conditions with satellite technology.

Ethiopia has difficulty drawing full advantage from its livestock resources – the largest in Africa – because of the unreliability of pasture and water caused by persistent drought.

The new insurance scheme, known as index-based livestock insurance, aims to reduce losses, support pastoral communities, and lower the risk of conflict sparked by pastoralists migrating into agricultural areas in search of forage or water.

Coverage has been sold since July 2012 in southern Ethiopia’s Borena zone by Oromia Insurance Company (OIC), with technical assistance from the International Livestock Research Institute (ILRI), U.S.-based Cornell University, and Mercy Corps, an international development organisation. Just over 500 pastoralists took up coverage initially.

The scheme was based on an earlier insurance effort rolled out in 2010 in neighbouring Marsabit region in northern Kenya, said Andrew Mude, principal economist at ILRI in Nairobi.

There, payouts were based on livestock deaths. But “the (experience) we had with the Kenyan programme was that some animals are more hardy than others, and so (with) differential mortality rates … (it) was a bit complex,” Mude said.

The insurance offered by OIC in Ethiopia instead offers coverage based on the actual scarcity of the herders’ forage, rather than the mortality rate of their livestock.

HOW IT WORKS

The insurance uses NASA satellite data to look at forage availability in the Borena zone. Experts from ILRI and Cornell University compare current images with historical data from the past 30 years.

“We provide the technical expertise to understand how to use the information from satellites on the state of forage on the ground,” Mude said.

The timing and amount of insurance payouts are then calculated based on the severity of the lack of forage.

OIC’s insurance will pay out up to 6,000 Ethiopian birr ($300) for a cow, 10,000 birr ($500) for a camel, and 800 birr ($40) for a sheep or goat annually. Pastoralists pay premiums averaging about 7.5 percent of the value of the maximum payout.

If forage levels become scarce compared to the index based on the historical satellite data, the herder receives compensation, even if no livestock have been lost.

In response to poor forage conditions, OIC made its first payout to all the insured holders, totalling 570,000 birr ($28,300), at the beginning of November this year at a ceremony in Yabelo, a town 565 km (353 miles) south of the capital, Addis Ababa.

Mude said that although livestock is the key productive asset and source of income for pastoralists, the novelty of insurance in this remote region initially made it difficult to sell.

ILRI spent two years researching the needs of the Borena zone herders before formally launching the insurance.

A further challenge is how to assess the damage suffered by policyholders when dealing with a mobile population.

Mude explained that an important feature of the insurance is that pastoralists remain covered even if they migrate out of the woredas (districts) where they are insured, since migration itself implies that there is a severe lack of forage. Compensation is therefore calculated based on the area where they were initially insured.

Wondimu Beteyo, a pastoralist who received a payout for his cattle and goats, says that until recently he had to trek several days for pasture and water. Now, he says, the money he has received will allow him to replenish the cattle he lost during the recent drought.

Dono Kotelo, from Teltale woreda, insured his two goats and two cattle for a total of 1,048 birr ($50) after learning about the insurance scheme. Although none of his animals died, because he migrated to find pasture, he received a payout of 192 birr ($10) for costs associated with the dry season and said he plans to buy insurance again for the coming year.

LOWERING CONFLICT RISK?

Getaneh Eerena, a livestock insurance officer at the micro-insurance department of OIC, said that in the long run the programme is not just about financial payments but about avoiding conflicts.

“The area tends to have high conflict incidence, both within (the) pastoralist community and against agricultural communities,” Eerena said.

Kotelo, the herder, said his Borena community used to cross into the land of agricultural communities when their own pastures were exhausted, often leading to deadly clashes.

Mude and Eerena said their organisations planned to extend the insurance scheme eventually across the country.

http://in.reuters.com/article/2014/12/05/ethiopia-insurance-idINL6N0TP1GW20141205

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Dereje Digaffe (above, pictured) was winnowing the raw wheat to separate the grain from the chaff, winnowing is part of crop processing during the port harvest season, and it is locally called mabearyet.

By FASIKA TADESSE
Fortune staff writer

Post-harvest crop loss starts from harvesting, handling, storing, processing, packing and transporting the crop until the crop reaches to the final point either to the market or the farmers’ house.

Depending heavily on annual rainfall, the farming community of Ada’a Woreda have grown teff, wheat, lentils and beans, for both commercial and home consumption purposes for generations.

The scene marks the start of the post-harvest season, which happens once a year in these parts of Ada’a Woreda, which extends from Dukem to Bishoftu (Debre Zeit).

Farmers had already started threshing their crops when Fortune visited parts of the woreda on Tuesday December 2, 2014. Threshing, locally known as wukia, takes place on the wudema, a piece of land cleaned and coated with cow dung.

That Tuesday many farmers had gone to attend the funeral of a village elder. But the two brothers, Dereje and Asnake Digaffe, 26 and 28 years old, were busy with the wukia of their wheat crop, which they had grown on one qert, a quarter of a hectare of land. They expected to get five to seven quintals of wheat.

“Our main challenge is wastage during the threshing, as the wudma is too small,” said Dereje, the younger brother, who started farming with his father six years ago, after failing the eighth grade national exam.

Post-harvest steps include harvesting, handling, storage, processing, packing and transportation of the grain. Of the crops, teff suffers the most wastage during the process. Up to 26pc is lost, with maize following losing 23.3pc. Barley and bean lose 18.9pc and 19.6pc, respectively, according to Central Statistics Agency (CSA) data. The loss of wheat is 13.8pc and sorghum loses just 10.9pc.

The production of cereals and pulses has increased from 211 million quintal in 2010/11 to 222 million quintals the following year. Last year 240 million quintals was produced.

During the current fiscal year, 14.1 million hectares of land was cultivated with cereal and pulses, with an expectation of 280 million quintals of crop being produced. Teff has the major share, with 3.2 million hectares and an expected yield of 44.2 million quintals, while maize follows with two million hectares and an expected yield of 65 million quintals. Wheat comes next, with 1.6 million hectares and an expected yield of 39.3 million quintals.

“Beyond the small plot used for processing, high wind and the animals are major reasons for the waste,’’ said Dereje. “The oxen used in the process eat the crop and they push the crop out from the Wudema.”

“The major problem is that post-harvest technology has been given little emphasis, both by farmers and the government,’’ says research by Shemels Admasu, a food technologist with the Ethiopian Institute of Agricultural Research (EIAR).

A sense of disappointment at the post-harvest losses is also felt by Worku Mekonen, 74, a father of 10 who had been farming a 1.5ha land in Hude Kebele, located approximately two kilometres off the main Addis Abeba-Djibouti road.

Worku is one of the farmers in Hude Kebele of Ada’a Woreda, in the East Shoa zone of Oromia Regional State. The kebele has an estimated population of 4,412, according to the Kebele’s administration. The farming community makes up 865 households, of which 182 are female-led. Farmers in Hude have as much as a couple of hectares of land. Many have one or two qert, and rent additional plots to produce ada’a magna teff, a type of teff that the community claims is better.

“The regional agricultural bureau is doing nothing for us to control crop waste during the post-harvest. They are supporting during the pre-harvest and harvest seasons by providing us improved seeds, fertilisers and assistance,’’ said Worku.“As I am too old, I would like to have simple machines to process crops to take less time and power.’’

“We advise the farmers to avoid losses,’’ said Belay Chala, a Development Agent (DA) in the Hude Kebelle, admitting that there was little support for reducing the losses.

During the current fiscal year the government made supports for the farmers in the pre harvest and harvest season. It distributed 8.5 million quintals of fertiliser, 841,000ql of improved seeds and 33,000 pieces of equipment that help the farmers sow seeds and 2,000 other pieces of equipment that help farmers put fertilisers in the farm. However, the Ministry only provides farmers with training in the post-harvest season.

“The main solution to avoid losses during the post-harvest is to motivate farmers to use modernised equipment, such as a harvesting combiner,’’ said Tesfaye Mengste, director general for Agriculture Extension Services at the Ministry of Agriculture (MoA).

Tesfaye mentioned that the 500 combiners owned by private investors could be used by farmers. These owners charge farmers 45 Br to 69 Br per quintal for processing. The price varies depending on the areas and the owners of the combiners.

According to the MoA, in the current harvest season 13.1 million hectares of land has been cultivated by 13 million farmers. From the total crop, 60pc has already been harvested; the remaining 40pc is expected to be harvested by the end of December, 2014.

The current harvest season is expected to show an increase in yield of 20pc from the last fiscal year, according to both the MoA and the CSA. This forecast is a source of hope for some farmers in the Hude Kebelle who are frustrated by crop loss during the post-harvest season. The Ministry is expecting 300 million quintals of major crops, exceeding last year’s total yield of 254 million quintals.

On the same day on December 2, 2014 in Mendello Kebele Alemnesh Girma, another farmer with two children, was assisting her teenage relative. She showed her relative, Habtamu Asalefe, how he should let the oxen walk on the wheat, one way used by the farmers to separate the crop and the waste. They were processing wheat they had collected from one qert, which takes three days. On average, the traditional process takes four days for wheat and seven days for teff that is collected from one qert.

Alemnesh has been farming with her husband for the last 13 years on the two qert plot of land which her husband inherited from his family. In addition to the two qerts, they rented eight additional qerts and harvested teff and wheat. She was assisting Habtamu because her husband, Addisu Worqu, was sowing teff on their farm early, as the National Meteorology Agency warns farmers to collect their crops early because weather forecasts had shown there will be rain by the end of December.

“The loss occurs during the transportation of the crop from the farm land to the storage area where it is processed,’’ she said. “Past experience has shown us between 30Kg and 50Kg of crop collected from one qert is wasted during processing.’’

The MoA deployed Farmer Training Centres (FTC) at all kebeles with three agents specialised in natural resource, crop and livestock to assist and train the farmers individually, and in groups, before, during and after the harvest season.

“A great effort is needed to generate technology that minimises losses,’’ suggests Shemels.

An expert from, the Food & Agricultural Organization (FAO) shared Shemels’s view that “the Agricultural Transformation Agency (ATA), the autonomous body of the government under the MoA, should work on the development of small equipment that can help the farmers process crops in a shorter time while avoiding loss,’’ he said.

Sourced here  http://addisfortune.net/columns/crop-loss-tackling-under-whelms/

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Innovative bankrolling gains popularity and raises high hopes among key countries

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By: 

Kingsley Ighobor and Busani Bafana

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An artist’s impression of the Grand Ethiopian Renaissance Dam.   

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It is an audacious $4.8 billion project undertaken by one of the world’s poorest countries.  At the construction site in the Benishangul region of Ethiopia near the Sudanese border, some 8,500 workers are labouring tirelessly every day to build the gigantic Grand Ethiopian Renaissance Dam. When completed in 2017, the dam will generate 6,000 megawatts of electricity for domestic consumption and export. 

On the surface, the 558 ft tall dam — Africa’s biggest hydropower project — belies Ethiopia’s financial muscle. The GDP per capita in Ethiopia is only $475. The late Prime Minister Meles Zenawi, who laid the foundation stone in 2011, said the dam would be built without begging for money from donors. Since then, construction has progressed steadily using money from local taxes, donations and government bonds. Ethiopians abroad and at home contributed the first $350 million, with government workers contributing amounts equivalent to a month of their salaries.

Semegnew Bekele, an Ethiopian construction engineer working on the dam, told The Guardian, a British newspaper: “Ordinary people are building an extraordinary project.” Development experts now showcase the dam as proof of an innovative approach to project financing. “Approximately $450 million has been raised from Ethiopians to help build the dam and I think the target is probably a billion dollars,” says Zemedeneh Negatu, managing partner at Ernst & Young Ethiopia, a financial consulting firm.

Ethiopians, private companies and even other countries such as Djibouti are buying bonds. In addition, the Ethiopian Electric Power Corporation, a state-owned utility, is investing its own revenue and the money it is borrowing from state-owned banks. Economists warn that using private sector finance to pay for the dam could slow Ethiopia’s economic growth in the future. But the government counters that this will be offset by selling electricity to countries in East Africa, a region with improving economic growth.

Ethiopia’s recipe for financing the dam from bonds and taxes is being touted as a model for other African countries. This East African country uses a computerised system to track and collect taxes, making evasion difficult. The government regularly carries out awareness campaigns to explain taxation and publicize what collected taxes are funding such as the dam.

Dismantling tax havens

Ethiopia’s financing approach, including taxes, is just one of the emerging ways of funding projects in Africa. Other countries on the continent are working towards similar initiatives. Africa currently collects about 27% of its GDP in taxes, which is insufficient to fund infrastructure such as roads, bridges, schools and hospitals.

At the Ninth African Development Forum in Marrakesh, Morocco, last October, Prime Minister José Maria Pereira Neve of Cape Verde explained that Africa could receive more tax revenues with “good governance and transparency in the management of public finances.”  Many of the 700 delegates at the conference, which was organized by the UN Economic Commission for Africa (ECA), including some African heads of state, private sector and civil society representatives, discussed innovative ways of financing Africa’s projects. They urged African governments to laser-focus on tax havens where some multinational companies keep their money.

Tax havens, which are places where taxes are markedly low, are a part of the broader problem of illicit financial flows (IFFs) from Africa, an issue that has lately drawn scrutiny. In 2013, for instance, ActionAid, an international non-government organization focusing on poverty, launched a global campaign to stop Barclays, a British bank, from promoting tax havens in Africa. By “helping your clients set up operations in tax havens like Mauritius, you are part of a system that is draining vital public funds out of the continent each year,” ActionAid warned the bank. Barclays denied it encourages business set-ups in tax havens.

Magnets for investors

Africa loses between $50 billion and $148 billion annually to IFFs, according to a 2013 ECA report titled: The State of Governance in Africa: The Dimension of Illicit Financial Flows as a Governance Challenge. Tracking and stopping “illicit financial flows is not just a moral imperative, it is a good input for transformative policies,” said Carlos Lopes, ECA’s executive secretary, in an interview with Africa Renewal held at the conference. IFFs include under-invoicing, over-pricing, double duties, disguised profits and the use of tax havens.

In tones that were at times urgent and angry, some speakers at the Marrakesh conference maintained that while Africa could still accept aid and encourage foreign direct investments, these should not be the main sources of finance. Africa’s vast natural resources such as gold, platinum, diamonds, chromite, copper, coal, cobalt, iron ore and uranium — 12% of the world’s oil reserves and arable land and forests — will continue to be magnets for investors. The rate of return on investment in Africa today, even adjusting for real and perceived risks, is higher than in any other developing region, according to an ECA report.

Private equity firms forage 

Mr. Lopes is optimistic about Africa’s private sector investment prospects. “Africa might have finally found a way to whet the appetite of private equity investors,” he says, adding: “The reality is that Africa cannot rely on development aid for its transformation agenda, so its appetite is moving towards private investment and domestic resource mobilization.” The message sounds good except that, again, tax loopholes are spanners in the works. In response, Mr. Lopes is arguing for an African common market to harmonize disparate regulatory systems and discourage companies from exploiting both the loopholes and the tax havens.

Private equity funding, which is when rich individuals or institutions inject capital into a company and acquire equity ownership, can be lifelines for companies gasping for cash. Yet, ten years ago, it wasn’t even well known in Africa, according to the ECA. But in the second quarter of 2013 alone, 164 firms secured $124 billion private equity capital, according to Preqin, a firm that tracks private equity trends.

The African Development Bank (AfDB) states that between 2010 and 2011, investment deals in Africa increased from $890 million to $3 billion. In 2012, institutional investors injected $1.14 billion in Africa-focused private equity funds, according to African Private Equity and Venture Capital Association, an organization that promotes private investments in Africa.  For example, Ethos Private Equity, a South African firm, alone received $900 million from equity funds.

The AfDB has also jumped on the private equity bandwagon, launching a pan-African facility to support the development of women fund managers. Geraldine Fraser-Moleketi, the bank’s special envoy on gender, told Africa Renewal that the idea is about looking at “innovative policies because current models are not inclusive.” Africa’s approximately one billion population and a combined consumer spending power that will rise to over $1.3 trillion by 2020, according to McKinsey, a global management consulting firm, makes the continent a tantalizing prospect for private equity funders.

Pension funds pool money from workers to be paid upon retirement and are particularly useful for long-term investments. During tough financial times, pension funds can be handy to augment infrastructure expenditure, financial experts believe. David Ashiagbor, a consultant with the AfDB’s “Making Finance Work for Africa” project, says Africa’s pension funds currently hold $380 billion in assets, thanks to a decade of economic growth. Even then, only very few countries, including South Africa, have pension systems that are broad-based, relatively transparent and protect beneficiary rights. Another problem is that many pension funds lack credibility due to poor services to beneficiaries and mismanagement of funds, according to 27four, a South African firm that consults on managing retirement funds. Consequently, not every African country can rely on pension funds for projects.

Growing investments at home

Despite Africa’s socioeconomic challenges, Mr. Lopes remains optimistic. “I am also a realist,” he says, identifying three megatrends in Africa’s favour. “The first is the demographic one. It is true the rest of the world is aging and Africa is getting younger. The second is the hard commodities in Africa once you take out oil and gas. The third is Africa’s reservoir of productivity through unused arable land.”

Cristina Duarte, Cape Verde’s finance and planning minister, who has announced her candidacy for the AfDB’s presidency, says Africa must keep trying to grow investment at home, adding: “How can we convince others to invest in our continent and in our development if we are not doing the same to the full extent of our ability?”  Still, the current project financing picture in Africa is mixed: Ethiopia’s fast-moving dam construction is a success story compared with a trans-West African highway that is yet to be completed 40 years after it was conceived. At the Marrakesh Development Forum, however, the palpable feeling was that Africa is entering a new dawn of innovative financing.

Sourced here  http://www.un.org/africarenewal/magazine/december-2014/financing-africa%E2%80%99s-massive-projects

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Investment: Made in Ethiopia

Almeda Textiles benefits from low overhead costs, but is limited by challenging logistics.

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Low costs attract investors, but there are many obstacles to the country’s industrialisation.The Ethiopian government is pouring resources into industrialisation in an effort to break into global markets.

In the near future, everybody will produce the right products to fit the international market

But, in a country where manufacturing accounts for only 4.2% of gross domestic product, challenges loom large.

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Ethiopia’s largest garment producer, Almeda Textiles, imports machinery from Asia and chemicals from Europe, says general manager Libelo Gebreslassie.

It then exports finished garments to retailers like H&M of Sweden, KiK Textilien of Germany and Steve Horne Enterprise of the US.

“The very important thing is support from the government,” Libelo says.

“Even though there are a lot of problems, this is the reason why international investors are coming.”

He adds that Almeda faces obstacles including low-quality domestic cotton, the high cost of imported chemicals and low managerial capacity.

Ethiopia’s ability to break into global value chains is inhibited by difficult trade logistics, power shortages, red tape and a lack of access to credit.

The country’s advantages include low costs – labour, land leases and electricity are relatively cheap – and duty-free machinery imports and duty-free access to Western markets, according to Lars Moller, the World Bank’s lead economist in Ethiopia.

“Ethiopia’s image as an investment destination has improved tremendously in recent years, which is positive and is supporting the trend of an increased number of companies investing here,” Moller explains.

“But it will take a while before this will transform the economy.”

Foreign-owned firms, including Chinese leather producers and Turkish textile factories, are indispensable to Ethiopia’s industrial sector.

Locally owned businesses hope to gain more market share.

“Everybody is aware that we have a good opportunity, and in order to utilise this opportunity, we have to change internally,” Libelo says.

“In the near future, everybody will produce the right products to fit the international market.”

http://www.theafricareport.com/East-Horn-Africa/investment-made-in-ethiopia.html

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Yara Dallol BV Potash Project – Environmental Impact Assessment

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- Yara ESIA provides details that may well apply to pending Allana Potash PEA and subsequent SOP production

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Yara International (Yara) is a chemical company that specialises in the manufacture of agricultural products and environmental agents including fertiliser products (such as potash). To support this Yara has started a subsidiary company called Yara Dallol BV, which is involved in the exploration and development of potash minerals in the Danakil Depression of Ethiopia. Yara Dallol BV is also working together with Novopro Projects Inc. (Novopro), a Canadian Project Development and Management Company, to develop a potash mine and production unit.

The proposed Project is located in the Danakil Depression in the Afar region, Zone 2 of the Dallol Woreda.

Before proceeding Yara Dallol BV must conduct an Environmental and Social Impact Assessment (ESIA) to assess how the proposed Project is likely to affect the local natural environment and surrounding communities either positively or negatively. The ESIA process will also work to identify ways of minimizing any negative  impacts and maximizing benefits (positive impacts) related to the proposed Project. In addition the ESIA report will, further advise if and how the proposed Project can be developed in a sustainable manner, as well as assist the Ethiopian officials with the permitting process.

Documents

 

DRAFT ESIA

Non-Technical Summary (English)

Non-Technical Summary (Amharic)

PART 1 – DRAFT ESIA

Cover, sign off page, contents

Chapter 1 – Introduction

Chapter 2 – Project Description

Chapter 3 – Project Motivation

Chapter 4 – Project Alternatives

Chapter 5 – Institutional and Legal Framework of Ethiopia

Chapter 6 – The Environmental and Social Impact Assessmnets (ESIA) Process

Chapter 7 – Stakeholder Engagement

Chapter 8 – The Receiving Environmental – Physical and Biological Characteristics

Chapter 9 – The Receiving Environmental – Socio-Economic Characteristics of the Project Area

Chapter 10 – Assessment of Physical and Biological Impacts and Mititgation

Chapter 11 – Assessment of Social Impacts and Mitigation

Chapter 12 –  Cumulative Impacts

Chapter 13 – Environmental and Social Environment System

Chapter 14 – Conclusion

Chapter 15 – References

PART II

Annexure A – Scoping Report Approval Letter

Annexure B – Primary Baseline Study Methodologies

Annexure C – Stakeholder Engagement Programme

Annexure D – Study Specific Criteria for Assessing Impacts

Annexure E – Faunal List and Inventory of Cultural Heritage Sites

PART III

Annexure A – Air Quality Management Plan

Annexure B – Noise Management Plan

Annexure C – Biodiversity Management Plan

Annexure D – Emergency Response Plan

Annexure E – Integrated Mine Closure Plan

Annexure F – Spill Prevention Control and Containment Plan

Annexure G – Waste Mangement Plan

Annexure H – Water Management Plan

Annexure I – Cultural Heritage Management Plan

Annexure J – Community Health, Safety and Security Management Plan

Annexure K – In-mitigation Management Plan

Annexure L – Sourcing , Procurement and Recruitment Management Plan

Annexure M – Worker Management Plan

Background Information Document 

English (1Mb PDF)

Amharic (815Kb PDF)

Final Scoping Report

Chapters 1 – 4 (2Mb PDF)

Chapters 5 – 8 (3Mb PDF)

Chapters 9 – 13 (3Mb PDF)

Annex A (679Kb PDF)

Appendix A (151Kb PDF)

Appendix B1 (160Kb PDF)

Appendix B2 (3Mb PDF)

http://www.erm.com/Yara-Dallol-BV-Potash-Project-EIA 

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Addis Ababa metro set for completion in January

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By Aaron Maasho in Addis Ababa

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Ethiopia expects to complete the Chinese-backed construction of a $475 million metro rail system in the capital Addis Ababa next month, the head of the project said.

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The project, built by China Railway Engineering Corporation (CREC) and mostly financed through a loan from China’s Exim Bank, is a rarity on a continent plagued by poor transport links.

Beijing is a major partner in Ethiopia’s bid to expand its infrastructure, with cumulative investments by Chinese firms reaching well over $1 billion, official figures show.

The Horn of Africa country is building a new rail link to neighbouring Djibouti and wants to complete 5,000 km of railway lines by 2020.

It will also aims to almost treble the size of the road network by next year, from less than 50,000 km in 2010.

Ethiopia is one of Africa’s fastest growing economies, expanding by about 9 percent a year and attracting overseas investment with its with rock-bottom wages, cheap and stable electricity and transport projects such as the metro.

A country where many still rely on subsistence agriculture, Ethiopia is nonetheless developing a reputation for producing clothes, shoes and other basic goods that have attracted firms from China, as well as India and the Gulf.

The metro system will transform the lives of the more than 5 million people in the capital, where commuters currently wait in long queues before they are crammed onto buses and minivans.

Project manager Behailu Sintayehu told Reuters nearly 80 percent of the tracks had been laid and he expected it to be completed by the end of January 2015, three years after the plan was launched in January 2012.

“We believe that it will have a great impact in alleviating the problem of transportation in the city,” Behailu said.

Stretching for a combined 32 km, two lines dividing Addis Ababa north-south and east-west will serve 39 stations, in underground and overground sections.

The state-run Ethiopian Railways Corporation signed an agreement this month that will see Shenzhen Metro – the enterprise managing the Chinese city’s subway system – operate the lines for a period of 41 months alongside CREC.

CREC will carry out a trial phase of up to three months and then the teams will decide when to start operating the system, Ethiopian Railway Corporation’s spokesman Dereje Tefera said.

Other African capitals with either subway systems or light rail networks are Cairo, Algiers and Tunis. South Africa has an extensive system linking several cities.

http://www.theafricareport.com/East-Horn-Africa/ethiopia-addis-ababa-metro-set-for-completion-in-january.html

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Djibouti embarks on $9.8 billion mega projects

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By ANDUALEM SISAY in Addis Ababa

Djibouti has announced embarking on several mega infrastructure projects with a total investment of $9.8 billion.

The cost of the projects is six times more than the tiny eastern Africa country’s Gross Domestic Products (GDP).

Djibouti is currently constructing $804 million multi-purpose and three specialized ports to be dedicated for export of livestock, and 4 million tons of potash export per year from Ethiopia and 6 million tons of industrial salt annually from Djibouti.

“Out of the $9 billion total investments for the 14 mega projects, we have already secured 58 per cent funding,” Mr Abubaker Mohamed Hadi, the Chairman of the Djibouti Ports and Free Trade Zone Authority (DPFTZA), told visiting journalists from Ethiopia.

The funds, he explained, are from China Exim Bank and the 23.5 shareholder of DPFTZA, China Merchants and other financers.

New airports

Currently, most of Ethiopia’s $13 billion import and $3 billion export goods come and exit through Djibouti port.

In addition to Ethiopia, which has become a major client of the Djibouti port following the 1998 Ethiopia-Eritrea War, Djibouti also plans to expand its services to South Sudan.

“…Of the 17 landlocked countries in Africa, 10 are in our region,” Mr Hadi said, explaining the prudence of investing in the mega infrastructure projects.

The other mega projects in the country with less than one million people, include new airports, national shipping company and an airline, crude oil terminal, development of business districts and $3 billion natural gas refinery.

The $525 million Doraleh Multipurpose Port is expected to be completed in the two years.

When complete, the old Port of Djibouti will be converted to a business district, according to Mr Hadi.

Mr Hadi further noted that the investment also took into considerations the connectivity plan of Africa and integration of the continent.

He indicated that Ethiopia’s fast economic growth in recent years had helped Djibouti to grow by 5 per cent on average annually for the past five years.

http://www.africareview.com/News/Djibouti-embarks-on-mega-projects/-/979180/2551052/-/8bom5jz/-/index.html 

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NO ORDINARY MATTER: CONSERVING, RESTORING AND ENHANCING AFRICA’S SOILS (2014)

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Agriculture for Impact presented the new Montpellier Panel report ‘No Ordinary Matter: Conserving, Restoring and Enhancing Africa’s Soils’ on Thursday 4th December 2014 at the International Fund for Agricultural Development, Rome- ahead of World Soil Day on the 5^th of December.

In sub-Saharan Africa, an estimated 65 per cent of soils are degraded, and unable to nourish the crops the chronically food insecure continent requires. Poverty, climate change, population pressures and inadequate farming techniques are leading to a continuous decline in the health of African soils, whilst the economic loss is estimated at USD 68 billion per year. Conversely, better land management practices could deliver up to USD 1.4 trillion globally in increased crop production – 35 times the losses.

This report from the Montpellier Panel argues that if left unaddressed, the cycle of poor land management will result in higher barriers to food security, agricultural development for smallholder farmers and wider economic growth for Africa.

The report is a comprehensive analysis of land management in Africa today, and answers a series of critical questions:

• Are donors and governments neglecting soil health in Africa?
• What are the key approaches to restoring Africa’s soils?
• How can improved land management tackle climate change in Africa?

Agriculture’s ability to catalyse rural development and eradicate poverty has been widely cited, with the World Bank claiming GDP growth from agriculture in Africa approximately 11 times more effective for reducing poverty than growth coming from any other sector. In 2006, the African Union’s Abuja declaration called for fertiliser use in sub-Saharan Africa to increase from today’s average of 8 kg/ha — the world’s lowest — to at least 50 kg/ha by 2015.  However, agriculture must be implemented sustainably in order for food security to be possible for future generations, therefore the panel calls for ‘Integrated Soil Management’; combining targeted and selected use of fertilisers alongside traditional methods such as application of livestock manure, intercropping with nitrogen-fixing legumes or covering farmland with crop residues.

The launch was opened by Kanayo Nwanze, President of the International Fund for Agricultural Development at the United Nations in Rome.

Director of Agriculture for Impact, Professor Sir Gordon Conway chaired the panel discussion – comprising David Radcliffe Senior Advsior for Development and Cooperation DG at the European Commission, Camilla Toulmin, Director of the IIED, and Henri Carsalade, Agropolis Foundation – before opening up the conversation to questions from the audience.

You can also click here to watch the recording of the event, courtesy of IFAD

http://ag4impact.org/news/no-ordinary-matter-conserving-restoring-and-enhancing-africas-soils-2014/

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Arup South Africa to Prepare Transit Oriented Development Master Plan for Addis Abeba Light Rail

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Arup South Africa has won the contract to prepare a Transit Oriented Development (TOD) master plan for ten of the key stations that are part of the Light Rail Transit (LRT) system being built in Addis Abeba.

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The 34.24 km network, based on two initial lines, one running north-south from Menelik Square to Kaliti and the other running east-west from Ayat to Tor Hailoch is set for completion in January 2015, with 41 stations in all.

The network is designed to carry 15,000 passengers per hour per direction.

“We have been retained by the Ethiopian Railway Corporation (ERC) to illustrate what activities, uses and yield can be created around the new stations within a 400 meter radius,” says Nico Venter, leader of Integrated Urbanism at Arup SA.

In a statement sent to Addis Standard, Arup further said that within this walkable node it needs to assess if each place and loci can accommodate appropriate use and bulk development. This forms part of the regeneration of a 125-year-old city with over 3 million people. Arup will visualize these nodes and illustrate potential future development, culminating in a broad based bankable approach, cognizant of costs and the catalytic potential these nodes could have on the city.

“This is a typical African city and each precinct has its own unique requirements and sense of place,” the statement said, adding the framework must therefore look to short, medium and long-term approaches that allow for flexibility and that can change over time as the node develops and matures.

“We have been requested to provide an independent view, using a multi-disciplinary approach, within a tight schedule of five months. We look forward to this task, as an exciting step forward in the future of city making,” said Venter.

Arup is an independent firm of designers, planners, engineers and technical specialists that makes up the heart of the creative force of many of the world’s most prominent projects in the built environment and industry.

http://www.wardheernews.com/ethiopia-arup-south-africa-prepare-transit-oriented-development-master-plan-addis-abeba-light-rail/

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 Ethiopia To Build Three New Airports At A Cost Of $64.5M

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By Kevin Mwanza

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Ethiopia is set to expand its airport reach with construction of three airport runways in three major regional cites, with a capacity to host big jets like B737.

The Ethiopian Airports Enterprise (EAE) the state company tasked with expanding and supervising Ethiopia’s increasing airports signed a $68.5 million (1.37 billion Ethiopian Birr) with three local firms who won tenders for the construction of three airport runways, on December 11, 2014.

The Runways which will each have 2,500 meters length and 60 meters width, are part of the government’s drive to boost trade and tourism ties across the country for it’s next ambitious economic goal named Growth and Transformation Plan II (GTP) set to start in end of 2015.

The most anticipated contract was the one for the southern city Hawassa, Ethiopia’s premier resort and tourism Hotspot as well as an industrial hub with a total cost $ 22.9 million. The contracting company is named Yotek Construction private Limited Company (PLC) with the supervisory form being Saba Engineering (Plc).

The second contract pertains to runway construction for another southern city Robe Goba, won by Akir Construction PlC for $ 24.7 million and to be supervised by Transport Construction Design Plc.

Robe is better known for its proximity to the UNESCO listed natural wonder the Sof Omer Cave system, and for being an agricultural belt of Ethiopia.

With The third project being in the Far North of the country near the city of Shire, to be constructed by Ethiopian Roads Construction Corporation (ERCC) and supervised by Transport Construction Design Plc at a cost $ 20.9 million.

The Third project hopes to utilize the mineral resources of the area especially gold which in that part of the country is heavily dominated by Artisanal mining.

http://afkinsider.com/81901/ethiopia-build-three-new-airports-cost-64-5m/

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Ericsson to take part of telecom deal after ZTE row

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Swedish telecom group Ericsson is set to sign a contract with Ethiopia to expand telecom infrastructure, taking a slice of an USD 800 million contract from Chinese firm ZTE Corp because of a row over terms, a senior official told Reuters on Thursday, Dec. 11.

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ZTE Corp’s deal with state-run operator Ethio Telecom was signed in 2013. The other half of the overall a USD 1.6 billion package to help double mobile subscribers was shared with another Chinese firm, Huawei Technologies Co Ltd.

But Ethiopian and ZTE differed over the cost of upgrading an existing network. Ethiopian officials said the firms were expected to carry out the upgrade at no extra charge, while ZTE said it would cost an additional USD 150 million to USD 200 million.

Ethiopian officials had said Nokia and Ericsson could take some work if agreement was not reached.

Ethio Telecom Chief Executive Officer, Andualem Admassie, told Reuters that discussions with Ericsson were nearing completion.

“Ericsson will start working on that share of expansion work,” he said, without giving a value for the deal. “We are only waiting for confirmation from the (Ethio Telecom) board.”

“Huawei is continuing its role,” he said, adding that ZTE would continue with some work. “ZTE have lost parts of their share but have made it clear they are willing to resume work, no matter what the current circumstances.”

Ericsson could not immediately be reached for comment.

The overall project aims to help the nation of more than 90 million people double mobile subscribers to 50 million in the next year and expand its 3G service.

The overall contract also includes a plan for Huawei to roll out a high-speed 4G network in Addis Ababa.

China has extended its economic influence in Africa in recent years, with state-owned firms winning road tenders in Kenya, signing deals for construction of energy projects in Uganda and running mining projects in various countries.

The USD 1.6 billion contract signed with the Chinese firms in Ethiopia had a long-term loan package to be paid over a 13-year period with interest of less than 1 percent, officials said.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2878-ericsson-to-take-part-of-telecom-deal-after-zte-row

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Israel Chemicals to invest $452m in Chinese phosphate company

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- Israel Chemicals will set up a joint venture with Yunnan Yuntianhua and hold a 15% stake in the Chinese company.

Israel Chemicals Ltd. (NYSE: ICL; TASE: ICL) is to invest $452 million for 50% ownership of a joint venture that will operate a fully integrated, phosphate business in China. Israel Chemicals will also take a 15% strategic holding in Yunnan Yuntianhua, one of Asia’s leading producers of phosphate rock, which is traded on the Shanghai stock exchange with a market cap of $1.8 billion.

The joint venture will include a mine that produces 2.5 million tons of phosphate rock annually for the next 30 years, a downstream phosphate operation and a marketing and sales organization that primarily serves the Chinese and the Asian markets.

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Israel Chemicals says that the strategic alliance will leverage its and Yunnan Yuntianhua’s technical, marketing and production expertise and will include a joint phosphate R&D platform in the Yunnan province to develop process improvement and new products for both partners.

Israel Chemicals says that it has identified significant expansion and synergy potential and the major thrust of the joint venture’s strategy will be its transformation from a commodity fertilizer company to a specialty player in agriculture, food Ingredients and engineered materials.

http://www.globes.co.il/en/article-israel-chemicals-to-invest-452m-in-chinese-potash-venture-1000993990

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Ethiopia, Turkey keen to boost business ties

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Opening the second Ethio-Turkish Business Council Forum, Prime Minister Hailemariam Desalegn called on more Turkish investment in the areas of development and finance, investment and bilateral trade with between the two countries. 

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The Turkish delegation, numbering some 200, led by the country’s Minister of Economy, Nihat Zeybekci, discussed with its Ethiopian counterpart on means of bolstering investment relations between the two countries.

Prime Minister Hailemariam said that his government has started negotiation with Turkey on the basis of financial freedom to attract more investment from the country.

“Turkey is one of the most reliable development partners the Government of Ethiopia has in its endeavors to extricate itself from poverty,” Hailemariam said during the opening of the forum at the United Nations Economic Commission for Africa (UNECA). The Prime Minister also urged the Turkish EX-IM Bank to finance projects in Ethiopia.

“There is still ample room for further expansion, in terms of volume and quality, of the development financing that the government of Turkey has been putting at our disposal [which nevertheless] has been increasing,” Hailemariam added.

On the occasion, the Turkish Minister of Economy, Zeybekci, made official the USD 300 million loan his country extended for the Awash-Woldiya Railway Project.

According to Yusuf Aydeniz, chairman of Ethio-Turkish Business Council, the ever growing investment and trade volume between the two countries has weighted over the last few years.

When the investment reached USD 1.6 billion, the largest Turkish investment in Africa, the trade volume jumped from USD 70 million to USD 450 million, Aydeniz said.

Solomon Afework, President of Ethiopian Chamber of the Commerce and Sectoral Associations, vowed to take the partnership with Turkish Confederation of Businessmen and Industries (TUSKON) forward by participating in the 9th International Turkish-African Congress which will be held next year in Istanbul, Turkey in April next year.

Back in August, the Ethiopian Investment Commission announced that Turkish Foreign Direct Investment (FDI) to Ethiopia is leading the group of emerging economies that have shown interest in investment opportunities in Ethiopia.

Although the Chinese lead in terms of number of companies that have invested in the country, the Turks lead others in combined capital outlay, the commission said.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2875-ethiopia-turkey-keen-to-boost-business-ties 

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Ethiopia, Kenya ink cross-border trade agreement

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The governments of Kenya and Ethiopia have signed an agreement that aims at creating opportunities for communities at the borders of the two countries, President Uhuru Kenyatta said on Wednesday adding that the agreement will create stability and security.

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Speaking at a farewell ceremony for Ethiopia’s Ambassador to Kenya, Shemsedin Ahmed, President Kenyatta assured the outgoing envoy that his government is determined to implement the special status agreement signed between the two countries.

On the recent terror attacks that took place in Kenya, the president said that his country is committed to winning the war and that his government will continue working with and borrow best practices from Ethiopia, which also neighbors Somalia.

“A busy person will have no time thinking of taking a gun to commit crime, rather he would be so committed to their businesses which he/she knows will ensure they get their daily livelihoods,” the president said.

The Ethiopian envoy condoled with the president and the people of Kenya following the recent terror massacre in Mandera saying the Ethiopian government will work closely with Kenya to ensure they root out the Al-Shabaab menace in the region.

He assured the president that his government is committed to the implementation of the agreement saying it will ensure security and stability within the region.

Ambassador Shemsedin said conflict between border communities has also contributed to border insecurity.

He said that the ongoing construction of Isiolo-Moyale road onwards to Ethiopia will facilitate economic growth and that the Ethiopian government is committed to enhancing border trade without much bureaucracy.

“Issues of currency will not matter when it comes to border trade. We will allow our people to trade freely with their neighbors with no restrictions,” Shemsedin said.

President Kenyatta said the agreement will not only accelerate the implementation of the infrastructural projects but also enhance relations between the peoples of the two countries.

“Everybody will gain; no one will lose in this agreement. This agreement will help our people move freely and develop together. It will help us move from government-to-government engagement to people-to-people relations,” Kenyatta said.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2876-ethiopia-kenya-ink-cross-border-trade-agreement