18 November 2013 Business News Briefs (Updated)

New Proclamation to Grant More Responsibility to Trade Practices Authority

The proclamation, which will also see the authority renamed, has been supported by the United Nations Conference on Trade and Development

The Trade Practices & Customers’ Protection Authority (TPCPA) is to see itself gain additional powers in two weeks, when a revised proclamation is enacted into law by Parliament.

According to the revised proclamation, the Authority will prosecute violations of trade practices and impose financial penalties. The revised proclamation, which includes a change in the name of the Authority itself, was approved by the Council of Ministers two months ago. It has now been sent to the Trade Affairs Standing Committee of the Parliament for further scrutiny.

Accordingly, the Authority will acquire the new name of ‘Trade Competition & Customers Protection Authority’. The rationale behind the change in name is that the term ‘trade practices’ includes a wide range of issues that may be beyond the mandate of the Authority.

“We are subsets within the larger trade practices,” Merkebu Zeleke, director general of the Authority, said while briefing journalists on the revised proclamation at the TPCPA’s headquarters, located inside the Fana Broadcasting Corporate (FBC)’s building near the Black Lion Hospital in Lideta District. “The term ‘trade practitioner’ covers the entire process, from registration to enforcement,”

When established back in 2010, the Authority was tasked with safeguarding the rights and privileges of consumers, inspecting traded goods and making buying and selling more efficient.

While its efforts over the last three years have focused on protecting the business community from unfair competition and market practices, as well as from misleading market conducts, the revised proclamation will give it additional powers. One of these will enable it to investigate cases related to unfair trade competition- a power that has been afforded to it as a representative of the Ministry of Trade (MoT).

The Authority established a court back in June, 2013. Its judges were appointed by Prime Minister Hailemariam Desalegn.

The court was authorised to deal with civil procedures within the trading disciplines, but had no power to impose financial penalties on those it found guilty. The revised proclamation has given it that power. The court started hearing the first cases three weeks ago.

“The court will begin dealing with financial penalties as soon as the revised proclamation is put into effect,” says Tesfaye Neway, a judge appointed by the Prime Minister.

The Authority has benefited from experience sharing with advisors from the United Nations Conference on Trade and Development (UNCTAD), according to the director general.

“This helped us in revising the proclamation,” Merkebu informed.

The Authority is also expected to deal with addressing the daily prices of commodities.


Uncollected Steel Imports Create Congestion Risk at Port of Djibouti

Up to 200,000tn of steel that Ethiopia imported within the last three months through the Port of Djibouti is yet to be retrieved by importers, which could lead to congestion, Fortune learnt.

Most of the steel, 180,000tn of which belongs to private importers, failed to be picked up because of financial problems encountered by importers, according to the Ethiopian Shipping & Logistics Services Enterprise (ESLSE).

The goods were imported through a uni-modal arrangement, where once the goods arrive at the port, importers are responsible for handling the paperwork and transportation into the country.

Though officials from the two countries are discussing the issue, they have disagreements on its seriousness.

While officials from the Enterprise are pushing importers to collect their steel ‘soon’, officials at the Port are insisting that not only is it not in danger of congestion, but that it has the capacity to handle even more steel.

“Congestion happened for the last time in October 2012 and we sorted it out,” said Aboubaker Omar, chairperson of the Djibouti Ports & Free Zones Authority. “The issue of congestion does not worry us.”

The Port, which has the capacity to serve about 150,000tn at a time, charges fees for each day that goods stay on its premises.

“They tell us that they can serve up to 500,000tn, but we know a large amount of steel is left on the soil near the water because they do not have enough space,” Mesfin Teferra, freight-forwarding deputy CEO at the Enterprise, told Fortune.

These kinds of snags in importing goods are not new to Ethiopia, with reports by international organisations, such as the World Bank (WB), indicating that poor logistics is severely hampering trade and foreign direct investment. The country ranks 141 in the world in the logistics sector, according to the WB’s latest assessment released in June 2013, which is a drop from the 104th ranking the country had just five years ago.

The Enterprise, which launched a multimodal system in mid-2010 to streamline shipments from Djibouti Port through a door-to-door service, aims to handle 80pc of cargo through this method by the end of the current fiscal year – up from the 56pc at the end of the 2012/13 year.

That system, which was supposed to help avoid warehouse fees in foreign currency and the confiscation of imported goods, has, however, also been subject to numerous reports of congestions and delays since the beginning.

These recurrent logistical problems are currently being studied by Nathan Associates Inc, consultants hired by the government for one million dollars in June 2012, to develop an in-depth logistics and trade strategy for Ethiopia.

The diagnostics analysis that the consultants submitted to the government in late September, which is the first of four reports due by March 2014, assessed institutions and stakeholders involved in the transport sector. These included the Modjo Dry Port and truck drivers that transport goods by land on the Ethio-Djibouti corridor. They found that much greater collaboration by different institutions in the logistics sector is needed to overcome the problem.

In the meantime, however, the problems remain unresolved.

On the Tuesday, November 13, 2013 edition of Addis Zemen – a state-owned Amharic newspaper where government announcements are published – the Maritime Affairs Authority (MAA), which is under the Ministry of Transport, warned importers that they have to pick up their goods within the next three weeks.

Though that is the extent of the measures the Enterprise has taken so far to solve the backlog of imports at the Port, depending on the reaction of the importers, serious measures may soon follow.

“The Djiboutians are not the losers when this happens,” said Mesfin. “It is rather Ethiopian customers that will face the price hike that is likely to come when the importers attempt to compensate what they lost.”

Previously, imported goods would be picked up within 15 to 20 days of their arrival, but 50pc of the steel imported and available at the Port currently has stayed for more than 90 days, according to available data at the MAA.

The part that belongs to the government is expected to be picked up from the Port and transported into Ethiopia within a month, according to officials at the Enterprise.

The government’s steel was mostly stuck due to a shortage in transporters. The fact that the steel is needed to help the ongoing construction projects is the major drive for the government to insist it be transported soon, according to them.

Following truck congestion that happened at the Port previously, the Enterprise signed a Memorandum of Understanding (MoU) a month ago with seven private transporters to transport goods from the Djibouti Port and Modjo Dry Port to Addis Abeba.


ETE to Open Three New Cash-and-Carry Outlets

–  The new outlets are seen as a way of improving price competitiveness in the capital

The first three stores of the Ethiopian Trade Enterprise’s (ETE) new cash-and-carry chain will open in Addis Abeba in the first quarter of 2014, under the trading name Alle Bejimla.

The Amharic name Alle Bejimla, which will be known as just Alle in English, literally translates as “wholesale is available”. It will initially begin operations through a business-to-business model that focuses on providing goods to businesses like kiosks, cafes and hotels.

The three locations of the new wholesaler were all previously owned by the Merchandise Wholesale & Import Trade Enterprise (MWITE), another state-owned enterprise.

One store is located in Megnenagna, Bole District, close to the automotive company AMCE, while the second one is in Kaliti, Akaki-Kaliti District. The third one is what used to be the main MWITE store in front of Khelifa Building, in Merkato, Addis Ketema District.

The General Manager of MWITE, Gemeda Aleme, confirmed that the stores were taken from his enterprise some two months ago.

“They are currently renovating them,” he told Fortune.

The one billion-Birr project was initiated by the government over concerns that runaway inflation was caused by a lack of competition in the wholesale market of the country. In an attempt to tame the escalating prices on consumer goods, the administration of the late Prime Minister Meles Zenawi had even taken control of private wholesalers’ import distributions and warned them it would open the sector to the test of foreign competition.

Eventually it was decided that a new state-owned enterprise would be formed to increase competition in the sector.

The new cash-and-carry chain will be managed by a board, comprised of six members, Fortune learnt. The board members will be top officials from the Prime Minister’s Office, Ministry of Trade (MoT), the Ethiopian Revenues & Customs Authority (ERCA) and the Trade & Consumer Protection Authority at the MoT, according to sources.

The operation is going to be a purely Ethiopian affair, according to Joy Muchina who works at Cactus Ethiopia – the company retained as the public relations contact of the Enterprise.

However, Fortune confirmed from a source that A.T. Kearney, a consultancy firm headquartered in the American city of Chicago, will be involved as consultants on recruitment and the establishment process of the company. In addition, it will also develop a business plan capable of making the company profitable.

The involvement of the global firm, which was estimated to have earned in excess of one billion dollars in 2012, is not new. Its German office recently designed the ETE’s Enterprise Resource Planning (ERP) – a business management software that the company can use to manage business processes, including inventory and cash flow, after it won the seven million Euro (9.4 million-dollar) project in February 2013.

The management of the firm, however, is yet to be determined. The process of recruiting heavyweight staff members, including the positions of general manager, deputy general manager and finance director, has just began.

“In addition to the stores offering much more variety than is currently available, the management will also be more structured,” said Muchina.

Once the positions are filled, the stores will open for business, a process that the ETE plans to complete early next year.

The three locations in Addis Abeba, which are pilot stores, will form the basis for a nationwide expansion, said Muchina, who declined to disclose details of the planned timeline.

However, while previously talking to Fortune in late September, Ali Siraj, state minister for Trade, had indicated that 36 wholesale stores are planned across the country within 27 months.

This arrival of a state-owned giant enterprise had previously raised concerns it would not add much to the local market. A macroeconomist who previously spoke on the issue had stated that there was no use creating an enterprise that would be similar to the MWITE. Structural constraints in the supply chain were what needed to be resolved, was his message.

In addition, it could instead hurt local wholesalers.

However, Alle’s arrival is not a concern for Al-Sam Plc – one of the main wholesalers in the country, according to Saber Argaw, a major shareholder, who noted that the company is already handling competitors.

“Competition is healthy,” echoed Muchina. “Alle will not hurt wholesalers, we will complement each other.”


Lion International Bank Almost Doubles-Up On Profits

–  A considerable increase in service charges and commissions influenced the growth, with foreign exchange dealings remaining more static

Lion International Bank recorded a 23.26pc increase in their non-interest income in the 2012/13 fiscal year, reaching 128.08 million Br.

A considerable increase in income earned from service charges and commissions – which grew from 45.03 million Br to 61.21 million Br – was the major factor for the growth, as the gains from foreign exchange dealings only increased by 4.9pc to reach 27.86 million Br. This modest result makes Lion the lowest achiever in foreign exchange among the banks that have released their financial reports so far.

Nonetheless, the Bank’s total revenue has increased considerably. Interest income has grown twice as fast as non-interest income – recording a 46pc increase over 2011/12’s figure. This saw it standing at 168.96 million Br by the year’s end.

As a result of this performance, profit after tax of 111.29 million Br was recorded by the Bank. This is a 47.6pc growth over the previous results.

Lion’s success in the year that ended on June 30, 2013 came in a demanding environment, where the cost of rent rose to staggering levels, coupled with operational constraints.

However, the Bank managed to show a restrained rise in its staff and general administrative expenses, which stood at 88.8 million Br. Expenses which rose by 27.4pc over the 2011/12 year, were eclipsed by the 35.25pc increase in total revenue during that same period.

“The Bank focused on reducing expenses as a strategy,” said Daniel Gebregziabher, director of Business Development & Corporate Planning at the Bank.

In addition, the introduction of its One Window Service – a streamlined service provision that improved efficiency – was also a factor in its successful year, according to the message of the Board chairperson, Birhanu Gebremedhin (PhD) printed together with the annual audited report.

Lion’s successful year is also seen in the significant reduction of its provision for doubtful loans, which plummeted to 2.06 million Br from 5.24 million Br. This is all the more notable since the Bank disbursed loans and advances of 1.3 billion Br – an increase of 36.13pc over 2011/12 figures.

“That is a considerable reduction and the management of the Bank should be applauded,” said Abdulmena Mohammed, who is an accounts manager for Portobello Group Ltd – a London-based holding company with subsidiaries in property investment and development.

Daniel attributes the reduction to the Bank focusing on increasing scrutiny prior to loan disbursement. This is in addition to a more decentralised system to follow up on these loans, by enlisting its 44 branches, which are due to rise by an additional three in the next week.

The rest of the Bank’s balance sheet showed that total assets rose by 19.5pc to 2.9 billion Br, and mobilised deposits reached 2.106 billion Br, up from the 1.7 billion Br in 2011/12. This is an increase of 21.26pc. The loan-to-deposits ratio of Lion has now soared to 61.73pc from 55pc.

Despite this performance, the balance sheet also revealed that Lion’s liquidity is showing signs of strain. Liquid assets-to-total assets plummeted to 27.2pc from 42.19pc, while liquid assets-to-deposits went down to 38pc from 59.83pc. Lion’s liquidity analysis further shows that liquid assets-to-total liabilities decreased to 32pc from 51.41pc.

This is most likely due to the Bank’s growing investments in five-year Nation Bank of Ethiopia (NBE) bonds, which have reached 523.21 million Br – up from the 346.5 million Br by the end of 2011/12. They now account for 17.78pc of total assets and 24.84pc of total deposits, while in the year ended June 30, 2012, they were at 14pc and 19.95pc, respectively.

“A further increase in the loan- to-deposit ratio is highly unlikely as the investments in NBE bond are building up,” cautioned Abdulmena.” If Lion tries, it will be at the risk of a liquidity squeeze.”

Striking a good balance between achieving a high loan-to-deposits ratio and maintaining reasonable liquidity levels should be on the agenda this year, he added.

Though Daniel agrees with the issue of maintaining reasonable liquidity levels, he argues that Lion’s asset quality is in good shape. Return on capital has risen to 21pc from 19pc in the previous year, he pointed out.

“We have  been able to efficiently utilise loan funds,” he said.

Lion, which increased its paid-up capital by 11.6pc to 374.94 million Br, can comfortably meet the 500 million Br threshold, which the NBE requires from banks, by 2016, according to the account manager. “Lion is a well-capitalised bank,” Abdulmena said, noting the Bank’s capital adequacy ratio of 34pc. “It can easily comply with the NBE directive by increasing its paid-up capital by 10pc per annum.”


Berhan Bank Sees Total Assets Leap to More Than Two Billion Birr

Berhan International Bank S.C. (BIB) saw its total assets increase by 71pc to 2.197 billion Br in 2012/13.

The Bank, which also managed to perform well in its financial intermediation operations, has doubled loans and advances to 964 million Br and mobilised deposits of 1.593 billion Br.

This came despite the fact that the Bank operated in a tight environment, marred by shortage of foreign currency, which negatively affected its operations. This has pushed the cost of doing business up to much higher levels.

The steep rise in competition for resources has also been among the main challenges faced by the Bank to maintain success in the fiscal year that ended on June 30, 2013.

“The Central Bank’s order to all private banks to maintain loan portfolios that are comprised of at least 40pc short-term loans has become a big challenge,” Daniel Gebremedhin, director of Planning & Business Development Division with the Bank, told Fortune.

Berhan has invested 348.85 million Br into NBE five-year bonds. This represents 15.88pc of the total assets and 21.9pc of the total deposits of the Bank.

At a time when deposit mobilisation sources are drying up for most of the private banks operating in the country, Berhan’s total deposit as of June 30, 2013, reached 1.6 billion Br. This is an increase of 661.4 million Br or 70.9pc compared to last year’s figure of 931.7 million Br. Berhan has managed to improve its loan to deposits ratio to 60.5pc from 53pc.

This achievement came against the prevailing competitive environment facing the sector.

“It shows the growing confidence of the public in our bank,” Daniel said.

Berhan, which held its annual assembly on Saturday, November 9, replicated this success in its profit, registering a growth of 55.21pc to 52.29 million Br. Growth in both interest and non-interest income helped the Bank to achieve this profit.

“Interest income and foreign commissions contributed greatly to reap greater profits,” Daniel said.

The Bank, nevertheless, incurred costs while increasing its income, with expenses in staff and general administration increasing considerably.

Interest expense has increased by 38.81pc to 39.2 million Br and staff and general administration expenses have soared by 70.58pc to 58.97 million Birr.

Further expansion in staff and general administration expenses is inevitable as Berhan is a newcomer to the industry, said Abdulmena Mohamed, who is an accounts manager for the Portobello Group Ltd – a London-based holding company with subsidiaries in property investment and development.

“The management of the Bank should maintain the income growth in line with the expansion in expenses,” said Abdulmena.

Where the Bank differed from several others in the industry is in its liquid assets, which have registered high growth. Berhan’s cash and bank balances have gone up by 37.47pc to 739.87 million Birr. The liquid assets to total assets ratio has declined to 33.67pc from 41.88pc and liquid assets to deposits ratio has dropped to 46.44pc from 57.76pc.

Despite this decline in the various liquidity measures compared to last year, the ratios are significantly higher than other private banks.

“This should give Berhan ample opportunity to expand its loan book in the coming years,” Abdulmena said.

Daniel agreed with Abdulmena, indicating that the loan expansion of the Bank has improved in the year that ended on June 30, 2013.

During the previous year, Berhan managed to open seven additional branches in Addis Abeba and other towns, pushing the total number of branches up to 22. Four sub-branches have also been opened during the year, increasing the number of sub-branches to five.

“We plan to open 20 new branches this year,” Daniel said.

Having achieved a capital adequacy ratio (CAR) of 35.25, Berhan is well-capitalised. It has increased its paid-up capital by 58.77pc to 313 million Birr.

Berhan needs to increase its capital by 17pc annually, in order to meet the NBE directive that compels private banks to increase their paid-up capital to half a billion Birr by 2016, recommended Abdulmena.

“We can comfortably meet the NBE’s requirement by 2016,” Daniel said.

However, the increase in paid-up capital last year, according to Abdulmena, is far higher than required. It has considerably undermined EPS and return on equity, which dropped slightly to 15.39pc from 16pc.

“The management of should increase capital gradually to reduce its impact on shareholders returns,” Abdulmena advises.


Habesha Breweries Sells Shares to Increase Capital

–  The income from the sale of the shares is to fund the construction of Habesha’s factory in Debre Berhan

Habesha Breweries S.C sold 66,301 shares on November 16, 2013, at its headquarters located in the Hayahulet Mazoria area, Yeka District. This came following the decision to sell the shares during the company’s eighth extraordinary general assembly meeting on July 6, 2013.

The Company had intended to sell 300,000 new shares to increase its capital to 550 million Br from its current 250 million Br.

Habesha’s existing shareholders were offered the chance to buy 200,000 of the new shares without the premium asked from new shareholders for buying the shares risk-free, according to Yonas Alemu, Marketing & Business Development manager of Habesha.

“They have been with us right from the day the Company first began operating,” said Yonas, explaining that now that the factory is being built, risk has reduced. “They took a risk in buying our shares then.”

After the decision to sell the shares, 127,539 were snapped up by existing shareholders at 1,000 Br a share during the 40 days from July 1, 2013.

However, this left 72,461 unsold shares, which were put up for a bid. Seven bidders submitted their documents up until November 15, 2013.

A current shareholder who bought 100 shares when the Company was setting up shop, however, is not concerned that the offer of the shares to the public would dilute his shares.

“I like looking at the big picture,” he told Fortune, adding that although he was offered 100 shares this time around, he opted not to buy. “Having more shares will mean we have more presence in the economy.”

While existing shareholders could buy just four shares, new shareholders were required to bid for a minimum of 10 shares, for at least 1,000 Br a share.

“We cannot divulge the amount of money offered by the leading bidders or the identity of the winner just yet,” said Eskinder Desta, vice chairman of the Board of Directors. “The Board has to validate the sale before we make an official announcement.”

The Company had no problem setting the price of shares, even though there is an absence of secondary share prices in the country, according to Zewdu Negate, general manager of Habesha’s factory.

“The price of the shares is the same as it was at the beginning of the Company,” Zewedu said. “This is the par value though.”

The income from the sale of the shares is to fund the construction of Habesha’s factory found in Debre Berhan – a town 125km north east of Addis Abeba – which started in September 2013. The factory, located on a 7.5ha plot of land, will have the capacity to produce 500,000 hectolitres a year. Construction, undertaken by Lehui Food Machineries Co Ltd – a contractor from China – and Yerer Construction Plc – a local civil contracting company – is expected to end within a year.

Habesha has 7,800 local shareholders and Bavaria N.V. Brewery – the foreign shareholder which owns 49.9pc of the Company, according to Eskinder, who added no shareholder is allowed to hold more than 50pc of Habesha.

The remaining shares will be put on the market at a later date, Fortune learnt. The Company plans to construct a malt factory in the near future.

Availing two types of beer, Premium and Lager, to the Ethiopian market, as of September, 04, 2014, is in the pipeline, according to Eskinder.

Habesha is set to enter a market that is still undeveloped. Ethiopia’s average annual beer consumption stands at five litres per person, while Kenya’s is 12 litres. According to research by the Kirin Institute in Japan, the Czech Republic tops the list with 131.7 litres a person.

BGI Ethiopia ranks first in the Ethiopian beer market with a 48.25pc market share. The Heineken and Dashen Breweries trail behind as second and third, with an 18.75pc and 18pc, respectively. Diageo Plc comes last with 15pc.


Ethiopia and Angola double number of girls in school in 10 years

NAIROBI (Thomson Reuters Foundation) – The number of girls enrolling in primary school has soared across Africa in the last decade, according to a report released on Monday, which also found a significant drop in the number of child deaths over the past five years.

With primary education now free in all but five African countries, there has been a boom in the number of children attending school, with Ethiopia and Angola showing the most dramatic improvements.

In Ethiopia, girls’ enrolment rose to 83 percent from 41 percent between 2000 and 2011, while Angola saw an increase to 78 percent from 35 percent, according to the African Report on Child Wellbeing produced by the African Child Policy Forum, a research institute based in Ethiopia.
The report looked at how child-friendly African governments were by measuring their performance in providing basic services for children, adopting laws and policies to protect children, and promoting child participation in decisions that affect them.

African governments are increasingly child-friendly,” former Mozambican president Joaqim Chissano said in the report. “Achievements on the education front – and particularly the dramatic increase in access to primary education, especially for girls – are commendable.”
However, girls continue to fare poorly at secondary school. In Angola, only 12 percent of girls attend secondary school, slightly below 15 percent of boys.
“Low levels of access to secondary education mean they will also not enter tertiary education, which effectively excludes them from the most gainful employment opportunities, thereby perpetuating systemic gender imbalance,” the report said.

Across Africa, 26 percent of girls and 30 percent of boys attend secondary school while 78 percent of girls and 83 percent of boys attend primary school.
South Africa is the best performing, with near universal access to secondary education for girls at 97 percent, and only a slightly lower level for boys at 93 percent, according to figures from the U.N. children’s agency UNICEF.


The report found the greatest gains in Africa over the past five years were in reducing child deaths.
“The greatest good news of all has been the decline in under-five mortality rate, at a pace not observed or recorded by any other continent or country in the world,” the report said. “This may well be the fastest decline in child mortality the world has seen for at least three decades.”

Between 2008 and 2011, Rwanda reduced child mortality by more than 52 percent, and Liberia by more than 47 percent. Niger, Ethiopia, Guinea and Madagascar also recorded significant gains.

In Seychelles, Mauritius and Tunisia, child mortality rates are low as those of industrialised countries.
The major causes of child mortality in Africa can be prevented by simple measures such as women giving birth with skilled attendants, use of mosquito nets and access to antibiotics.
Child mortality is generally highest in countries with the lowest coverage of water and sanitation, such as Chad and the Democratic Republic of Congo.

Overall, the report found that political commitment, rather than the wealth of a country, was the key factor in improving the lives of its children.
“It is a matter of political commitment, manifested primarily in a government’s willingness to put children at the top of the policy agenda and prioritise budgets accordingly,” it said.
African governments spend on average about 11 percent of their budget on health, below the 15 percent they committed to in the 2001 Abuja Declaration. Education receives an average of 4.6 percent of Gross Domestic Product, half of the nine percent to which they committed in Dakar.
Mauritius, South Africa, Tunisia, Egypt, Cape Verde, Rwanda, Lesotho, Algeria, Swaziland and Morocco emerged as the 10 most child-friendly countries in Africa.

The 10 least child-friendly governments were Chad, Eritrea, São Tomé and Príncipe, Zimbabwe, Comoros, Central African Republic, Cameroon, Democratic Republic of Congo, Côte d’Ivoire and Mauritania.


PM Hailemariam arrives in Kuwait for Africa-Arab Summit

Prime Minister Hailemariam Desalegn left for Kuwait on Monday to take part in the 3rd Africa-Arab Summit which will be held from 19-20 November, 2013.

 The summit, whose theme is “Partners in Development and Investment” is expected to launch a new phase of Arab-African joint co-operation.

The forum also provides a platform for African and Arab business actors to meet policy makers at national, regional and continental levels and share ideas on improving the business climate.

Prime Minister Hailemariam is expected to hold side discussions with various financial institution leaders at the Summit.

Participants at the forum are public and private sector leaders, Arab, African, regional and international organisations, specialised institutions, intellectuals and the civil society from both regions.

After the two day summit in Kuwait, Hailemariam would leave for Warsaw, Poland, to participate in the United Nations Climate Change Conference.


Kuwait hopes 3rd Africa-Arab Summit will improve well-being of Arab and African peoples

The Government of Kuwait said on Sunday (November 17) that it hoped the 3rd Africa-Arab Summit which will be starting on Tuesday (November 19) would achieve “positive results” that would improve well-being of the Arab and African people.

The Prime Minister, Sheikh Jaber Mubarak Al-Hamad Al-Sabah, said the two-day summit reflected the keenness of the Amir of Kuwait, Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, to activate “Arab-African cooperation and to explore new horizons of cooperation between the two regions, which reflect “positive civilized interaction for the sake of advancement and prosperity of mankind. ” Over seventy delegations from nations and international organizations will be attending the Summit, and over thirty Heads of State, seven deputy leaders and three prime ministers are expected.


CBE’s reserve hits 149b Birr

Commercial Bank of Ethiopia’s reserve has hit 149 billion Birr, Samuel Tadesse, an official with CBE, said on Sunday.

Samuel attributed the increase in bank reserve to the program called “Save and Be Awarded”.

The “Saving for a Home” scheme also considerably contributed to the increase, he added.

Prior to the introduction of the stated programs, the Bank’s reserve stood at 134 billion Birr.

The Bank has handed over prizes to winners of the second round “Save and Be Awarded” lottery.

The number of CBE’s clients has reached 7 million.


Union envisages exporting value added coffee

The Sidama Coffee Farmers Cooperative Union said that it is striving to export packed coffee produces to the global market unlike the previous trend which was overwhelmingly exporting raw garden coffee. The value added coffee would increase the revenue from the coffee thereby boost growers and the dealers income.

Burka Bulasho, Union Marketing Head said that the Union has envisioned to export roasted coffee beans by applying a series of value adding procedures to increase the revenue generated from garden coffee export.

He said that the effort made to enrich the profitability of the union has put the farmers advantage into consideration. They are able to get profit in dividends in four principal ways. “ First, they get profit from the sale made to local farmers associations. Secondly, they get benefit from the Ethiopian Commodity Exchange market. Thirdly, farmers get benefit from the Union which is the sole representative of the member farmers and responsible to repay them as per the amount of coffee served. And lastly, it is in the form of fair trade, a reward for every members of the union.”

According to Burka, once the price is set bench-marking the New York Commodity Market, the union has found no role over price setting to rise the market value of coffee. Nevertheless, the stiff engagement made to maximize productivity and produce quality coffee produces is quite essential task of the union. This in turn enable the farmers to compensate low-priced set, as the income earned would risen through the bulk quality coffee export, he added.

He also said that the zone has set to avail modern marketing system which help farmers sale collected garden coffee in nearby market centres, adding that shortening the market chain is significant to ensure the benefit of farmers.

He further noted that there is a huge potential of production in 13 woredas in the zone of which 12 are specialized in it.

Tesfaye Woka, smallholder coffee grower in Dale Woreda, whom the journalist found at his coffee yard said that he has two hectares of coffee and employing this, he would be able to feed his family. As to him, the coffee beans seems decreasing, and the price is also unreliable which most of the time fluctuates between six and seven birr. However, he said since the government has given due attention to farmers in terms of offering fertilizers, the yield has shown significant improvement over time.

He who is the member of farmers association and the union at large benefits more. The union is relentlessly working for the benefit of the farmers.

Another farmer, Dekema Debas at Fura Kebele in Shebedino Woreda is also said that he is fearing of the unreliable price of coffee. “ We are unable to earn to the extent of our effort. We need the price matters to be ended,” he added.

As to him, it is with the genuine engagement of the government that the price and quality issue be resolved in the future.

The Union located in the Sidama zone of southern Ethiopia, began representing small-scale farmers in 2001 and has since grown to become the second largest coffee producing cooperative union in the country. The majority of its member coops are organic and Fair Trade certified and nearly all their coffee is grown in the shade of diverse, indigenous trees. Approximately 5,000 tons of Sidama coffee is produced per year of which 95 per cent is washed.


Institute holds workshop on leadership,  governance challenges

Ethiopian Civil Service University (ECSU) Institute of Leadership and Good Governance (ILG) held a workshop on leadership and governance challenges to the promotion of security and development in the Horn of Africa in collaboration with Cranfield University at Hidasse Hall, main campus yesterday.

Institute Director Dr. Wagari Negari said that the objective of the workshop was to enhance researches on the areas of good governance and development in partner with concerned ministries and organizations towards addressing good governance and leadership challenges on the sustainable basis. “We work with Cranfield University of Security to bring meaningful change in leadership, good governance and development related to security in the Horn of Africa,” he added.

Director of Security Sector Management at Defence Academy of the United Kingdom, Professor Ann Fitz-Gerald noted that the workshop was research based which brought many paper together which are being circulated in different Ethiopian universities. The most important thing was to bring together students and the future leaders with practitioners, policy makers and academicians, she added.

“ We have worked a lot in Ethiopia compared with other African countries because there is a willingness here at civil society and academic levels. There is also great institutional supports and excellent cooperation from the government of Ethiopia and the security sector institutions at large,” the Director remarked.

Tesfaye Belachew, Good Governance State Minister Adviser with the Ministry of Civil Service pointed out that the workshop is important because it provides opportunity to gain knowledge and strengthen civil service ability.

In the event, various papers were presented on managing globalization challenges in the context of security and development, managing security and development and challenges in peripheral regions, managing security in the Horn of Africa and managing transformation across the civil service, among others. Different participants drawn from state and federal institutions, UNDP, Cranfield University and ECSU attended the workshop is expected to be concluded today.


3rd Iodine Deficiency Prevention Day to be marked Tuesday

The Ministry of Health announced Friday that the 3rd Iodine Deficiency Prevention Day will be marked with the theme : “Access and Consumption of Quality, Iodized Salt for All,” in Semera, Afar State, Tuesday.

Ministry Public Relations and Communication Directorate Director Ahmed Emano told journalists that iodine is an essential element in human health. Iodine deficiency can cause complex health problems. It can cause goitre , affect the development and functioning of the brain, retard physical growth, miscarriage, affect the learning ability of the people and lower their intelligence with incalculable damage to social and economic development of nations.

Noting that the most effective means of controlling and also eliminating the problem is harvesting and accessing iodized salt for all, Ahmed said to this effect the government has made mandatory salt iodization regulation. However, since the regulation is in its infant stage, the desired objective has not been achieved, Ahmed added.

Accordingly, the Day would be a forum in which that efforts made so far evaluated and stakeholders reaffirm their commitment for the successful realization of the effort.

Ministry Nutrition Technical Advisor Teshome Desta on his part said since the issuance of the regulation , various activities have been carried out at national level. Efforts are being made to raise the awareness of salt producers, and traders the health benefits of iodized salt and their role in distributing standard iodized salt for the public.


World Quality Day marked

World Quality Day was marked with the theme: “Making Collaboration Count,” here yesterday.

The Ethiopian Conformity Assessment Enterprise Director General Teshale Belehu on the occasion said that as per the GTP, the enterprise is working to make sure that most goods and services supplied to the society meet the conformity criteria to ensure quality.

He also noted that the services laboratory test, inspection and certification services provided by the enterprise are done through third party to avoid conflict of interest and meet international standard. This also enables executive bodies to receive sanction and measure certification, Teshale added.

The Director General said the enterprise is working to facilitate a fair play field in the local market and improve the quality goods being exported by domestic companies.

Adviser to and Representative of the Minister of Science and Technology Abdisa Yelma on his part said quality is essential for ensuring sustainable economic growth and conformity assessment enterprises play a crucial role in putting in place an efficient market system by ensuring quality.

The issue of quality has been given due emphasis both in the country’s Science, Technology and Innovation Policy and the GTP, he added.

Enterprise Director Deputy General Gashaw Tesfaye also said that currently the enterprise has eight branches across the country the major ones being in Hawassa, Dessie, Bahir Dar and Dire Dawa which undertake light conformity tests. The residue conformity test is undertaken at the headquarters here in Addis, he added.

The Enterprise primarily works to ensure the conformity of mainly construction materials, and textile, chemical and food products. The conformity certification is given after test is complete based on standards and contracts, he said.

He also noted that conformity plays a crucial role in bringing consumers and producers together. “Conformity tests are crucial for improving competitiveness, reducing wastage, pollution, production cost,” Gashaw added.


Grant Thornton Becomes Third Global Professional Services Firm in Ethiopia

Local company AW Thomas Consulting has formed a joint venture with GT firms in Oman and Yemen to create Grant Thornton Ethiopia, which will be officially inaugurated on Tuesday, November 19, 2013, at the Sheraton Addis Hotel.

This will finalise a process that started over a year ago, when the managing partners of the Middle Eastern firms – Nasser Al Mugheiry from the Oman office, and Ramzi Al Ariqi and Talal Thabel, both from the Yemeni firm – met with the Ethiopian company to discuss the possibility of starting a new firm.

“We had been hoping to have an international partner,” said Kedir Musa, project advisor at the new firm. “We hope that their experience will boost our share in the market here in Ethiopia.”

Though the two parties signed the agreement for the joint venture in July 2012, details such as getting office space and procuring furniture, delayed the inauguration, according to Melaku Abeje Tesema, managing partner at AWT.

The arrival of GT, which ranked sixth globally in 2012 in accountancy earnings, means that three international professional service firms now operate in Ethiopia. These include the long-established Ernst & Young (EY) and newcomer Deloitte Consulting – which entered the country earlier this year after merging with local firm HST Consulting.

EY has consolidated its lone presence in the country for over a decade. And Deloitte, though only opening an office in February, will enable HST to take the lead on government projects, Solomon Gizaw, a founding partner of HST, previously told Fortune.

AWT Consulting was selected since the accountancy wing of the firm, AW Thomas LP, is among the top accountancy firms in the country, according to Aliya Saud Patankar, head of Business Development & Marketing at GT Oman. Both sides declined to reveal the revenue sharing or exact ownership arrangements.

This growing trend of global heavyweights opening offices locally is not a concern, however, for Zemedeneh Nigatu, managing partner at EY.

“Competition has always been with us throughout the 14 years we have been working in Ethiopia, we have always had competition, so this is not any different,” he said, noting that global firms that do not have offices in the country still compete on projects.

Indeed, PricewaterhouseCoopers (PwC), which is one of the “Big Four” along with EY, KPMG and Deloitte, was the firm that conducted a study on the e-government project of the Ministry of Communications & Information Technology’s (MoCIT). McKinsey & Co, on the other hand, was recently hired by the Agricultural Transformation Agency (ATA) to assess the Ethiopian Commodity Exchange’s (ECX) ability to facilitate contract farming.

Zemedeneh’s view was echoed by Patankar, who insisted that there is enough room for everyone. In fact, the benefit of joining such a global company for a firm is the extensive experience it can tap into, in order to strengthen operations in its home market, she added.

GT, which in 2012 recorded 4.2 billion dollars in combined global revenues, has more than 100 member firms that run over 500 offices. It has in excess of 30,000 employees in its worldwide network, spread over 120 countries.

“Clients are also referred from the head office in London, which will help the new firm as it establishes itself,” she said, pointing out that the inauguration will be attended by people from across the company’s vast network, including the head of advisory at the London headquarters, Nigel Ruddock, as well as David Fisher, managing director for the Middle East.

Although AWT as a whole currently has over 45 employees, almost all of them work in the auditing and tax portion of the business, AW Thomas LP, which was established in 1981. The consultancy business, which is the portion that is involved in the joint venture, is only a couple of years old, according to Kedir, and has few employees.

The joint venture is expected to strengthen this advisory section, since the Middle Eastern firms – with a combined experience of over 20 years – have more know-how on that front.

“If a firm does not have capabilities in a particular area, experts from member firms in other countries can come and help to supplement in-house capabilities,” Patankar said.

While the advisory unit of GT has experience throughout the world in a variety of sectors, including mining, banking, hospitality and energy, the Ethiopian market provides big opportunities, particularly in projects related to the large presence of non-governmental organisations (NGOs) and international organisations.

“There is an edge in approaching them, since they like UK or US-based consultancy firms,” she said, explaining that GT Ethiopia plans to more aggressively bid for consultancy contracts.

The Company is now in the midst of recruiting 10 to 12 employees, including the head of the advisory section.

“We hope to complete the process within the next three to six months,” said Patankar.



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