29 December 2013 News Round Up

Temesgen M. Bitew and Tolosa Shagi Temesgen M. Bitew and Tolosa Shagi (pictured)  

  North Holdings to build cement factory               

An Ethio-American company based in the US, North Holdings Investment Inc., is to build a new cement factory with an outlay of USD 800 million in the Amhara Regional State near Dejen town.

North Holdings Investment Inc president, Temesgen M. Bitew, told The Reporter that his company is planning to build the factory in east Gojam, Dejen wereda, Menda locality. Temesgen said with two production lines the factory will have the capacity to produce 8.4 million tons of cement

The idea of building the cement factory was conceived in 2006. According to Temesgen, the feasibility study was completed. The company is to hire a Danish contractor called FLS that would build the factory, supply and install the machineries.

The cost of the investment is estimated at USD 800 million. Temesgen said the company will secure loan for the project from a London based investment bank.  He declined to disclose the name of the bank.

The project includes the establishment of a cement bag factory, a transport company and a coal manufacturing plant. “We want to transport the cement with a reasonable price. So we will establish a transport company,” Temesgen said.

With the view being energy self sufficient North Holdings plans to build a coal manufacturing plant in Gonder, Chilga locality where a coal deposit is found. According to Temesgen, the total cost of the investment will reach 1.1 billion dollars.

The company has secured a 250 hectares plot of land and hopes to commence work on the project in the New Year. When the whole project is realized fully it will create 15,000 jobs, according to Temesgen.

The Ministry of Mines granted limestone mining license to North Holdings. Tolosa Shagi, state Minister of Mines, and Temesgen signed the mining agreement on Thursday at the Ministry of Mines. According to the Ministry of Mines the license area covers 24, 513 sq. km plot of land and the mining license will be valid for 20 years.

North Holdings is a business corporation established by 12 business people in Delware, United States in 2006.



Ethio-Chinese joint geological study concession provokes protest

Local and foreign mining companies expressed their discontent over the large concession held by the Chinese and Ethiopian Geological Survey institutes for a joint geological study in southern and western Ethiopia.

Based on a bilateral agreement signed by the governments of China and Ethiopia the Ethiopian and China geological survey institutes are undertaking a joint geological study in the south-western part of Ethiopia. The south-western part of Ethiopia is known for different mineral resources, including gold. The concession includes tens of thousands of square kilometers of land in the south-western parts of Ethiopia. The geological surveys are aimed at identifying the mineral resources of the concession area. Chinese and Ethiopian geologists are jointly working to learn about the types of existing minerals. The cost of the exploration project is covered by the Chinese government. However, Ethiopian and foreign mining companies are not happy at all about the project. They are wary of the Chinese move.

At a two-day consultative meeting organized by the Ministry of Mines at the Ghion Hotel this week representatives of Ethiopian and foreign companies expressed their grievances over the project.  Abu Wube, exploration manager of Kropto Mining and Chemicals Plc, was the first to speak out. Abu said that it was a very large area that was given to the Chinese. “Can other companies apply for concession in the joint study area? Abu asked officials of the Ethiopian Ministry of Mines.

TolosaShagi, minister of state for mines, said that it was the Chinese government that allocated a budget for the joint study. “They cover the cost, they provided experts and all the required equipment for the joint study program.  They are adding value. It is impossible to grant exploration areas to other companies in the joint study area,” Tolosa told the conference.

Other participants said that the southern and western parts of Ethiopia are rich in minerals and why the ministry allocated a vast area exclusively for the Chinese.  Representatives of different companies said that they can conduct the exploration work by themselves if they can secure concessions from the ministry.

However, Tolosawas adamant. He told the participants that the joint study is being undertaken on the basis of a bilateral agreement signed by the Ethiopian and Chinese governments. “It is financed by the Chinese government. They are collecting useful geological data from the joint study area. They are doing what we were unable to do by ourselves. The geological data collected by the Chinese will be made available to all interested companies when the joint study is completed,” Tolosa said. He added that it will take three years to finalize the study and asked the investors to be patient.

Ethiopian and foreign mining companies fear that they would not be able to secure concession in the joint study area even after the Chinese finalized the study. Representatives of mining companies told the Reporter that the Chinese Geological Survey will handover the geological data to Chinese mining companies even before the joint study is finalized. “Based on the data, the Chinese companies apply for the most promising areas as soon as the joint study is completed. So other companies will not have the chance to secure concessions in those areas,” they lamented.

Officials of the Ministry of Mines listed the problems with companies engaged in the exploration and development of minerals.

Teketsele Tsige, case team leader, licensing and administration, said delay in commencing wok on exploration projects, reluctance to pay land rent, failure in delivering performance report on time and failure in executing environment and community development projects are the major problems with mining companies. However, Tekestele said there were also companies that execute work according to schedule.

Dr. Arega Yirdaw, CEO of MIDROC Technology Group, congratulated the Ministry of Mines for organizing a consultative meeting. Dr. Arega said the government’s move to increase mining earnings tenfold and to reduce royalty fee was commendable. He said that the previous mining law exempted expatriates from income tax while the revised law does not mention anything about this. Dr. Arega noted that the ten-year period allocated for mineral exploration work was not adequate. “MIDROC has been prospecting for gold for the past nine years and currently we are conducting the feasibility study and we may go beyond the ten-year limit,” he told officials of the ministry.

After completing exploration work, companies will have a one-year period to undertake preparation work to start production. The draft mining proclamation pushes the time limit to two. However, Dr. Arega and Dr. Kebede Hailu, exploration manager of Nyota Minerals (the British company engaged in gold exploration in Western Wollega), said that a two-year period was not enough to mobilize and venture into production. “Procurement and transporting the required machineries to the mining site by itself takes a long time.”

He added that the ministry could avoid conflicts between local people and mining companies if it followed up environment and community development work undertaken by companies.

Dr. Kebede said that the minerals licensing and administration directorate is seriously affected by staff turnover. “The ministry should work on recruiting and staff retention schemes,” he suggested.

Regarding access to loans, Dr. Kebede said that it was impossible to access foreign loans due to ambiguous loan provisions. “When we ask the Ministry of Mines it tells us to go to the National Bank of Ethiopia or the Ministry of Finance and Economic Development. The bank and the Ministry of Finance advise us to go back to the ministry. So it will be commendable if the Ministry of Mines gathered all the information about foreign loans and provide the information to interested companies at one window.”

Land rent is the other controversial issue.  Wube said that most regional states charge 60 birr per sq. km per year. Benishangul charges 120 birr per sq. km per year. The Oromia Regional State increased the rate from 60 to 600 birr. Wube said that mining companies operating in the Oromia region had stopped paying land rent due to the inflated price.

Many company representatives voiced their concern over the mineral licensing procedures. The representatives said it took a long time to process exploration license. Inefficient geological laboratory service was the other major problem raised by the companies. Some of the participants said that when they went to the Geological Survey geochemical laboratory with samples they would be told to wait for days. “At times the laboratory does not render service due to lack of chemicals,” they lamented.

Sisay Ayalew, minerals licensing and administration directorate director, said that the ten-year exploration period was adequate. “For those who are working on the project according to schedule and who are conducting feasibility study a two-year additional time would be given. This has been stipulated in the revised law that was presented to the parliament,” Siasay told the participants.

Sisay said that the directorate stopped accepting applications for exploration license for over a year but it resumed doing go last June. “Now we have changed the procedure from first come, first served to competitive evaluation. We accept different applications for the same concession and after evaluating the proposals we grant the license to the company which presented the best proposal. And concessions with good geological data will be floated for bids” Sisay said.

He said that it was a committee that evaluates the applications and admitted that there was shortage of skilled manpower. “We have lost most of our senior staff members. We are working hard with the limited number of experts we have,” Sisay said.

Regarding access to foreign loan, Tolossa said that the comment forwarded by Dr. Kebede was appropriate. According to Tolossa, this was a new need among mining companies. Previously it was only MIDROC Gold that was engaged in gold production and MIDROC came up with its own capital. But now more companies are joining the club. So a demand for foreign loans was forthcoming. “So we will work on this and come up with a clear information on loan provision,” Tolossa assured the participants.

Ethiopian Geological Survey chief geologist Hunde Melka said that the geochemical laboratory was established with the view to providing service only to the institute. However, he said the institute started rendering service to the private sector. “We know that the laboratory has limitations. We also face shortage of chemicals. We are now working on capacity building program. We will enhance the capacity and render better service,” Hunde said.

In a related news, the declining price of gold on the international market is affecting the country’s foreign currency earnings. The ministry had planned to earn 72.5 million dollars from minerals export in the first months of the current budget year but managed to collect only 20.4. “This is due to the decline in the price of gold. MIDROC Gold, the major gold producer, did not export most of its product due to the fall in price,” Tolosa told The Reporter.

The price of gold on the international market has been going down in the past three years. The price of an ounce of gold, which was 1900 dollars, plunged to 1200. The ministry hopes to compensate the lost income by increasing production and supply. MIDROC Gold mines four tonnes of gold per year from the Legedembi gold mine in south Ethiopia.

Nyota Minerals, National Mining Corporation, ASCOM Mining, and Stratex have discovered a huge amount of primary gold ore in the south-west and the Tigrai regions. Ethiopia will be a major gold exporter when these companies begin production.

In related developments, the prime minister’s office has appointed a new minister of state for the Ministry of Mines. Tewodros Gebregziabher is the new minister of state for mines. Tewodros graduated from the Arba Minch University in hydraulic engineering. He has been working with an aid organization, REST, in the Tigrai Regional State.

Last week President Mulatu Teshome appointed the Minister of Mines, Sinknesh Ejigu, Ambassador to Brazil. Tolosa is expected to replace her. The second minister of state is expected to be appointed enter. Reliable sources said Dr. Tarekegn Tadesse, president of the Addis Ababa Science and Technology University, will be the second minister of state.



Ethiopia to ratify AU non-aggression, common defense pact

–  Ministry of Defense to have more power

The House of Peoples’ Representative (HPR) on Tuesday began discussion on the ratification of the African Union Non-Aggression and Common Defense Pact eight years after the pact was adopted and signed by member countries, including Ethiopia.

The Pact, which was first adopted in 2005 in Nigeria’s capital, Abuja, at the 4th ordinary session of the assembly of AU’s Heads of State, formulated to deal with threats to peace, security and stability in the continent and to ensure the well being of the continent’s peoples.

The pan-African pact has 23 articles and is formulated with a vision of building a strong and united African state parties that aim at establish an African army in the final stages of the political and economic integration of the continent.

Stated among the articles, the pact stipulates the obligation of countries such as any signatory member’s obligation to cooperate and enhance their military and intelligence capacity through mutual assistance.

It further underlines the obligation of countries in providing mutual assistance towards their common defense and security vis-à-vis any aggression or threats of aggression.

Creating a united and strong Africa based on respect for the principle of peaceful co-existence, non-aggression, non-interference in the internal affairs of member states, mutual respect for individual sovereignty and territorial integrity of each state are included in the pact as part of the objective.

The pact boldly states that any aggression or threats against any of the member states shall be deemed to constitute a threat or aggression against all members of the AU.

Any state may withdraw from the pact by giving a one-year prior notice to the Chairperson of AU Commission, according to the pact.

Once the House get this pan-African pact ratified, the Ministry of Defence will have more power in implementing and enforcing everything demanded and stipulated in the convention while executing the duties, obligation and responsibilities on behalf of the country.

Underlining Ethiopia’s role in peacekeeping activity in the continent and its progressing influence in the troubled Horn of Africa region, some Members of Parliament (MPs) commented that the ratification of the continental convention was necessary.

Pointing out that Ethiopia signed the pact in March 2003, MPs said that the country should have done the ratifying measure earlier. They reiterated that they wanted the relevant standing committee to review why Ethiopian had been waiting too long to ratify it as the convention that was signed eight years ago.

After a short deliberation on the overall content of the draft bill that was attached with the pact, the Houses referred the bill to Foreign Security and Defense Affairs Standing Committee with no objection for further revision.

So far, 43 member states of the AU have signed the pact and only 19 of them have ratified it. Ethiopia will be the 20th nation to do so if the HPR ratified the pact.



The Crisis in South Sudan and its implications for Ethiopia

By Mehari Taddele Maru and Abel Abate

Since 15 December 2013, soldiers loyal to the deposed Vice President, Dr. Riek Machar, have fought against President Salva Kiir’s loyalists in Juba in the vicinity of the Presidential palace.

Emboldened by the rebels’ success in controlling Bor, the capital of Jonglei State under General Peter Gatdet, Dr. Riek Machar announced his wish to be the next leader of South Sudan after deposing the incumbent President; a move that further increased tensions in the country. As the conflict continued between the warring forces, it was reported that thousands of civilians had been killed and that hundreds of thousands had been displaced.

The international community and regional organizations, including the United Nations (UN), the European Union (EU), the African Union (AU), the Intergovernmental Authority on Development (IGAD) and other concerned authorities, have been calling on the warring factions to show restraint and come to the negotiation table. Shortly after the conflict broke out on 19 December 2013, an IGAD ministerial delegation led by Ethiopia visited South Sudan to seek an end to the fighting. Signifying the grave nature of the crisis and possibly due to the challenges the ministerial mediation effort has faced, on December 26, 2013, the Ethiopian Prime Minister Hailemariam Desalegn and the President of Kenya Uhuru Kenyatta traveled to Juba. The delegation of the ministers and heads of states met President Salva Kiir and urged both sides to engage in a dialogue. On 24 December 2013, Reuters reported that Dr Machar had requested President Kiir to release his ‘comrades’ who were under detention so that they could be evacuated to Addis Ababa as a precondition. Dr. Machar added that if the President met his demand they could begin their dialogue straight away. Rejecting the proposal for a meeting in Addis Ababa, the Juba government immediately insisted that dialogue needed to take place in Juba.

President Kiir has been encouraging and sometimes demanding the Republic Sudan to hold dialogue in Addis Ababa with the rebels fighting Khartoum. It is not clear why President Kiir would reject the same process being commenced in Addis Ababa. This seems to be the first challenge for IGAD and Ethiopia as chair of IGAD. The request by Dr Macher for the transfer of detainees in order to commence dialogue in Addis Ababa and the precondition by President Kiir for the renunciation of revolt by his opposition should serve as a basis to defuse the tension. Despite Entebbe’s initiative; Addis Ababa should be the most acceptable venue for the dialogue as Ethiopia is the current chair of IGAD and AU. But to avoid unnecessary tension and perceptions, Nairobi could also become an alternative venue. IGAD heads of state and government summit is scheduled on 27 December 2013.

Ethiopia’s active mediation role in the current crisis is commendable and justified. While IGAD under the leadership of Ethiopia provides the best vehicle for dialogue, Ethiopia has a very high stake in this crisis due to a number of factors. A peaceful region, the two Sudans at peace with each other and at peace within themselves would benefit Ethiopia’s peace and development efforts enormously.

First there is the issue related to the refugee flow from South Sudan to the bordering Ethiopian regions of Gambella and Benshangul-Gumuz. Currently close to 40,000 refugees are registered in Ethiopia while there are more than 50,000 internally displaced persons. Apart from Ethiopia’s humanitarian responsibility to grant asylum to so many refugees, insurgent rebel groups may use the resultant instability to destabilize the border regions. The spillover effect of the crisis may also extend beyond refugee flows to the destabilization of Ethiopia’s peripheral areas where kin communities such as the Nuer reside. With the vulnerability of porous borders, and the natural mobility of the Nuer in gaining access to the neighboring regions of Ethiopia, the consequences the crisis will not be limited to South Sudan. The long-term effect on Ethiopia’s federal structures that rely on a delicate balance between numbers and power could be significant given previous historical experiences. In 2003, refugee camps in Ethiopia were at the centre of violent conflict due to the impact of large-scale migration on the regional state of Gambella with a population of about 160, 000.  In Ethiopia’s federal system, regional administrative power is allocated in direct proportion to the population of the country’s ethno-cultural communities. The relative numerical superiority of a certain ethno-cultural community would therefore entitle it to more seats than the other. With a region that is known for cross-border migration (of the pastoral Nuer as well as refugees fleeing the conflict in South Sudan) where the national identity of the inhabitants of bordering areas is very fluid, the balance in terms of power sharing between ethno-linguistic communities in neighboring regions could easily become destabilized. Prior to 2003 changes in Gambella, an outcome of such demographic change due to influx from South Sudan has been the creation of what has been termed by one of the writers the ‘minority in power but majority in number’ situation. An influx of tens of thousands of refugees could create similar imbalance in the regional states bordering South Sudan again.

Composed of entirely Ethiopian troops numbering slightly more than 4000, the mission of the United Nations Interim Security Force for Abyei (UNISFA) could be easily affected by the spread of the current conflict in Unity and Warap and the encirclement of Abyei. Facilitated by former South African President Thabo Mbeki, chief of the AU-High-level Implementation Panel (HIP), the Addis Ababa Agreement on Abyei was signed by the SPLM forces and the Government of Sudan (GoS) on 20 June, 2011. The main objective of the Addis Agreement on Abyei is to ensure that this border area remains demilitarized until proper demarcation is undertaken. The same agreement provided for the deployment of the United Nations (UN) peacekeeping mission from Ethiopia. The UN Security Council Resolution 1990 authorized a UNISFA under Chapter VII of the UN Charter. In response to the current crisis, the UNSC has approved the appropriate transfer of troops, force enables and multipliers from other UN Mission including those in the UN Organization Stabilization Mission in the Democratic Republic of Congo (MONUSCO), African Union-United Nations Hybrid Operation in Darfur (UNAMID), United Nations Interim Security Force for Abyei (UNISFA), United Nations Operation in Côte d’Ivoire (UNOCI) and the United Nations Mission in Liberia (UNMIL). Nevertheless, Ethiopia may need be wary of any redeployment of UNISFA troops inside South Sudan as that could lead to a dreadful confrontational situation that requires siding with one of the factions. This will certainly affect its relations with both South Sudan and the Republic of Sudan, seriously undermining the mediation efforts between the two.

Another diplomatic burden for Ethiopia is to keep UNISFA from implicating in the South Sudanese internal crisis. Deployed to help the mediation and prevent a border war between the Khartoum and Juba, UNISFA needs to enjoy the full support of the two states. If implicated in the internal crisis of South Sudan, the negative impact of a civil war between within South Sudan will not be limited to the Ethiopia but also to the mediation effort by President Mbeki. Thus, Ethiopia has to tread carefully to ensure its fair-handed role of peacemaker and mediator.

Moreover, Ethiopia as the current chair of IGAD and the AU has to discharge its mandate effectively on behalf of the region and Africa. Thus, an additional diplomatic burden for Ethiopia remains the usual balancing role it plays within IGAD and the divergent interests of its member states, particularly Sudan and Uganda, who might lend support to different factions in this crisis. Here close assistance by the AU and the UN will be critical to ensure unison of messages to the warring factions, and their external supporters.

The long-term interest of Ethiopia in the region will only be ensured through democratic states that are peaceful within themselves and with their region. Support and encouragement for internal democratic reform of SPLM and SPLA is the best place to start with.

But above all, IGAD, AU and the UN need to note that at the heart of the current crisis lays SPLM; the current ruling body of South Sudan, which was formed as a liberation movement, is unfit to offer an effective leadership to transform a new war-torn country into a democratic state that could make use its resources for the wellbeing of its population. Thus, solving the current crisis in South Sudan requires resources, a concerted effort and sustained pressure on the political leadership of SPLM and the military leadership of SPLA to kick-start a genuine transformation from a liberation movement and fighters to a Democratic Party and state army respectively.

Ed.’s Note: Dr. Mehari Taddele Maru is an international consultant and Senior Fellow at the North Atlantic Treaty Organization (NATO) Defense College. He can be reached at
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. Abel Abate Demissie is a Senior Researcher at the Ethiopian International Institute for Peace and Development (EIIPD). He can be reached at
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. The views expressed in this article do not reflect the views of The Reporter.



 IGAD Gives S Sudan Rivals 4 Day Ultimatum to End Hostilities

Nairobi — The Intergovernmental Authority on Development (IGAD) has given South Sudan President Salva Kiir and former Vice President Riek Machar until Tuesday to hold face-to-face talks.

Once the four day deadline passes the IGAD member states of Kenya, Uganda, Ethiopia, Djibouti, Somalia and Sudan said they would be forced to take further action.

They however stopped short of expounding on what that further action will be in a communiqué read by Ethiopia’s Foreign Affairs Minister Tedros Adhanom.

“The stakeholders in the Republic of South Sudan welcomed the commitment by the Government of the Republic of South Sudan to an immediate cessation of hostilities and called upon Dr Riek Machar and other parties to make similar commitments,” he said.

IGAD also required of Kiir and Machar to rein in on their troops and guarantee the safety of women, children, humanitarian workers and unarmed civilians in general.

“The summit strongly condemns criminal acts of murder, sexual violence, looting and other criminal acts against civilians and unarmed combatants by any actor and demand that all involved be held responsible by their de-facto and or de jure leaders,” they underscored.

IGAD joined the United States legislature in condemning Machar’s attempt to secure power through a coup as opposed to a democratic process and appointed Kenyan General Lazarus Sumbeiywo and Ambassador Seyoum Mesfin of Ethiopia to facilitate the peace talks.

They however also welcomed the United Nation’s resolution to bolster their peace keeping force in South Sudan saying it would complement their political efforts to restore peace in the newly-formed nation.

The IGAD member states also pledged their support for the protection of key infrastructure and installations in South Sudan, a job Uganda had been charged with.

“The Summit commends the effort of the Republic of Uganda in securing critical infrastructure and installations in South Sudan and pledges its support to these efforts,” the communiqué reads.

The communiqué also stressed that it was imperative that those detained on suspicion of involvement in the alleged coup be treated humanely and tried within the confines of South Sudan’s laws.

The talks which took place this afternoon were attended by Djibouti, Uganda, Somalia and Ethiopia’s Heads of State at State House Nairobi.

Kiir was represented by his Foreign Affairs Minister Barnaba Marial while Sudan was represented by its First Vice President Bakri Saleh.



Chamber Organizes Public Private Consultative Forum On Company Formation Process in Ethiopia

The Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) has organized a Public Private Consultative Forum was held at the Hilton Hotel Dec. 26th under the theme “Company Formation Process in Ethiopia: Challenges and Recommendations.”

The Forum deliberated on the regulatory and administrative challenges encountering company formation procedures (particularly share companies) and measures that must be taken to address these challenges

According to a statement from CCSA the As effective conduit to pool large amount of financial and human resources from the larger public, share companies can potentially play a prominent role in a country’s economy. By allowing large scale operation, share companies can provide better business and employment opportunities to the public; can help facilitate technology transfer; can ensure provision of better products and services and increase competitiveness in the international market.

Effective exploitation of these potential, however, requires putting in place simple, cost effective and transparent company formation process and an administrative practice that takes protection of the public interest into account, The increased challenges observed in company formation and administration in Ethiopia over the last few years call for a joint evaluation of the existing challenges to come up with practical solutions to overcome them.

“In an attempt to come up with recommendations intended to overcome challenges surrounding company formation process, ECCSA has undertaken a study, the findings of which have been used to prepare a Position Paper of the private sector to be presented in the upcoming forum.”

Minister of Trade, H.E Kebede Chane and President of ECCSA, W/ro Mulu Solomon co-chaired the Forum, which brught together key stakeholders from the private and public sectors. The Forum also deliberated upon the findings of the study noted above as well as other issues to be raised by participants. Other discussed include problems surrounding document registration and authentication, protection of shareholders’ interest, company formation procedures including company naming and issues related with nomination of board members.



Developing countries are being undermined by rich nations’ greed

By Clark Gascoigne & Tom Cardamone

When you hear the words ”global development”  what comes to mind?  Foreign aid? Malaria prevention? Humanitarian assistance?

These are all worthy causes, but the most damaging economic problem facing the world’s poor today is the flow of illicit money leaving developing economies as a result of crime, corruption, and tax evasion. Two recent studies drive this point home.

On December 11, Global Financial Integrity released its annual assessment of the amount of money flowing illegally out of the developing world, and the picture is stark. The global ”south” lost nearly $US1 trillion ($1.13 trillion) in illicit financial outflows resulting from crime, corruption and tax evasion in 2011 (the most recent year for which there is reliable data) – roughly 10 times the amount of money these nations received in official development assistance.

The scariest part is just how fast the problem is growing. The  $US946.7 billion in illicit outflows in 2011 is a historic high, and it’s up nearly 14 per cent from the previous year. Indeed, over the decade analysed in the report, average annual illicit outflows increased at a rate of 10 per cent a year.

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Unless major policy interventions are made soon, the accelerating scourge of illicit financial flows could  be disastrous for the developing world –  and the global economy.

That’s why a report published by the Organisation for Economic Co-operation and Development (OECD) should raise eyebrows. It found its members – 34 of the world’s wealthiest nations – are largely failing to halt money laundering due to tax evasion and corruption in the developing world.

For decades, the dominant view in the developed world was that illegal capital flight was a problem only for the world’s poorest nations, whose purportedly corrupt governments and poor business environments drove capital to flee their economies. However, this is a two-way street. The countries absorbing illicit financial flows – that is, offshore secrecy jurisdictions and developed countries  such as  the US, Britain, and Australia – likewise bear responsibility.

Over the past half-century, Western nations established an offshore financial system comprised of tax havens, anonymous shell companies and various trade-based money-laundering techniques, designed to facilitate the outflow of capital from developing countries  and into Western banks.

While anonymous shell companies are the top tool for laundering criminal money, the OECD’s study reveals that 27 of its 34 member countries are either ”non compliant” or only ”partially compliant” with the recommendations on transparency of corporate ownership information from the Financial Action Task Force,   the anti-money laundering standard-setting body. Worse, none of the OECD countries are ”fully compliant” with the standards.

On the eight  task force recommendations related to customer due diligence and record-keeping by banks, Australia actually comes out worst – failing to comply with six  of eight recommendations and only partially complying with the other two. But Australia has a chance to redeem itself.

Next year, Prime Minister Tony  Abbott is hosting the annual G20 Summit –  consisting of the world’s 20 largest economies – and the government is now formulating its G20 agenda. The Prime Minister should make sure that tax evasion, money laundering and illicit financial flows feature prominently.

This  year, British Prime Minister David Cameron used his chairmanship of the G8 Summit to push for  important  tax evasion and transparency measures which led to a breakthrough at the G20 Summit in September, where nations agreed to adopt automatic exchange of tax information  as the new global standard. Talks are  being held on how to implement this measure and it’s vital  Australia pushes to include developing countries in these discussions.

Cameron made history again in October, when he decided to go beyond the task force standards on anonymous shell companies and create the world’s first public registry of corporate ”beneficial ownership.” Public registries  ensure law enforcement, journalists, policy-makers, investors and others have access to information on who truly owns a corporate entity. Australia should create its own public registry and make  the transparency of corporate entities a focal point of the 2014 summit. If not, we can  expect the outflow of illicit money from developing countries to continue to grow.

Tom Cardamone is managing director of Global Financial Integrity, a Washington research organisation. Clark Gascoigne is GFI’s communications director.



Old Ethiopian town gets revamp

The town situated almost 800 kilometers from the capital Addis Ababa, was founded in 13th century.

Having witnessed several wars in its long history, it is now turning the sleepy town into a city due to several infrastructure and cultural projects taking place.

Tsegay Gebrekidan from Mekele City Public Relations said: “Since the city was close to the war frontiers, it is obvious that it was a victim of the war. The war claimed lives of 60,000 people and injured more than 100,000. The city was very underdeveloped and literally had no infrastructure at all.”

Proprietor Ato Yirdaw Mekonnen said: “As you can see now, Mekele has really changed. In 1992 when the Dergue regime was overthrown, the city was in the dark. We had electricity from 6 o’clock to 10 o’clock in shifts. The city had one generator that was not able to power the whole city.

Despite the distance from the capital city, it is steadily becoming more popular with tourists.

An estimated 1,500 new investors are now registered here – and over 27,000 new jobs have been created.



Expansion of Aluto-Langano Geothermal Power Plant launched

Expansion work at the Aluto-Langano Geothermal Power Plant, to boost its capacity to 70mw, launched on Wednesday at a cost of over 30 million USD.

Drilling of wells, up to 2,500m deep started on that day.

Speaking on the occasion, Water, Irrigation and Energy Minister, Alemayehu Tegenu said the expansion will improve the power the country is generating from geothermal to 70mw from the previous seven megawatts.

He said activities are well underway to generate 77mw electric power from geothermal energy by 2007EC.

The cost of the expansion project will be covered with financial assistance from the government of Japan and the World Bank as well as the coffers of the government.

Japanese Ambassador to Ethiopia, Kazuhiro Suzuki for his part said his country has provided 10 million USD assistance to support the project.

Located in the Rift Valley lakes region, the Aluto Langano is the first geothermal power plant in Ethiopia.

The geothermal resource covers an area of about eight square kilometers.

It was launched in 1998 as a pilot project to test the geothermal resources and identify any issues that could affect the power plant.

Various studies confirmed that up to 100mw electricity can be produced from the Aluto steam field, known to be one of the high temperature prospected areas in the country.



Ethiopia earns over 633 million US dollars foreign trade

Ethiopia has earned more 633 million US dollars revenue from foreign trade during the past five months, the Ministry of Trade said.
Public Relations and Communication Director with the Ministry, Amakele Yimam, told WIC that the stated sum was secured from the export of 287,210 tonnes of cash crops and 332, 485 tonnes of live animals.
The director said the revenue secured during the reported period has shown a 15.9 per cent decline compared to the same period the previous year.
Coffee, live animals, cotton, natural gum, tea, cereals, oil seeds, spices, are among the products exported during the reported period, he said.



New Cement Development Strategy being designed

The Institute of Chemical and Construction Input Supply said works are underway and various projects have been readied to modernize cement production system in order to trim down its price.
General Director to the institute Samuel Halala said the power that factories use to produce cement is the reason for price increase, and said using coal as power supply can be cost saving relatively to that of mazut.
Manager in Chief at Mesobo Cement Plant said his factory is conducting researches that would enable it use another alternative power supply –bio gas, hoping for price cut.
As part of the effort, the institute is designing cement development strategy to expand the exemplary experience to all the other 18 cement plants in the country.
Samuel, the general director said the strategy would support the factories improve their technologies, and believed would enable them increase their annual 11 million tons of cement, and export their products to Djibouti, Kenya and Somali-land and win the market.
In the current fiscal year, it has been planned to earn 10 million USD by exporting cement to the aforementioned neighboring countries.




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