18 January 2014 News Round Up


Land bill endorsed after record debate


The House of Peoples’ Representatives (HPR), on Thursday, finally endorsed the land bill, almost eight months after it was first presented to the House.

The bill caused an unusual amount of debate in the House, leaving Members of Parliament (MPs) divided as to whether some of the proposed articles needed constitutional interpretation by the House of Federation (HoF), or simply treated by the HPR.

It was reported that the HoF endorsed the divisive articles, ruling that they did not contradict the constitution.

However, when MPs presented the resolution of the bill, the final decision was not as problematic as before, and it was voted in with an absolute majority. It was not even denied a vote from the sole representative of the opposition group, Girma Seifu, let alone from the dominant MPs of the ruling party, which accounts for 99.6 percent of the House.

Last month MPs argued that the draft proclamation’s provision on the registration of urban land and land-related properties was unclear in terms of the allocation of power. When it came to clarifying the relationship between the registration and administration of land and land-related properties, as well as the scope of power to issue land use law, it was said to be beneficial for the HoF to present an in-depth opinion as per the power vested in it by the constitution.

Cited in the constitution, the federal government is empowered to enact laws pertaining to land and natural resources, while the states have the power to administer land in accordance with federal law.

The draft was intended to regulate the registration of urban land and land-related properties, and provide title-deed holders guaranty for their assets. As a result the bill posed a question of dividing jurisdictional issues between federal and regional governments, and so must be governed in accordance with the procedure set out by the constitution.

In addition, it was reported that some MPs argued that referring the issue to the HoF was akin to giving away their power to decide, while others opposed that argument.

The draft law was first presented before the parliament in June last year, and is considered the bill to have taken the longest time to endorse in the House’s history.



GE’s chief to visit Addis Ababa


The United States multinational conglomerate corporation, General Electric’s (GE) chairman and CEO, Jeffrey Immelt, is to visit Addis Ababa early next month.

Reliable sources told The Reporter that Jeffery Immelt, as part of his Africa tour, will visit Ethiopia, Kenya, Mozambique and Nigeria. The CEO will start his visit in Addis Ababa where he will stay only one night. During his visit Jeffrey Immelt will meet senior Ethiopian government officials.

Sources told The Reporter that Jeffrey Immelt will sign a major agreement with the Ethiopian government. Sources declined to identify the project. GE has been looking at the power development and transport sectors in Ethiopia.

Executives of GE have been negotiating with the Ethiopian Electric Power Corporation (EEPCo) to secure a contract on the electro-mechanical work on the Grand Ethiopian Renaissance Dam (GERD) project. GE also has a keen interest to engage in the railway development project in Ethiopia, though competing with Chinese companies is a challenging assignment for the American giant.

Chinese companies are acclaimed by the Ethiopian government for bringing project financing. But knowledgeable sources say GE could also be backed by the US Export-Import (EXIM) bank, which finances major American exporters.

Observers say GE could together work with the Metals and Engineering Corporation (MeTEC) on the GERD. They also said GE could involve in the Light rail project in Addis Ababa run by the Ethiopian Railway Corporation.

GE has a strong partnership with Ethiopian Airlines. GE has been supplying aircraft engines to Ethiopian. Ethiopian Boeing B787-8 Dreamliner and B777 aircraft are powered by GE engines. During his stay in Addis Ababa, Jeffrey Immelt will visit the headquarters of Ethiopian.

In the wake of the 2008 global economic crisis GE started to look for new frontiers in emerging economies. And as part of the expansion GE opened a country office in Addis Ababa seven months ago. GE has a regional office in Nairobi and has a strong presence in Nigeria.  The company has 1800 employees in Africa, 400 of them working for Nigeria’s office.

GE has different wings including energy, health, home and business solutions, transportation and finance. It is known for manufacturing aircraft engine, home appliances and crude oil extracting machines.

General Electric is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut in the United States. The company makes an annual revenue of 150 billion dollars.



Ethiopia passes FAA’s safety audit


The Ethiopian Civil Aviation Authority (ECAA) has successfully passed the US Federal Aviation Administration’s (FAA) flight safety audit.


Officials of FAA last week informed ECAA that Ethiopia meets the International Civil Aviation Organization’s (ICAO) international flight safety standards. The director general of ECAA, Wossenyeleh Hugegnaw (Col.), who traveled to the US was informed that Ethiopia retained its Category 1 status.

“We have been informed that we qualified as Category 1. There are some works that we have to do with experts of FAA. Then we will receive an official notification letter from FAA,” Wossenyeleh told The Reporter. ECAA will hold a press conference announcing the result of the audit and the significance of qualifying for Category 1 list.

FAA grants permits to airlines of a country to fly to the US if the regulatory body of that country qualifies the FAA audits. Ethiopian Airlines started flying to the US in 1998 after ECAA was certified by the FAA as Category 1.

FAA conducted the international flight safety audit on ECAA last August. FAA team of experts lead by John Barbagallo, chief inspector, came to Addis Ababa on August 23 to audit the ECAA. The experts spent five days assessing the authority working procedures and the qualifications of experts of the authority.

Five FAA inspectors evaluated all the working procedures of the ECAA and the qualifications of the professionals working in the authority.  FAA’s checklist comprises thousands of items but the most critical ones are: the existence of legislation, organizational structure, regulation, skilled man power, operation manuals, operators certification, surveillance (follow-ups), and enforcement.

After the experts conducted the assessment they identified 36 findings. Most of the problems are related to the availability of certified personnel. They gave ECAA two months to rectify the deficiencies. “It was a thorough investigation,” Wossenyeleh said. According to Wossenyeleh, with the support of the Ethiopian government the authority worked hard to fill the gaps.  “The government provided us with all the support we required. Our government showed that it is really committed to the development of aviation in this country,” Wossenyeleh said.  According to him, the authority rectified most of the findings.

For countries which fail to meet the flight safety audit, their carriers will be banned from flying to the US.  Ethiopian Airlines flies to Washington DC and it plans to add two more destinations in the US.



Africans hear China slam Abe as trouble


Harsh words: Xie Xiaoyan, China’s ambassador to Ethiopia and permanent representative to the African Union, gives a press conference on Japanese-Chinese relations at the African Union headquarters in Addis Ababa on Wednesday. | AFP-JIJI


ADDIS, ABABA – China’s diplomatic assault on Prime Minister Shinzo Abe moved to another continent Wednesday, as China’s top official at the African Union labeled him a troublemaker just after his three-country visit to Africa.

Abe visited Cote d’Ivoire, Mozambique and Ethiopia over the last week, pledging hundreds of millions of dollars in aid and trying to shore up relations on a continent where China has made deep inroads in recent years.

Abe’s Africa trip follows his visit last month to Yasukuni Shrine in Tokyo, which China views as a memorial to war criminals who assaulted the Chinese people.

Xie Xiayoan, China’s ambassador to Ethiopia and its envoy to the African Union, said Abe’s visit to Yasakuni was offensive and he called the prime minister a “troublemaker” in Asia.

The Chinese disdain for Abe’s visit here went past the political level. On Sunday, Chinese activists brawled with Japanese Embassy security in the capital of Ethiopia, as they took pictures of the embassy and protested Abe’s visit.

Chinese activists had collected signatures from among the thousands of Chinese nationals living in Ethiopia and tried to submit them to the embassy to protest the shrine visit.



FDI Into Africa Increase By $43b In 2013 –  World Bank


Business in AfricaVENTURES AFRICA – The World Bank has said in its recently published report “Global Economic Prospects,” that Foreign Direct Investment (FDI) into Africa grew by 16.2 percent to $43 billion in 2013, on the back of encouraging investment performance.

In the report, the global development agency showed that while the real Gross Domestic Product (GDP) of sub-Saharan Africa grew by 4.7 percent in the year, countries in Southern Africa, except South Africa, recorded an average GDP growth of 6 percent.

The report however projected sub-Saharan growth to reach 5.3 percent and 5.5 percent in 2014 and 2016 respectively on the back of “strengthening external demand.”

“However, a protracted decline in commodity prices, tighter global financing conditions and domestic risks including political unrest, and weather shocks could weaken growth prospects,” and adversely discourage investments, the World Bank highlighted.

FDI to the region increased to $43 billion in 2013 from $32 billion the previous year. Many of the remittances have gone into macro-level infrastructural projects to enhance capacity for African economies.



MasterCard Signs Largest E-Payments Deal In Africa


VENTURES AFRICA- Pan-African financial institution, Ecobank Transnational Inc. has signed an agreement with global electronic payment company, MasterCard to fast-track electronic payment adoption in 28 sub-Saharan African countries where it operates.


The multi-country licensing partnership which will benefit more than 60 percent of Africa’s population is said to be MasterCard’s largest multi-country licensing deal in Africa.

“This is the largest multi-country licensing project completed by MasterCard in Africa and as such is a great milestone for us, as we aim to achieve our vision of a world beyond cash by bringing the benefits of electronic payments to an increased customer base in sub-Saharan Africa,” Daniel Monehin, Division President, Sub-Saharan Africa, MasterCard said.

“We expect that the 28 newly licensed Ecobank subsidiaries will begin to accept MasterCard credit, debit and prepaid cards at their ATMs and Points of Sale from early 2014, as we work with the Ecobank Group to complete licensing of the remaining Ecobank subsidiaries,” he added.

Ecobank’s deal with MasterCard comes on the heels of a November, 2011 agreement which provides for both companies to explore joint business development opportunities across Central, East, West and Southern Africa where the pan-African bank operates.

The contract will enable Ecobank’s customers to have more access to MasterCard’s credit, debit and prepaid card products, while MasterCard will leverage Ecobank’s unrivalled pan-African footprint to provide its electronic payments solutions to a wider customer base, a communiqué released by the bank read.

According to Ecobank’s Group Chief Executive Officer, Thierry Tanoh, the deal demonstrates the banks “vision” for its customers across Africa.

“[Ecobank] recognize that partnerships with leading global players such as MasterCard are key to accelerating the migration of our customers to a ‘cashless society’ throughout Africa,” Ecobank’s Group Executive Director (Domestic Banking), Patrick Akinwuntan added.



Sustainable agribusiness incubator said promoting new  innovations


 State Minister Mitiku Kassa

USAID stressed that Sustainable Agribusiness incubator implemented for the first time in Ethiopia is producing new agricultural innovations through dynamic entrepreneurs.

Speaking at the first Ethiopian Agribusiness Investment Forum held at Sheraton Addis Thursday, Deputy Mission Director Gary Linden said that the sustainable Agribusiness incubator, signed under a cooperative agreement between USAID and Precise Consult International is bringing new agricultural products by providing entrepreneurs a package of services that includes: business development training, technology support, links to financing, and support for gaining market access. As to the Deputy Director, the activity also supports more established companies that demonstrate exceptional promise as innovators.

He further explained that the first-of- its kind approach in Ethiopia accepted dynamic entrepreneurs like Dr. Dessaleng Benga, who is introducing modern beehives to increase honey yields by up to four times and Ebise Bayisa, an entrepreneur seeking to manufacture products such as lotion, lip balm, and deodorant using beeswax sourced exclusively from Ethiopia.

Agriculture State Minister Mitiku Kassa on his part noted that Ethiopian government have been making concerted effort to develop all types of commercial agriculture by private investors. As to Mitiku, the resulting increase in agricultural productivity can then be both invested in industrial enterprise and also be used as input into building domestic resource based industry. “It was with this vision that the Industrial Development Strategy of Ethiopia was formulated in 2003 with a view to providing unprecedented and generous direct support to private investors in selected sectors that are labour intensive and use domestic raw materials,” said the State Minister.

As the forum highlighted lucrative opportunities in the sesame, dairy and honey sectors, more than 200 business leaders, domestic and foreign investors and government officials attended the first Ethiopia Agribusiness Investment Forum.



Floriculture in Ethiopia – well positioned to thrive


Arguably flowers are considered to be the best gifts one can give to a loved one in order to express profound emotions without speaking a single word. Flowers play an essential role in people’s celebrations and everyday lives. Weddings, graduations, funerals, Mother’s Day, Valentine’s Day, Easter and Christmas are all peak periods of demand for flowers. Cut flowers are made into elaborate arrangements and bouquets, or packaged together for cash-and-carry purchases.

Floriculture as an industry offers unlimited opportunities in Ethiopia. From business perspective there is a high potential for growers, exporters and florists among others, to engage in the sector. It also creates enormous job opportunities for many citizens.

The industry also significantly contributes to income generation for local community. It gives an impetus to the export sector. The business opportunity may be specially high for growers and exporters; however beneficiaries from the sector are far too many than just producers and exporters. The sector also avails opportunities for different business actors engaged in related fields. Some of these actors include floral decoration firms, consultancy firms, contract farmers, and those engaged in selling floral ribbons, floral baskets containers and vases.

Some of the flowers that have huge demand in the market include poinsettias, orchids, florist chrysanthemums, and finished florist azaleas. Foliage plants are also sold in pots and hanging baskets for indoor and patio use, including larger specimens for office, hotel, and restaurant interiors.

Ethiopian flowers and horticultural products are in high demand in export markets. Many countries are interested in Ethiopian floricultural products because they are believed to be of high quality. The Netherlands is one of the major destinations where Ethiopian flowers are exported. With different incentives, favorable policies and facilitations in place, Ethiopia stands to benefit highly from the global market. From the growers’ perspective there is great chance to expand flower investment in different parts of the country.

Ethiopia has emerged as a global player especially in the cut flowers business ranking second in Africa as reported by US Politics Today in New York. The industry in Ethiopia enjoys a good mix of incentives and facilitations. The government turned the flower sector from zero to a USD $200 million export sector that has created more than 85,000 jobs in just a short period of years._ This was made possible because Ethiopia enjoys an inherent comparative and competitive advantage in the production and delivery of flowers. _While the country’s agro-climatic conditions and altitudinal variations give it advantages in growing a wide variety of flowers, fruits and vegetables, its location affords it a fast and cheaper transport and delivery potential. The country is also considered to be well positioned to develop robust export-oriented horticulture sector.

Floriculture is a discipline concerned with the cultivation of flowering, and ornamental plants for gardens and for floristry. Flower farming incorporates scientific and technological components alongside cultivation. Horticulture on the other hand is a much broader field that involves growing edible plants such as fruits, vegetables, mushrooms and culinary herbs for local consumption and for export.

Horticulture also involves growing non-food crops including flowers, trees and shrubs, turf-grass, hops, grapes, medicinal herbs. It also includes providing other related services such as plant conservation, landscape restoration, landscape and garden designing construction/maintenance, horticultural therapy, and much more.

Flowering and foliage plants are combined together in baskets or planters, or sold individually with pot covers and sleeves to accent their beauty. Cut flowers, potted plants and bedding plants are available at florists, supermarkets, grocery stores, mass-market outlets and garden centers. Many people buy flowers from supermarkets as part of their weekly grocery shopping. Several growers have retail outlets on the farm where one can buy products such as long stem roses, potted orchids and bedding plants.

All over the world cut flowers are usually sold in bunches or as bouquets with cut foliage. The production of cut flowers is specifically known as the cut flower industry. Farming flowers and foliage employs special aspects of floriculture, such as spacing, training and pruning plants for optimal flower harvest; and post-harvest treatment such as chemical treatments, storage, preservation and packaging. In Australia and the United States some species are harvested from the wild for the cut flower market.

Farmers engaged in floriculture earn higher net farm incomes than farmers engaged in other agro activities. This sector provides more rural employment and income generating opportunities which are crucial for overall economic development of an individual country. In this context although there is a huge potential for growing horticultural products in different rural areas of Ethiopia there are marketing and distribution problems particularly for small scale growers. Flower growers on the other hand are situated mainly in metropolitan areas like Adama, Makele, Awasa. In relation to this availability of retail and wholesale market will definitely stimulate the horticulture sector especially in rural areas.

Human capital has been identified as a key stimulus of economic development in general. Many theories explicitly connect investment in human capital development to education and the role of human capital in economic development, productivity growth, and innovations. Floriculture sector will in this regard give ample opportunities.

Ethiopian highlands provide ideal growing conditions particularly for roses. The fact that rose farms grew from 40 hectares productive to 250 hectares with in a short period since the country made its debut in the sector evidences the fact that Ethiopia is an ideal for growing highland roses. Accordingly the share of flowers to the total flower export grew from 0.15 per cent in 2001 to 1.59 per cent in 2005. The value of Ethiopian flower exports rose from $660,000 in 2001 to $12,645,000 in 2005.

Ethiopia also has globally competitive advantages in relation to quality produce, cost of freight, cost of production and proximity to markets. Labor costs are cheaper than that of many African countries involved in floriculture export. The country has the second highest population in the African continent next to Nigeria. 84 per cent of populous live in rural and 16 per cent in urban areas. The country also has 12 river basins, 18 natural lakes and a potential of 3.7 million hectares of irrigable land. Temperatures are conducive to floriculture and there are long hours of sunshine – usually more than 11 hours a day. Water for irrigation is available in ample quantity and the well-drained soil in is suitable for growing flowers.

The high demand for roses comes mainly from countries in North America, Europe and the Far East. While USA’s demand for roses is mostly met through imports from South American producers such as Columbia and Ecuador, Europe receives flowers mainly from Africa, Israel and local producers. Japan’s market is catered by Asian as well as European growers. Unlike the UK and USA surging and maturing market, the German market has always been the largest in Europe for consumption of cut-flower.

With the increase in the diversity of export items, Ethiopia has set itself as one of the fastest growing African economies. Floriculture and floriculture combined fetched USD 113 million last year.

Over the last two decades the country has created a growing middle class population primarily in rural areas and brought about changes in a number of areas. Consumer tastes and lifestyles have changed over the years as a result of improved economic conditions . Such changes are expected in the course of years to create local markets for the floriculture products as well.

The government of Ethiopia has put in place a policy framework that aims to attract foreign direct investment in a range of sectors. As a result many multinational corporations are making their base in the country and are expanding their businesses to other parts of Africa. One of the areas that have caught much of the attention of the big multinational companies is floriculture. As the world flower market continues to grow following the recovery of industrialized countries from the 2008 economic crisis, the floriculture sector in Ethiopia is set to have its best moments for boosting ahead of it.





–     17 January 2014 News Briefs


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