22 February 2014 News Briefs


Council of ministers evaluates past three years’ GTP performance; passes various decisions


The Council of Ministers of Ethiopian Federal Democratic Republic, in its 63rd session, evaluated past three years’ performance of the Growth and Transformation Plan and passed various decisions.

The Council has also endorsed the proposal to establish Policy Study and Research Center.

According to a press release the Council sent to WIC, the evaluation has basically focused on economic development, infrastructure, social development, democracy and good governance.

The gross domestic growth rate reached 9.7 per cent in the past fiscal year; indicating the contribution of the three major economic sectors moving towards the intended direction.

The contribution of agriculture, industry and service are 7.1, 18.5 and 9.9 per cent respectively, the press stated.
Due to the efforts made to bring changes in economic structure, the contribution of agriculture is reduced to 42.9 per cent in 2013 from 46.5 three years before.

The council also ensured that the industry and the service sectors are raised to 12.4 and 45.2 respectively from 10.3 and 44.1 in 2010; indicating the industry showing a gap of 2.9 from what was planned to attain.

The Council of Ministers decided to exert considerable efforts to fulfill the gap in the contribution of the industry this fiscal year, according to the press release.

It also stated that the registered economic growth is by far better than the 5 per cent economic growth rate that Sub Saharan Countries have registered, the press release pin pointed, adding the growth happened amid global market challenges.

The Council also evaluated the number of people living in poverty reduced to 26 per cent in 2013 from  29.5 per cent three years before, moving in a right path to reduce it to 22.2 per cent in 2015.

National saving has also risen to 17.7 per cent in 2013 from 5.2 per cent three years before, showing a marvelous achievement beyond the 15 per cent planned to attain in the GTP period.

Road infrastructure also rose to 58, 338 kilometers in 2013 from 48, 800 kilometers in 2010, the press indicated.

In social services, the number of Elementary Schools (Grades 1-8) reached 34, 495 in 2013 from 26, 951 and the number of students reached 17.4 million from 15.8 million in 2010.

The number of Secondary Schools also reached 1,912 from 1,335 in the same period.

The press release also indicated that health centers reached 3, 100 from 2, 142 three years ago.



Over 3,000 cooperatives established in six months


Some 3,457 cooperatives were established in the first half of this Ethiopian budget year, according to the Federal Cooperative Agency (FCA).

With over 334, 840 members, the newly established cooperatives were able to generate over 94.3 million birr income, Public Relations Directorate Director with the Agency, Yigzaw Dagne, told WIC. Some 8 unions which made 11.6 million birr income were also created in the first six months of the budget year, according to the director.  In addition to supplying their products to local markets, the cooperatives are exporting various products to overseas markets, thereby generating foreign exchanges for the nation, he said. According to Yigzaw, they earned over 31.2 million US dollars in revenue in the reported period by exporting coffee and sesame to various countries.

the cooperatives and unions have saved over 54.2 million birr as well as distributed over 62.8 million birr to their members, he added.

With a view to alleviating storage shortage of the cooperatives and unions, four warehouses were built in Amhara and Tigray regional states at a cost of over 37.6 million birr.  Efforts are also underway to build seven additional warehouses in various parts of the nation, he added.

Short-term trainings on service provision, accounting and marketing were also given for 944 heads and employees of unions and cooperatives, he indicated.  The agency has set a target of raising the number of cooperatives at the end of GTP period to 59, 401 from 53, 982 now, while the number of unions to 546 from 309 now.



New Age discovers oil, gas in Elkuran-3


The British Oil company prospecting for oil in the Ogaden basin, New Age, has noted oil and gas flow in its appraisal well Elkuran-3.

New Age started drilling the appraisal well last October, with a targeted depth of 2,850 meters. Reliable sources told The Reporter that a crew was drilling the well when it noted oil and gas flow at a depth of 1200 meters on February 12, 2014.

“Oil and gas shows were noted throughout the intervals,” the source said. The results are similar to that of Tenneco, the American company that drilled the first exploration well in the Elkuran locality in the 1970s. “Tenneco’s drilling crew encountered similar results in 1972,” the source said.

A petroleum expert told The Reporter that oil and gas flow does not necessarily mean that there is a commercial deposit. “Oil and gas flows are very common in that region, especially in the Elkuran and Hilala localities. More exploration work is needed,” the expert said.

Sources said the reservoirs at Elkuran-3 have low porosity and permeability and will likely require acid or fracture stimulation to produce the necessary commercial levels. “Oil and gas-condensate was recovered from one of sample zones. At the base of the well, a flow of gas was encountered and the drilling is suspended in order to mobilize test equipment to evaluate this zone. A decision has also been taken to deepen the well to below the initial planned target depth of 2,300m, to evaluate the deeper sandstone zone which is considered to have a significant gas condensate potential,” the source said.

New Age (African Global Energy) Limited works in the Ogaden basin Block 7, 8 and the Adigala concessions with its partner, Africa Oil, the Canadian oil firm.  New Age engages in the exploration, development, and production of oil and gas, primarily in the African region. The company holds licenses for 13 onshore and offshore blocks in Congo-Brazzaville, Ethiopia, South Africa, and Kurdistan, covering an area of approximately 88,000 sq.km. According to the company’s official website, it has a portfolio of development, appraisal, and exploration assets, with 37.5 million barrels of oil equivalent of gross probable reserves, 17.1 million barrels of oil equivalent of gross contingent resources, and 702.2 million barrels of oil equivalent of gross prospective resources. New Age (African Global Energy) Limited was founded in 2007 and is based in London.



Change the laws and boost investment, workshop tells government


Various companies have proposed that the government introduce better petroleum and mining laws to help boost the potentially lucrative industry.  

During a two-day workshop at the Harmony Hotel organized by the renowned consultancy firm Deloitte Ethiopia earlier this week, representatives of different companies said that Ethiopia has immense mineral and petroleum resources, adding that the government should improve the existing mining and petroleum laws to attract more direct foreign investments.

Haileleule Tamiru, managing partner of Deloitte Ethiopia, said that his company (HST consulting), has represented Deloitte in Ethiopia since 2003. Deloitte consults on corporate finance, tax and audit, working closely with banks, mining, oil and gas companies, among others. Last year the company organized a workshop for the banking sector, and is currently planning to organize similar workshops for different sectors.

Haileleule told The Reporter that oil was discovered in South Sudan, Uganda, and Kenya. “Somalia also has oil. Ethiopia will discover oil. And we need to be prepared. The right legal framework should be there, and we will need to build our capacity,” he said.

Representative from the Ministry of Mines, Almaz Belayneh, in her keynote address said that currently there are 12 international petroleum companies engaged in oil and gas exploration in different parts of the country. Almaz said that this was a good start, adding that the ongoing exploration work will eventually bear fruit.

Tadesse Tilahun, CEO of National Oil Company (NOC), echoed that oil is being discovered in different east African countries, saying that it would be wise if the region could work together to build oil pipelines and refineries. “It would be commendable if they could share these resources. Ethiopia has already started exporting electric power to Djibouti and Sudan, and is in the process of selling power to Kenya. This should be emulated in the oil sector. This is how we can economically integrate Africa,” he told the participants.

Some members expressed their concern about what would happen if oil is discovered before having the right legal framework. “Does the Ministry of Mines have enough professionals who can negotiate with multinational oil and mining companies?” they wondered.

Andy Clay, mining consultant from Deloitte South Africa, said that sharing resources and building oil infrastructure is a commendable idea. “It needs a huge financial resource. East African countries cannot do it alone. They need the assistance of international financial institutions, like the World Bank,” he said.

Deloitte can consult and work with the East African governments, he continued, and the oil and gas companies on these types of project.

Some of the participants, however, raised the question of peace and stability in the region. Fisseha-Tsion Menghistu (Prof.), vice president of the International Leadership Institute, said that conflicts were the stumbling blocks for such joint infrastructure development projects. “How can you talk about such major infrastructure development projects in the absence of peace and stability? Twenty six African states are regarded as fragile states. This means that they cannot sustain peace and stability. How can you build oil pipelines and refineries if the countries cannot maintain peace and stability? Look what is happening in South Sudan,” Fisseha-Tsion said.

Deloitte organized another workshop for mining companies and artisanal miners on Tuesday at the same venue. Representatives mentioned that international mining companies are running away from gold exploration projects due to the declining price of gold in the international market. “We have not seen a new mine being opened in Ethiopia in the past 25 years. Big multinational mining companies come to Ethiopia and start exploration activities, but they abandon the projects and pull out of the country. So the Ministry of Mines should improve the existing mining laws in such away that it can attract foreign investments,” they noted.

The participants said that foreign companies should be allowed to engage in alluvial gold exploration and production projects, in partnership with artisanal miners. The draft mining law restricts alluvial gold production to only Ethiopian citizens.

An expert from the Ministry of Mines, Berhe G. Silassie, said that it has been revising the mining and petroleum regulations in a manner that could attract investments. “Our mining and petroleum laws encourage investments. We have competitive laws but limitations in implementing them. We have a capacity problem, and are working on capacity building programs with our development partners,” Berhe said.

Regarding alluvial gold production, Berhe said that alluvial gold can be explored and produced by local knowledge and capital. He said that as it does not need much capital or investment, even cooperatives are able to do the job. “So this area is restricted for nationals. We need foreign investors to engage in the exploration and production of primary gold,” he said.

Deloitte Ethiopia held a similar discussion with artisanal miners. Different mining equipment was displayed during the workshop, and The Ministry of Mines granted mineral exploration and production licenses for 260 companies. The country earns USD 600 million annually from the export of minerals, while artisanal miners sell 8.3 tons of gold valued at USD 450 million every year to the National Bank of Ethiopia.



Ethiopian company turns dung into energy gold


 A biogas project in Ethiopia is taking the expense, environmental impact and back-ache out of energy generation. The biogas backpack uses a balloon-like bag to transport renewable energy to underprivileged, rural areas.

ADDIS ABABA – Goatie the goat may not know it, but he could hold the key to providing energy to hundreds of Ethiopians.

The fermentation of organic material, like animal dung, generates methane and carbon dioxide. This biogas is now being harvested and stored in backpacks.

Each backpack contains a cubic metre of flammable gas, which allows for up to five hours of cooking.

“The project is all about providing biogas to the rural people, and in Ethiopia we have a lot of livestock potential and most of the cow dung is not used, and it’s polluting most of the town; so we thought why not use this curse as a blessing,” explained Yodit Balcha of of (B)energy Biogas Backpacks.

The Ethiopian government has shown an interest in the initiative, and hopes the technology will enhance the implementation of its National Biogas Programme.

With millions of Africans in need of sustainable, renewable energy, start-ups like the biogas backpack may just be one of the solutions needed to solve the issue.



Shipping enterprise grosses 5.37 billon birr in six months


Ethiopian Shipping & Logistics Services Enterprise (ESLSE) grossed 5.37 billion birr during the first half of the budget year, the state owned enterprise disclosed.

Osman Ali, the enterprise’s corporate communication services head, said 503.8 million birr is registered as net profit during the period.

The half budget year performance met 99 percent of the projection for the period which stood at 5.41 billion birr, Osman told WIC.

ESLSE, the only company engaged in sea freight activity in the country, transported over 1.5 million tons of goods during the period, Osman said.

The revenues also include income generated from stevedoring (loading and unloading of goods) and shore handling services.

Compared to the same period last budget year, the gross revenue generated during the six months showed a growth of 1.7 million birr, Osman told WIC.



Existing railway service halts operations over dispute with MEtEC


The increasingly fragile Ethio-Djibouti railway line has temporarily halted the service stretching from Dire Dawa to Djibouti, The Reporter has learnt.

According to sources the line has been suspended due to wrangling over workers’ salaries and wage payments.,

The Ethio-Djibouti Railway Enterprise manages the service but is struggling to maintain full operations, so workers were handed over to the Metals and Engineering Corporation (MetEC), which was tasked with wage payments.

The enterprise’s general manager, Ta’eme Teke, confirmed to The Reporter that the service is temporarily suspended, but he declined to explain the reason behind the disruption. He rather referred the case to the Dire Dawa branch office of the railway.

According to sources, MetEC demanded 2.5 million birr from the enterprise to use for wages.

The Reporter’s repeated attempts to reach MetEC’s corporate communications officials were unsuccessful at the time of going to press.

Similarly, further attempts to get the reaction of branch office manager, Abdulaziz Mohamed, were not successful, and he was not willing to comment on the matter via telephone.

“I can not comment on this issue via telephone. Even if we are supposed to comment on it, I cannot say anything to the media by myself, as it should only be treated by a committee” he told The Reporter on Friday afternoon.

The railway has been transporting people to and from Dire Dawa to Djibouti, with the capacity to transport around 1,000 people in one trip.

The railway has recently signed a new agreement with National Cement to transport cement to Djibouti port and carry red ash from Metahara.

The country’s oldest railway line, built during the time of Emperor Menelik II, has encountered various problems on the route that stretches from Addis Ababa to Djibouti port. It has been more than a decade since the Addis Ababa-Dire Dawa railway line was damaged.

In recent years the Italian firm Consta has carried out repair works on the French-built track, which suffered damage during the Ogaden war in the late 1970s, but it remains largely outdated, underused and dilapidated.



US awards eight grants to Ethiopian enterprises


– USAID AGP-Livestock Market Development Project launches new Innovation Grants Fund

AGP grant

 New grantees pose with USAID Ethiopia Mission Director Dennis Weller

(center front) and CNFA Chief of Party Marc Steen (center rear).

The United States Agency for International Development (USAID) funded Agricultural Growth Program-Livestock Market Development project (AGP-LMD)hosted a grant signing ceremony between USAID and eight grantees on Wednesday Feb. 19th.  According to a statement from the US Embassy in Addis Ababa, the eight small grants valued at over $760,000 will encourage local Ethiopian investment and innovation in the livestock sector. “The overall purpose is to improve productivity and competitiveness of selected livestock value chains including live animals, meat, and dairy.”

The first eight grants were awarded to: Addis Livestock Production and Productivity Improvement Service (ALPPIS), Emebet & Her Children Milk & Milk By-Products PLC, Ethio-Feed PLC, Project Mercy, OMO Micro Finance Institute Share Company, Kifiya Financial Technology PLC, Zemam Sintayehu Enterprise, and  Harme Milk & Milk By-Products PLC.

In his opening remarks USAID Ethiopia Mission Director, Dennis Weller said, “Ethiopia’s livestock sector has enormous potential to reduce extreme poverty and malnutrition. These grants are to spur local entrepreneurship and innovation as well as unblock obstacles to producing and marketing better or new products and, eventually, grow more jobs in livestock businesses”.

The goal of USAID’s AGP-Livestock Market Development project is to improve productivity, competitiveness, and profitability of activities related to dairy, meat and animal production, processing, and export. Through this new Innovation Grants Fund, USAID’s AGP-Livestock Market Development project intends to award up to $5 million over the next three years. Each grant award may range from between $25,000 and $300,000.  The type of grant is determined based on the applicant’s need and proposed activities.  Successful grant applications will continue to address innovations and technologies that solve critical constraints along the value chain from farm to various markets.

USAID’s AGP-Livestock Market Development project is funded by the U.S. Government’s Feed the Future (FTF) Initiative as part of the USG contribution to the Government of Ethiopia’s Agricultural Growth Program (AGP).



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