28 February 2014 News Round Up

Ethiopia Drafts New Mining Policy to Empower Private Sector


Ethiopia’s Mining Ministry has said it has drafted a new mining policy that will give the private sector more leeway to operate.

“The draft policy gives all exploration, development and marketing of mineral resources to the private sector,” Bacha Faji, public relations director at the Mining Ministry, told Anadolu Agency on Wednesday.

The role of the government will be limited to providing legal frameworks, supervision and follow up, he said.

The Ethiopian government has been facing criticism for engaging in trade and business – which business leaders say should be left to the private sector.

The government, however, defends itself, saying it is engaged in areas that are too risky to leave to the private sector, such as electric power and telecoms.

Faji said the new mining policy was meant to bolster the mining sector and increase Ethiopia’s foreign currency earnings.

“The policy aims to see the mining sector contributing ten percent of Ethiopia’s GDP in the coming 20 years,” he said. “The draft policy allows for the free engagement of both local and foreign investors in the sector.”

The draft policy has been submitted and is currently being scrutinized by pertinent government and legislative bodies, he said.

“We believe there will not be industrialization in the country without development of the mining sector,” said Faji.

The policy will be instrumental in generating employment and increasing household incomes through legalizing traditional miners, he stressed.

Ethiopia has significant potash, tantalum, gem stones, marble, coal and gold resource potentials, in addition to unknown quantities of oil and gas.



Opal Exhibition Showcases Emerging Export Opportunity


Though there has been evidence of the Wollo Opal’s existence since the 1930s, commercialized mining of the precious gem in Ethiopia has not lived up to its potential. In fact, it was only in 2008 that the government started exporting it.

One company which specializes in the production of the gem is Yeabzer Gemstones Gallery. The gallery which was established in 2012 sources its gems from brokers who in turn get them from farmers and miners in the Wollo region in Amhara national regional state.

Three types of Opals are available at the Bole Medhanealem gallery and they vary by grade. You’ll pay USD 30-50 per carat for the highest, which is hard to come by, USD 25 for the second grade, while the third grade opal can be sold for as little as USD 2. Of course the price of the gem increases when it is polished and shaped.

Yeabzer in association with Royal Opals, Takele Yilma and Meruts opal exports prepared its third exhibition at the Hilton on February 21, 2014. At the exhibition, Yeabzer displayed polished citrines, Tourmaline, Amethysts, Petrified Wood, and Amazonite among others. These jewels were also seen in the rough or set in jewels as finished products.

Esayas Abebe, owner of Yeabzer, says that the exhibition is prepared to create awareness about Ethiopian gems and promote them to embassies. Yeabzer previously sent the gems abroad, to be set in gold or silver. But now he started to provide that service here.

“The gem extraction system of Ethiopia is very backward,” Esayas says. “Besides that there are no limits imposed on the quantity exported to other countries. Precious stones are precious because of their rarity. The more a country exports a product, the more common it becomes, thus diminishing its value,”

Ethiopia earned USD 176 million from the export of minerals in the first half of this fiscal year. Australia is the largest producer of opals followed by Ethiopia. Large deposits are found in Honduras, Sudan, Hungary, Brazil, Mexico and the United States. Esayas says that he exports most of the company’s jewels to the USA China, Hong Kong and Thailand.



ETHIOPIA: Tesco works to raise clothing factory conditions


British retailer Tesco is making efforts to raise working conditions and ethical standards in Ethiopia’s textile industry before it begins sourcing garments from the Horn of Africa country.

“We think the garment industry in Ethiopia has great potential – both to produce good quality clothing for our customers and to create jobs and economic growth for the country,” a Tesco spokesperson told just-style.

“That’s why we’ve been working closely with suppliers and the government there to develop a strong, ethical factory base for the future.”

Tesco last month held training workshops in Ethiopia on industry-related ethical issues, and has started dispatching auditors to the country’s textile and clothing factories to assess ethical performance.

The company has stopped sourcing garments from a number of factories in Bangladesh over safety concerns highlighted following the collapse of the Rana Plaza building in April.

Meanwhile, Yoseph Assefa, chief technical adviser for the International Labour Organization (ILO) in Africa, is convinced that working conditions in Ethiopia’s textile industry are better than in Bangladesh.

“There is very good quality control in Ethiopia’s textile sector due to a high level of government inspection. By my assessment the working conditions in Ethiopia’s textile sector are higher than the conditions in Bangladesh,” he told just-style.

The Ethiopian government wants the east African country to become a hub for global big buyers such as Hennes & Mauritz (H&M), Marks & Spencer and Primark.



TUSKON bridging Turkey and Africa


The Confederation of Business and Industrialists Turkiye (TUSKON) held Turkiye-East Africa Trade Bridge 2014.  The trade fair that invited eleven countries from East Africa, including Ethiopia brought together big Turkish companies with business owners from Africa.
“What we did for the East African trade fair was bring the companies together in a way that they would be able to make deals. The companies were able to do exactly that. There are some companies that have bought machines for their business here,” said Ahmet Yalman, Public Relations Coordinator.
TUSKON is a non-governmental and non-profit umbrella organization representing 7 business federations, 211 business associations and over 55,000 entrepreneurs from all over Turkey. The organization has hosted several regional and worldwide trade fairs in the last few years alone.
Turkey’s export to East Africa is worth USD 813 million per year, while imports from the region to Turkey amounts to USD 160 million annually, according to 2013 figures. The country also announced it is planning to invest up to USD 400 million in Africa just this year.“When we do these fairs, we choose companies that meet our standards. We look at the companies’ turnover, number of employees and investment capacity. Turkish companies that participate in these trade fairs expect to meet with the best companies. We want to bring respected business people and respected companies together,” Yalman said.
One participant of the Turkiye-East Africa Trade Bridge 2014 trade fair was Simeret Abate, owner of Mulmul Bakery.
“It was really a good opportunity for me; I have learned so much. I got to see many things and met various companies and I have been able to make some deals regarding machineries and raw materials order for my business,” she told Capital.
TUSKON’s upcoming trade fair is the Turkiye-Africa Women Entrepreneurs Trade Bridge to be held starting February 26th to March 1st in Istanbul.
“The participants for this trade fair will only be women; we wanted to do this because there aren’t really other trade shows that are targeting just business women. We also want to encourage women business owners and provide them with different opportunities so that they become stronger,” Yalman said.
He also stated that more than 300 companies from 54 countries in Africa will be participating, while over 500 Turkish companies will take part as well.
“From Ethiopia, eight companies will be participating. The number of participants per country is limited,” Yalman explained.
Besides organizing trade shows and bringing companies together, TUSKON also encourages Turkish companies to come and invest in Ethiopia.
“Our other aim is to bring Turkish investment here. Ethiopia is a textile and agriculture country, the government is also promoting and working on attracting investors to come. That is why there are a lot of textile companies here,” Yalman said.
As the organization has a lot of members, it always encourages them to visit Ethiopia and explore investment opportunities, he said.
“In Turkey, all agricultural land is already occupied, so companies seek other countries and invest. Many textile companies have relocated to Ethiopia and many more are planning to do so because there are many convenient things here such as; cheap labor, cheap electricity and a lot of government support that makes it easer to get land and other things,” Yalman said.
He also confirmed that there are several Turkish companies in the textile sector in the process of investing in manufacturing plants soon.
TUSKON has five representative offices in Brussels, Washington, Moscow Beijing and Ethiopia as well as partner organizations in 140 countries. The Ethiopian office that recently opened, works in partnership with Nejashi Ethio-Turkish International Schools.



Ethiopia Hopes to Become a Chinese Textile Hub


The Ethiopian Textile Industry Development Institute (ETIDI) says the call by Ethiopian President Mulatu Teshome in January for Chinese clothing and textile companies to invest in his country is grounded in good sense.

“Ethiopia offers cheap labor, free rent, cheap electricity, duty-free import of machinery and goods, favorable rules and regulations, cheap air freight, quality and Ethiopian cotton, ” Bantihun Gessesse, institute spokesperson told just-style.

And his optimism is backed by Sun Guoqiang, president of the Chinese Chamber of Commerce in Ethiopia, who told just-style: “China is looking to strengthen bilateral relations this year with Ethiopia’s textile sector as it has identified many opportunities and because China is looking for alternatives in Africa.”

Teshome highlights that China needs to keep its production costs down for its textile industry to be globally competitive.

He also adds that Ethiopia is ready to take on a portion of the 80m manufacturing jobs that China is expected to shed over the next few years due to rising labor costs.

Ethiopia’s clothing and textile sector is undergoing rapid expansion fuelled by foreign investment.

And while there are as yet no serious Chinese investors in Ethiopia’s textile industry, Chinese shoe manufacturer Huajian has relocated production facilities to Ethiopia to escape rising costs at home.



Forum emphasizes FDI role in light manufacturing


Formulating, implementing and utilizing industrial policy would help in realizing high quality product in GTP2.


The 5th High Level Forum for the Phase II Policy Dialogue of Industrial Development in Ethiopia stressed Foreign Direct Investment (FDI) inflow on light manufacturing industry.

Ethiopia focuses on industrialization to be led by export which is primarily supported by light manufacturing. Thus, formulating, implementing and utilizing industrial policy would help in realizing high quality product in Growth and Transformation Plan II (GTP2).

The forum discussed international comparison of manufacturing performance in line with Ethiopia’s light manufacturing targets, roles and performance of industry development institutes in Ethiopia positioning Kaizen movement in GTP2 and long-term industrialization vision.

National Planning Commission Commissioner Mekonnen Manyazewal on the occasion said that the need to employ other countries experience in the context of Ethiopia would help as an ingredient in various perspectives for the preparation of the second phase of national plan, GTP2.

“We have now gained experience from the implementation of GTP I. We are also aware of the successes and the challenges. So, we need to define indicators to monitor the progress and benchmark countries’. We need FDI to ensure technology transfer, to help us build capacity and link to domestic enterprises,” said Mekonnen.

Professor Kenichi Ohno from National Graduate Institute for Policy Studies, in his presentation indicated that Ethiopia’s current light manufacturing capability is very limited by global standards. There is long way ahead. However, recent light manufacturing FDI inflow and rising investor interest in Ethiopia are good signs.

“Ethiopia should have its own definition of ‘light manufacturing’ to fit its policy objectives. There must be reliable data of value addition, trade and FDI for international comparison and monitoring progress during GTP II and toward 2025,” Ohno suggested.



Factory says facing  problem in power, raw material supply

Else Addis Industrial Development Plc said that it is facing quality raw material and power supply shortage in its investment venture.

Briefing journalists during a visit organized by Government Communication Affairs Office Monday, Factory Manager Nevzat Kerim Aydin said that they are facing problem in the area of power and raw material supply in the production process.

According to the Manager, there is a potential for cotton, labour and geographical option in this country that make them continue their investment though they face problem in the supply of cotton both in quality and quantity.

He further indicated that following discussion on the problem, the government has provided them land around Omo river to run cotton plantation on their own at a cost of 200 million USD.

As to him, they have already developed 400, 000 hectares of land and plan to produce cotton equal to the total production of the country within five years. The Manager also said that apart from textile factory, they have different investment options in the country.

Producing high quality products employing skilled work force is instrumental in becoming competitive in the global market, he said.

Though there is the potential to export their products to African market, they prefer European or American ones because of the price offer, he said, adding they plan to enter the African market in the near future.

Nevzat Kerim Aydin further pointed out that they are not using chemicals in the production process that affect the environment except the cotton dust which has no environmental impact.

He further noted that the company’s infrastructural development in and around the factory positively impacts the local community and contributes to their well-being.

Else Addis launched its investment in Ethiopia in 2009. The investment has two phases and currently they are running phase on 46,000 square meter of land. The factory employs 1,500 workers of which 95 per cent are Ethiopians.

Presently, the factory produces 100, 500 tonnes of yarn monthly and plans to increase its total textile production from 750, 000 metric tonnes per month to 1,000,700 metric tonnes. Else Addis Industrial Development P.L.C is a fully vertically integrated textile factory located in Adama town.



Egypt plans dam-busting diplomatic offensive against Ethiopia


CAIRO, Feb. 27 (UPI) — Egypt may be in the throes of political turmoil, but the government has begun a diplomatic offensive aimed at stopping Ethiopia from building a huge hydroelectric dam on the Nile River that Cairo says will be a disaster for the Arab world’s most populous nation.

The military-backed administration began its effort to internationalize the thorny issue in hopes of gathering support for its case against Ethiopia, where the Blue Nile rises in the northwestern highlands, after bilateral negotiations deadlocked in January.

“The campaign initiated by Egypt … aims to persuade the international community to reject the dam’s construction because it may lead to further conflict and instability in the region of the Nile Basin,” an Egyptian diplomatic source in Cairo told the Middle East’s al-Monitor website Feb.19.

“More negotiations with Ethiopia only waste time and directly threaten Egypt’s water security,” said the source, who declined to be named because of the sensitivity of the issue.

“We realized that Ethiopia doesn’t want genuine solutions to end the crisis, but is only trying to portray Egypt as approving of the dam’s construction to facilitate access to the funding.

“But Ethiopia hasn’t provided genuine guarantees the dam will not affect Egypt and has shown no intention to amend the technical specifications to minimize the potential risks according to the report by the international experts’ committee, which recommended reconsidering the dam’s safety studies.”

Ethiopian Prime Minister Hailemariam Desalegn said Feb. 13 that Addis Ababa will not back down on the $4.8 billion Grand Renaissance Dam, which will be the largest in Africa.

He observed that since there’s no international court specializing in arbitrating water disputes, Cairo had no choice but to negotiate to reach a settlement acceptable to everyone.

Gamal Bayouni, secretary-general of the Egyptian-European partnership at the Ministry of International Cooperation in Cairo, said Egypt now seeks to “target all countries that provide technical assistance for designing and building the Renaissance Dam through private contractors and also the states likely to fund to construction of the dam.”

On Feb. 6, Egypt’s minister of water resources and irrigation, Mohamed Abdul Muttalib, visited Italy, considered to be Ethiopia’s main technical supporter in building the dam.

Italy’s Salini Construction Corp. is building the 6,000-megawatt facility on the Blue Nile, the main tributary of the Nile that flows northward through nine African states to the Mediterranean.

The Blue Nile accounts for 85 percent of the Nile’s water flow. It joins the White Nile, whose headwaters lie in the East African highlands in Burundi.

Muttalib, who was accompanied by Egyptian Foreign Minister Nabil Fahmy, said after a series of meetings that “the visit has achieved its goal. Italy has understood Egyptian concerns.”

Egyptian sources say Muttalib’s next trip will be to Norway, which is one of the countries funding the dam project.

But it’s not clear at this stage whether Egypt’s diplomatic offensive will be able to secure enough international support to influence Addis Ababa.

The Ethiopians consider the Renaissance Dam and the other dams they plan to build as a symbol of national pride as they will produce electricity that will transform the economic prospects not only for their country but for much of seriously under-developed East Africa as it stands on the cusp of a major oil and gas boom.

For Cairo, maintaining the current flow of Nile water is a matter of national security.

Egypt’s last two presidents, Hosni Mubarak, overthrown Feb. 11, 2011, and Mohamed Morsi of the Muslim Brotherhood, ousted by the army July 3, 2013, both made thinly veiled threats to use military force to uphold Egypt’s current access to the waters of the world’s longest river.

The current military regime in Cairo is focused, so far at least, on riding out the domestic political turmoil and restoring stability amid a growing Islamist insurgency.

But it can’t afford to let this issue slide. The Grand Renaissance Dam is to become operational in 2017.

Egypt, with its 84 million people totally dependent in the Nile for water, cites British agreements in 1929 and 1959 that guarantee it the lion’s share of the water and a veto over upstream dam construction.

But Ethiopia, along with Tanzania, Rwanda, Kenya and five other African states with growing populations and mounting demands on agriculture, dismiss these accords as colonial relics.



Renaissance dam has more space for cooperation: Outgoing Italian Ambassador

Addis Ababa, 27 February 2014 (WIC) – Italian Ambassador to Ethiopia Renzo Mario Rosso said that the issue of Ethiopian Grand Renaissance Dam (GRD) has more space for cooperation among the riparian countries.

In an exclusive interview with The Ethiopian Herald yesterday, Ambassador Rosso said that understanding one another would enable riparian countries benefit from the low cost energy to be produced. He added that all technical issues of the dam have fully been met by Ethiopia as far as his knowledge is concerned.

Ambassador Rosso also expressed his strong conviction that Salini Construction would successfully bring the construction into reality. “I can say the Ethiopian government knows Salini more than I do. And more than words can tell, the construction firm has international credence and full capacity to do so.”

The Ambassador, who concluded his tenure in Ethiopia, perceives the relations between the two sisterly countries dating back to the years in the 1890’s has complimented the growing “special relationships”_ in his own words— between his country and Ethiopia in all spheres, political, economic, and social and more.

He also described his stay in Addis as rewarding: “My stay here has been so rewarding because Addis has become a truly African city and Ethiopia has been changing over the years.”

Regarding the political cooperation between the two sisterly countries, he noted that Ethiopia and Italy have been co-chairing the IGAD Partners Forum showing their increased collaboration. “We share common vision concerning the stability of the Horn of Africa.

Italy signed bilateral protocol for a project concerning the stabilization of Kismayo area and full agreement with Ethiopia and IGAD administration. In this case, we are trying to be a sort of loud speaker for the efforts made so far”, the Ambassador added. According to him, IGAD has become an important stakeholder in promoting peace initiatives in Somalia and South Sudan.



Ethiopia, Korea sign MoU


Addis Ababa, 27 February 2014 (WIC) – The Governments of Ethiopia and the Republic of Korea (RoK) signed a Memorandum of Understanding to collaborate in science, technology and innovation activities here yesterday.
The agreement was signed by Ethiopian Minister of Science and Technology (MoST) Demitu Hambisa and Korean Science and Technology Policy Institute (STEPI) President Dr. Jong Guk Song.
According to the agreement, the two parties would collaborate in the field of science, technology and innovation policy, research and development, management strategy, exchange of scientific information and researchers when it seems desirable for short term and long term periods, conduct training and education programmes on science and technology policy among others.
Speaking at the signing ceremony, Demitu said that the relation between the two sisterly countries started long ago. This relation was further solidified when Ethiopian soldiers sacrificed their lives during the hard time of Korea in the beginning of 1950’s, she added.
She also said: “Today’s MoU signing on science and technology policy between MoST and STEPI indicates the continuation of our long-standing relation in a wider cooperation.”
Dr. Song also said: “We are here to discuss further and more concrete cooperation between us. STEPI has established International Innovation Cooperation Centre as an effort to promote the effectiveness of our development cooperation with our partner countries and institutes in the field of technology innovation. This centre supports partner countries to achieve national development goals by improving their innovative capabilities.”
The agreement is expected to strengthen closer ties and greater understanding between the two parties through promoting mutual benefits.



Irish Credit Unions League to set up shop in Ethiopia


Addis Ababa, 27 February 2014 (WIC) – The Ethiopian government has selected the Irish League of Credit Unions to develop credit unions in the county in what is described as “landmark contract”.
According to the journal.ie, the charitable arm of the Irish credit union movement, The Irish League of Credit Unions’ International Development Foundation (ILCUF), has been awarded an exclusive two-year project which aims to allow half a million people in Ethiopia access “affordable and flexible” financial services.
The foundation secured the contract after a lengthy and competitive tendering process and has already been involved in the development of credit union movements in Ghana, Gambia, Liberia and Sierra Leone following their destructive civil wars.
The foundation is a registered charity and all administrative costs are met by the Irish League of Credit Unions (ILCU). All contributions go directly towards supporting the various projects.
It is hoped that the project will help women in particular, through enhanced access to affordable and flexible financial services, mainly savings and loans facilities.
Rural communities
The Minister for Trade and Development, Joe Costello said the ILCUF has considerable experience in working with credit unions in developing countries, stating: “I am sure that ILCUF’s work in Ethiopia will also help lift many people in rural communities out of poverty. The Embassy of Ireland in Addis Ababa supported the ILCUF bid and the award of the contract is especially welcome since it reflects wider efforts by the Government to secure more business for Ireland through multilateral organizations”.
“We are delighted to be granted this major project to support the development of credit unions in Ethiopia. Ireland has had a proud tradition of helping in Africa. The foundation was set up to maintain this tradition, sharing_the success of the Irish credit union movement with similar movements in the developing world,” said Kieron Brennan, ILCU CEO.
He added that winning the contract is a huge endorsement for the Irish credit union model and a great boost to partner countries fighting to alleviate people from poverty.



Ethiopia takes major steps to combat impacts of climate change: MoA


Addis Ababa, 27 February 2014 (WIC) – The Ministry of Agriculture (MoA) said that Ethiopia has taken major steps to buffer the impact of climate change.
Agriculture State Minister, Sileshi Getahun, made the remark here yesterday at a National Forum on Climate Change Adaptation held under the theme: Building Community Resilience through Innovative Adaptation Practice.
The forum is organized by Canadian Hunger Foundation (CHF) and Organization for Rehabilitation and Development in Amhara (ORDA) in partnership Ministry of Environment and Forest (MoEF).
The key objective of the forum among many is to share knowledge between farmers, government, research institutions and international organizations on the effects of climate change on agricultural development.
Sileshi has also applauded the Organization for the Rehabilitation and Development of Amhara (ORDA) for its successful activities to combat climate change through conducting rehabilitation works.
Former Director General of Environmental Protection Authority and Advisor to the Minister of MoEF, Dr. Teweldeberhan Gebre-Egziabher on his part said ORDA has achieved remarkable results through teaching the people on how to preserve its environs.
“If we want to go on living, we, humans, must unite to act together and neutralize climate change before it becomes devastating to us all,” he told participants of the forum.
Rehabilitating degraded lands and combating the impacts of climate change are the key factors to ensure food security and defeat poverty, Dr. Teweldeberhan noted.
He added that all stakeholders should support activities of ORDA so that it can continue its rehabilitation activities more strongly, thus tackling the impact of climate change.
Executive Director of ORDA, Dr. Amlaku Asres, said an effective management of resources is fundamental to develop a sustainable agricultural production.
ORDA has so far managed to reach over 3.5 million people through its various interventions that include water shade management, reforestation, biodiversity, potable water supply, hygiene and sanitation, small scale irrigation, improved crop varieties and livestock production, he said.
Country Director for (CHF), Salfiso Kitabo, on his part said the Climate Resilient Green Economy (CRGE) policy objectives and the associated instruments to implement these objectives, has set Ethiopia on the path to addressing the challenges and opportunities provided by climate change.
CHF with the support from the Canadian government, have been working alongside the federal, regional and zonal Ethiopian government ministries, ORDA, research institutes and universities to learn together, document best practices.



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