07 April 2014 News Flash (Updated)


Allana Potash Corporation Plans a New Agricultural Paradigm for Africa


Canadian Company Seeks Bountiful Harvest From a Scorching Barren Desert


TORONTO, April 7, 2014 (GLOBE NEWSWIRE) — Ethiopia is fast becoming the focal point for a renaissance in African agricultural development. Allana Potash (AAA.TO) is one company that wants to be in the forefront of this change and is working towards starting up the first potash mine in Africa by 2017. This is very different from what has happened in the past as Allana Potash (a Canadian junior mining company) becomes part of the solution in solving the African hunger crisis.

Across Africa today, from Mozambique where an estimated 300,000 face famine to the pastoral lands of Sahel and the Horn of Africa where severe food shortages have left millions without basic nutrition, the continent is facing hunger pains almost everywhere you look. Once endowed with the planet’s most arable lands, a combination of conflict, outdated farming and irrigation techniques, erosion, degradation of soil quality resulting in low yields and trade barriers has many African nations facing significant food security challenges now and in the future.

To initiate change, The United Nations has declared 2014 as the International Year of Family Farming while the African Union affirmed this year for Agriculture and Food Security. The Director-General of the Food and Agriculture Organisation (FAO) of the United Nations, Jose Graziano da Silva said Africa has the economic, natural and human resources it needs to promote food security and sustainability in the continent.

“With political will, comprehensive programs bridging agricultural production and social protection, adequate funding, and by tapping into the potential of its youth, we can get there. We are in this together,” he said as FAO’s 28th Regional Conference for Africa opened in Tunis this month to boost increased investment and broad-based transformation in support of smallholder farmers.

One such project is unfolding in the most unlikely of places to help shift Africa’s agricultural paradigm.

The focus of this project in the Danakhil Depression around Ethiopia’s Dallol area is simple — use the potassium salt of Africa to feed Africans first.

Here in the land of ancient salt miners where rivers dry up under a merciless sun never to reach the Indian Ocean, Allana Potash Corp. (AAA.TO) has established a strategic alliance with Israel Chemicals Ltd. (ICL), the world’s sixth largest potash producer, to develop a potash mine. Potash, also known as potassium chloride, is a key ingredient in fertilizer that can replenish soil nutrients to provide higher crop yields and increase plant development.

The Government of Ethiopia and a number of international organizations including Allana are also focusing on introducing progressive technologies and improving infrastructure to reverse the demise of agricultural productivity.

Among these improved technologies include, better crop management of the unique native tef crop, public/private partnerships to fund development, the establishment of agricultural cooperatives to affect orderly and competitive pricing of inputs and marketing of farm products, and creating a robust Soil Information System as a basis for improving soil health and fertility.

Allana Potash has also committed annual financial assistance to the Government of Ethiopia’s Agricultural Transformation Agency (ATA) to support its country-wide program of on-farm balanced fertilizer demonstration trials. These trials show local farmers that proper nutrient supply applied in conjunction with other improved crop management techniques can increase economic opportunities.

The trials will also help create a soil fertility database and the information required for calibrating fertilizer nutrient requirements to achieve yield goals.

“Through combined, sustained initiatives such as this, the African paradigm can shift from a general lack of available food to becoming a large exporter of agricultural products, like Ethiopia is today,” said Richard Kelertas, vice-president of Corporate Development at Allana.

“Allana and Ethiopia are strategically located to serve the rapidly growing African demand for potash, where typically potash consumption has been low,” said Farhad Abasov, President and CEO of Allana Potash Corp.

“We believe that together with Ethiopia, one of the world’s fastest growing economies, Allana Potash can foster growth in potash consumption in East Africa over the next several years and the Ethiopian government is fully supportive of our project. They are also fully behind of our strategic partnership with Israel Chemicals Ltd (ICL).”

“The Danakhil mine will provide potash for Ethiopia and Africa, and combined with ICL’s agronomic fertilization know-how, our alliance will enable local farmers to increase agricultural output and food security for the region,” continued Farhad Abasov.

A feasibility study (FS) has indicated that Allana’s mine will have the potential to produce approximately one million tonnes of potash annually over 25 years commencing in a few years. The potash resource is large enough to significantly extend the life of the mine.

Allana plans a solution mining method and the use of the 45-degree Celsius sun-baked grounds of the Danakhil Depression for its solar evaporation process. This mining and processing method will be considerably less costly than the open pit or deep shaft mining done by its competitors. Allana’s FS has pegged its capital expenditure for the Danakhil project at about USD$642 million. Comparatively, capital expenditures necessary to build a solution mine in other parts of the world are estimated to cost billions of dollars.

The Allana-ICL alliance is very unique in the sector and includes a full off-take agreement. ICL will purchase and market the output of the Danakhil mine with a take-or-pay contract for 80% of the mine’s output every year it is in production.

Currently, ICL operates mines in Israel, Spain and Britain. In 2013, ICL sold over 5 million tonnes of potash worldwide.

This month’s gathering of African agricultural ministers in Tunis concluded that agriculture in the continent must literally return to its roots by rediscovering the importance of healthy soil, draw on natural sources of plant nutrition, and use mineral fertilizer wisely.

For Allana, that means getting potash from its Danakhil mine into the hands of African farmers quickly, effectively and efficiently. With ICL’s backing, Allana’s potash project in Ethiopia and its dream of producing critical potash fertilizer in Africa for the benefit of all Africans is one giant step closer to becoming a reality.

Legal Disclaimer/Disclosure: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Market One Media Group makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice. Market One Media Group assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article. Therefore, in no case whatsoever will Market One Media Group Inc. be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or editorial or for any related damages.


Richard Kelertas



Turkish textile group, Tesco and H&M invest in Ethiopia


Ayka Addis Textile & Investment Group, a subsidiary of Istanbul-based Ayka Textile, is planning to invest one billion Ethiopian birr (31 million pounds) in an expansion of its current RMG production unit in Alem Gena, 19 kilometers away from Addis Ababa. The expansion will create an additional 13,000 jobs, thus tripling employment, and take production capacity up to 100 percent. The company is also expecting exports to triple to 150 million US dollars from currently 56 million US dollars (2012/13).

“The expansion project will increase our present garment production capacity by 50 perccent, when the first Turkish textile group, Tesco and H&M invest in Ethiopiaphase of expansion is finalised and by 100 percent when the second phase of expansion is finalised in 14 months. Once finalised, the project will create job opportunities for 13,000 people,” confirmed Ayka CEO Amare Teklemariam when speaking to Fortune.

Expansion to take place in two phases

The expansion will take place in two phases and the first one will begin this month itself. Ayka has already received 3.6 hectare of land from the Kolfe Keranio District for its first phase and is in the final stages of leasing an extra 2.6 hectare according to Teklemariam. Of the total project cost of 962.5 million birr (29.9 million pounds), 221.3 million birr (6.88 million pounds) will be spent on building and civil work, to be carried out by Ayka’s own construction wing; 623.2 million birr (19.37 million pounds) on machinery and equipment. The remainder will be used as working capital, so Teklemariam.

In view of the global competition, ready-made garment manufacturer and exporter Ayka Textile, founded in 1988, decided on Ethiopia for its vertical expansion and made an initial investment of 140 million US dollars in 2010 when the Ayka Addis Group was founded.

The company currently employs 7,500 permanent and 100 temporary workers in five plants in Alem Gena, which operate at 80 to 90 percent capacity and have the capacity to spin 40 tons of cotton, knit 38 tons of thread, dye 50 tons of cloth and produce 80,000 pieces of garments. The company exports its garments mainly to Germany.

According to the Ethiopian Textile Industries Development Institute (ETIDI), ten new additional factories with a combined production capacity of 100 tons a day are expected to start production this fiscal year (2013/14) and an additional three new projects in the next fiscal year (2014/15).

Tesco and H&M sponsor training for Ethiopian garment workers

Turkish textile group, Tesco and H&M invest in EthiopiaIndustry giants Tesco and H&M are currently sponsoring training courses for Ethiopian garment and textile workers, a move that shows Ethiopia’s growing importance as a sourcing base for international brands and retailers.

“They are here transferring knowledge and skill to many of our textile and garment companies,” confirmed Bantihun Gessesse, communications director at ETIDI. Having learned their lesson in Bangladesh and other Asian garment-producing nations, the companies also invest in safety from day one.

“The business objective is first to improve quality and safety and finally make clothes in Ethiopia. They are now engaged in training on employee and working hour management, quality of products, growth in productivity, as well as environmental protection,” said Gessesse. He confirmed the growing demand for Ethiopian textiles and garments in Western markets, citing Germany as an example with 47 percent of the national production being exported to Germany in 2013. Over the last eight months, Ethiopia has earned 75.28 million US dollars from textile export and is aiming for 317 million US dollars for the whole year.



Ethiopia, China to boost bilateral ties


Addis Ababa – Ethiopia and China have agreed to prepare and implement a new comprehensive co-operation framework to further boost bilateral ties.

This was agreed when Ethiopia’s Deputy Prime Minister Demeke Mekones and Chinese vice Foreign Minister Zhang Ming held discussions on the issue recently.

New partnership areas such as aviation, space science, tourism and mining are to be included in the new 10-year co-operation framework.

During the discussions, Mekones said the incorporation of the new areas of co-operation would help Ethiopia learn from best practices of China in those areas.

The Chinese vice-minister told journalists that the new framework would enable the two countries to expand their areas of co-operation.

The two countries’ finance ministers are expected to discuss various provisions under the framework later this month. –



Export promotion, diversification emphasized in the remaining GTP period


Over the past two decades, there had been significant progress in key human development indicators: primary school enrolments had quadrupled, child mortality had been cut by three quarter and the number of people with access to clean water had more than doubled. These gains, together with more recent moves to strengthen the fight against malaria and HIV/AIDS, paint a picture of improved well-being in Ethiopia.

More so, the past three years of the Growth and Transformation Plan (GTP) (2010/11-2012/2013) had witnessed a strong and broad based average economic growth of 10 per cent and significant expansion in social services and infrastructural development. Gross primary education enrolment rate had exceeded 95 per cent while the country had already achieved the MDGs target of reducing under-five child mortality last year, two years ahead of the target year of 2015.

Th agriculture sector registered a rate of 7.1 per cent, the industry 18.5 while the service industry spotted a 9.9 growth. Over 10,000 km roads were built and rural Ethiopia had over 30,000 km of roads. Not only that, the country had managed to secure 107 billion birr from that of 43 billion in 2010 which showed a 17 per cent growth.

The economic growth has brought with it positive trends in reducing poverty both in urban and rural areas. In today’s Ethiopia extreme poverty has declined from 45.5 per cent in 1995/96 to 27.8 in 2011/12. A trend which represents a significant reduction of 38.9 per cent over the last sixteen years. This includes increasing access to quality health and education services; enhancing the resilience of vulnerable households to food insecurity; increasing adoption of Disaster Risk Management (DRM) systems and strengthening sustainable natural resource management and resilience to climate change. Ethiopia is set to achieve MDG2- reducing poverty level to 22.2 per cent by 2015. Expanding and improving services such as health, education, potable water, agriculture and road development on both urban and rural levels are also part of the set goals. The government is already devoting a very high share of its budget-over 69 per cent- to pro-poor programmes and investments.

There is no doubt that the country is growing rapidly. One has to look at the number of construction sites and new roads being built across the country. The GTP achievement so far has been impressive given its ambitious nature. The second year progress evaluation report indicates that many of the targeted achievements were nearly met but remain slightly off target. Export promotion and diversification had declined last year by 2.5 per cent. One of the factors for the low performance of the sector is the decline in international market prices of some export commodities while, the key factor is limited supply and lack of product diversity to significantly expand the sector.

Hence, emphasis has to be given to revitalizing the export sector in the remaining two years with focus placed on increasing the production of diversified export commodities and creating a better competitive manufacturing sector.

The emphasis should also be on enhancing foreign exchange revenue generation via improving the domestic production capacity in general and further boosting agricultural and industrial production in particular. Improving the effectiveness of the implementation of the various export promotion policies is essential to accelerate export trade. The government and the private sector need to enhance their collective efforts to make a break through in the country’s export sector as well.

Despite the considerable expansion and provision of power and telecom services, the significance of addressing the lingering challenges of quality and reliability in the remaining period must be also underlined.

The agriculture and other related sectors should be fully developed. Creating more jobs in the non-agricultural sectors for the country’s youth must be made a point. For this to happen in the remaining period the private sector should be supported with more adequate credit provision. It is recommended too.

It is to be recalled that Ethiopia’s economy had grown by 11.4 per cent during the first year of the GTP. The 10 per cent economic growth in the first two years is slightly lower than the 11.1 per cent annual average growth rate target set for the first two years of the GTP and the 11.2 per cent annual average growth rate target set for the entire GTP period.

Experts are enthusiastic that this marginal difference can be compensated through accelerated growths in the agricultural and industrial sectors in the remaining GTP period.



 Ethiopia once again looks to Indian teachers 


Ethiopia, where Indian teachers have long been revered, is again looking at Indian teachers and trainers in various fields as the ancient East African nation, where one of the earliest traces of human existence has been found, shifts its economy from an agrarian to an industrial one.

“In 1950-60 when we were expanding our education system, India came to our rescue because we did not have any teacher training colleges. Later, when our capacity grew, we started training elementary and high school teachers. Today, we are expanding our higher education and have close to 500 Indian professors in our colleges and universities,” Ethiopian Ambassador Gennet Zewide, who completed eight years in India this month, told IANS in an interview.

“Our tryst with education has further diversified. Not only we take teachers from here but also we bring our Ethiopian students to India. The Ethiopian government consciously gives scholarships to train its would-be professors and instructors at universities in India. So we have close to 500 Ethiopian instructors studying in India,” said the amiable envoy who, before her stint in New Delhi, served as the country’s education minister 1992-2005. She is an academic who taught business education courses and designed administration programmes.

Ethiopia has already tied up with institutes like the South Indian Textile Research Association (SITRA), the National Institute of Fashion Technology and the Footwear Design and Development Institute. “These institutes train people for the industry in our country,” the envoy said.

“They give technical assistance as well. They travel to give short-term training to our people and we also bring our students here,” she added.

“A team from the Metal and Metallurgy Institute of Ethiopia will be coming in a month’s time to talk with the Council of Scientific and Industrial Research (CSIR). This tie-up will help in knowledge and technology sharing,” she said.

The team will be visiting the three CSIR institutes – the National Metallurgical Laboratory, Central Mechanical Engineering Research Institute and the Central Electronics Engineering Research Institute.

(Aparajita Gupta can be contacted at aparajita.g@ians.in)



Tendaho One Sugar mill to start operations in this month


Ethiopian Sugar Corporation has announced that massive efforts are being undertaken to start the operation of the Tendaho One Sugar mill by the end of April. Asrat Kebede, Director of the Sugar Corporation’s follow-up plans told reporters that upon completion the Tendaho One Sugar project will have the capacity to produce 750,000 tons of sugar annually. Tendaho One and the recently upgraded sugar mills at Fincha, Metahara and Wonji are expected to produce annually 5 million quintals of sugar. With the completion of all the 12 sugar projects now under construction, Ethiopia will beome a major exporter of sugar.



Can Assela Malt Factory cope up with the trying challenges it is facing ?



The state-owned Assela Malt Factory was established with the aim of producing and providing malt for breweries in the country with a total capital of 9.3 million birr and 14.7 hectares of land in 1984. The factory was established in the region of potential malt barley producing zones namely: Arsi, western Arsi and Bale zones. The initial capacity of the factory was 100,000 quintals per annum where the demand of the breweries during that time was also nearest this capacity.

After the down fall of the Derg in 1991 and the followed free market expansion of the then existing breweries create a rising demand of malt products. In response to this growing demand, the factory went through its expansion to increase the annual production capacity from 100,000 quintals to 150,000 quintals in 1995. This production capacity can cover 35 – 40 percent of the breweries demand at the time whereas the remaining 60-65 of malt requirement had been fulfilled by the import which exhausting the country’s foreign currency reserves.

With the aim of satisfying domestic demand of malt, the factory had been implemented its second and third expansion projects during 2010-2012 to increase its production capacity from 150,000 quintals to 360,000 quintals per annum and begin its production with full capacity since 2012. The expansion project increased the production capacity of the factory by about 140 per cent than before.

Even though the production capacity of the factory has increased to this extent, it can cover only 55 per cent of domestic breweries malt demand because of contentious expansion of domestic breweries and their ever increasing production.

At present, the factory needs more than 600,000 quintals of raw malt barely to produce 360,000 qintals of malt per annum. But it is not getting the aforementioned amount in the local market. Hence, the factory has been undertaking various measures in collaboration with stakeholders to curb the problem.

Even though the factory has been trying to give technical support for malt producers since 2007, it is still facing shortage of malt barley both in quality and quantity which is essential to further boost its production, according to Amare wakjira, General Manager of the malt factory.

This year, for example, due to the heavy rain that hit the barely crop fields, farmers could not harvest and supply sufficient malt barley to the factory. Besides, the traditional cultivation methods like dependency on rain-feed agriculture is also another factor contributing to shortage of the raw material. As of January 2014, the factory has bought 170,000 quitals of barley from farmers which shows an increase by 100,000 quintals as compared to the same period last year.

The factory purchases malt barley from merchants, unions and farmers. “We encourage farmers by covering their transport fee, providing seeds and also paying over the actual market price. But the farmers seem not motivated to produce malt barley as they are more inclined to producing the edible barley. The factory, thus, plans to collect selected seed for distribution to the farmers,” Amare said.

Though it is facing shortage from local market, the factory doesn’t import malt barley. “As we know, barley is a staple food in Arsi and its environs. Hence, we are lobbying the community to substitute their consumption with other options so that they could increase malt barley supply to the factory.

Since the factory has a great shortage of barely supply from local suppliers in the required quantity and quality, it is becoming forced to import from abroad. This demands a large amount of foreign currency. Using what we have in store, we can run the factory up to July 10, 2014. Otherwise, we will look into foreign market options,” Amare said. But now the malt factory will be looking to increase its raw materials supply from domestic options, he added.

According to the general manger, the factory has long term loan borrowed from commercial bank of Ethiopia to finance its expansion projects. It also used the dividend which was to be paid for the government to finance the same project since 2008. Due to this, the factory facing financial shortage as it has been utilizing the profit and bank loan for expansion work instead of transferring it to the government as dividend for the last four years. Now, the organization has run into huge debt.

Fluctuation of fuel price is also one of the challenging factors cost of production as the factory uses high amount of furnace for kilning process. Therefore, the shortage of malt barley from the local market, loan and state dividends are the current factors which negatively influencing financial state of the factory. “We are now in fear that the factory would stop at some point unless appropriate measures are taken to redress” Amare said.

Malt is the second largest use of barley after food, and it is an important crop for farmers in the cold highlands of Ethiopia. Beer production in Ethiopia has increased from 1 million hectoliters in 2003 to roughly 4 million HL in 2011, growth of nearly 20 per cent annually. This growth has led to corresponding growth for malt barley demand, which is the key raw in-put for beer production. At present there are six breweries in Ethiopia, and the sector is attracting overseas companies including the global giants Heineken and Diageo, and more new ones are under construction. It is estimated that about 16,000 tons of malting barley are produced annually in Ethiopia, while the demand is at 48,330 tons, and this is expected to double in a few years owing to the expansion of breweries. Most of the demand for malt is met through imports, which accounts for 67 per cent of the total annual requirement. The country spends over 120 million birr (USD 14 million) per annum to import malt which is putting pressure on the already scarce foreign currency. To satisfy the ever increasing national demand for malt barley and to ensure dependable and higher cash returns to the farmers, it is necessary to expand the production of malt barley.

BGI Ethiopia, Harer Brewery Share Company, Bedele Brewery Share Company are among the major customers to the factory. Even though the factory is a sole producer of malt in the country, it is expected to supply quality products for its customers. On the other hand, in order to retain its existing customers, and to stay in the market, the factory should work hard to improve its product quality.

Cognizant of this fact, Assela Malt Factory (AMF) has already started to set out growing scheme with smallholder farmers to increase its malting capacity. But, the supply still remains low, and the quality standards do not often satisfy the requirements of the malt factory.

The expansion project can help the factory to produce with high capacity. The demand for malt is increasing year to year as domestic breweries are expanding and this can create high selling performance. If the factory gets enough malt barely supply from the local market , during the coming three to four years, it will be in a good financial position, Amare noted.

In order to retain its existing customer base and to stay in the market the factory should work hard to improve its product quality. To attain these strategic aims, the factory has been conducting different types of reforms such as total quality management(TQM), total productivity maintenance(TPM), Integrated Performance Management System (IPMS), continuous productivity improvement programme (Kaizen) and business process re-engineering (BPR), and management information systems to improve its system.

With in all these trying challenges, the question that “can it attain its goals and sustain itself for the better future?” remains to be answered in the coming few years. The factory’s fate, which affects the fate budding new breweries and the old ones in the country either positively or negatively remains uncertain. Concerned stakeholders should extend their support to rescue it.



Rural Infrastructure investment a government matter


The need for infrastructure development in rural areas to link farmers to markets, featured prominently during the Regional Trade and Infrastructure Work Stream discussions at the 10th CAADP Partnerships Platform held in Durban, South Africa from 17 to 21 March 2014.

Convened by the African Union Commission (AUC), NEPAD Planning and Coordination Agency (NPCA), COMESA and the East African Community (EAC), the session on regional trade and infrastructure highlighted the need for rural farmers to have easy access to markets in order to reduce post-harvest losses.

While chairing the March 20th session, COMESA CAADP Coordinator Dr Sam Kanyarukiga said the issue of infrastructure in rural areas should be addressed at a higher level by African governments.

He added that rural infrastructure development should be addressed beyond the line ministry of agriculture as well as the National Agriculture Investment Plans (NAIPs). “We urge countries to see this as a government matter. The Ministers of Agriculture alone cannot address the issue of rural infrastructure development. COMESA works with Member States on all issues of policy in all development areas, and we encourage them to implement their commitments to the CAADP agenda,” Dr Kanyarukiga said. He added that COMESA has been working, with the support of development partners, the EAC and SADC, within the tripartite framework, to facilitate regional trade and investment.

“One of the milestones within the tripartite framework in the quest for regional trade facilitation was the establishment of one stop border posts. These have helped to ease the flow of goods and between countries, and has reduced clearing times at border posts,” he said.

EAC’s Livestock and Fisheries Officer, Mr Timothy Wasonga said the REC was developing a regional policy on aflatoxins to harmonise standards by coming up with Maximum Residue Levels (MLR) for aflatoxins in the region.

The work stream on infrastructure, market access and regional integration made several recommendations to the AU Summit of Heads of State and Government in June 2014. These included the need to increase volumes of intra-regional trade and the need for RECs to work together towards the establishment of the intercontinental free trade area.

The session was attended by participants from the United States Agency for International Development, Department for International Development (DfID), European Centre for Development Policy Management (ECDPM), the Government of Netherlands, and World Bank among others.



What investors think about private equity in Africa



In 2010, private equity firm The Abraaj Group, through one of its funds, bought a stake in Ghana’s HFC Bank. During Abraaj’s investment, HFC greatly expanded its lending and branch network. Last year, Abraaj sold its stake in HFC to a Caribbean bank. It didn’t disclose details of the sale, but one would assume it was for much more than it bought the stake for originally.

Private equity firms usually try to improve the financial results and prospects of the companies in which they buy a stake, in the hope of reselling the business to another firm or cashing out via an initial public offering (IPO). The value created is then passed on to the investors in the fund.

However, private equity managers, such as Abraaj, live and die by their ability to convince investors – such as pension funds, development finance institutions, sovereign wealth funds or high-net worth individuals – to back their funds. These investors, also known as limited partners (LPs), generally have a variety of other options in which to invest their money, including stock exchange-listed companies, bonds and properties. Private equity fund managers therefore need to provide a compelling case to attract their capital.

Supported by strong economic growth, Africa’s private equity industry is fast evolving and a number of new fund managers have emerged in recent years. But how willing are LPs to invest in African-focused private equity funds?

Recent research by Riscura, AVCA and SAVCA seeks to answer this question. The authors spoke to a diverse mix of 48 LPs based across four continents, from pension funds to insurance companies to development finance institutions. The resulting report, titled The search for returns: Investor views on private equity in Africa, aims to provide stakeholders with views on private equity in Africa from the LP’s perspective.

Below are some key takeaways from the report.

1. Growing interest in African private equity: African private equity fund managers have reason to be optimistic about the future, as 85% of LPs indicated they plan on increasing their percentage exposure to private equity on the continent over the coming two years. It should however be noted that Africa-based LPs have a greater appetite to increase allocation to African private equity than international respondents.

2. Africa vs. other emerging markets: Seventy percent of respondents indicated that they think Africa is more attractive compared to other emerging markets. However, 10% of LPs believe Africa is less enticing due to the relatively nascent stage of the private equity industry.

3. Backing the consumer story: LPs believe the consumer goods and financial sectors will be the most attractive over the next three years. Some respondents also highlighted energy and power/utilities as appealing sectors.

4. Outperforming the stock market: Some 80% of LPs believe African private equity will outperform locally listed equity over the next decade.

5. Barriers to investing in African private equity: When asked about the specific challenges facing African private equity, the relative youth of the industry was the main concern.

LPs are also worried about the weak exit environment. Elsewhere in the world, many private equity funds exit their investments by putting their shares in a company up for sale on a stock market, an IPO. However, because of Africa’s relatively undeveloped stock markets, this has been a less attractive option.

Political risk in Africa was only cited as the third biggest challenge.

6. The preferred route to accessing African private equity: Just over half of LPs listed regional funds as their preferred route in the near term, followed by funds-of-funds (23%) and country-dedicated funds (13%).

7. Factors affecting the selection of fund managers: When evaluating an African private equity fund manager, LPs consistently cited track record and operational expertise among the most important considerations.

However, the majority of the respondents said they would be willing to back a first-time fund manager in Africa, especially if the team had other experience to draw on or if the team has a background in executing transactions from investment through to exit.



Tigray Intersects 28.2 Metres at 8.50 Grams per Tonne Gold at Mato Bula, Adyabo Project, Northern Ethiopia

Tigray Resources Inc.

April 07, 2014 06:00 ET

VANCOUVER, BRITISH COLUMBIA–(Marketwired – April 7, 2014) – Tigray Resources Inc. (TSX VENTURE:TIG) (“Tigray” or the “Company”) is pleased to announce diamond drill results from Phase 2 drilling at the Mato Bula discovery at Adyabo (refer to Tigray’s news release dated July 16, 2013 for Phase 1 drill results). Six additional holes (WMD007 to 012) have been completed, totalling 1,117 metres. Drilling on 80 metre sections targeted extensions to mineralization defined during the Phase 1 diamond drilling campaign (WMD002 to 006). This drilling has extended Upper Lode mineralization to depth over 150 vertical metres below surface, and to 80 metres extensions at both the northern and southern extents of existing drill intersections. Eleven diamond drill holes have now tested the system over a 640 metres strike.


Highlights include;

  • Section 19880N – WMD007 drilled 100 vertical metres down dip of mineralization intersected in WMD006 (12.28 metres grading 12.25 grams per tonne gold and 0.30% copper – refer to Tigray’s news release dated July 16, 2013 ) at Silica Hill, and intersected 28.20 metres at 8.50 grams per tonne gold and 0.24 percent copper including 17.55 metres at 13.18 grams per tonne gold and 0.27 percent copper, from 179.75 metres drill depth.
  • Section 19960N – WMD009 drilled 80 metres grid north of WMD006 and 007, and intersected 14.87 metres at 4.49 grams per tonne gold and 0.04 percent copper including 7.90 metres at 7.95 grams per tonne gold and 0.05 percent copper, from 164.20 metres drill depth.
  • Section 19400N – WMD012 drilled the depth extension to previous mineralization at Mato Bula South (WMD004), and intersected 12.98 metres at 4.40 grams per tonne gold and 0.87 percent copper from 105.62 metres drill depth.
  • Section 19320N – WMD011 drilled 80 metres south of previous drilling at Mato Bula South (WMD004), and intersected 13.98 metres at 2.28 grams per tonne gold and 0.74 percent copper including 5.43 metres at 4.88 grams per tonne gold and 0.82 percent copper, from 126.25 metres drill depth.

At Silica Hill, Upper Lode mineralization and alteration is now defined to 150 metres vertical depth below surface, remains open at depth, and has been defined on two sections 80 metres apart. The tenor (gram-metres) of Upper Lode mineralization and intensity and volume of alteration increases to depth on both sections. Step out drilling, initially along strike to both the north and south at Silica Hill, is required to test the near surface potential of this discovery.

At Mato Bula South, Phase 2 drilling has extended the Upper Lode mineralization at depth and 80 metres south of previous drilling. The tenor (gram-metres) of Upper Lode mineralization increases at depth on section 19400N.

Both Silica Hill and Mato Bula South are part of the Mato Bula Trend, a mineralized corridor now defined over 8 kilometres in strike length. Gold-copper mineralization is interpreted to be part of a porphyry style Cu-Au system containing porphyry-style mineralization, high-grade Au-Cu quartz veins and possible replacement styles of mineralization.

Other significant targets previously identified along strike include:

  • Mato Bula North approximately 1 kilometre northeast of Mato Bula where a one hole test into the interpreted carapace of a porphyry intrusion intersected 17.35 metres grading 1.65% copper and 0.40 grams per tonne gold from 53.80 metres drill depth (WMD001 – hole abandoned before full test of drill target) (refer to Tigray’s news release dated July 16, 2013); and
  • Da Tambuk approximately 4 kilometres northeast of Mato Bula where a four hole test yielded best results of 12.00 metres at 17.34 grams per tonne gold and 0.32 percent copper from 52.75 metres drill depth (refer to Tigray’s news release dated March 11, 2014.

Andrew Lee Smith, President and CEO of Tigray stated, “Our continued success in identifying new discoveries and robust drill intersections is a testament to the potential for significant discovery that this region of Ethiopia possesses.”

Mato Bula Phase 2 Diamond Drill Intercepts

Hole ID From (m) To (m) Interval (m)1 Gold
Copper % Zone Local Azimuth Dip
WMD007 179.75 207.95 28.20 8.50 0.24 Upper/
274 -46
including 189.25 206.80 17.55 13.18 0.27
and including 195.80 206.80 11.00 19.55 0.35
WMD008 77.20 105.00 27.80 1.81 0.07 Upper/
279 -50
including 94.60 98.60 4.00 5.75 0.04
WMD009 164.20 179.07 14.87 4.49 0.04 Upper/
273 -48
including 166.40 174.30 7.90 7.95 0.05
WMD010 No Significant Intervals 272 -46
WMD011 97.40 101.45 4.05 1.24 0.51 Main 274 -45
126.25 140.23 13.98 2.28 0.74 Upper
including 131.45 136.88 5.43 4.88 0.82
WMD012 105.62 118.60 12.98 4.40 0.87 Upper 272 -45
including 105.62 108.72 3.10 17.08 3.05
141.40 142.40 1.00 14.60 0.08
1 True thicknesses are interpreted as 65-90% of stated intervals.
2 Intervals use a 0.3 g/t cutoff value.
3 No top cut has been used on assay values.

Click here to view a Map of the Mato Bula Drill Hole Locations

Quality Control

The planning, execution and monitoring of Tigray’s quality control programs at the Harvest project are under the supervision of Jeff Heidema, P.Geo., Tigray’s Vice President Exploration. Mr. Heidema is a Qualified Person as defined by National Instrument 43-101. Diamond drill core samples and trench samples have undergone preliminary preparation at the Acme Laboratories facility in Ankara, Turkey, and are crushed to 80% passing 10 mesh, and pulverized to 85% passing 200 mesh (PRP70-1KG package). Analyses are conducted at Acme Laboratories in Vancouver, Canada, utilizing Aqua Regia digestion and ICP-ES for base metal and silver analyses. Gold analyses are conducted via Fire Assay Fusion with AA finish, and gravimetric analyses are completed for over-limit samples. Blanks and certified reference standards are inserted into the sample stream to monitor laboratory performance. For core, duplicate samples are inserted into the sample stream to both monitor laboratory performance and also characterize potential mineralization.

Qualified Person

Mr. Heidema has reviewed and approved the scientific and technical information contained in this news release.

About Tigray

Tigray is a Canadian mineral exploration company focused on discovery through advancing early-stage mineral projects in Ethiopia. Tigray’s key property is the 70%-owned Harvest polymetallic VMS exploration project, which covers 155 square kilometres in the Tigray region of Ethiopia, 600 kilometres north‐northwest of the capital city of Addis Ababa. The company has an option to earn an 80% interest in the Adyabo property covering 418 square kilometres immediately west of the Harvest project. Tigray’s shares trade on the TSX Venture Exchange under the symbol TIG.

Tigray and East Africa Metals Inc. (“East Africa”) (TSX VENTURE:EAM) have jointly announced that they have entered into a definitive agreement pursuant to which East Africa has agreed to acquire all of the issued and outstanding common shares of Tigray (other than the Tigray shares East Africa currently owns). The transaction will be implemented by way of a statutory Plan of Arrangement under the Canada Business Corporations Act (refer to Tigray’s news release dated February 24, 2014).

More information on Tigray Resources Inc. can be viewed at the company’s website at www.tigray.ca.

On behalf of the Board of Directors:

Andrew Lee Smith, P.Geo.

President, CEO and Director

Cautionary Statement Regarding Forward-Looking Information

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “plan”, “expect”, “intend”, “estimate”, “forecast”, “project”, “budget”, “schedule”, “may”, “will”, “could”, “might”, “should” or variations of such words or similar words or expressions. Forward-looking information is based on reasonable assumptions that have been made by the Company as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: risks associated with mineral exploration and development; metal and mineral prices; availability of capital; accuracy of the Company’s projections and estimates, including the initial mineral resource for the Harvest Project; interest and exchange rates; competition; stock price fluctuations; availability of drilling equipment and access; actual results of current exploration activities; government regulation; political or economic developments; environmental risks; insurance risks; capital expenditures; operating or technical difficulties in connection with development activities; personnel relations; the speculative nature of strategic metal exploration and development including the risks of diminishing quantities of grades of reserves; contests over title to properties; and changes in project parameters as plans continue to be refined, as well as those risk factors set out in the Company’s listing application dated August 18, 2011.

Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to the price of gold, silver, copper and zinc; the demand for gold, silver, copper and zinc; the ability to carry on exploration and development activities; the timely receipt of any required approvals; the ability to obtain qualified personnel, equipment and services in a timely and cost-efficient manner; the ability to operate in a safe, efficient and effective manner; and the regulatory framework regarding environmental matters, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information that is included herein, except in accordance with applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release


Contact Information



IFPRI launches 2013 Global Food Policy Report


The International Food Policy Research Institute (IFPRI) yesterday launched the 2013 Global Food Policy Research report. According to the report, ending hunger and under-nutrition by 2025 should be a top priority in the post 2015 development agenda.

Launching the report, Shenggen Fan IFPRI Director General said that with less than two years to go, the deadline of achieving MDGs is fast approaching as progress in halving hunger is not on track, he added.

Citing UN Food and Agricultural Organization report, he said, close to 840 million people or one in eight people worldwide go hungry to bed. And more two billion people suffer from “hidden hunger” or shortage of essential micro-nutrients in the food they consume, he added.

“ Much work need be done. The fight to end hunger and under nutrition must continue beyond 2015.”

According to him, despite significant global progress in reducing the number of hungry and malnourished people, in Africa south of Sahara and south Asia high level of hunger and malnutrition remain a stubborn and tragic stain on the fabric of thriving and vibrant world.

According to the Director General, the goal of eliminating hunger and malnutrition sustainably by 2015 is an inspirational one as experiences of several countries have shown remarkable progress, most notably China and Brazil, they can get close to it. Meeting this ambitious goal will require viable policies and programmes as well as right agricultural investment supportive legal fameworks.

In addition, he said, the communties need to be monitored to guide actions and to hold duty bearers to account. The world’s hungy and malnourished people cannot solve their plight on their own, they need support from goveremnts and interantional communities, he added.

Agriculture State Minister Prof. Tekalign Mammo on his part said that the reoprt is timely and excellent for which Ethiopia has been mentioned in the report as working aggressivley to end hunger and malnourishment befor the deadline.

To heed steadliy in meeting the goals, Ethiopia has developed food securty programme thereby improving the liveliohood and decreasing hunger vulnerablity of its people which is part of the intervention international organizations have been doing, Prof. Tekalign added.

According to him, close to two million people are food secure under the programme developed to relieve hunger vulnerable population.




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