17 April 2014 News Round-Up




Ethiopia building 5 fertilizer plants


The plants will cost over $2.8 billion.

World Bulletin / News Desk

Ethiopia is currently building five fertilizer plants at a total cost of over $2.8 billion, the Ministry of Industry said on Wednesday.

“Each of the plants will have the capacity to manufacture 300,000 tons of fertilizer annually,” the ministry’s corporate communication director, Melaku Taye, told Anadolu Agency, noting that all five facilities were located in Yayu, some 330km west of Addis Ababa.

“The country spends more than $103.3 million on fertilizer imports on average a year,” he noted. “The factories, expected to begin production in 2017, will also enable some import substitution, thereby alleviating congestion of import items at ports.”

According to Taye, the Yayu area was selected to host the plants due to the presence of the coal resources and raw materials needed to manufacture the fertilizers.

“Investment in fertilizer manufacturing is a new sector that the government is taking the lead in. Hopefully, the private sector will follow,” the official said.

Melaku said fertilizers were key to revitalizing Ethiopia’s agricultural sector, which is the main contributor to national economic growth.

In Ethiopia, an agrarian country, a total of 16 million hectares of land are used for agricultural purposes. An estimated 12 million hectares of the total area are used for growing food grains, he said.

The state-owned Ethiopian Metal and Engineering Corporation is leading the construction process, Taye noted.

The manufacturing sector has contributed to Ethiopia’s economic growth over the last three years, he added, noting that the sector had contributed 18 percent to national economic growth last year and was expected to grow by between 21 and 23 percent this year.



African banks to fill trade finance space


African banks are set to maximise on trade finance space left by European lenders due to tough capital requirements.

African Banks to occupy gap left by Euro banks in trade finance sector. PHOTO: Getty Images

However, bureaucracy and inadequate research are two major challenges dogging the sector and will require immediate attention if progress is to be realised in the industry.

(READ MORE: Trade financing on the rise

“Traders intending to sell their products in trade finance space as well as exporters in the market often make the mistake of entering the market without having done enough research. It is important for investors to understand various nuances like different trade control regimes and understand how to obtain foreign currency among others,” Minos Gerakaris, head of trade and finance at Rand Merchant Bank told CNBC Africa.

Gerakaris added that new investors coming into the African continent make the mistake of assuming that Africa is a single country and not diverse. This is caused by lack of research.

“Prospective investors should always undertake a due diligence exercise, get more understanding from local partners and also assess the situation on the ground as to have a thorough appreciation of the industry,” he added.

Bureaucracy is one of the challenges in the sector but there has been positive developments in the continent.

“Angola has made great strides in cutting bureaucracy and the same with Mozambique. Ten years ago in Angola for example, one would see about 80 ships waiting to dock but that number to date has been reduced to about 15 at a time “.

As the continent moves forward extending working capital facilities in the sector will be of necessity together with injecting the much needed liquidity in the working cycle.

Last March, South Africa hosted a conference on trade finance in the continent and discussed among others thriving markets attracting interest such as Ethiopia, Ghana, Mozambique, Namibia, Tanzania and Zambia.



Nairobi Bourse Plans Public Offering


VENTURES AFRICA – Kenya is set to witness another big public offering since Safaricom, as the Nairobi Securities Exchange (NSE) revealed plans for a June listing on the Main Investment Market Segment.




Chief Executive of the bourse, Peter Mwangi disclosed the planned listing during the first ever release of the financial results of the NSE at its Nairobi head office.

Results showed that the bourse grew its profit by 210 percent from 2012, posting a Sh263 million ($3 million) net profit for 2013.

“Our strong financial position in 2013 was a result of the very strong market performance and the efforts of management to diversify revenue streams from the traditional sources of transaction levy and annual listing,” said Mwangi.

The NSE also increased its income by 62 percent in 2013 from Sh384.3 million ($4.4 million) to Sh622.7 million ($7.2 million). Its market capitalization rose by 49.91 percent to Sh1.92 trillion ($22.1 billion) and All Share Index during the period increased by 33 percent.

NSE posted equity turnover of 79.45 percent increasing from 2012’s Sh86.79 billion ($998.2 million) to Sh155.75 billion ($1.8 billion) in 2013, with foreign investors responsible for an average of 51.38 percent of the executed equity transactions during the year.

Aggregate growth however slowed by 20.01 percent due to a decline in the turnover of the NSE’s fixed income market segment, which dropped from Sh565.67 billion ($6.5 billion) in 2012 to Sh452.46 billion ($5.2 billion) in 2013.

Mwangi said the Exchange would, at the end of the month, separate management from shareholding. It has therefore settled issues of owners and has also obtained approvals from the Capital Markets Authority to ensure a smooth listing.



Ethiopia Cancels Anti-Gay Rally and Drops Proposed Bill


By Cathy Kristofferson, April 16, 2014

rainbowethiopiaThe AP is reporting plans to hold a mass anti-gay rally in Addis Ababa, Ethiopia, have been cancelled. The two religious groups planning the rally announced last week it would be held on April 26th. The government-affiliated Addis Ababa Youth Forum and a religious group associated with the Ethiopian Orthodox Church reported an alarming increased rate of ‘homosexual acts’ had caused the need for the rally.

Chairman of the Ethiopian Orthodox Church group the Weyiniye Abune Tekelehaimanot Association, Dereje Negash, had previously told reporters at a press conference:

“Children are being raped by gay people in this country. …  All in all, gay acts are against health, the law, religion and our culture, so we should break the silence and create awareness about it.”

Today, Negash said the cancellation is the result of people inside the church asking the government to prevent the rally.

Currently, same-sex acts are punishable by up to 15 years in prison or 25 years if convicted of infecting another person with HIV during same-sex acts in the country.

Also today, government spokesman Redwan Hussein, said the Ethiopian government does not support the anti-gay movements that have been building in the country. He said that the bill recently submitted, sponsored by the Ministry of Justice, which would have made gay sex crimes an unpardonable offense has now been dropped.

Maybe gay bashing isn’t so popular in Ethiopia after all. Let’s hope that sentiment spreads across the African continent.



Japan provides 100 million birr worth fertilizer to Ethiopia


A grant aid signing ceremony was held today between the governments of Japan and Ethiopia.

According to a statement the Embassy of Japan sent to WIC, the signing ceremony was attended by Kazuhiro Suzuki, Ambassador Extraordinary and Plenipotentiary of Japan to Ethiopia and Ahmed Shide, State Minister of Finance and Economic Development of Ethiopia.

Ambassador Suzuki on the occasion said that under this grant aid, Japan extends approximately 100 million birr as a contribution to Ethiopian farmers, which is a symbol of the friendship between Ethiopia and Japan.

He said Japan’s assistance not only covers such areas as the construction of roads and bridges and the promotion of the idea of ‘Kaizen’ in the public sector but also Ethiopia’s agriculture.

Indeed, agriculture remains the largest sector of the Ethiopian economy and improving its productivity will contribute significantly to Ethiopia’s economic growth.

Agriculture is also extremely important for the alleviation of poverty.  If economic growth leading to significant poverty reduction is to occur in Ethiopia, it will require the development of both the agricultural and industrial to be the engines of the growth.

He said that Japan will continue to support Ethiopia’s efforts to achieve the goals set out in the GTP.

Remembering the visit of Prime Minister Shinzo Abe to Ethiopia, he recalled a number of agreements reached between the two Prime Ministers on a variety of topics including the project signed today as one of those that PM Abe committed during his visit in January this year.



Authority implementing 14.3 bln birr new road projects


Some 12 new road projects are under implementation at a cost of over 14.3 billion birr, according to the Ethiopian Road Authority (ERA).
Authority Communication Directorate Director, Samson Wondimu, told WIC the projects underway since the beginning of this budget year include the construction of 696.3 kilometers of road.
The government has earmarked 9.45 billion birr for the projects, while the remaining 4.85 billion birr will be secured on loan from various organizations.
Upon completion, the roads will link regions from regions as well as allow farmers to easily locate the best place to sell their output, according to Samson.



ERC to outsource light rail operations management


Ethiopian Railways Corporation (ERC) is planning to hire an international company which would be responsible to manage operations once the Addis Light Rail Transit (AA-LRT) commences service.

As the Addis Light Rail project enters its final phase of power traction works, ERC’s director general, Dr. Getachew Betru (Eng.) said the corporation is already making preparations for the operations phase.

“We will seek for an internationally recognized company to hire as a management contractor when we begin operations,” the director general said.

“The safety and security of our customers is our biggest priority. That is why we will hire an international company with proven experience in light rail operations,” Getachew added.

When completed, AA-LRT will be the first light rail public transport system in sub Saharan Africa as Nigeria’s Abuja Light Rail, whose construction began in 2007, struggles to see completion.

According to ERC, the 475 mln US dollars Addis Light Rail project is 60 percent complete and the corporation expects to start three months of testing as of January 2015.

On Sunday 15 April, 2014, the contractor China Railway Engineering Corporation (CREC) officially launched traction works in the presence Workineh Gebeyehu, minister of transport, Driba Kuma, Mayor of Addis Ababa and officials of ERC.

The power traction works includes the installation of 850 electric poles and overhead wires, extending 143 km, to power the light rail vehicles. It also includes the construction of 18 traction sub stations, nine on each of the east-west and north-south directions of the 34 km double-track electrified light railway.

CNR Corporations, the Chinese train manufacturer, will supply the 41 light rail vehicles (LRVs), also known as tramcars, which are expected to arrive to Ethiopia in August 2014.



Asian Paints to buy 51% stake in Ethiopia-based Kadisco Chemical


Asian Paints (International) Ltd (APIL), a wholly owned subsidiary of India’s largest paints company Asian Paints Ltd, has agreed to buy 51 per cent equity stake in Ethiopia-based Kadisco Chemical Industry Plc for an undisclosed amount, according to a stock market disclosure.

Asian Paints (International) has signed an agreement with the shareholders of Kadisco to acquire either directly or through its subsidiaries, 51 per cent stake of the equity share capital of Kadisco, the disclosure said. Kadisco manufactures and sells paints, other coatings and adhesives in Ethiopia.

In February this year, Asian Paints had hiked its stake in Singapore-headquartered Berger International Ltd (BIL), an investment holding company which manufactures, distributes and sells paint and related products in Bahrain, The United Arab Emirates, Jamaica, Trinidad and Barbados, to around 96.7 per cent.



Addis Ababa 3rd among cities most likely to become a global leader



Jakarta and Manila, two of Asia’s most chaotic, congested cities, are likely to get a lot better in the next two decades, according to a new ranking by A.T. Kearney.

The U.S.-based consulting firm placed Indonesia’s capital at the top of a list of 34 cities in low and middle income countries most likely to become a global leader in everything from business activity to workforce health and security. The Philippine capital grabbed second place, followed by Ethiopian capital Addis Ababa.

The only other Southeast Asian countries on the list were Kuala Lumpur (10), Bangkok (21), and Ho Chi Minh City (29).

The A.T. Kearney report cited Jakarta’s increasingly stable political system and emphasis in addressing income inequality and environmental concerns as some of the main reasons for its top ranking.

Some economists, however, expressed reservations.

“We know the potential of Indonesia,” said Euben Paracuelles, Nomura’s senior economist for Southeast Asia. But the upcoming presidential election could prove a significant stumbling block to Jakarta’s globalization, depending on its outcome, he said.

Indonesia just held legislative elections, with the party thought most likely to see huge gains getting less of the vote than anticipated. That has created the need for multiple party coalitions, which in the past have held up policy making. If a large, clunky coalition leads the next government, it could continue to delay much-needed reforms, say analysts.

Mr. Paracuelles says Manila, which ranked just below Jakarta, appears to have more promise.

“Manila I think has done a little bit better [than Jakarta] over a relatively short period of time,” he said. “Assuming they sustain this reform momentum, that bodes very well.”

The Philippines’ economy is storming ahead of its peers this year, bolstered by favorable demographics and a reformist government led by president Benigno Aquino III, whose promise to tackle longstanding corruption has won the favor of foreign investors.

Economic growth in the Philippines hit 7.2% in 2013, second in Asia only to China’s 7.7%, despite being hit by a series of disasters toward the end of the year. The World Bank expects 2014 growth to reach 6.6% — a robust figure when growth across Asia is slowing.

The A.T. Kearney survey took into account a wide range of metrics when determining its rankings. It included how developed infrastructure was in each city, ease of doing business, income inequality and environmental stability.

Jakarta, which is famous for mind-boggling traffic and paltry infrastructure, scored most highly on measures involving its population, such as income equality, while improvements in stability and security also bumped it up the table. Scores were determined by evaluating how cities progressed between 2008 and 2013 and extrapolating to measure the likelihood of improvement in the next two decades.

Over the past five years Jakarta has invested heavily in infrastructure, while Governor Joko Widodo worked to implement a low-cost health care scheme and dramatically raised the minimum wage.

Bangkok was the best performer in Southeast Asia for cultural capital—it was the world’s number one tourist destination in 2013. But it ranked low on other factors mainly due to political and economic stagnation, made worse by recent political instability caused by ongoing antigovernment protests.

“In 2008, Bangkok seemed destined to rise” in terms of business activity, human capital and international political engagement, the report says. “Since then, and coinciding with a long period of political uncertainty, scores in all three of these dimensions have flagged.”

This year Bangkok’s emerging cities ranking puts it behind Caracas and just above Casablanca.

In a separate ranking of global cities including those from developed economies, New York came in first, followed by London in second and Paris in third. Singapore, the only city in Southeast Asia to make the top 40, came in at 9th place. (Wall Street Journal)



Ethiopia-Indonesia Trade Exchange Grows Fivefold


The annual trade exchange between Ethiopia and Indonesia has jumped from 70 million USD to 350 million within the last three years, the Indonesian Ambassador in Ethiopia said.

Ambassador Ramil Saud said significant progress in trade and people-to-people relationship was registered during the past three years. The fivefold growth in trade confirms that, he added.

Pea, leather and hide, plants of medicinal value have high demand in Indonesia, while pulp, food items, spice and detergents are imported by Ethiopia.

Indonesian investors are entering the Ethiopian market seizing the favorable investment opportunity in Ethiopia, Ambassador Ramil Saud said.

Furthermore, a joint economic and technical cooperation agreement was signed last year to further boost the cooperation of the two countries, he recalled.

According to ENA, following the signing of the agreement, several visits were arranged so that businesspersons of the two countries could make use of the market opportunities and exchange experiences, it was indicated.

Since Indonesia, like Ethiopia, is a country with many nationalities and religions, religious leaders drawn from the two countries were made to exchange experiences on conflict resolution, according to the Ambassador.  [WaltaInformationCenter]





Tags: , , , , , , , , ,

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: