26 April 2014 Development News Updates

Government to tighten control on mining companies


Prompted by the declining price of gold in the international market, the Ethiopian government is to push local and international companies engaged in gold exploration activity to launch production. 

Presenting a nine-month report to the House of Peoples’ Representatives on Thursday, Prime Minister Hailemariam Desalegn said that though the mining sector was expected to register remarkable growth (in generating foreign currency) the gold export earnings fell by 27 percent, compared to the same period last year. Hailemariam attributed the drop in gold export earnings to the decline in the price of gold in the international market. 

In the 2012-2013 fiscal year, gold, the country’s highest source of export revenue, fetched 578.8 million dollars, a four percent decline compared to the previous year’s performance. The price of gold,which was 1900 dollars per  ounce, dropped to 1,200 dollars.

The government now wants to export more gold by pushing companies engaged in gold exploration projects to start production. Hailemariam said the government should persuade mining companies to start mining and exporting gold. He said that although the price of gold is declining in the international market the government will strive to increase the export earnings from gold by improving leadership, technology, professionalism and marketing strategies. He said the amount of gold produced by artisanal miners could also be boosted if the bottlenecks in the sectors could be eliminated.

Artisanal miners are contributing a significant share to the country’s gold export. Last year artisanal miners panned and sold 8.3 tons of gold valued at 420 million dollars to the National Bank of Ethiopia (NBE).

A senior official at the Ministry of Mines told The Reporter that the ministry will tighten controls on companies engaged in mineral exploration projects. “The ministry will closely monitor the activities of the companies engaged in the exploration and production of minerals. We will identify the companies that are working according to their work plan and those who fail to perform to the level of our expectation,” the official said. He said that the ministry will persuade companies that had discovered gold ore to start mining as soon as possible. National Mining Company, MIDROC Gold, Nyota Minerals, Ezana Mining, Tigrai Resources, Stratex and the latest entrant, Ascom Mining, are the major companies that have discovered new gold ore deposits in different parts of the country. Some of these companies are in the process of starting mining activities.

A private mining consultant told The Reporter it was difficult to persuade companies to start production immediately after discovery is made. “You need to conduct feasibility studies. Companies should raise funds from banks and stock markets to venture into developing mines. All these require prolonged time and the Ministry of Mines knows this very well,” the consultant said.

The Ministry of Mines is envisioned with foreseeing the mineral resources contribution to the foreign currency earnings increased by 10 fold, and be the back bone of the industry in 2020-2023.



Canadian mining firm taps gold in Tigray


Tigray Resources Incorporate, a Canadian mining firm, recently stated that it has found gold and copper after its second phase of drilling, completing some 1117 meters the company conducted in the Tigray region, north of Ethiopia. 

The news release the company posted on its website details that after conducting six additional holes in the region, mainly in Adiyabo and harvest projects where the company searches for gold, copper, silver and other mineral resources, in a place called Adiabo the Vancouver based Tigray Resources has intersected 28.20 meters at 8.50 grams per ton gold and 0.24 percent copper including 17.55 meters at 13.18 grams per ton gold and 0.27 percent copper, from 179.75 meters drill depth, the company stated. 

Andrew Lee Smith, President and Chief Executive Officer of Tigray Resources said that the sustained achievements the company has scored over the years in detecting new discoveries testifies the potentials of the country, particularly in the region.   “The robust drill interactions is a testament to the potentials for drill intersections for the significant discovery that the region of Ethiopia possesses,” Smith noted.

According to the company, the ongoing Mato Bula phase two diamond drill in the Tigray region has so far intersected a total of some 179 grams per ton at six holes drilled at different stages.

The Reporter contacted officials at the Ministry of Mines to learn about the new discovery reports Tigray Resources announced. However, it bore no fruits. Bacha Fuji, corporate communication directorate director at the ministry said he has no information on the matter.

Following the untapped and underexplored mineral deposits in the Tigray region has been the center of attention for major multinational mining corporations across the globe. That said, the region also provides artisanal gold production by the local residents. At a country level, one million artisanal miners produced and sold some 8.3 tons of gold to the National Bank of Ethiopia valued at some USD 420 million.

Tigray Resources Incorporate is a Canadian mineral exploration company dealing with the discovery of mineral resources at the early-stage mineral projects in Ethiopia. The company also has an outreach in African and Middle Eastern countries. Ezana Mineral Development Private Limited Company and East Africa Metals Incorporate are some of the companies Tigray Resources is working with.



Updated 1 – Six members of Zone Nine, group of bloggers and activists are arrested


Here is announcement from the group’s Facebook page.

Six members of Zone Nine, group of bloggers and activists are arrested today late in the afternoon at 5:20 pm by security. Team members Befeqadu Hailu, Atnaf Berahane, Mahlet Fantahun, Zelalem Kiberet, Natnael Feleke and Abel Wabela are all under custody on arrest warrant.

[Picture: Natenail who met Kerry in May 2013 is among the six bloggers arrested yesterday]

John Kerry to visit Ethiopia in May 2014
The arrest comes immediately after the bloggers and activists notified their return to their usual activism on April 23, 2014 after their inactivity for the past seven months. On their return note the group has indicated that they have sustained a considerable amount of surveillance and harassment. They have indicated that one of their reasons for their disappearance from activism is the harassment they have been receiving from government security agents.
We believe members and friends of Zone Nine have nothing to do with illegal activities and we request the government to release them immediately.

Also there are reports of Journalist Tesfalem Woldeyes arrested. [Picture on the left]

More details to come



Kenya-Ethiopia to Build a One-Stop Border Post in Moyale


Kenya and Ethiopia have signed a bilateral agreement to develop a One-Stop Border Post at Moyale.

The Ministry of Transport has said the agreement seeks to enhance transport services along the border crossing, strengthen trade in the region as well as reduce transit time for goods across the common border, including enhancing immigration processes.

The agreement signed by Transport and Infrastructure Minister, Eng. Michael Kamau on behalf of the government and Ethiopian Minister for Transport , Hon. Workneh Gebeyehu would facilitate gradual removal of non-tariff barriers and improve railway services between the two countries.

In a joint communique’ issued in Addis Ababa, the two governments have formally inaugurated a Joint Transport Corridor Commission of ministers, which is expected to speed up the completion of projects within reasonable timeframe. This is expected to create the required seamless transport connectivity between the two countries.

Top on the agenda is the fast tracking of implementation of the Mombasa-Nairobi-Isiolo-Moyale-Addis Ababa transport and the development of Lamu-Isiolo-Moyale-Addis Ababa transport corridors. The latter is under the LAPSSET project.

“Kenya and Ethiopia are determined to address bottlenecks relating to high transport costs, transit delays at entry and exit border points, inadequate infrastructure and poor management of transport systems. The two have agreed to do away with bureaucratic procedures and devise mechanisms to enhance coordination along the Mombasa to Addis Ababa transport corridor.” the Transport Ministry said.



Fine Line: There is little as magnificent …


There is little as magnificent, glaring and dedicatory in illustrating the energy and determination of the Revolutionary Democrats than the Addis-Adama Expressway, gossip observed. Sceptics of their rule might have felt that the late Meles Zenawi had his head in the clouds when inaugurating the construction of the six-lane super highway, thereby heralding his project on Ethiopia’s renaissance, back in November 2010, gossip recalls.

He may have passed rather untimely before seeing his dream come true, yet his successor, Hailemariam Desalegn, and his entourage, had a debut on the toll road a couple of weeks ago, gossip disclosed. It won’t be his last, claims gossip.

He will have to accompany Chinese Prime Minister, Li Keqiang, whose government has provided nearly 800 million dollars in loans. He is due to visit Ethiopia for two days during the first week of May, beginning on the 4th, gossip disclosed.

Among some of the projects companies from his country are building in this country, he is scheduled to visit this expressway built by China Communications & Construction Co. (CCCC), which shortens the driving to Adama down to 45 minutes, gossip reveals. The two prime ministers will no doubt inaugurate the road and open it for public use subsequently, claims gossip.

Yet, the days of Chinese generosity in “no-condition attached” loans availed to Ethiopia – unlike development partners from the west – appear to be numbered, claims gossip. The signs that the Chinese government are holding onto loans have been felt for quite some time, according to gossip. Partly due to restructuring within the Chinese government and its ruling communist party, and influenced by growing concerns over Ethiopia’s ability to sustain anymore debts, the Chinese are wary of handing out more cheques, gossip claims.

The administration’s point man on the issue, Finance & Economic Development Minister, Sufian Ahmed, had a sojourn to Beijing a few weeks ago. Not only did he meet with his counterpart; he was also given an audience by big bosses of the Chinese EXIM and development banks, in a bid to persuade them to continue providing more loans for his country, with average interest rates of three percent on LIBOR, and a 12-year maturity period, gossip revealed.

He came back with little in the way of good news, claims gossip. The Chinese have stood their ground and have little reason to take any more risks when it comes to Ethiopia, according to gossip.

Nonetheless, the door has not been totally slammed shut, gossip claims. They have pointed out to Sufian that should his government be prepared to offer guaranteed export items and provide concessions on natural resources to their extractive industries, they may offer additional loans, gossip disclosed. Unfortunately for him and his administration, the finance obtained in such an arrangement may not exceed half a billion dollars a year and the interest rate could be a little higher and the maturity period shortened, claims gossip.

Subsequent to his return, senior staffs at his Ministry were seen busy trying to determine what sort of natural resources are available in the country to be handed out as a concession, in order to collateralise loans – quite a common practice of the Chinese elsewhere, according to gossip.

Thus, the visit of the Chinese Prime Minister to Ethiopia in May is seen, in the gossip corridors, as being beyond the simple ceremonial cutting of the ribbon on the modern expressway, claims gossip. Hailemairam and his macroeconomic team will have to use the opportunity to implore on Jiabao that Ethiopia is indeed bankable, and with a historically positive reputation on its commitments to its creditors, whether they come from the west or the east, gossip claims.


Related post: http://allanapotashblog.org/2014/04/12/potash-for-loan/


 No changes made on serious accounting flaws in government offices


The Federal Auditor General’s recent report to the House of Peoples’ Representatives indicated that  over 4.5 billion birr from last year’s budget found in

the official records of nine government organizations were flawed due to uncollected revenue, unaccounted for expenditure, exaggerated procurement and failure of utilization of allocated budget.

According to the latest report presented to the House on Tuesday, close to 1.5 billion birr  had not been collected while it was found that around 785 billion birr was spent unlawfully either by existing financial documentations or other forms of information from the spending organizations. Similarly, the report made clear that over 2.3 billion birr had been identified as not being implemented for the intended purposes that had been approved by Ministry of Finance and Economic Development (MoFED).

The annual report presented to the House by Gemechu Dubisso, auditor general, expressed concerns over the existence of such types of unaccounted for expenditure in the official government system in the past and budget utilization that had not been improved despite the recommendation that was suggested in the same reported period in the previous year.  And, oftentimes, government offices at ministerial level such as the Ministry of Defense (MoD), Ministry of Foreign Affairs (MoFA), Ministry of Industry (MoI) as well as Ministry of Water, Irrigation and Energy (MoWIE) along with higher educational institutions had been primarily mentioned in relation to unaccounted for expenditures and unlawful utilization of the budgeting system.

Meanwhile, 77 offices are found to have arrears of receivables amounting to 877,045,264.30 birr, specifically, the office of Agriculture and Technical Vocational and Educational Training Coordination under Ministry of Agriculture, Ministry of Foreign Affairs (MoFA), Ministry of Education, Ministry of Defence, Gonder University,  Debre Birhan University, and Government Procurements and Property Disposal Service are listed in order of the their accounts.

It has been found that some 1.3 billion birr had been mismanaged in five government offices during the audit period. Public universities, notably Jimma, Semera, Wollo, Bahr Dar and Jigjiga, were among the major government institutions the report found serious shortcomings with regarding cash.

Contrary to the expected improvement in most offices, according to the report, the continuing exasperated problem of failing to finalize and close their audit accounts  on the due date needed serious revisions and proper legal actions.

“Even though the relevant action has been taken from our side, it still desperately needs the attention and immediate actions, whether from the House or MoFED,” Gemechu told MPs.

The report that presented the national budget performance of the 2012/13 budget year was carried out by the Federal office of Auditor General along with Audit Investigation Corporation and authorized private Audit firms.

Out of the planned 140 federal government institutions targeted for auditing, according to the report, it was able to audit 138 institutions that accounts for  98.57 percent of its plan. Despite the offices effort, only two intuitions, the Ethiopian National Theater and the Agricultural Transformation Agency (ATA), had not been audited. The National Theater was not able to finalize its 2012/13 budget while the ATA did not utilize the budget it received from MoFED and did not prepare its budget documents.

“Though there is no remaining audit tasks that rolled over from the previous year, we are in a good position to pursue the auditing responsibility in almost all government offices that eventually gave us the opportunity to identify procedural gaps,” Gemechu said.

“Still, frequent and similar defects which could have been resolved continue to exist this year too. Since we are still weak to resolve these challenges, this reminds us as to how much we should pay attention to our future work.

“All in all, like in the previous few years, there are still challenges that have been prolonged from previous years, such as collecting revenues and expenditure accountings, procurements without rules and regulations, frequent problems with regard to government revenue collections, domestic revenue and utilization of government property. These should be given proper attention and corrective measures by all concerned bodies,” the Auditor General said.

In some instances, also, payments had been made more than once for a product that had been paid for already, not to mention the exaggerated and unlawful allowance payment to employees.

Though the cooperation during auditing activity showed progress, Gemechis told the House, “Lack of cooperation remained to be an impeding challenge among various offices such as unwillingness of providing office facility and documents had been hindering the required auditing tasks and finalizing it in due time”.

The report also urged the need for desperate attention to be paid by the government with regard to construction activities of various projects which are behind schedule, were not in progress and were suspended.


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