07 June 2014 Development News – (UPDATED)


Israel investment conference to showcase Ethiopia


A high profile Ethio-Israeli investment conference is scheduled to take place next Monday in Tel Aviv. The conference, which will be held at the Dan Panorama Hotel, will be organized by the Ethiopian Embassy in Israel and headed by Ambassador Helawi Yoseph.

Several presentations will be given at the conference to showcase to Israeli investors the significant investment opportunities in Ethiopia. The presenters include Fitsum Arega, the director general of the newly restructured Ethiopian Investment Agency and Zemedeneh Negatu, the managing partner of Ernst & Young, Ethiopia.

According to information obtained by The Reporter, a diverse group of Israeli investors are expected to attend the conference representing sectors such as agriculture, manufacturing, mining and technology.

In the past few years, Israel’s close relationship with Ethiopia has expanded beyond the historical ties, which included the resettlement of hundreds of thousands of Ethiopian Jews in Israel in the 1980s, to the investment sector. Recently, several announcements have been made by Israeli investors regarding their intentions to invest in the rapidly growing Ethiopian economy. This includes Israel Chemicals, which has invested in Allana Potash and is also planning to invest in a fertilizer processing plant.

Another recently announced Israeli investment deal is Eshet Engineering Ltd, which signed a memorandum of understanding with the Ethiopian Ministry of Industry to form a joint venture to set up an industrial zone in Kombolcha, in the Amhara Regional state. The total project cost is estimated at USD 200 million and will be constructed on 1,000 hectares. In March of this year, a delegation of 60 Israeli companies visited Ethiopia led by Yair Shamir, the Agriculture Minister. Israeli companies were one of the first to invest in Ethiopia’s flower and horticulture sectors starting about 10 years ago.

According to information obtained from the government of Ethiopia, there are more than 100 Israeli companies that have already invested in Ethiopia or that are in the process of investing in sectors such as agriculture, natural resources and manufacturing.

The investment conference in Tel Aviv is part of a broad strategy by the Ethiopian government to attract Foreign Direct Investment (FDI) from diversified sources. Similar investment conferences led by senior government officials, including Prime Minister Hailemariam Desalegn and Foreign Minister Tedros Adhanom (Ph.D.), accompanied by representatives of the Ethiopian private sector, had been organized in Europe, South Korea, Japan, the Middle East and the US, and just three weeks ago a delegation led by the Mayor of Addis Ababa, Driba Kuma, visited Germany and gave presentations in Leipzig promoting investment in Ethiopia as part of the 10-year anniversary of the establishment of the relationship between the two cities.

Last year, according to data obtained from Ernst & Young, the global professional services firm, USD one billion in FDI was received by Ethiopia, the highest amount ever. Ernst and Young is forecasting annual FDI flows to top USD 1.5 billion dollars for each of the next three years, excluding investments in the mining and oil and gas sectors.

The Ethiopian economy grew by an average of 10.6 percent between 2004 and 2011, according to the World Bank, amongst the fastest in the world. The Ethiopian government is forecasting more than 10 percent GDP growth for the current fiscal year, which ends on July 7.



Cuba Assembles Biotechnology Plants in Other Countries


labiofam tvcamaguey co cuCuban Biopharmaceutical Laboratory Business Group (LABIOFAM) is now working on the design, construction, assembly and launch of biotechnology plants in countries like Tanzania and Ethiopia, after doing so in China, Venezuela, Vietnam and Argentina, among other nations.

China to Strengthen Political-Government Links with Cuba

These efforts will be shown during the LABIOFAM 2014 International Congress, scheduled for September 22-25 at Havana’s Convention Center, announced on Thursday during a press conference Jose Antonio Fraga, director of the entity.

Attending the meeting will be entrepreneurs and health and agriculture ministers of several countries, representatives of international organizations and delegates of Spain, China, Russia, Rumania, Peru, Mexico, the United States, Bolivia and Chile, among other nations.

LABIOFAM develops a wide gamut of bio-pesticides, bio-stimulants and bio-fertilizer products for human, plant and animal use, with the purpose of preventing the harmful damage caused by chemicals.  /  Source: ACN.



Southwest Technologies, partners to launch data center in Ethiopia


Southwest Technologies and its partners announced they are set to launch a data center in Ethiopia to make Ethiopia a hub for IT in Central Africa on Tuesday at the Sheraton Addis.

“It’s a historic event,” Tewdros Ashenafi, Chairman—Southwest Holdings said applauding the move of the company alongside its involvement in the energy industry.

“In terms of this opportunity, people may say think, isn’t it too early to do this? But we say we are in the right time,” he said. According to him, his company is interested in making history, and this would pick Ethiopia’s standing in the world to realize e-commerce, e-agriculture and so many sectors.

Dhaneshwar Damry, Chairman—Buhmishq Group hailed Southwest Technologies’ interest that aims to develop the country’s Information Technology (IT) sector that accelerates the economy in being more competitive worldwide. “In 2050 my daughter will tell me who fixed all the setbacks here as she had asked me where I was going after retrieving the map of the country on her iPad,” he said. “Because the country would have transformed by then as it carries out such vital developments.”

He further pointed out that Ethiopia would become an IT hub of Central Africa as Kenya has already stepped up its efforts to remain East Africa’s IT hub. “IBM will remain fully committed to this project and, this data center will be a model for the world,” he said.

Gustavo Alvarez, IT service leader, IBM in East Africa also shared the views expressed and added that IBM has already moved from selling commodity business to value added services. “Eighty per cent of people working in IBM are in the service area so that we need to look for selling services rather than selling hardware and printers,” he said.

After many years of active involvement in East Africa, IBM launched a Kenyan Innovation Center last year housing a cloud company center that aims to drive Information Technology skills development in the region, and it also announced that it would open more Innovation centers in Africa aiming at seizing the opportunity of the economic growth of the continent.



South Africans keen to investment in Ethiopia


The reliable peace and fast economic growth in Ethiopia is conducive for investment, said South African business people and investors.

The investors discussing with the Ethiopian Premier, Hailemariam Desalegn in Addis Ababa said that because of this conducive environment, they want to invest in Ethiopia.

They expressed their interest particularly to invest in agriculture which has untapped potential, in addition to contributing to technology transfer in this sector.

Prime Minister Hailemariam Dasalegn briefing them on investment opportunities in Ethiopia said that what these business people interested in were the country’s priority areas.

Ethiopian ambassador to Pretoria, Mulugeta Kelil said that because of the work done promoting the Country’s investment opportunities there; it has been possible to attract big South African companies to Addis Ababa.



Infrastructure coordination office to be established


A new draft bill proposing the establishment of a federal coordinating agency for integrated infrastructure with a mandate of execution of infrastructure development works in accordance with road masterplans and the development of a formula for the assessment of compensation for properties has been presented to the House of People’s Representatives (HPR).

The newly proposed bill indicates that the agency would be accountable to the Office of the Prime Minister and is believed to solve the recurrent problems of uncoordinated activities among various organizations which at the same time create havoc while one organization engages in particular development activities by damaging other’s infrastructure.

According to the explanation attached to the proposed proclamation, this agency will be dealing with conflicting natures of infrastructure development such as for example, a new road facing damages by other organizations’ expansion projects like by the Water Resource Development office, telecom expansion or electric power expansion by the newly formed Ethiopian Electric Power Services Office (EEPSO).

Ethio Telecom, EEPSO and Water and the Sewerage Authorities have been fiercely criticized for demolishing newly or existing roads while attempting to address the access of telecom demand, power and water access for society and organizations.



Ethiopian Wins Bombardier Airline Reliability Performance Award


Ethiopian Airlines, the fastest growing and most profitable airline in Africa, won the 2014 Airline Reliability Performance Award from Bombardier Aerospace. Ethiopian has won the award four years in a row.

The award was given to Ethiopian for achieving an average dispatch reliability rate of 99.4 percent, making it first in the overall Q-400 product category for the Middle East and Africa region. The award recognizes the skill and dedication of Ethiopian employees working on the turbo prop and light aircraft of the airline.

Mr. Tewolde Gebremariam, Ethiopian CEO said; “We are pleased to receive the award for the fourth year in a row. I wish to thank our employees and especially those working in our light aircraft and turbo-prop section for this outstanding result. It is the fruit of their continued dedication and hard work. We are committed to providing to our esteemed customers reliable schedule and punctual flights at all times. Our higher dispatch reliability performance is a reflection of this commitment to our customers on the domestic and regional routes.”

Mr. Todd Young, Bombardier Vice-President Customer Service and Support, said: ‘’Ethiopian Airlines was the first operator to introduce the Bombardier Q400 in a dual class configuration. Indeed, they have a well-equipped maintenance space and recently certified as a Bombardier authorized service facility for the Bombardier Q400 aircraft. Ethiopian won this reliability award for the fourth times which is a testimony to their commitment to their quality of maintenance and utilizing Q400 for both

Regional and Domestic routes. It is my great pleasure to once again recognize their effort and achieving this reliability award”.

Ethiopian currently operates 13 Q-400 Next Generation aircraft, of which five of them are re-configured in to business and economy class with 7 and 60 seats respectively. The Q-400 is an ideal aircraft for domestic and regional flights with a speed closer to narrow body jet airplanes and with reduced noise, fuel consumption and emission.

Ethiopian flies the Q-400 to 18 domestic destinations and regional routes such as Djibouti, Mombasa, Nairobi, Kilimanjaro, Dar-es-Salaam, Zanzibar, Entebbe, Kigali, Juba, Khartoum and Hargeisa.



Ethiopia sets up mechanisms to fight hunger


Ethiopia sets up mechanisms to fight hunger

It’s World Environment Day Thursday, and this year there’s a special focus on food security. Africa has some severe challenges when it comes to the issue, despite the continent’s vast natural resources. Countries like Ethiopia, for instance, are considered food insecure. But that’s beginning to change.

The Horn of Africa. It’s a region often associated with terrorism. But there’s a much bigger killer here, Hunger.

The region is considered one of the most food-insecure in the world. More than 40 percent of people are under-nourished, according to the F-A-O. Countries in the region have experienced successive famines too. But there’s one success story that cannot be ignored.

“Remember Ethiopia had a famine. Ethiopia had a big famine and since they then they have put in place mechanisms for resilience, mechanism for responding for venerability. They have put in place country investment plans. Now as I speak Ethiopia is doing well as far as agriculture is concerned.” AUC peace commissioner Tumusiime Rhoda said.

Despite Africa’s agricultural potential, the continent has struggled to feed itself. But policy makers and international organisations want to change that.

“Food insecurity is a very noble objective but what we want is more than food security. We want Africans actually to take advantage of their agricultural potential, which is amongst the best in world.” UNECA executive secretary Carlos Lopez said.

“We have not paid attention to respond to mitigation and adaptation measures to external factors especially climate change. Now we are beginning to now look at options of how do you build resilient efforts but also harness other opportunities like abundant water resources, increase irrigation and all these arid and semi-arid areas to be able to change the pattern of food production and productivity.” Agriculture expert Keizire Boaz Blackie said.

Food insecurity is not a new challenge for Africa. For more than 20 years, the continent has struggled with hunger. But it seems countries like Ethiopia are making sure they aren’t caught unawares again. And there’s hope because much of he continent is working towards doing the same.


ICT Exhibition, Bazaar and Conference Opened


Under the theme of “ICT for Ethiopian Renaissance” the seventh ICT Exhibition, Bazaar and Conference was opened on Thursday, June 5, 2014. The event is taking place at the Exhibition Center and it is going to last for five days.

Over 350 local as well as international exhibitors are participating in the event and they are presenting their products under three thematic zones; hardware, software and service. The aim of the exhibition is to raise the level of ICT awareness, display advanced technological equipments as well as services and promote their implications on the national growth.

Dr. Debretsion Gebre Michael, Minister for Communication and Information Technology, said the event will enhance exchange of knowledge and experience for stakeholders. According to the Minister the occasion will enable them play their due role in national development.

Adualem Admassie, Acting CEO of Ethio telecom, commented the expansion work that has been done by his company is related to the nation’s ICT development.

Andualem further noted Ethio telecom will continue the expansion of telecom infrastructure it currently is undertaking. He continued, “In the coming months and years the expansion of important ICT services like school net, woreda net, wireless telephones for all kebeles and other infrastructure
that benefit citizens residing throughout the country will be carried out with strong commitment”.

According to the Acting CEO, there are about 27 Million Ethio telecom customers that are benefiting from the expansion work that is being carried away by the company. Nonetheless, the demand for more expansion work Ethio telecom has started another expansion program that will take the number of Ethio’s customers to 60 Million, he added.

Commenting on the further expansion works Andualem said, “This commitment demonstrates the leapfrog in the information communication technology sector in that the task being undertaken within a year is too rapid and intensive compared to the nationwide expansion tasks undertaken so far”.



Giant car dealers unite to voice common industry issues


Some of the renowned car and machineries importers have sustained in the industry over half a century in Ethiopia.

Orbis Trading and Technical Center SC, for instance, has been in business for over 60 years importing and selling Mercedes-Benz cars. Orbis together with 13 giant importers recently formed an association which is expected to voice common interests of the rivaling companies. 

Abraham Y. Abegaz, Chief Executive Officer (CEO) of Nyala Motors SC and board chairman of the newly formed association, on Thursday told The Reporter that to echo common challenges the industry faces, it has become essential to join hands. The new association, to which some 14 exclusive agents belong to, is expected to leverage major issues of customs on import duties, shortages of hard currency, and fluctuation of hard currency.

Abraham said that price invoices they present to the Ethiopian Revenues and Customs Authority (ERCA) were rejected on a number of occasions, the latter saying the invoices are not reflecting the true prices of the cars imported. The argument ERCA holds to justify this is basically sourced from the Internet or websites of manufacturers, Abraham said. Doing so in such ways will never prove the actual price since the manufacturers assign 18 digit numbers which detail the make and price of the vehicle, he argues.

The introduction of a new taxation levied on to cover transportation costs from Djibouti to the capital is also a concern the new association has to deal with.

The government was escaping procurements from importers staging two major complaints. Price hikes and delays of delivery were critical for the government to procure from Dubai. Abraham deviates as this is not a realistic approach to pursue. He argues that real prices are rather reflected by the exclusive agents since they avoid the middlemen in the process. Besides, bypassing and traveling abroad for procurement may inflict corruption to prevail, Abraham said.

He went on to saying that delivery sometimes fails to address the demands of the government on conditions where both the dealers and the manufacturers follow the newly introduced “just-in-time” delivery strategy which intends to reduce stock piling costs.

Mekamu Assefa Mamo, CEO and vice chairman of Marathon Motor Engineering (exclusive importer and distributor of Hyundai vehicles and parts) said that the company as a genuine brand car importer guarantees and takes risks of any defects, contrary to the foreign third party procurements  made in the past.

Abraham furthered the risking challenges where public agencies react when requested to be bound by conditions of exchange rate fluctuations and other unforeseen issues while procuring. On top of such cases, new models are not recognized by the public agencies as quickly as the dealers require, since the manufacturer produces the vehicles based on the climate and topographic nature of the buying countries, importers regret.

Hence, to voice such issues and other objectives a new association has become a reality to the industry. According to the preconditions of the association, importers need to prove they have licenses both from the government and the original manufacturers.

Rolf Gautschi, general manager of Orbis, Chris De Muynck, managing director of Moenco, Ries Engineering and BH trading and technical services are board members of the association.



Power Africa goes off-grid in Addis Ababa


Solar panels are installed in Rema, a village 150 miles northwest of Addis Ababa, Ethiopia, where many rural households still do not have access to electricity. U.S. President Barack Obama’s Power Africa initiative will invest in off-grid and small-scale energy projects to bring electricity to rural areas. Photo by: Stiftung Solarengie / Bread for the World / CC BY-NC


The U.S. Department of Energy Tuesday announced a new framework for investment — “Beyond the Grid” — a partnership with 27 “investors and practitioners” who commit to direct $1 billion towards off-grid and small scale energy projects in sub-Saharan Africa, in support of President Barack Obama’s Power Africa initiative.

The announcement could help assuage some environmentalists’ and pro-poor advocates’ fears that Power Africa investments lean too heavily on conventional and grid-connected energy projects and threaten to increase carbon emissions while neglecting rural communities that are often the most impoverished and underserved.

U.S. Energy Secretary Ernest Moniz announced the new framework Tuesday at the U.S.-Africa Energy Ministerial co-hosted by the governments of Ethiopia and the United States in Addis Ababa. U.S. Agency for International Development Administrator Rajiv Shah, African Development Bank Director Alex Rugamba, U.S. National Security Council Senior Director Gayle Smith and other notable public figures are participating in sessions that span topics related to access to energy for women, governance and natural gas utilization, among others.

“With close to 600 million people without access to modern-day electricity, it is clear that centralized grid access is not a comprehensive solution for these countries in one of the world’s least urban continents. But through solutions including off-grid and small scale energy projects, we can bring electricity to these rural areas,” Secretary Moniz said in a statement.

Overseas Private Investment Corp. President and CEO Elizabeth Littlefield presented Wednesday a set of guidelines for power purchase agreements, intended to make them more “bankable” in the eyes of potential investors. A multi-agency effort to produce those guidelines — which Devex detailed in March — arrived at a set of “key elements for attracting financing to energy projects,” according to a statement from OPIC.

“Bankable power purchase agreements are key to unlocking private and public sector capital needed to build generation capacity across the continent — which is the goal of Power Africa,” said Littlefield in a statement released ahead of her address at the ministerial.

Read more on U.S. aid reform online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.


About the author

Michael igoe 400x400

Michael Igoe

Michael Igoe is a Global Development Reporter for Devex. Based in Washington, he covers US foreign aid and emerging trends in international development and humanitarian policy. Michael draws on his experience as both a journalist and international development practitioner in Central Asia to develop stories from an insider’s perspective.



Where to Invest Around the World, 2014 Edition



Do you work at a company that does business overseas? Or maybe you’re an investor hoping to buy a chunk of the growth in emerging markets? Either way, you’re probably wondering where the right places are to invest for the next five years. It’s an especially tough question today, given the geopolitical and financial risks plaguing the global economy. But a detailed consideration of all the things that can happen between earning a return abroad and bringing it home can offer a useful place to start.

Last May, I presented the first edition of the Baseline Profitability Index (BPI), which brought together eight factors to predict the total pretax return investors might expect in countries around the world: economic growth, financial stability, physical security, corruption, expropriation by government, exploitation by local partners, capital controls, and exchange rates. (In the original article linked above, I list my data sources.) In each case, I estimated how likely a given factor was to affect an investment, and then how costly the effect might be.

The idea of the BPI is to see how all of these factors might affect a foreign direct investment — the kind a private equity firm might make — over five years.

To my knowledge, it’s the first publicly available tool that explicitly takes a holistic approach to forecasting investment returns. It’s not perfect, because it doesn’t account for the interactions between all of these factors; just looking at them individually already involves many layers of complexity. But it’s a start.

In just the past 12 months, quite a lot has changed in the global investing environment. Some struggling economies have found their feet, notably in Europe, while others around the world have fallen victim to conflict. A few have improved their economic institutions, too; neighbors Greece, Macedonia, and Turkey all bolstered legal protections for investors, and nearby Azerbaijan strengthened its property rights.

Thanks to the availability of new data, four countries joined the BPI this year: Cyprus, Ethiopia, the Democratic Republic of Congo, and the Republic of Congo. It also lost a few: Benin and Tunisia (whose sovereign debts are no longer rated by Standard and Poor’s); and Ukraine (whose economic forecast from the International Monetary Fund is currently in flux).

Before I get to the results, I have three notes: In the 2013 edition, I used the International Property Rights Index as a gauge of the likelihood of government expropriation. The index is valuable, but covers fewer countries and does so more idiosyncratically than other sources. This year, I decided to use the property rights component of the Heritage Foundation’s Index of Economic Freedom. In the rankings below, I have recalculated the 2013 numbers using last year’s edition of the Heritage index. Also, the World Bank changed its methodology slightly for measuring protection of investors and then revised all previous years of data; these changes are reflected in the 2013 rankings as well.

Finally, the Chinn-Ito index I used to evaluate capital controls has not been updated, so I’m using the same values as last year. Some countries did indeed change the ease with which money could be moved across their borders; Cyprus, Ghana, and notably Ukraine made it more difficult, while Argentina and Venezuela made it easier. Hopefully a future update will include the effects of these new policies.

Comparisons across the first two years of the BPI tell plenty of interesting stories. Botswana originally ranked second last year, but using the Index of Economic Freedom puts it in first place for two years in a row. Four other countries in sub-Saharan Africa join it in the top 20, with strong prospects for growth and, in Ghana and Rwanda at least, friendly business climates. East Asia performs even better, locking down seven of the top 20 places. India maintains its sixth position in large part because of the potential for real appreciation in the rupee; this may now be more likely than ever, thanks to Narendra Modi’s supposedly reform-minded government and the strong hand of Raghuram Rajan at the central bank.

China’s case is one where the switch to the Index of Economic Freedom is noticeable. It ranked 21 in the original 2013 BPI and slipped to 43 after the change. The index takes a dim view of Chinese property rights, perhaps because of the country’s nominally communist system. China’s expectations for growth dimmed significantly as well, pushing it still further down the rankings to 60th place in 2014.

Several countries made even wider jumps between the two years of uniform data. The biggest movers in the right direction were Jamaica, Japan, and the Philippines. Forecasts for faster growth, a better credit rating, and an increase in political stability helped the Philippines. In Japan, the 2013 BPI foresaw a real depreciation in the exchange rate, which indeed came to pass thanks to the huge expansion of the money supply encouraged by Shinzo Abe’s government; with this risk somewhat lessened going forward, Japan became more attractive for investment. Jamaica had a bit of both: a slight increase in its growth forecast and a suggestion that its currency was ripe for appreciation.

The deepest drops in the BPI were by Cape Verde, Egypt, Turkey, and Uruguay. Cape Verde suffered downgrades in both its economic forecast and its credit rating; Standard and Poor’s cited the country’s rising budget deficit — in part a consequence of lower growth and tax revenues — in cutting the rating. In Egypt, expectations for the economy worsened markedly as the army’s coup heightened the general level of uncertainty, while the likelihood of being shortchanged by a local partner rose. Turkey actually improved some protections for investors, but its security situation and its growth forecast both became gloomier. The political tribulations these economies have suffered in the past year did them no favors in terms of attracting investment. Meanwhile, peaceful, pot-smoking Uruguay also saw some erosion in the rule of law and a decrease in expected growth. I’ll let you draw your own conclusions.

Once again, the BPI suggests that not every fast-growing country is a perfect target for foreign investment. Many other factors determine just how much of that growth will be transformed into a cash return back home. Plenty of them are not included in the BPI, but it still contains much more information than a simple economic growth forecast.

We won’t know how predictive the BPI has been of investment returns until a few more years have passed. Even then, it might be tough to compare its forecasts to the profits earned by multinational corporations and private equity funds. But at the very least, the BPI synthesizes the many factors that can affect an investment; as a first approximation, it should at least help investors to ask the right questions.


Full content original article (registration required) here:  http://www.foreignpolicy.com/articles/2014/05/29/where_to_invest_around_the_world_2014_edition_bpi


USAID to support Djibouti’s labor and energy sectors


The Administrator of the United States Agency for International Development (USAID), Rajiv Shah, on Tuesday (June 3) announced that USAID would be investing in programs to support the development of Djibouti’s labor force and energy sector.

He said “Working hand-in-hand with the government of Djibouti, these targeted investments will unlock opportunity, reduce extreme poverty and promote innovation.”

Shah, meeting with Djibouti’s Minister of Foreign Affairs and International Co-operation Mahamoud Ali Youssouf on a visit to Djibouti, noted that as “a result of our work together, Djibouti has witnessed extraordinary gains.

In the past decade alone, we have seen Djibouti’s maternal mortality cut by half and its primary school enrolment jump by 25%.” He said he was in Djibouti to build on last month’s important meeting between President Obama and President Guelleh and to deepen the partnership between USAID and the Government of Djibouti.

Shah said the planned initiatives would include job training programs, including technical training for job seekers and management education for employers, to help empower Djibouti’s workforce to compete in the global marketplace.

USAID would also work to catalyze investment in renewable energy projects and “by collaborating with local partners, we will not only tailor these investments to areas of need, but will promote sustainable development for generations to come.”



Nation Eyes on Sesame to Diversify Source of Earnings




The amount of revenue Ethiopia has been expecting to earn from export of coffee has declined during this year because of price decline in the global market.

The revenue secured from coffee export has been also fluctuating over the past years too. The foreign earnings the nation has expected to gain during the first nine months of the budget year declined because of low performance of coffee, among other export items.

Because of the fluctuation of the revenue earnings the country is losing the hard currency it has expected to get.

The government has taken a ‘wise’ measure to compensate the revenue lost due to coffee price fluctuations, giving priority to export of oil seeds, particularly sesame, according to Samuel Gizaw, Representative of Crop Marketing Directorate with the Ministry of Trade.

The activities carried out over the past years enabled the nation to earn over 1.5 billion USD revenue from sesame during the past three and half years.

The first measure the government has taken was convincing farmers to grow oil seeds, particularly sesame, alongside with cultivation of cereals.

Improving productivity of small holder farmers’, who supply 70 percent of the country’s sesame production is also another priority area the government is working.

Private investment in this area is high, compared to other crop productions, according to Samuel. Up to 30 percent of the total sesame production is cultivated on commercial farms. The investors are cultivating sesame on about 600,000 hectares land in Amhara, Tigray, Beneshangul-Gmuz and Oromia regional states, he indicated.

The measures the government took and increased knowledge of farmers lead for 15-20 percent annual growth of production despite variations year to year, the representative remarked. Still the country’s dependence on rain-fed agriculture and post-harvest production loss are challenges from further increasing sesame production, he added.

Despite the increase in production, quantity of sesame output the country exports has been fluctuating, which led to irregularity of earnings over the past three consecutive years.

In 2003 E.C, the nation had exported 218,247 tons of sesame and earned 300.7 million USD revenue, lower than that of the previous year in both amount and revenue.

2004 was the year with the greatest performance, he noted. In that year the nation has earned 436.9 million USD revenue from export of 331,584 tons of sesame.

But this couldn’t continue the next year, 2005E.C. Both quantity of sesame exported and revenue earned were declined by 105, 879 tons and 46.3 million USD respectively, compared to the previous year.

The nation is striving to increase the revenue earnings from sesame export to 527.5 million USD during the current budget year, if achieved there will be a 136.9 million USD increase. According to Samuel, 456.03 million USD revenue has earned during the first three quarters of the budget year.

This inconsistency couldn’t prohibit Ethiopia, supplier of six percent of sesame output to the global market, from being one of the first five countries in sesame export.

Because of western economic freezing, coffee’s economic outcome has sharply decline in past two months, Samuel said. During these two months sesame becomes number one agricultural export item in generating high foreign currency.

However, because of high demand for coffee at the global market, sesame couldn’t continue to extend its hegemony over coffee.

The establishment of the Ethiopia Commodity Exchange (ECX) has helped to modernize the country’s agricultural outputs trading system thereby increase amount of outputs, including sesame the country exports, Samuel said.

The market system before the establishment of ECX was problematic in terms of exporting quality agricultural outputs with the desired quantity and benefiting farmers.
The volume of sesame traded in the ECX trading floor is growing from time to time, said chief strategy officer with the ECX, Abnet Bekele.
Despite some yearly differences in volume, sesame is showing a 14 percent average yearly growth since 2011, when sesame trading has started at the ECX.
Close to 251,000 tons of sesame has traded at the ECX over the past 10 months alone, suppressed the previous year same time by 26 percent, he added.
According to the expert, the volume of sesame being traded in the Exchange has also surpassed coffee recently. Volume of coffee the Exchange has traded during the past 10 months was 200,000 tons.
Lack of modern infrastructure, low quality of sesame and post-harvest loss are the major challenges that embed the country from benefiting its huge potential for sesame, Abnet said.





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