20 June 2014 News Items


Ethiopian Airlines and Agence Française de Développement sign €50 million loan agreement


Ethiopian Airlines and the Agence Française de Développement (AFD) signed a loan agreement of 50 million euros on June 20, 2014 at the Ethiopian Airlines Headquarters. The agreement is aimed at financing the construction of the new state-of-the art cargo terminal.

Chief Executive Officer of Ethiopian Airlines, Tewolde Gebremariam, and Mr. Christian YOKA, AFD Regional Director signed the agreement at Ethiopian Headquarters on 20 June 2014 in the presence of H.E. Ms. Brigitte Collet, French Ambassador to Ethiopia.

“Infrastructure development is one of the four pillars of our fast, profitable and sustainable growth strategic roadmap, Vision 2025. This loan from AFD will enable us to build our new cargo terminal, which is being constructed in 2 phases, and when completed will have 1.2 million tons annual capacity, making it one of the largest in the world. The new cargo terminal is part of our Ethiopian Cargo Vision 2025, which aims first and foremost to support our country’s fast growing export of perishables such as flowers, fruits, vegetables and meat. As part of our Ethiopian Cargo Vision 2025, we plan to operate 18 dedicated freighters serving 37 international cargo destinations by 2025.
I wish to thank our longtime partner AFD, the French Government, and the French Embassy in Addis Ababa for their continued support. Our Academy expansion is also being undertaken thanks to the financial support of AFD. We look forward working for a successful and continued partnership with AFD”, said Mr. Tewolde G. Mariam, Chief Executive Officer of Ethiopian.

“This credit agreement is the second of its kind after the one signed for the expansion and upgrading of Ethiopian Airlines multinational aviation training center which is nearly completed partially in operation. The new agreement shows our commitment to further support Ethiopian in its growth plan,” said Mr. Christian YOKA, AFD Regional Director for Ethiopia, Sudan, South Sudan, Somalia and Eritrea.
Ethiopian Cargo currently has dedicated freighter services to 26 cargo destinations in Africa, the Gulf, Middle East, Asia and Europe, using 6 dedicated cargo freighters including B777-200Fs. Ethiopian Cargo is an award winning cargo service provider and is ranked 43rd by revenue out of the top 50 global cargo operators.



Nation Keeps Inflation Rate at Single Digit


Nation Keeps Inflation Rate at Single Digit

The government of Ethiopia has managed to keep the general inflation rate at single digit for the last 15 months, the Central Statistics Agency said.

The inflation rate was recorded at 8.70 percent in May 2014, a 0.4 percent decrease from the previous month, Household Research and Price Statistics Director at the Agency, Alemayehu Teferi told ENA.

Inflation Rate in Ethiopia averaged 19.69 percent from 2006 until 2014, reaching an all time high of 64.20 percent in July of 2008 and a record low of -4.10 percent in September of 2009.

Inflation rate dropped to single digit since March 2013. This demonstrates that efforts exerted to keep the inflation rate at single digit during the growth and transformation plan period is successful, he said.

The drop in the inflation rate is a result of various measures taken by the government to stabilize the market, he added.

Various measures including subsidizing some products such as wheat and edible oil, and removed taxes on flour and grains, price freeze and adopting contractionary monetary policy were taken by the government to address the challenge.

Food inflation dropped to 6.3 percent, showing a 1.7 percent drop from the previous month, while non-food items inflation raise to 11.4 percent from a 10.3 percent in April.

The drop in food inflation contributed for the drop in the general inflation rate. The inflation rate increase in non-food items doesn’t much affect the general inflation because of low contribution, the Director added.

It is expected that the inflation in the coming two months is expected to show a slight increase because of the possible shortage of food items following the main rainy season, he explained. But the inflation will return to the current level starting from September.

Demand increase and shortage of supply, creating artificial shortage by hiding items and increasing amount of increase in money supply are the main factors in Ethiopia for rise in inflation.

It will be fine for better performance of the economy and the society if inflation rate be able to keep at this level, he said.

The Director suggested that government agencies should prioritize to make sure that demand and supply are going parallel rather than focus on only monetary control.


House passes new investment proclamation


The House of People’s Representative today (June 20) passed a new legislation on investment. The new proclamation amended the name of the Ethiopian Investment Agency to be named as Ethiopian Investment Commission. The new proclamation has also introduced changes in the organization, duties and responsibilities of the Commission .Accordingly, the proclamation envisages the establishment of a new Investment Board headed by Prime Minister Hailemariam Desalegn. The Investment Board will have the authority of controlling and administering industrial zones. The new proclamation also introduced changes in areas of investment open for domestic investors and in the administration of industrial zones. Berhanu Mekuye , Chair of the Industry Affairs Standing Committee said that the promulgation of the new law will have an important impact in enabling to fully benefit from Ethiopia’s growing investment attraction. The establishment of the Board that will be chaired by the Prime Minister is said to have an important role in addressing policy issues from local and foreign investors in a swift manner.



Ethiopia and Canada Keen to Strengthen Ties


During the 4th Ethio-Canada Bilateral Consultation officials of Ethiopia and Canada affirmed they will strengthen ties in the areas of trade and investment and also cement former deals.

According to the Foreign Minister American Affairs Director, Taye Aske Sellasie, Canada is the third top development partners of Ethiopia and it has been assisting Ethiopia in various development initiatives which are in line with the Growth and Transformation Plan (GTP) as well as the Millennium Development Goals(MDGs).

Taye further noted the Consultation was aimed at looking the gaps and major achievements secured by Ethiopia with regard to the eight MDGs it is working on by the bilateral assistance it gets from Canada.

Taye also marked representatives of the two countries will discuss ways on how to enhance trade and investment.

The Canadian Ambassador to Ethiopia, David Usher, on his part noted Canada has been providing support to Ethiopia on different sectors. He also appreciated achievements made by Ethiopia.

Usher further noted Ethiopian Airlines’ flight to Canada three times a week is the best opportunity to cement and investment relation of the two countries.

As per the delegates of Canada, they aspire to increase Canadians participation in the mining sector. In addition to this, they expressed their interest in empowering women in the sector via training. Currently, as the data from the Ministry of Mines indicate, there are 11 Canadian licensed investors in Ethiopia participating in the mineral and petroleum exploration.

In relation to trade relation the balance of trade the two countries is in favor of Canada even if there is some improvement.



Also see:  http://www.theglobeandmail.com/globe-debate/read-and-vote-does-harper-have-a-sensible-foreign-policy/article19215855/


Ethio-German Economic Relations Growing, Says Ambassador Cyrus


The economic relationship of Ethiopia and Germany has registered growth, according to Germany’s Ambassador to Ethiopia.

Ambassador Lieselore Cyrus said the relationship of the two countries with respect to investment would further be consolidated.

The Ambassador appreciated the development activities she saw during her four years stay in Ethiopia and promised to work for the further strengthening of the relationship of the two countries.

President Mulatu Teshome held talks with the departing German ambassador on Friday June 20 at the National Palace.

During the occasion, he appreciated the ambassador for her efforts in further improving the strategic relationship of Germany and Ethiopia.

He said there is strong desire on the part of the two countries to further strengthen bilateral relations.


Uganda, Ethiopia to remain leaders in East African coffee sector


Uganda and Ethiopia will remain the pre-eminent coffee exporters in East Africa over the next decade, according to foodanddrinkinsight.

We highlight Tanzania as the country best-placed for coffee production growth in the region, though government initiatives will boost production across the region.

Aside from Ethiopia, East African coffee producers have seen either stagnation or outright declines over the last 20 years.

Production in Uganda and Kenya peaked in the late 1990s, while output in Tanzania failed to sustain a level above 1mn bags for at least two consecutive years.

In contrast, Ethiopia has significantly increased production since the early 2000s, raising output by more than 125% between 2000/01 and 2012/13 to 6.3mn bags.

Ethiopia and Kenya produce arabica coffee almost exclusively, while Uganda predominantly focuses on robusta production. Tanzania farms both crops.

Though East Africa is one of the world’s largest producers of arabica coffee beans, with total production of around 17mn bags, it remains well behind Brazil, which produces between 35mn and 40mn bags in any given year.

The main reason behind the recent stagnation in Ugandan, Kenyan and Tanzanian coffee production is falling or stagnant yields. Both Kenya and Tanzania have suffered from declining yields while area harvested has remained largely static.

Uganda, on the other hand, has seen volatility in its yields, which have averaged around the 6,500 hectogram per hectare (hg/ha) level for the last 50 years.
Tellingly, Ethiopia has also seen yields fall over the last 20 years and has only boosted output by devoting a significantly greater area to coffee production.



Int’l Agriculture Promoting Exhibition Opens


Int'l Agriculture Promoting Exhibition Opens

A five-day Specialized International Exhibition in Agriculture and Food (AGRIFEX) opened here on Thursday June 19, 2014 at the Addis Ababa Exhibition Centre.

During the opening of the exhibition, State Minister of Agriculture Dr. Gebregziabher Gebreyohannes said the aim of such kinds of exhibitions is to create opportunity for investors who engage in the agro-processing with a view to connecting manufacturers with beneficiaries in a short period.

The Government of Ethiopia encourages the private sector to engage in agro-processing which boosts the economic growth of the country as agriculture is the backbone of economy.
Meanwhile, Fabio Santoni, delegation leader of the eight Italian companies which took part in the exhibition, told Ethiopian News Agency that Italian companies are ready to transfer their knowledge in agro-business to Ethiopians in order to help rural development.
He said the aim of the exhibition is not to sell equipment but assist in technology transfer, training and management capacity so as to enable Ethiopian agro-business enterprises become competitive in the global export market.
A total of 76 companies, including 36 foreign agro-business companies from India, Namibia, Egypt and Sudan, are taking part in the 7th Specialized International Exhibition in Agriculture and Food Exhibition organized by the Addis Ababa Chambers of Commerce and Sectoral Associations.


Ethiopia and Israel to Strengthen Ties




Ethiopia and Israel agreed to further strengthen their ties through economic, social and security cooperation.

After holding talk with the Israeli Foreign Minister, Ethiopia’s Foreign Minister, Dr. Tedros Adhanom, told journalists the visit of Avigdor Liberman, Israel’s Foreign Minister, with 50 business tycoons will open a new chapter in the bilateral economic cooperation of the two countries.

Tedros furthered during the discussion he learned Israeli investors are keen to invest in Ethiopia. He added, as a means to further streghten the two countries relation, they have discussed to open Ethiopian Jewish Community Heritage Museum in Gonder and Shire.

In addition to these, Tedros disclosed he has also discussed with his Israeli counterpart on security issues at national and regional levels to fight terrorism.

Liberman on his part noted the two nations will further work on economic, social and security issues. He furthered Israeli business tycoons are keen to invest in Ethiopia and use the conducive investment climate.

According to Liberman the business delegation from the Israel Export Institute are keen to identify investment and business opportunity in Ethiopia and establish mutually beneficial business relationship.

The business delegates also had business to business summit with their Ethiopian counterparts and discussed areas of investment where they can create joint ventures.

Ethiopian Chamber of Commerce and Sectoral Associations President, Solomon Afework, revealed the Israeli business delegates are involved in agriculture and water technology; energy and mining; life science; information technology; mining industries; homeland security; infrastructure industries; consultancy and aviation.



Over 100 SMEs participating at Omo Kuraz sugar project


Some 108 small and micros enterprises (SMEs) with a total of 1,100 members are taking part at the Omo Kuraz sugar development project, public mobilization office of the project said.

Omo Kuraz sugar development project is being implemented in the Southern Nations, Nationalities and Peoples (SNNP) Regional State by Sugar Corporation.

The project comprises the construction of five sugar factories, sugar cane plantations, housing units, and roads.

Some 108 small and micros enterprises consisting of 1,100 members are participating at the project, small and micro enterprises jobs creation team leader at the office, Tesfaye Jemu, told WIC.

Construction, manufacturing and service sectors are the areas where members of the enterprises are currently engaged in, he said.

As a result of the launch of the project, each enterprise managed to save up to 500,000 birr.

Sugar Corporation is working in partnership with the (SNNP) Regional State to build the capacity and increase the participation of the enterprise in the project.

According to Tesfaye, residents around the project site are getting safe drinking water, electricity and road facilities, which were not present in the past.



Ethiopia and Djibouti Committed to Strengthen Ties


During a bilateral talk between Ethiopia and Djibouti on Thursday, June 19, 2014, representatives of the countries have announced they are committed boost their bilateral relations. The bilateral relation is said to enhance the socio- economic benefits the peoples of both countries will get.

Solomon Abebe, Foreign Ministry African Affairs Director General, said the relation of the two countries is remarkable and also noted there is an increase in people to people integration.

Commenting on the meeting Solomon said, it was aimed at evaluating the implementation of goals and strategic plans adopted by the 12th Joint Ministerial meeting held in Addis Ababa.

According to the Director General the two nations have reached on a consensus to outline action plans in order to address common problems in the areas of security, education and health.

Djibouti’s Director for Bilateral Relation, Yachin Houssein, on his part appreciated the two countries relationship to be strong in every aspect but noted they should work on exchanging information on epidemic and addressing human trafficking.

Houssein furthered the two countries have tight bilateral relations in economic integration, political and social levels. He added this is expected to be further strengthened.

Commenting on the meeting Houssein said, the meeting will lay down major strategic guideline for the 13th Joint Ministerial meeting.



Heineken to Open New Brewery in Ethiopia


Africa One of World’s Fastest-Growing Beer Markets


By Bart Koster

AMSTERDAM— Heineken HEINY -0.14% Heineken N.V. ADS U.S.: OTC $35.90 -0.05 -0.14% June 20, 2014 11:28 am Volume (Delayed 15m) : 16,019 P/E Ratio 22.77 Market Cap $41.51 Billion Dividend Yield 2.04% Rev. per Employee $315,612 06/20/14 Heineken’s Ethiopia Plans High… 06/20/14 Heineken to Open New Brewery i… 05/11/14 What Is the Outlook for Twitte… More quote details and news » NV will next month open a new brewery in Addis Ababa, Ethiopia, in what is the Dutch brewer’s latest push to expand in Africa, one of the world’s fastest-growing beer markets.

The brewery in Kilinto, on the outskirts of Addis Ababa, will be Heineken’s third plant in the East African country and will have an annual capacity of 1.5 million hectoliters.

The facility, which will produce local brands such as Bedele and Harar and possibly Heineken’s premium lager beer in the future, is meant to bolster the brewer’s footprint in the Ethiopian capital, said Siep Hiemstra, the president of Heineken’s operations in Africa and the Middle East, in an interview.

“We couldn’t serve the Addis Ababa region from our existing two breweries,” he said. “So this will strengthen our position in the country.”

Heineken’s expansion in Ethiopia, Africa’s second-most populous country, highlights the growing importance of the continent for the world’s top brewers.

Africa is one of the world’s fastest-growing beer markets thanks to its rosy economic prospects and emerging middle class. This has made the region a battleground for global brewers like Heineken, SABMiller SAB.LN +0.18% SABMiller PLC U.K.: London GBp3401.00 +6.00 +0.18% June 20, 2014 4:29 pm Volume : 4.06M P/E Ratio 0.26 Market Cap GBp54.56 Billion Dividend Yield 2.80% Rev. per Employee GBp199,383 06/10/14 Here Are Brewers’ Dream World … 05/22/14 Treasury Wine Rejects KKR Offe… 05/22/14 Africa, Latin America Pep Up S… More quote details and news » PLC and Diageo DGE.LN +0.05% Diageo PLC U.K.: London GBp1854.00 +1.00 +0.05% June 20, 2014 4:29 pm Volume : 3.00M P/E Ratio 0.18 Market Cap GBp46.54 Billion Dividend Yield 2.13% Rev. per Employee GBp398,662 06/20/14 Heineken to Open New Brewery i… 06/08/14 His Nose Is the Most Valuable … 06/04/14 Diageo Turns to the Web in Chi… More quote details and news » PLC, as they seek to counter a slowdown in mature markets in Europe and North America.

“Competition is intensifying and that sharpens the game,” Mr. Hiemstra said, referring to Heineken’s main competitors.

Heineken traditionally has a strong position in Africa, having opened its first brewery in Congo in 1923. The Dutch brewer currently has leading market positions in more than a dozen African countries, including Nigeria, its second-largest market after Mexico. It employs around 15,000 people in Africa.

In 2013, Heineken reported revenue of €3.07 billion ($4.18 billion) in the Africa and the Middle East region, which led to an operating profit of €665 million ($905 million), about 21% of the group total.

“Margins in this region are 1.5 times higher than the Heineken average,” Mr. Hiemstra said.

Mr. Hiemstra said Heineken is looking to further capitalize on Africa’s growth prospects through acquisitions and joint ventures. The primary focus, however, is to grow organically, for example, by building new breweries like the one in Addis Ababa, he added.

Mr. Hiemstra, a Heineken veteran who joined the brewer in 1978, said Heineken aims to use as much local resources in Africa as possible. By 2020, the company targets that 60% of the raw materials used to produce beer, like barley and cassava, will be sourced from local farmers. In 2013, the company used 48% from local sourcing.

“Through investments in local workers and local resources we create goodwill with national and regional authorities,” Mr. Hiemstra said. “It shows that we’re not only here to make profits, but that we also want to improve the local economy and social conditions.”



Public Enterprises and Labour Associations Signed Agreement


Government public enterprises signed an agreement with their respective labour associations a deal to implement Industrial Development Strategy (IDS) on Thursday, June 19, 2014.

During the occasion Dr. Zerihun Kebede, State Minister, noted the implementing IDS is not beneficial only for employers and the employees yet to the government too.

Zerihun added “The common and individual interest of the major actors (government, employers and employees) are the springboard of cooperation and conflict. Understanding the interests of the three parties is of paramount importance in the process of ensuring industrial peace. Thus their needs have to be treated separately”.

In related news the Ministry of Labour and Social Affairs reminded dialogue plays a pivotal role in boosting productivity of organizations and cultivating positive relations among employers and workers. Commenting on this the State Minister said social dialogue is a scientific method being used in the developed world to settle disagreement between employers and workers.

Zerihun also said in order to have uninterrupted production, minimize industrial dispute and boost workers moral one needs to ensure harmonious industrial relations. Commenting on this he said dialogue is a better way to achieve harmonious relations than rules and regulations.

Fekadu Gebru, an official from the Ministry, made a presentation in which he affirmed the stance of the State Minister. By his presentation entitled, Social Dialogue as a Toll for Industrial Peace, he said social dialogue is the key to creating conducive working environment that accommodates the interest of both employers and workers.

Fekadu added in order to achieve industrial peace there needs to be a reconcile in the needs of the employers and workers, better productivity and better payment respectively.

George Okutho, Country Office Director for Ethiopia and Somalia ILO, also said improving workplace cooperation between employers and workers for the primary objectives of achieving higher productivity and competitiveness should be collective objective for this year and years to come.

Okutho further noted his organization will continue to help Ethiopia in it’s capacity building needs. Nonetheless, he continued, progressively there should be a shift from ad hoc actions.



Kefi Minerals makes progress on Ethiopian project


AIM-listed gold explorer Kefi Minerals has taken a step towards building its Tulu Kapi project in Ethiopia.

The results from an extra drill hole show strong gold mineralisation at Tulu Kapi, with best results of 12m at 4.23 gross tonnage.

The group has completed field work and classified 90% of the minerals as reportable resources and reserves.

Managing Director Jeff Rayner said Kefi could now update resources, reserves and mine planning to re-activate its mining licence application by the end of 2014 and start construction in 2015.



Four things you should know about agriculture and food in Africa


BY | 20 June 2014


The World Bank estimates that Africa holds 60% of the world’s uncultivated arable land. Coupled with a youthful workforce and water resources, the potential for agribusiness in Africa cannot be ignored.


This week, the 24th annual International Food and Agribusiness Management Association (IFAMA) World Forum and Symposium, held in Cape Town, explored the opportunity for increased crop and food production on the continent, as well as some of the obstacles that need to be overcome.

How we made it in Africa looks at some of the key points raised at the event.

1. An investment of US$55bn needed in agriculture

“Africa exports US$45bn worth of agriculture produce. Unfortunately it imports $81bn worth of agriculture produce,” said MD Ramesh, Olam International’s president and regional head for southern and east Africa.

He noted that 70% of Africa’s population relies on agriculture for their income, and that a considerable portion lives in poverty, with little or no support to help increase productivity. In order to feed Africa and the world, significant investment will be required to meet Africa’s agricultural potential.

“Our calculations say it will take about $55bn worth of investments in the agricultural sector in Africa to transform agriculture on the continent,” explained Ramesh.

2. Informal markets dominate

Some 90% of all food in Africa (excluding South Africa) is purchased through informal markets, according to David Tschirley, professor at Michigan State University’s Department of Agriculture, Food and Resource Economics.

While there is an increasing demand for formal retail shopping and processed food, driven by rising incomes, Tschirley said that informal food markets will not become obsolete in the next 10-30 years. Nevertheless, his projections suggest that informal trade will decrease from 90% to around 65%.

Tschirley noted that traditional retailers will have to modernise their services alongside consumers’ demand for better quality products.

“So we need transformation not just in the modern sector, but also in this traditional sector… there needs to be a whole food system supply chain transformation.”

3. Technology can leapfrog infrastructure deficit

Lack of access to finance and market related information is a major limitation that small-scale farmers face in rural Africa. However, mobile penetration and innovations in mobile money technology can help reduce these challenges.

Thad Simons, IFAMA’s board president and senior executive advisor for Novus International, said mobile phones can assist the agricultural supply chain.

“In Kenya [Novus International] actually communicates with all of our poultry farmers – of all different sizes, across the country – through text messaging. The SMS system allows us to provide information to them on things like price of eggs and meat in Nairobi. But more than that, if [farmers] asked a question with regard to their productivity, if they started to see a problem with their flock, we can address those. It’s a way of delivering a service without necessarily going to the remote location where the farmer is,” Simons explained.

4. Majority of arable land situated in only a few countries

According to Milu Muyanga, assistant professor at Michigan State University’s Department of Agriculture, Food and Resource Economics, most of sub-Saharan Africa’s arable land lies in just a handful of countries.

“Most of these countries are fragile states… we are talking about DRC, Republic of Congo, Cameroon, Mozambique, and Zambia.”

While these countries hold the greatest potential for crop land expansion, Muyanga noted that much of this arable land is inaccessible due to poor infrastructure.



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