27 June 2014 Development News


Statement by an IMF Staff Mission on the 2014 Article IV Consultation with Ethiopia




An International Monetary Fund (IMF) mission led by S. Kal Wajid visited Addis Ababa June 11-25 to conduct discussions for the 2014 Article IV Consultation with Ethiopia.

At the conclusion of the mission, Mr. Wajid issued the following statement:

“The Ethiopian economy continues to experience robust growth and single-digit inflation. The mission projects real GDP growth in the 8-8.5 percent range for 2013/14 and 2014/15. The expansion in economic activity has contributed to poverty reduction and progress toward achieving the Millennium Development Goals. Deterioration in the trade balance this year was partly offset by higher net inflows from services and transfers. Strong external loan and higher foreign
direct investment, however, allowed for a modest increase in gross international reserves. Sizeable investment spending of public enterprises continues to absorb a large share of domestic financing and constrain credit available to the private sector.

“Going forward, the mission recommends continued cautious monetary policy stance that keeps money growth consistent with preserving the gains on inflation and achieving robust economic growth. The stable inflation conditions are ripe for developing market-based instruments of indirect monetary control. In this respect, there is a need to gradually raise nominal interest rates to activate
the Treasury bill market for more flexible liquidity management. There is scope for improving the market functioning and price setting mechanism for the exchange rate. This may entail greater exchange rate flexibility not only to help to clear the foreign exchange market but also to promote the competiveness of the traded goods sector. The mission supports the National Bank of Ethiopia’s
objective of gradually raising foreign exchange reserves to 3 months of imports.

“The mission stresses the importance of obtaining comprehensive financial information of major public enterprises for establishing an overall fiscal anchor. The consolidated fiscal position is required to assess the fiscal policy impact on macroeconomic developments and debt sustainability. The continued large borrowing of the public sector with large share from domestic banking
system is crowding out the private sector. In this respect, to further support private sector development and employment creation, there is a need to reduce public sector borrowing by either prioritizing investment projects or attracting more external financing at appropriate terms.

“Ethiopia’s public sector led development strategy has delivered robust growth and rising living standards. To sustain these achievements, adapting policies to provide greater scope for the private sector will be important. In terms of the next Growth and Transformation Plan, consideration should be given to mitigating constraints to private sector development and improving export competiveness.Concerted efforts are needed for improving efficiency of trade logistics, increasing access to financial services, ensuring a competitive exchange rate, and providing a predictable regulatory environment for businesses. Harnessing the transformation power of private enterprises will be increasingly important as Ethiopia transition from agricultural to industrial based economic growth.

“The IMF Executive Board is expected to complete the 2014 Article IV consultation in September 2014.”

Source: IMF Press Release



Tigray to cultivate over a million hct of land in Meher


More than 1.3 million hectares of land would be covered with seeds in the upcoming Meher (production) season, the Tigray Regional State Agriculture and Rural Development Bureau said.

Bureau Public Relations Coordinator, Michael Miruts, told WIC today that the land would be covered with main crops such as maize, teff, sesame, rice and sorghum, among others.

He said various agricultural inputs essential for the development activities are under distribution.

Out of the 749, 823 quintals of fertilizer required for the development activities, some 362, 777 quintals have so far reached in the hands of the farmers, he said.

He said farmers are using more than 13.1 million quintals of compost and 31 million quintals of animal manure.

According to Michael, 49, 889 quintals of select seed were also prepared, of which 9,100 quintals have already been reached in farmers’ hands.

Some 12,462 kilograms of herbicides and 128, 870 liters of insecticides are being distributed to beneficiaries, he said.

The region expects to reap 47. 8 million quintals of agricultural outputs the land that would be developed during the Meher season, he said.



Ethiopia’s Electric Power Export Growing


Ethiopia’s Electric Power Export Growing

Ethiopia’s effort to create power integration in Eastern Africa consolidates its economic benefits and the capacity to generate power, according to Ministry of Water, Irrigation and Energy.

Water, Irrigation and Energy Minister Alemayehu Tegenu told ENA that the power integration not only strengthens the relations among the countries, but also increases the foreign currency earning of Ethiopia.

As a result, the country has earned over 32 million USD during the past nine months, the minister disclosed.

The mega power projects Ethiopia has been building and the growing power demand of the countries in the region shows that the benefits Ethiopia gets from those would grow continuously, Alemayehu elaborated.

Beyond economic benefits, the power integration effort would have pivotal role in stabilizing the region and in strengthening the political and social relationships of the countries, he said.

Due to the above considerations, Ethiopia is contributing its part for the strengthening of power integration, he added.

Currently, Ethiopia provides 100 megawatts electricity to Sudan and up to 50 megawatts to Djibouti.

Electric power transmission lines with the capacity of carrying 2000 megawatts are also being extended to Kenya to supply power to the country.

The minister added that beyond East Africa, Ethiopia has been undertaking preparatory works to export electricity to Yemen via Djibouti, and electric power will soon be supplied to South Sudan and Somalia.

The electric power export does not affect the domestic electric supply, the minister stressed, adding that there is sufficient power.

He attributed the current power interruption to network problem in addition to the growing demand for power.

The minister further noted that Ethiopia produces 2,000 megawatts of electricity and that can definitely meet the current demand of the country.

According to Alemayehu, the current problem is caused by defects on transformers and inability of electric cables to carry loads as well as other factors.

To alleviate the problem, the ministry, in collaboration with Metals and Engineering Corporation (MetEC), is producing from 30 to 35 transformers in a day, the minister stated.’s-electric-power-export-growing&Itemid=260


Civil service reform bearing fruit, says ministry


The civil service reform programs which are being implemented are beginning to bear fruits, Ministry of Civil Service (MoSC) said.

Various types of reform programs such as business process reengineering (BPR), Balanced Scorecard (BSC), Citizen’s Charter and Kaizen philosophy have been implemented with a view to improve public service delivery.

“There are improvements in service delivery and productivity of civil servants,” Mohammed Seid, communications and external relations director at MoSC, told WIC.

“Public satisfaction is also growing,” he said adding that there remain works to fully implement all the civil service reform programs.

“The progress the country has achieved in all fronts is one testimony to the success of the civil service reform being programs implemented,” Mohammed said.

However, he said the ministry will strengthen its effort and build the capacity of civil servants and better engage the general public to further improve public service.



Ethiopia, Nigeria sign agreements to deepen all-rounded cooperation 




Prime Minister Hailemariam Desalegn and Nigerian President Goodluck Jonathan jointly announced (June 25) that both Ethiopia and Nigeria had agreed to comprehensively deepen mutual cooperation in the fields of trade and investment, tourism and agriculture as well as security.

The two sides signed a memorandum of understanding on diplomatic training and agricultural cooperation.

Both leaders also recognized the necessity to jointly promote development and prosperity of their peoples through the consolidation of bilateral ties in the priority areas including trade, investments, agriculture and air transportation, the establishment of enabling factors for cooperation and the re-activation of investment friendly regulatory frameworks.

To realize sustainable economic growth and development, both sides committed to remain seized to extend their support to the promotion of regional and global peace and security. They also denounced all forms of terrorism and extremism as well as this growing threat to African countries.

During a joint press conference with President Jonathan, Prime Minister Hailemariam said that terrorism was “a global phenomenon that has to be tackled together in unison. It should not be left to this or that region or this or that country. We have to bear in mind the genesis of this terrorism.” He also noted that the increasing surge of suicide bombing by terrorists was a testimony for their elimination from their strongholds, stressing that much remained to sustain the momentum on the fight against terrorism.

He detailed that the East African region had resolutely fought terrorism attaching special importance to a comprehensive cooperation over the last decade, adding that the cooperative security mechanism had considerably incapacitated Al Shabab insurgents. He said that the current situation pressed Al Shabab insurgents to resort to suicide bombing, noting that this cooperative security of the region and the ideological bankruptcy of the threat accelerated the fading away of terrorism and extremism. He said that terrorism or the killing of humanity “has nothing to do with religion or political ambition.”

He suggested that countries vulnerable to terrorist attacks, including Nigeria and Ethiopia, must lead the process of combating the indiscriminate killing of humanity and remain committed to continue the fight against terrorism until its stoppage.

With regard to industrialization, the Prime Minister stressed the importance of sustained cooperation and support in the agenda of the resurgence of African industrialization to take root in the continent, adding that this cautious move would save Africa from becoming “a dumping site for foreign producers.

”President Jonathan on his part stated that Nigeria had a lot to draw lessons from Ethiopia’s experience in the fight against terrorism.

He recognized that Ethiopia-Nigeria economic ties had not enjoyed steady developments, stressing that the urgency of strengthening cooperation in the areas of agriculture, power and commerce would enable the two nations to generate jobs for youths and advance the cause of development.

He also appreciated Ethiopia’s commendable efforts in the development of power generation, agriculture, commerce and industry.



President Mulatu: close engagement of Chinese business people expedites win-win development


FDRE President Dr. Mulatu Teshome held discussions (June 26) with the business delegation of the People’s Republic of China headed by Wang Chuchang, Head of Chinese Cultural Academy, at the National Palace.

Discussions focused on ways to scale up the already existing economic ties to a new high through the close engagement of the two friendly countries’ business communities.

President Mulatu stressed that the proactive engagement and participation of the Chinese business community in the fields of medicine, mining and manufacturing would inject new impetus to further consolidate Ethiopia-China comprehensive partnership to achieve mutual benefits.

He also noted that establishing Chemical and Medical Equipment Producing industries would offer enormous profits.

The Chinese business delegation promised to bring their enterprises to Ethiopia in order to engage in the selected priority areas of investment including mining, manufacturing and establishing Chemical and Medical Equipment Producing industries in Ethiopia.



Authority to construct road to interconnect Omo-Kuraz sugar project


The Ethiopian Roads Authority on Wednesday signed contract agreement amounting to 2.5 billion Birr with the Chinese

Communications Construction Company (CCCC) for construction of 102 km road on Omo River.

The road project aimed at linking the six sugar factories under the Omo-Kuraz project with each other and main roads, Authority Director General Zaid Woldegebriel said.

The construction of the road to be finalized in three years will be carried out in two phases. The first phase that covers 41.7km will run from the Omo no-6 junction to no-4.

Construction of a 200m bridge over the Omo River will be undertaken in this phase of the project expected to consume 108 billion birr.

Up on completion within three years, the road will link people living in both sides of the river and the sugar factories with each other, Zaid said.

The second phase of the project that covers 60.6 will be carried out with an outlay of over 1.4 billion Birr. Construction of 157 small bridges will be carried out in this phase of the project, according to Zaid.

According to ENA, this road will interconnect the Omo no-4 and no-6 sugar factories with Hana- Jinka and Sawla Maji main roads.



Omo Kuraz, 3 universities sign MoU


The Omo Kuraz sugar development project has recently signed a Memorandum of Understanding (MoU) with 3 universities based in the SNNP Regional State.

The agreement was signed with Hawassa, Arba Minch and Mizan Tepi universities, general manager of Omo Kuraz sugar development project, Nuredin Asaro told WIC.

According to the agreement, the universities will produce skilled manpower as well as provide short and long-term training for employees of the project, he said.

An agreement was also signed with Jinka, Bonga, Wolaita and Mizan Tepi technical and vocational colleges, Nuredin added.

He said the colleges have agreed to train middle-level manpower equipped with the necessary skills in sugar development.

According to Nuredin, Arba Minch University is undertaking preparations to launch masters program in sugarcane development, while Semera University eyes to become a center of excellence in the same area.



Crown Paints To Spend $8m On Setting Up Ethiopia Plant




VENTURES AFRICA – Nairobi Stock Exchange (NSE)-listed firm, Crown Paints Kenya Ltd has proposed a Sh701 million ($8 million) factory for Ethiopia in 2015, following commencement of production at its Tanzania plant in January.

“We want to establish a large plant in Ethiopia,” said Rakesh Rao, Crown Paints’ Group Chief Executive as the company expands its operations in the East African market.

Rao noted that the Ethiopian market was special. The company had therefore opened discussions with the government as it continues consolidating its presence in East Africa. The paint maker also has plants in Arusha, Tanzania and Kisumu, Kenya.

Crown Paints described its Sh300 million ($3.4 million) investment in the Tanzanian factory as part of its strategy to increase regional market income and reduce its reliance on its Kenya, a market accounting for 92 percent of the paint maker’s total sales.

The new Tanzanian plant, which will be funded through debt, will be fitted with the capacity to produce one million litres of paint per month.

The company will from August spend Sh263 ($3 million) to establish a manufacturing plant in Kisumu as a supply base of economy grade paints for the Great Lakes market.



Authority signs agreement to build 20km roads with over 1 bln birr

Addis Ababa City Roads Authority (AACRA) on Thursday signed contract agreements with 5 contractors for the construction of 20km asphalt roads at a cost of more than 1.1 billion birr.
AACRA signed the agreement with CRBC Addis Engineering plc, Yemane Girmay General Contractor, Macro General Contractor Trading Plc, Aser Construction plc and Melcon Construction.Engineer Fekade Haile, general manager of AACRA and heads of the contractors signed the agreement at a ceremony held at the authority’s head office.
Engineer Fekade on the occasion said the 20km asphalt roads to be built by the authority would link Arabsa, Yeka Abado and Tulu Dimtu condominium sites with main roads.The cost for the construction of the roads will be covered by the Addis Ababa City Administration, he said.
According to the manager, the contractors will begin the construction of the roads within the coming 15 days and finalize them on February 2015.

The construction of the roads would create 10,000 jobs, it was learnt.



Tullow Oil To Begin Kenyan Oil Production In 2017




VENTURES AFRICA – Tullow oil has placed a 2017 time frame, in line with the government’s target, to commence oil production after describing the oil as that of a “high quality and of international marketable standard.”

“The government of Kenya is looking forward to have its first oil in 2017,” said Tullow’s CEO, Paul McDade.

Having discovered eight commercially viable wells in Kenya since 2012, the British company can sell part of its stake in Kenya oil blocks to potential buyers from Europe and eastern part of the world.

To meet its 2017 target, the company has to construct a 1,330km underground heated pipeline between Holma in Uganda and Lamu through Lokichar in Kenya. This will ease transportation of Kenyan and Ugandan oil through a single pipeline.

“The quality of oil Uganda and Kenya has are compatible and can pass through the same pipeline” said Tullow vice president, for south and east Africa, Gary Thomson.

President Uhuru Kenyatta has set this plan rolling by inviting locals to buy a stake in the pipeline in other to get the full value of the infrastructure.

“We have started working with 50km corridor which will narrow to 2km and later 200m” Mr Thomson disclosed.




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