07 July 2014 News Round-Up

 

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Ethiopia PM cites major shift from Egypt on Nile dam

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Egyptian President Abdel-Fattah al-Sisi (L) is welcomed by Sudanese President Omar al-Bashir (2nd R) upon his arrival at the Kahrtoum International Airprot in Khartoum, Sudan on June 27, 2014.

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ADDIS ABABA  –  Ethiopian Prime Minister Hailemariam Desalegn said Monday that Egypt has shown a major shift of stance toward its controversial multibillion-dollar hydroelectric dam being built on the upper reaches of the Nile.

Ethiopia welcomes the recent shift in stance demonstrated by the new egyptian leadership,” Desalegn told the parliament, hinting at a new chapter of mending fences between the two Nile-basin nations.

Desalegn’s remarks came to show thaw in ties between the two countries after they agreed last month to resume tripartite talks – also including Sudan – to discuss the construction of the massive dam.

The understanding came after Desalegn agreed with recently-elected Egyptian President Abdel-Fattah al-Sisi during late June’s African summit in Malabo to resume talks on the mega-dam Addis Ababa is building on the Nile, which Cairo fears will reduce its traditional share of river water.

“The tripartite talks will not be simple and we expect some tough proposals from the Egyptian side,” Desalegn said. “ Ethiopia will keep its calm and follow through the tripartite engagement.”

Desalegn went on to say that he asserted during his meeting with Sisi that the construction of the dam would not be disrupted.

“Instead of suspicions and distrust, it would be better for Ethiopia and Egypt to cooperate on a basis of understanding and mutual trust,” the premier said. “The two countries should cooperate [in other fields] beyond the Nile,” he added.

Set up in 2011, a tripartite technical committee was tasked with studying the impact of the multibillion-dollar Grand Ethiopian Renaissance Dam on the two downstream countries.

The panel’s work, however, was suspended in January amid mounting tension between Cairo and Addis Ababa.

Ethiopia insists that the dam is necessary for its national development, saying that the project will not impact Egypt’s traditional share of Nile water, which has long been set by a colonial-era water-sharing treaty that Addis Ababa has never recognized.

Tension has marred relations between Ethiopia and Egypt in recent years over the former’s construction of the Nile dam, given the fact that the river represents Egypt’s only source of water.

Egypt fears that construction of the Nile dam could potentially reduce its water supply and hurt local agriculture.

http://www.dailystar.com.lb/Business/Regional/2014/Jul-08/263029-ethiopia-pm-cites-major-shift-from-egypt-on-nile-dam.ashx

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UK Pledges to Continue Supporting Ethiopia

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UK Pledges to Continue Supporting Ethiopia

Great Britain will continue extending the 300- million Pound Sterling assistance it provides annually to Ethiopia, the International Development Cooperation Minister said.

Prime Minister Hailemariam Desalegn held talks on Monday, July 7, 2014 with a delegation led by UK International Development Cooperation Minister, Lynne Featherstone.

During the occasion, the premier said Britain should strengthen the financial support to help Ethiopia realize its poverty reduction program.

The prime minister, who said that Ethiopia has been utilizing the financial assistance obtained from Britain for the intended purpose, added that the contribution of UK in the structural change Ethiopia is making from agriculture to industry-led economy is huge.

The premier also urged the UK to continue its financial support during the Second Growth and Transportation Plan.

Minister Lynne Featherstone on her part said the support of her government would further be consolidated in the future.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2327:uk-pledges-to-continue-supporting-ethiopia&Itemid=260

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Will Ethiopia and Djibouti become “a single country with two chiefs”?

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Djibouti President, Ismaïl Omar Guelleh puts himself under Ethiopia’s protection

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Indian Ocean Newsletter

THE plan for economic integration devised by Djibouti and neighbouring Ethiopia could ultimately lead to a kind of political unification between the two countries. During the last few weeks, certain Ethiopian dignitaries have hinted at it and one of them even went so far as to utter “a single country with two chiefs”.

Ethiopian desire to secure its Djibouti port outlet is nothing new and some people in Addis Ababa have been talking about “an obligatory merger” with Djibouti for years. So far this trend has been latent but is now coming into the fore, because President Ismaïl Omar Guelleh (IOG) needs an Ethiopian umbrella in various sectors, including that of guaranteeing his immunity when he is no longer in power.

Weakened President

The Djibouti president was born in Dire Dawa, Ethiopia, and owns a house in Addis Ababa. He is beginning to show his age (he is 67 according to his official birth date) and his health is not what it used to be. He is currently getting over an operation at the Val-de-Grace military hospital in Paris and he is losing his mobility. Moreover, the traditional Independence Day garden party on 27 June was not held this year, the first time in decades.

During the military parade, all measures were taken for him to make the least possible effort: IOG did not even get up to return the salute of the commanders of the parading troops. Nor did he appear on 21 June at the Hotel Kempinski for the presentation of Djibouti Vision 2035, even though it is under his High Patronage. The government, and in particular finance ministerIlyas Moussa Dawaleh have been working on this project for many years. Finally, the cabinet meetings, which are normally held every week, are getting further and further apart.

No successor in sight

IOG has several times reiterated that he will not run in the 2016 election and his state of health suggests that this will indeed be the case. However, from 2006 to 2009 he had also promised that he would not amend the constitution so he could run for another mandate, which he did finally do. At present, he does not give the impression of being particularly keen to prepare a successor.

The best placed potential candidate for his succession, presidential secretary general, Ismaïl Tani, from the same Issa/Mamassan ethnic group as IOG, is at the moment not in the good books of the highly influential First Lady Kadra Mahamoud Haid.

In the event of choosing a non-Mamassan, the most likely candidates would be Ilyas Moussa Dawaleh, former health minister Abdallah Abdillahi Miguil, and even the Afar Prime MinisterDileita Mohamed Dileita. But such a change would probably produce strong tension inside IOG’s party Rassemblement populaire pour le progrès (RPP) – an opportunity that the opposition coalition still lying in wait, Union pour le salut national (USN), would not fail to seize. Thus, whether IOG stays in command or hands over the helm in 2016, a turbulent political time is in store and Ethiopian protection could be necessary for him.

Furthermore, France and the other western powers present in Djibouti would not intervene militarily to support the regime, unless there is serious foreign aggression.

Economic merger

Many of the companies operating in Djibouti do not want to hear anything about a merger with Ethiopia, as they fear that Djibouti could move from its quite open economic system at present to the frequently more protectionist approach of Ethiopia. However, the current infrastructure projects (railways and roads, for example) favour increased economic integration and good political entente between the two countries.

Ethiopia depends on its neighbour for its trade to transit and is extremely wary of Djibouti becoming destabilised by radical Islamists or Eritrea.

Djibouti, for its part, has become dependent on Ethiopia on several counts: importing electricity, attributing land in Serofta in the Oromia Regional State to cultivate cereals for the Djibouti market; another land concession near Shinile (eastern Ethiopia) to extract 100,000 cubic metres of drinking water a day and the construction of a 70 km aqueduct to Djibouti.

The firm MAI Resources International (Switzerland) AG chaired by the Swiss national of Kuwaiti extraction Rashad Shawa is working with the Djibouti authorities on this particular project. Djibouti could then sell the water from Ethiopia on to other countries in the Gulf of Aden.

http://sodere.com/profiles/blogs/should-ethiopia-and-djibouti-merge-into-one-country

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National Action Plan Launched to End Fistula within Six Years

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National Action Plan Launched to End Fistula within Six Years

Ministry of Health announced that it has prepared a national action plan that helps eliminate obstetric fistula from Ethiopia in the coming six years.

The ministry, in cooperation with key stakeholders, launched on Monday, July 7, 2014 a national conference in Addis Ababa with a motto “Ending Fistula, Transforming lives.”

Opening the conference, Health Minister Dr. Kesetebirhan Admassu said the action plan is launched with the belief that the country would eliminate fistula caused by delivery in the coming six years.

He said the activities carried out by the health sector over the past two decades have created capacity which enables the sector to eliminate fistula cases.

According to Dr. Kesetebirhan, the huge boost in the number of health centres, trained midwives, hospitals and trained surgical officers over the years have created favourable situation for eliminating fistula cases.

He said the main objective of the action plan will be preventing fistula by making mothers deliver in health centres, and tracing and treating mothers that suffer from fistula.

The minister said a recent analysis of the problem shows that there are 39,000 women currently living with this problem and over 3,000 obstetric fistula cases occur in Ethiopia.

United Nation Population Fund Country Representative, Faustin Yao, on his part said UNFPA would work to cure victims of fistula.

Yao said UNFPA will continue providing technical and financial support for the effort by the government to eliminate obstetric fistula by 2020.

The number of trained midwives in Ethiopia, which was 1,275 in 2008, has reached 6,900 through accelerated midwifery training programs.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2328:national-action-plan-launched-to-end-fistula-within-six-years&Itemid=260

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Amhara plans to reap 166 mln qtls agricultural produce in Meher

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The Amhara Regional State agriculture bureau planned to reap 166 million quintals of agricultural output in the upcoming Meher season.
Representatives of public relations process leader at the bureau, Getnet Tarik, told WIC the stated volume of yield will be garnered from 4.5 million hectares of land.

More than one million hectares out of the total land has so far been covered with seeds, according to the representative.
Out of the 3.3 million quintals of fertilizer which the bureau readied for use, over 2 million quintals have so far been disbursed to beneficiaries, Getnet added.

Some 194,000 quintals of select seed are also prepared for the season, of which 72, 695 quintals have already reached in the hands of farmers, he added.
Some 7,626 quintals of lime that enables to treat acidic soil were also distributed for farmers, he said.

http://www.waltainfo.com/index.php/explore/14038-amhara-plans-to-reap-166-mln-qtls-agricultural-produce-in-meher

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Ethiopia launches tourism body to target higher earnings

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Ethiopia new tourism policy

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Ethiopia has launched a tourism body to target a two-fold increment in the number of tourists visiting by 2015 and make the country one of Africa’s five top tourist destinations in five years.

The Ethiopian Tourism Organisation, created recently to market the East African nation as a leading tourist destination, is mandated to bring together government agencies and local businesses to create jobs.

“We will be proactive in the identification of the market opportunities and partnerships and we will search for innovative approaches to tourism development and marketing,” Solomon Tadesse, the ETO Chief Executive Officer, said during the launch of the organisation.

Ethiopian Prime Minister Hailemariam Desalegn called for the establishment of the tourism body in August 2013 through a Federal Regulation, which also set up the Tourism Board as a new institution to promote the country.

“It is not too late to establish this new entity. The setting up of such a particular agency has its particular reasons at this time,” Solomon said. “There was no infrastructure but now, we have the infrastructure.”

Ethiopia is counting on at least nine World Heritage Sites recognized by the UN Educational, Cultural and Scientific Organisation (UNESCO), the highest such concentration in any single African country, to attract visitors.

“It is time to work hard. We are projecting that we will become one of the top five tourist destinations in Africa in the next five years. We are realistic not to expect too much because you can only bite what you can chew,” Solomon added.

The UN Development Programme (UNDP), which has financed the initial setting up of the new entity, said Ethiopia’s huge potential as a tourism giant has not been fully exploited.

“Ethiopia’s potential and expectation has not yet translated into a thriving tourism industry and we are left to lament over the unfulfilled promise,” said Eugine Owusu, the UNDP Ethiopia Representative.

Ethiopia hopes to double the tourist arrivals by 1 million visitors every year and grow the average tourist spending from US$250 million to US$3 billion by 2015.

“When approached in a sustainable manner, it is true that tourism may not be a silver bullet to transform  a country but it can help a country do a number of things. It can help grow and alleviate poverty,” Owusu said.

Ethiopia still needs to improve manpower in the tourism sector and build more world class hotels.

The country is also required to invest more in its wildlife parks to attract more visitors while sustaining the investments in the hotel sector.

http://www.afrikanspot.com/2014/07/ethiopia-ethiopia-launches-tourism-body-target-higher-earnings-lethiopie-lance-une-agence-pour-accroitre-les-revenus-du-tourisme/

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Addis Ababa Light Railway System to Go Operational on New Year

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Addis Ababa Light Railway System to Go Operational on New Year

The Addis Ababa light railway system will go operational in January, 2015, the Ethiopian Railways Corporation disclosed.

Corporation General Manager, Dr. Getachew Betru said the overall progress of the project has exceeded 70 percent while civil works, bridges and underground (cave) constructions jumped over 90 percent.

The project is currently undertaking works on advanced electrification, signalling, communication and railway stations, he added.

According to the General Manager, the great challenge the project faced was proper railway administration, which it is trying to tackle with professional companies that help operate the railway system.

The Addis Ababa Light Railway Project General Manager, Engineer Behailu Sintayehu, on his part said civil work is completed while welding of rail track and construction of power generating poles are being finalized.

The Addis Ababa light rail transit will cover more than 34 kilometres with proper stations in every 700 meter distance on average, he added. The project has so far created more than 3,000 jobs, it was indicated.

The Addis Ababa Light Rail Transit Project commenced on January 31st, 2012.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2329:addis-ababa-light-railway-system-to-go-operational-on-new-year&Itemid=260

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NEBE set to make upcoming elections free, credible

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The National Electoral Board of Ethiopia (NEBE) said it is undertaking preparation for the 5th general elections scheduled to take place next year. Presenting NEBE’s 11 month performance report to the House of Peoples Representatives (HPR) yesterday, Prof. Merga Bekana Chairperson of NEBE said the board is undertaking all the necessary preparations to make the upcoming election free, fair and credible.

Preparation of ballot boxes and training of political parties are among the activities being carried out by the board, he said.
In a related development, HPR ratified the draft bill providing for establishment of the Infrastructure Development Coordinating Institute to coordinate infrastructure development activities at the federal level.

It is necessary to establish the Institute to manage the infrastructure development across the country through one system and create coordinated activities among implementers.
The establishment of the Institute will help to lead such activities in a coordinated manner and minimize challenges related to resource management, service interruption and environmental degradation.

According to ENA, the House also ratified the agreement between Ethiopia and Djibouti for supply of water.
The agreement which will enable Djibouti to get 37 million cubic meter water per annual from Ethiopia for the coming 30 years said to boost the cooperation between the two countries.

http://www.waltainfo.com/index.php/explore/14028-nebe-set-to-make-upcoming-elections-free-credible

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Ethiopia’s Banking Industry Finally Opens Up To Adopt Electronic Payment

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Ethiopia has a population of about 90 million people, and you would be surprised to know that very few local Ethiopians have a bank account. This is because the Ethiopian banking services are very limited, and the government does not allow foreign banks to operate locally. The Ethiopian government does this in a bid to protect the domestic lenders. With such limited banking services, all local retail transactions are done primarily in cash; retailers complain that the scarcity of debit cards greatly limits the growth of their businesses. Foreign chains are also restricted from the domestic retail industry.

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Ethiopia has a population of about 90 million people, and you would be surprised to know that very few local Ethiopians have a bank account. This is because the Ethiopian banking services are very limited, and the government does not allow foreign banks to operate locally. The Ethiopian government does this in a bid to protect the domestic lenders. With such limited banking services, all local retail transactions are done primarily in cash; retailers complain that the scarcity of debit cards greatly limits the growth of their businesses. Foreign chains are also restricted from the domestic retail industry.

But despite this, the Ethiopian economy has been steadfast and is one of fastest growing economies. It however goes without saying that they are still crippled with a lot of inefficiencies when it comes to money transfers and payments. Ethiopia’s economy stands to benefit greatly if the government backs down the strict regulation it has imposed on the country’s banking sector.

Thanks to Visa Inc. it would appear the time for such a change has finally come. Visa has been able to introduce the first debit cards in Ethiopia. After an aggressive campaign to try and convince the government on the potential benefits, the Ethiopia’s economy would enjoy by adopting electronic payments. Visa Inc. citing examples of how electronic banking has improved other African countries economies; it increases international trade, thereby placing the country in a more favourable balance of trade with its foreign trade partners among other benefits.

According to Visa’s Manager for Southern and East Africa, Jabu Basopo, Visa’s aggressive campaign in Ethiopia has yielded fruits and Ethiopia is now ready to adopt electronic payments. Currently, the Ethiopian government is running a pilot program for electronic payments; government officials have been issued pre-loaded cards that will enable them transact via electronic payment, but still their spending will be checked. So far the government has been impressed with the trial program, and this is a good indication of further adoption of electronic payment in other sectors of the economy.

Basopo has also raised concerns on the lack of muscles by the Ethiopia’s local banks to push the Central Bank into effecting the necessary changes in the country financial sector. The state has too much power and influence on the local banking industry; the leading commercial lender is owned by the government and holds about two-third of all of Ethiopia’s deposits.

http://www.innov8tiv.com/ethiopias-banking-industry-finally-opens-adopt-electronic-payment/

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Engine Factory to Be Operational

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An engine factory being constructed in Mekele Town of Ethiopia with 300 million Birr will be operational in the coming year, the Ethiopian Power Engineering Industry said.

Industry General Manager Major Asefa Yohanes said that the factory will manufacture engines for light and heavy vehicles.

It will also produce engines for water pumps.

The factory will get input from the Akaki Metal Products Factory and Hibret Manufacturing Industry under the Metals Engineering Corporation.

Since the automotive industry is booming, manufacturing engines locally will help to save expenses for engines importation, the Manager said.

http://allafrica.com/stories/201407070592.html

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Japan constructs new bridge linking Addis, Djibouti

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Japan constructs new bridge linking Addis, Djibouti

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– Will provide loan for Alto Langano geothermal project

– The only existing bridge that links Ethiopia and Djibouti and was built 43 years ago is to be replaced by a new 145 m long and 40 m high two-way bridge with a 230 million birr finance secured from the Japanese government.

The old bridge, which is currently limited to serving trucks, only allows one to pass at a time. The vehicles crossing over the bridge are required to wait for some two or three minutes for their turn. The bridge is built over the Awash River, some 350 km from Addis. 

Officials of the Japanese project contractor, Sato Kogyo, and the consulting firm Central Consultant Inc. under the implementing agency, Japan International Cooperation Agency (JICA), told reporters on Thursday at the site that building the bridge and equating one km road on both directions (Addis Ababa, Djibouti) required the import of a special type of reinforcement bar from Japan. Some 700 tons were imported. In addition to that, polymerized asphalt was vital  to level the roads and serve longer years ahead. Hence, Sato Kogyo brought in an additional 2,000 drums of polymerized asphalt. In a nutshell, the construction consumed some 12 thousand tons of cement.

Osamu Hasegawa, project manager for the replacement of Awash Bridge on A1 truck road, said the construction of the new bridge took two years and is expected to be finalized by the end of next September. As of June 25, some 84 percent of the work was accomplished, Hasegawa said. The Japanese contractor signed the deal for the job in 2012.

The lifeline for the import and export sector of Ethiopia, the bridge, is assumed to be in service for some fifty years and if flooding and other calamities are contained, it can serve for 100 years, Hasegawa affirmed.

Driving from the capital, on the left side of the A1 truck road Awash Bridge, the Chinese are stretching a railway structure heading to the Port of Djibouti. There are two existing bridges extending over the Awash River adjacent to these two new structures. The existing truck road bridge was laid during the reign of Emperor Haile-Selassie, and next to this bridge stretches an old metallic railway bridge nonfunctional anymore built under the same Emperor.

According to Hasegawa, it was a hectic and time-consuming experience to import anything into Ethiopia. The custom clearance and documentation, he said, were very unfriendly for such a construction to idle for months. The other difficulties faced include the deep bedrocks, which made the excavation stage tougher for the 100 or so men Hasegawa employs. In about four months, however, the smooth construction would go on. According to Jun Fujimura, chief resident engineer for the project, the 43-year-old existing bridge will retire to serve only for emergency diversion and mostly will remain as a pedestrian bridge. The speed limit of vehicles is expected to increase to 85km/h rather than 20 km/h following the construction of the new bridge. In the same way, the weight limit at present under 34 tons will go up close to 41 in the near future.

In a related news, Japan is sponsoring to provide a loan facility for the Alto-Langano geothermal project. The ongoing geothermal project’s feasibility study will be expected to prove it has the capacity of generating some 70 MW. In that regard, Koo Nakahmura, spokesperson at the embassy, told The Reporter that the amount Japan may extend to the project depends on further studies.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2208-japan-constructs-new-bridge-linking-addis-djibouti

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Africa Oil to conduct seismic survey in Arba Minch

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The Canadian oil firm, Africa Oil, is to collect seismic data from a new oil exploration block in southern Ethiopia, around Arba Minch town, Southern Nations and Nationalities Regional State.

Africa Oil acquired the new oil exploration block in southern Ethiopia rift valley system in February 2013 from the Ethiopian Ministry of Mines. The block is a large area covering 42,000 sq.km of land in the great East Africa Rift Valley. 

Reliable sources at Africa Oil told The Reporter that the company has put up a tender to hire a company that will undertake a seismic survey in the concession area. Sources said five international companies specializing in conducting seismic surveys submitted their technical and financial proposals to Africa Oil last May. According to sources, Africa Oil will disclose the results of the bid this month. European and Chinese companies are bidding to win the contract.

The Vancouver-based company has been prospecting for oil in the Ogaden and in South Omo basins. A senior official at the Ministry of Mines said that Africa Oil, in collaboration with Tullow Oil and New Age, is undertaking encouraging oil exploration activities. The official said Africa Oil has a rich experience in exploration and extracting oil in African countries.

The company has three projects in Ethiopia consisting of blocks 7 & 8 in the Ogaden Basin of eastern Ethiopia, the Adigala Block close to the border with Somalia and Djibouti and the South Omo Block which lies in the Omo Rift Valley of south-western Ethiopia.

The Ogaden Basin blocks are relatively underexplored with limited well and seismic data to constrain the petroleum system proved by the Calub and Hilala fields to the east. The Adigala block is a wildcat opportunity with no wells in the area. An analogue petroleum system is predicted based on nearby outcrop data and field surveys. The South Omo Block is within the Tertiary age East African Rift, just north of Lake Turkana, Kenya and within the same petroleum system as the Company’s Kenya Block 10BB and Tullow’s Uganda discoveries.

Africa Oil operates in an exploration area measuring 50,000 sq. km of land in the Ogaden. The company bought the concession in Ogaden from a Swedish company, Lundin Petroleum and the South Omo concession from a British and South Sudan consortium, White Nile. Africa Oil later sold 50 percent stake on the South Omo concession to Tullow Oil, the UK company that is prospecting for oil in South Omo.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2218-africa-oil-to-conduct-seismic-survey-in-arba-minch

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WB approves record-high funding to Ethiopia

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Guang Z. Chen

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The Washington-based World Bank Group this fiscal year has approved and disbursed a historic record high funding to Ethiopia, The Reporter has learnt. 

According to the information obtained, this fiscal year alone the WB has approved USD 1.6 billion and disbursed some 1.3 billion for eight projects in the country.

The World Bank published statements on its website saying it had extended loans to more than 150 projects in Ethiopia centered on infrastructure, protection of basic services, food security and education. As of January 2014, the portfolio has 25 active projects with a net commitment value of more than USD 6 billion.

According to the bank’s recent history, it was during the 2008 financial crisis that USD 900 million was committed to Ethiopia. The size of the commitment grew steady except in 2011 when the bank limited the amount to USD 640 million. But one reason for the diminishing size of the commitment was that 2011 was the high time when the Ethiopian government made itself busy in preparing the ambitious five-year term Growth and Transformation Plan (GTP).

Since then the bank has extended sizable loans and grants to the country. This year witnessed many document signings of the commitments and disbursements. Guang Z. Chen, country director of the bank for Ethiopia, frequented the offices of Sufian Ahmed, minister of the Finance and Economic Development, located off King George VI Street, to ink agreements.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2216-wb-approves-record-high-funding-to-ethiopia

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Ethiopia says expanding zones to become industrial hub

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BY AARON MAASHO  –  ADDIS ABABA

(Reuters) – Ethiopia will start setting up a new industrial park in September and will expand another at a total cost of $250 million, an official said, part of efforts to shift away from farming and become a hub for textiles and other industries.

The Horn of Africa nation aims to attract investors who are moving some manufacturing from China and other Asian markets, where costs are rising. Ethiopia offers cheap labor and fast improving power supply, transport and other infrastructure.

Luring new industry is seen as vital to maintaining high growth rates in Ethiopia’s still largely agrarian economy. The economy has expanded annually by double digits in the past decade and is forecast to grow by 8 percent or more this year.

Yaregal Meskir, deputy director general of the Ethiopian Industrial Development Zones Corporation, said plans were being finalised to expand the existing Bole Lemi Industrial Zone, on the southern outskirts of the capital, while a new industrial hub was planned at Kilinto, 30 km (20 miles) further south.

“We have witnessed many investors have come to acquire sheds and land and there is a long queue,” he told Reuters in an interview on Friday. “We prefer labour-based industries like garment manufacturing and shoe manufacturing for exports.”

After selecting a designer, he said building Bole Lemi phase two and the Kilinto Industrial Zone would start in September.

A third of the 156-hectare Bole Lemi site was developed at a cost of 2.5 billion birr ($127.5 million), financed by the state, in the first phase and has attracted Korean garment-maker Myungsung Textile Company and Taiwan’s George Shoe Corporation.

The Kilinto zone will cover 243 hectares.

Both the expansion work and new site would be financed by a $250 million World Bank loan, Yaregal told Reuters.

The industrial parks are central to Ethiopia’s plans to build an industrial base, with textiles and garments seen as a key sector, in part because the country benefits from the U.S. AGOA trade pact allowing duty-free exports to the U.S. market.

The industrial zones offer land for factories at $1 per square meter a month, tax holidays for up to seven years and customs and other services on site for those investing in the nation of about 90 million people, officials say.

NEW HUBS PLANNED

“Ethiopia has developed a strategy that gives priority to certain industries,” Taddese Haile, State Minister of Industry, told Reuters. “The aim is to see Ethiopia as a globally-known cluster for textiles and garment products.”

Another three manufacturing hubs are planned across the country in the next decade, including a Special Economic Zone in the eastern town of Dire Dawa of 3,000 to 20,000 hectares. Details of the Special Economic Zone are still under study.

Ethiopia faces tough competition from other African countries seeking to benefit from increased interest among foreign investors in a continent with a fast-growing middle class with rising disposable incomes.

In countries like Ghana, for example, small, prefabricated ‘pop-up’ factories are providing low-cost, low-risk ways to churn out consumer goods for global markets by circumventing onerous local regulations and corruption. [ID:nL2N0P80ME]

Ethiopia, once ruled by communists, has driven up its economic growth rates with strong state intervention as well as rising farm output. Industry accounted for just 10 percent of economic output last year, official figures showed.

The International Monetary Fund forecasts economic growth of 8 percent to 8.5 percent for fiscal 2013/14 and 2014/15 but has also said the state must avoid squeezing out private firms.

Strong growth has helped fuel projects that include hydro-electric dams and other power projects to offer cheap electricity and a growing network of roads and railways. The capital will soon have its own urban metro, a rarity in Africa.

In a bid to encourage investment, the government is allowing private firms to build their own industrial hubs. One such enterprise is the Eastern Industrial Zone, whose shareholders included China’s Jiangsu Qiyuan Group.

Firms operating in that zone include Huajian Group, which produces around 300,000 pairs of shoes and sandals a month for Western markets. The firm is planning its own industrial park.

http://sodere.com/profiles/blogs/ethiopia-says-expanding-zones-to-become-industrial-hub

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