01 November 2014 Business News Briefs

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ADPI launches study on new Ethiopian mega airport project

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The expansion of the passenger terminal of the Bole International Airport is expected to cost some USD 250 million

The expansion of the passenger terminal of the Bole International Airport is expected to cost some USD 250 million

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Hired by the Ethiopian Airports Enterprise, ADPI, a French consultancy firm, recently commenced study on the mega hub airport development project. 

The Ethiopian Airports Enterprise is planning to build a new mega international airport out of the capital Addis Ababa. Dukem, Modjo and Teji towns are proposed for the construction of the new international airport. A decision has not yet been made. The enterprise is also expanding the Addis Ababa Bole International Airport passenger terminal at a cost of USD 250 million.

Last July the enterprise hired ADPI which is tasked to supervise the construction of the Addis Ababa Bole International Airport passenger terminal and undertake a study on the new international airport. The second task includes conducting a study on the site location. The consultant will also undertake feasibility, technical, and financial studies as well as drafts airport master plan. The consultant is also tasked to study the integration of the new airport with the Addis Ababa Bole International Airport.

The Ethiopian Airports Enterprise has embarked on the construction of the Addis Ababa Bole International Airport passenger terminal expansion work. A senior official at the enterprise told The Reporter that ADPI deployed two groups in Ethiopia. The first group is supervising the Bole expansion project while the second group is undertaking a study on the planned international airport.

The official said the second group recently commenced the study on the site location. “Based on their recommendation a decision will be made on the site for the construction of the mega hub,” the official said.

The Ethiopian Civil Aviation Authority (ECAA) is also involved in the project. It is the authority that approves the site and inspects the new airport. The Chinese government has given a green light to confer loan for the construction of the mega hub.

Based on the recommendation of ADPI the Ethiopian Airports Enterprise will select the site. After the site is selected the detailed study will commence. Before commencing the detailed study the enterprise, and the Ministry of Transport will hold a launching ceremony in which they will officially unveil the multi-billion dollar project.

Industry experts believe that the mega hub project will help Ethiopia become a regional hub. It will also accommodate the fast growth of Ethiopian Airlines. Ethiopian Airlines has a strong vision of making Addis Ababa a major hub in Africa. Addis Ababa is already a major hub in East Africa. Its arch rival, Nairobi, is expanding the Jomo Kenyatta International airport at a cost of 650 million dollars.

Modjo is preferred for low altitude which will enhance the pay load of aircraft by improving fuel efficiency. The recently opened Addis-Adama Expressway is a plus for Modjo. But still the distance and the integration is one area of focus the consultant will work on.

Teji and Dukem are the other prospective areas for the new airport construction because of their proximity to Addis Ababa but their altitude is almost the same as Addis Ababa, which will not make aircraft fuel efficient during take offs.

Dukem is located 37 km east of Addis Ababa while Modjo is 66 km south east of Addis Ababa. Teji is a small town located 43 west of the capital. Addis Ababa’s elevation is 2300 m above sea level and aircraft take a lot of fuel to take off Bole International Airport due to the high elevation. This entails a reduction on the amount of load an aircraft can lift. The high altitude also stresses aircraft engines. According to aviation experts, going down to Modjo in the rift valley will enable airlines especially Ethiopian Airlines to reduce fuel cost. Yet there are others factors to be considered to select the site.

The Ethiopian Airports Enterprise has asked the International Civil Aviation Organization (ICAO) for technical assistance on the site selection process and the later expressed its willingness to help.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2718-adpi-launches-study-on-new-ethiopian-mega-airport-project

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World Bank Extends 600 Million USD for Productive Safety Net Program

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World Bank Extends 600 Million USD for Productive Safety Net Program

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Addis Ababa Oct 31/2014 – The World Bank extended today 600 million USD loan for the implementation of the fourth Productive Safety Net Program (PSNP 4).

The loan agreement was signed by Sufian Ahmed, Minister of Finance and Economic Development, and Guang Zhe Chen, World Bank Country Director for Ethiopia here in Addis Ababa.

The minister said on the occasion the program, which has been implemented during the last ten years in different phases, has benefited many farmers.

The program not only provides day- to-day support to the needy but also plays effective role in enabling them to extricate themselves from poverty and secure assets, he noted.

The program implemented throughout the country over the years has succeeded in extricating over 6 million Ethiopians from poverty, the minister said, adding that it is the biggest in Africa.

Sufian said the last three phases have proved successful and many farmers have graduated from the program as they became self-sufficient.

World Bank Country Director Guang Zhe Chen said on his part since its launch nearly a decade ago the program has made remarkable contributions not only to food security and Ethiopia’s progress in meeting many of the MDG goals, but to reversing land degradation.

PSNP has played a key role in mitigating the risk of economic and climate related shocks by introducing soil and water conservation activities, small irrigation, and integrated watershed management.

“None of this would have been possible without the vision and strong commitment of the Government,” he added. “This commitment is clearly demonstrated in the provision of close to USD 500 million from the country’s own resources to the PSNP over five years, with a large share of that being cash contributions on budget. This sets a standard for other African countries to match and is an important step towards a long term and sustainable safety nets systems for Ethiopia,” Chen underscored.

According to the country director, PSNP 4 builds on the program’s past success and further contributes to reducing poverty and promoting shared prosperity for Ethiopians.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2435:world-bank-extends-600-million-usd-for-productive-safety-net-program&Itemid=260

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PM relieves ERA head

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Zaid Woldegebriel

Zaid Woldegebriel

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Prime Minister Hailemariam Desalegn relieved Zaid Woldegebriel of his duties as director general of the Ethiopian Roads Authority (ERA) effective immediately.

A letter signed by the Prime Minister and dated November 30, 2014 states the dismissal is made upon request by the Ministry of Transport (MoT) without disclosing the reasons. ERA is accountable to the MoT and minister Workineh Gebeyehu also serves as chairman of the board of directors of ERA.

Sources told The Reporter that recent road projects awarded to foreign contractors without adequate assessment of their performance in other road projects is the major source of disagreement between the minister and Zaid.

In the first quarter of the budget year alone, ERA has awarded 9.3 billion birr worth road projects extending a total length of 599 km. Out of the seven road projects awarded during the period, five projects worth 7.2 billion birr were awarded to foreign contractors with Chinese companies sealing the four. One was awarded to a Spanish contractor. Two local contractors, Sunshine Construction Company and Macro General Contractor Trading PLC, were awarded a total length of 160 km road project worth 2.1 billion birr.  A total of 30 billion birr is allocated for ERA for the budget year.

Zaid, a transport economist by training, served the authority as director general since 2004. Until our press time on Friday evening, no replacement was appointed. Attempts to reach Zaid were unsuccessful.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2723-pm-relieves-era-head

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“Ethiopia Best Coffee Growing Country”

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arabica

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A team of coffee industry experts has ranked Ethiopia first among top 10 coffee growing countries of the world. The global coffee experts praise the product of Ethiopia – said to be the birthplace of coffee – for its special aromas and top quality.

According to AllAfrica, the group was asked by Thrillist.com for their opinion about the word’s best coffee growing countries. The experts gave Ethiopia 25 points, while Kenya and Colombia stands second and third respectively with 12 and 10 points. Some experts explain Ethiopia’s top position from the fact that “coffee is native to Ethiopia, it rarely incites climate or disease-born chaos. Coffee still grows wild all over Ethiopia, and there are thousands of undiscovered varietals in Ethiopia.”

Ethiopia is the largest producer of coffee in Sub-Saharan Africa; the country is the fifth largest coffee producer in the world next to Brazil, Vietnam, Colombia, and Indonesia, contributing about 7 to 10 percent of total world coffee production. Coffee production is important to the Ethiopian economy with about 15 million people directly or indirectly deriving their livelihoods from coffee.

Ninety five percent of Ethiopia’s coffee is produced by small holder farmers on less than two hectares of land while the remaining five percent is grown on modern commercial farms. Coffee is a major Ethiopian export commodity generating about 25 percent of Ethiopia’s total export earnings.

http://www.your-bizbook.com/en/Club-Africa-News/ethiopia-best-coffee-growing-country

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Ethio-Egyptian business forum to kick off tomorrow

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– Anticipates to boost trade volume to USD 1 billion 

Flag-Pins-Egypt-Ethiopia

The Ethio-Egyptian business forum will be held from November 2-3 at the Sheraton Addis in the presence of senior government officials and major Egyptian companies.  

The Forum will be held on the sidelines of the fourth session meetings of the Ethio-Egyptian Joint Ministerial Committee, headed by the ministers of foreign affairs of the two countries aimed at finding ways to push forward the bilateral cooperation between the two countries in all sectors.

A press released issue by the Egyptian embassy in Addis Ababa stated that major Egyptian companies, and banks operating in the market will meet the Ethiopian private sector. A large Egyptian business delegation led by Egyptian minister of Trade, Moneer Fakhry Abdel Nour is expected to arrive Addis Ababa today.

Ethiopian Minister of Trade, Kebede Chane, will lead the Ethiopian business delegation. The Ethiopian and Addis Ababa Chambers of Commerce and Sectoral Associations will partake at the forum. One hundred Ethiopian and 50 Egyptian companies are expected to attend the forum.

Ayman Essa, chairman of the Ethio-Egyptian Business Council said the forum allows the governments of the two countries an opportunity to identify the real problems facing the Egyptian and Ethiopian companies and the obstacles facing the economic relations between the two countries, put them on the table to be resolved as soon as possible.

Essa stressed the importance of holding the forum at a time when Egypt is seeking to rework its economic and political relations in all countries of the world, especially the African countries. He added that the council was keen to achieve synchronization between the forum and the ministerial committee which meets after a 4 years’ stop.

Essa, expressed his hopes that the forum would be a starting point for a solid springboard for trade exchange between the two countries and directing capital in both countries for joint investments in the fields of common interest under the developmental and economic challenges faced by the two countries and stressed the importance of developing programs for technical cooperation and financial support in this regard.

The Ethiopian Ministry of Trade and Investment Commission will make presentations on the investment climate in Ethiopia and the plans and approaches that have been adopted in the targeted sectors including construction, engineering, manufacturing food industries, and leather industries.

According to Essa, a study conducted by the council on the Ethiopian market will presented during the forum. This will be followed by the identification and selection of the Egyptian companies representing targeted sectors and providing necessary support, assistance and expertise to enter the Ethiopian market and good coordination with the Ethiopian counterparts.

The selection criteria will be based on the companies’ export and import capabilities, former business experience, markets in which it entered before, products specifications produced by each company, targeted customers of Egyptian companies in Ethiopia and investment plans for Egyptian companies in the Ethiopian market especially in labor intensive export industries.

There are Egyptian products that have a substantial market share in the Ethiopian market. Egyptian medicines, paper products, plastics, and food items are available in the Ethiopian market. Egypt is the fourth largest exporter of drugs to Ethiopia after China, Germany, and India. There are products manufactured in Ethiopia with Egyptian investments such as cables, smart electricity meters, polypropylene irrigation and sewerage pipes.

Essa explained that the study prepared by the Council would be the nucleus of economic information center between the two countries to serve different sectors by providing updated and accurate information and data required for both Egyptian and Ethiopian companies.

The trade volume between the two countries amounted to USD 215 million dollars in 2013. According to the council, Ethiopia has a high competitive advantage in a number of products which can be exported to Egypt, which are live cattle, meat, coffee, cereal plant, oilseeds especially sesame, legumes and roses.  The council aims to reach a trade volume of one billion dollars annually during the next phase.

The trade volume reached USD 89 million during the first half of 2014, of which USD 68 million of Egyptian exports, and about USD 21 million of Ethiopian exports to Egypt.

Egyptian exports witnessed an increased from USD 58 million to USD 68 million exports with an increase of approximately 17 during the first half of this year compared to the same period of 2013.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2719-ethio-egyptian-business-forum-to-kick-off-tomorrow

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Ethiopia Wants to Share Rich Experience of Indonesia in industry, President Mulatu

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Ethiopia Wants to Share Rich Experience of Indonesia in industry, President Mulatu

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President Mulatu Teshome said Ethiopia and Indonesia should strengthen their relationship in the industrial sector.

While confering with the departing Indonesian Ambassador to Ethiopia, Ramli Saud, the president said Ethiopia wants to share the rich experience of Indonesia in the industry sector, particularly in manufacturing.

The countries that are registering rapid economic growth could perform better if they work together, he added.

Appreciating the effort of the ambassador for facilitating the signing of the technical cooperation agreement between the countries, President Mulatu urged the ambassador to promote the investment opportunities and alternatives in Ethiopia.

Ambassador Saud, who served his country for four years in Ethiopia, said draft agreements on elimination of double taxation and on opening flight services to Jakarta are in pipe line.

According to him, during his tenure the trade exchange between the countries has jumped to 380 million USD from 70 million.
An Indonesian soap factory and a food factory have been operating in the country, he said.

Other investors are also doing feasibility studies to work in textile and paper production, Ambassador Saud revealed.

The ambassador said Ethiopia is changed for good and he attributed the change to the political stability in the country, security, and encouraging legal frameworks to investors, among others.

To boost the people-to-people relationship of the two countries the embassy teaches the Indonesian language at its embassy and Ethiopians are also in Indonesia on scholarships, Ambassador Saud stated.

Ethiopia and Indonesia established diplomatic relations in 1961.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2433:ethiopia-wants-to-share-rich-experience-of-indonesia-in-industry-president-mulatu&Itemid=260

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President of Ethiopia to open Bamboo and Rattan Summit

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–  Summit to share Ethiopia’s bamboo sector success and promote Ethiopia’s policy framework as a basis for green growth with bamboo

inbar

His Excellency President Mulatu Teshome of Ethiopia will open the INBAR – Ministry of Agriculture Summit on “Bamboo and Rattan in the Green Economy” in Addis Ababa on Wednesday 5th November. He will be joined by the Ethiopian State Ministers of Agriculture and Environment, senior representatives of FAO, UNEP and the EU, senior government representatives from Ghana, Cameroon and China, business leaders, policy experts and environmentalists, to help set an agenda for bamboo development in the years to come.

Ethiopia is at the vanguard of bamboo-based development in Africa. With over a million hectares of natural bamboo forests, the country is blessed with a huge bamboo resource base of which it is pioneering the use to protect the natural environment, grow livelihoods and develop a greener economy.

Although Ethiopia has only had a formal bamboo sector since 2012, earlier work by INBAR and other development partners and investors helped raise awareness of bamboo’s potential, and pilot businesses have shown the way for development with bamboo. These days the sector attracts major investors who see bamboo not as potential, but as practice, with clear and growing international markets for bamboo as green products – and that will help develop rural and urban livelihoods as well. This rapid growth has been, in large part, due to the Government’s implementation of its Short and Medium-Term Strategic Plan of Bamboo Development, part of its bamboo sector strategic framework, which has focused attention and investment in an unprecedented way.

The Summit is organized by INBAR and the Ministry of Agriculture of the Government of Ethiopia, and supported by:

  • The Royal Norwegian Embassy in Ethiopia
  • Department of Foreign Affairs Trade and Development (DFATD), Embassy of Canada in Ethiopia
  • GIZ-Sustainable Land Managament Programme (GIZ-SLMP)
  • GIZ Development Partnerships with the Private Sector (GIZ – DPP)
  • International Fund for Agricultural Development (UN-IFAD)
  • Sustainable Land Management Program, Ministry of Agriculture (SLMP – MoA)

 

Summit location – Sheraton Hotel, Addis Ababa

Date – 5 November 2014

Time – 09.00 – 18.00

http://www.inbar.int/2014/10/president-of-ethiopia-to-open-bamboo-and-rattan-in-the-green-economy-summit-in-addis-ababa/

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Midroc Gold Announces $250 million Gold Extraction Plant

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Following the announcement earlier this year that MIDROC Gold would soon be mining gold from a second mine in Oromia, the company has announced that it is investing $250m in a second gold extraction plant in Benishangul Province in Ethiopia.

Latest estimates suggest that the deposits being uncovered in the area after a decade of exploration, costing a quarter of a billion birr to undertake, are expected to amount to a further decade’s worth of extraction. The energy required for the extraction will come from the Gilgel Beles Power Generating Dam. MIDROC Ethiopia Technology Group’s first gold extraction plant is situated at Shakisso in Oromia.

http://www.sheikhmohammedalamoudi.info/home/news/update-midroc-gold-oromia

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Beyond dams and pipes: domestic water politics in Ethiopia

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Koga dam, Ethiopia. Photo: Beatrice Mosello/ODI
International disputes over water make the headlines; they tend to translate into grim prospects of countries fighting each other for increasingly scarce water resources. But the danger is that they distract from states’ critical domestic responsibilities to manage water equitably and sustainably.

Take Ethiopia’s Grand Renaissance Dam on the Blue Nile. Already 40% complete, it will be the largest hydroelectric power plant in Africa when it’s finished in July 2017, supplying desperately needed electricity for Ethiopia, and other countries too.

Politically speaking, it is not a straightforward project. Thanks to a 1959 British-brokered treaty, Egypt and Sudan have enjoyed near-exclusive rights to the Nile’s waters for decades. A rapidly growing, powerful Ethiopia is now challenging this, and while Sudan has reacted by taking a neutral stance aimed at maximising its gains from the dam, Egypt has been less conciliatory. After eight months of bitter statements and mounting tensions with Addis Ababa, it agreed to go back to the negotiation table only last August; the three countries concluded their latest round of negotiations this month.

For its part, Ethiopia has shown ample willingness to cooperate with its neighbours, though as the upstream player it holds the cards. The country is currently pursuing an ambitious development plan aimed at achieving middle-income status by 2020 – investment in hydropower, as well as new irrigation and water supply, is seen as essential for growth.

But unconstrained water development and weak management can undermine the resource base and squander opportunities for responsible growth, as India and China have demonstrated (pdf). Here, decades of investment in new infrastructure failed to adequately account for the environmental and social impacts of big projects.  As Ethiopia’s investment in irrigation, energy and water supply ramp up, will it fall into the same trap?

As well as thinking internationally and investing in new infrastructure, Ethiopia needs to focus on local issues, and invest in the ‘softer’ elements of water resources management. It has to develop a framework, based on clear rules, that manages the needs of competing uses and users. This should be adaptive, so that decision-makers and users can respond to the challenges posed by climate, economic and demographic change. And, above all, it should meet the basic needs of the poorest and most marginalised people, and protects the environmental services they depend on.

Building institutions – not dams and pipes – is the biggest challenge facing water managers in Ethiopia today. But where to start? First of all, it is important to recognise that you can’t separate the technical from the political when talking about water resources management (see ODI’s work on ‘thinking and working politically’). You need to put in place the systems needed to measure water extraction and monitor water quality, and to negotiate and allocate water use.

This means investing in data collection and analysis, and producing scenarios and projections to address the uncertainty of the near and far future. It also means considering all the other sectors and users that need water to function and survive (or what is sometimes referred to as ‘the water-energy-food nexus’ in development jargon). Water managers should engage in an open and continuous dialogue with other governmental, civil society and private sector actors, as well as those with a stake but no voice in water resources management.

Putting in place the right institutional framework to harmoniously perform all these tasks – and allocating the financial, technical and human resources to operate it – is today the real challenge facing Ethiopia (and other countries that, like Ethiopia, are entertaining ambitious economic growth plans). This is no less daunting than agreeing how to share the waters of the Nile between powerful competing economies. We must not let headlines on future water wars distract us from this essential obligation to manage water resources responsibly, in a way that fuels positive socio-economic development, without leaving anyone behind.

http://www.odi.org/comment/8903-domestic-water-politics-ethiopia-gerd-dam

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