05 Nov. 2014 Business Briefs


Inclusive & sustainable industrial development key to African prosperity




African countries should adjust to a new model of industrialization, an inclusive and sustainable development, based on their own national conditions to bring prosperity for their people, Ethiopia’s minister of industry said Wednesday.

After the industrialization of many European and Asian states, African developing countries are now striving hard to achieve their own inclusive and sustainable development, a new path to industrialization, which, compared to the old model of growth, in long term, would cause less environmental problem while significantly promoting poverty reduction and employment.

“African leaders have to commit themselves for industrializing their country to bring prosperity for its citizen, so if that is the only way, they have to adjust themselves to inclusive and stainable development.” Ahmed Abtew, minister of industry in Ethiopia, told Xinhua during an UN forum.

In the past 20 years, his country has created capacity for industrialization in urban area, he told Xinhua.

“Now is time to give more focus for industrialization,” he said, adding that “without the industrialization development, no one bring prosperity for its citizens.”

There is no doubt that industrialization is the strongest momentum of the economy growth for developing states in the world, however, in the past, industrialization often comes with some negative effects on the increasingly vulnerable environment.

In the context of the UN post-2015 agenda, high level officials, experts gathered in Vienna from Tuesday to Wednesday, discussing the implementation of inclusive and sustainable industrial development(ISID), a new model of growth for developing counties, also the United Nations Industrial Development Organization(UNIDO)’s new mandate.

UNIDO is an UN organization which provides assistance for developing economies to achieve industrialization.

Abtew told Xinhua, his county has years of experience in developing sustainable industrialization, a strategy in line with the ISID program.

Together with partners, including UN agencies and private sectors, UNIDO is trying to scale up the investment for the ISID to meet the demand of its member states, the main thrust behind the partnership business model is the mobilization of external partners and resources.

“Industrialization will promote employment, one of the big issues you are facing, really very tough.” He said.

Ngouille Ndiaye, Senegal Minster of industry and Mining, told Xinhua, his country currently is faced with tough employment pressure, especially among the youth.

“Industrialization will promote employment, one of the big issues you are facing, really very tough,” he said, adding that Senegal has just started implementing the ISID program.

When asked his view of the industrialization of African states, he said: “I think they (African states) need to follow, they have no choice…we are in the global market, and there are a lot of global and regional policies.”

UN Secretary-General Ban Ki-moon on Tuesday said at the forum’s opening that “the overarching imperative for our planet’s future is sustainable development. We have a vision of a just world where resources are optimized for the good of people. Inclusive and sustainable industrial development can drive success,” adding that “For industrial development to be sustainable it must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources,” he said.



UNIDO Forum Expresses Cautious Optimism on Ethiopia’s Economic Strides




Inter Press Service

VIENNA, Nov 05 (IPS) – With annual economic growth rates of over 10 percent and attractive investment conditions due to low infrastructural and labour costs, Ethiopia is eagerly trying to rise from the status of low-income to middle-income country in the next 10 years.

Ethiopia, with some 94 million inhabitants, is the second most populous country in Africa after Nigeria, but it remains a predominantly rural country. Only 17.5 percent of the population lives in urban areas, mainly Addis Ababa.

It is also one of the continent’s fastest growing economies. Between 2015 and 2018 growth is expected to average 7.3 percent, according to a recent study by the United Nations Industrial Development Organisation (UNIDO).

While economic growth since 2006/2007 doubled per capita income to 550 dollars in 2012/13, and the percentage of people living below the national poverty line dropped from 38.9 in 2004 to 29.6 in 2011, government sources admit that eradication of poverty remains a compelling issue.

The official target of rising to a middle-income country is considered to be realistic, but an East Asian diplomat accredited to the African Union in Addis Ababa says there is reason to be sceptical, partly because although the amount of foreign direct investment (FDI) rose from 0.5 percent in 2008 to 2 percent in 2013, investors continue to face trade constraints.

According to UNIDO, these are mainly related to border-logistics. Djibouti, the main import-export seaport used by Ethiopia, is situated 781 km from Addis Ababa, which makes the cost of land transportation a critical factor.

It is against this backdrop that UNIDO has chosen Ethiopia, along with Senegal, as a pilot country for its ambitious inclusive and sustainable industrial development (ISID) programme, which aims to achieve industrialisation in developing countries in order to eradicate poverty and create prosperity.

According to UNIDO Director General Ll Yong, there is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialised sector.

What distinguishes the ISID programme is that “current modes of industrialisation are neither fully inclusive nor properly sustainable”, he added. UNIDO is therefore not merely promoting industrialisation but trying to approach the needs and challenges of the globalised world that demand future-oriented concepts.

Promoting the sustainability that should be inherent to industrialisation, UNIDO says that the ISID programme takes into account environmental factors together with its partner countries and organisations.

It also fosters an industrialisation that is inclusive in sharing the benefits of the generated prosperity for all parties involved, thereby promoting social equality within populations as well as an equal distribution between men and women to ensure that nobody is excluded from the benefits of growth.

To show how these objectives can be met and to promote ISID, UNIDO organised the Second Forum on ISID from Nov. 4 to 5 in Vienna. In an opening statement, U.N. Secretary-General Ban Ki-moon said: “We have a vision of a just world where resources are optimised for the good of people. Inclusive and sustainable industrial development can drive success.”

The Secretary-General, who is a strong advocate of the sustainable development agenda, also said that in order to achieve this objective, industrial development must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources.

Prime Minister Hailemariam Desalegn of Ethiopia and Prime Minister Mahammed Dionne of Senegal, representing the two pilot countries chosen for ISID, commended UNIDO for implementing a partnership programme, and Ethiopia’s State Minister of Industry, Mebrahtu Meles, emphasised that building industrial zones will accelerate industrialisation, as has been done by Asian countries such as China.

Forum participants expressed optimism about Ethiopia achieving economic growth through inclusive and industrial sustainable development provided that leadership and vision focused on the country’s comparative advantages while improving infrastructure.

They said that regional integration could be key for the development of the country, and called for further exploration of UNIDO’s role as a catalyst of transformational change.

In particular additional efforts were required to enhance the productivity in existing light industries such as agro-food processing, textiles and garments, leather and leather products. There was also a need to diversify by launching new industries such as heavy metal and chemicals and building up high-tech industries like packing, biotechnology, electronics, information and communications.

The ambassadors of China, Japan and Italy to Ethiopia, Xie Xiaoyan, Kazuhiro Suzuki and Giuseppe Mistretta respectively, as well as business stakeholders and development banks, assured their continued support in helping Ethiopia take the path towards inclusive and sustainable industrial development, mainly through UNIDO.

(Edited by Phil Harris)



Update: Allana Potash Releases Optimization Update



The author is long ALLRF. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.



  • Allana Potash will conduct additional optimization work and announced the port and road construction are still on schedule.
  • No surprises here, as I and the market as a whole are waiting to see the company secure financing for the Danakhil project.
  • The investment thesis remains unchanged, and Allana Potash is a waiting game until it secures financing and starts building the project.


Allana Potash (OTCPK:ALLRF) has released an update on its Danakhil potash project in Ethiopia, Africa. As you might know, the company has recently started an optimization study in order to try to improve the economics of the mine. An additional solution mining well has been drilled at well SW3 and brine will be pumped to the ponds. According to the company, a first observation of this program has indicated the flow rates are quite high at 100 cubic meters per hour, indicating the water seems to be able to be used for solution mining.

At the ponds near the SW3 well, the brine solution will result in crystal crops after the evaporation process, and these crystal crops will be used for further optimization work. Unfortunately, there’s once again no ‘hard’ update on the financing front, as the company ‘continues to be in discussions’ with various lenders in order to get the Danakhil project fully funded. The feasibility study has been published quite a while ago now, and even though I was hoping for a quick funding solution, the process is taking much longer than I originally anticipated, and I can definitely imagine some shareholders aren’t too happy with the slow progress. Fortunately, there’s some good news from the port in Djibouti as the construction activities seem to be on track there with the anticipated completion date being late 2016.

The upgrade work on the road infrastructure from the mine site to the border with Djibouti is also continuing according to the original schedule and this should be ready by the end of 2015. With this update, Allana Potash is proving it’s still alive and doing some work, but I’m afraid the share price won’t move at all unless either the potash market is on fire again (unlikely) or if the company would be able to secure its financing package for the Danakhil project. Let’s hope 2015 will be a better year than 2014.

Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.



Ethiopia striving to improve transparency in extractive industry: President


Ethiopia striving t improve transparency in extractive industry: President

President Mulatu Teshome said Ethiopia has been striving to properly utilize the untapped natural resources by improving transparency in the sector.

Ethiopia is utilizing its natural resources for the development of the country and maximize the benefits of citizens, the President explained to the visiting Extractive Industries Transparency Initiative (EITI) Board Chair Clare Short.

Ethiopia submitted an EITI candidature application in October 2013 to improve transparency in its extractive industry and admitted as an EITI Candidate country in March 2014.

Saying the Initiative’s goal, ensuring transparency in the extractive industry matches the nation’s policy in the sector; the President affirmed to the Chair that Ethiopia will continue to work together with the Initiative to develop this culture.

The government has been signing agreements with multinational companies for exploration and development of natural resources. Reserves of gold, tantalum, potash, platinum and copper have been identified.

Publicizing these agreements has helped to protect maladministration and misuse of natural resources, the President elaborated.

He explained that the government has ‘closed all doors’ that led to maladministration and misuse of natural resources and has introduced a legal system that makes persons involved in this crime accountable.

Gold is the main mineral export of the country; export values reached 602 million USD in 2012, a more than hundred-fold increase from 2001.

Small-scale mining is an important employer in Ethiopia, employed approximately one million Ethiopians directly in artisanal mining activities.

Chair of the Board of EITI Clare Short for her part recognized the nation’s efforts to use transparent procedures to properly utilize its natural resources.

The Initiative will provide extensive support for Ethiopia to further strengthen transparency in this sector, the Chair added.

Rather than supporting development of nations, natural resources have been source of war and conflict. The Initiative is working to improving transparency of nations in the extractive industry thereby minimize risks in this regard.


Mining renewable energy systems 70% cheaper than diesel power


Mining companies were not traditionally considered a good fit for renewable energy. A closer look shows that this is not true anymore. Numerous renewable energy systems already power mines today, and experts from both worlds – mining and renewables – agree that a boom in this field is ahead.

Mining renewable energy systems

Mining companies have been facing price pressure for the last few years. Many high-yield mining locations are already exhausted, the material that is extracted today is more difficult to access and it also requires more energy in reduction and purification processes afterwards. The amount of energy per unit is increasing, and so are electricity and diesel prices, whereas the prices for renewable energy, wind and solar, have been falling considerably during the last few years. This is why mining companies are paying more and more attention to renewable energy topics. There is a big demand for information on both sides.

“The objective of THEnergy is to accelerate the application of renewable energy in the mining sector by providing missing information,” points out Dr. Thomas Hillig, founder of THEnergy. One of the key elements of the platform “Renewables & Mining” (www.th-energy.net/mining) is a plant database for renewable energy systems near mines. It contains wind, PV, CPV, CSP and solar thermal plants. “Successful examples in the same industry are very often the catalyst that lays the basis for a breakthrough. They eliminate existing doubts to a large extent,” explains Hillig. By using the platform mining companies also get to know which renewable energy players are already experienced in this field. For renewable energy companies the platform is a good source to discover who the progressive first movers are in the mining industry.

The platform also collects background information such as technical overviews and business models. On a monthly basis, reports and white papers will be published. Finally, a blog allows for discussions among experts and players that are new to the field.

The best business case can be observed for hybrid power plants. In mining, these are solar or wind power systems that are combined with or integrated into existing diesel power plants. Wind and solar energy are often more than 70 percent less expensive than electricity from diesel, especially in remote areas where transportation makes up a large share of the total diesel cost.



 Ppc Limited – Ppc Increases Stake In Ethiopia To 51%



PPC is pleased to advise of the successful acquisition of the Industrial
Development Corporation’s 20% stake in Ethiopian based Habesha Cement Share
Company (“HCSCo”) for a purchase consideration of USD 13 million
(“Acquisition”). PPC’s initial 27% stake in HCSCo, acquired in July 2012,
now rises to 51% while the balance of the shareholding in HCSCo is held by
over 16 000 local shareholders.

HCSCo has begun the construction of a 1.4 million tonnes per annum facility
35 km north-west from the bustling city of Addis Ababa. Project costs for
this factory are approximately $135 million and commissioning of the plant
is anticipated in 2016.

“We are very excited about our increased investment in Ethiopia; a country
with a population of 91 million people that is set to reach 100 million by
2018 and having a growth rate that is expected to remain above 8% in the
medium term.

“This Acquisition will provide further momentum to our growth strategy on
the continent. PPC has, in addition to the HCSCo project, signed EPC
contracts for projects in Rwanda, the Democratic Republic of the Congo and
Zimbabwe; all with construction underway,” commented Bheki Sibiya,
Executive Chairman.

Financial close of this Acquisition is expected in December 2014
once all conditions have been satisfied.



Ethiopia strengthens its information and communication technology policies with UNCTAD support

UNCTAD is assisting Ethiopia in the production of information economy statistics and a review of its e-commerce laws.

On 23-25 September 2014, UNCTAD delivered a workshop hosted by the Ministry of Communication and Information Technology (MCIT) of Ethiopia in the capital Addis Ababa on the production of information economy statistics, which was attended by 20 participants from the national statistical office and the MCIT.

With the objective of increasing the availability and quality of data that can support national information and communication technology (ICT) policy making, Ethiopian stakeholders agreed during the workshop to join efforts to develop official information economy statistics and to include such statistics in the national statistical plan.

At this time, national coordination of ICT statistics [in Ethiopia] is very important“, one of the participants said.

Recognizing the importance of ICTs as tools for economic development and social inclusion, Ethiopia has put in place a National ICT Policy and Strategy and is drafting legislation to facilitate e-commerce. The (MCIT) of Ethiopia is being assisted in these endeavors by UNCTAD, which is reviewing Ethiopia’s cyber-legislation and developing statistics to measure progress in the information economy.

In May 2014, UNCTAD reviewed drafts of the Ethiopian Electronic Transactions Proclamation (ETA), the Ethiopian Electronic Signature Act (ESA), the Ethiopian Computer Misuse Proclamation, and the Ethiopian Data Protection Proclamation. The government has expressed its appreciation to UNCTAD for having helped to incorporate new ideas, and reorganize and validate the documents. The drafts are currently under consultation and will be finalized with the Ministry of Justice.

UNCTAD’s work on ICT and Law Reform is financed by the Government of Finland. The statistical workshop was supported by the Swedish International Development Agency (Sida), through a trust fund project building the capacity of developing countries to benefit from ICT.

http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=874&Sitemap_x0020_Taxonomy=Information and Communication Technologies;#1450;#Technology and Logistics;#20;#UNCTAD Home

Demand for second-stage land certification in Ethiopia: Evidence from household panel data



Sosina Bezu & Stein Holden

Publication date:

Saturday, 1 November 2014


  • Research paper


External to ACUI

Project theme:

Full document download:


Ethiopia has implemented one of the largest, fastest and least expensive land registration and certification reforms in Africa. While there is evidence that this ‘first-stage’ land registration has had positive effects in terms of increased investment, land productivity and land rental market activities, the government is now piloting another round of land registration and certification that involves technically advanced land survey methods and computer registration.

This ‘second-stage’ land registration differs from the registration system employed in the first round that used field markings in conjunction with neighbors’ recollections to identify plot borders. We use panel data from 600 households in southern Ethiopia to investigate household perceptions of and demand for such a new registration and certification.

Our study revealed relatively low demand and willingness-to-pay (WTP) for second-stage certificates. The WTP also decreases significantly from 2007 to 2012. Our findings indicate that farmers do not believe that the second-stage certificate enhances tenure security relative to the first-stage certificate except in instances in which first-stage certification was poorly implemented. The demand for second-stage certificates appears to come primarily from governmental authorities, as it can provide a better basis for land administration and produce accessible public documentation of land-related affairs.

By Sosina Bezu & Stein Holden in Land Use Policy, Volume 41.


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