Djibouti Plans LNG, Oil Terminals to Develop Regional Trade
Djibouti will start work on liquefied-natural-gas and crude-oil terminals by March as part of a $5 billion plan to develop regional trade ties, Djibouti Ports & Free Zones Authority Chairman Aboubaker Omar Hadi said.
Construction of the two facilities will add to four new ports already being built that will quadruple cargo handling in the Horn of Africa nation to almost 80 million metric tons annually, Omar Hadi said in an interview with Bloomberg TV Africa to be broadcast today. Durban, South Africa, one of the continent’s busiest ports, handles more than 80 million tons of cargo a year, according to Transnet National Ports Authority.
“What the Djibouti Ports and Freezones Authority wants to achieve is to unleash East Africa’s economic potential,” Omar Hadi said. “We are trying to build the economy of the country to serve the neighboring countries in foreign trade.”
Djibouti’s $1.5 billion economy relies on services related to the country’s location on the Red Sea, one of the world’s busiest shipping lanes. Transport and logistics account for more than two-thirds of gross domestic product in the nation of about 873,000 people, according to Omar Hadi.
The two ports under construction at Tadjourah and Goubet are expected to be completed and operational by December 2015, Omar Hadi said. Work on a multipurpose facility at Doraleh and a livestock terminal at Damerjog began last month and both are expected to be finished in December 2016, he said.
Chinese, Indian, Brazilian and Turkish investors are contributing investments to each port, Omar Hadi said, without providing details.
Djibouti is developing rail links, oil pipelines and other infrastructure as it seeks to become a middle-income country by 2035. The economy is forecast to grow 6 percent this year and 6.5 percent in 2015.
The three existing ports in the capital, Djibouti City, currently handle about 17 million tons of containers, oil and general cargo a year, Omar Hadi said. That amount is expected to grow about 10 percent next year, he said. Traffic at the four new ports under construction is estimated at 40 million tons, while the LNG and crude terminals will handle 20 million tons, he said.
“The six new ports will mainly handle export commodities,” Omar Hadi said.
Underutilization of existing capacity at Djibouti’s Doraleh port suggests that there’s currently no need for the country to expand its facilities, said Bert Hofhuis, founder of Fleetlink, a Cape Town-based transport consultancy. Doraleh last year handled less than half its estimated design capacity of 1.5 million twenty-foot equivalent units, he said.
Djibouti also has logistical constraints that may make some of the expansion plans unfeasible, Hofhuis said. For instance, the country currently has no pipeline that would feed LNG and oil to Ethiopia or other countries in the region, he said. A port planned for the town of Goubet would be difficult to access because of dangerous currents that would require the use of a number of tugs to guide vessels, he said.
A railway linking Djibouti’s ports to the capital of neighboring Ethiopia, Addis Ababa, is expected to be completed by October 2015, Omar Hadi said. The link is being built at a cost of about $4.2 billion and will help Djibouti extend its trade links into South Sudan and other East African nations, Omar Hadi said.
“Djibouti’s ports are serving Ethiopia and South Sudan, and with the railways and roads development will reach the Great Lakes countries,” he said.
Nations in Africa’s Great Lakes region, a system of lakes in the Great Rift Valley, include Rwanda, Burundi, the Democratic Republic of Congo, Tanzania and Uganda. The Kenyan port of Mombasa, East Africa’s biggest, serves countries including Uganda, Rwanda, Burundi and eastern Congo.
Djibouti’s government in July rescinded DP World Ltd.’s concession at Doraleh after it said it found evidence the Dubai-based company paid bribes and gave other financial incentives to the former chairman of the facility. DP World, the world’s third-biggest port operator, denies the allegations.
Five ways to do better business with Africa’s small-scale farmers
Agriculture in sub-Saharan Africa is dominated by small-scale farmers. But doing business with these farmers – they often live in remote areas with little money to spend – is no easy feat.
German agricultural chemical and seed company Bayer CropScience is currently growing its footprint in Africa, and courting small-scale farmers is one of its top priorities.
Eric Bureau, head of business development for Africa, recently shared with How we made it in Africa some of the company’s strategies to boost sales to smallholders.
1. Demonstrate the advantages of modern farming inputs
Modern seeds and chemicals don’t come cheap, and even when farmers are able to afford these inputs there is a lack of knowledge on how to use them. For this reason Bayer is involved with demonstration farms and training centres aimed at proving to small-scale farmers they can achieve better yields with modern technology and the latest farming practices. For example, in Zambia, Bayer is involved in a demonstration farm set up by American tractor-maker AGCO.
These initiatives don’t have immediate pay-offs but are rather a more strategic approach to develop farming in the region and subsequent demand for modern farming technologies and equipment.
Bayer is also involved with similar projects in South Africa, Ghana, Ethiopia and Morocco.
2. Get involved with agricultural development projects
Bureau believes strategic partnerships are essential to influence the buying behaviour of the millions of small-scale farmers across the continent. For example, in the Democratic Republic of Congo – an area more than triple the size of France – Bayer would have to recruit a significant number of staff if it wants to reach even a fraction of the farmers by itself.
It is therefore actively involved with numerous agricultural development projects. Through the Competitive African Rice Initiative (CARI), Bayer supplies its products and expertise to improve the harvests of rice farmers in Burkina Faso, Ghana and Tanzania. And in Kenya and Nigeria it is involved in potato projects sponsored by the GIZ, Germany’s international development agency.
“We will never reach all the small farmers [by ourselves], so we need to partner with these kinds of projects,” says Bureau.
And while these initiatives might seem more like corporate social responsibility (CSR), he says there is a clear business interest for Bayer. “We see it as a way to create new markets for our products… I would not call it CSR, although there is a social component in it.”
3. Innovate with packaging
Bayer is also adapting its packaging to better cater for the needs of small-scale farmers. Similar to companies such as Unilever and Procter & Gamble that are selling toothpaste and washing powder in small pack sizes for low-income customers, Bayer is also offering its agrochemicals in single-use packs.
The company has launched a small 10mℓ pack of insecticide that can be used on cotton. It is just about the right quantity to mix with 15ℓ of water, the capacity of a knapsack sprayer typically used by small-scale farmers. The product costs under US$1, and is currently for sale in Malawi, Zimbabwe and Zambia. A number of other crop protection products that can be launched in smaller pack sizes have already been identified.
4. Supply product to organisations that aggregate small-scale farmers
In many cases in sub-Saharan Africa, large groups of small-scale farmers are managed by state-owned organisations or private companies. They will typically be supported with products such as seeds as well as expertise. For example, in Cameroon the cotton industry is tightly controlled by a government-owned company which distributes inputs and collects the crops at harvest. While in Zambia US-based food and commodity trading company Cargill supplies inputs and training to thousands of small-scale farmers from whom it buys maize, cotton and soya beans.
In some cases Bayer sells products directly to these organisations, which gives it easy access to thousands of smallholders.
5. Find the right distributors
However, the majority of agricultural inputs are brought into sub-Saharan Africa through importers that distribute it to farmers via a network of retailers.
Bureau says it is often a challenge to find the right distribution partner that will both put sufficient effort into distributing its products and has the right network of retailers to reach as many farmers as possible.
Oilseeds export outweighs coffee
– Sesame harvest affected by heavy rainfall
Making Ethiopia the second larger exporter next to India, oilseeds, spices and pulses export have generated a total of USD 919.9 million during the concluded Ethiopian fiscal.
The export performance of oilseeds has surpassed coffee where the latter concluded the budget year amassing USD 718 million, remaining short of USD 200 or so million behind the oilseeds performance. Coffee was unable to meet the targets set for the ended fiscal year, shying away by over half while USD 1.5 billion was expected from its export.
During a press conference held on Wednesday at the Ministry of Trade (MoT), Assefa Mulugeta, director general of the newly formed Export Promotion Directorate, said that Ethiopia has become the major player and price setter of sesame in the global market. The fourth producer, next to India, China and the Sudan, Ethiopia in 2013/14 was able to export 674 thousand tons of oilseeds, pulses and spices out of which sesame alone performed 90 percent of the export volume, Assefa noted.
However, the export of spices in the reported period was below five percent, following the impact of a ginger disease, which was the major exported item in the category. The spice exports amassed USD 19.2 million against the targeted USD 26 million in the concluded budget year.
When asked by reporters the impacts of the heavy rainfall during the rainy seasons, Haile Berhe, president of Ethiopian Pulses, Oilseeds and Spices Producers and Exporters Association (EPOSPEA) confirmed that the unprecedented rainfall is expected to affect the best and premium varieties sesame, which are grown mostly in the Northern region of the country. Haile said that though the effect could be seen reducing the quality, it is anticipated that sesame would make it to the international market with the target volume for this fiscal year.
Samuel Gizaw, Director of Crop Marketing Directorate at the Ministry outlined the details of the export targets for the year. Hence, USD 1.4 billion revenue is set wherein the first quarter of the budget year the targets have been achieved at full scale. The reason for that, according to Assefa, is that the high volume export of delayed produces contributed for the performance registered. In a nutshell, the performance of the sector in the past four years stood at 11.6 in growth with 24 percent of annual growth in prices.
That said, the country remains unable to hull and add value to sesame, forcing Ethiopia to lose USD 300 to 400 per tone. According to Assefa, exporters are not performing well in processing sesame and adding value to the expectations of the government. The Ministry of Industry was tasked to oversee the activities in that regard yet the actual outcomes remain unsatisfying, Assefa said.
In related news, EPOSPEA is set to host the fourth international conference on November 12 and 13 at the Sheraton Addis. According to Haile, over 400 participants are expected to attend it. Out of that, 100 individuals are said to come from 20 countries. Established 13 years ago, EPOSPEA houses 125 exporting companies engaged in the oilseeds, pulses and spices business.
Ethiopia Desirous of Bolstering Relations with Austria
Prime Minister Hailemariam Dessalegn said Ethiopia wants to bolster its historical relationship with Austria.
The PM also held discussions with the Director-General of United Nation Industry Development Organization.
First Lady Roman Tesfaye on her part held talks with the Head of International Atomic Energy Agency.
While conferring with Austria’s President Heinz Fischer yesterday in the Hofburg Palace, Prime Minister Hailemariam said Ethiopia wants to boost the bilateral relations the countries established half a century ago.
In the process, it wants to share the experience of Austria in giving quality service to its citizens, he said.
Government Communication Affairs Office Minister Redwan Hussen who attended the discussion told ENA that Hailemariam also told President Fischer that Ethiopia wants Austrian businesspersons to invest in Ethiopia.
President Fischer on his part said that his country is happy with the historical relations it has with Ethiopia and it would reopen its embassy in Ethiopia to further improve its relationship.
The president also appreciated the role Ethiopia has been playing by being a source of peace and development in Africa, beyond ensuring the benefits of its citizens.
During the discussion PM Hailemariam held with Li Yong, Director-General of United Nation Industrial Development Organization, he thanked the organization for its support to the country’s transformation into an industry led economy and the contribution it made in promoting Ethiopia at the forum held in Vienna.
The premier also asked the organization to continue its support in the effort to sustain the country’s achievement in the industrial sector.
Yong on his part promised to support Ethiopia in finding fund from international, continental and financial institutions in Middle Eastern countries to consolidate its role in industrial development in the continent.
PM Hailemariam also held discussions last Tuesday with European Union International Cooperation and Development Commissioner Neven Mimica on agriculture and renewable energy development, and on the safety net program.
They also discussed on the peace keeping role Ethiopia has been playing in Africa and in the Horn of Africa.
Meanwhile, First lady Roman Tesfaye held talks with Amano Yukiya, Director-General of International Atomic Energy Agency.
According to ENA, their discussion focused on how the agency could support the fight against cancer in Ethiopia.
In a briefing he gave to journalists, the Director-General said the agency will support Ethiopia in its effort to prevent and control cancer.
Turkey to Further Strengthen Relations with Ethiopia
Turkey would further consolidate its trade, investment and diplomatic relations with Ethiopia, the Turkish Public Diplomacy Bureau said.
Turkish Public Diplomacy Bureau Head, Kamilton Hasmi, told the Ethiopian News Agency reporter in Ankara that Turkey would further consolidate its cooperation in development, trade and investment with Ethiopia.
The participation of Turkish investors in Ethiopia has been increasing since 2003, he said.
Only one Turkish company was engaged in Ethiopia 12 years ago, Hasmi noted, adding that the number of Turkish companies has now jumped over 350, according to the head.
He also told ENA that many Ethiopians pursuing higher education in different Turkish universities.
The cooperation in the sphere of education will further be boosted, Hasmi indicated.
The government of Turkey gives high regard and appreciation to the effort Ethiopia is exerting to bring about durable peace and stability in the African continent.
The head who also stated that the growing cooperation of Turkey with African countries and the African Union pointed out that Turkish Airline is providing flight services to 35 African countries.
The increase in flight destinations in Africa is not only meant for profit rather to also strengthen friendship with Africans, the head elaborated.
Hasmi disclosed that the 2nd Turkish-African Friendship Conference will be held in Malabo, Equatorial Guinea, from November 19-21, 2014.
Turkish high officials are conferring with more than 30 African ambassadors in Ankara to make the conference successful, he concluded.
Giant state-owned edible oil factory privatized
The largest state-owned edible oil factory was sold to Ethio-Asian Industries PLC, a subsidiary of East African Holding SC for 50 million birr.
A few days ago, the Privatization and Public Enterprises Supervising Agency (PPESA) struck a deal to transfer the factory to the Ethio-Asian Company. Hamaressa Edible Oil Factory was re-established as a share company in 1991 with an authorized capital of 81.5 million birr. Ethio-Asian will take over the existing employees of the factory along with other physical assets.
Situated in the Harari Regional State, some 526 km east of the capital, the state-owned enterprise was set to process and produce edible oil from groundnuts, cottonseeds and the likes. The study made by the agency indicated that the edible oil was set to hit the South Sudan and Djibouti markets. Hamaressa was also associated with producing and supplying oil-cakes and pallet to the local market.
Ethio-Asian Industries, which started operations in 1994 here is best known for the production of laundry and toilet soaps and detergents. The East African Holding SC, chaired by Bizuayehu Tadele, manages 11 companies under its umbrella including National Cement, Anbessa Flour and Pasta Factory, Berchaco Ethiopia, the East African Group Chemical Industry, the East African Group Food Industry and recently the East Africa Tiger Brands Industries Company joined the family.
Some 27 cooperatives established in quarter year
The Federal Cooperative Agency (FCA) said it has established 27 new cooperatives with 788 million birr capital in the first quarter of this Ethiopian budget year.
Public Relations Director at FCA, Fekadu Berhe, told WIC that the newly established cooperatives have 875 members.
According to Fikadu, cooperatives across the nation also accumulated close to 40 million birr. More than 59 million birr loan was also distributed to member of the cooperative in the quarter year.
The cooperatives have also earned more than 14.4 million US dollars from the export of 2, 411 tons of coffee and 114 tons of sesame, according to him.
As part of the efforts to raise awareness of the society on cooperatives, the agency has offered training for 331, 914 people. The plan was to provide the training to 121,800 people.
OIC introduces new service for pastoralists
Oromia Insurance Company (OIB) has introduced a new service using satellite data to insure pastoralists in Southern Ethiopia by using Index Based Livestock Insurance (IBLI).
According to OIC, for the first time, the insurance company has paid more than half a million birr to Borana pastoralists insured by IBLI.
OIC, one of the private insurance companies in Ethiopia, embarked upon the IBLI in August 2012 and has been underwriting this product in ten pastoral woredas of the Borana Zone, Oromia Regional State.
According to a statement OIC sent to The Reporter, in 2014, OIC sold 1,138 policies covering 2,563 head of livestock and it gives the insurance cover for cattle, camel and shoats (sheep and goat) for ETB 6,000, 10,000 and 800, respectively.
The value or premium that pastoralists pay various from one ‘woreda’ to the other depending on the drought severity history of the woreda. However, one herder/pastoralist pays ETB 469 for cattle, ETB 781 for camel and ETB 62 for shoats on average, according to the company statement.
It was also noted that the IBLI Ethiopia project has been introduced here based on the lesson drawn from a highly innovative program, similarly led by an International Livestock Research Institute (ILRI) and Cornell University’s partnership in Northern Kenya that is currently being scaled up.
The Borana IBLI product was designed by correlating publicly available satellite data known as Normalized Differenced Vegetation Index (NDVI), with field-based research of seasonal average herd loss.
OIC has been giving the services to the Borana pastoralists for the last two and a half years covering five sales windows. Because of the good forage availability for the last three years, settlement of claims has not been there for the last three years.
However, as drought has been observed in the last three months at the zone, the payout has been triggered and OIC is poised to pay the insured pastoralists 570,000 birr in 10 woredas, OIC said.
ILRI and Cornell University designed the Index Based Livestock Insurance, a drought insurance product that enables pastoralists to transfer drought risk to the insurance company. IBLI is a new insurance product that has been implemented in Kenya for the first time. Ethiopia is second in implementing the product in both in Africa and the world. Index Based Insurance (IBI) is used to protect against shared rather than individual risk such as the risks associated with weather fluctuations, disease outbreaks or price loss.
For the time being, OIC has targeted Borena zone which is best known for its dependence on livestock production owing to its pastoralist and semi-pastoralists population.
However, the area is notoriously known for pervasive drought hazard that claims the lives of livestock due to shortage of forages. Because of the lack of any mechanism that absorbs such loss, it leaves many households destitute.
The product is sold and premium is collected through intermediaries such as primary cooperatives, unions and Micro Finance Institutions (MFIs). Since electronic money transfer and cellphone transaction have not been rolled out in the country, the possibility of collecting the premiums through such channel is further down the road. Premium is collected through intermediaries for which OIC pays commission and the payout is also carried in the same manner.
Inflation falls to 5.4 percent in October
Ethiopia’s inflation rate for the month of October fell to 5.4 percent because of decline in food item prices, the Central Statistics Agency disclosed.
The inflation rate has declined by 0.2 percent compared to last month.
The inflation rate for food items fell to 2.9 percent from the 3.8 percent in September mainly due to a decline in cereal prices.
However, inflation rate for non-food items rose to 8.3 percent from 8.1 percent last month.
PM office to oversee mapping agency
A new draft law submitted to the executive branch is considering the re-establishment of the Ethiopian Mapping Agency (EMA) by altering its accountability from the Ministry of Finance and Economic Development (MoFED) directly to the Office of the Prime Minister.
The expanding duty of the agency has prompted the amendment, a reliable source, engaged in the drafting process of the bill, told The Reporter.
The agency was originally established in 1954 as the geography and mapping institute of Ethiopia. Since then, it has passed through various organizational setups until its establishment as an autonomous agency of the government of Ethiopia under proclamation No 193/1980. According to the proclamation, the agency has been responsible for the compilation, preparation, publication, administration and distribution of fundamental geo-information data and reporting it to MoFED.
Conducting geodesy (an accurate measuring and understanding fundamental properties of the earth), aerial photography, satellite imagery, topographic maps, thematic maps and hydrograph are some of its responsibilities. Though the agency is responsible for reporting to MoFED, there are various governmental and non-governmental institutions demanding and obtaining the agency’s information, the source said. The Central Statistical Agency, the National Electoral Board of Ethiopia, the Ministry of Mining, the Ethiopian Roads Authority are some of the government institutions getting the data and maps with the full consent of the government, the source said.
“Thus, it is mandatory to make the agency more autonomous and report directly to the PM office,” he said.
Furthermore, the draft bill, prepared by EMA, intends to amend a few articles from the existing proclamation so as to avoid conflicts from the Information Network Security Agency (INSA), the source added.
Proclamation 808/2013, which re-established INSA, contains a few articles that are contradicting with duties of the mapping agency.
For instance, article 6 sub-article 13 of this proclamation gives power to INSA to develop and administer national geospatial data infrastructure and using the infrastructure INSA is required to collect, analyze, store and disseminate any kind of geospatial data.
This article entirely disregarded the main task of the mapping agency, the source said but is not willing to elucidate how the draft could rectify this with the interest of the agency.
In related news, the mapping agency is co-organizing the ninth ministerial conference of the Regional Center for Mapping of Resources for Development (RCMRD), a regional body of mapping and geo-special information in collaboration with the United Nations Economic Commission for Africa (UNECA).
The ministerial conference will be held for two days starting on November 17, Sultan Mohammed, director general of Ethiopian Mapping Agency, told journalists on Thursday. The ministerial conference is the overall policy and political organ of the RCMRD as well as a platform for promoting its activities at a national and regional levels, according to Sultan.
Thus, the ministers comprising 20 member states will review and approve a new strategic plan of the RCMRD for the period 2015 to 2018.
This strategic plan is expected to provide clear direction and a bold step to position the regional body and to play a strategic and central role in the development and use of geospatial information to foster sustainable development in the member states, Sultan said.
Prior to the ministerial conference, the governing council of RCMRD will convene from November 10 to 14, this month. The governing council is composed of officials with the rank of permanent secretary or national mapping agency director generals representing each member states.
The RCMRD was established in Nairobi, Kenya, in 1975 under the auspices of the UNECA and the African Union. It is a non-profit intergovernmental organization and currently has 20 tracting member states, namely: contracting Burundi, Comoros, Ethiopia, Kenya, Lesotho, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Somalia, South Africa, South Sudan, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
ASCOM Mining in negotiations to secure mining license
A multinational mining company engaged in gold exploration projects in western part of Ethiopia, Ascom Mining Ethiopia PLC, is holding talks with the Ethiopian Ministry of Mines to secure a large-scale gold mining license.
Ascom Mining has been prospecting for gold in the Benishnagul Gumuz Regional State, Assosa Zone, Sherkole Wereda, Shungu and Nazali localities since 2009. The company has discovered a large amount of primary gold in the license area which covers 268.17 sq.km of land. The gold deposit is found in a mountain commonly called Dish mountain.
Last March, experts of Ascom made a presentation to officials of the Ethiopian Ministry of Mines about the gold discovery. Reliable sources told The Reporter that officials of the ministry were happy with the presentation. Sources said the company conducted feasibility study.
A senior official at the Ministry of Mines told The Reporter that executives of Ascom and the ministry are holding talks on the gold mining license. The official said the ministry will grant the company a large-scale gold mining license once the negotiations are finalized.
The official said Ascom has made the largest gold discovery in the history of gold exploration in Ethiopia. “Once the company acquired the license it will develop the mine with in a year,” the official said. The gold deposit is estimated at more than 100 tons.
Ascom Mining Ethiopia PLC got its gold and base metals exploration license through transfer from previous license holder Ariab Gold Mining PLC (Sudanese and Ethiopian JV Company) on November 20, 2008.
The license was previously granted to Ariab Gold Mining PLC on May 7, 2007. Ascom Mining Ethiopia PLC constitutes of ASCOM PRECIOUS METALS BVI owning 96 percent of the share and Ariab Gold Mining PLC owning the remaining 4 percent.
According to the Ministry of Mines, in accordance with the mining law, in addition to the initial first three years the license has been renewed four times relinquishing 25 percent from the retained license area at each renewal. The ministry said the company is currently in its 7th year exploration period working in 268.17 sq.km area.
Ascom Mining Ethiopia Plc exploration site is 100 km from the Great Ethiopian Renaissance Dam, and the company is a multinational share company whose long list of shareholders includes Egyptian shareholders.
According to the Ministry of Mines, the shareholders are Sudanese, Egyptians and other North African and Middle Eastern country nationals. The company has concessions in many countries including South Sudan and Sudan. In Ethiopia it has another exploration license in the Gambela Regional State. It also undertakes exploration and mining activities in different countries in Africa and the Middle East.
“Egyptian investors are our country’s development partners. We share the same geological and mineral belts with Egypt similar to the Blue Nile water, thus, we wish more Egyptian investors to join us to invest in Ethiopia,” the ministry said.
So far MIDROC Gold is the only company engaged in large-scale gold mining activity. In 2012, the ministry granted Ezana Mining PLC large-scale gold mining. Ascom will be the third company to secure large scale gold mining license.
A British company, Nyota Minerals, was about to secure its large-scale gold mining license to mine the Tulu Kapi gold mine in west Wollega. However, the company recently farmed out its concession to another UK company, KEFI Minerals. KEFI Minerals will soon apply for large scale gold mining license.