11 Nov. 2014 News Round-Up


Ethiopia’s Prime Minister Says Natural Resources Can Catalyze Africa’s Development


Ethiopia’s Prime Minister Says Natural Resources Can Catalyze Africa’s Development Ethiopia’s Prime Minister Says Natural Resources Can Catalyze Africa’s Development

Mineral resources are a catalyst for development in sub-Saharan Africa, whose share of global gross domestic product is a minuscule two per cent, Ethiopia’s new Prime Minister, Hailemariam Desalegn, said Tuesday.

In a keynote speech at the ongoing African Development Forum in Addis Ababa, Prime Minister Hailemariam said that a situation where bountiful resources exist side-by-side with abject poverty was unacceptable, noting that the argument that natural resources cannot lead to development was untenable.

“We have to reverse irrevocably the idea that resources are curse.”

After all, he added, resource-rich countries such as Norway and resource-poor countries such as Korea have both achieved development.

He argued that the idea behind the resource curse was a fundamental misdiagnosis of Africa’s problem, which was like arguing that rich people’s children could never be good.

“Resources are as valuable and beneficial to our economies as we make them to be,” he said.

The Prime Minister cited exploitation as one of the problems that have prevented Africa from benefiting from the sector for economic development and transformation, noting that the continent’s exploitation has not improved much from the way it happened during colonial times.

“There is seldom any value added to natural resources,” Mr. Hailemariam said, “and few linkages to other sectors of our economies.”

This scenario has not only lowered earnings from the sector, but “we are missing out on possibilities for the growth of our economies.”

Among absurdities in Africa’s mineral resources exploitation, Hailemariam said, were that Antwerp is the world’s leading diamond-cutting centre, although the diamonds come from Africa. He also noted that some African countries export crude oil and import refined oil.

He cited Botswana, which has built a middle-income economy using its diamond resources, as an example for other African countries to emulate.

Mr. Hailemariam said that sub-Saharan African countries need to adopt a transparent, ethical and long-term perspective to exploit their mineral resources. They also need to encourage public-private partnerships, ensure that resources are exploited sustainably, and that agriculture and rural communities were not relegated to the periphery of Africa’s plans.

He said that Ethiopia was investing proceeds from its natural resources in modernizing and leveraging its agriculture value chain by linking it with the food and beverage industries. Despite challenges yet to be overcome, he added, Ethiopia has generated US $500 million from the mining sector in the current fiscal year.

He expressed hope that the deliberations of the AFD VIII would suggest how the knowledge gap could be filled and come up with innovative ideas for better livelihood.

Mr. Hailemariam paid tribute to his predecessor, Prime Minister Meles Zenawi, who passed away in August, for laying the foundation for Ethiopia’s growth and transformation. Participants at the forum also observed a minute of silence for the late Prime Minister, who was known to have participated in all previous AFD forums.



China Mounts Business and Technology Expo in Addis Ababa


Chinese ambassador to Ethiopia Xie Xiayon talking with Chinese Premier Li Keqiang regarding the details of the latter’s visit to Africa in May.


The Chinese Ministry of Commerce is currently holding a business and technology expo in Ethiopia’s capital Addis Ababa, Xinhua News Agency reported.

The 2014 “(Africa) China Commodities, Technology and Services Expo,” which began on Monday and will run until Wednesday, features more than 100 Chinese companies showcasing their products.

The expo is aimed at enhancing business cooperation among China, Ethiopia and other African nations, according to the Xinhua report.

The showcase is geared toward creating opportunities for businesses and buyers to personally interact, as well as allow for discussions on information and technology dialogues.

Xie Xiayon, Chinese ambassador to Ethiopia, said during the opening that the expo is an effort to further promote the exchanges and cooperation within the business communities where China, Ethiopia and other African countries belong.

The officials also spoke of the growing relationship between China and Ethiopia.

“Our countries have made many fruitful achievements through cooperation in politics, economy, trade, culture, education, science, technology and other areas. Ethiopia is China’s important strategic partner in Africa,” Xie said.

The ambassador reiterated the six areas Chinese Premier Li Keqiang mentioned during an African visit in May which should be pursued in order to strengthen cooperation between China and Africa.

Industry, finance, poverty reduction, environmental protection, cultural exchanges and peace and security are these six areas, according to the ambassador.

Meanwhile, Tadesse Haile, Ethiopian minister of industry, said that Ethiopia and China are benefitting from great bilateral relations.

The two countries, the minister said, share many ideas that can be used to promote accelerated and sustainable economic development.




Dalol begins supplying coal, pet coke


Dalol Oil SC, which is one of the four Ethiopian owned oil companies, announced that it will begin supplying alternative energy products for the manufacturing sector. The company that began operating in the beginning of 2012 has stated its intention to begin importing coal and petroleum coke (pet coke) in the current budget year.

Currently, National Oil Ethiopia (NOC) is the only supplier of these two products, and now Dalol will be the second.
According to Serkalem G.Kirstos, CEO of Dalol Oil, the company began importing bitumen/asphalt last fiscal year in addition to the usual lubricant and petroleum (fuel) import.
During its second year of operation the oil firm registered significant profit even though it is usual to take a loss for five years in that industry.
The CEO said that the new energy supplies that the company introduced in the past budget year has played a major role in the company’s success.
In the past budget year the company has supplied bitumen for the Ethiopian Road Construction Corporation (ERCC), Addis Ababa City Roads Authority (AACRA) and Tidhar Group, an Israeli company that constructs roads in Addis Ababa and some other parts of the country.
The product of coal and pet coke is an alternative energy source for the manufacturing sector, like cement factories, which require a significant amount of energy for their production.
The annual report that the oil company released at the general assembly indicated that Dalol supplied 7,500 barrels (1,463 metric tons) of bitumen for its clients.
In the past budget year the company distributed 37.4 million liters of petroleum, which is an increase of 210 percent growth compared with the 2012/13 budget year.
The company that imports the lubricant from Saudi Arabia’s Petromin, a sister company of Saudi Aramco, a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia, has also shown significant growth in terms of the supply compared with the preceding year.
The total volume of lubricant that the company supplied in the past budget year was 206.7 metric tons, which is 750 percent higher than the 2012/13 achievement.
As of the end of the past fiscal year the non-current assets of the company reached 22.1 million birr and the current assets are set at 198.2 million birr.
According to the annual report, the oil company has undertaken 700 million birr in sales. Despite financial constraints the company has been very successful.
The external audit report stated that the company has registered about 10.5 million birr in profits before tax. The net profit after tax for the year was 8.5 million birr, which accounted for a loss during its first year of operation.
The CEO told Capital that even though the company registered good performance for the stated year, financial constraint has been a challenge for the company’s growth. He said that the company should expand its capital to go through on big capacity projects. To accomplish this, the company has decided to expand its capital.
The annual report indicated that the company has plans to put 22.5 million birr worth of subscribed but unpaid shares for interested buyers.
It stated that it has begun negotiations with interested companies and individuals to sell  the stated amount of shares.
The total paid up capital reached 41.7 million birr, while the subscribed shares are 64.1 million birr.
At the general assembly held at Global Hotel, the board of directors chaired by Dereje Walelegn proposed that the expansion of the company’s capital to 400 million birr aiming to boost the company’s operation, which is highly capital inducement.
Currently, ten oil station are operating under Dalol, and out of this two are company owned dealer operated (CODO), which are owned by Dalol and operated by investors, while the other eight stations are controlled under a dealer owned dealer (DODO) arrangement or fully owned by investors.
Serkalem expects this will expand to 15 stations and four CODO stations this year including one in Addis Ababa.
Serkalem was the general manager of Continental Petroleum and the Managing Partner of Habitable Business Solutions which works on the environment. He was also commercial manager of NOC. His contribution in introducing alternative sources of energy like Petroleum Coke in Ethiopia, for the first time when he was at NOC, is considered to be a huge success. He is the second CEO of Dalol since it began operating.



We are open for business: Previously closed Ethiopia flutters eyes at African investors


Ethiopia's construction boom is a visible part of its fast-growing economy. (Photo/File)

Ethiopia’s construction boom is a visible part of its fast-growing economy. (Photo/File)

ETHIOPIA is now courting new investors from as far as South Africa to participate in the growth story of one of the continent’s emerging economic success stories. 

Double-digit growth rates and a large working population has contributed to a growingly-lucrative market, as well as served up opportunities for investment in a country which is already attracting businesses from the Middle East, China and Europe, a top official said.

African investment, however, is still small with only a handful of sub-Saharan African countries present in Ethiopia. Speaking in Johannesburg at a Mail & Guardian Africa  “Doing Business in Ethiopia” meeting, Tadesse Haile, Ethiopia’s deputy minister of industry, urged African investors to buy into a range of sectors in his country, including agro-business, infrastructure and services.

Tadesse said that changes from a state-dominated to a market-driven economy, political reforms and democratisation have contributed to the country’s boom.

“Slightly more than two decades ago Ethiopia was in the aftermath of a long civil war and the threat of a break-up was looming large because of economic stagnation which brought with it low living standards and deteriorating infrastructure,” he said at the event hosted by audit major KPMG.

Ethiopia reversed the negative trend through reforms from a new economic policy launched in 1991, as well as increasing peace and stability, the minister said, adding that Ethiopia today is held up as an example of the ‘Africa Rising’ trend on the continent.

Annual growth rates have averaged 10% over the last 11 years, and the size of the economy has also doubled in this period, said Tadesse.


Build confidence


International rating agencies are also marking up Ethiopia on governance, political and macro-economic stability, and on rapid growth. “These ratings will also contribute to build confidence of international financers and investors to do business in Ethiopia”, Tadesse said.

The country hoped to be a hub of light manufacturing for textile, leather products and agro-processing. It has a competitive advantage and is building industrial zones around the capital Addis Ababa, most of them already occupied by footwear and garment manufacturers, including a mega ‘shoe city’ built by Chinese and Taiwanese companies.

Ethiopia has received $250million from the World Bank to build the zones, Tadesse said. The country also has cheap electricity, a large, trainable workforce and an abundance of arable land, he said in his pitch.

KPMG associate director Joleen Young said there are deep opportunities in the service sector in Ethiopia, including telecommunications. The total cell phone penetration in Africa is 67%, thus Ethiopia could provide a lucrative market not yet saturated by the big players present elsewhere on the continent.


Many openings

Xolela Mlumbi-Peter, chief director for Africa Multilateral and Economic Relations in the Department of Trade and Industry, said that a number of South African companies, including South African Breweries and PPC Cement are already present in Ethiopia, but “a lot more can be done”.

Total trade between South Africa and Ethiopia in 2013 was $75 million, but still hugely in favour of South Africa.

The conference noted that Ethiopia has an important strategic role to play in the Horn of Africa and on the continent, notably as headquarters of the African Union and the United Nations Economic Commission for Africa. A lot of the construction and infrastructure boost in Addis Ababa in the last few years has been attributed to the growing regional importance of these two institutions.

Fay Mukkadam, president of the Johannesburg Chamber of Commerce and Industry, said South Africa had signed a cooperation agreement with Ethiopia in 2008 and since then some business missions have been organised to that country. Another trade mission is planned from December 1-6 this year.

She noted that former South African president Nelson Mandela had said visiting Ethiopia was like “unearthing my roots” and finding “what has made me African”.



Ethiopia registers significant basic services delivery



Ministry of Finance and Economic Development disclosed that Ethiopia has registered significant progress towards promoting basic service delivery.


In his opening speech at the 4th round meeting of Promoting Basic Services III (PBS) program held today at Ghion hotel, State Minister of MoFED, Dr. Abraham Tekeste stated Ethiopia has shown tremendous changes in basic service expansion and delivery.
According to Dr. Abraham, changes in some of the basic services like education, health, agriculture, water, sanitation and rural roads have benefited millions of Ethiopians.
The country has achieved commendable results in improving the quality of basic services nationwide, the State Minister said, adding that the government along with development partners will consolidate efforts to ensure sustainable economic progress and social development.
The Midterm Joint Review and Implementation support (JRIS) meeting on promoting of basic services has been able to see the delivery of basic services for all citizens so far, he added.
The  rapid  development  in basic social services has  contributed to fast economic  growth, which in turn  reduced the long  standing poverty, the State Minister  said, adding that  the  head  count poverty index of the nation has declined from 38.7 percents in 2005 reduced to 24 per cent in 2014.
The promoting basic services III Program is  considered as a  critical source of support to accelerate the realization of the country’s Growth and Transformation Plan and  United Nations Millennium Development Goals.
It is known that the Ethiopian economy grew at 10.1 per cent  per  annum  in the last four years’ of GTP period and  a total  average of 10.9  per cent growth in the last 11 years, as a result, the size  of the country’s economy is  estimated to  1.1 trillion EB or  55 billion USD.



Ethiopia Will Be Top Tourist Destination by 2020


According to Expert Analysis, Dr. Ray Muntida, advisor to the IGAD Sustainable Tourism Master Plan (ISTMP) says that Ethiopia will be one of the top five tourist destination countries in Africa if it properly implements its Sustainable Tourism Master Plan by 2020.

The BBC’s Michael Buerk described the scene there 30 years ago as “a biblical famine in the 20th century” and “the closest thing to hell on Earth”. It drove Bob Geldof into a rage and was responsible for Live Aid 1985. This morning, at the Damayno School in Ethiopia’s Tigray province, President Michael D Higgins marvelled at the change.

Ethiopian tourist sites

“It is wonderful to see how the whole landscape has been transformed by clever watershed management,” he said. “It is difficult to imagine today that what we see now was once so barren that the local community wanted to leave.”

The IGAD Sustainable Tourism Master Plan (ISTMP, said he expected Ethiopia to achieve its targets before the deadline because of its stability, fast economic growth and the interlink between the master plan and the Growth and Transformation Plan. He emphasized that Ethiopia needed to continue infrastructure development and also keep up the strong commitment of both the government and the private sector to realize its goal.
Ethiopia’s Sustainable Tourism Master Plan (STMP), being formulated by the partnership of different stakeholders, is part of the on-going process in the implementation of the IGAD Sustainable Tourism Master Plan. It is being developed with technical support provided by the sub-regional office for Eastern Africa (SRO-EA) and the division for Regional Integration and trade (RITD) of United Nations in partnership with the Ministry of Culture and Tourism. IGAD’s Sustainable Tourism Master Plan is based on a regional tourism study done in 2010 and it was given the green light at a meeting in Djibouti in 2011. The IGAD plan is focused on the theme Towards a Sustainable Tourism Industry in Eastern Africa and it was officially launched at the IGAD Tourism Inter-Ministerial forum in Nairobi in December last year.

Ethiopia’s STMP followed the Prime Minister’s decision to prioritize the tourist industry, setting up a National Tourism Transformation Council, to be chaired by Prime Minister Hailemariam , and the Ethiopian Tourism Organization to spearhead tourism product development and marketing. The industry was identified as a key sector in the Growth and Transformation Plan, and it is similarly defined in the 2nd Plan now being drawn up. The process of formulating the STMP entailed extensive field missions, in-depth interviews with key stakeholders drawn from various sectors including public, private, professional organizations, civil society, regional government officials and academia. Regional consultative meetings were also held in Mekele and Dire Dawa.

Ethiopia had just over half a million tourists last year (compared to Egypt’s 9 million) but the industry still contributed 12.3% of GDP. Tourism is, of course, a leading foreign exchange earner and a key sector for both domestic and foreign investment as well as being one of the leading employers, generating over 2.4 million jobs directly and indirectly.



Ethiopia gets first topographic data from NASA


“We are not alone in this universe”

Charles Frank Bolden, Administrator of the National Aeronautics and Space Administration (NASA), gave Ethiopia the first high-resolution topographic data generated from NASA’s Shuttle Radar Topography Mission (SRTM) in 2000, which was previously only available for the United States.

I an exclusive interview with Capital, Bolden revealed that this release of topographic data for Africa will help empower Ethiopia to better plan for the impacts of severe environmental changes such as drought, glacial retreat, inland flooding, landslides and coastal storm surges.
“One of our missions here is to deliver a 30 meter pixel high resolution data gathered from a satellite launched back in 2000, which is a digital elevation map data set taken from space, covering the entire continent of Africa.” He further added “nobody has had access to such data at high resolution scale with such high accuracy, so Ethiopia will be the first one”
Lower-resolution SRTM topographic data having 90-meter pixels were released publicly in 2003 for many parts of the world, providing a global standard for many applications. The new data increases the detail of 30-meter pixel spacing, now revealing the full resolution of the world’s landforms as originally measured by SRTM.
“The availability of enhanced global SRTM topographic data will greatly benefit international efforts to better understand natural processes that shape our planet, prepare for and respond to natural hazards, and anticipate and prepare for the impacts of global change,” said NASA’s administrator.
“Food security and programs to build capacity, focuses on the regional climate, should be based on information. The earth is a very complex thing and you have to understand what goes on in the atmosphere and the real concern is to know the environmental dynamics. We need to know about everything so we can predict what will happen,” he further said.
Topographic data benefits a wide variety of activities, from aviation safety to civil engineering projects. Topography also strongly influences many natural processes, such as the distribution of plant communities and the associated animals that depend upon them, weather and rainfall patterns, and the flow and storage of surface water. The data aids in better understanding, predicting and responding to flooding from severe storms and the threats of coastal inundation associated with storm surge, tsunamis and sea-level rise.
Multiple training workshops on SRTM data are planned for users in Africa.
The administrator also said that he is one of those who believe humans are not alone in this galaxy. “I am one of those who believe that the universe is so vast and we know that literally the universe consists of millions of other stars not planets, stars like our sun, so thousands and thousands if not millions of the galaxies like the milky way where we live, every single of those are each universes, and it’s hard for me to conceive, a universe as vast as this, and only the milky way have a form of life, and there are also a lot of reasons for me to believe we are not alone,” he said.
NASA predicts that 100 million worlds in our own Milky Way galaxy may host alien life, and space program scientists estimate that humans will be able to find life within two decades.
During his stay he will meet government and Africa Union officials to discuss applications for NASA’s Earth science research.
Capital will feature the full and exclusive interview with Chales Bolden in next week’s issue.



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