02 January 2015 News Round-Up


Official: Ethiopia dam project could start power generation by June



A much-delayed $1.8 billion dam project under construction along Ethiopia’s Omo river could begin generating power by June and be fully operational by early 2016, an official said on Thursday.

Gilgel Gibe 3 will nearly double the country’s energy output, helping to resolve chronic power outages and sustain a booming economy. Work started in 2008 and was due to be completed around three years later, but the project has faced funding shortages over concerns about its environmental impact.

“88 percent of the work for the Gibe 3 hydropower project has already been completed,” Azeb Asnake, chief executive officer of the Ethiopian Electric Power Corporation, told Reuters.

Two of ten units would be ready by June, Azeb said, while one additional unit would come on line each month after that. Upon completion the project will generate 1,870 MW of power.

Ethiopia plans to spend a total of $12 billion to tap the rivers that cascade down its craggy highlands over the next two decades in a bid to beat energy shortages and become Africa’s biggest power exporter.

The country’s economy is expanding by 9 percent a year, and the dam is part of an infrastructure plan aimed at sustaining that growth. A bigger project, the 6,000 MW Grand Renaissance Dam, is being developed along the Nile.

Power outages are common in this country of over 90 million, where a majority still rely on subsistence agriculture. Addis Ababa’s nascent manufacturing sector is also attracting firms from China, Turkey and India to produce clothes, shoes and other basic goods, but frequent blackouts hamper economic activity.

Ethiopia already exports power to neighbouring Kenya, Sudan and Djibouti, and it has signed agreements with Tanzania, Rwanda and South Sudan, as well as Yemen.

Critics of Gilgel Gibe 3 say it will reduce water flow and devastate the fisheries of Lake Turkana, which is fed by the Omo. Ethiopian officials admit criticism led the European Investment Bank and the African Development Bank to turn down a request to disburse funds.

The Industrial and Commercial Bank of China stepped in four years ago with a loan of $500 million to pay for turbines.

Azeb dismissed the concerns, saying Ethiopia’s research suggests regulating river flow will stabilise fluctuating water levels. “If they read these studies, they would not continue with their arguments,” she said.



President says Ethiopia keen for more Nigerian investment

The government of Ethiopia is keen to extend support for Nigerian investors who are interested to engage in Ethiopia, President Mulatu Teshome said.

While talking to the departing Nigerian Ambassador to Ethiopia Bulus Paul Lolo in his office, Dr Mulatu said there are many business and investment opportunity that could make Nigerian companies profitable.

The President explained to the Ambassador about the various investment and business opportunities existing in the country.

There is a desire from the Ethiopian government to further boost the strong cooperation, according to a high level official who attended the meeting.

After discussing with the President, Ambassador Lolo told reporters that the Nigerian government is keen to enhance ties with Ethiopia and it is working to that end.

Activities are being carried out in both sides to improve investment ties, he added.

“Certainly we have many good ideas to bring private sector together to exchange trade mission so that Nigerian trade mission will visit Ethiopia and then Ethiopian trade mission will also visit Nigeria.”

Bilateral ties between the two countries started after Nigeria got its independence in 1960. Ethiopia opened its Embassy in Lagos a year after Nigeria’s independence in 1961.



Addis Ababa’s $475m metro to complete next month


The Ethiopian capital presently has 5 million people but no urban rail system (Source: Wikimedia Commons)

The Ethiopian capital (pictured) presently has 5 million people but no urban rail system.

Ethiopia expects to complete the construction of Addis Ababa’s metro next month, the first urban light rail scheme to be built in a sub-Saharan country outside of South Africa.

Behailu Sintayehu, the project manager for the scheme, told the Reuters news agency that 80% of the track had been laid and that the system would be completed by the end of January 2015, three years after work began.

The commissioning period is expected to take another three months, before the first passengers board in May.

“We believe that it will have a great impact in alleviating the problem of transportation in the city,” he said. The capital’s 5 million inhabitants presently rely on crowded buses and vans to get around.

The metro will consist of two lines running for a total distance of 32km. It will have underground and overground sections, 39 stations, and two operators: the Ethiopian Railways Corporation and Shenzhen Metro.

The $475m cost of the scheme is mostly being met by a loan from China’s Exim Bank, and the construction work has been undertaken by the China Railway Engineering Corporation (CREC).

Beijing has become a major partner in Ethiopia’s efforts to expand its infrastructure, with cumulative investments by Chinese firms reaching well over $1bn.

As well as the Metro, Chinese firms are constructing a rail link to neighbouring Djibouti.

Ethiopia also aims to treble the size of the road network by next year, from less than 50,000 km in 2010.

Ethiopia is one of Africa’s fastest growing economies, expanding by about 9% a year and attracting overseas investment with its with rock-bottom wages, cheap and stable electricity and transport projects such as the metro.



Ethiopian delegation of members of House of Peoples representative in Saudi Arabia

An Ethiopia delegation of members of the House of Peoples Representative’s led by Abadulla Gemeda went to Saudi Arabia over the week end

The delegation left for Saudi Arabia for a working visit upon invitation of Shura Council. In a meeting with the members of the Shura Council, Speaker of the House Abadulla Gemeda stated to that the bilateral relations between Ethiopia and Saudi Arabia is historic stresessing that the two countries are enjoying strong partnership currently.

The Speaker noted that considering the fact that Saudi Arabia needs large number of labor force the Ethiopian government is working to finalize labor agreements and so as export of labor is conducted in legal manner that avails protection to workers. He also noted that the government is working to address issues related to lack of skill in workers travelling to Middle East.

Speaking about investment, Abadula urged Saudi investors to take advantage of the investment climate in Ethiopia and opportunities in Ethiopia in manufacturing and agriculture sectors.

Representatives of the Shura Council extended their appreciation to Ethiopia’s development efforts. They also noted that the Shura Council is encouraged by the relation between Egypt and Ethiopia .The delegation is expected to sign bilateral agreements between the Ethiopian House of People’s Representatives and the Shura council to further strengthen relations between the two legislative bodies.

The Ethiopian delegation is also expected to discuss with Ethiopian citizens in Riyadh.



Mekelle University undertaking expansion with close to 3 bln birr  



The Mekelle University in Tigray Regional State said it is undertaking expansion project in its all campuses with close to 3 billion birr.


University President Kindeya Gebrehiwot, told WIC the expansion project includes construction of dormitories, cafeterias, classrooms, research and community service centers, laboratories, libraries, workshops, offices, sport academies, social centers, model community schools, among others.

He said the expansion project would enable the university to increase its enrollment capacity. The university enrolled 32, 000 students this academic year, of which 24,000 are regular students.

According to Kindeya, the university is training 2, 400 students in masters and 24 students in PhD program.

In order to ensure education quality, the university is undertaking special and continuous activities, including a modular system which enhances learning by providing students with intensive and focused time on each topic, he said.

Kindeya further said the university is building teachers’ capacities to maximize the quality of education. Out of the total 1,637 teachers in the university, 1,245 teachers are second and above degree holders.

He added that some 125 instructors were also hired from foreign countries to maintain the quality of the master’s programs being offered by the university.

The university is applying 1-to-5 network in all departments, where one student responsible for tutoring five slow learners, so that students can contribute their share to ensure education quality, he said.

Mekelle University aspires to become one of the top 25 universities in Africa by 2025, it was learnt.



Germany extends 35 million Euros for TVET excellence program

german coop


The government of Germany donated 35 million Euro to support technical and vocational education and training (TVET) excellence centres in Ethiopia.


Germany has extended a total of 20 million Euro previously during the first and second phase of the program, which aimed to strengthen selected TVET institutions. 

German Development Bank (KfW) Deputy Director Saskia Birling said 11 institutions are eligible to this support.

Six of the 11 institutions have got priority and they will be furnished with the necessary equipment next month, she added.

Deputy Director-General of Ethiopia’s TVET Agency, Nguse Gebre for his part said the program is aimed at making selected institutions center of excellence for TVET.

The program will help to train and upgrade of the skills and competency of technical teaching staff thereby provide standard trainings for students, he added.



Ethiopia building station to launch rocket



Ethiopia is building a station at the northern part of the country to launch rockets up to 30km distance in to the space, project manager Eng. Mulualem HileMarian said.

According to him, construction of a station, Alpha Meles named after the late Prime Minister Meles Zenawi, is being built at the Tigray regional state.

Constructions of two underground stations, in which preparation activities and testing will be carried out are also being built. 

Testing for the system and capacity of the rocket to be launched will be finalized in these underground stations until the end of the month of July, he added.

Sixty engineers drawn from various fields are working day and night for the success of the project.

Parts of the station are fabricated locally by Mesfin Industrial Engineering and Mesebo Cement, local private companies and the Metals and Engineering Corporation (METEC), the stated owned military industry.



Customs proclamation takes effect this week


A new customs proclamation is promulgated and is in effect as of Wednesday December 24, 2014. The new bill has fully replaced the former customs bill, Proclamation Number 622/2009.

The new proclamation is dubbed Proclamation 859/2014 which aims at promoting and supporting the manufacturing industry and economic development has eight parts.

The newly passed bill introduces structural changes in the authority and its human resources management. In addition to this it has included provision that ensures free movement of goods for those organizations identified as Authorized Economic Operators (AEO), eases Post Clearance Audits (PCA), and decentralizes the activity of the authority.

According to Capital, the proclamation will fill gaps that were witnessed because of the customs proclamation that has been in effect for the past five years. The newspaper furthered it is the need for a more modern customs legal framework to support development of industries and investment has made the introduction of the new proclamation necessary.

Commenting on the promulgation of the new proclamation Girma Tafesse, Federal Inland Revenue Branches Coordination Office Directorate Director of ERCA, said; “The new proclamation will accelerate the international and local business in collaboration with the upcoming new proclamation for income tax”.

Draft proclamation which will amend the income tax legal regime governing is also on the making and is now at the Ministry of Finance and Economic Development (MoFED) for final revision before it is delivered to the Councils of Ministers.



Why Africa’s degraded soils will cost the continent dearly


Montpellier small



The United Nations has named 2015 the International Year of Soils. You will be forgiven for not having it marked on your calendar already – but the truth is, the ground under our feet, particularly in Africa, should be getting much more attention than it currently does.

Africa is showing great promise, home to seven of the world’s fastest growing economies, with foreign domestic investment tripling in the last decade. But the continent is still haunted by unacceptably high rates of hunger and malnutrition that are hindering development processes. When we factor in that Africa’s millions of smallholder farmers, most of them women, are trying to grow their crops on famished soil, we may well be getting to the root of the problem.

It is estimated that 65 percent of Africa’s agricultural land is degraded, and that land degradation is costing sub-Saharan Africa approximately $68bn per year. Halting and reversing this will be fundamental to fostering Africa’s economic growth. We know that growth from agriculture is up to eleven times more effective at reducing poverty than growth in any other sector in Africa. Investing in restoring, conserving and enhancing Africa’s soils will certainly have a knock on effect on the overall development of the region through sustainable productivity increases.

With some 60 percent of the world’s unused agricultural land in Africa, the world and Africa stand to gain from investments to restore, conserve and enhance the fertility of Africa’s soils. That is why the Montpellier Panel is launching a new report this week that outlines concrete recommendations for donors and governments on what needs to be done to improve Africa’s soils.

This new report shows that the uptake of appropriate land management practices that would lead to healthier soils in Africa remains low. Too often, the choice is made to forego better practices in favour of more affordable, less labour intensive or alternative uses of resources. Traditional approaches to restoring and conserving soil health have been steadily abandoned by smallholder farmers as population increases have shortened or eliminated fallow systems, climate change takes hold on weather and rainfall patterns, and farm labour remains in short supply. Yet more modern approaches – involving herbicides, improved seeds and synthetic fertilizers for example – remain prohibitively expensive and unavailable in remote areas, leaving African soils in limbo.

Farmers must be equipped with the tools they need to adopt an integrated approach that combines traditional approaches such as water harvesting, erosion control, intercropping and the use of organic fertilizers with the appropriate use of necessary inputs like mineral fertilisers. Donors and governments must focus on investing in the training farmers need, as well as making the inputs they need more readily available and affordable.

The Soil Health Programme run by the Alliance for a Green Revolution in Africa (AGRA) has been working towards these goals since 2009. AGRA has trained almost two million farmers in 13 countries in “Integrated Soil Fertility Management” (ISFM) and has reached out to another 3.5 million farmers through radio and other communication channels to promote for ISFM practices, such as fertiliser micro-dosing combined with the use of improved seed. In Tanzania, Malawi and Ghana, farmers participating in AGRA’s soil health initiatives are doubling and even tripling yields of maize, sorghum, pigeon pea and soybean.

Currently, donor and government strategies do not pay sufficient attention to land restoration and management. Where commitments have been made by donors to combat degradation of Africa’s soils, these are not aligned with investment plans already put in place by African governments in their Comprehensive Africa Agriculture Development Programme Compacts, nor are these commitments easily quantified, monitored or evaluated.

Recommendations for action outlined in the report also advocate creating incentives for Africa’s smallholder farmers to invest in their land. Here, secure land rights through titling would be an important tool. This would encourage farmers to make long term investment decisions to enhance the fertility of their soils.

Encouraging political leaders to commit to a Zero Net Land Degradation target for halting land degradation will also be key. The Sustainable Development Goals – which will succeed to Millenium Development Goals as a framework for guiding global development policy in 2015 – are currently being formed. These debates present an ideal opportunity to bring the issue of land degradation to the fore at a high level.

Bridging gaps in data available on African soils through the use of advanced remote sensing systems, dense networks of local weather information and “citizens’ science” networks is critical. Soil mapping schemes are already underway in Ethiopia – such initiatives must be supported and replicated across the continent.

To similar effect, a new generation of African soil scientists must be nurtured so that they will have the capacity to carry out this continued analysis and implement soil health restoration programmes. Africa’s soils are as varied as the farmers who work them. Appropriate solutions for each region will only be found when local scientists and farmers work together.

Africa cannot afford to leave its land in limbo. A vibrant, agriculture-driven rural economy is the continent’s most promising exit route from poverty. This cannot be achieved with degraded soils.

Namanga Ngongi is a member of the Montpellier Panel and former president of the Alliance for a Green Revolution in Africa.



Efforts underway to supply cooking oil demand with local products

Several efforts geared towards addressing the growing demand for cooking oil with locally produced oil is well underway.

As such, 11 types of pulses and oilseeds with potentials to enable the country produce affordable cooking oil in large quantities have been identified. In particular, soya beans have been selected as the most viable oilseed for this purpose. Plans to mass produce soya beans and supply it to cooking oil factories will be activated shortly. The Ministry of Industry and The Ministry of Agriculture are working in collaboration to link farmers with the raw materials and factories that need the pulses and oilseeds.

State Minister of Industry Mebrahtu Meles (Ph.D.) said farmers producing oilseeds in Bahirdar and Adama have established working relations with cooking oil producing factories.

Ethiopia exports a large amount of oilseeds but imports cooking oil at a much expensive price tag. The latest effort to produce cooking oil locally is aimed at resolving this irony.

Efforts to promote the mass production of soya beans also include arrangements with Sugar Corporation to plant soya beans on farm fields not hosting sugar cane. Wonji and Metehara Sugar factories have already tried this scheme.



Is Somaliland truly ‘open for business’?




Somalia has the reputation of being a mysterious and conflict-ridden land. Who hasn’t heard of the infamous “Black Hawk down” episode, the militant group al-Shabaab or the pirates off the Somali coast?

But in the northwest corridor of war-ravaged Somalia lies Somaliland, a self-declared independent state that claims to be open for business. Really?

It’s easy to dismiss the “open for business” claim by Somaliland’s Ministry of Planning as mere fantasy or wishful thinking. Flying from Nairobi on a painfully slow UN-chartered plane, being greeted at the hotel by Kalashnikov-armed guards, or travelling to your meeting in an armoured car is enough to discourage even the most adventurous entrepreneur.

At first sight, Somaliland has all the characteristics of a fragile and conflict-affected situation (FCS). However, you never want to judge a book by its cover. In Somaliland, I’d argue that the conventional narrative of fragility needs to be revisited.

The Republic of Somaliland has been an internationally recognised autonomous region but has not been recognised as an independent state since it broke away from Somalia in 1991 after the fall of Somali dictator Siad Barre. Somaliland’s GDP per capita is estimated at US$347, one of the lowest in the world, according to the World Bank.

However, like many FCS economies in sub-Saharan Africa, Somaliland has embarked on a path to reform its business environment. This has partly been possible thanks to the relative peace and stability that prevails and thanks to the existence of a functioning democratic government. The 2012-2016 National Development Plan sets out an ambitious capital investment proposal of $1.19bn. But the regulatory framework will need to be improved to foster investments.

According to the Doing Business in Hargeisa 2012 report, many crucial reforms need to be considered in order to improve the investment climate. If one compares Hargeisa to the 183 economies measured by Doing Business 2012, it would rank 174th on ease of doing business – ahead of economies like Eritrea (180th) or Chad (183rd), but behind Djibouti (170th).

To complement the regulatory reform process, a team from the World Bank Group’s Trade & Competitiveness Global Practice is working with the government and private sector to lay the groundwork for the Somaliland Business Development Forum (SBDF), the state’s first public-private dialogue (PPD) platform. The World Bank Group held a workshop in November to raise awareness and discuss the Doing Business indicators. More than 85 representatives from the government and the private sector, including heavyweights like Dahabshiil and Telesom, participated and showed their support for PPD and a better business environment.

Leading this workshop was one of the toughest jobs I’ve ever had as facilitator – not due to any resistance from the participants, but rather due to the overwhelming passion and appetite for PPD and for the opportunities that it offers. Somaliland is a country of traders who use dialogue as a traditional way to deal with conflicts and find sustainable solutions. Public-private dialogue seems to be a natural fit. The private sector has had the upper hand for many years, substituting for the government in areas like public service provision, taxation, licensing, and law and order.

In Somaliland, and in Somalia in general, it’s crucial to redefine the fundamentals of development: Instead of trying to reduce the role of the state in the economy, one has to bring the state on board. This has to be done by engaging the private sector and providing reassurance that the rehabilitation of the state will not come at the expense of business. Companies want to operate on a level playing field, and they require a more solid regulatory environment. The public and private sectors need to engage in a structured policy dialogue in order to identify the bottlenecks impeding the investment climate and, together, find solutions.

Joint commitment from the government, the Chamber of Commerce, and business entrepreneurs at large can help Somaliland move past the seemingly inalterable fragile-states narrative.

As I was about to board my UN plane to return to Nairobi, I realised that there was an Ethiopian Airlines jet on the tarmac. I learned, to my surprise, that it flies daily to Addis Ababa. It may just be a sign, but it seems as if Somaliland is indeed slowly opening up for business.

Steve Utterwulghe is a senior private sector development specialist. This article was first published on the World Bank’s blog network.


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