11 June 2015 Business News


COMESA-EAC-SADC Tripartite launched


comesaThe COMESA-EAC-SADC Tripartite Free Trade Area was officially launched today setting the stage for the establishment of a single market for the 26 African countries in the Eastern and Southern African Region.

The tripartite Heads of State and Government and Plenipotentiaries representing their Heads of State and Government appended their signatures on the Agreement at Sharm El Sheikh in Egypt.

The leaders directed the Member/Partner States to expedite the process towards the operationalization of the COMESA-EAC-SADC Tripartite Free Trade Area by finalizing outstanding issues. These include the Elimination of Import Duties, Trade Remedies and Rules of Origin, which will form part of the COMESA-EAC-SADC TFTA Agreement.

Following the signing, the Countries will proceed to initiate the ratification process through their legislative assemblies. The Agreement will come into force once ratification is attained by three quarters of the Member States.

The leaders also directed the commencement of Phase II negotiations covering trade in services, cooperation in trade and development, competition policy, intellectual property rights and cross border investments.

Further, they directed that all negotiations, including outstanding work be carried out in accordance with principles, processes and institutional structures as approved by Summit.

The Tripartite Sectoral Ministerial Committee on Trade, Finance, Economic Matters and Home/Internal Affairs was directed to develop a Roadmap on Phase II negotiations, providing timelines for key activities relating to the negotiations, their conclusion, and the implementation of the outcomes thereof

The leaders further directed that work on the Industrial and Infrastructure Pillars which are complementary to the COMESA-EAC-SADC TFTA is expedited and negotiations on Movement of Business Persons continues on a separate track.

The landmark signing of the Tripartite FTA comes seven years since the Heads of State and Government of the three Regional Economic Communities decided in their First Tripartite Summit of 22 October 2008 in Kampala to deepen Inter-regional Cooperation and Integration amongst COMESA, EAC and SADC.

Subsequently in June 2011, the leaders launched the Negotiations for the Establishment of the Tripartite Free Trade Area which has now been realized within the set time-frames.

In signing of the Agreement the leaders reaffirmed the developmental integration approach built on the three pillars of industrial development, infrastructure development and market integration that was adopted at the Second Tripartite Summit.

Tripartite FTA represents an integrated market of 26 countries with a combined population of 632 million people which is 57% of Africa’s population; and with a total Gross Domestic Product (GDP) of USD$ 1.3 Trillion (2014) contributes 58% of Africa’s GDP.

The establishment of a Tripartite FTA is expected to bolster intra-regional trade by creating a wider market, increase investment flows, enhance competitiveness and encourage regional infrastructure development as well as pioneer the integration of the African continent.

Heads of State and Government The Tripartite Summit were HE Abdel Fattah El-Sisi, of Egypt; HE Hailemariam Desalegn, Prime Minister of Ethiopia; HE Prof. Arthur Peter Mutharika of Malawi; HE Dr. Hage Geingob of Namibia; HE Omer Hassan Ahmed Al -Bashir of Sudan and HE Robert Gabriel Mugabe of Zimbabwe.

Others were HE Prosper Bazombaza, First Vice President of the Republic of Burundi, HE Mohamed Ali Soilihi , Vice President of the Republic of the Union of the Comoros HE William S. Ruto,Deputy President of Kenya, HE. Danny Faure, Vice President of Seychelles, HE Dr. Mohamed Gharib Bilal, Vice President of Tanzania, HE Agostinho do Rosário, Prime Minister of the Republic of Mozambique HE The Right Honourable, Anastase Murekezi, Prime Minister of the Republic of Rwanda. Other heads of delegations were Ministers.


In Ethiopia, crop insurance takes root but changes needed – experts


Ethiopian government development agent Ibrahim Nuriye discusses weather index crop insurance with insured farmers in Ethiopia’s Oromia regional state.

ZIWAY, Ethiopia, June 11 (Thomson Reuters Foundation) —

Gebre Sire, a farmer from the village of Abine Germama in Ethiopia’s Oromia regional state, has been paying into weather-index based crop insurance for over two years. While he’s happy that he has recently received his first payout after drought ruined his corn crop about a year ago, he feels there are ways to better maximize the scheme’s benefits.

“I’ve already been paid 250 birr ($12.50) on the 100 birr ($5) premium I pay every season,” he said. But the value of the birr has been steadily dropping since the scheme began three years ago, and Sire says his payout doesn’t quite cover all of his costs.

“The premium we pay is too small,” he said. “I would like it to increase along with the payout.”

For Ethiopian farmers dealing with the worsening impacts of climate change, small-scale crop insurance can be a lifesaver. But the insurance needs to expand – and undergo some tweaks – to effectively help them effectively recover from extreme weather, farmers and experts say.

Sire’s complaint is a familiar one to Daniel Negassa, head of the micro-insurance department at Oromia Insurance Share Company (OIC), the only crop insurer in the state. However, he says, change is not yet on the cards.

“Micro-insurance by its nature is for the benefit of the low-income population,” he said. “We’ve seen in our impact assessment that some farmers have difficulty even paying the current premium.”

In the next three or four years, OIC does plan to scale up insurance premiums and compensation in more affluent areas, Negassa said.

The more pressing issue, experts say, is getting the benefits of crop insurance to more farmers.

According to Melkachew Temesgen, a crop insurance officer at OIC, farming is a hugely untapped market for insurance companies. However, poor literacy levels among farmers, the complexity of weather-index-related insurance schemes and the need to convince intermediaries such as farmers cooperatives has discouraged other insurance companies from offering crop coverage.

Kosie Hashiguchi, an expert from the development organization Japan International Cooperation Agency (JICA), has been assisting the OIC with its insurance scheme for over two years. “When the idea was first proposed to insurance companies, many of them were unsure,” he said. “Some even asked that JICA pay for the initial insurance premium payouts.”

Hoping to encourage the use of crop insurance throughout the country, JICA has been funding awareness creation programs and spreading the word to farmers through radio ads and leaflets. The agency is also working alongside the federal government and several regional governments to develop trainers who explain to insurance companies how crop insurance works.

While OIC insurance officer Temsgen agrees that the uptake of crop insurance is slower than he hoped, he is reassured by its success so far. Three farmers’ cooperatives and 1,870 households in the Oromia region paid for crop insurance in 2013; by the end of 2014, that had risen to five cooperatives and 5,720 household.

The hope, he said, is to emulate that success across Oromia and wider areas of Ethiopia.


Experts say one obstacle to the expansion of crop insurance schemes is the complexity and unreliability of the data. Using historical weather data, insurance companies evaluate an area’s vulnerability to extreme weather and base compensation on those findings.

But according to Hashiguchi from JICA, because the satellites that track rainfall levels are not always reliable, there can be gaps in the data. “Weather-index crop insurance schemes need constant research and experimentation,” before they can be considered reliable, he said.

He added that for countries such as Ethiopia, which has a majority rural population, strong reinsurance companies are needed to spread the risk before crop insurance can be sustainably expanded across the country.

Feyiso Biyo, head of Abine Germama village, would like to see the issues with crop insurance resolved so that the remaining third of the 919 households in his locality feel confident to join the scheme. The other households are already covered, he said.

Freeing farmers from the worry of crop failure could have far-reaching positive impacts, he said.

“We used to suffer from persistent drought, but this insurance scheme has assured people and motivated them to deal with climate change,” he said. “They can now focus on other activities such as planting trees in deforested areas.”

Neighboring villages have taken notice and want to participate in the scheme, he said.



Ethio Telecom fulfils 90% of the sector’s objective in the GTP


By Birhanu Woldesemayat

ethiotelAddis Ababa: June 11, 2015 –

CEO of Ethio Telecom Amdualem Admassie disclosed that the company has fulfilled 90% of the sector’s objective in the first phase of the Growth and Transformation Period (GTP).

The number of mobile phone subscribers in the country has reached 37 million, just three million subscribers short of the objective in the sector. The company aims to fill the gap within the remaining months by selling more subscriptions.

Network expansion projects to host millions of new subscribers have been completed, Andualem underscored. He added, tariffs for mobile phones and regular lines are the lowest in Ethiopia in comparison with other African particularly, East African, countries.

Regarding data internet customers, the sector outperformed its objective by 238% and caters for nine million subscribers. In addition to providing the service to more people, the company’s profits have also increased.

Access to phones in rural areas has been reduced to just five kilometers, 90% of Ethio Telecom’s plan in this sector. The program has provided access to 16,000 rural Kebeles to regular lines.

Andualem noted wireless phone provision has met its objectives.

However, over the years, problems of network disruption have been witnessed. The problem has been addressed in the capital Addis Ababa and other cities in the country. Some towns still experience the problem, the CEO admitted. For the past three months, Ericson has been working to solve network disruption problems in Adama and other Southern towns. Similarly, ZTE is currently working to resolve the network problem in Ambo, Nekemte and environs. Both projects also include upgrading of existing networks into 3G and 4G services.

Preparations are well underway to reach some areas of the country, Andualem said.

The number of regular line subscribers has diminished from a million to 800,000. The company is working to boost customers of the service by reducing prices and has seen some positive results.



21-tower scheme to be Ethiopia’s ‘biggest real estate project’ says Chinese developer


Artist’s render of the Royal Garden scheme planned by developer Sinomark in Addis Ababa (Sinomark Real Estate)

Render: Artist’s render of the Royal Garden scheme planned by developer Sinomark in Addis Ababa (Sinomark Real Estate)

A Chinese developer says it will build a 21-tower development that will “change the face” of the Ethiopian capital, Addis Ababa.

The news comes in a period of high growth for Africa’s second most populous country, whose government has just proposed a budget that is 20% higher than last year to fund development.

The scheme will cost $194m (4bn birr), and each of the 21 towers will have more than 20 storeys, Ethiopian News Agency (ENA) reported.

On its website, developer Sinomark Real Estate says the scheme, called Royal Garden, will be the “biggest real estate project in Ethiopia”, and will provide “quality, luxurious and affordable” homes for Ethiopians.

Built with help from Ethiopian firm Saba Engineering, Royal Garden will have swimming pools, sport centres, and a commercial zone, ENA reported.

It will be built at Gotera, a district approximately one kilometre from Bole International Airport, which is undergoing a major expansion, with a new passenger terminal and Africa’s biggest air cargo hub planned.

Ethiopia’s economy is expected to expand 8.6% this year and 8.5% in 2016, compared with 10.3% growth last year, the International Monetary Fund said in its World Economic Outlook released in April.

Just today, the Ethiopian government proposed an $11bn budget for the fiscal year to fund development, up nearly 20% from the previous year, Reuters reported.

A view of downtown Addis Ababa, capital of Ethiopia (aiic2015assembly.org)

Ethiopia was Africa’s eighth-largest recipient of foreign direct investment last year, up from 14th position in 2013, Bloomberg reported, quoting accounting firm EY.

At the groundbreaking ceremony for Royal Garden, Ethiopian President Mulatu Teshome said that real estate projects contributed 12.5% to domestic growth in the past 10 years. He said the Sinomark scheme would create 500 jobs.

According to ENA, Sinomark director-general, Yan Sin Li, said the new scheme would be based on “French design” and will “change the face of Addis Ababa”.

It would take three years to complete the construction of the real estate, Li said.



Sawiris family plans to invest in Ethiopia’s hotel sector: Ethiopian PM’s advisor 


Ethiopia received a request from the Sawiris family to invest in the country’s hotels sector, according to the Ethiopian Prime Minister’s Adviser, Getachew Reda.

Reda added that Ethiopia is negotiating with some Egyptian businessmen to boost new investments, and has received various requests from Egyptian investors to launch projects in Ethiopia.

“El-Sewedi and Abo Elenin already have investments in Ethiopia, and we are negotiating increasing investments,” added Reda.

Reda said Ethiopia encourages Egypt to invest in wheat agriculture to provide a supply of the grain for the Middle East and Russia.

“The time frame for ratifying the agreement is very tricky, but there are intentions to join the agreement, and for Ethiopia it requires in depth negotiations. No offer of goods has been made to implement, but the country should work on providing comprehensive goods,” said Reda. “The establishment of the Free Trade Area [FTA] and the investment between the countries is very impressive.”

He pointed to the importance of the agreement to further enhance coexisting relations. The FTA is very important investment project between the two countries and for cooperation in industrial and agriculture sectors.



Hurray! Gamechanger Djibouti-Ethiopia railway ready, will cut goods travel time from two days to 10 hours


99% of imports from fast-growing Ethiopia pass through its neighbour, while Djibouti is nursing geopolitical ambitions.

Work in progress on the new railway tracks linking Djibouti with Addis Ababa, May 5, 2015. (Photo/AFP)

THE leaders of Djibouti and Ethiopia will oversee the completion of a railway linking their two capitals on Thursday, with the ambition that the link might eventually extend across the continent to West Africa.

Djibouti’s President Ismail Omar Guelleh and Ethiopia’s Prime Minister Hailemariam Desalegn will attend the ceremonial laying of the last track in the 752-kilometre (481-mile) railway, financed and built by China, linking the port capital of Djibouti with landlocked Ethiopia’s capital Addis Ababa.

The first scheduled train is expected to use the desert line in October, reducing transport time between the capitals to less than 10 hours, rather than the two days it currently takes for heavy goods vehicles using a congested mountain road.

“Some 1,500 trucks use the road every day between Djibouti and Ethiopia. In five years, this figure will rise to 8,000,” said Abubaker Hadi, chairman of Djibouti’s Port Authority. “This is not possible, this is why we need the railway.”

With a capacity of 3,500 tonnes—seven times the capacity of the old line at its peak—the new electrified line will mainly be used for transporting goods to Africa’s second-most populous nation.

Ethiopia’s economy is growing fast, with almost 90% of its imports going through Djibouti. Both countries benefit from economic integration, with Ethiopia gaining access to the sea and Djibouti gaining access to Ethiopia’s emerging market of 95 million people.

“Ethiopia is an important country for us,” said Djibouti’s Transport Minister Ahmed Moussa Hassan. “It is the main customer for our logistics facilities and this new railway line will strengthen trade.”

The new line is in fact the resurrection of an old one, built in 1917 by the Franco-Ethiopian Railway Company, but decades later it fell into disrepair and only worked erratically. Trains would regularly derail and it could take as long as five days to make the journey between the two capital cities.

Some abandoned parts of the old line are still visible in Addis Ababa and in central Djibouti.

Djibouti’s ambitions

Another new line linking Djibouti and the northern Ethiopian town of Mekele is also due to be built, but this is not the extent of the project’s ambition.

Hadi says the railway is a step towards a trans-continental line reaching all the way to the Gulf of Guinea, in West Africa.

“We are already the gateway to Ethiopia. We intend to continue this railway line to South Sudan, the Central African Republic (CAR) and Cameroon to connect the Red Sea to the Atlantic Ocean,” said Hadi.

Djibouti, the smallest state in the Horn of Africa, is embarking on large infrastructure projects, building six new ports and two airports in the hope of becoming the commercial hub of East Africa.

Late infrastructure

“Infrastructure is coming very late to Africa. It is impossible for a truck to cross the continent. To transport goods from the east coast to the west coast of Africa, it is necessary to circle the continent by boat,” Hadi said of a sea voyage that can take more than three weeks.

A trans-Africa railway is feasible “in seven or eight years,” he said, as long as conflicts in South Sudan and CAR come to an end.

Liu Xiaoyan, commercial director of the China Civil Engineering Construction Corporation, who is in charge of the Djibouti-Addis line, said his company is ready to continue the work.

“We want to show off Chinese technology to everyone, especially to Africa,” he said, adding that it was also an opportunity to strengthen China’s trade ties with Africa and its presence on the continent.



Ethiopia emerges Africa’s most favourable investment spot


By Emmanuel Iruobe

ethiochartThe recently concluded World Economic Forum (WEF) on Africa saw strong growth and investment winds gravitate towards Ethiopia, the famous political capital of Africa.

Multiple media reports suggest that executives from General Electric, Dow Chemical, Standard Bank Group and MasterCard, who attended the event, singled out the East African nation as a market with strong growth potential.

In the last two years, Ethiopia has risen from the fourteenth place on the list of African foreign direct investment (FDI) recipients to the second place and the number of projects in the country have spiked by 88 percent. This is a direct result of a flourishing economy and a well-funded government.

“It’s got a government that is managing economic development in a very deliberate, cautious manner. It’s the second-most populous country in Africa. It hasn’t urbanized like other African countries, but it’s going to. It’s a very exciting place,” remarked Ross McLean, Dow Chemical’s sub-Saharan African President.

The International Monetary Fund (IMF) says growth projections for Ethiopia are 8.6 percent for 2015 and 8.5 percent the following year, this correlates with historic growth of 10.3 percent in 2014.

Such impressive growth potentials, in a world characterized by slowing growth, continues to attract significant foreign capital and businesses into the country. Recently, the Dangote Group, announced a $500 million expansion of its cement plant in Ethiopia, an addition to the $600 million already invested.

“We will leave no stone unturned to make this country a suitable destination for foreign investment,” Prime Minister Hailemariam Desalegn said at the opening of a production plant at Mugher, about 80 kilometers (50 miles) west of Addis Ababa.

The emergence of Ethiopia comes with lots of lessons for Africa, all of which hover around the power of effective and purposeful leadership as well as the prudent management of resources. It also demonstrates that a country faced with socioeconomic hassles and infrastructure gaps can effect a turnaround by doing the right things.



Booming State, Ethiopian E-Commerce Industry


Internet transaction, transforming Ethiopian economy

ecx_boardE-commerce in Ethiopia has shifted the gear on how business is done. For instance, primary internet transaction introduced at full scale by banks through mobile and card banking services would play considerable.

These technologies follow the launch of centralized, online real-time, electronic banking solutions advancing the banking service which increased bank revenue as their clients number increased.

This rather conscious decision of the banks was meant to put the banks online. The motives were to increase and build the confidence of the public and shareholders in order to attract more capital to the banks. _It did exactly that making every local bank networked. The implication of implementing online transaction can also observed from individuals selling items on social media getting more customers online than at their shops. The benefits are threefold: it’s easy, time-saving and affordable.

Clearly, e-commerce is not being fully utilised and much needs to be done to rightfully take advantage of it to support and even grow the Ethiopian economy. One neglected sector is the tourism sector. Ethiopia owns several tourist attraction sights but suffers from limited promotion and inadequate infrastructures affecting the country’s benefit from the sector.

Nevertheless, the sector now benefits from better attention from the government with the encouragement of_travel agencies and development of hotels. Hotel developers are fortunate to get construction plots without lease payment. Following this, range of new hotels and lodges flooded every corner of the country. As the country strives to improve the in-house infrastructure, promoting the hotels and lodges to the rest of the world remained unavailable until jovago.com joined the flourishing Ethiopian tourism industry.
This will bring new business opportunities not only to hotels but also to the tourism industry which is targeting to bring one million visitors to the country until the end of 2015. _Indeed the company will help hotels to better manage booking free of charge. Hotel booking is now simplified by allowing users from all over the globe to compare best offered prices and secure a booking while still away. The company plan is to make every available accommodation in Ethiopia into online so that service is communicated to the right people at the right time. _It will also be engaged in promotion of destinations for business and vacation facilitating the movement of travellers.

Jovago is recently founded by the Africa Internet Group already having 250 employees being one of the leading e-commerce enterprises in the continent. It has offices in Africa, Asia and Europe with successful experiences under its belt. The company joined the Ethiopian market with the necessary resources and expertise. Without a doubt it’s coming to Ethiopia will promote the country to achieve the success it desires through tourism industry. From every stakeholder the expectation to advance hotel booking system through the company is much higher as it took over the market this May.



More Than 25 Solar-Powered Health Centers Go Operational in SNNPR


More Than 25 Solar-Powered Health Centers Go Operational in SNNPRAddis Ababa: June 11, 2015  –
Over 25 solar-powered health centers in Southern Nations, Nationalities and Peoples’ Region (SNNPR) were handed over yesterday by the German and Irish Ambassadors to Ethiopia.

The newly inaugurated health centers have started providing full service.

The handing over ceremony of the project that facilitates modern health services in rural areas through solar electrification took place at Gebab Health Centre in the remote Silte Zone.

Solar power will also be installed next month in more than 1,300 health centers that have no access to electricity, it was indicated.

The photovoltaic system enables the operation of microscopes, sterilizers and fridges (for medication which needs to be kept cool). The solar power also pump clean water to the clinics and the surrounding areas, sources pointed out.

Director of Public Health Infrastructure with Ministry of Health, Mekonnen Engida said the solar-powered clinics would hugely benefit communities that have no access to electricity.

Irish Ambassador to Ethiopia, Aidan O’Hara said some 8 International Energizing Development Programs including German Development cooperation (GIZ) have been carrying out projects to support the development activities in developing countries thereby supplying power.

The project, which comprises 25 health centers, is expected to benefit 700,000 citizens.



Milk, meat production increase in the GTP period

Milk, meat production increase in the GTP periodAddis Ababa: June 9, 2015 –
The Ministry of Agriculture says the production of milk and meat have increased three folds in the past five years period of the Growth and Transformation Plan (GTP).

Animal Fodder Development Drector with the Ministry, Tadesse Sori said the total yield of milk product of the nation was 1.5 billion liters in 2010, which reached 5 billion liters in the last budget year of the GTP period.

Tadesse added that the total production of meat has also risen to 1.5 million tons in 2105 from 500,000 tons in 2010.

According to Tadesse, strengthening of animal fodder supply, improvement of watersheds and rehabilitations of grazing lands   were undertaken to increase animal productivity across the nation.

Ethiopia is leading in Africa and ranked tenth in livestock resources with a total population of 54 million cattle, 2.5 million camels, 50 million sheep and goats.


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