The deal, named the Addis Ababa Action Agenda, was struck by the 193 UN Member States late Wednesday at the United Nations Financing For Development (FFD) conference held in Addis Ababa.
While the multinationals prosper, the poor and marginalised will suffer.
The new deal will provide a foundation for implementing the global sustainable development agenda, which world leaders are expected to adopt at the UN meeting this September in New York.
“The action agenda provides a global framework for financing sustainable development and developing sustainable finance,” Wu Hongbo, United Nations Under Secretary-General for Economic and Social Affairs, told the press on Thursday.
Experts estimate that new Sustainable Development Goals will cost $3 trillion annually to finance the 17 new development goals.
“This new framework aligns all financing flows and policies with economic, social and environmental priorities,” the Under-Secretary General said.
The UN, in a statement, says central to the agreement is a framework for countries to generate more domestic tax revenues, than be dependent on foreign aid, in order to finance their development agenda.
No UN body for Tax
The conference in Addis Ababa has disregarded the agenda for the creation of a UN global tax body from various angles, including civil societies.
ActionAid’s international tax power campaign manager, Martin Hojsik, called the decision “appalling failure and a great blow to the fight against poverty and injustice”.
Civil societies were campaigning for the developing countries, which they say are losing billions of dollars a year to tax dodging, to be given equal say in fixing unjust global tax rules.
“This lost money could have gone to the provision of education, healthcare and other poverty-reducing public services,” said Martin.
“While the multinationals prosper, the poor and marginalised will suffer.”
Developing countries lose an estimated US$212 billion every year to tax dodging by multinational companies.
Developing countries stood up
Activists blame “a small group of rich countries” for blocking the plan toward inclusiveness.
But developing countries say the spotlight will remain on tax and illicit financial flows.
“This text could have been agreed to on Monday morning,” said Pooja Rangaprasa policy coordinator for the Financial Transparency Coalition.
“But developing country governments stood up and said ‘no’ arguing that they must have more say in how global tax standards are drafted.”
“While we didn’t achieve the final win this week, the campaign is just getting started,” added Tove Maria Ryding, tax justice coordinator for the European Network on Debt and Development (Eurodad).
“We’ve managed to deliver a message loud and clear: the days of the rich deciding for everyone must end.”
Transport: East Africa’s rail to the rescue
Governments are betting big on new railway and port projects to boost the regional market’s competitiveness with Asia.After years of neglect, East Africa’s logistics networks are starting to see the benefits of sustained investment from public bodies and private companies.
Ethiopia, which lost its access to the sea with the independence of Eritrea in 1991, relies on Djibouti’s port as its main access point.
Long lines of trucks stream out of Djibouti’s Doraleh Container Terminal, headed south along the crowded highway leading to Dire Dawa and the Ethiopian capital, Addis Ababa.
But this congestion should end when Ethiopia finishes its long-awaited rail links between the capital, the port to the north and various key economic zones in the country, including the new sugar plantations and refineries in the Awash Valley.
Given that inter- national transport costs can hit $4,000 per container, this should help move Ethiopia closer to its goal of offering an alternative to the manufacturing hubs of Asia.
Tracks on track
“By October 2015, a considerable portion of the Addis Ababa- Djibouti project will be finished,” Getachew Betru, chief executive of the Ethiopian Railway Corporation told reporters in January, adding that the first trains will run in early 2016.
With $1.6bn in upfront financing from the Export-Import Bank of China and sections built by China Railway Engineering Corporation and China Civil Engineering Construction Corporation, the $4bn project will connect Ethiopia’s inexpensive workforce to global markets.
However, exporters and importers still face challenges in clearing containers at Djibouti’s ports. Congestion can block the arrival of new containers.
“So instead of the cargo waiting at Djibouti, we can take it as soon as possible to our dry ports. And all other processes, including ours, will be finalised at [the end of this year],” Mesfin Tefera, the deputy chief executive of Ethiopian Shipping & Logistics Services Enterprise (ESLSE), tells The Africa Report.
The government is also targeting Port Sudan for imports and exports for northern Ethiopia and Berbera in Somaliland for importing coal.
“Five to ten percent of the country’s imports are planned to come through the port of Berbera, and we will be looking for proper ports for different areas of the country,” transport minister Workneh Gebeyehu told parliament in February.
“But the port of Djibouti continues to be the major one.”
The government in Addis Ababa has experimented in outsourcing the management of key parastatals without relinquishing ownership.
For instance, France Telecom managed Ethio Telecom from 2010 to 2013.
Given the scale of the ESLSE’s operations, it may well be that foreign companies see management opportunities arise.
Across the border in Kenya and Uganda, management contracts for parastatals already exist, although they had a bumpy ride in their first iterations.
The Rift Valley Railways (RVR) consortium picked up the baton in 2006 and is currently managing the colonial-era metre-gauge track system.
RVR bought 20 new General Electric locomotives in 2014, of which 13 have been delivered to Mombasa.
When added to the current rehabilitated stock, this doubles RVR’s mainline pulling power. An additional 120 wagons should arrive by November of this year.
RVR says that it welcomes the competition from Chinese-built rail networks.
China Road and Bridge Corporation, a subsidiary of China Communications Construction Company, began work on a new standard gauge rail line in Kenya in 2014.
“The total throughput of Mombasa port is estimated to be around 26m tonnes per annum (mtpa) by 2017,” says Andreas Heinel, RVR’s chief commercial officer.
“We would be able to carry approximately 4mtpa at full capacity on the metre gauge. And the standard gauge railway would target around 10mtpa when fully up and running. That still leaves a lot of slack to be picked up.”
FINAL BIDDING TRIGGERED FOR PROJECT CONTRACTORS TULU KAPI GOLD PROJECT, ETHIOPIA
Site visits by short-listed candidates will commence next week and the Company’s intention is to select the winning bidders next month.
Today’s opening of final bidding by project contractors follows the completion of preliminary reviews of the recently completed Definitive Feasibility Study by the Independent Technical Consultants for secured financiers.
Short-listed contractors comprise leading international firms from several continents, all of whom have been selected based on their representations, experience, commitment to the development of the Ethiopian mining industry and capacity to contribute development funding through their contractual arrangements.
Harry Anagnostaras-Adams, Executive Chairman of KEFI Minerals, commented:
“We are pleased to be reaching another milestone in the development of Tulu Kapi, our key asset, and are delighted with the high calibre of the bidders. Progress on the project remains on schedule for optimisation of development funding this quarter, commencement of works next quarter and production in early 2017.”
Ethiopia’s generational freeze
The Metekakat policy of making room for younger politicians has been put on ice.Had late Prime Minister Meles Zenawi been alive today, perhaps this might have been a year of change.
Meles, who died in 2012, had been slated to step down in accordance with Metekakat, a programme to move top officials into advisory roles and clear the way for a younger generation.
“As they say in the West, ‘If it ain’t broke, don’t fix it,'” says Getachew Reda, an adviser to Prime Minister Hailemariam Desalegn who won a seat representing the Tigray Peoples’ Liberation Front (TPLF) in late May’s parliamentary elections.
Only a small number of high-level statesmen, like former foreign minister Seyoum Mesfin and former communications minister Bereket Simon, have vacated their posts in recent years to serve in advisory, diplomatic or corporate capacities.
On the heels of an election that delivered a sweeping victory to the ruling coalition, the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF), party leaders say they have no intention of effecting fundamental change.
There is no question that TPLF leaders like Meles, deputy prime minister Debretsion Gebremichael and security chief Getachew Assefa played key roles in steering Ethiopia’s policy direction, in part because Tigrayans led the rebellion against the Derg regime 24 years ago.
The TPLF is one of four regional parties making up the EPRDF coalition. It shares the stage with the Oromo Peoples’ Democratic Organization (OPDO), the Southern Ethiopian Peoples’ Democratic Movement (SEPDM) and the Amhara National Democratic Movement (ANDM).
At regional congresses in August, each party will appoint nine of its members to fill the EPRDF’s executive committee.
For all four of the parties, sticking to the EPRDF’s script is paramount. Officials say the TPLF does not have outsize influence on national affairs.
The cabinet is well-balanced, and the central and southern regions have some figures in powerful positions, like finance minister Sufian Ahmed of the OPDO and Prime Minister Hailemariam, a technocrat from the SEPDM who is expected to retain his post for a five-year term.
The parties are unified, says ANDM office head Alemnew Mekonnen, who sits on the EPRDF executive committee: “We have similar beliefs, in terms of improving living situations and democratisation.”
He says he is determined to improve governance, discipline rent seekers and remove obstacles to policy implementation.
Other than that, the objective is to follow the development model that Meles laid out.
Grassroots members, too, defend the status quo. But if there is one common complaint it is that national programmes can take precedence over regional priorities.
Some ANDM members say the party is not doing enough to protect Amharas who live in other regions, and some TPLF members complain that their best and brightest are creamed off to national posts in Addis Ababa.
Still, all of the EPRDF’s parties are reckoning with mostly rural constituencies, where service delivery is of paramount importance.
And the ruling coalition’s ethnic federalist system has done its best to maintain balance in a diverse country.
However, oppositionists complain that the political and economic playing fields are largely closed to outsiders. The two major opposition parties rejected the May election as a farce.
Human rights advocates condemn a restrictive media environment and economic analysts say that logistical problems are inhibiting industrialisation and investment.
Had Metekakat progressed as planned, a new generation of politicians might have begun addressing these issues.
The OPDO and SEPDM have elevated new leaders at least to mid- level positions, but all four parties say more capacity-building is needed before younger members can fill high-powered roles.
With Ethiopia at least a decade away from achieving its goal of middle-income status and still in the midst of several mega-projects, now, the EPRDF says, is not the time for major changes.
World agrees on framework to generate financing for post-2015 development agenda
The Addis Ababa Action Agenda, an outcome document of the Third International Conference on Financing for Development, contains more than 100 concrete measures. It addresses all sources of finance, and covers cooperation on a range of issues including technology, science, innovation, trade and capacity building.
Even as the developed countries re-committed to invest 0.7 percent of their gross national income, a far cry from today’s average of 0.29 percent, for foreign aid as the Official Development Assistance (ODA) with 0.15 to 0.2 percent allocated to the LDCs, the UN says domestic resource mobilization is central to the agenda.
The ODA from members of the OECD reached 135.2 billion US dollars in 2014 but experts and officials have said the amount is far from enough for developing countries achieve sustainable development. Tax revenue and the private sector represent the two key areas to tap into for development funding.
In the Addis Ababa outcome document, countries agreed to an array of measures aimed at widening the revenue base, improving tax collection, and combatting tax evasion and illicit financial flows. Countries also reaffirmed their commitment to official development assistance, particularly for the least developed countries, and pledged to increase South-South cooperation.
In taxation, countries agreed to consider taxing harmful substances to deter consumption and to increase domestic resources. They agreed that taxes on tobacco reduce consumption and could represent an untapped revenue stream for many countries.
In infrastructure, countries agreed to establish a Global Infrastructure Forum to identify and address infrastructure gaps, highlight opportunities for investment and cooperation, and work to ensure that projects are environmentally, socially and economically sustainable.
Governments also aim to operationalize the technology bank for the low-income countries by 2017, according to the documents.
Countries also agreed to establish a Technology Facilitation Mechanism at the Sustainable Development Summit in September to boost collaboration among governments, civil society, private sector, the scientific community, United Nations entities and other stakeholders to support the sustainable development goals.
UN Secretary-General Ban Ki-moon said, “This agreement is a critical step forward in building a sustainable future for all. It provides a global framework for financing sustainable development. ” He added, “The results here in Addis Ababa give us the foundation of a revitalized global partnership for sustainable development that will leave no one behind.”
Countries also stressed the importance of nationally owned sustainable development strategies, supported by integrated national financing frameworks.
“We reiterate that each country has primary responsibility for its own economic and social development and that the role of national policies and development strategies cannot be overemphasized,” the agreement states.
Europe to provide clean water for 120.000 households across Ethiopia
More than 120,000 households across Ethiopia are expected to benefit from significant new investment in water, wastewater and sanitation infrastructure. Three leading European development finance institutions today confirmed more than EUR 81 million of support for the upgrading programme to improve water services around the country by the Ministry of Water, Irrigation and Energy.
The European Investment Bank, French Agency for Development (AFD – Agence Française de Developpement) and the Italian Ministry of Foreign Affairs and International Cooperation, represented in Ethiopia by the Italian Development Cooperation Local Technical Unit (IDC), announced the new backing on the sidelines of the Third International Conference on Finance for Development currently being held in the Ethiopian capital Addis Ababa.
“The European Investment Bank is very glad to be back in Ethiopia after many years to help finance a project in such a crucial sector as water and sanitation. Our engagement here shows our continued commitment to water investments across Africa and around the world. The programme that we’ve agreed to jointly finance today is expected to lead to improvements in health conditions and thus the quality of life of many Ethiopians.” said Pim van Ballekom, European Investment Bank Vice-President.
The new programme, which will include both technical assistance during its implementation and long-term loans, will provide new water and sanitation infrastructure as well as rehabilitate existing services in small and medium towns across Ethiopia. Expected to directly benefit more than 120,000 households, the scheme will be supported by the Water Resources Development Fund’s (WRDF), and technical assistance will also be provided to regional water authorities.
The three European partners today agreed to provide more than EUR 81 million to the programme. This includes EUR 40 million from the European Investment Bank, EUR 20 million from AFD and EUR 15 million from Italian development cooperation a further EUR 6,4 million in grant funding from the three partners will complement the loans.
Over the last five years the European Investment Bank has provided more than EUR 500 million to support water investment including in Mali, Niger and Burkina Faso in the Sahel, Cameroon in central Africa as well as Tanzania, Uganda, Lesotho and Zambia.
In 2014 the European Investment Bank provided more than EUR 2.5 billion to support infrastructure and private sector investment across Africa.
More than 30 Countries, Int’l Organizations Launch Addis Tax Initiative
In launching the Addis Tax Initiative, over 30 countries and international organizations have teamed up to strengthen international cooperation in this area.
During the occasion, Finance and Economic Development Minister Sofian Ahmed said Ethiopia has made remarkable transformation in collecting tax at the national level, especially during the past five years. Yet there is much to do when compared with the tax collecting system of other countries.
Least developed countries (LDC`s) like Ethiopia will benefit more from the initiative by sharing experiences from developed countries and creating awareness among local tax payers, according to the minister.
The initiative highlights the importance of domestic revenue for financing development and specifically stresses the significance of tackling domestic and cross-border tax evasion, it was learned.
The countries subscribing to the Addis Tax Initiative have declared their commitment to enhance the mobilization and effective use of domestic resources to improve their tax systems.
The following have joined the Addis Tax Initiative: Australia, Belgium, Cameroon, Denmark, Ethiopia, European Commission, Finland, France, Italy, Germany, Indonesia, South Korea, Liberia, Luxembourg, Malawi, Netherlands, Norway, Philippines, Sierra Leone, Senegal, Slovenia, Sweden, Switzerland, United Kingdom, and the United States.
EIB opens first office in Addis Ababa
At a ceremony held in Addis Ababa earlier today the European Investment Bank (EIB), Europe’s long-term lending institution, formally opened the bank’s first permanent representation in Ethiopia. The new office will lead engagement by the EIB, the world’s largest international public bank, both to support long-term infrastructure and private sector investment in Ethiopia and to manage relations with the African Union Commission and other international organizations based in the Ethiopian capital.
“The European Investment Bank has helped to change lives across Africa for more than 50 years. On behalf of my country Ethiopia I am pleased to welcome the EIB to Addis Ababa and wish all those working in the new office the best of success.” said H.E. Ahmed Shide, State Minister of Finance and Economic Development of Ethiopia.
“The European Investment Bank has a strong track record supporting crucial infrastructure investment across Africa and around the world. Our new home in Addis Ababa will help us to support crucial investment in water, energy and other key sectors, as well as backing private sector growth, essential for economic development in Ethiopia. This represents an historic step in strengthened engagement of the European Investment Bank in the country and has only been possible given the firms support of Ethiopian authorities and European Delegation colleagues.” said Pim van Ballekom, European Investment Bank Vice President responsible for sub-Saharan Africa.
“The European Investment Bank is Europe’s bank and the new Addis office will strengthen European support for crucial investment across Ethiopia in the years to come.” said Ambassador Chantal Hebberecht, Head of the European Union Delegation to Ethiopia.
“The new permanent presence of the EIB in Ethiopia will enable the world’s largest multilateral finance institution to directly contribute to European Union discussions with the African Union and other Addis based organisations. The new office will allow the EIB’s significant infrastructure, climate action and private sector experience to be shared for the benefit of Africa and Africans.” said Ambassador Gary Quince, Head of the European Union Delegation to the African Union.
The official opening was welcomed by H.E. Ahmed Shide, State Minister of Finance and Economic Development of Ethiopia, H.E. Erastus Mwencha, Deputy Chairperson of the African Union Commission and Ambassador Chantal Hebberecht, Head of the Delegation of the European Union to Ethiopia. Minister and Ambassadors from across Africa and Europe, representatives of other international finance organisations and the business community were also present.
Confirmation of a strengthened presence of the EIB, comes a day after the announcement of EUR 40 million of new support to improve clean water supply in 20 towns across Ethiopia by the bank on the sidelines of the Financing for Development Conference convened to prepared new Sustainable Development Goals.
The EIB also confirmed that Christophe Litt, will head the new office that will be based within the European Union Delegation to Ethiopia. A qualified lawyer Christophe has many years of professional experience managing investment in new hospitals, microfinance and infrastructure projects in both Europe and the Middle East.
The EIB has supported investment in Ethiopia since 1976 and last year the European Investment Bank provided more than EUR 2.5 billion for investment across Africa.
Chinese Corporation to Construct Hawassa Industrial Park for $246m
Hawassa’s suitable conditions and infrastructure makes it an ideal location for the park.
China Civil Engineering Corporation (CCECC) concluded a 246 million dollar deal with the Industrial Corporation on July 1, 2015 for the construction of the Hawassa Industrial Park.
The project, with MH Engineers, as consultant, will be completed in nine months with a focus on garment manufacture and agro-industry.
Currently, there are four industrial zones in the country, three of them foreign-owned. The Eastern Industrial Zone at Dukem, the Lebu Industrial Zone which is owned by Huajian Group and Modjo Industrial Zone owned by George Shoe are the private industrial parks.
The only government owned Industrial Park is the Bole Lemi Industrial Zone. The 139 million Birr consultancy contract for phase two of this project was signed between the Ministry of Industry and DOHWA Engineering Co. Ltd. on April 1, 2015.
Construction of the Hawassa Industrial Park, which began subsequent to the signing of the contract. It includes 35 factory sheds and 19 buildings which will be used as exhibition halls, food courts, dormitories, and other purposes in the first phase. This phase will cover 100ha, while the remaining phase will add 200ha more.
“The number of factories intended to be included in the first cycle of the Industrial Park project is 35. Nevertheless, the government is requiring the construction of more buildings in the park,” Kalkidan Betre, CCECC’s Quality & Safety Department Engineer told Fortune.
CCECC was awarded the contract after being shortlisted in a competitive bid that saw the participation of companies such as Tekleberhan Ambaye Construction (TACON) and Rama Construction.
TACON, which was also shortlisted, was removed on the grounds that it formed a joint venture with a company that was not listed during bidding, sources disclosed to Fortune.
Investor demand has driven the Corporation to select Hawassa for the construction of the industrial park, Tinsae Yemam, customer service officer at the industrial parks corporation explained to Fortune, adding that geographical location, resource and infrastructure conditions of an area are important factors in the selection of industrial parks. Hawassa is also suitable due to the Modjo-Hawassa Expressway, other developing infrastructure and rich resources, he added.
For the second Growth & Transformation Plan (GTP II), the Industrial Park Corporation has planned to construct parks in Mekelle, Adama, Jimma and Bahir Dar. Furthermore, the Corporation will construct another industrial park in Addis Abeba in a joint venture with Ayka Addis Textile & Investment Group Plc.
Politico says US health system can learn from Ethiopia
Ethiopia and Singapore held Bilateral Talks
Ambassador Berhane Gebre Cirstos held discussion with Mr T. Jasudasen, Ambassador of Singapore to Ethiopia and the African Union on Wednesday (July 15).
Ambassador Berhane recalled the increasing economic ties between the two countries and added on the importance of such cooperation as windows of opportunity to explore the potential areas of future cooperation.
Mr Jasudasen also recalled active investment endeavors made by the country’s leading industries like Wilmar Agribusiness in Ethiopia.
The Ambassador also mentioned the recent avoidance of double taxation agreement signed so that trade and investment could get invigorated.
Ambassador Berhane also noted Ethiopia’s interest to share experience on the sophisticated urban planning and Management of Singapore.
Ethiopia and the US to Move Forward Bilateral Economic Cooperation
Ambassador Berhane mentioned Ethiopia’s successfully accomplishments in regard to the Millennium Development Goals especially since the implementation of the First Growth and Transformation Plan. Ambassador Berhane also explained the Second Growth and Transformation Plan objectives at creating an all inclusive growth with an increased productivity in agriculture, industry and light manufacturing.
He said the Plan would also focus on issues of economic and political governance, and encourage more FDI. Appreciating the US government for the second extension of AGOA, the State Minister called for more US investors to invest in Ethiopia.
Tony Pipa said his country is committed to move the historic bilateral relation forward on the cornerstones of the second GTP including gender issues. He also appreciated Ethiopia’s role in preparing such a decisive and successful international conference and for bringing together the various stakeholders on finance and development.
Ethiopia, Thailand to boost trade and investment ties
State Minister of Foreign Affairs, Dewano kedir met with a Thai delegation led by Deputy Foreign Minister, Don Pramudiwinai on Tuesday (July 14, 2015).
On the occasion, Dewano noted the recent celebration of the 50th anniversary of diplomatic relation between Ethiopia and Thailand as a milestone that gave impetus to the growing ties. He underlined the importance of strengthening the long standing bilateral relation between the two countries through strong economic cooperation.
Stressing the need to boost investment in particular, Dewano said “trainable huge labor force, big domestic market and cheap power supply and a right policy makes Ethiopia a preferred investment destination to Thai investors.”
He added that particularly investment opportunities in textile and garment, leather and leather products, agro processing and health sectors are lucrative areas attracting significant foreign direct investment and urged Thai investor to take part in Ethiopia’s booming manufacturing sector.
He assured the delegation that the Government of Ethiopia would provide every possible support to Thai investors investing in Ethiopia. Don Pramudiwinai for his part congratulated Ethiopia for hosting the 3rd Finance for Development Conference in a successful way.
He further said Addis Ababa has an important place in international diplomacy as host to several bodies such as the UNECA and the AU making it a political capital of Africa and reiterated Thailand’s desire to strengthen its ties with Ethiopia.
In pursuance of boosting trade and investment, the Deputy Minister noted Thailand’s plan to send a board of investors and officials to Addis Ababa in the coming months. He noted that new projects aimed at boosting Thailand and Ethiopia’s bilateral relations are on pipeline.
The two sides exchanged views on building industrial zones in Ethiopia. Dewano affirmed that Ethiopia supports private initiative’s to build industrial zones as a matter of top priority and assured every possible support to Thai investors intending to build industrial zones.
Discussions were also made on the need to work together on the planned visit of Thai business delegation and issues of diplomatic representation.