Marriott’s first Executive Apartments in Africa
03 October 2015 – By Henok Reta.
Marriott International, Inc. Middle East and Africa President and Managing Director Alex Kyriakidis said that Ethiopia’s peace and stability were key factors for the company choosing to operate in partnership with Sunshine Business Group.
During the opening of the first African Marriott Executive Apartments (MEA) in Addis Ababa Kyriakidis said that Marriott International, as a leading worldwide operator in the hospitality industry, always gives specific attention to security and stability whenever planning to expand. Because of its high reputation and importance to its 52 million royal members, Marriott has to focus on these issues, which have been well maintained in Ethiopia over the years.
MEA Addis Ababa is located off Jomo Kenyatta Street and is adjacent to the UNECA headquarters and conference center. The USD 35.5 million apartment hotel features 101 suites of 68 square meters of which two are penthouse presidential suites, each with a fully equipped kitchen. It will also have a swimming pool, a grocery store and room services.
According to Samuel Tafesse, president and owner of Sunshine Business Group, the huge investment the government is currently making has given him greater courage to operate in the hospitality industry. During the same event, Samuel signed an agreement to construct and manage a five-star Marriott Hotel in the vicinity of Bole Medhanelam. Similarly, he signed a deal with Hilton Worldwide to construct and operate a Hilton Resort in Hawassa, 270 km southeast of the capital.
While speaking at the inaugural ceremony held at MEA, President Mulatu Teshome (PhD) acknowledged that the effort made by Sunshine Business Group has tremendously impacted the country’s development in the construction sector. On the other hand, Amin Abdulkadir, Minister of Culture and Tourism, said that Samuel has become the second local investor to introduce an upscale international hotel brand in Ethiopia next to business tycoon Sheik Mohammed Al Amoudi of the Sheraton.
Speaking with The Reporter, Kyriakidis described Samuel’s determination and commitment while coping with the difficulties he faced during the process before he signed the final agreement with Marriott International three years ago.
“The success is because of that pretty remarkable partnership,” he said.
He also hinted that the rate of the apartment hotel could be USD 250 per night as Addis Ababa incurs the highest average rate in Africa due to its crucial presence as a hub in the continent and due to the largest African flag carrier, Ethiopian Airlines. According to Samuel, Marriott Courtyard Hotel is expected to cost some USD 76 million and Hilton Resort in Hawassa will cost around USD 42 million, making the total cost for the two brands 3.2 billion birr. Solomon Tadesse, CEO of Ethiopian Tourism Organization, on his part said that the completion of the two hotels within the coming five years will have a significant contribution to the country’s tourism as hotels play a greater role in keeping the tourism sector vibrant and dependable.
According to Kyriakidis, MEA and the future Marriott Hotel are supposed to create full-time jobs for 600 citizens, which would have a positive effect on both the economic and social aspect of life in Ethiopia.
Similarly, Sunshine Business owner and EVP, Selamawit Samuel, commented, “We are proud to open the first Marriott branded Hotel in Sub–Saharan Africa. Marriott is an outstanding brand which will add great and unique hospitality flair to the diplomatic capital of Ethiopia.”
Marriott International, Inc. is a global lodging company based in Bethesda, Maryland, US, with more than 4,300 properties in 81 countries and territories. Marriott International reported revenues of nearly USD 14 billion in fiscal year 2014. The company operates and franchises hotels and licenses vacation ownership resorts under 19 brands.
Government plans to garner USD 3 billion from mining sector
03 October 2015 – By Kaleyesus Bekele.
At the end of the second Growth and Transformation Plan (GTP II) (2016-2020) the Ministry of Mines is planning to garner three billion dollars a year from mineral and gas exports.
The leadership of the Ministry of Mines and employees of the ministry are deliberating on the second GTP at the ministry from October1-5. In the sideline of the meeting Minister Tolossa Shagi told The Reporter that the ministry anticipates to earn three billion dollars a year as of 2020. Tolossa said that the foreign currency would be garnered from gold, potash, tantalum minerals and gas exports.
“We hope to start gas export from the Ogaden region by 2018. At least two companies would start potash export from the Afar region in the second GTP term,” the minister said.
The Chinese company, Poly GCL, is working on natural gas field development project in the Ogaden basin in the Somali Regional State in Calub and Hilala localities. The company plans to produce three million tons of Liquefied Natural Gas (LNG) annually and mainly export it to China through the Port of Djibouti. The total amount of natural gas the company plans to pump out from the two gas fields each year is 4 billion cu.m. The total investment cost of the gas development project is estimated at four billion dollars. The company hopes to start production in 2018. More than one billion dollars earning is expected from the gas export in a year.
Tolossa said that Yara Dallol BV and Circum Resources would begin mining potash deposits in the Afar Regional State in the second GTP term. Allana Potash, the Canadian company that was under preparation to commence potash export failed to realize the project due to the nose diving commodity price in the international market.
Allana has sold its concession to the Israeli mining giant, ICL. Tolossa said the ministry is not formally communicated about the transaction. “Allana did not proceed with the potash development project as we planned due to the price fall in the international market,” the minister said.
Four companies (KEFI Minerals, MIDROC Gold, Ascom and Ezana Mining) are expected to open new gold mines in different parts of the country.
The Ethiopian government earned a total of 2.4 billion dollars from minerals exports in the first GTP term (2011-2015). The country generates 500 million dollars foreign currency from minerals exports in a year–the lion’s share coming from gold export. Artisanal miners produce the majority of the gold. The earning from gold export has declined since the gold market crash in 2013.
During the discussion on GTP II, state minister of the Ministry of Mines, Alemu Sime (PhD), said that the mining sector should integrate with manufacturing, construction and agriculture sectors. Alemu said much emphasis would be given to industrial minerals that would supplement the manufacturing, construction and agriculture sectors.
Research reveals indigenous crop varieties face danger
By Yonas Abiye
Because of the little attention given to indigenous crop varieties including teff, wheat and barley in favor of improved seed varieties, the indigenous crops are facing a serious threat of extinction, a collaborative research output revealed on Thursday.
The research output jointly conducted by the Ethiopian Biodiversity Institute (EBI) and the International Biodiversity Institute (IBI) proved that the local varieties have better yields and productivity.
Director General of EBI, Gemedo Dale told a press conference on Thursday at Elilly International Hotel that after the research, local varieties are found to be endangered due to the expansion of improved varieties; however, the local ones are better and highly productive.
The director general further warned that attention should be given for the natural variety.
As a remedy, Gemedo said that his institution has already prepared a package to safeguard the endangered species.
Fantahun Basaznew, a researched, on his part said that he and his team carried out an assessment in the past harvest season to identify the selection of seeds both from the improved types and the natural ones. Hence, behavioral analyses have been conducted on 12 natural varieties including Kuncho improved variety and other blended seed types in Minjar Shenkora Woreda.
“However, the assessment result has shown that there are no differences in both varieties particularly in the length, biomass as well as nutrient contents. The statistical analysis proved that the natural variety is not less than the improved one despite the latter one being regarded as being the best variety,” the researcher said.
He further said: “the same research also found out that the natural variety has given 22 quintals of produce while the improved one gave only 21 quintals of produce”.
Apart from the joint assessment, the International Biodiversity Institute has carried out its own separate research on durum wheat in Tigray and Amhara regional states along with an Italian University, Scoula Santa Ana.
IBI country Representative Carlo Fadda said that the local varieties of the durum wheat are superior in several traits, including yield, biomass yield and resistance of pests compared to the improved varieties.
“This is the result of greater adaptation to the environment in which the varieties were tested. Ethiopian farmers participating in the experiments clearly showed a positive attitude towards their varieties,” he said.
He also highlighted that the local farmers’ varieties are better adapted to prevalent conditions in Amhara and Tigray and some places in Oromia.
“It would therefore generate additional benefits if the untapped potential of durum wheat could be considered in crop improvement programs of the country,” Fadda recommended.
Though Teff (eragrostis tef) originated and is consumed much in Ethiopia, it is also getting the attention of the outside. Researches show that the ancient crop has the potential to address food insecurity throughout the developing world.
In Ethiopia it is most widely grown cereal crop, providing over two-thirds of nutrition in the Ethiopian diet.
Ethiopia to issue licenses for 22 TV channels, 13 radio stations
Addis Ababa, October 3, 2015 – The Ethiopian Broadcast Authority (EBA) said it will issue licenses for 22 television channels and 13 commercial radio stations over the coming five years.
The authority will also give licenses for unlimited number of newspapers and magazines, Leul Gebru, Deputy Director of EBA said today.
Granting licenses for all newspaper and magazine applicants have a significant contribution towards creating a demanding generation with a reading habit, he said.
Of the 22 television channel licenses, three will be issued for commercial enterprises, while the rest will be issued for public services, according to Leul.
The authority has also a plan to issue licenses to 30 community and four education radio stations as well as to double the current number of radio stations over the coming five years.
Ethiopia sets aside money to fund SDGs
Addis Ababa, October 3, 2015 – Ethiopia is the first African country to commit part of its domestic budget to bankroll the recently adopted global development goals, which range from tackling poverty to dealing with climate change, by 2030.
Uganda and Mali also put aside money to fund the Sustainable Development Goals (SDGs).
According to the Nairobi-based East African Newspaper, Ethiopia set aside 70 per cent of its budget for pro-poor activities such as education, health, agriculture and food security.
Uganda earmarked 10 per cent for health and education while Mali committed 10 per cent to end hunger with plans to raise this to 15 per cent.
China pledged the biggest part of its budget towards the Sustainable Development Goals (SDGs), especially for the poor nations. It set aside $25 billion as the United Nations and its partners committed $25 billion.
The Chinese government also announced it will forgive the debts due this year of its worst-off debtors.
The 193 UN member countries adopted 17 SDGs as a roadmap to end poverty and hunger, fight inequality and conquer climate change.
The SDGs and their 169 associated targets, due to come into force on January 1, will guide the international development agenda over the next 15 years, or 800 weeks.
Meeting the 2030 goals could cost $3.3 trillion to $4.5 trillion a year in state spending, investment and aid.
Current spending on infrastructure, education and health has left a funding gap of about $2.5 trillion, much of which would have to come from private business, according to the UN Conference on Trade and Development.
Turkish Textile Maker Plans Massive Expansion at 850m Birr
MNS has spent 400m Br so far and the expansion will provide another 450 jobs
MNS Manufacturing Plc, a Turkish textile maker in Ethiopia, is quadrupling production with an investment of 850 million Br, with test production expected to begin November 2015.
Mahmud Nursacan, general manager of the company, has a five per cent share, with the remaining 95pc owned by Milkay Tekstile Sanayi A. S., a textile company based in Turkey, according to MNS website. The company started the expansion because of a mismatch among the different production levels, including, spinning, weaving, dyeing and garment. When the expansion is completed, all these areas will have the same levels of production.
Currently, MNS uses cotton yarn as its input, but with the installation of spinning machines, it will begin producing its own yarn.
The company now produces 4.5tn of towels a day, although the installed capacity is eight tonnes. The expansion will increase the capacity to 16tn. Its towels are mostly exported to markets in Western Europe, Turkey, Middle East, Norway and US.
So far 42 containers of machines have arrived from different destinations, including ITEMA, PICANOL, STAUBIL, and RABATEX brands from Italy, Belgium, France and India, respectively. Other machines for garment making are also being shipped now, said Tesfahun Sanna, project manager of MNS.
With its factory situated on 10ha of land in Legetafo, Oromia, on the outskirts of Addis Abeba, MNS is undertaking construction for the expansion at an adjacent eight hectare plot it leased a year ago. The plant rests on 3.2 ha. Maklina, a Turkish company is undertaking the construction, with power line installations and finishing work remaining for completion.
The company could have other business plans for the use of the spare land, Tesfahun said, but he did not specify.
MNS uses eight megawatts of electricity from Ayat substation; following the expansion it is now processing a request for two additional megawatts of electric power from Ethiopian Electric Power.
So far MNS has spent 400 million of the 850 million Br budget it had allocated; the remaining will be spent mainly on machinery acquisitions.
Products which are below export standards are available for local markets, according to Tesfahun. His company, along with Elsi Addis and E-tour, was penalised for selling its products to the local markets.
The penalty included revoking their duty free incentive and imposing income tax on their foreign employees, according to the Ethiopian Textile Industry Development Institute (ETIDI) performance report in July 2015.
MNS is among the relocated Turkish companies with the assistance of Ayka Addis, the icebreaker to enter into the textile sector in Ethiopia after relocating its factory from Turkey in 2010. MNS started out in Ethiopia with an investment of 1.1 billion Br in 2011.
Since the entrance of Ayka, Turkish companies with more emphasis on the textile sector have been flowing to the country. There are now more than 150 companies employing 50,000 people. MNS has 750 permanent employees and is planning to add 450 more for the expansion.
So far Turkish companies have invested three billion dollars.
The textile sector has had unsuccessful performance in the first growth and transformation plan (GTP I), collecting only 456 million dollars of export revenue, from the planned 1.2 billion dollars, GTP II aims even higher at 2.5 billion dollars.
Ethiopia to host key meet on agriculture, rural development
Addis Ababa, October 2, 2015 – Ethiopia to host a Conference of the Specialized Technical Committee on Agriculture, Rural Development, Water and Environment between the 8th and 9th October 2015, which will be preceded by a two day meeting of senior officials/experts that will take place on 5th and 6th October 2015 to examine the various documents and prepare their report to the ministers.
Some of the overall objectives of that conference among others will be to review relevant strategic goals, facilitate mutual accountability and Identify synergies, linkages and complementarities in on-going agriculture.
Also, rural development, water and environment related initiatives, and their implications on the achievement of the overarching goals of Africa accelerated agricultural growth and transformation (3AGT) agenda for attaining food and nutrition security, reduce poverty, boost intra-African trade, and enhance resilience of production systems and livelihoods to Climate Change and related shocks.
More specifically, the Conference will have the following objectives: To review and adopt the rules of procedure of the specialized technical committee on agriculture, rural development, water and environment.
To facilitate broad-based consultation and dialogue among all relevant stakeholders on mutual accountability, mutual learning and biennial reporting on previous commitments.
Consideration of various strategic documents related to agriculture, rural development, water and environment.
To identify synergies, linkages and complementarities in on-going agriculture, rural development, water and environment initiatives and agree on areas of follow up actions at various levels and to examine and internalize the strategic and operational modalities for coordination mechanisms between the relevant sector ministries at Member State level, which are also linked to those at REC level.
However, various side events and stakeholders’ forums will be organized on the margins of the Conference on October 7, 2015 to facilitate consultations and contribute to an interactive ministerial session that will be held on 8th and 9th October 2015.
The 7th of October 2015 will also be used to prepare and adopt the reports of the senior officials/experts to be submitted for consideration by the ministers.
The African Union Assembly of Heads of State and Government adopted the configuration of the specialized technical committees (STCs) and the modalities of their operationalization in January 2009 and July 2011, respectively as Organs of the Union in accordance with Article 5 (1) (g) of the Constitutive Act.
One of the specialized technical committees recommended for establishment is the specialized technical committee (stcs) on agriculture, rural development, water and environment.
The STCs are composed of Ministers or senior officials responsible for sectors falling within their respective areas of competence. They are responsible for preparing projects and programs of the Union and submitting them to the Executive Council.
They also have the duty to ensure the supervision, follow-up and evaluation of the implementation of decisions taken by the organs of the Union and the coordination and harmonization of projects and programs of the Union.
The STC is also expected to carry out any other functions assigned to it for the purpose of ensuring the implementation of the provisions of relevant AU Acts.
The STC Conference will therefore provide a peer environment for exchange and learning to support the achievement of individual and collective responsibilities for relevant sector ministries targets.
The envisaged outcomes of the inaugural conference of the au specialized technical committee on agriculture, rural development, water and environment include the rules of procedure of the specialized technical committee on agriculture, rural development, water and environment adopted modalities and mechanisms for mutual accountability, mutual learning and biennial reporting.
Also, the various relevant strategic documents reviewed and pertinent decisions adopted and agreements on synergies, linkages and complementarities in on-going agriculture, rural development water and environment initiatives identified and areas of follow up actions at various levels obtained.
There will be plenary and parallel sessions for Experts/Senior Officials to facilitate deliberations and review of documents, these include The Agriculture and Rural Development Experts Session to review and consider relevant reports.
The two days ministerial session will be conducted in a format that on the one hand facilitates inclusive and interactive conversations and dialogue among the ministers as well as between the ministers and key strategic stakeholders, and on the other hand allows the Ministers to consider strategic reports and items that warrant their considerations in a closed session.
Hence, the 1st day of the conference will be devoted to an open interactive session, while the 2nd and final day will be devoted to a closed session. The ministerial session is scheduled for the 8th and 9th of October 2015.
To be presented at the conference includes the following documents Draft Rules of Procedure of the Specialized Technical Committee on Agriculture, Rural Development, Water and Environment, Communiqué of the Permanent Secretaries/Head of Ministries Leadership Retreat on Operationalising the Malabo Declaration.
The Malabo Declaration on Africa Accelerated Agricultural Growth and Transformation (3AGT), with its clearly articulated commitments on eradicating hunger, halving poverty, boosting intra-African trade and enhancing the resilience of production systems and livelihoods to climate change and other shocks, is calling action for impact and sustaining the CAADP Momentum.
In the Water and Sanitation Sector, African Heads of States and Government have adopted the Sharm El Sheikh Declarations in June 2008 to fast track implementation of the African Water Sector Goals, and most importantly to achieve targets set in the MGDs and the African Water.
Vision 2025 in line with many other declarations in the sector such as the 2004 Sirte Declaration on integrated development of Agriculture and Water in Africa.
Meet Seedstars World’s 11 top startups of Ethiopia
The startup competition for emerging markets, Seedstars World, has made it to Ethiopia for the first time, revealing 11 of the East African county’s best startups.
Invited to pitch in Addis Ababa next week for a chance to win up to US$500 000 in equity investment at next year’s finale, the Ethiopian crop of companies ranges from a mobile game studio to a crowdfunding platform and an elearning company.
Seedstars World kicked-off its seven-month Africa tour in May this year with a mission to visit 12 different countries around the continent. These include Mozambique, South Africa, Nigeria, Ghana, Ivory Coast, Senegal, Rwanda, Uganda, Kenya, Ethiopia, Tanzania and Botswana.
Once the regional winners have been selected, the final will take place in February 2016, in Switzerland. Contestants will be competing for a total of US$1.5-million in equity investments and various other prizes.
Brain Up Software Technology: developing custom mobile games and apps for all platforms and operates a feature phone app store with 1 500 daily downloads.
Enhid: A modern mobile application designed to provide event news for users living in Addis Ababa, Ethiopia.
Aer: The world’s first item based crowdfunding platform to enable non-profits to campaign for various items.
Besew: A peer-to-peer courier service which allows sends to send their parcels with someone who is able to deliver the package on their route.
Locally: For small businesses who need an alternative marketing platform, Locally recommends trusted and reliable business and happenings around you.
EthioInfoDesk: The alleged leading online news and media provider in Ethiopia.
Winsol Green Power Engineering: A solar-powered mobile charger for Ethiopian farmers.
Addiscan: A mobile-based Enterprise Operation Management Platform. It enables efficient and convenient management for businesses.
GeoArt: A digital atlas to re-discover less disturbed natural places in promoting the existing eco-tourism business development.
Sabacards: Payment platform for individuals & businesses to access their different banks accounts, POS, declare taxes & make online transactions by card
AhadooTec Fidel: enables access to curriculum mapped content to African students both online & offline on PCs, mobile phones & tablets.
IMF hails Ethiopia’s recent macroeconomic performance
Addis Ababa, October 1, 2015 – On September 21, 2015, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Ethiopia.
Ethiopia’s recent macroeconomic performance has continued to be strong overall, though with some rising domestic and external vulnerabilities. Economic growth in 2014/15 was buoyant (at an estimated 8.7 percent), supported by booming manufacturing and construction sectors, IMF said in a statement.
However, inflation has been on the rise, with domestic food prices pushing it above 10 percent. External vulnerabilities have also increased as exports of goods and services slowed significantly, while imports continued growing fast, it said.
A sharp widening of the current account deficit (to an estimates 12.8 percent of GDP) was largely offset by robust capital inflows, with a 50 percent increase in foreign direct investment and a much higher public borrowing from abroad, IMF noted.
The general government deficit expanded only marginally (by 0.2 percentage point) to an estimated 2.8 percent of GDP. At the same time, public enterprises continued to borrow heavily to finance their accelerated investment plans. As a result, their financing needs increased to 7.4 percent of GDP, while public and publicly-guaranteed debt reached an estimated 50 percent of GDP in June 2015.
The economic outlook remains favorable, reflecting the country’s significant potential, generally sound macroeconomic policies, and the government’s efforts to improve infrastructure and attract foreign direct investment.
In the medium term, staff forecast strong growth at 7½ – 8 percent. Public investment is expected to moderate, while private investment is projected to increase only gradually, reflecting constraints on access to credit and foreign exchange, the overvalued exchange rate, as well as other competitiveness challenges.
The authorities’ medium-term budget targets a general government deficit of less than 3 percent of GDP and maintains a strong pro-poor focus. Monetary policy, anchored on base money growth, is geared toward maintaining inflation in single digits. The public debt-to-GDP ratio is expected to increase, reflecting large financing needs associated with implementation of the second Growth and Transformation Plan.
Executive Board Assessment
Executive Directors commended the authorities’ macroeconomic management that has delivered robust GDP growth and poverty reduction. The directors noted that the outlook for Ethiopia remains broadly favorable but domestic and external vulnerabilities have increased. Accordingly, they encouraged the authorities to persevere with policies that safeguard macroeconomic stability, strengthen buffers, and foster private-sector participation in the economy.
The directors agreed that fiscal policy has been prudent and appropriately pro-poor. However, with tax revenue below potential, they recommended broadening the tax base and improving revenue administration to mobilize more resources for needed development spending.
They expressed concern over the acceleration of public sector borrowing with attendant risks of external debt distress and private sector crowding-out. In this regard, they advised careful selection and implementation of public projects with judicious use of non-concessional external financing and greater use of public-private partnerships. The directors welcomed the authorities’ plans to establish an agency for the oversight of state-owned enterprises, which will strengthen the transparency of the public sector.
The directors supported the National Bank of Ethiopia’s tight monetary stance, in light of recent inflationary pressures. Phasing out the central bank’s direct advances to the government and full pass-through of lower oil prices would also help reduce inflation.
More broadly, the directors recommended modernizing the monetary policy framework and strengthening liquidity management. The directors took note of the staff assessment that the exchange rate appears to be overvalued in real effective terms and encouraged the authorities to allow greater exchange rate flexibility to facilitate external adjustment.
They agreed that further steps to secure positive real interest rates and greater financial deepening remain key to bolstering domestic savings and investment. To increase credit to the private sector, the directors also supported phasing out the requirement for banks to channel resources to the national development bank, which may distort financial intermediation. They also stressed the importance of maintaining an adequate regulatory and supervisory framework to support financial development.
Noting a softening of export activity, the directors recommended more decisive action to strengthen the business climate and enhance external competitiveness. Greater exchange rate flexibility, less burdensome regulation, and easier private sector access to credit and foreign exchange would be steps in the right direction. Opening some strategic sectors to foreign investment could also improve the provision of critical services.
The directors emphasized the importance of timely and comprehensive data for effective policy design and evaluation. They called for continued improvements in Ethiopia’s statistical capacity, particularly as regards national accounts and financial sector statistics.
Bullish Ethiopia and Djibouti agree on $1.55Bn pipeline; Kenya’s LAPSSET has reason to worry
Ethiopia and Djibouti are looking to create an African infrastructure hegemony that reaches into West Africa.
ETHIOPIA and neighbour Djibouti signed an agreement for a $1.55 billion fuel pipeline with developers Mining, Oil & Gas Services and Blackstone Group LP-backed Black Rhino Group.
The two countries in the Horn of Africa signed framework agreements on Tuesday for construction of the 550-kilometer (340-mile) line to transport diesel, gasoline and jet fuel from port access in Djibouti to central Ethiopia, the companies said. Financial close is expected in 2016, with construction scheduled for completion two years later.
Growth in landlocked Ethiopia has surpassed every other sub-Saharan country over the past decade, and the government has boosted spending to expand infrastructure. Fuel is typically delivered by tanker truck.
“The pipeline will increase energy security, aid economic development and reduce harmful emissions,” Black Rhino Chief Executive Officer Brian Herlihy said in the statement. The 50-50 joint venture with MOGS, a unit of Johannesburg-based Royal Bafokeng Holdings, will seek to raise at least $1 billion of senior debt financing.
The project, known as the Horn of Africa Pipeline, includes an import facility and 950,000 barrels of storage capacity in Damerjog, Djibouti, linked to a storage terminal in Awash, Ethiopia.
The 20-inch (51-centimetre) line is capable of transporting 240,000 barrels a day of fuel. The concession period after commercial operations start is for as many as 30 years.
Looking to conquer
Ethiopia and Djibouti have invested heavily in joint infrastructure, in a bid to make the make the Ethiopia-Djibouti belt the logistics hub of the continent in the long-term, but more immediately for the wider East and Central Africa.
In the meantime, both countries benefit from economic integration, with Ethiopia gaining access to the sea and Djibouti gaining
Nearly 99% of imports from fast-growing Ethiopia pass through its neighbour, in June the two countries oversaw the completion of a railway linking their two capitals Addis Ababa and Djibouti.
The ambition is 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 attended the ceremonial laying of the last track in the 752-kilometre (481-mile) railway, financed and built by China.
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.
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.
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.
The Addis Ababa-Djibouti railway will be completed in a few days: Its architects see it is a step towards a trans-continental line reaching all the way to West Africa. (Photo/AFP).
Indicative of the strategic thinking of Djibouti, Abubaker Hadi, chairman of Djibouti Port Authority, said in June that therailway 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.
“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.
“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 the Central African Republic Republic (CAR) come to an end.
Hurry up for Kenya
The reference to the conflict in South Sudan is significant, because it is seen as one of the reasons for a similar project in which Ethiopia signed up to; the Lamu Port Southern Sudan-Ethiopia Transport (LAPSSET) corridor.
LAPSSET is the Kenyan government’s biggest infrastructure project. It envisages the construction of a port, power plant, railway and other facilities from the Lamu port, through to South Sudan and Ethiopia.
A desalination plant will also be built in Lamu to address water shortages in the area.
Kenya’s Treasury has estimated the Lapsset project will cost $26 billion. East Africa’s largest economy envisages also building resort cities, an international airport and an inter-regional highway, according to the government’s website.
However, LAPSSET has been hit by delay and security problems. Lamu borders Somalia, where the al-Qaeda-linked militants have waged an insurgency since 2006.
They’ve also carried out raids along Kenya’s coast, including one in Mpeketoni, near Lamu, in June 2014 in which at least 60 people died.
The national government has taken measures to improve security in the area, including starting construction of a border fence.
The deadly new war in South Sudan, the world’s youngest nation, that broke out in December 2013 following a political fall-out between President Salva Kiir and his former deputy Riek Machar, took another layer of shine over the project.
It is not clear if the Djibouti-Ethiopia pipeline will affect Addis Ababa’s interest in LAPSSET. In all likelihood, it will be completed as it’s not affected by Somalia and South Sudan instability.
Perhaps aware that not everyone would wait, Kenya is frantically trying to jumpstart the project.
In July, it was reported that Kenyan and U.S. companies were negotiating a potential multibillion-dollar agreement with the Kenyan government to help develop LAPSSET.
Discussions were led by Aeolus Kenya Ltd., a closely held power and infrastructure developer known as AKL, he said in a phone interview on July 21.
The group of U.S. companies interested in the project, includes Bechtel Group Inc.
Discussions about the deal coincided with U.S. President Barack Obama’s visit to Kenya.
Ethiopia, Djibouti agree on Blackstone-backed fuel pipeline
Addis Ababa, September 30, 2015 – Ethiopia and Djibouti signed an agreement for a $1.55 billion fuel pipeline with developers Mining, Oil & Gas Services and Blackstone Group LP-backed Black Rhino Group.
The two countries in the Horn of Africa signed framework agreements on Tuesday for construction of the 550-kilometer (340-mile) line to transport diesel, gasoline and jet fuel from port access in Djibouti to central Ethiopia, the companies said.
Financial close is expected in 2016, with construction scheduled for completion two years later.
Growth in landlocked Ethiopia has surpassed every other sub-Saharan country over the past decade, and the government has boosted spending to expand infrastructure. Fuel is typically delivered by tanker truck.
“The pipeline will increase energy security, aid economic development and reduce harmful emissions,” Black Rhino Chief Executive Officer Brian Herlihy said in the statement.
The 50-50 joint venture with MOGS, a unit of Johannesburg-based Royal Bafokeng Holdings, will seek to raise at least $1 billion of senior debt financing.
The project, known as the Horn of Africa Pipeline, includes an import facility and 950,000 barrels of storage capacity in Damerjog, Djibouti, linked to a storage terminal in Awash, Ethiopia.
The 20-inch (51-centimeter) line is capable of transporting 240,000 barrels a day of fuel. The concession period after commercial operations start is for as many as 30 years.
Railway projects well in progress
Addis Ababa, September 30, 2015 – The Awash-Woldia and Woldia-Hara Gebeya-Mekele railway projects are well in progress.
The two projects, with a total length of 757 km, cost over 3.3 billion US dollars.
The Awash-Woldia railway project being built by Turkish YAPI MERKEZI has a length of 390 km.
In addition to contributing for the economic growth by linking the Northern part of Ethiopia with Port of Djibouti, the projects provide a transportation service for towns located along Mekele-Woldia route.
The Awash-Woldia railway project is being built in three phases, namely Awash-Shewa Robit, Shewa Robit-Kombolcha and Kombolcha-Woldia.
“There is a plan to finalize the 150km Shewa Robit-Kombolcha line and commence operation after a year, Engineer Abdulkerim Mohammed, manager at the project told FBC yesterday
The Awash-Woldia railway project, which is now more than 15 per cent complete, will be finalized as per schedule (two and a half years), he said.
The Awash-Woldia railway is an extension project that will connect to Addis Ababa – Djibouti railway line.
Similarly, the Mekele-Woldiya-Hara Gebeya Railway project being built by the Chinese China Communications Construction Company (CCCC) is progressing well, according to Engineer Tekle Hadigu, manager at the project.
“The project is now over 15 per cent complete,” he said.
Ethiopia has been undertaking several transportation projects to enhance the transportation network within the country and neighboring countries so as to boost the economic development.
National Railway Network of Ethiopia (NRNE) is one of the several projects.
NRNE projects will have a total length of more 5,060km.
Theft and damage plague national rail line
|By Muluken Yewondwossen|
International symposium on balancing soil nutrients to be held in Hawassa
Addis Ababa, September 29, 2015 – Land degradation worldwide costs an estimated US$10.6 trillion every year and presents a huge challenge to future global food security.
In sub-Saharan Africa, including Ethiopia, soil nutrient-depletion is directly related, where fertilizer use and agricultural productivity rates are the lowest in the world.
Many African countries use little or no potash fertilizers, which are crucial for balanced fertilization and sustainable cropping systems.
To address this challenge, over 70 international agricultural experts and researchers will gather at the Hawassa University, in the southern region of Ethiopia, for the 2nd annual symposium on the role of potassium in balanced fertilization from 24-25 November 2015.
The symposium, jointly organized by the Ministry of Agriculture of Ethiopia, the Ethiopian Agricultural Transformation Agency, the International Potash Institute, and Hawassa University, will bring together key researchers and senior soil fertility experts to discuss the beneficial role potassium fertilizers can play in increasing crop production and quality in the region.
This focused and timely event will provide leading professionals from Africa, Asia and Europe with an opportunity to meet with Ethiopian researchers to analyze findings from soil fertility mapping, potassium research and the latest technology innovations in the sector.
“For the first time in its history of chemical fertilizer use, Ethiopia has started to distribute potash fertilizers to farmers in areas where it is urgently needed. This is no less than a dream come true! And is an exciting story we intend to share with symposium participants,’’ says Professor Tekalign Mamo, State Minister and Minister’s Adviser at the Ethiopian Ministry of Agriculture.
The role of potassium in balanced fertilization and its impact on crop productivity and quality is gaining increasing attention from agronomists and plant nutritionists. This is particularly relevant to sub-Saharan Africa (SSA) where soils are nutrient depleted, fertilizer use is low and agricultural productivity remains the lowest in the world.
The Second Potash Symposium aims to maintain the momentum created by the previous symposium (which was held 4-5th September 2014 in Addis Ababa) by bringing together key researchers and senior soil fertility experts with rich experience in potassium research, technology innovation and dissemination globally.
Leading professionals from Africa, Asia and Europe will participate in this Second Symposium to share their experiences.
Ethiopian researchers from higher learning institutions and the agricultural development sector will also present their recent findings from national digital soil fertility mapping, extensive potash fertilizer demonstrations, and potassium fertilizer research conducted by research staff and graduate students.
Ethiopia to break ground for Africa’s largest Airport
Addis Ababa, September 29, 2015 – Information is emerging from Addis Ababa that at the sidelines of the Airport Infrastructure and MRO conference last week, Ethiopia’s Minister for Transport, Workneh Gebeyehu, announced that ground will be broken soon for a new mega airport close to the capital.
The new airport will, when complete, be able to handle up to 120 million passengers a year and become the new home for fast-growing Ethiopian Airlines, presently the largest and most profitable African airline with a network spanning across all continents.
Workneh was quoted to have said that the airport project would be similar to the great Renaissance Dam in terms of investment value, and allow Ethiopia to position herself as Africa’s number one aviation hub. After working for some time on identifying a suitable site, the Ethiopian Airports Enterprise (EAE), which earlier on had appointed French consulting firm ADPI to assist in site sourcing, has now given three possible locations for the new airport and indicated government will now embark in a consultative exercise with local communities before making a final decision.
To be built in several phases, the new airport will eventually have four runways, several passenger terminals, and an airport city will be built which will, when ready, provide facilities equal to similar projects elsewhere in the world.
Ground-breaking is anticipated for about two years from now, and the construction of the new airport could take as much as ten years to be fully completed and probably not a moment too soon considering the increasing capacity constraints at Bole International Airport. Built initially for a capacity of six million passengers, traffic has already exceeded this last year, with more than eight million passengers arriving, departing, and transiting. Work is underway, however, to raise the capacity to over 20 million passengers to serve as a stop gap until the new mega airport will be ready.
Airport operator, Ethiopian Airport Enterprises, oversees nearly two dozen airports and aerodromes across the country including four international airports and is expected to invest at least US$4 billion in the new facility, at present day cost.
Relocation, Compensation Court Case Delays Industrial Park
The Supreme Court will hear the case of the 10 residents claiming compensation
Construction of the highly acclaimed Huajan Industrial Park, for which the Prime Minister laid the cornerstone on April 16, 2015, further delayed as relocation and compensation of occupants of the land goes to the Supreme Court.
The case involves the plaintiffs, 10 residents of Lebu area in Nefas Silk Lafto District and defendants, the administrators of the city, the Nifas Selk Lafto District, and the Wereda 02 under it. It started on July 7, 2014, with a file presented to the High Court protesting the administrative decision to relocate the residents and the compensation assigned them for doing so. The claimants assert their right of land holding, covering 3,989sqm, as legally protected since 2003.
On July 31, 2015, the High Court decided in favour of the administrative body’s noting that it has no jurisdiction over the case. They took their case to the Federal Supreme Court, which deemed the case admissible to the court and therefore adjourned for examination in November, 2015.
The three defendants were summoned to appear at the High Court, but they failed to appear, and so the case was heard in their absence. Later in their statement of defense, they argued that proper compensation and substitute land was given by the district to the farmers with accompanying legal rights. However the 10 are considered to be illegal grabbers who deserve neither compensation nor substitute land, according to their argument. They also argued that, based on Proclamation No. 455/2012, Expropriation of Land Holdings for Public Purpose & Payment of Compensation, the case was not the mandate of the court but of the Compensation & Evacuation Appeals Hearing Tribunal in the City Administration.
Part of Phase One of the Huajian Industrial Park which has been suspended due to the court case.
Presided over by Judge Birhanu Mengestu, the High Court examined the case and said based on Urban Land Lease Holding Proclamation No. 721/2011, once an immovable property is acquired illegally, evacuation can be ordered by the district without compensation by giving just a notice. The court discarded the application of the residents noting that the case should have been first referred to the respective administrative organ to hear appeals and that the case is beyond its jurisdiction. But the Supreme Court to which the plaintiffs appealed their case accepts that the case is capable of falling under court’s jurisdiction and appointed the parties for November 2015 to examine the substance of the case.
The pause in the overall process costs everyone involved, weighing high on the Huajan Group, President of the group, Zhang Huarong told Fortune. “All is in place; 80pc of the materials for construction of the factories has already been imported from China. All earthwork and land labelling have been accomplished and 46 employees have already been hired. What hinders the construction of the park is just the court case.”
Huajian’s industrial park development has four phases extending to December 2019. Part of the first phase was carried out before the lawsuit started.
According to data from the Chinese company HHD Engineering, in charge of the preliminary design of the park, the overall industrial park which is a combination of factory sheds and residential areas includes family villas, business districts with shopping centres, corporate headquarters building, district office,training schools and other facilities. The construction will be undertaken by Huajian itself, supervised by local construction company Eyoel Construction Engineering.
Huajian decided to invest in the country after the close personal follow-up of the late Prime Minister Meles Zenawi. In 2012, Zhang and Meles inaugurated the first buildings of a future city of 200,000 inhabitants, the Huajian International Shoe City in Ethiopia. The city was imagined and planned in less than two years. A contract with wider scope of collaboration was signed between the two in June 2013. Having the construction of industrial park, the company immediately started a shoe factory in Eastern Industrial Zone.
The industrial zone mainly focuses on light industrial products of footwear and their accessories. It rests on 138ha of land, covering a factory area of 50ha. The industrial park which targets production exclusively for the export market is expected to generate over two billion dollars of export revenue each year at its full production capacity of 35,000 pairs of shoes per day. Its current capacity is 10,000 pairs at its rented factory in Eastern Industrial Zone on Dukem.
The leather sector contribution to export revenue of the country is slowly improving. Last fiscal year around 33 million dollars were obtained from the export of footwear, half of the exports coming from Huajian and Gorge Shoe, from Taiwan, both the largest in the industry.
There are also around 14 local companies exporting footwear and more than 1,000 smaller and micro enterprises that produce footwear on substandard technology and input, according to the Industry Development Institute of the Ministry of Industry.
During implementation of the next Growth & Transformation Plan (GTP II), the government plans to earn around 800 million dollars from leather and leather products export market with 50pc of expected revenue from the exportation of footwear. The estimated export revenue expected from the footwear industry alone is 100 million dollars a year.
There are now two Turksih companies that have shown interest in participating in the production of non-leather footwear in Ethiopia, said Wondu Leggesse, director general of the Leather Institute, adding that non-leather footwear accounted for 65pc of the global market.
“While this is the global scenario, we cannot be competitive exporting leather footwear and a shift to non-leather footwear is essential to expand our market,” he said.
KEFI signs up Ethiopian gov’t as investor in flagship project
Addis Ababa, September 28, 2015 – KEFI Minerals (LON:KEFI) delivered some significant news on the funding of the flagship Tulu Kapi gold project in Ethiopia that should significantly lessen the financial burden on shareholders.
For the AIM-listed group said the US$120mln to get the operation up and running will be financed at the project level.
KEFI can do this because the Ethiopian government has said it will fund up to US$20mln-worth of infrastructure in return for an increased share in the project. It currently has a 5% free carried interest.
The company said Tulu Kapi will now be financed using debt, gold streaming and equity. A deal is inching closer.
“We are pleased to have achieved this major milestone and, in particular, we welcome the government of Ethiopia’s intention to increase its equity in the project,” said KEFI chairman Harry Anagnostaras-Adams.
“Along with the intended use of some gold stream finance, this materially reduces the level of debt to be introduced and makes the financial structure more conservative, which is appropriate for such volatile times in capital markets.
“We look forward to finalising terms with the emerging syndicate of parties and rapidly moving on to the next phase of development.”
Construction of the 100,000 ounce a year, low cost operation is expected to get underway by the end of this year.
Separately, the mine developer unveiled its interim results, which revealed the miner made a loss of US$2.4mln (£1.6mln) – not surprising giving the formative stage of development KEFI is at. As at June 30 it had cash of around US$1.5mln (£1mln).
The company also owns the Jibal Qutman project in Saudi Arabia, host to a JORC compliant 733,000 ounces of gold.
The first-half results themselves revealed the significant progress made to date in Ethiopia, with signing of the mining licence in April the major landmark.
With all-sustaining costs of US$780 an ounce, Tulu Kapi is one of the most economic gold mines in the world. It is host to just over 1mln ounces of the gold.
Hailemariam urges COMESA members to strengthen trade with rest of world
Addis Ababa, September 18, 2015 – Prime Minister Hailemariam Dessalegn has urged COMESA member states to further strengthen trade harmonization with the rest of the world.
Hailemariam held discussion today with Chibesakunda Lombe, Judge President of COMESA Court of Appellate.
Two of the twelve judges of COMESA Court of Appellate, who could not make solemn of oath in March 2015, took the oath in front of Prime Minister Hailemariam Dessalegn who is the current Chairperson of COMESA.
During the occasion the Chairperson said the integration of trade in the COMESA region and beyond is very important.
He added that trade among African countries must be promoted for harmonization of tariff and other issues to bring about the leveling of ground in the region.
COMESA region is one block that needs to be promoted, Hailemariam stressed.
The trade issues and relations of Africa should not only be restricted to the continent but also strengthened with Europe and other parts of the world, according to the Chairperson.
Judge President of COMESA Court of Appellate, Chibesakunda Lombe, said on her part the two judges would be responsible to solve problems related to COMESA treaty.
One of the judges is going to be on the appellate court, the highest court of COMESA, and the other to first instance court. The judges are from Egypt and Mauritius.
COMESA Court of Justice was established in 1994 through the COMESA Treaty and operates as an independent organ of the Common Market.
Agency takes back land from three firms
Addis Ababa, September 15, 2015 – The Ethiopian Agricultural Investment Land Administration Agency has repossessed land from three firms that failed to deliver on their contracts.
The agency also issued last warning for 18 firms, Daniel Zenebe, agency’s public relations director, told FBC yesterday.
Indian Saber Farm Plc and JVL Overseas Pte Ltd as well as the home-based Mela Agricultural Development Plc are the three firms which did not perform their obligation as per the contract, he said.
Both the Indian firms have failed to commence activities after leasing land in Gambella Regional State for cotton and soybean development, he said.
“Saber Farm Plc leased 25, 000 hectares of land but didn’t develop it. Similarly, JVL Overseas PTE Ltd put the 5,000 hectares of land it received idle,” he said.
The home-based Mela Agricultural Development Plc terminated its contract as it couldn’t able to begin development on the 5,000 hectares of land it received for cotton development in the Southern Regional State, he said.
The agency has so far distributed 470,000 of the 3.6 million hectares it received to administer from four regional states to developers, according to Daniel.
The Development Bank of Ethiopia has put aside a 15.6 billion birr loan for investors keen to engage in agricultural investment in the second Growth and Transformation Plan (GTP) period, according to an official from the bank.
Canada appoints new Ambassador to Ethiopia
Addis Ababa, September 14, 2015 – Ambassador Berhane Gebre-Christos, State Minister for Foreign Affairs, who received on Friday (September 8) a copy of the credentials of the newly appointed Ambassador of Canada to Ethiopia, Ambassador Philip Baker, said that Ethiopia and Canada enjoy excellent relations.
Ambassador Berhane reiterated that Ethiopia appreciates Canada’s positive role in the region, emphasizing that Ethiopia is keen to work in concert with Canada to maintain global peace and collaborate in the sphere of peacekeeping.
Ambassador Berhane said that the two countries have witnessed growing relations with a promising prospect for more cooperative partnership in the spheres ranging from agriculture, agro-processing, infrastructure to mining.
Ambassador Berhane, who said that Ethiopia welcomes Canadian companies to benefit from the investment opportunities presented in Ethiopia, share their expertise and transfer technologies said that Ethiopia welcomes the participation of Canadian firms to invest in Ethiopia in order to make every effort to the benefit of all.
Ambassador Philip Baker on his part said that commended Ethiopia for successfully hosting the Third International Conference on Financing for Development.
He also appreciated the role played by Ethiopia in the adoption of the Addis Ababa Action Agenda.
The adoption of Third International Conference on Financing for Development put Ethiopia on the world stage of development cooperation, he said.
Ambassador Philip Baker reiterated that his country stands committed to cooperate with Ethiopia in various areas including mining, small and medium scale enterprises, empowerment of women, and infrastructure.
He also affirmed that Canada is ready to collaborate with Ethiopia to stop child, early and forced marriage.
Ambassador Fare Camara of Mali and Maureen Achieng of IOM also presented copies of their credentials on the same day.
Ambassador Berhane expressed Ethiopia’s commitment to strengthen the relationship with Mali and how the government is alongside with Mali’s “right direction” in solving the complex security problems in the country.
The Malian Ambassador expresses his gratitude to Ethiopia in showing her commitment to fully support the government’s endeavor in stabilizing the country.
Discussions with IOM’s Chief of Mission and Representative to the AU, UNECA and IGAD Maureen Achieng covered issues related to IOM’s contribution to Ethiopia’s Diaspora mapping, the situation of refugees in the region and cooperation between Ethiopia and IOM.
Ambassador Berhane wished the newly-appointed Ambassadors and Head of Mission success in their duties, assuring them of providing all the support for the strengthening of the relations with their respective countries and organizations.
Ethiopia plans to build over 100,000-km of roads in GTP-II
Addis Ababa, September 9, 2015 – Ethiopia plans to build more than 100,000 kilometers of roads in the second Growth and Transformation Plan (GTP-II) period.
Ethiopia’s total road coverage now stands at 105,000 km and this figure will be improved to 205,000 kilometers over the coming five years, Workneh Gebeyehu, Transport Minister, told FBC.
The country managed to build 43,000 kilometers of rural roads in the first GTP, though the plan was 71,000 kilometers, the Minister said.
According to him, Ethiopia has set a target to shorten the transit time of import-export goods by 50 percent in GTP-II.
Workneh further said prime attention will be paid to modernize the country’s transport sector.
Preparations have been made to increase the number of passengers Ethiopian airports handle from 12 million a year now to 70 million over the coming five years, he said.
More than 2, 782 kilometers of railway lines will also be built in the plan period, he added.
The government has given permission for the duty-free import of 1,000 taxis to address the problem of transportation services in Addis Ababa, he said.
It will also provide the necessary support for investors coming in group and keen to engage in transportation services, he said.