14 October 2015 Business News Briefs

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Ethiopia is cheapest emerging market for luxury property, data shows

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 13 October 2015 | By GCR Staff

addisababa

Addis Ababa at night

Fast-growing Ethiopia is the cheapest place in the world’s emerging markets to buy luxury property, according to a new ranking from a specialist property company.

Top end real estate there costs around $448 per square metre, while luxury property in Angola is ten times more expensive, at over $4,500 per square metre, data from property portal Lamudi shows.

Africa’s second most populous country, Ethiopia is also one of Africa’s top economic performers: its 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 April.

A four-bedroom luxury house in Addis Ababa

While Ethiopia comes top in the “cheap league”, Ivory Coast is next in line, with a square metre of posh home there costing around $483, and third is Tanzania, where classy real estate costs $549 per sq m, says Lamudi. (See table below)

Prices for Angolan luxury property were pushed to extremes as a result of the country’s oil boom after the civil war ended in 2002.

African luxury prices still fall far below luxury prices in the developed world, however.

Last year in New York City ultra-luxury apartments reached an average cost of $1,297 per square foot – or approximately $13,800 per square metre – according to one estimate, while a square metre in London’s Royal Borough of Kensington and Chelsea would set you back $18,270 (£12,000).

A villa’s interior (Lamudi)

“As Ethiopia’s property market matures, high-end real estate is increasingly in demand,” said Lamudi Ethiopia managing director, Wunmi Osholake.

“At the same time, prices here remain low comparative to many of our neighbours, making Ethiopia the most affordable place to buy luxury real estate anywhere in the world.”

Ethiopia Travel Advisory Map

Osholake said she expected more projects like Chinese developer Sinomark Real Estate’s 21-tower Royal Garden development, billed as Ethiopia’s biggest real estate scheme.

Who is buying luxury property in Ethiopia? Lamudi told GCR that 43% are aged between 35 and 44, 66% are male, most (91%) speak English, and 34% are located in the US, while 37% hail from Ethiopia.

Safety is a concern in some areas, with terrorist group Al Shabaab reported to have planned attacks. The UK’s Foreign and Commonwealth Office (FCO) advises against all travel to within 10km of the border with Eritrea, with some exceptions, and to regions bordering Somalia and Kenya. (See map.)

But the FCO says crime levels are low, and that around 20,000 British nationals visit Ethiopia every year with most reporting no trouble.

Latin America also has a strong showing in the “cheap league”, Lamudi data shows.

http://www.globalconstructionreview.com/news/ethiopia-cheapest-emerging-market-l8u8xu8ry/#read

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New Tax Law Draft Ready for Public Discussion

The first separate tax administration law has been drafted, which will give the country two laws to streamline its tax system. The first draft tax administration law and a separate tax law dealing with the substantive elements are expected to be discussed by federal and regional authorities later this month.

“We planned to have the final approval of the new law in January 2016,” Beker Shale, director general of the Ethiopian Revenue & Customs Authority (ECRA) told Fortune. In the meantime discussions with the public and regional representatives will be held so they can have a law that harmonises with this one, he added.

The law which is the Tax Administration Proclamation and the Income Tax Proclamation proposed a number of amendments to existing law.

Among the changes in the administration of tax are redefined schedules adding one more schedule to the existing system, namely employment income, business income, other income and a separate category of income which is exempt income.

The latest suggestions merge rent from buildings and business income in a single schedule, Schedule B called business income. According to this newly redefined schedule rent generated from buildings made for the specific purpose of leasing are separately included in the business income curve.

The other two, Schedule C and Schedule D for other income taxes and exempt income respectively have also been refined.

Consolidation of the tax collecting system, which puts together taxpayers falling under the different schedules, will help the government to effectively carry out its mandates. This may help the government given the nature of the taxation is seen as progressive but for taxpayers it has no significance, a tax expert who runs an established business in the area explained to Fortune.

Simplified procedures are other aspects of changes recommended in the tax administration draft law.

Tax procedures for Category B says they are subjected to presumptive tax, based on a percentage of turnover.

The then Ministry of Finance & Economic Development and Ethiopian Revenue & Customs Authority expressed concern that this will discourage reporting expenditure, as stated in the document.

The draft suggests cash accounting, expensing of depreciable assets, no stock take for trading stock and shorter record keeping.

Taxpayers in this category are expected to have a simple report only recording their profit and expenditure with no need to record payable and receivable moneys, according to the expert.

A related aspect is that of taxpayers’ attitudes towards tax compliance. The draft took the existing system one step ahead.

It reads “ consideration should be given to allowing those tax payers with a good compliance record to be excluded from advanced tax payments on imports and withholding tax on domestic payments and being subject only to the current payment system.”

The expert on this issue commented that in the current context taxpayers are presumed to be evaders from the outset. He welcomed the change that speaks to the underlining attitude but with caution.

Tax experts have reservations on this saying the way the authority will investigate whether tax evasion is deliberate or not, might be subjective and it may be easily manipulated.

The new law introduced special tax system on particular institutions.Accordingly, tax on non-resident airline operators will be implemented. However if the tax is exempted by a treaty it will not have effect.

Some standard provisions for taxation of mining and petroleum operations have also been introduced. It also included tax on imports and withholding tax on domestic payments which has been replaced by general current payments system.

On the substantive aspect of the law the draft has further stressed the need to review the monetary threshold of business taxpayers in the three categories. According to the current threshold, businesspersons paying tax of less than 100,000 Br comprise Category C, from 100,000 Br to 500,000 Br, Category B and over 500,000 Br as Category A. The draft however, makes suggestions but does not place these figure in the boxes.

The draft is still in process and it is early to give a comment on that, said Haji Ibssa, communications head at the ministry.

As per the other draft on administrative tax, there a new autonomous body is suggested – a Tax Appeal Commission, which will be accountable to the Prime Minister. As of now tax appeals are regulated by the Ministry of Justice.

It is difficult to handle such big issues in a small department so the Commission is necessary, said Aschalew Ashagere, a lecturer at Addis Abeba University and researcher on tax systems.

Usually changes in tax laws are made when the need is felt; the amendment is a little bit late given the changes in context, according to him. The new law is expected to come with radical changes.

http://addisfortune.net/articles/new-tax-law-draft-ready-for-public-discussion/

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Ethiopia Prepares to Build Major Hub Airport for Africa

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 – October 13, 2015
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Tewodros Dawit, CEO of Ethiopian Airports Enterprise, said the new Addis Ababa Airport could rival developments in Dubai.
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Ethiopia’s transport ministry is finalizing plans to start building a new airport for the capital Addis Ababa in 2016. The facility, which is expected to take eight years to build at a cost of up to around $4 billion, is intended as a major new hub airport for African air transport, according to Ethiopian transport minister Workneh Gebeyehu. In late September, he told the Airport, Infrastructures and MRO conference in Addis Ababa that the development will feature four runways and will have capacity for more than 100 million passengers per year.

It’s not only a runway and terminal that we are going to build,” Ethiopian Airports Enterprise CEO Tewodros Dawit told AIN. “The airport city will make Ethiopia a hub for the whole region.” Comparing the new development to airports in Dubai and London, he said that it will include hotels, shopping malls, office buildings and homes.

The Ethiopian government has narrowed down the choice of prospective sites for the new airport to three, all of which are between 37 and 44 miles of the center of the Addis Ababa. French airport engineering specialist ADPI is conducting the planning study for the new facility.

Meanwhile, Ethiopian Airports Enterprise is completing a $350 million expansion of the existing Addis Ababa Bole International Airport. This project is due to be completed in 2018 and should triple current passenger capacity of 7 million per year.

In 2013, Ethiopian Airlines overtook South African Airways and Egypt Air to become Africa’s largest carrier. Apart from 17 Bombardier Dash 8 Q400 twin turboprops in regional airline service, the flag carrier’s 76-strong fleet entirely consists of Boeing aircraft, including 13 of the new 787-8 Dreamliners. During U.S. President Barack Obama’s August visit to the country, Ethiopian Airlines CEO Tewolde Gebremariam urged him to re-open the U.S. Exim Bank, which serves as the guarantor of loans for purchases of Boeing aircraft.

https://www.ainonline.com/aviation-news/air-transport/2015-10-13/ethiopia-prepares-build-major-hub-airport-Africa

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Long Overdue New Gold Miners Make 140.6m Br Investment

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The ministry has a new approach to licensing the small-scale mining of gold

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Two small scale mining companies are seeking gold and silver extraction licences to join the multi-billion Birr sector now dominated by MIDROC Gold.
These companies, Letto and Lozbez, completed their exploration work and submitted their feasibility studies to the Ministry of Mines (MoM) in September.
During the five years of the first Growth and Transformation Plan (GTP I), MIDROC Gold and artisanal miners had mined 26,547g and 43,434g of gold, according to MoM’s GTP I report. The government collects five per cent royalty from MIDROC, and lately the former has unsuccessfully tried to increase that to seven per cent.

Lozbez Mining Plc was established in June 2009 in Tigray Regional State after its partners separated from another company which was operating in Wellega Zone, Oromia. It had its exploration licence covering 438sqkm in Abergele in Temben wereda of Tigray.

It has now applied for a mining licence indicating a mining cost of 126 million Br. But it asking for a much smaller area of 8.3 square kilometres.
The area has large gold reserves, but the mining operation has been dominated by artisans, which attracted Lozbez’s interest in working in the area, said Yonas Tewelde, general manager of Lozbez.

Lozbez estimates that there could be 771,480 grams of silver and 3.9 million grams of gold reserve in the area, based on its exploration, which it conducted for the past six years.

Its feasibility forecasts that 55,546g of gold and 284,943g of silver will be mined in the first year, gradually growing to 69,433g of gold and 356,179g of silver a year, with seven per cent royalty payment to the government. It has indicated a selling price of 800Br and 11Br per gram for gold and silver, respectively.

The second company, Letto, has indicated a much lower investment cost of 14.6 million Br for the mining it wants to start on a 1.8sqkm area in Tulu Berkesa, which is found in Adela and Wadenie weredas in Guji Zone, Oromia. It has been exploring for gold for the past five years.

Despite the area and investment cost being significantly lower than those indicated for Lozbez in the northern part of the country, Letto’s feasibility study is claiming an annual extraction capacity of 540,000g in the first year, eventually reaching 675,000g of gold in six years. It is indicating the same price and royalty as Lozbez.

Months before receiving the requests of these two companies, MoM had, on April 12, 2015, licensed Kefi Minerals Plc, a UK company, for exploration in Beganj wereda, in Wolega, Oromia, with an investment cost of 151.6 million dollars. Such companies, including MIDROC, are large ones that require an extended period for exploration, Sisay Ayalew, director at the Mineral Licensing & Administration Directorate of MoM explained. “What is going to be done in the next fiscal year as well as during the coming years of the second Growth & Transformation Plan (GTP II) is giving short time exploration licences which will increase the extraction quantity as well as export revenue,” Sisay said.

This will help to beat the reluctance of large companies to produce and sell when the price of gold is low in the international market, according to him. Whereas, Merga Qena’a, director of the Extractive Industries Transparency Initiative at MoM, was of the view that a higher number of smaller investors could attract larger ones to invest in the country. The Ministry of Mines has been renamed under the newly established cabinet as Ministry of Mines, Petroleum & Natural Gas,while the Minister, Tolosa Shagi, has remained in that position.

http://addisfortune.net/articles/long-overdue-new-gold-miners-make-140-6m-br-investment/

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Kanoria Chemicals to inaugurate Ethiopia plant on Oct 24

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Kanoria Chemicals to inaugurate Ethiopia plant on Oct 24

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Addis Ababa, October 12, 2015  –  Kanoria Chemicals and Industries Limited (KCI) will inaugurate its denim production plant in Ethiopia on October 24, 2015 as a part of its expansion move into textiles, according to a top company official.

“The denim production plant at Ethiopia will be inaugurated this October 24. In the first phase, we plan to manufacture 12 million metres of high quality denim fabric at this plant,” Asit Roy, assistant vice president (Economic Affairs), KCI told Fibre2Fashion.com.

“We wanted to diversify into textiles, and also increase our international footprint. The future economic growth will be driven by Africa, and the company intends to create a foothold for future expansions. The venture in Ethiopia will not only provide it a base, but will also provide a better access to the African market,” he explained.

This plant will be a value addition to Ethiopia’s largely agrarian economy, and hence it will also get the support of the Ethiopian government, according to Roy.

KCI also wanted to capitalise on the early mover advantage in denim production in East Africa. “Inexpensive power, availability of cotton and a pro-industrialisation stance of the Ethiopian government are the other reasons for locating the project in Ethiopia,” he said.

KCI has so far invested $44 million in the Ethiopian plant and the products manufactured there would be mainly meant for exports, informed Roy.

http://www.fanabc.com/english/index.php/component/k2/item/4118?Itemid=674

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Korea-based company inaugurates textile factory in Ethiopia

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Korea-based company inaugurates textile factory in Ethiopia

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Addis Ababa, October 12, 2015  – A textile factory established at Bole Lemi Industrial Park by Shints ETP Garment PLC, a Korean-based company, officially inaugurated today.

The factory, built by Korean investors, began exporting standard cycling apparel, hockey sportswear and uniforms designed for various factories to Vietnam and South Korea.

The factory, which has currently created jobs for 1,600 people, planned to raise the number to 12, 000 after two years by executing huge expansion project.

Taddesse Haile, Industry State Minister, after citing the contribution of the factory in creating jobs and generating foreign exchange earnings, said the government has paid more attention to the manufacturing sector.

It will also continue to give due attention and offer support to the sector, he added.

Government’s support for the manufacturing sector and the good investment opportunities existed in the country were the inspiring force to establish the plant in Ethiopia, the Koran investors said.

“We want to remember Ethiopians’ support during the Koran war by investing in Ethiopia,” they added.

http://www.fanabc.com/english/index.php/component/k2/item/4114?Itemid=674

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ERC takes delivery of trains as Ethio-Djibouti project nears completion

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ERC takes delivery of trains as Ethio-Djibouti project nears completion

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Addis Ababa, October 12, 2015  – The Ethiopian Railway Corporation has taken delivery of 315 locomotives that carry passengers and freight along the Ethio-Djibouti railway.

A total of 1,171 trains are required to start full service on the Ethio-Djibouti railway line, said Dereje Tefera, Corporate Communication Affairs Head with the corporation.

Metals and Engineering Corporation manufactured 130 of those already delivered while Chinese Company named NORINCO manufactured the remaining 185.

The new trains get power from both electric and diesel fuel, Dereje said.

The project, which is being built in two directions – Sebeta-Measo, Measo-Diredawa-Dawele- is expected to be finalized the coming October.

Two Chinese companies, China Railway Group Limited (CREC) and China Civil Engineering Construction Corporation (CCECC) are handling the project.

With the completion of track laying, project progress stands at 92 per cent, according to Dereje. Remaining tasks include installation of power lines and signal reception and communications equipments.

The Ethio-Djibouti railway line stretches 656 kilometers inside the Ethiopian boarder while it spans only 100 kilometers inside the Djibouti boarder.

The Ethiopian Railway Corporation plans to hand over administrative tasks to a foreign company.

http://www.fanabc.com/english/index.php/component/k2/item/4112?Itemid=674

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New formula to boost strength of railway projects
By Staff Reporter
Monday, 12 October 2015

The Ethiopian Construction Project Management Institute (ECPMI), in collaboration with the German-based company BASF Polyurethanes GmbH, introduced new chemical engineering inputs that give extra strength to concrete mixtures of the city tram project. The chemical additives were displayed to participants from several affiliated organizations on Tuesday, October 6 at a demonstration workshop held at Capital Hotel.
The institute, which is responsible for introducing new technologies and undertaking studies on the construction industry, introduced the chemical technologies that will strengthen railway infrastructure.
ECPMI Chief Yosef Birru (PhD) told Capital that the technology is commonly used on construction works in the developed world, but its application is a significant breakthrough here. “We need to apply it on our work, it has various benefits,” he said.
The product, Elastotrack, is a liquid chemical composition applied on gravel layers of railway lines. When applied to ballast stones, the two-component polyurethane chemical prevents the gravel from sliding away under the strong dynamic force of passing trains. BASF disclosed that the product contributes to reduce maintenance costs, by reducing the potential of derailment, and it improves environmental performance, and promotes a quieter and more comfortable ride for passengers.
“It is good for the durability of the line and it is environmental friendly, minimizing the dust, while saving on maintenance costs,” Dr Yosef explained.
Yosef said that ECPMI did researches on the technology for six months. Coming up with satisfactory results, the institute decided to start using Elastotrack on railway projects the Ethiopian Railway Corporation (ERC) monitors.
The product has been tested on some locations on the Addis Ababa Light Rail Transit. Yosef said that BASF Polyurethanes GmbH has the interest to establish a production facility in Ethiopia, if use of the chemical technology becomes widely applicable as modern railway systems expand throughout Ethiopia.http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=5499:new-formula-to-boost-strength-of-railway-projects&catid=35:capital&Itemid=27

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Gibe III starts power generation

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Gibe III starts power generation

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Addis Ababa, October 10, 2015  –  The Gilgel Gibe III hydroelectric project has begun power generation this evening.

“Dear all, good news GG III has started power generation this evening,” Alemayehu Tegenu, former Minister of Water, Irrigation and Energy, tweeted.

Having a height of 243m and total installed capacity of 1,870MW, the Gilgel Gibe III hydroelectric project is the highest Roller Compacted Concrete (RCC) dam to facilitate better access to electricity for the nation as well the neighboring countries.

The project will increase the generation capacity of Ethiopia by close to hundred per cent and makes the power export program of the country viable.

Thus, the project is expected to have great socio- economic contributions by feeding Ethiopian grid, and creating regional integrations among the neighboring countries through interconnected system.

http://www.fanabc.com/english/index.php/component/k2/item/4107?Itemid=674

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Over 3 billion birr road project inaugurated

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Over 3 bln birr road project inaugurated

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Addis Ababa, October 10, 2015  – The Agula’e-Berhale-Dalol asphalt road built at a cost of 3.1 billion birr allocated by the government of Ethiopia inaugurated today.

The 151 km road was built by the indigenous firm, Defense Construction Enterprise.

The road will help to offer efficient service for tourists, besides facilitating socio-economic integration between Tigray and Afar Regional States, Workneh Gebeyehu, Transport Minister said at the inauguration ceremony.

The road will help to smoothly transport salt from Dallol, an area located in Afar Regional State.

http://www.fanabc.com/english/index.php/component/k2/item/4105?Itemid=674

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Fitch Affirms Ethiopia at ‘B’; Outlook Stable

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(The following statement was released by the rating agency)

PARIS/LONDON, October 09

(Fitch) Fitch Ratings has affirmed Ethiopia’s Long-term foreign and local currency Issuer Default Ratings (IDR) at ‘B’. The Outlooks are Stable. The issue ratings on senior unsecured foreign currency bonds have also been affirmed at ‘B’. The Country Ceiling and the Short-term foreign-currency IDR have been affirmed at ‘B’.

KEY RATING DRIVERS Ethiopia’s ‘B’ IDRs reflect the following key rating drivers:

Ratings are well entrenched in the ‘B’ rating category due to weak development and governance indicators. Despite rapid improvement over the past five years, Ethiopia’s income per head and human development indicator remain among the lowest of Fitch-rated sovereigns, even among ‘B’ rated peers, illustrating weak debt tolerance.

Driven by massive public investment by the government and state-owned enterprises (SoEs), growth has averaged close to 10% over the past five years in real terms, including 8.7% in FY15 (ending in July 2015). This has led to a rapid improvement in living standards and progress towards meeting Millennium Development Goals. However, this has come at the expense of a rise in indebtedness of the broader public sector. The government’s cautious fiscal stance prevailed in FY15, with the budget deficit likely to have been contained at 2.7% of GDP, and government debt broadly stable at a moderate 26.3% of GDP, lower than ‘B’ rating peers.

Nonetheless, SoE public debt has risen materially in recent years, particularly in FY15, to an estimated 25.6% of GDP at end-FY15, a large share of which is non-concessional. This brings the consolidated debt of the government and SoEs to an estimated 52% of GDP at end-FY15, 55% of which is external. Although the authorities expect SoE debt to be repaid from commercial receipts, in Fitch’s view it represents a rising contingent liability for the central government. Domestic vulnerabilities remain important rating drivers, including high and volatile inflation, as well as a rapid rise in credit. The drought resulting from unusually low rainfall in 2015 has pushed food prices up, bringing inflation up to 11.4% yoy at August 2015, and creates economic risks for next year. Credit (mostly to SoEs) has also risen very fast, triggering a score of ‘3’ in Fitch’s macro-prudential indicator assessing potential systemic stress, and lending is often at negative real interest rates.

The banking sector, dominated by the public sector, is sound and profitable but heavily exposed to a limited number of SoEs, on which there is limited transparency. Weak export performance (exports of goods and services declined by an estimated 6.6% in FY15) associated with dynamic capital goods imports has led to the current account deficit deteriorating to an estimated 13% of GDP in FY15 (FY14: 8.6%). This largely reflects the weak and concentrated export base but also weak competitiveness partly caused by an increasingly overvalued exchange rate. The IMF estimates the real effective exchange rate appreciated by 21.4% in FY15 alone, which suggests it could now be around 30% above its equilibrium level. As a result, net external debt jumped to an estimated 25% of GDP at end-FY15 (FY10: 12.1%), higher than ‘B’ medians.

International reserves have historically been particularly low, at just two months of current external receipts at end-FY15. Together with the rise in external debt and the overvaluation of the birr, this increases the risk of exchange rate adjustment. The central bank’s ability to continue depreciating the currency by only 5% a year in nominal terms will critically depend upon the economy’s ability to generate FX in the coming years. The recent pick up in FDI and energy export prospects are promising in that regard but the low exports of manufactured products so far, which the government intends to develop in the coming years, illustrate the challenges to industrialisation (including weak business environment and access to credit for private companies). However, Fitch believes that the potential negative impact of currency devaluation on government debt would be manageable, given the relatively modest increase in the debt stock that it would imply.

RATING SENSITIVITIES

The Stable Outlook reflects Fitch’s assessment that upside and downside risks to the ratings are currently balanced. The main factors that could, individually or collectively, lead to positive rating action, are:

-Stronger external indicators reflected in higher exports, stronger FDI and international reserves. -Further structural improvements, including stronger development and World Bank governance indicators.

-Further improvement in the macro-policy environment, supporting moderate inflation and a transition to broader-based growth. The main factors that could, individually or collectively, lead to negative rating action are:

-Rising external vulnerability, illustrated by declining international reserves, further widening of the current account deficit or rising external indebtedness.

– A further rapid increase in public sector indebtedness or increased risk of contingent liabilities from SoEs and publicly-owned banks materialising on the state’s balance sheet.

KEY ASSUMPTIONS

Fitch assumes that world GDP will grow by 2.7% in 2016 and 2017, supporting Ethiopia’s exports of goods and services.

Fitch assumes that Brent crude will average USD55 and USD60 per barrel in 2015 and 2016 respectively, therefore alleviating pressures on the current account deficit.

Contact:

Primary Analyst Amelie Roux Director +33 144 299 282 Fitch France S.A.S 60 rue de Monceau 75008 Paris

Secondary Analyst Ed Parker Managing Director +44 20 3530 1176

Committee Chairperson Tony Stringer Managing Director +44 20 3530 1219

Media Relations:

Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com.

Additional information is available on http://www.fitchratings.com

Applicable Criteria Country Ceilings (pub. 20 Aug 2015) here

Sovereign Rating Criteria (pub. 12 Aug 2014) here

Additional Disclosures Dodd-Frank Rating Information Disclosure Form here

_id=992092 Solicitation Status here

Endorsement Policy here ail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

http://www.reuters.com/article/2015/10/09/idUSFit93653120151009

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ECX inaugurates eTRADE Platform at HQ

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ECX inaugurates eTRADE Platform at HQ

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Addis Ababa, October 8, 2015  – Ethiopia Commodity Exchange (ECX) today inaugurated its revolutionary eTRADE Platform located at its headquarters on Chad Street.

It also made public the introduction of a new consolidated coffee grading system for the coming harvest season. Moreover, the Exchange’s enhanced SMS/IVR market data dissemination platform was launched on the same day.

Today’s inaugurated eTRADE Platform is revolutionary in that it has the capacity to trade nearly 5000 times more transactions than its current “Open-Out-Cry” or “Pit-Trading” platform capacity, the Exchange said in a statement it sent to FBC today.

The eTRADE platform was entirely developed by the Exchange over the past two years and it is expected that it will dramatically increase trade efficiency, transparency and accessibility. The project came to fruition in collaboration with the Investment Climate Facility for Africa (ICF) and other partners.

The eTRADE Platform saw its soft launch on July 20, 2015 by introducing local washed/unwashed byproduct coffee trades. Thus far, a total trade volume of 2,390 MT has been traded on the platform with a trade value of ETB 120 million (USD 5.7 million).

The launch of eTRADE will eventually enable market players to trade electronically from anywhere.

CEO of ECX, Ermias Eshetu said “The inauguration of this eTRADE platform sets a new course for Ethiopia and brings with it unparalleled economic and social benefits. The platform inevitably breaks the physical and time barrier of the current Open-Out Cry trading platform and provides the ECX with vital economies-of-scale to trade a number of additional new commodities.”

ICF CEO, William Asiko, said: “ICF is happy to have been able to support this very important initiative. The modernization of ECX will help to improve the business environment for stakeholders involved in the commodities sector and give Ethiopian agricultural products a competitive advantage. But for farmers, this modernization will be life changing. It will enable farmers to get better pricing for their produce, thereby creating a more equitable distribution of wealth that has far reaching social implications.”

ECX also announced the implementation of a new consolidated coffee grading system which will be effective in the coming harvest season. The Exchange highlighted that Ethiopia is the center of origin for “Coffee Arabica” and exporting coffee based on specific geographical origins such as Yirgacheffe, Sidama, Harare, Limu, Jimma, and others in which each has its own distinguishing physical and organoleptic character. Accordingly, ECX’s tradable coffee contracts classification was designed to reflect the country’s coffee distinct character and quality profile.

The Exchange also disclosed on the day of the eTRADE launch a major revamp to its current Short Message Service (SMS) and Interactive Voice Response (IVR) services for market data dissemination via its enhanced SMS-934 and IVR-929 access. The SMS and IVR services were first introduced in late 2011 in two languages (Amharic and English) whereby, users can either subscribe or request market information and receive real-time access to commodity prices traded at ECX.

The enhanced version supports two additional languages (Oromiffa and Tigrigna) making the number of languages to four and introducing new features such as USSD (menu based information services) and enhanced user interfaces.

The SMS service currently processes over 800,000 transactions per month while the IVR receives over 1million calls/month. The expanded SMS and IVR service usage is expected to significantly grow and reach more rural communities and farm areas.

About ECX

The Ethiopia Commodity Exchange (ECX) is a new initiative for Ethiopia and the first of its kind in Africa. The vision of ECX is to revolutionize Ethiopia’s tradition bound agriculture through creating a new marketplace that serves all market actors, from farmers to traders to processors to exporters to consumers. The ECX is a unique partnership of market actors, the Members of the Exchange, and its main promoter, the Government of Ethiopia. ECX represents the future of Ethiopia, bringing integrity, security, and efficiency to the market. 

http://www.fanabc.com/english/index.php/component/k2/item/4080?Itemid=674

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World Bank projects 42 million Ethiopians to live in urban areas by 2030

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WB projects 42 mln Ethiopians to live in urban areas by 2030

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Addis Ababa, October 8, 2015  – The World Bank (WB) has projected 42 million Ethiopians to live in urban areas by 2030.

This was disclosed during a meeting the World Bank and the Ministry of Urban Development and Housing organized here today to present a study finding on Ethiopia’s urbanization prospect.

According to the study the World Bank conducted in collaboration with experts from Europe, America, Asia and Africa, the number of Ethiopia’s who will live in urban areas by 2030 is projected to reach 42 million.

Some 20 per cent of Ethiopians now live in urban areas. Urbanization in Ethiopia has witnessed a 5.2 per cent annual growth, the study indicated.

After pointing out the gaps and problem witnessed in urban land issues, the Bank urged the government to do more in creating jobs.

The Ministry of Urban Development and Housing accepted the existence of the problem.

A Land Administration Corporation tasked with resolving problems that arise in connection with land issues in urban areas will be established, Mekuria Haile, Urban Development and Housing Minister said.

The Corporation will be established in Amhara, Tigray, Oromia and Southern regional states, he said.

According to him, the government has a plan to create job opportunities for 82 million citizens over the coming ten years.

The finding of the study will be utilized as an input for the development activities to be executed by the government, he said.

http://www.fanabc.com/english/index.php/component/k2/item/4078?Itemid=674

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FEACC prevents corrupt malpractices in illicit procurement

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FEACC prevents corrupt malpractices in illicit procurement

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Addis Ababa, October 7, 2015  –  The Federal Ethics and Anti-corruption Commission (FEACC) said it has prevented corrupt malpractices that were to be committed during transparent procurement processes.

Executive Committee of the National Anti-corruption Coalition is holding its 11th Regular Conference here in Addis Ababa.

The Commission has managed to save more than 937 million birr, including 7.5 million in Oromia, 413,000 in South and 89 million in Amhara regional states, which was to be lost through illicit procurement activities.

As part of the efforts to prevent corruption and malpractices, the Commission is undertaking awareness raising campaign on the danger of corruption as well as promoting transparency and accountability.

The Commission also made decision on institutions and individuals involved in corrupt practices.

The Commission filed charges against 3,143 individuals and 2,549 of them received verdict, Mekonnen Zerihun, Ethics Supervision Director of FEACC said.

FEACC has the responsibility to combat corruption and impropriety by raising public awareness about the disastrous effects of corruption and by promoting ethics in public services and among the society.

It is also duty-bound to prevent corruption by studying the practices and working procedures in public offices, public enterprises and public organizations.

It is responsible for investigating any complaints of alleged or suspected serious breaches of codes of ethics in public offices, public enterprises and public organizations and following up the taking of proper measures.

The Commission is legally authorized to put forward corrective measures and recommendations and follow up their implantation.

It promotes integrity, loyalty, transparency, confidentiality, honesty, accountability, serving public interest, exercising legitimate authority, impartiality, respecting the law, responsiveness, and exercising good leadership.

The FEACC is accountable to the Prime Minister. It is free from any interference or direction by any person with regard to cases under investigation or prosecution or to be investigated or prosecuted.

http://www.fanabc.com/english/index.php/component/k2/item/4068?Itemid=674

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