28 October 2015 Economic News Round-Up

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Black Rhino looks at renewable power investments in Ethiopia

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Ethiopia targets to double road expansion to 200,000km by 2020

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Ethiopia targets to double road expansion to 200,000km by 2020Addis Ababa, October 28, 2015  –
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Foreign Affairs Minister Dr. Tedros Adhanom has today addressed a Plenary Session on “Collaborating to Address Africa’s Infrastructure Needs” at the India-Africa Business Forum in New Delhi.
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Upon congratulating the Government of India for the successful organization of the ongoing deliberations of the 3rd India-Africa Forum Summit, Dr. Tedros said, “In Ethiopia we value the principles of the forum as they are very critical for mutual growth and development.”

Taking note of the fact that Africa is by far the fastest growing continent in the world with an average economic growth of five percent; Dr. Tedros said, “This impressive growth needs to be complemented by the right policies that ascertain its sustainability”.

On the need to foster intra-regional links in Africa, Dr. Tedros emphasized that the “Regional Economic Communities should play a vital role in realizing these goals and pave the way for gradual integration as stipulated in the African Union agenda 2063.”

Notwithstanding Africa’s weak infrastructure link and the financial gap in such regard, the Minister reminded his listeners that Africa “should value the support of many bilateral and multilateral financial institutions in which the Indian Government is also part of”.

Despite the infrastructure impediments, the Minister noted that the African continent has enormous untapped renewable energy potentials with great potentials for development. In such score, he cautioned on the need to stand together to make use of this important resource for “our social and economic growth targets” adding that Africa‘s renewable energy potential “not only supports our massive needs for industrialization and infrastructure development but also nurtures the future of our content.”

Expressing that Africa should make sure that the right infrastructure backbone is laid down, the Minister said, “In an information age, Africa can’t achieve its development objectives without efficient and effective telecommunications network”.

Mindful of the multifaceted and massive infrastructure projects in Ethiopia, Dr. Tedros said, “My country Ethiopia is a strong advocate of both national and regional infrastructure development.”

The Minister further noted that Ethiopia has been connected by highways with all its neighbors adding that the country has targeted to double up its road expansion to 200 thousand by the end of the Second Phase of the National Growth and Transformation Plan in 2020.

The Minister also noted that Ethiopia has made significant strides in energy generation, in which the sector focused on both rural electrification and regional integration projects. In such line, the Minister said Ethiopia is endowed with more than 60,000 MW of potential resource that comes from hydropower, wind, geothermal energy.

He further noted that the country has embarked on railway expansion project which he said is “in tandem with keeping the cost of doing business and bringing about efficiently for the thriving import and export needs”.

The Minister also disclosed that the construction of a major railway project that connects the country’s main outlet to the Djibouti port will be completed by mid 2016, during which he said, “This will revolutionize the transit corridor logistics and putting Ethiopia as a land linked against a landlocked nation”.

Touching upon the country’s air transport development, Dr. Tedros noted that the Ethiopian Airlines, which is close to 70 years of existence, has now been an example of a leading corporate entity in Ethiopia with the most profitable airline in the continent of Africa and with a world renowned safety records.

http://www.fanabc.com/english/index.php/component/k2/item/4275?Itemid=674

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Economist Summit underway in Addis

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Included on the agenda is the role of international banks in private equity and expansion deals in African financial services and whether Ethiopia will benefit from this. Also to be discussed is the telecoms market in Ethiopia, an industry sector with enormous potential and possibilities for the involvement of international players.

Another agenda item is Ethiopia’s infrastructure expenditure and its energy costs which are among the lowest on the continent. Higher labour cost in Asia have led to the prediction that international manufacturers will move to Africa.

More than 150 policy makers and business leaders currently attending the event claim their issues aren’t addressed well.

During the meeting so far Arkebe Okubay, special advisor to the Prime Minister said “the banking industry in Ethiopia will remain closed to foreign investors in the next five years.” He also attributed growth in Ethiopia mainly to policy continuity.

Commenting on Ethiopia’s infrastructure expenditure and its energy costs, Azeb Asnake, CEO of Ethiopian Power Corporation, told the summit that energy tariff in Ethiopia, which currently lies at less than 0.06kwh/dollar, is under revision to attract FDI.

http://addisfortune.net/articles/economist-summit-underway-in-addis/

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ICL embarks on Potash project

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By Kaleyesus Bekele

 

iclThe Israeli chemical giant, ICL, has embarked on potash mine development project in the Afar Regional State, in Dallol region.

ICL took over the potash mine in the Dallol depression from the Canadian company, Allana Potash. Initially, ICL bought 16 percent shares from Allana Potash. Earlier this year ICL bought the remaining 84 percent stake of Allana Potash.

The declining price of the potash mineral in the global market and less interest to financing potash mines compelled the management of Allana to sell the company. The price of potash in the global market has been nose diving since 2013.

An executive of ICL told The Reporter that the company is in the process to develop the potash mine that lies on a 300sqkm plot of land. The potash deposit is estimated at 3.2 billion tons.

The executive said ICL plans to develop the potash mine and build three fertilizer factories. He said the company is in advanced discussion with the Ethiopian government on the construction of three fertilizer blending facilities in the country and produce world class mixed nutrient fertilizers.

ICL is working on the detailed engineering of the project and expects to make a final project investment decision by its board of directors before end of this year. First sales of potash are expected with in three years. ICL is expected to invest more than one billion dollars on the potash mine and fertilizer blending plants.

ICL is closely working with the Ministry of Agriculture and Natural Resources and the Agricultural Transformation Agency.

Commenting on ICL’s potash development project the Minister of Mines, Petroleum and Natural Gas Tolossa Shagi said that Allana did proceed on the potash development project as planned due to the price fall in the international market. However, Tolossa said his ministry is not formally communicated about the acquisition made by ICL. “What we know is that Allana is still operating in the country.”

An executive of Allana told The Reporter that his company has written an official letter to the then Ministry of Mines informing it of about the stake transaction.

ICL is the 6th largest potash fertilizer, in the world and the 2nd in west Europe. ICL is a multinational fertilizer manufacturing company publicly traded with a capital of 12 billion dollars.

http://www.thereporterethiopia.com/index.php/news-headlines/item/4083-icl-embarks-on-potash-project

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