22 January 2016 Economic News Briefs

Ethiopia finalizes national soil fertility mapping survey

Addis Ababa, January 20, 2016  – The Ethiopian Soil Information System has said that only eight months remains to finalize the country’s soil fertility mapping with 490 districts having so far been covered in the survey.

The soil fertility survey has covered Tigray, Amhara and Southern Nations, Nationalities and People’s states, according to Professor Tekalign Mamo, Team Leader of Agricultural Commercialization Clusters and Ethiopian Soil Information System at the Agricultural Transformation Agency.

The soil fertility survey will help to identify soil fertility status, propose the required type of fertilizers to boost crop production and productivity in the country, Professor Tekalign said.

He dubbed the move transformational as it also included over 40,000 new fertilizer validation demonstrations attended by 4.5 million farmers in the five fertilizer blending plants across the nation.

The Ethiopian Soil Information System is the first of its kind of such national initiatives in Africa.

The project was launched in 2012 to analyze the specific nutrients of soils in different locations in the country.

 

Ethiopia, China agree to cooperate in media, communication

Addis Ababa, January 18, 2016  –Ethiopia and China have today signed an agreement to cooperate in media and communication sectors.

 

Government Communication Affairs Office (GCAO) State Minister, Firehiwot Ayalew, and Vice Minister of State Administration of Press, Publication, Radio, Film and Television, Tian Jin, signed the agreement representing Ethiopia and China, respectively.

Tian Jin on the occasion said Ethiopia and China have strong cooperation in infrastructure development and his government is keen to repeat this cooperation in the media and communication sector as well.

Government Communication Affairs Office Minister, Getachew Reda, on his part said the two countries have long standing people-to people relations.

The strategy which the Chinese government employed to lift its people out of poverty could be a good lesson for Ethiopia.

 

Ethiopia, U.S. to consolidate development, counter-terrorism cooperation

Addis Ababa, January 16, 2016 – The United States (U.S.) has praised Ethiopia’s foremost role to bring peace and stability both in South Sudan and Somalia.

A U.S. delegation led by Ed Royce, Chairman of the House Foreign Affairs Committee, held talks with Prime Minister Hailemariam Desalegn here today.

The support from the U.S. government is vital for Ethiopia’s continued role to produce peace in the region, the Premier told the delegation.

Close collaboration between the US and Ethiopia is needed to improve peace and security in Somalia and South Sudan, Hailemariam said.

The two said discussed on the importance of joint efforts to totally demolish the weakening terrorist group, Al-Shabaab, Ambassador Taye Atskeselassie, State Minister of Foreign Affairs, who attended the talks told ENA.

The Premier, who praised U.S. government’s solidarity with Ethiopia in its efforts to mitigate the effect of the El Nino-caused drought, urged the U.S. to carry on its support.

The Premier also briefed members of the delegation on Ethiopia’s investment potentials and the support the U.S. investors will get if they engage in investment here.

The two sides also deliberated on ways of implementing President Barak Obama’s Power Africa, an initiative to double access to electricity across sub-Saharan Africa, including Ethiopia, according to Ambassador Taye.

Chairman Ed Royce, on his part lauded Ethiopia’s leading role to bring peace and stability in East Africa, South Sudan and Somalia in particular.

The U.S. government will consolidate its development and counter-terrorism cooperation with Ethiopia, he added.

According to Royce, President Obama’s last year visit to Ethiopia shows the strength of partnership between both countries.

Chairman Ed Royce also praised Ethiopia’s role to bring the South Sudan’s rival factions to the current promising peace agreement through coordinating the international community.

Royce finally pledged to support Ethiopia’s response to the El Nino induced drought.

 

KEFI refinements boost economics of Ethiopia mine

Addis Ababa, January 13, 2016 – KEFI Minerals (LON: KEFI) has agreed a series of tweaks and refinements to its Tulu Kapi gold project in Ethiopia that have enhanced further the economics of the planned mine.

The changes were made after discussions with potential debt financiers, who will stump up US$100mln of the US$120mln of capital costs of building Tulu Kapi, and after talking to other partners.

Production, which is expected to begin next year, will be 980,000 ounces of the precious metal over 10 years rather than the previous 960,000 over 13 years. This gives annual output of 115,000 ounces, 20,000 ounces more than previously slated.

In the process, all-in sustaining costs come down to a top-quartile US$742 an ounce from US$780 and operating cash flows increase US$19mln a year to US$66mln.

Under the new plan the internal rate of return would be 50%, while the net present value is put in the order of US$197mln at a discount rate of 8%.

The company is also being asked to use gold hedging of around 10% of base case production as part of a risk management programme to mitigate the fluctuations of the price of the yellow metal.

Chairman Harry Anagnostaras-Adams said: “The development and financing plan has been further improved with the syndicate of contractors and bankers which has emerged from our rigorous international selection process.

“Despite very tough capital market conditions, Tulu Kapi’s robust economics have attracted support for production start-up in 2017 as planned.

“Whilst we continue to optimize our financing options pending finalisation and approval by the National Bank of Ethiopia in mid-2016, we have already selected our preferred syndicate of contractors and the investors of equity and non-equity capital, and look forward to working with this high calibre consortium to bring this project to fruition.”

The equity financing portion of the build (US$20mln) is being provided by the Ethiopia government.

 

OPDO decides to fully rescind Addis Ababa–Oromia master plan

Addis Ababa, January 13, 2016 – The Oromo People Democratic Organization (OPDO) has decided to fully rescind the Addis Ababa–Oromia special zone integrated master plan.

OPDO’s Central Committee, in its three-day emergency meeting held in Adama town, passed various decisions after holding wide and in-depth discussion on the regional state’s current issues.

A decision has been made to fully annul the disputed master plan, the Central Committee said in a press conference it gave yesterday night after the meeting.

OPDO is an organization which registered several human rights, democratic and development gains by ousting the past repressive regimes, it said.

The Organization appreciates and honors the public’s questions for development and clarity in any development activity as it is the result of the system which OPDO is building in collaboration with other democratic forces, it said.

Based on this, the Organization is ready to honor and meet the interest of the people, the Central Committee said.

Works are underway to obtain answer within a short period of time for the question of special benefit that the Oromia Regional State should get from Addis Ababa City Administration as stated in the Constitution, it said.

The Central Committee also ordered the Oromia Council (Chefe Oromia) to look into again the Oromia cities proclamation which it recently approved as the people are expressing their doubt on some articles.

Regarding good governance, the Committee said it is ready to work in partnership with the people and based on the decisions taken at the OPDO’s 8th Organizational Conference.

The Central Committee also called on the public to scale up the participation they began to expose and bring to justice destructive forces striving to attain their goal by hijacking the public’s questions for development and clarity.

The Central Committee finally said members of OPDO, member organizations and allies of EPRDF as well as nations and nationalities in the regional state will do their level best to realize their renaissance by struggling obstacles.

 

Ethiopia, WB sign loan agreement of $300 million for urban safety net project

Addis Ababa, January 13, 2016 – Ethiopia and the World Bank (WB) on Tuesday signed a loan agreement of 300 million U.S. dollars, which will be used to finance urban productive safety net project in the East African country.

Abdulaziz Mohamed, Ethiopian Minister of Finance and Economic Cooperation (MoFEC), and Carolyn Turk, WB Country Director for Ethiopia, signed the agreement at a ceremony held on the premises of MoFEC in Ethiopia’s capital Addis Ababa.

The urban productive safety net project, which will be implemented over five years with a total cost of 450 million dollars, aims to improving income of urban poor households and establishing urban safety net mechanisms in Ethiopia.

The objective will be achieved through provision of cash transfers, financial and technical support to access livelihood opportunities, building the capacity of institutions to effectively deliver the support, and developing core systems for delivery of safety nets and complementary livelihood services, according to MoFEC.

The urban safety net project was inspired by the success gained by the rural productive safety net project implemented over several years since 2005 here in the country, said Abdulaziz during the signing ceremony.

The Ethiopian government will contribute 150 million dollars of the project’s total cost of 450 million dollars, according to the Minister.

“Looking at the difference made by the rural safety nets on the lives of the vulnerable population, the government of Ethiopia decided to initiate a similar program to support the poorest segment of the urban population,” said the Minister.

“This first phase is envisaged to support over 600,000 beneficiaries in 11 cities in Ethiopia,” he said.

The urban productive safety net project (UPSNP) is the first flagship urban safety net in Africa, said the WB Country Director.

Together with the rural productive safety net project (RPSNP), the program will promote the government commitment to expanding productive safety net to a national coverage, she added.

She further said UPSNP would contribute to the Government’s strategic commitment to promoting inclusive growth and ensuring shared prosperity.

“The project will contribute to the realization of Ethiopia’s Growth and Transformation Plan II (second GTP) ensuring that the urban poor and vulnerable receive a predictable safety net and the support they require to experience faster income growth,” said Turk.

The success of the project will depend on a strong implementation arrangement, capacity and commitment at all levels, noted the Director.

She said that the World Bank team would continue to provide the necessary technical support to the UPSNP project.

 

Ethiopia set to generate 300MW solar energy in GTP-II

Addis Ababa, January 12, 2016 –The Ministry of Water, Irrigation and Electricity (MoWIE) is working to generate 300MW from solar energy in the second Growth and Transformation Plan (GTP-II) period.

Bizuneh Tolcha, Public Relations and Communication Director at the Ministry told FBC today that the construction of three solar energy plants each with 100MW power generation capacity will be commenced as of next year at a cost of 630 million US dollars.

The power plants will be built at Hurso, Semera and Awash Arba areas, he said.

According to him, the Ministry is outlining selection criteria to pick from those domestic and foreign companies which showed interest to participate in the development of the solar project, he said.

In addition to the 300MW solar energy to be supplied to the national grid system, 15, 000 solar panels will be distributed at a cost of120 million US dollars this budget year alone.

Ethiopia distributed 25,000 solar panels with 209 million US dollars during the first Growth and Transformation Plan (GTP) period.

 

Light train manufacturing factory ready for production

Addis Ababa, January 12, 2016 – A light train manufacturing factory established in Addis Ababa is ready to commence production.

The factory, which is under the umbrella of Metal and Engineering Corporation’s (MetEC) Locomotive Industry, is located in an area commonly known as Cherkos.

The factory has currently manufactured a prototype light train.

Tsegay Gebrekirstos, Manager at the Locomotive Industry, said the factory was established to manufacture light trains for projects like the Addis Ababa Light rail transit.

According to him, 285 million birr was spent to establish the factory, import manufacturing materials, and manufacture the sample train.

The factory was established not only to assemble but also to manufacture light trains, he said.

In addition to saving foreign currency, the factory will help to encourage job creation by promoting technology transfer, he said.

The Locomotive Industry in its branch in Dire Dawa is producing long distance travelling trains after concluding a sub-contract agreement with the Chinese NORINCO Company, it was learnt.

 

Ethiopia plans to build 105 small dams in GTP-II

Addis Ababa, January 11, 2016 – The Ministry of Water, Irrigation and Electricity has disclosed that additional efforts are underway to harness small rivers to ensure more access to hydropower in rural localities.

At national level, the ministry has planned to carry out 105 small dam construction projects on small rivers within five years.

Project implementation sites have already been identified in Oromia, Southern Nations, Nationalities and Peoples’, Gambella, Amhara and Benishangual-Gumuz regional states.

The latest rural electrification plan takes into consideration the country’s topography which is well suited for hydropower projects on small rivers.

Bizuneh Tolcha, Public Relations Director at the Ministry told ENA that the projects target off-grid areas throughout the country.

He said the projects play additional role by supplying cost efficient power, expand small industries and irrigation development schemes.

The ministry says it has finalized feasibility studies in five selected sites with potentials of up to 11 megawatts in which private investors are encouraged to involve.

In GTP-1, the ministry managed to provide hydropower from small river dams to around 300 thousand inhabitants of Oromia and Southern Nations, Nationalities and People’s states.

Overall, 27 dams were built over small rivers in the reported period with the involvement of a range of stakeholders, he said.

Through the abundant supply of such clean energy, the ministry plans to protect deforestation, according to Bizuneh.

German Development Cooperation (GIZ) has been engaged in the field to facilitate knowledge and technology exchange.

GIZ’s partnership with the Ministry of Water, Irrigation and Electricity will continue in GTP-2 based on agreed plans to exploit power potentials of small rivers.

More than 465 households, 96 businesses and 40 social institutions have so far benefited from GIZ implemented four micro hydropower plants in Oromia and Southern Nations, Nationalities and People’s regional states.

Ethiopia is endowed with many small rivers that are convenient for development of small and micro-hydropower generation, according to the ministry.

The country boasts enormous potential to generate electric power from small rivers with 5,000 such sites have already been identified.

 

Government investigating officials’ ill-gotten wealth

Addis Ababa, January 11, 2016 –Investigation has been commenced into government officials who have generated wealth improperly, Dr Debretsion Gebremichael, Deputy Prime Minister for Finance and Economic Cluster and Minister of Communication and Information Technology said.

During his stay with FBC’s Mogach (debate) program, Dr Debretsion said, “Though it is a weakness not to address good governance problems so far, there shouldn’t be doubt on government’s determination to tackle the problem.”

“Good governance issues shouldn’t have been separated from development. This is a weakness. The government is committed to tackle the problems as it affects the ongoing development efforts,” he said.

Though good governance comes through process, the government is taking rapid corrective measures against individuals committing malpractices, he said.

Regarding telecommunication, he said, there will be a change in tariff rate. The telecom tariff rate in Ethiopia is less than the tariff in other countries. This was made to lift citizens out of poverty, he said.

As regards to the Grand Ethiopian Renaissance Dam (GERD), the Minister said the study to be conducted on GERD will create trust among the riparian countries.

The impact of the dam should be analyzed in detail as it directly touches both Egypt and Sudan. Ethiopia supports the study as it helps to find solutions if there are problems, he said.

The Grand Ethiopian Renaissance Dam benefits not only Ethiopia but also the riparian counties and this should be verified by professional study, he said.

According to him, no study will be conducted after the study to be held by the two firms chosen by Ethiopia, Sudan and Egypt.

During a meeting held from December 27-29, 2015 in Khartoum, Sudan, Foreign and Irrigation Ministers of the three countries chose a new company known as Artelia.

The two firms, Artelia and BRL groups, will officially commence their studies on the dam early next month.

 

‘Ethiopia, African lion of development’- The Korea Herald

Addis Ababa, January 10, 2016 – Ethiopia is a country with a long history and diverse cultures. We are the oldest independent nation in the world with deep roots in our ancient civilizations. As Africa’s second-most populous country with 90 million people, Ethiopia is becoming a continental hub with capital Addis Ababa housing the African Union.

Our government is a federal republic founded in August 1995, following a transitional government that ended 17 years of Marxist dictatorship of the Derg (the Coordinating Committee of the Armed Forces, Police and Territorial Army) in 1991. Prior to the Derg regime, Ethiopia was ruled by Emperor Haile Selassie I (1892-1975).

We have a market economy that prioritizes privatizing state-owned enterprises. Our economy is largely based on agriculture, which accounts for 40 percent of the gross domestic product and 55 percent of total employment. Manufacturing and the services industry make up 14 percent and 46 percent of our GDP, respectively.

Ethiopia has 32 universities that are constantly improving the quality and scope of their curriculums. Enrollment rate in primary school is 94 percent and 39 percent in secondary schools. Public health care has expanded coverage dramatically, administering services for millions of our citizens.

Over the last 11 years, we have managed an impressive double-digit economic growth, leading to significant reductions in poverty, registered at 22 percent last year. To continue this trend, we have embarked on mega projects in railways, infrastructure and fertilizer and sugar industries. Our ambitious Grand Ethiopian Renaissance Dam, owned and financed by our country, is currently under construction in the Benishangul-Gumuz region on the Blue Nile River.

Due to the changing climate and El Nino effect, our agriculture faced severe drought and crop failures last year, but our government managed these challenges effectively.

We aim to be a middle-income economy by 2025, and to realize our “national renaissance,” Addis Ababa has revised and implemented the five-year Growth and Transformation Plans. The second GTP is set to begin this year with an emphasis on pushing our economy from agriculture to industrial development.

Our economy has huge potentials for investment, particularly in agriculture, manufacturing, tourism, mining, hydro power and social services. Having a sizeable, young population and one of the largest markets in the continent, Ethiopia also serves as a gateway to the Common Market for Eastern and Southern Africa, a union of 19 countries with over 400 million people.

Many of Ethiopian products qualify for preferential, duty-free access to the European market under the European Union’s Everything-But-Arms initiative as well as the U.S. market under the African Growth and Opportunities Act.

Ethiopia has invited Korean companies to take advantage of its fast-growing economy, air transport networks and favorable investment climate offering a wide array of incentives. Our government has made commendable efforts in legislative and procedural reforms to attract foreign direct investment, revising our laws three times since 1992.

Ethiopia has rich tourism assets encompassing cultural, historical and archaeological heritages, including nine on the UNESCO List. We also have a great diversity of flora and fauna that comes from our sundry topography, ranging from high peaks 4,550 meters above the sea to depressions 110 meters under the sea.

Addis Ababa has initiated numerous measures to preserve and develop tourist hot spots, national parks and hotel infrastructures. As a result of these efforts, inbound tourists have surged in recent years and Ethiopia was chosen as one of the world’s best destinations last year by the European Council on Tourism and Trade.

As Africa’s largest top carrier delivering flights across the world, the Ethiopia Airlines remains a driving force behind our tourism sector. The airline provides three flights a week between Addis Ababa Bole International Airport and Incheon International Airport.

Ethiopia and Korea established diplomatic relations in 1963, when the latter opened its embassy in Addis Ababa. Ethiopia was one of the 16 United Nations countries that responded to the U.N. Security Council call to preserve peace and security of the Korean Peninsula during the Korean War (1950-1953). With our 6,030 troops, Ethiopia won all 235 battles, not losing a single soldier as a prisoner of war or missing casualty.

Having forged our relations in blood, it is high time to elevate and strengthen our partnership for the two countries’ sustainable development and prosperity.

 

Hawassa Industrial Park attracts well-known apparel makers

Addis Ababa, January 9, 2016 – Aspiring to become the continent’s top light manufacturing hub, Ethiopia is set to attract globally renowned apparel, textile, fashion and designing companies to its newly-erected Hawassa Industrial Park, which is to be completed in the coming months.

To that effect, top ten leading textile and apparel sourcing and manufacturing companies are cementing deals to join the park.

The government is targeting world-class cloth makers to come to Ethiopia and is currently negotiating with ten companies from four or five countries: U.S., India, Sri Lanka, Indonesia and Hong Kong, sources close to the matter were quoted as saying by The Reporter.

Three are top US-based companies including PhillipsVan Heusen (PVH) Corporation, owner of popular brands such as Tommy Hilfiger and Calvin Klein, are negotiating to lease sheds in the Hawassa Industrial Park which is expected to go operational in June.

Apart from that, top apparel makers from India such as the Raymond Group and Arvind Limited are part of the ongoing negotiations to secure a place at the park.

In addition to PVH, Ralph Lauren (RL) and Vanity Fair (VF) corporations are in the list of companies that are contemplating to come and join the Ethiopian textile sector.

The 246 million US dollars Hawassa Industrial Park will house 37 factory sheds on 300 hectares of plot.

 

U.S. mining giant to engage in gold exploration, extraction in Ethiopia

Addis Ababa, January 9, 2016 -Newmont Mining Corporation, an American mining giant considered to be one of the world’s largest producers of gold, has shown interest in gold exploration and extraction projects in the Tigray Regional State.

Tolosa Shagi, Minister of Mines, Petroleum and Natural Gas, told The Reporter that Newmont is getting ready to engage in gold exploration and development projects in two concessions in the Tigray Regional State.

“We believe that the mining sector should significantly contribute to the fast economic development Ethiopia is registering. So we have drafted a new strategy that enables us to lobby and attract giant international mining companies,” Tolosa said.

Founded in 1961 by William Boyce Thompson as a diversified holding company, Newmont is currently headquartered in Greenwood Village, Colorado with active mines in Nevada, Indonesia, Australia, New Zealand, Ghana and Peru.

Holdings include Santa Fed Gold, Battle Mountain Gold, Normandy Mining, Franco-Nevada Corp and Fronteer Gold.

Newmont also has many joint relationships. As of the third quarter of 2014, it was the world’s second-largest producer of gold, behind only Barrick Gold and remains to be the only gold company in the Standard & Poor’s 500 index.

The coming of the mining giant is also expected to pave the way for others to join the sector. The ministry is also in the process of bringing in more companies.

According to Tolosa, Ethiopia has not fully utilized its mineral resources. So his ministry has drafted a new scheme that enables it to unleash the country’s mining potential.

So far, MIDRO Gold, KEFI Minerals and Ascom are some of the companies engaged in gold exploration in Ethiopia. Back in October 2015, the three companies had completed their feasibility studies to start production in the early years of the second Growth and Transformation Plan (GTP-II) period.

Apart from large scale mining, currently, more than one million people are engaged in artisanal mining primarily focused on gold. Artisanal miners pan eight tons of gold every year fetching a significant amount of foreign exchange to the country. Presently, Artisanal miners generate more than 400 million US dollars.

 

UK-based 54 Capital invests $42m in Ethiopia’s Addis Pharmaceutical Factory

Addis Ababa, January 8, 2016 – 54 Capital, a private equity firm focused on investments in Africa, has backed Ethiopia’s drug manufacturer Addis Pharmaceutical Factory with $42m.

The firm has made and initial investment of $30m with an option to provide further $12m in financing which Addis plans to use for improving production capacity and enhancing its product portfolio.

With the local government putting a priority in its future development, Ethiopia’s pharmaceutical sector is expected to growth to $1bn by 2018 at the latest.

Saad Aouad, founder and CIO of 54 Capital, said,” The Ethiopia pharmaceutical sector is one of the most exciting industries in the country and is poised to witness a high level of demand in the coming years.

“Through our investment into APF we will be both partnering with EFFORT, an investment group dedicated to transforming the Ethiopian business landscape, and investing into one of the leading companies in the country; marking our recognition of the importance of the sector in Ethiopia and our continued commitment to the country.”

Founded in 2013 54 Capital is an Africa-focused asset management firm. Apart from the current deal it has so far invested around $35m into the FMCG sector in Ethiopia since 2014.

In 2011, Aouad originated and took part in one of the largest private equity deals to date in Ethiopia – a $90m growth capital investment in the second-largest and only remaining independent brewery in the country.

 

Chinese investors still consider Ethiopia a “target country” for manufacturing operations: FM

Addis Ababa, January 8, 2016 – Foreign Affairs Minister Dr Tedros Adhanom says he is confident that Chinese investors still consider Ethiopia a “target country” for manufacturing operations overseas, as wages rise across Asia.

“I expect even more foreign direct investment flow from China. There is a strong interest to migrate manufacturing to Ethiopia,” he told the Financial Times.

Wages in Ethiopia are about a quarter of those in China’s and half of Vietnam’s. Ethiopia also benefits from duty-free access to the US market for many goods through the US Africa Growth and Opportunity Act.

Ethiopia’s government has made turning the country into a hub for light manufacturing a key priority. That strategy is bearing fruit: industrial output grew by 21.2 per cent between 2013 and 2014, and now accounts for some 14 per cent of GDP.

The Ethiopian government has set itself a target of $1bn in textile exports by 2016. Attracting Chinese companies will be key. Between 2003 and Q3 2015, 11 of the 15 projects China has invested in Ethiopia have been in manufacturing, according to fDi Markets, a data service from the Financial Times.

Major retailers have taken note. Swedish clothing powerhouse H&M announced in August that it would begin sourcing products from Ethiopian factories, following similar initiatives by the likes of Tesco and Walmart.

The Ethiopian government is putting money behind its bid for industrialisation and plans to continue to do so at pace, despite headwinds in the global economy, according to the minister.

“We are beginning a programme of massive infrastructure construction and special economic zone building so that we have the parts in place to attract these investments,” Dr Tedros says. “We have strong commitment from the Chinese government, and from Chinese companies.”

Industrialisation has proven difficult across much of the region, so African policymakers are watching the Ethiopian example with interest.

In 2014, officials at the Ethiopian Industrial Development Zones Corporation said it would put a $250m World Bank loan into expanding the Bole Lemi special economic zone (SEZ) outside Addis, the capital, as well as building an entirely new “industrial hub” at Kilinito some 30km south. At least another three SEZs are planned for other parts of the country in the coming few years, including one in Dire Dawa in the south-east.

The question is whether China’s manufacturers will be making the jump across at the pace Ethiopia anticipated in years past. China’s FDI into greenfields projects in Africa fell sharply in the first half of 2015, according to fDi Markets.

According to Dr Tedros, any dip in China’s investment flows into the region will be temporary. “It will not last. The curve will go back up,” he says. “The difference will depend on SEZ construction.”

Results from the December Caixin survey mark the fifth month in a row that China’s manufacturing purchasing managers’ index has remained below the 50-point mark that separates economic expansion from contraction.

According to analysts, however, Ethiopian officials’ optimism is not misplaced. As China’s demand for commodities slows, “Ethiopia should be more resilient than other commodity-exporting countries”, says Sarah Baynton-Glen, Africa economist at Standard Chartered.

Bucking trends across much of Africa for commodities-led growth, Ethiopia has emerged as one of the world’s fastest-growing economies on the back of strong growth in the services, agriculture and industrial sectors.

Investment is only a small part of the relationship. “A large part of involvement by China in Ethiopia is through project contracts — largely infrastructure projects — which we do not think are likely to drop off as a result of slower Chinese growth,” says Baynton-Glen.

For the time being at least, plans for Ethiopia’s industrial transformation appear set to remain on track.

 

Chinese corporation ink agreement to construct Addis National Stadium with over 2.4 billion birr

Addis Ababa, January 5, 2016 – The Ministry of Youth and Sports and the Chinese State Construction Engineering Corporation Ltd (CSCEC) have today signed an agreement for the construction of Addis Ababa National Stadium at a cost of 2.47 billion birr.

The new stadium, to be built on 48.8 hectares of land, will have the capacity to hold 60,000 spectators.

The stadium, which meets the requirement of FIFA and IAAF, will help to host both world cup final and Olympic games.

Design contract for the stadium was awarded for MH Engineering.

Up to 40 per cent of the construction of the stadium will be carried out by local capacity. Its construction will create jobs for more than 2,000 people.

The construction of the stadium will be completed within 900 days.

The stadium, to be built near at the Youth Sport Academy, Bole sub-city, will have parking space for 10,000 cars.

Invited guests, including Redwan Hussien, Minister of Youth and Sports, attended the signing ceremony.

 

Ethiopia’s coffee industry sees steady growth

Addis Ababa, January 5, 2016 -Ethiopia’s coffee exports are increasing, thanks in part to government incentives, a Trade Ministry official told Anadolu Agency on Sunday.

Coffee exports totaled 184,000 tons in 2014, and were worth $780 million, Shimelis Arega told Anadolu Agency.

“And coffee exports will increase 45 percent to over 260,000 tons this year,” he said. “Incentives will help achieve this goal, and they will include marketing linkage, loans for coffee exporters and processors, and the promotion of the Arabica coffee that the country exports at trade shows abroad.”

Coffee exports account for nearly 30 percent of the country’s hard-currency earnings, according to ministry figures.

“We are helping companies to expand coffee farms and to modernize processing,” Shimelis added.

The government will also take steps to crack down on the illegal coffee trade, he said.

“The ministry is training smallholder coffee farmers in improved harvesting, storage and preservation,” Shimelis pointed out, adding that these techniques add value to the coffee which then earns more in export sales.

The largest export destinations are Germany and Saudi Arabia. “Ethiopian exporters have 18 percent of the German market, and 16 percent of the Saudi Arabian market,” Shimelis said.

The Ethiopian Coffee Growers and Exporters Association members have holdings covering over 80,000 hectares (800,000,000 square meters), according to Association General Manager Yilma Gebrekidan.

“The association has 200 members, and each owns 30 hectares of coffee farms. They exported 14,000 tons of coffee worth $70 million in 2014,” he said.

He said that association planned to increase the value of its exports to well over $ 100 million in the coming years, with government support as part of the Second Growth and Transformation Plan (GTPII), a five year economic plan beginning 2016.

The association is expanding farms, using promotions, and is helped by incentives including tax exemptions for investors who import goods for coffee processing.

According to the association, the overall area covered by coffee farms in Ethiopia is about 800,000 hectares (8,000,000,000 square meters) of land with an annual production capacity of 500,000 tons. Coffee farms account for 25 percent of the workforce in Ethiopia.

 

UNDP willing to scale up support for young Ethiopian entrepreneurs

Addis Ababa, January 4, 2016 – The United Nations Development Program (UNDP) has expressed its willingness to support young Ethiopian entrepreneurs for stronger impact in the country’s developmental agenda during the Second Growth and Transformation Plan.

While conferring with President Mulatu Teshome today, UNDP Resident Representative, Ahunna Eziakonwa-Onochie said UN will give special attention for job creation in GTP-2.

“We want to engage in Ethiopia’s GTP through the UN Development Assistance Framework (UNDAF) and focus on sustainable economic growth and risk reduction, basic social services, job creation, capacity development and youth,” she said.

The UN will provide direct financial, advisory, technical, organizational, and management support.

According to her , UN is willing to support the Ethiopian government in order to maintain the developmental agenda, especially in areas of education, water, entrepreneurship, and other priority areas.

Eziakonwa-Onochie, who noted that Ethiopia is a fast-growing country in all areas and all sectors of its economy, added that “our collaboration will provide a strong foundation for the transformation of Ethiopia in the coming few years.”

The UN system in Ethiopia is working in a truly coordinated way to help Ethiopia enhance capacity to develop and implement programs that meet international standards, she pointed out.

We hope to continue with this successful partnership long into the future to promote sustainable development, job creation, and education as well as improved quality of life for all Ethiopians, the resident representative stressed.

President Mulatu on his part indicated that Ethiopia has a very good chance in higher education.

The UN Country Team (UNCT) in Ethiopia is the largest in Africa, and taken as a single entity, one of the major development partners of the country.

 

Ethiopia preparing to bid for UNSC membership

Addis Ababa, January 1, 2016 –The Ministry of Foreign Affairs (MoFA) of Ethiopia said preparations are underway to bid for a non-permanent member seat at the United Nations Security Council (UNSC).

In order to make the country a member of the Council, preparations are underway to carry out campaign, do lobbying and draw lessons from other countries, Dr Tedros Adhanom, Foreign Affairs Minister said.

Successful activities were carried out at the Arab-Africa and Africa-South America summits held on the sideline of the 70th United Nations General Assembly in New York, he said.

The country had expressed its stand at the ministerial and heads of states meeting held on South Sudan and Burkina Faso at the African Union as well as at the UN peacekeeping mission and UNSC meetings on terrorism, he said.

In addition to its active participation at the meeting convened to adopt the post 2015 development agenda, the country delivered a speech at a meeting of the UNSC on Somalia by representing IGAD, he said,

Ethiopia is the only the East African country put forward as a candidate for membership as Seychelles has agreed to leave its candidature for Ethiopia, he said.

According to him, getting two-third vote from the present member states won’t be difficult for Ethiopia in order to be accepted by the UNSC.

Ethiopia earned 186 of the 190 total votes during its election as a member of the UN Human Rights Council and this shows that the country is in pole position to become a non-permanent member.

Ethiopia had been a non-permanent member of the UNSC for two terms in 1967-68 and 1989-90, it was noted.

 

Ministry set to modernize nation’s construction sector

Addis Ababa, January 1, 2016 – The Ministry of Construction (MoC) said it has prepared a plan which helps Ethiopia’s construction industry become competitive in the second Growth and Transformation Plan (GTP-II) period.

The ministry is holding consultation on the plan period with heads of regional bureaus and stakeholders.

A plan has been prepared in order to address the bottlenecks in the sector and make the construction sector competitive in GTP, Dr Ambachew Mekonnen, Minister of Construction said at the consultation.

Discussions were held on performances and gaps witnessed in the first GTP as well as on activities that would be carried out in the years to come.

Limited capacity of contractors and consultants, use of outdated technologies, design problems and rent seeking behaviors were mentioned as the main bottlenecks for the construction sector during the past years.

In the second GTP period, works will be carried out to deal with these problems, make the construction sector competitive and to enable the sector contribute its share to the country’s economic growth, he said.

In order to maintain the quality in the construction industry, professional competence test will be given to experts engaged in the sector and university graduates, he said.

Moreover, in order to alleviate supply shortage of construction materials, support will be offered to suppliers engaged in the sector. Construction materials manufacturing companies will also be established to back the sector, it was noted.

Policy and strategic framework was prepared to build capacity and properly manage the construction industry and projects in the second plan period.

 

Ethiopia plans to secure 15 new finance sources

Addis Ababa, January 1, 2016 – The Ministry of Foreign Affairs (MoFA) plans to secure 15 new sources of development finance through bilateral and multilateral mechanisms in this Ethiopian fiscal year.

The ministry presented its 1st quarter performance report to the Foreign Affairs, National Security and Defense Standing Committee of the House of Peoples Representatives (HPR) today.

The report focused on strategic partnership, image building, economic diplomacy, Diaspora engagement, capacity building and reform management.

Foreign Affairs Minister, Dr Tedros Adhanom, briefed the Committee on the diplomatic activities carried out to establish new strategic partnerships with Russia, Netherlands, Canada, Brazil and Vietnam and efforts made to resolve conflicts in Somalia, South-Sudan and Sudan in peaceful mechanism.

Dr Tedros also told the Committee about the plans for this fiscal year.

Ethiopia will continue to give prime focus to deepen its socio-economic and political ties with neighboring countries and IGAD member states so as to create peaceful, integrated and prosperous Horn of Africa, he said.

The country will also pursue a policy of strengthening people-to-people ties with the people of Eritrea, Dr Tedros noted.

Ethiopia will continue to work towards thwarting the destabilizing efforts of the Eritrean regime and to fight terrorism along with partners, which according to him, the latter will be one of the core areas of the country’s foreign relation activities in the fiscal year.

Dr Tedros said that his ministry has a plan to secure 15 new source of development finance as well as to conduct 15 promotional trips to boost the tourism sector.

Works will be undertaken to increase flow of remittances from the Ethiopian Diaspora community while also encouraging GERD bond sales, he added.

Concerning Ethiopia’s entry to the Northern Corridor Integration Projects (NCIP) initiative, he said, Ethiopia’s participation in the initiative will have an important role in enhancing cooperation between IGAD and the East African Community (EAC).

Dr Tedros further indicated that Ethiopia and Djibouti are working on strategic plan to realize full economic integration in due course.

 

China’s POLY-GCL completes gas appraisal wells in Ethiopia

Addis Ababa, January 1, 2016 – China’s POLY-GCL Petroleum Group Holdings Ltd has finished drilling two appraisal wells in Ethiopia’s southeast and will soon know the size of gas deposits there, a senior Ethiopian official said.

Ethiopia says the wells in the Calub and Hilala fields in the Ogaden Basin should show deposits of 4.7 trillion cubic feet of liquid natural gas (LNG) and 13.6 million barrels of associated liquids. The deposits were discovered in the 1970s.

“They have finished drilling and are now conducting tests on the reservoir. Tests will conclude soon,” State Minister of Mines, Petroleum and Natural Gas, Wakgari Furi, said.

“We may start gas production in 2016. They are working fast,” he told Reuters in an interview late on Thursday.

POLY-GCL, a joint venture between state-owned China POLY Group Corporation and privately owned Hong Kong-based Golden Concord Group, plans to drill five wells in Ethiopia’s southeast, including three wildcat exploration wells.

The project involves developing the fields and building a pipeline from landlocked Ethiopia to the coast of neighboring Djibouti, where it will build an LNG plant and export terminal, according to a company website.

POLY-GCL estimates the cost at $4 billion and initially expected to start LNG production by mid-to-late 2018 at 3 million tonnes a year at first, rising to 10 million tonnes.

Foreign firms have acquired licences to explore in more than 40 blocks in Ethiopia over the past four years, mostly in the southeast near Somalia.

Africa’s eastern seaboard could soon become a major global LNG producer, with other planned projects based on big gas finds made in Tanzania and Mozambique.

POLY-GCL was set up to develop oil and gas in Ethiopia, and aims to expand to other countries. It signed a deal with Ethiopia’s Mines Ministry in late 2013 to develop both fields in the Ogaden Basin. It also has eight other exploration blocks.

 

Agency terminates contract with Karuturi

Addis Ababa, December 31, 2015 – The Ethiopian Agricultural Investment Land Administration Agency has terminated its contract with Karuturi Agro Products PLC.

Karuturi was licensed eight years ago to engage in agricultural sector in Ethiopia with a registered capital of 138 million US dollars.

It received 300,000 hectares of land in Agnwak woreda in Gambella Regional State on the same year.

However, after three years, 200,000 hectares of land was retaken from the Indian company as it was incapable to develop the land. The remaining 100,000 hectares was given for it.

Of the 100,000 hectares of land it was given, the company managed to develop only 1,200 hectares, said Daniel Zenebe, Public Relations Director at the Ethiopian Agricultural Investment Land Administration Agency.

After repeated warning, the agency terminated the lease agreement as the performance of the company was found below expected, he said.

According to Daniel, the agency terminated its agreement on December 25, 2015.

The 98,800 hectares of land developed by the company will be confiscated, according to Daniel.

 

Ethiopia singled out as Africa’s major economic power by 2050

Addis Ababa December 30, 2015 – The top spot for Africa’s biggest economy by 2050 will go to Ethiopia, according to Dr. Carlos Lopes, Executive Secretary of the UN Economic Commission for Africa (UNECA).

Dr. Carlos weighed prospects and challenges for Nigeria, South Africa-current economic giants in Africa, with resource rich DR Congo and fast growing Ethiopia to reach to the conclusion that Ethiopia will come out as top performer in Africa by 2050.

Mail & Guardian Africa’s Editor Charles Onyango-Obbo “sat” digitally with Lopes to send out feelers about Africa’s future – where the continent is likely to go in the next 85 years.

The Executive Secretary said: “At nearly 100 million, the country [Ethiopia] is Africa’s third most populous, and has posted blistering economic growth in the past decade or so.”

“More importantly, it is fast closing the infrastructure gap, laying down a flurry of roads, railways and power projects, which would give it a competitive advantage in the region, particularly over DR Congo that is notoriously poorly connected,” Dr. Carlos added.

Speaking of Nigeria, Africa’s current economic giant, Lopes said: “even with its rosy headline economic figures, huge population and massive potential, also mask deep structural flaws in the economy that might make it choke on growth soon.”

“Nigeria will have strong competition and by 2050 may have an economy smaller than DR Congo and Ethiopia,” said Lopes. Nigeria’s weak point, he said, is in its lack of power.

Nigeria produces just 1.5% of the electricity it needs for its 173 million people. Over 70% of running costs go to running fuel generators alone, and industries retain slow, outdated manual processes because they don’t have the power to run machines.

Without radical reform, and if oil revenues have hit a permanent slump, Nigeria will not be able to function as a modern economy, and may just become a de facto village, though still hulking in size, he warned.

Meanwhile, DR Congo’s potential is immense, he said.

The DR Congo’s total mineral wealth is estimated to be worth a mind-boggling $24 trillion, more than the GDP of Europe and the US combined.

The planned $80 billion Grand Inga Dam, if finally constructed, will be massive: Producing 40,000 megawatts when complete. It will be capable of literally lighting up the continent, providing electricity to half of African countries, according to Dr. Lopes.

Currently, the world’s largest hydropower plant is the Three Gorges Dam across the Yangtze River in China, delivering 22,500 Megawatts — Grand Inga will be nearly double the size.

But DR Congo is plagued by instability, so may not take its place at the top of Africa’s economic pile any time soon.

Making things worse, DR Congo has less than 3,000 km of all-weather paved road and only half of that paltry amount of all-weather road is in good condition.

“South Africa will not get back on top,” said Lopes categorically during the extensive interview with Mail & Guardian Africa.

Dr. Lopes listed the global commodity price collapse, the worst drought occurred in more than three decades, social unrest and the country’s sovereign credit risk as key contributing factors which hold back South Africa from regaining its spot as Africa’s economic power.

Over the next 35 years, more than half of the world’s births will happen in Africa. It means that over the same time period, the region’s working age population is expected to triple to 1.25 billion people, he further noted.

 

Rights institutions launch good governance movement

Addis Ababa, December 31, 2015 – The Ethiopian Human Rights Commission and Ethiopian Institution of the Ombudsman have announced joint plans to investigate into the role of poor governance in fueling the recent violence in some parts of the country.

The institutions have prepared a good governance movement plan to identify problems and suggest possible solutions to the executive body to take appropriate measures, as disclosed during a media briefing by officials of the two institutions.

Dr Adissu Gebregzihabiher, Ethiopian Human Rights Commissioner, explained that currently problems of good governance at service delivery are affecting the public.

The Commissioner stated that the institutions have planned to hold conference the coming Friday to enrich the draft plan for good governance movement with inputs from various public representatives and other stockholders.

According to Dr. Addisu, investigations are undergoing in case any human right violations committed during the uprising occurred following Qimant nationality’s claim about violations of their rights.

Similarly, reports of investigation on problems related with the Addis Ababa and Oromia special zone integrated master plan will be submitted to the House of Peoples’ Representatives.

He further stated that the Commission has planned to initiate follow up activities in drought affected areas as well.

Serawit Sileshi, Vice Commissioner of the Ethiopian Institution of the Ombudsman for her part said her institute is working to protect the rights of citizens from any violation by the executive body.

The commissioner stated that limitations have been observed on the executive body of the government in solving problems. So, service providing public institutions have been identified as target areas to make follow ups.

She added that though coordination work has been carried out through referral case handling system by the two institutions previously, the new integrated approach will facilitate working together.

The two institutions have been established as democratic and neutral institutes to execute their mandate set in the constitution.

It was indicated during the briefing that the Ethiopian Human Rights Commission handled more than 300 complaints during the past quarter year.

 

China keen to boost cooperation with Ethiopia in infrastructure: Vice FM

Addis Ababa, December 30, 2015 – Chinese Vice Foreign Minister Zhang Ming said Tuesday China is keen to strengthen cooperation with Ethiopia in the infrastructure development and transportation sector.

Zhang made the remarks after he visited the Addis Ababa Light Rail Transit constructed by the China Railway Group in the capital of the East African country.

Zhang said infrastructure development and transportation sector are among the various fields China and Ethiopia are cherishing.

Reiterating the two countries have forged cooperation in different areas, he said that China and Ethiopia would further go hand in hand with their cooperation to benefit the peoples of the two countries and develop their respective countries.

The cooperation between the two countries is also growing rapidly, Zhang said.

“Ethiopia is a very close friend of China in Africa. So, the bilateral cooperation (covers) almost all the fields between the two countries; it is going very fast, including the infrastructure; including the city traffic infrastructure,” said Zhang.

The electrified Addis Ababa Light Rail Transit (AA-LRT) is the first light railway on the African continent with two lines of a total length of 34 km.

Accompanied by diplomats and officials of Shenzhen Metro Group, among others, the vice foreign minister was on board of one of the rails on the north-south line that runs from Kaliti to Menelik II Square.

“It is an exciting experience for me to take the light train in Addis Ababa,” he said.

Stating that he has visited Ethiopia at various times, Zhang said the traffic in Addis Ababa has been improved due to many reasons, of one which is the light rail.

 

Genale Dawa 3 hydropower project reaches at 79 percent completion status

Addis Ababa, December 24, 2015 – The construction of Genale Dawa 3 hydropower project has been reached 79 per cent, according to the Ethiopian Electric Power (EEP).

Works are underway to finalize the 254 MW hydropower project as per the plan, Misker Negash, Foreign Relations Director at EEP said.

The project is being built at a cost of 451 million US dollars allocated by the government of Ethiopia and loan obtained from Exim bank of China.

Ethiopia’s current total electric power generating capacity stands at 2,421 MW and efforts are underway to raise the figure to 17,000 MW over the coming five years.

Ethiopia has the potential to generate 50,000MW from hydropower, 1.3 million MW from wind and more than 10,000MW from geothermal energy.

 

Ethiopia attaches due attention to increase education and health equity

Addis Ababa, December 24, 2015 – Due attention has been attached to increase equity, reach and improve the quality of human development, education and health sectors over the coming five years.

The House of People’s Representatives (HPR) is deliberating on the five-year second Growth and Transformation Plan (GTP-II).

The House is discussing on plans focused on human development and technological capacity building issues.

Government and private learning institutions will be bounded to work in line with quality and relevance of education.

Institutions tasked with controlling quality and relevance of education will be made to fulfill their responsibilities.

Similarly, works will be done to modernize the issuance of certificate of professional competence.

In science and technology sectors, due attention will be given for skills development and technology transfer.

Efforts will be made to provide quality health care services by filling the gap between demand and supply of medical equipment.

Moreover, works will be carried out to raise the average life expectancy in Ethiopia to 69 years after five years from 64 years now.

Human Resource Development and Education

Utmost efforts will be exerted over the coming five years to sustain the success gained in education and training and to address problems that impede the enrolment of school age children and girls in particular.

Prime attention will be paid to increase coverage of primary and secondary education as well as preschool and adult education.

Moreover, the government will step up its efforts to maintain education quality in higher learning institutions because producing skilled manpower is a key for the country’s socio-economic growth.

Over the coming five years, the government of Ethiopia has planned to increase:

• Gross enrollment ration in preschool education to 80 percent from 43.2 percent last year.

• Net enrolment ration in primary schools (1st-8th grade) to 100 per cent from 92 percent now.

• Bring the male-female ratio at all levels to 1:1

• Special needs education gross enrollment ration in primary school (1st-8th grade) to 15 percent from 4.4 per cent now.

•Gross enrollment ration in secondary education from 39.3 per cent now to 74.2 percent; and adult education to 95 percent.

• Increase the number of technical and vocational training institutions to 1,778 from 1,329 at present.

• Make available at least one institution in all woredas across the country and increase their enrollment capacity to 598, 729 students from 408, 838 now.

•Some 11 additional universities will be built and due attention will be given to maintain education quality

•Set target to increase government universities’ enrollment of undergraduate students in regular program to 600,000 and the number of postgraduate students to 63,000.

•Set target to increase the number of female students in undergraduate program to 45 percent after five years from 32 per cent a year ago; in second degree program to 35 percent from 22 percent and in PhD programs to 20 percent from 11 percent.

Health Care Service

In addition to increasing reach, producing healthy and productive workforce through maintaining the quality of health care service plays a key role in accelerating economic growth.

With the help of health extension program and active participation of the public, undertaking basic health care services will remain a priority for the government over the coming five years.

Moreover, due attention will be given towards maintaining quality health care service in hospitals, improving drug supply and equipping health institution with skilled manpower and equipment.

Due attention will be given to increase the number and improve the skill, combination and management of health professionals.

In addition to the ongoing efforts to reduce migration of health experts, prime attention will be given towards training health professionals in a large number so as to compensate the migration.

Efforts will be made to implement a quality health care service system by filling the gap between demand and supply of medical equipment.

Technological Capacity Building

Over the coming five years, efforts will be exerted to make the training programs focus on science and engineering fields as well as bring the level of the training quality to related institutions in other countries.

Due attention will be given towards producing a well trained manpower capable of building capacity for technology transfer.

Special support will be provided to science and technology universities and other technological institutions.

Building capacity of research centers, fulfilling research infrastructures and supporting research and technology projects are among government’s priority areas in the second Growth and Transformation Plan (GTP-II) period.

 

Ethiopia to get connected by railway with all neighboring countries by 2025

Addis Ababa, December 16, 2015 – President Mulatu Teshome said Ethiopia’s railway coverage will reach 5,000 km by 2025.

The president said this while conferring with Turkish delegates from Yapi Merkezi Construction Company which builds the Awash-Woldiya Railway Project.

During the discussion the president said the railway coverage would connect the country with Djibouti, Kenya, Sudan and South Sudan.

The Awash-Woldiya railway project under construction costs USD1.6 billion, it was learned.

President Mulatu finally recommended that Turkish companies engage in the energy sector.

Yapi Merkezi Construction Company General Manager, Murat Hasim Koksal, said 25 percent of the 370 km railway project is completed and has created 2,500 jobs.

Turkey is among the top three countries with huge FDI in Ethiopia.

 

Nigeria eyes Ethiopia’s model for agri-business

Addis Ababa, December 15, 2015 – AS part of its efforts to diversify Nigeria’s oil dependent economy and create wealth for the larger population, and in line with its North East reconstruction plan, Nigeria is studying how Ethiopia has substantially boosted agricultural growth and catalyzed the transformation of the sector.

Vice President of Nigeria, Professor Yemi Osinbajo, recently hinted that the Federal Government was working towards improving Nigeria’s economy through agriculture.

Ethiopia’s success is said to be hinged largely on the country’s Agriculture Transformation Agenda (ATA) and the Agriculture Transformation Agency established in partnership with the Bill and Melinda Gates Foundation.

Similar to the experiences of many other countries like Nigeria, a key aspect of Ethiopia’s strategy was to address systemic bottlenecks, while using its innovative Agricultural Transformation Agenda as the vehicle to address bottlenecks in the sector.

Director of the African Team at the Bill and Melinda Gates Foundation, Dr. Ayo Ajayi, who confirmed the development, said that Osibanjo, had reached out to the Foundation and had been briefed with relevant documents and details on the Ethiopia’s strategy and success story.

Official statistics have it that agriculture is the dominant sector of Ethiopia’s economy, representing about 45 per cent of GDP, 77 per cent of employment, and 84 per cent of exports of Africa’s second most populous nation. It is recorded that the majority of the agriculture sector consists of smallholder farmers who make their living from less than two hectares of land.

Much of Ethiopia’s growth strategy has been focused on agricultural development supported by heavy government investment. Officials said that over 15 per cent of the national budget is allocated to the sector, compared to an average of 2.7 per cent in the rest of Africa.

 

Ethiopian flower industry flourishes

Addis Ababa, December 14, 2015 – The Ethiopian flower industry is flourishing, with the help of government incentives and low labor costs, experts told Anadolu Agency on Friday.

The country is now the second-largest flower exporter in Africa, with over 100 flower growers on 1,700 hectares (17, 000, 000 square meters or 182,986,477 square feet).

“We are now second in Africa only to Kenya, and we expect to overtake them soon,” Berhanu Ludamo, Promotion and Information Service Head of Ethiopian Horticulture Producers Exporters Association told Anadolu Agency.

“Ethiopia earned $250 million from horticulture export in 2014. The amount is expected to increase this year due to the expansion of horticulture farms.” Berhanu said. The area will grow to 3,000 hectares in the coming five years and the revenue is projected to increase to $550 million, according to Berhanu.

Climate is a major competitive advantage. Parts of the country south of Addis Ababa are 2,000 meters (6,561 feet) above sea level, and this makes it an ideal environment for floriculture, according to Shiferaw Mitiku, a researcher and agricultural marketing consultant in Addis Ababa.

“The export-oriented agricultural policy, attractive incentives, macro-economic stability and cheap labor constitute the competitive edge for the Ethiopian flower industry,” he said.

According to Ethiopian Investment code 2001, flower growers are offered “a five-year tax holiday, duty free imports, access to bank loans and farm lands as well as a 100 percent exemption from payment of export customs duties.”

Berhanu said the competitive advantages are attracting foreign flower growers.

“They are coming from Kenya, Tanzania and Uganda and from Ecuador,” Shiferaw said. The Netherlands, which is the world center of the flower trade, is also investing in local flower farms.

Gizachew Wondimu, manager of one of the biggest farms, Gallica Flowers, which moved in 2008 from Ecuador to Ethiopia, told Anadolu Agency that “availability of adequate water and human labor encouraged the farm to move to Ethiopia.”

“The   farm is located at 2,600 meters above sea level, which is suitable for growing best quality flowers,” Gizachew said. “We grow 82 premium quality flower stems per hectare annually on average and export to Italy, France, Germany, Middle East, Korea, Japan, Russia, Cameroon, Nigeria and South Africa.”

“The farm exported 6 million best quality flower stems last year,” he said. Private investment will help the farm grow to one of the largest in Africa, Gizachew said.

But the “Ethiopian brand” is not yet established in the world flower industry, according to Shiferaw. “Some countries re-export Ethiopian cut flowers and the brand disappears.”

“We have very few experts,” he said. “And incorporation of the rural community is also a serious issue,” he added.

A floriculture entrepreneur, who asked for anonymity, told Anadolu Agency that the industry is led by foreign investors, and foreign demand.

“Local demand is insignificant,” he added.

Berhanu said that the Netherlands is specialized in adding value to and re-exporting flowers it imports from different countries including Ethiopia.”

The Netherlands exported the highest dollar value worth of flowers amounting to $4.7 billion during 2014. Brazil is also a competitor, although a newcomer to the industry, with $25.8 million in flower exports in 2014.

Dutch floriculture in Ethiopia is reaching the global markets, however: Afriflora, from Ethiopia won a Dutch Flower Award on November 5.

 

Ethiopia joins Northern Corridor Integration Projects initiative

Addis Ababa, December 11, 2015 – The formal entry of Ethiopia into the Northern Corridor Integration Projects initiative is likely to reshape the regional economy and politics, creating a new trading bloc.

In the 12th Head of States meeting on Thursday in Kigali, Rwanda, Ethiopia applied to join Kenya, Rwanda, South Sudan and Uganda, in the initiative, which is slowly transforming into more than just an infrastructure oriented group.

Ethiopian Foreign Minister Dr Tedros Adhanom said his country on Thursday submitted a letter to join the initiative after being an observer for six years.

Improve Trade

“The northern corridor projects have been practical and successful due to the political will demonstrated by its leaders,” said Dr Tedros.

Started by presidents Paul Kagame (Rwanda), Yoweri Museveni (Uganda) and Uhuru Kenyatta (Kenya), the initiative developed as a way to improve trade between the three countries.

The coming together of the three presidents was seen as a protest at the slow integration in the East Africa Community, with the initiative seeking fast-tracking of much of the agreed protocols in the EAC.

Only Tanzania and Burundi are not members of the initiative. The admission of South Sudan, which is yet to be accepted as member of the EAC despite applying, also cements speculations of a splinter group.

Tanzania, on the other hand is still an observer of the NCIP proceedings.

Game Changer

The move by Ethiopia is considered a game changer in the bloc, especially in the future handling of the proposed crude oil pipeline through Kenya and Uganda.

Since South Sudan and Ethiopia both fall on the northern side of Kenya, they are expected to fully support the passage of the crude oil through the northern route.

Kenya has been optimistic that the crude pipeline will eventually pass through the Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor.

 

 

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