Ethiopia fulfilling responsibility for Africa’s economic integration: PM Hailemariam
Business for Africa, Egypt and the World Forum, meant to promote African ties and partnerships, opened today in Sharm el-Sheikh, Egypt in the presence of high level government and business leaders.
The two-day event was graced by the presence of Prime Minister Hailemariam Desalegn of Ethiopia, Nigeria’s President, Muhammadu Buhari as well as President Omar al-Bashir of Sudan, among others.
The socio-economic development which Ethiopia is undertaking in the East African region shows its dedication for the success of the economic integration that Africa has planned, PM Hailemariam said at the Forum.
Ethiopia is building infrastructures to promote regional integration in addition to its efforts to bring about economic growth within itself, he said, citing the country’s move to create regional power, road and railway interconnections with Djibouti, Sudan, Kenya and South Sudan as a case in point.
According to the Premier, Ethiopia is doing this because counties could not achieve development in isolation from the others.
“Ethiopia doesn’t want the economic integration which it has been creating be limited at a regional level. It is committed to discharge its responsibility for the economic integration and sustainable development of the Continent,” he said.
The Grand Ethiopian Renaissance Dam (GERD), being built on the Nile river, is one of the efforts that Ethiopia has been exerting to fetch regional and Continental integration through power.
The Premier also reiterated Ethiopia’s firm stance towards equitable utilization of Nile waters for the mutual benefit of all riparian countries.
“Ethiopia is committed to achieving sustainable development and utilization of the Nile waters for the benefit of everyone and all parties,” he said.
The declaration of principles signed between Ethiopia, Sudan and Egypt in Khartoum shows Ethiopia’s commitment to mutual cooperation and the promotion of confidence for the entire Nile basin development, he added.
The Premier also called for individual and collective efforts to achieve the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC) and the East African Community (EAC) tripartite free trade zone launched last year.
The Premier finally said the Forum will provide great opportunities for Africa to take advantage of the opportunities available in the Continent.
In his opening remark, Egypt’s President Abdel-Fattah El-Sisi, told the attendees that “achieving development is one of the main challenges facing Africans, which requires developing the mechanisms of joint action.”
El-Sisi added Egypt is looking forward to the future establishment of the African Free Trade Zone.
President of the African Development Bank (AfDB), Dr Akinwumi Adesina, on his part said the bank will unfalteringly work for the economic integration of Africa and economic growth of African countries.
Resolving the bottlenecks in the energy sector, ensuring food security, expanding the manufacturing sector, facilitating the economic integration and improving the livelihood of Africans are some of the areas which the bank will focus in the years to come, he said.
Egyptian Companies to Construct Their Own Industrial Park in Ethiopia
The seminar will be attended by Health Ministers of Ethiopia and Egypt as well as Ambassadors of the two countries, including the largest and most reputable pharmaceutical companies in Egypt.
20 Feb, 2016
The outstanding loan that the Commercial Bank of Ethiopia (CBE) has provided through the purchase of corporate bonds has reached 152.7 billion birr, the National Bank of Ethiopia’s annual report noted.
Although there is no secondary bond market in Ethiopia, government bonds, treasury bills and corporate bonds are growing to be preferred instruments of investment for financial institutions and pension funds in the country.
Among these instruments, corporate bonds were the least known among private commercial banks. Nonetheless, the country’s largest state-owned financial institution, CBE, is currently investing heavily on corporate bonds.
According to the annual report of the National Bank of Ethiopia (NBE) released on February 15, 2016, corporate bonds in the order of 48.3 billion birr was purchased by CBE during the 2014/15 fiscal year. The amount stated is 50.2 percent higher than the bond that CBE has purchased in the previous year.
CBE has accumulated 152.7 billion birr worth corporate bond holdings, since the commencement of this corporate bond trade, a couple of years ago. Among the corporate institutions that are accountable for total worth of CBE’s outstanding corporate bond holdings, Ethiopia Electric Power, the state-owned power monopoly, takes the lion share— 74.5 percent.
While the remaining 15.4 percent of the bond goes to the Addis Ababa City Administration which borrowed mainly for its public housing projects, according to NBE’s annual report.
The remaining 8.5 percent goes to Ethiopian Railways Corporation and the rest 0.7 percent outstanding bond holdings belongs to regional states, the report detailed.
Last week, CBE has announced 6.7 billion birr profit for the first half of current fiscal year.
According to a press release the bank sent to The Reporter last week, the opening of 35 new branches, bringing the total to 1,000 is another crowning achievement of the bank in the stated period. The statement also mentioned that the bank has lent 39.4 billion birr though direct advances and NBE’s bond purchases. However, it did not show the amount of its outstanding corporate bond holdings.
In a related news, NBE’s annual report revealed its own mounting direct loans to the central government. According to the report, the outstanding claim of NBE on the federal government has reached 92.1 billion birr. NBE’s direct advance that is feared by economists to cause inflationary pressure on the economy, accounts for 90.3 percent of the total outstanding loans advanced by NBE to the government, according to the report. The remaining 9.7 percent outstanding loans represent NBE’s bond holdings.
Ethiopia tenders to buy 70,000 tonnes of wheat
Finance for the purchase is being provided by the World Bank’s International Development Association (IDA) and other aid agencies, they said.
Ethiopia has issued a series of wheat tenders in past months, including a giant 1 million tonne tender in October 2015. Its last tender for 70,000 tonnes closed in early January.
Failed rains during spring and summer 2015 have sparked food and water shortages in the African nation, which boasts one of the continent’s highest growth rates but depends heavily on farming.
On January 31, Ethiopia urged international donors to offer aid promptly for relief operations to support 10.2 million people critically short of food.
Ethiopia and the African Development Bank (AfDB) signed on February, 3 loan agreements amounting to approximately $325 million.
The agreements were signed between the finance and economic cooperation state minister, Ahmed Shide, and Josephine Ngure, resident representative of African Development Bank Ethiopia Group.
According to Ahmed, the first loan agreement amounting to 5.3 billion birr will be used for the implementation of Basic Service Transformation Programme.
The launch of the digital village is to bolster its Corporate Citizenship efforts in Africa in a bid to help the continent achieve its Sustainable Development Goals (SDGs).
Speaking at the 2016 Samsung Africa Forum, Abey Tau, Corporate Citizenship and Public Affairs Manager, said: “As a global citizen, we felt it was important to use our technology to give back to society. We do this in four ways: by creating new learning opportunities so that young people can enjoy access to better education; by using our technical expertise to develop and provide access to new healthcare solutions; by supporting youth employment through vocational training and skills development; and by reducing our impact on the environment.”
According to the World Bank, sub-Saharan Africa accounts for more than 50 percent of all out-of-school children worldwide, which affects their future employment opportunities. The dire situation faced by many African countries is a result of a number of factors, including civil unrest, cultural beliefs and a lack of schooling infrastructure and resources. It is against this backdrop that Samsung Electronics Africa has adopted an attitude of innovation by introducing technology where it previously had not existed. The aim is to make sure that every African child has access to education no matter where they are on the continent, using state-of-the-art digital technology enjoyed by children in developed countries.
Its Solar Powered Internet Schools, Smart Schools and E-Learning Academies provide solutions that deliver on this vision and improve the quality of learning, enhance teaching effectiveness and allow administrators to run institutions more effectively. The company said that it is working with educators around the world to improve learning experiences through the use of technology, facilitating a classroom environment that is limitless and gives students access to a world of knowledge from their desks or on the go. Through these education initiatives, Samsung hopes to instill a love of learning in students so that they may have equal access to opportunities and go on to become active participants in the economy. This can help to reduce the number of out-of-school children, giving them a chance to succeed.
Earlier this month, Nigerian president, Muhammadu Buhari, attended the launch of a Smart School in the state of Ogun, and this is a continued drive access to education initiative in East Africa along with Ghana and Democratic Republic of Congo (DRC). In 2013, Samsung announced it was finalizing a deal on opening assembly plant partnering with Metal and Engineering Corporation (MetEC) in Ethiopia to expand its East Africa market.
Staggering Aid Bleeds Businesses
The El-Nino induced drought has destabilized and debilitated food production systems causing widespread economic losses, and fear of what will come hovers in the air.
Close to ten million people are now food insecure. This is just the tip of the iceberg as problems are expected to increase exponentially. In response, government is planning to significantly increase its commercial imports of wheat. The end of October 2015, had seen the biggest import tender for one million tonnes of wheat.
A huge gap in capacity and lack of coordination are at the heart of the problem, with losses to transporters, though related issues are a minor problem in light of the magnitude of the drought.
The average figure in the last five years is 420,000tn. More than one billion dollars needs to be set aside to meet the projected dark future. Financial mobilization to meet the demand is progressing well so far. The sum of 680 million dollars has already been raised, approximately half of what is required for the urgent need.
As bulk shipments procured in October and after reached the Port of Doraleh, what surfaced was a headache in managing the logistics of getting food aid from the ports to strategic warehouse destinations for disbursement to people affected by the drought.
As bulk shipments procured in October and after reached the Port of Doraleh, what surfaced was a headache in managing the logistics of getting food aid from the ports.
A huge gap in capacity and lack of coordination are at the heart of the problem, with losses to transporters, though related issues are a minor problem in light of the magnitude of the drought. None of the stakeholders is happy with what is taking place in that regard. Particular focus on the bleeding business is startling and some measures are being taken to improve the mess but delays continue despite the huge budget allocated.
Corporation assembling cargo locomotives
The Corporation began assembling the locomotives in its branch, Dire Dawa locomotive sub-industry, according to Major Gebre-Egziabher Tsegaye, General Manager of the industry told ENA.
The Corporation is assembling freight locomotives each with 700 quintals weight carrying capacity, he said.
It is currently assembling up to six locomotives in a day to attain the target set to save foreign exchange spending by assembling 530 locomotives in the coming four months, he said.
The Corporation has received 100 hectares of land from Dire Dawa administration to build a factory that enable to locally manufacture and fully substitute externally manufactured locomotives.
The construction of the factory will be completed within 18 months.
According to Major Gebre-Egziabher, the Corporation will export locomotives to overseas markets after meeting local demand.
The new Ethio-Djibouti railway line, being built by Chinese state-owned companies, parallel to the existing line, is at the final phase to commence operation.
New Competitor Samsung C&T Wins Fertilizer Bid
The company’s lowest offers could be attributed to the fall in the price of oil on the international market
Samsung C&T, a Chinese subsidiary of South Korean Samsung C&T Corporation, is supplying fertilizers to Ethiopia’s Agricultural Inputs Supply Enterprise (AISE) at lower prices than previous purchases.
A new entrant into the market, Samsung has offered 319.87 dollars, 324.87 dollars and 326.87 dollars for 159,000tn of Urea fertilizers to be delivered in three installments. Its parent company is known for its operation a multiple areas of investments including trading of industrial commodities such as chemicals, steel and natural resources, as well as organising projects such as power plant, renewable energy and infrastructure development.
These offers were made in the bid for purchase of 228,000tn Urea and 81,000tn of NPS fertilizer.
The Enterprise opened the bid on November 5, 2015 and now is in process of opening letters of credit (LC) for their importation.
Samsung’s prices are a little lower than the lowest price the Enterprise had obtained in its September 2015 tender. That price was Agri Commodity’s winning offer of 335 dollars for one lot and 523.3 dollars for another in a total order for the supply of 100,000tn of urea. The lowest price Agri Commodity had offered a year earlier was 381.5 dollars.
The price decline could be a result of the fall in the price of oil on the international market, said the Enterprise’s Marketing Head. The price of urea was down in Chinese markets from 263 dollars in September to 248 dollars in November.
Yara will supply 60,000tn and 37,200tn of NPS for 487 dollars and 491.85 dollars a tonne, respectively. Trammo and Amropa AG gave 322.10 dollars and 336 euro a tonne for bulk shipment of 32,200tn and 41,000tn, respectively.
This year, the Enterprise bought Urea and NPS fertilizers in two rounds. In the first round, it bought 498,000tn of NPS-B fertilizer in 10 lots. Yara Switzerland supplied 43,000tn for 505.7 dollars a tonne, and two lots of each 50,000tn for 520.7 dollars and 526.7 dollars a tonne. End Agro supplied two lots at 518.33 dollars and 533.33 dollars a tonne. The remaining three lots were awarded to Mid Gulf, Iskenderun – a Turkish company, and Trammo at prices of 453 euro, 551 dollars and 312.95 dollars a tonne, respectively.
Out of this order, a total of 248,599tn has so far arrived at the Port of Djibouti between November 2015 to January 2016. As of last week, there was only 198,599tn of Urea and NPS at the Port of Djibouti. Another 100,000tn shipment is expected to arrive at Port Sudan by the end of February. The purchase was made for Amhara, Oromia and Southern Nations Nationalities & Peoples’ states, for distribution to farmers through cooperatives for the coming Belg & Meher seasons.
The latest purchase is expected arrive between March and June, 2016.
The Agricultural Inputs Supply Enterprise is a public enterprise established in 1985 and accountable to the Ministry of Agriculture & Natural Resources (MoANR). Its fertilizer procurement committee has members from MoANR, the National Bank of Ethiopia (NBE), the Commercial Bank of Ethiopia (CBE) and the Ministry of Finance & Economic Cooperation (MoFEC).
More tenders are expected during the remaining months of the year, to meet increasing regional demand, said the marketing head.
ERA, contractors sign 2.5 bln birr road project agreements
Araya Girmay, director general of ERA and representatives and heads of the contractors concluded the agreement here today for the construction of Meki-Zeway section of the Modjo-Hawassa expressway project and Ankober-Dulecha road.
The 37-km Meki-Zeway road was awarded for a South Korean construction company, Daewoo Engineering & Construction Co., Ltd, to be built at a cost of 1.7 billion birr.
The 40 km Ankober-Dulecha road project will be built by a local contractor at a cost of 858 million birr.
Meki-Zeway project will be constructed with loan obtained from the Export-Import Bank of Korea (Korea Eximbank), while the government will covers all the cost for the Ankober-Dulecha road.
Ethiopia, Kenya business leaders pursue bilateral trade pact
The leaders who met in Nairobi on Thursday said implementation of the Special Status Agreement was key to growing trade between the countries.
According to the Kenya Association of Manufacturers, the country “has a strong interest in the implementation of the SSA,” which will eliminate tariff and non-tariff barriers in trade between the two countries.
It is also expected to improve market access between them, increasing the flow of goods and services.
KAM has partnered with the Kenya National Chamber of Commerce and Industry to spearhead bilateral talks, in the wake of increasing industrial competition from the north-neighbouring country.
“We anticipate that the co-operation will open up better opportunities for local businesses in Ethiopia and vice versa,” KAM CEO Phyllis Wakiaga said in a statement last Friday.
Ethiopian business delegation was led by its Foreign Affairs State Minister, Regassa Kefelew.
Analysts have projected that Ethiopia is likely to become a leading investment hub for global manufacturing companies eyeing Africa due to its investments in infrastructure projects and lower electricity costs.
Kenya’s north-neighbouring country, Africa’s second largest by population, has since the turn of the decade concentrated on upgrading its railway transportation services.
The 756-kilometre standard gauge railway from capital Addis Ababa to Port of Djibouti – commissioned in 2011– is on trial use, while the 17 km Addis light rail mass transit system started operations on September 20, last year.
“Opportunities for peer learning through projects such as the tram and the standard gauge railway in Ethiopia and Kenya will set us on a path to economic sustainability for both nations,” Wakiaga said.
Kenyan companies have been keen on expanding into Ethiopia under the agreement.
Last year, Kenya Commercial Bank announced it had received a licence to open a representative office in Ethiopia, which has previously heavily restricted foreign investors from venturing into telecommunication, banking, retail, insurance and electricity sectors.
Kenya is banking on the bilateral engagements and improvement of infrastructure, which includes the Marsabit- Moyale road to grow trade opportunities into Ethiopia.
The value of trade between the two countries increased from Sh2.2 billion in 2004 to Sh7.4 billion in 2014, KNCCI CEO Matanda Wabuyele said.
10 billion birr saved under 40/60 housing program
More than 38,000 residential units are being built under the program in 13 sites.
Some 156,000 people were registered under the program and they have managed to save 10 billion birr until last fiscal year, according to the Addis Ababa Saving Houses Development Enterprise.
The program, launched two years and six months ago, created jobs for over 600,000 citizens and market linkage worth over 100 million birr for more than 500 associations organized in small and micros enterprises (SMEs).
Over $640 million obtained for drought mitigation effort
The government of Ethiopia allocated additional 109 million US dollars besides the fund it previously committed to supply food to the needy until January next year.
Only 46 percent of the total funding required to feed the people and provide health care service for one year has so far been made available, Mitiku Kassa, National Disaster Risk Management Commissioner, said.
The remaining 54 percent was not obtained, he said.
Currently, the drought affected 10.2 million Ethiopians living in 429 woredas (districts) in eight regional states and one city administration.
The number of people in need of food aid will be revised next June. However, they are currently receiving the necessary support from the government, he told FBC yesterday.
According to the Commissioner, the number of needy is expected to decrease at belg growing areas in July as better belg rain was forecasted by the National Meteorology Agency, thereby enabling the government to divert its attention to meher growing areas.
Moreover, their number is expected to decline as meher growing areas are widely engaged in irrigation development with the support from the government and other bodies to compensate the agricultural output lost due to the drought, he said.
If things do not go as per the weather forecast and plan, the government has put aside money, including emergency food reserve, he said.
According to the Commissioner, the government is importing 405,000 metric tons of grains in addition to the 222,000 metric tons already arrived at home.
Distribution of nutritional food is also underway for children and mothers from local food processing factories and by importing from abroad, he said.
The government has so far committed 380 million US dollars to tackle the problem.
About 31 million people living off-grid to gain access to electricity
Works will be carried out to provide electricity in remote rural areas by generating power from small rivers and using other renewable energy sources, Bizuneh Tolcha, Public Relations Director at MoWIE told FBC today.
The power to be generated from about 300 rivers through installing turbines will take the lion’s share, he indicated.
According to Bizuneh, more than 200,000 people living out of the main gird have gained access to electricity in the first growth and transformation plan period.
Sunlight lamps were also distributed for 2 million people, according to the director.
Gov’t injected 191 billion birr incentive for investors
Duty free imports of goods and a five-year tax holidays are some of the incentives that the government of Ethiopia provides for investors that are expected to contribute for the economic growth of the country.
The government has offered 60 billion birr as incentive in 2007 EC alone, Moges Balcha, Customs Program and Development Deputy Director General at ERCA said.
According to him, the incentive has witnessed a 31 percent annual growth
However, some investors are spoiling the tax incentives by using fake documents to import goods and below standard equipment, among others.
In order to tack the problem, the authority has prepared a new arrangement in partnership with institutions which have a duty free privilege.
Investment Commission, Ministry of Mines, Cooperative Agency, Charities and Societies Agency and Ministry of Foreign Affairs are the institutions with duty free benefit.
The new system is expected to be implemented until the end of this Ethiopian fiscal year.
Ministry plans to build 2.4 million houses nationwide
This was revealed at a three-day national conference kicked off today under the theme “My Home My Life.”
Participants drawn from construction companies, real estate developers and housing cooperative associations are in attendance of the conference organized by MoUDH.
Various options will be applied as of this Ethiopian fiscal year to ensure a fair distribution of housing units in rural and urban areas, Mekuria Haile, Minister of Urban Development and Housing, said.
There is a plan to build a total of 2.4 million houses at a national level in GTP-II by drawing valuable lessons from the first GTP period, he said.
In order to achieve the plan, the ministry is building capacity of contractors, besides improving the saving culture of the people, he told the participants.
Housing cooperative associations, in particular, will be taken as the main choice to meet the housing demand at regional cities and to build housing units in towns where industrial parks are to be established, Mekuria noted.
According to the minister, cooperative associations have so far managed to build 120,000 houses across the country.
Close to 300 participants are in attendance of the three-day event.
Participants are expected to discuss on rural housing development strategy, ways of meeting the housing demand in urban areas as well as on problems faced in the construction sectors and their solutions, among others.
Danakali diversifies with production of a second premium potash type
Wednesday, February 10, 2016 by Proactive Investors
Colluli is a 50/50 joint venture between the Eritrean National Mining Company (ENAMCO).
High quality sulphate of potash magnesia (potassium magnesium sulphate of SOP-M) was generated from salts within the Colluli resource at the Saskatchewan Research Council (SRC).
Product was generated in standard, granular and soluble form. SOP-M carries a price premium over the more common potash type, potassium chloride (muriate of potash or MOP) and has limited production centres globally.
In addition to providing potassium, which is essential to plant health and the defining element of potash, SOP-M also contains sulphur and magnesium which are key nutrients for high value crops and contribute to both crop health of and flavour of the harvest.
The global potash market comprises four potash types; potassium chloride, potassium sulphate, potassium magnesium sulphate and potassium nitrate. Colluli has the capability to produce three of the four potash types, an outcome Danakali attributes to the combination of potassium bearing salts within the Danakil Depression.
In addition to highlighting the potash product diversification potential, Danakali have highlighted the potential monetisation of waste products that will be extracted from the open cut mining operations including rock salt, magnesium chloride, magnesium sulphate and gypsum.
Colluli DFS demonstrates industry leading capital intensity, low development capital and low operating costs
In November 2015, Danakali released the results of a positive Definitive Feasibility Study (DFS) which demonstrates not only industry leading capital intensity and low development costs, but also that the project has low incremental growth capital which Danakali attributes to the shallow mineralisation of the resource.
The project also demonstrates bottom quartile operating cost curve position, allowing the project to deliver industry leading returns throughout the commodity cycle.
Scoping Study underway
Danakali has initiated scoping work to assess the impact of the addition of SOP-M to the second module of the project development.
Given the low incremental growth capital demonstrated by the DFS, and the premium price of SOP-M, there could be as highly favourable economic uplift to the highly favourable DFS released in November 2015.
Building the foundations of a multi agri-commodity and salt business
With the production of two premium, chloride free multi nutrient potash products, the establishment of a large, high quality, JORC 2012 compliant rock salt resource containing over 300 million tonnes, and the capability to produce potassium chloride and potentially monetise magnesium chloride and magnesium sulphate, Danakali is building the foundation of a multi agri-commodity and salt business.
It will have a product suite similar to United States producer Compass Minerals and German potash and salt giant K+S.
Work on Ethio-Djibouti fuel pipeline begins next June
US Assistant Secretary of State, Antony Blinken, made the announcement while concluding his two-day visit to Djibouti, where he held talks with Ismail Omar Guelleh, President of the Republic of Djibouti.
The two-year fuel pipeline project will be funded by Black Rhino, an American company that invests in African infrastructure development.
Both countries approved the project, also known as Horn of Africa pipeline (HOAP), in October. The pipeline will to come online in 2018.
The 20-in.-dia pipeline will transport diesel, gasoline and jet fuel from Djibouti Port to storage facilities at Awash in central Ethiopia, a country with an annual fuel demand growth rate of 15%.
This is the second oil-pipeline project Ethiopia has signed with its neighbors.
Earlier, an ambitious 29-billion US dollars transport and infrastructure agreement with Kenya, Uganda and South Sudan called for the development of a 2440-km crude-oil pipeline under the joint Lamu Port Southern Sudan-Ethiopia Transport (Lapsset) scheme.
It involves construction of a 32-berth port in Kenya, a 880-km highway, a 120,000 barrel-per-day refinery in Lamu, three lots of resort cities and three lots of airports. So far, only the construction of the 32 berths has started.
A feasibility study by German-Austrian firm ILF Consulting Engineers estimates the crude-oil pipeline’s cost at 4 billion US dollars. It will connect oil fields in northeastern Kenya with those in Uganda and in South Sudan and end up at the crude-oil processing plant in Lamu.
Analysts say the Ethiopia-Djibouti fuel-product pipeline is not a threat to the Lapsset one unless the HOAP project results in the transportation of refined products that the proposed refinery in Lamu cannot match in price.