12 April 2016 Business News Update

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Fitch Affirms Ethiopia at ‘B’; Outlook Stable

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bonds

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Fitch Ratings-Paris/London-08 April 2016:

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

KEY RATING DRIVERS

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

Weak development and governance indicators illustrate weak debt tolerance, entrenching the rating in the ‘B’ rating category. Despite rapid development over the past decade, Ethiopia remains one of the poorest sovereigns rated by Fitch, with a purchasing power parity gross national income per capita of USD1,500, much lower than the peer median of USD7,700 at end-2015, and weaker indicators of human and financial development than ‘B’ medians.

Macroeconomic spillovers of the on-going severe drought (which has pushed more than 10% of the population into food insecurity) have remained contained compared with previous drought episodes. Fitch has revised down its growth forecast for FY16 (ending in July 2016) to 7.0% from 7.5%, to reflect the expected fall in agricultural production, primarily livestock and to a lesser extent, crops. However, traditional export commodities, including coffee, are less affected. In addition, the massive public investment effort endorsed by the state and the state-owned enterprises (SoEs), which has been a key growth driver in recent years, is continuing.

Structurally high and volatile inflation remains a rating weakness. Inflation picked up to double digits in recent months, driven by higher food prices, but declined to 7.5% yoy at March 2016, helped by tighter monetary policy. Growth in broad money and credit to the economy has decelerated since mid-2015, triggering a decline to ‘2’ in Fitch’s macro-prudential indicator and indicating a lower risk of systemic stress.

Fitch expects the current account deficit to remain in double digits in FY16 after widening to 12.8% of GDP in FY15. Ethiopia is a large beneficiary of lower oil prices, but its goods exports, primarily comprising raw agricultural commodities are also exposed to low international prices and drought-related imports of cereals have already picked up by 10% yoy over the first half of FY16. Fitch expects the majority of this deficit to be financed by external debt inflows, pushing net external debt to an estimated 180% of current account receipts by end-FY16, above the peer median of 74.2%.

External vulnerabilities are therefore increasing. Large current account deficits have maintained international reserves at approximately 2.3 months of current account payments at December 2015, a low level given that the exchange rate is overvalued by more than 30% in real terms. Ethiopia is therefore exposed to the risk of exchange rate adjustment. The central bank’s ability to contain the depreciation of the currency to 5% a year against the US dollar will critically depend on FX generation through enhanced exports in coming years. The government is focusing on light manufacturing exports through the creation of industrial parks and improved trade logistics, as well as on electricity exports, but export diversification has remained weak so far.

The sharp decline in international oil prices has helped mitigate the impact of the drought on the budget deficit. The government has financed a large part of drought-related expenditures by tapping accumulated earnings in the Oil Stabilisation Fund, and benefits from international grants. Over the first half of FY16, budget deficit increased moderately, leading us to estimate that the full year budget deficit will be 3% of GDP, below the ‘B’ median of 4.1%. This will likely stabilise public debt to GDP at around 27% at end-FY16 (against a rating median of 54%), most of which will remain concessional.

Including SoEs debt, total consolidated public debt, at an estimated 56% of GDP at December 2015, is closer to rating medians as SoEs are heavily involved in public infrastructure financing. Although the government expects their debt to be repaid by commercial receipts, it still represents a contingent liability for the state, all the more so as it has guaranteed part of it (up to 8% of GDP in FY15).

RATING SENSITIVITIES

The Stable Outlook reflects Fitch’s assessment that upside and downside risks to the rating are currently balanced.

The main factors that could, individually or collectively, lead to negative rating action are:
– Rising external vulnerability, illustrated by declining international reserves, a further widening of the current account deficit or rising external indebtedness.
– A rapid increase in public sector indebtedness or increased risk of contingent liabilities from SoEs materialising on the state’s balance sheet.
– An increase in macroeconomic imbalances, including a surge in inflation or a recession, related to the current drought.

The main factors that could, individually or collectively, lead to positive rating action, are:
– Stronger external indicators reflected in higher exports, stronger FDI and international reserves.
– Further improvement in the macro-policy environment, supporting moderate inflation and a transition to broader-based growth.
– Further structural improvements, including stronger development and World Bank governance indicators.

KEY ASSUMPTIONS

Fitch assumes that Brent crude will average USD35 and USD45 in 2016 and 2017, respectively.

Fitch assumes that official donors and creditors will continue supporting Ethiopia, covering a large part of drought-related expenditures and of budget financing needs over the foreseeable future.

Fitch assumes that the recent social unrest will not escalate in a way that would be detrimental to sovereign creditworthiness over the forecast horizon.

https://www.fitchratings.com/site/fitch-home/pressrelease?id=1002249

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Amhara Creates an Invitation Only Investment Club

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Share company seeks investment of 16 billion Br, five pledged 100 million each

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The State of Amhara is actively engaging in the formation of a share company comprising a multibillion Birr investment in an array of sectors.

In a bid to increase its role in the manufacturing sector, Amhara had been hosting a series of forums in the past year, the State’s Investment Commissioner, Melaku Alebel, told Fortune.

“We’re going door-to-door and calling upon a select group of people to participate,” the Commissioner added.

The selected group, all natives of the Region, had its first meeting in Addis Abeba and then in Bahir Dar on March 29, to decide on the finer points. So far, a milestone of 16 billion Br has been decided on, but the group wants to sit on introducing more shareholders until a quarter of that has been raised.

The Trade & Industry Bureau had commissioned a preliminary feasibility study to identify key sectors that could profitable. Hearing their presentation during the formative meetings, five individuals have pledged at least 100 million Br each.

Among them, Abebaw Desta, of Star Business Group Plc,  and Belyneh Kinde, a well known exporter of oilseed who also bought the Addis Ababan Ethiopia Hotel are among the first round of investors. The latter gave 150 million Br.

“We’re following up on the promises made,” Melaku confirmed, “checking up on how much of the subscribed amount has already been deposited by the shareholders.”

Amhara has some beneficial characteristics on its side.

“The bureaucracy in the region is much less problematic than elsewhere,” said Yared Sertse, of Shayashone Consult, who has carried out investment research in some of Ethiopia’s regions including Amhara and Oromia.

His research has led him to believe that the Bureau can review a project proposal inside a month. Follow-ups can also occur more often, weekly as opposed to monthly, as is practised elsewhere.

After making inquiries, the Investment Bureau has secured finance with which to research the creation of an even more efficient system, Yared, who has been hired for this purpose, revealed. Its application will make procedures more competent.

He explained it will be more computerized and have better trained personnel.

Location could be a pro or a con, he said depending on the target market. The southern parts of the region like Debre Birhan are the closest one can get to Addis Abeba out of Oromia. If they plan on selling their goods in Addis, that would be strategic placement.

Kombolcha in the northeast is in close proximity to the Port of Djibouti, and Metema in the north-west actually borders Sudan. These are beneficial locations for those who aim to export.

While the Region has comparatively better road infrastructure, the rugged terrain could impact transport.

“We carried out some preliminary surveys in high schools and technical schools,” he added, “and the population is easily trainable.”

Although the decision is not final, investments in cement, iron, and MDF, a type of wood product commonly used in making furniture, are on the list, awaiting further studies before approval.

Amhara Region has potential in agro processing, mining, minerals, forestry, livestock, leather, and cotton.

Preliminary studies also indicate some iron wealth in the Region, although the amount has not been properly documented. The Kombolcha Steel Products Industry (KOSPI) is has located itself in the Region, although, it gets its source materials from other companies as well as via imports. Base metal industries get six-year tax exemptions in Amhara.

In the first six months of the current fiscal year, 260 projects have started operations within the Region, according to Tigist Abrham, process owner of the Developmental Investors’ Support with the Investment Bureau. An earlier press release indicated that 377 had been the target.

The investors are engaged in agriculture, industry, construction, trade, transport, and hotel, she said.

In February, the Region announced that it had transferred plots within the 1,400ha available, in the form of industrial parks in 11 different towns to 600 investors. An investment of 340 million Br has gone into their construction, they added.

Notable investments in Amhara State include Dashen Brewery S.C., Sheba Leather Industry, Fontana Flowers Plc, and an Indian-based horticulture company in neighbouring Kenya.

http://addisfortune.net/articles/amhara-creates-an-invitation-only-investment-club/

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Ministry electrifies over 200 villages

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Ministry electrifies over 200 villagesAddis Ababa, April 12, 2016  –
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More than 200 new villages have gained access to electricity during the past 8 months, according to the Ministry of Water, Irrigation and Electricity (MoWIE).
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Minister of Water, Irrigation and Electricity, Motuma Mekassa, made the remark while presenting his Ministry’s 8-month performance report to members of the House of Peoples Representatives (HPR) here today.

Motuma further said his Ministry managed to withstand the water scarcity problems encountered in drought hit areas by supply water to the residents at a cost of 1.2 billion birr.

About 5.8 million people have benefited from the water supply efforts carried out by using water trucks, according to the Minister.

A number of defunct water wells were also renovated and went operational, he added.

The Ministry was also able to deal with the power shortage associated with the drought, which led to a decline in water volume of hydropower dams, by generating 592 MW of electricity from Gibe III, Motuma noted.

Regarding good governance, 32 heads were relieved of their duties due to failure to discharge their responsibility effectively, he added.

http://www.fanabc.com/english/index.php/comptem/5623?Itemid=674onent/k2/i

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Stella Trade Join Ethiopia’s Gold Extractors

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The extraction license is a first for Stella, as well as the host region, Gambella

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Stella Trade and Industry PLC has joined the league of four gold extractors operating in Ethiopia, after securing a large-scale gold mining license. This is a first for the company, as well as the host region of Gambella.

While more than 80 companies are in the process of exploration, only four have obtained extraction licenses, according to this year’s publication by Ethiopia Extractive Industries Transparency Initiative (EEITI).

Established a decade ago with a 50.2 million Br capital from its Ethiopian and Kenyan founders, Stella secured a gold extraction license in late March, two years after commencing exploration.

A total area of 255sqkm is Stella’s to explore, comprising of two exploration blocks in Akobo – an area in the furthest West part of Ethiopia. The blocks, named Sali and Dembella, are located in the Bench-Maji Zone, Bero Woreda, in the Sali and Gabisa Kebeles, and in the Agnuwak Zone’s Dima Woreda, in the Dembella and Awaya Kebeles.

The extraction will take place on 1.26sqkm of land in the same regional state. A place called Nama Mota in Agnuwak zone, Dima Woreda, will host the extraction. The woreda is known for traditional gold mining.

The report by the Transparency Initiative indicates that Ethiopia has a reserve potential close to 200,000 tonnes of gold minerals. Gambella is among the highest contributors of gold, standing third with 14pc, while Oromia and Tigray take 40pc and 27pc of the supply portion, respectively.

The Ministry of Mines has seven types of licensing, out of which large-scale mining licenses take precedence over those with up to a 10-year validity period, plus the renewal potential for another five.

Stella’s exploration license is categorised as large-scale mining license and has up to 20 years of validity, with a renewal potential of ten years. Its extraction license, while also categorised under large-scale mining, is valid for just 10 years.

Before the 2013/14 fiscal year, the Ministry had given an exploration license for 187,810sqkm of land throughout Ethiopia.

Stella aspires to extract a little over 400kg of gold in just the first six years, dedicating 7pc as a royalty fee to the state. Based on the World Bank’s gold price forecast for 2022, Stella would pay close to one million dollar to the Ministry of Mines by the end of the first six years. This is before accounting for income tax – 25pc charge on income, 10pc dividend tax, and five per cent in equity tax.

Gold production takes the biggest chunk of revenue generated from the extractive industries at 40.7pc, closely followed by cement manufacturing at 39.9pc.

As of April 7, 2016, the purchasing price of gold at the National Bank of Ethiopia, from 14 Karat to 23 Karat, is within the range of 516.1Br to 847.8Br a gram.

When Stella came on to the scene in 2014, the supply of gold to the NBE saw a decrease of 16pc in volume to 8,331 kilogram. That year showed a parallel decrease in earnings from the 6.5 billion Birr recorded the previous year.

http://addisfortune.net/articles/stella-trade-join-ethiopias-gold-extractors/

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Authority to begin online tax payment system

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Authority to begin online tax payment systemAddis Ababa, April 11, 2016  –
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The Ethiopian Revenues and Customs Authority (ERCA) said it will launch e-payment (payment of taxes online by taxpayers) as of next Ethiopian fiscal year.
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ERCA’s Director of Education and Communications, Ephrem Mekonnen, told FBC today that the system helps to save time and money as well as to avoid overcrowding at the end of each month.

The system allows taxpayers to pay online from wherever they are using internet connection.

The system will be implemented extensively after it is proved successful on some taxpayers, he said.

http://www.fanabc.com/english/index.php/component/k2/item/5615?Itemid=674

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KEFI expects Ethiopia financing deal by June

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KEFI expects Ethiopia financing deal by JuneAddis Ababa, April 11, 2016  –
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Gold group KEFI Minerals PLC (LON: KEFI) anticipates presenting its financing plan for the Tulu Kapi mine in Ethiopia to shareholders at the AGM in June.
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The gold group said a package of around US$65 million senior secured debt, US$15mln overrun facility, US$40mln gold finance plus a 100,000 oz hedge facility was under discussion.

Equity finance will add a further US$25mln including US$20mn from the Ethiopian government.

Capital expenditure for the mine is estimated at US$145mln, with production schedule to start from the end of next year at a rate of 115,000 oz annually at an all in sustaining cost of US$742 per oz.

Adding an underground operation would boost output to 150,000 oz per year and start after a chunk of the development finance has been paid down.

Elsewhere, KEFI is taking to regulators in Saudi Arabia over its licence application for Jibal Qutman.

The equity capital requirements for the heap leach operation will be less than US$5 million for KEFI’s 40% share, based on a capital expenditure of under US$40 million and approximately 75% being provided by project finance.

Harry Adams, executive chairman said solid progress had been made over the last quarter in Ethiopia

“Projected cash flows are robust, with the first three years of open pit production targeted to repay all debts, commence the payment of dividends and fund growth in the highly prospective Arabian-Nubian Shield.

“We look forward to soon finalizing the Project’s integrated syndication package and proceeding with development.”

http://www.fanabc.com/english/index.php/component/k2/item/5612?Itemid=674

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Addis to Have Five New Stadiums, Blindfolded

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Each of four stadiums is expected to cost on average 300 million, with one in Akaki estimated at 1.6 billion Birr

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Addis Abeba is to launch construction for five more stadiums, adding to the two existing ones – Yidnekachew Tessema and Abebe Bikila stadiums, without any feasibility study.

Four of the five are zonal stadiums which will be constructed in the districts of Yeka, Nifas Silk Lafto, Bole and Gullele . The zonal stadiums have a prototype design of 40,000 sq m, 70,000 sq m and 110,000 sq m, in their order, whereas the plot for Gullele is not yet secured. Each of the stadiums has a carrying capacity of 30,000 people.

Despite the approach being taken by the Addis Abeba City Youth & Sport Bureau – fitting the zonal stadiums to space availed by the districts, a study done by Ministry of Urban Development & Housing, prescribes that a standard zonal stadium should rest on 113,080 sq m, discounting additional space required for parking and other purposes.

Securing the land had been the priority of the Bureau since its establishment in 2015, following the federal restructuring of the new Ministry of Sport & Youth. In its six month life span, the new office has identified and agreed on the location of plots in the Bole, Yeka and Gullele districts.

The location in Bole will be situated next to Balderas, while the ones in Gullele and Yeka will be built on plots near Kechene Medhanealem and Ferensay Legasion around the French Embassy.

The process of securing the land is well-advanced; in Nifas Silk Lafto, it necessitated relocating 24 private houses and 54 government-owned entities. The site in Bole has already reached the stage where contractors have been invited to bid for the work and 20 companies have shown interest.

“We are pushing a project that has lagged for the past five years,” Asnake Muleta, deputy head of the Bureau told Fortune. “We’re undertaking the project on a fast track implementation system by escaping some bureaucratic procedures using shortcuts.” Going into construction without any feasibility study is one of the shortcuts considered.

There is a huge demand from the public, so we go for it, said Asenake. The design was, however, shelved until the new bureau decided to revamp it.

“The city’s Sport Commission then did not have the capacity to carry out such projects,” the deputy head said.

Sources close to the case, however, find the explanation for the delay in budget shortage and lack of feasibility studies carried out before design work proceeds. The deputy head of the bureau does not deny the situation.

“We tried to bridge the gap,” Asnake said. “The price quote for the study by Addis Abeba University was deemed too high so we dropped it.”

However, the eyes of experience can clearly see a failed project even before it starts.

“Whether it is solely for profit or social causes, a feasibility study is crucial in such cases,” said an expert in an investment consulting company who wished to remain unnamed. “Such acts always end in dismay as the sustainability of projects done without feasibility studies is compromised,” he added.

According to recent reports released by the association of contractors, the construction sector of the country has also identified lack of feasibility studies in the construction designing stage as a fertile ground for corruption and low quality outputs.

“We have only done one design,” Begziabher Alebel, (PhD), general manager of Ultimate Plan told Fortune. “The other three must have been adapted. Such projects must take into consideration profitability of the stadium for the sake of at least sustainability,” Begziabhe continued.

He was surprised that a one-size-fits-all approach was adopted despite the difference in size and population of the different districts.

Designed by Yohannes Abay consultancy, the fifth project, Akaki-Kality Stadium has a carrying capacity 60,000, double that of the zonal stadiums. If all goes as planned, the Akaki-Kality Stadium will be the biggest in the City. Currently, the largest and over seven decades old Yidnekachew Tessema Stadium a.k.a. Addis Abeba Stadium, has the capacity to accommodate 35,000 only.

The Akaki stadium is a project that has been dragging since 2013. Teklebirhan Ambaye Construction (TACON) was awarded construction work in the same year for 1.3 billion Br, only to stall before a significant chunk of the work had been done.

“We have waited for almost one year to finally hear the cancellation of the bid,” source from TACON told Fortune. “Even then, we have been given no clear reason for the cancellation.”

Now, once again the issue of finance is far from being resolved.

“Each of the four stadiums is estimated to cost between 300 million Br to half a billion Birr,” deputy head of the Bureau told Fortune.

However, an architect involved in the process told Fortune that the price for the zonal stadium is too exaggerated and it will probably cost 300 million Br each.

Only 230 million Br has been set aside for the Bureau’s overall capital projects for the current fiscal year.

http://addisfortune.net/articles/addis-to-have-five-new-stadiums-blindfolded/

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Jiangsu Sunshine Group to invest $350mn to set up textile plant in Ethiopia

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YarnsandFibers News Bureau, 2016-04-09

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Jiangsu Sunshine Group to invest $350mn to set up textile plant in Ethiopia Chinese conglomerate Jiangsu Sunshine Group plans to make investment of $350 million to set up a textile plant in Ethiopia in a bid to boost the country’s textile industry as the textile industry is believed to be a bridge for economic development and making Ethiopia Africa’s textile industry hub.

The plant will be located in the industrial park of the city of Adama which will produce 10 million meters of worsted wool fabrics and 1.5 million finished parts.

The project has been announced as Ethiopia battles one of the worst droughts since the last in 1983.

In the recent years, Ethiopia has managed to attract several foreign companies operating in the textile and clothing sector including Turkish textile giant Akber and Taiwanese George Shoe Corporation.

Jiangsu Sunshine Group’s textile business has annual production capacity of 3.5 million sets of high-grade men’s suits and women’s wear, 35 million meters of superfine worsted wool Fabrics.

It is also the world’s largest wool textile manufacturer and high-grade apparel production base, and the only enterprise in China Textile industry who won honorable title of ‘World Brand’ and ‘Garment Export Inspection Exemption’.

http://www.yarnsandfibers.com/news/textile-news/jiangsu-sunshine-group-invest-350mn-set-textile-plant-ethiopia#.Vw0yFvkrK70

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Ministry, Chinese company to collaborate in livestock sector

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Ministry, Chinese company to collaborate in livestock sectorAddis Ababa, April 8, 2016  –
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The Ministry of Livestock and Fisheries and Chinese CGCOC Group have signed a Memorandum of Understanding (MoU) that helps to develop and improve the livestock sector.
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The MoU was signed by State Minister of Livestock and Fisheries Misrak Mekonnen and CGCOC Group Assistant President Gao Lei.

During the signing ceremony, Misrak said the ministry is implementing Livestock Master Plan and aims to strengthen the livestock sector and boost export-oriented production.

Livestock husbandry plays a vital role in agriculture development and has been the pillar industry in economic development in the country, contributing 16 percent of the total GDP, according to the state minister.

The ministry has been working with CGCOC since the beginning of this year, Misrak said, adding that a joint team is set to develop capacity building, improving the inspection and quarantine system, quality management, veterinary service, disease presentation and animal product traceability system.

Assistant President Gao Lei said on his part the MoU targets to work with Ethiopia in quarantine system, to develop the husbandry livestock industry zone that helps to export high value added product.

He said Chinese investors are getting engage in livestock since Ethiopia has large livestock population in Africa.

It would also contribute more advanced technology transfer and agriculture investment from China, Lei noted.

http://www.fanabc.com/english/index.php/component/k2/item/5596?Itemid=674

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Improved access for Ethiopia: opening the Addis Ababa-Djibouti line

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Soon after unveiling the first urban light railway in sub-¬Saharan Africa, Ethiopia accelerated the progress of its flagship project, a 700 km railway linking its capital Addis Ababa to the port of Djibouti. Due to become fully operational later this year, the link aims to provide landlocked Ethiopia with improved railroad access to the sea and is anticipated to have a dramatic impact on the country’s socio-economic development.

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Ethiopia rail

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In 2015, during the first ever visit of a US president to Ethiopia, Barak Obama described Africa as the continent with the greatest potential to become “the next center of global economic growth”.

Only two months later, Ethiopia unveiled the first phase of its $475m Addis Ababa Light Rail, the first electrified light rail transit system to open in sub-Saharan Africa.

The momentous launch however came at a time when Ethiopia is battling its worst drought in half a century. The drought, brought about by the El Nino phenomenon in June 2015, has caused widespread famine, wreaking havoc across the nation of 96 million, where the population still relies predominantly on agriculture. The deepening crisis prompted fears of “history repeating itself”, recalling the devastating famine that hit Ethiopia during the 1970s and 80s.

In response, the Ethiopian Government decided that the country’s first mega railway project – the Addis Ababa to Djibouti line – would begin its operations ahead of schedule to deliver essential food aid to the worst drought-stricken areas.

Successfully carrying its first freight on 20 November 2015 along the partially completed line to Merebe Mermersa, 112km south of Addis Ababa, the railway solidified its flagship status and strengthened hopes in its potential for future socio-economic development.
With its official opening expected in early 2016, the railway, it is hoped, will slash transit times for both freight and passengers, attract further foreign investment and ultimately catapult Ethiopia to a competitive force in the global marketplace.

Addis Ababa – Djibouti Line: an exciting development

Ethiopia has long suffered from a lack of railway infrastructure across its territory. Its first meter-gauge railway, built by the French in the 1890s, has over time deteriorated due to lack of maintenance, cutting Ethiopia’s direct access to the port of Djibouti. Today, Ethiopia still accounts for around 70% of the trade through the port, but all freight transportation relies on trucking.

Now, after a three-year long construction process, the nation’s biggest railway infrastructure project is on track to officially begin operating this year.

“Travel times between the two terminus points will be cut from several days to less than ten hours.”

The 700 km electrified railway runs parallel to the now abandoned Ethio-Djibouti railway. Once complete, the $4bn line will see passenger trains reaching speeds of 160km/h, while 3,000t gross capacity freight trains will run at 120km/h. The line is double-track for the first 115km, from Addis Ababa to Adama, while the remaining 600km to Djibouti is a single track rail.

As a result, travel times between the two terminus points will be cut from several days to less than ten hours. Its capabilities were demonstrated in November, when the first freight, hauled by a diesel locomotive, delivered more than 3,000t of grain from Djibouti port to drought-affected areas during a 16-hour journey.

Gaining the trust of foreign investors

“We are a niche market in a good geographical position,” said CEO of the Ethiopian Railways Corporation (ERC) Dr Getachew Betru in an interview with The Worldfolio. “This is why the railway mode of transport is called a game changer.”

“A few years ago nobody took us seriously. […] The reputation of Ethiopia with the drought, war and famine did not play in our favor. We had to articulate our case very carefully, addressing the issues of bankability,” he said.

But in 2013, ERC managed to secure $3bn in loans from the Exim Bank of China, with $2.4bn going to the Ethiopian section of the railway and the balance to be spent in Djibouti.

A big advantage playing in ERC favour was seeking foreign investment only after they had completed 30% of the project, at which point “people started taking them very seriously”, as Betru explains. Costs were further slashed due to ERC sourcing local resources such as the cement, sand and labour. The successful delivery of the Addis Ababa Light Rail project with no cost or time overruns served as a further guarantor to their credibility.

Two Chinese state-owned companies have been involved in building the new standard-gauge line: the 320 km stretch from Addis Ababa to Mieso is being built by the China Railway Group, while the 339 km section from Mieso to the Djibouti border is being built by the China Civil Engineering Construction Corporation.

As of January 2016, the construction was on track and over 90% of the project was complete.

Game-changer: the economic impact on Ethiopia

The Addis Ababa – Djibouti line falls within the Ethiopian government’s ambitions to transform the Horn of Africa nation into a middle-income country by 2025. After an average economic growth of more than 10% of GDP over the past decade, one of its aims is to have 5,000km of new-built rail lines working across the country by 2020.

“It is difficult to think of rapid economic development, industrialization and international competitiveness without efficient, high quality and modern transport infrastructure,” said Minister Workineh Gebeyehu at the 8th Ethio-Djibouti Railway Project Joint Commission meeting.

“It is difficult to think of rapid economic development, industrialization and international competitiveness without efficient, high quality and modern transport infrastructure.”

As such, the new railway, earmarked as one of Knight Frank’s top global infrastructure projects, will undoubtedly leave its biggest mark along the Djibouti-Dakar corridor, as it can influence all businesses within a 60km range of the corridor.

Firstly, reduced transit times will mean that consignment will be delivered in ten hours, with up to 3,000t of cargo transported in one go. This will also allow the landside port areas to be cleared quickly and avoid congestion.

Ethiopia will also be able to shift its attention to high-value imports, as the new transport corridor will be attractive to producers of perishables such as flowers, fruit and vegetables. In this context, Betru hinted at the possibility of branching out into business with the Middle East.

“By all standards, the Ethio-Djibouti project will change the way things work for any investor, particularly one who wants to get involved in manufacturing,” he said. “The transportation cost will be low and it will be very reliable.”

In ten years’ time, a $7bn Djibouti Free Trade Zone currently being developed by China Merchants Holding will provide a new profit opportunity for Ethiopia, along with a new Doraleh Container Terminal operated by DP World and the establishment of a Turkish processing zone to represent Turkey’s “major point of entry to Africa”, as described by Djibouti’s finance minister Ilyas Dawaleh.

Preparing future generations of rail professionals

However, the nation’s ambitions stretch beyond just this railway project. Ethiopia also keeps a close eye on its green credentials and its focus on the rapid transition from road to rail falls within this common international goal.

In April last year, Ethiopia put forward three Nationally Appropriate Mitigation Actions (NAMAs), a tool developed under the UN Framework Convention on Climate Change (UNFCCC) for developing countries to contribute towards global climate change efforts while moving forwards with their development in a sustainable manner.

The first NAMA proposes the establishment of a Railway Academy of Ethiopia for skilled railroad professionals, where people would be trained as managers, engineers, technicians, and researchers.
“Hopefully, by the end of 2020 all the railways will be made in Ethiopia by Ethiopians,” Betru said. “My generation is trying, but it is the next generation, the youth, that will transform Africa, and we will see the real impact on education, health and economy in the 2020s.”
The second transformational NAMA is the launch of a transit-oriented development (TOD) along the light rail. The pilot project, at an estimated cost of $8.9m, would look at removing barriers, increasing safety and accessibility, stimulating ridership and lowering the price of transportation for all.

A $150,000 vulnerability assessment for the railroad, with a particular focus on climate change adaptation was also put forward.
Nevertheless, the biggest transformational change, at least in the near future, will no doubt be delivered via the Addis Ababa – Djibouti line, an integral part of the “African Renaissance” as described as Betru.

“The creation of urban centers and integration of their resources through good transportation linkage will enhance the industrialization of Ethiopia and elevate its society to a better socio-economic environment.”

http://www.railway-technology.com/features/featureimproved-access-for-ethiopia-opening-the-addis-ababa-djibouti-line-4836968/

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Turkish Visor to invest $3 bln in Ethiopia’s telecom sector

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Turkish Visor to invest $3 bln in Ethiopia’s telecom sectorAddis Ababa, April 7, 2016  –
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The Turkish based Visor Company has expressed its desire to engage in Ethiopia’s telecom sector at a cost of 3 billion US dollars.
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President Mulatu Teshome has held discussion with a delegation led by Gokhan Arasli, Company CEO, here at the National Palace yesterday.

Arsali on the occasion told the President that his company is keen to invest 3 billion US dollars in Ethiopia’s telecom sector.

According to the CEO, the company is planning to discuss on the issues with Ethio telecom shortly.

President Mulatu Teshome on his part said Ethiopia’s five-year investment strategic plan aspires to broadly attract local and foreign direct investment (FDI) in the manufacturing industry in particular.

Visor could be advantageous if it engages in this sector in particular, the President indicated.

However, the Company could engage in a sector it believes is gainful as there are abundant investment alternatives in the country, the President indicated.

Visor Company is known for investing in construction, agro-processing and telecom sectors in 24 countries, including Italy, Russia, China, Haiti and Jamaica, according to information obtained the President’s office.

http://www.fanabc.com/english/index.php/component/k2/item/5578?Itemid=674

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The next generation of billionaires from Africa will be farmers

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The next generation of billionaires from Africa will be farmersAddis Ababa, April 6, 2016  –
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Akinwumi Adesina, President of African Development Bank (AfDB), believes that farming will soon be producing more millionaires and billionaires than any other sector in Africa.
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Adesina, who previously served as Nigeria’s Minister of Agriculture and Rural Development, was named Forbes African of the Year in December 2013 for his reforms to his country’s farming sector, according to a BBC report.

And most business leaders across the continent agree with Adesina, that farming could be an under exploited gold mine. Successful businessman, lawyer and parliamentary aspirant Victor Ogeto Swanya, says that “once Kenyans begin embracing modern methods of farming, then they will realize that there is a lot of potential in the field”.

Swanya has a number of productive greenhouses at his home in Kisii.

His sentiments are shared by Danish whiz-kid Kresten Buch, who has had great success in technology investments around the globe.

“The one thing most people don’t realize is that farming has come a long way, as a practice. If one particularly adopts modern techniques, then farming can be very profitable,” Buch once told this reporter. Buch hopes to start a properly-mechanised farm in Africa.

And those whose minds have been opened are already reaping fruits. The former milk-hawking couple of Susan Muturi and Njoroge Muturi, recently announced that they will be setting up a Sh50m ultra-modern dairy facility.

But the duo, who own the Tassells Dairy Farm in Ruiru, did not have the millions they are talking about now when the venture started 11 years ago.

Njoroge worked as a herdsboy for a farmer in Githunguri, and was later fired after a disagreement with his employer. By the time he was leaving, he had enough money to buy two cows, and was lucky enough that his new landlord, in Kiserian, allowed him to raise them in his compound.

His enterprising discipline saw him buy a new cow every time he had saved enough money, from his salary and milk sales. He met his wife, Susan, while hawking milk in town, and as fate would have it, she was also interested in dairy farming. Through the internet, they managed to adopt proper husbandry techniques, raising their herd to 400 dairy cows, which yield 6,000 and 12,000 litres of milk per day.

The enterprise is run on a two-acre farm, unlike the Muturis, Caleb Karuga had an enviable job, in the media, which he hoped to move away from. He at one time thought of quiting, but the thought that he would have to forfeit Sh1.5m in benefits saw him hold on. Luckily, he was retrenched, alongside tens others, as the media house he worked for restructured.

He went on to lease one acre piece of land in central Kenya and started poultry farming. Today, he operates three farms where he raises thousands of indigenous chicken, quails, guinea fowl. He also grows butternut, strawberry, sweet potatoes and sunflower.

Minister Adenisa believes Africa will be at a better place if the youth to see agriculture as a business, noting that, major local and international investors are now investing in agriculture.

“The number of seed companies alone has risen dramatically and the banks are lending to the sector more than ever before,” he said.

But farming, like every other rewarding career, is not a path plated with diamonds-It is a hard job. Luckily, for those who have a goal, and are willing to put in more than their fair share of tough work, the results soon become evident.

http://www.fanabc.com/english/index.php/component/k2/item/5569?Itemid=674

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Ethiopia joins African Trade Insurance

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Ethiopia joins African Trade InsuranceAddis Ababa, April 6, 2016  –
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The House of People’s Representatives (HPR) has yesterday ratified the draft bill which allows Ethiopia to join the African Trade Insurance Agency (ATIA).
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Genet Taddese, Chairperson of HPR’s Budget and Finance Affairs Standing Committee said joining ATIA enables to offer political and trade credit risk insurance services for investors as well as to attract foreign direct investment (FDI).

The Agency won’t affect Ethiopian insurance companies as it doesn’t offer similar service as well as violate the financial regulations stated by the National Bank of Ethiopia, she said.

The African Development Bank (AfDB) provided 7.5 million US dollars loan for Ethiopia to join African Trade Insurance Agency and to buy a share in the agency.

With the stated amount, Ethiopia can buy 75 shares and become a shareholder in ATIA.

Benin, Burundi, DRC, Kenya, Madagascar, Malawi, Rwanda, Tanzania, Uganda and Zambia are shareholder in ATIA.

ATI was launched in 2001 with the financial and technical support of the World Bank and the backing of seven African countries.

Since 2003, ATI supported over 17 billion US dollars worth of trade and investments across the continent.

The African Development Bank recently joined as shareholder and partner by funding countries to join ATI.

http://www.fanabc.com/english/index.php/component/k2/item/5563?Itemid=674

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Regional integration said key for dev’t of landlocked African nations

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Regional integration said key for dev’t of landlocked African nationsAddis Ababa, April 16, 2016  –
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Regional integration and cooperation is important for the development of landlocked developing countries through improved connectivity, enhanced competitiveness and trading capacity, market expansion and upgrading of value chains, says United Nations Under-Secretary-General, Gyan Chandra Acharya.
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Acharya, who’s also the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (LLDCs), told participants to a side event during the Economic Commission for Africa’s inaugural African Development Week that it’s highly important for the continent to develop a legal framework for improved transit transport and trade facilitation, adding this would greatly reduce high trade costs.

The side event was held under the title: “Enhancing Africa’s trade potential: The key role of trade and transport facilitation legal instruments.”

“While the African continent has made very commendable strides in implementing regional and sub-regional agreements, it is equally important to implement the international agreements,” said Acharya.

Some of the key legal instruments that offer legal and regulatory framework to facilitate transit transport and trade facilitation at international level include the WTO Trade Facilitation Agreement, the Revised Kyoto Customs Convention and the International Convention on the Harmonization of Frontier Controls of Goods.

“Full implementation of the legal instruments can generate substantial revenue for governments and simultaneously create the conditions to advance national and regional efforts toward achievement of the Sustainable Development Goals and aspirations of the Agenda 2063,” said Acharya.

Africa is home to half of the 32 landlocked developing countries found globally. The LLDCs are hugely constrained by their geography, including remoteness from markets and lack of direct territorial access to the sea ports resulting in their inability to fully harness their full potentials.

“They therefore require very strong partnerships with neighboring countries and other countries globally to assist with special measures and support that could assist them to end their marginalization in the international trading system and promote inclusive and sustainable development,” the Under Secretary General said.

He said addressing the trade-related challenges of the LLDCs requires a multi-dimensional approach from building physical infrastructure to reducing the trade costs; addressing other supply-side constraints in order to increase the LLDCs’ trade competitiveness; improving the market access for their products; and enhancing structural transformation in order to help diversify their product and markets.

He said his office will work with all Member States to support the achievement of a legal framework conducive to deepened regional integration, facilitation of trade and improved trade competitiveness of African countries, in particular the LLDCs in international trade.

This, Acharya said, can help the land locked countries achieve a sustainable and inclusive economic growth that delivers decent jobs, accelerates poverty reduction and ensures no-one is left behind in the global development process.

Fatima Haram Acyl, Commissioner for Trade and Industry at the African Union Commission, urged member states to ratify the Trade and Transport Facilitation Agreement.

She said sub-Saharan Africa lags significantly behind other regions in facilitating trade hence ambitious customs reforms and trade facilitation programmes currently in the works on the continent.

“Trade facilitation is an African trade priority at the continental, regional and national level,” she told high level participants in the meeting.

http://www.fanabc.com/english/index.php/component/k2/item/5560?Itemid=674

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Ethiopia, Somaliland sign accord to boost use of Berbera port

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Ethiopia, Somaliland sign accord to boost use of Berbera portAddis Ababa, April 4, 2016  –
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Ethiopia signed a deal to boost trade through Somaliland’s Berbera port amid congestion at a facility in neighboring Djibouti, officials said.
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Tariffs have been revised and a committee established to manage joint operations as part of the agreement signed on March 31, Sharmarke Jama, an economy and trade adviser for the foreign ministry of Somaliland, said on Monday.

The committee will work on the “smooth implementation of the bilateral agreement and for improved facilitation of transit trade along the corridor,” he said in an e-mailed response to questions.

Ethiopia wanted 30 percent of its trade to go via Berbera by July last year, according to a five-year growth plan published in 2010. As much as 97 percent of shipments are still going through Djibouti because of problems with the capacity and condition of Berbera’s port, the poor state of roads to Ethiopia, said Ethiopia’s Transport Minister Workneh Gebeyehu.

“Now we have really negotiated the issue and decided to go very fast to use Berbera port,” he said by phone. “The only thing that is left is the operational issues.”

It isn’t clear how many ships carrying Ethiopian cargo Berbera will be able to deal with, although there is a plan for coal imports to go through the port, Workneh said. Port Sudan is already receiving fertilizer for northern areas of Ethiopia, he said.

The Berbera Port Authority held discussions with U.S. Agency for International Development officials about aid imports, Jama said. The facility delivered 40,000 metric tons of wheat in February through Berbera for the UN World Food Programme to distribute to Ethiopians, according to the UN.

Somaliland’s government has shortlisted Bollore SA, P&O, which is owned by DP World, MSC Group’s Terminal Investment Ltd, and Prime Africa for a Berbera renovation project, Jama said.

http://www.fanabc.com/english/index.php/component/k2/item/5553?Itemid=674

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Ethiopian Trading Businesses Corporation established with over 3.8 bln birr capital

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Ethiopian Trading Businesses Corporation established with over 3.8 bln birr capitalAddis Ababa, April 4, 2016  –
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Ethiopian Trading Businesses Corporation (ETBC) was established with more than 3.8 billion birr capital after the merger of four public enterprises.
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The establishment of the Corporation helps to stabilize local market, carry out integrated business activities, put in place accountability and to efficiently exploit the capacity of the enterprises.

Corporation’s Deputy Chief Executive Officer (CEO) Mengistu Kebede, told ENA that the Corporation is mandated to distribute and supply crops, vegetables and fruits to domestic and overseas markets.

The merger helps the enterprises to contribute their share for the economic growth of the country, he added.

The Ethiopian Trading Enterprise (Alle Bejimal), Ethiopian Grain Trade Enterprise (EGTE), Ethiopian Procurement Service Enterprise and Ethiopian Fruit and Vegetables Marketing Share Company (Etfruit) were the enterprises merged to form ETBC.

http://www.fanabc.com/english/index.php/component/k2/item/5545?Itemid=674

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European Development Fund allocates €745 mln to Ethiopia’s nat’l program

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European Development Fund allocates €745 mln to Ethiopia’s nat’l programAddis Ababa, April 2, 2016  –
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A delegation from the European Parliament has assured EU’s commitment to further strengthen cooperation with Ethiopia and Africa.
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EU’s pledge for increased future cooperation came during Friday’s press briefing given by the visiting delegation in Addis Ababa.

During his briefing, the President of the Progressive Alliance of Socialists and Democrats at EU parliament, Gianni Pittella said Ethiopia is a key country in the region.

Close linkage between Europe and Africa is important for the betterment of future relations between the Union and African countries, according to the president.

In its earlier discussion with Prime Minister Hailemariam Dessalegn, the parliamentary group shared views on the necessity to reinforce democracy, freedom and pluralism.

The delegation also reflected on issues of terrorism, poverty, climate change, immigration and other possible areas of collaboration.

Pittella said “We can win if we act together”, and jointly rectify some of the mistakes made in pervious approaches to Africa.

He also talked about the necessity of building political partnership with Africa, and Ethiopia as well.

The leader of the EU parliament delegation stressed that the EU Parliament is strongly committed to further expand and deepen its cooperation in order to assist Ethiopia’s efforts to become a middle income country by 2025.

The majority of EU development funding for Ethiopia is reportedly financed by the European Development Fund with the objectives of increasing resilience, accompanying reforms and promoting sustained economic growth.

The 11th European Development Fund allocated an initial amount of 745 million Euros to the Ethiopian national program until 2020. It focuses on sustainable agriculture and food security, mainly targeting vulnerable population groups.

Under the previous cycle of funding from 2009-2013, the EU dedicated 674 million Euros to programs in Ethiopia.

One multi-donor program project with an EU contribution of 100 million Euros, the Productive Safety Net Program (PSNP), is the largest program of its kind in Sub-Saharan Africa.

It was indicated that another group of EU Parliament members is expected to visit Ethiopia.

http://www.fanabc.com/english/index.php/component/k2/item/5542?Itemid=674

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Corporation importing 800,000 metric tons of fertilizer

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Corporation importing 800,000 metric tons of fertilizerAddis Ababa, April 2, 2016  –
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The newly established Ethiopian Agricultural Works Corporation (EAWC) is importing 800,000 metric tons of fertilizer from abroad.
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Kefyalew Berhanu, EAWC Chief Executive Officer, told ENA that half of the total amount has arrived at home. The remaining will also enter into the country soon, he noted.

Kefyalew added distribution of 350,000 quintals of select seed is underway so as to increase productivity of farmers.

Ethiopian Agricultural Works Corporation was established with 2.4 billion birr capital.

It was formed by a merger of the Ethiopian Seed, Agricultural Inputs Supply, Agricultural Mechanization Service, Agricultural Equipment and Technical Service as well as Natural Gum Processing and Marketing enterprises.

http://www.fanabc.com/english/index.php/component/k2/item/5541?Itemid=67

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AAWSA undertaking 2bn birr expansion project

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AAWSA undertaking 2bn birr expansion projectAddis Ababa, April 2, 2016  –
The Addis Ababa Water and Sewerage Authority (AAWSA) is undertaking expansion project at its Kality wastewater treatment plant at a cost of 2 billion birr.
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Adugna Tulema, head of the project told ENA that about 30 percent of the project has so far been completed.

Upon completion within eight months, the expansion project boosts wastewater treatment capacity of the city by more than 75 percent, he said.

AAWSA Public Relations Head, Etsegenet Tesfaye, on her part said the project increases the city’s water treatment capacity to 100, 000 from 7, 500 cubic meters now.

In a related development, the installation of a 150 km of sewer line is underway across the metropolis, she added.

The sewer line being built by the Belgian Dennis Company benefits about 2.2 million dwellers of the city for the coming 50 years, she added.

http://www.fanabc.com/english/index.php/component/k2/item/5540?Itemid=674

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Ministry to begin online business registration, licensing cross nation

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Ministry to begin online business registration, licensing cross nationAddis Ababa, April 1, 2016  –
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The Ministry of Trade (MoT) is set to begin online business registration and licensing services to deal with good governance problems being observed in the sector.
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The new and modern system helps the business community to get the service right where they are.

It has already been implemented in Dire Dawa and Addis Ababa city administrations.

Tigray, SNNP, Amhara and Oromia regional states are expected to get the service this Ethiopian fiscal year.

The government is undertaking various reform programs beginning from amendment of commercial law to tackle problems of good governance, Ased Ziad, State Minister of Trade, told ENA.

The ministry also prepared an action plan to put in place the system in Gambella, Benishangul Gumuz, Ethiopian Somali, Harari and Afar regional states.

http://www.fanabc.com/english/index.php/component/k2/item/5532?Itemid=674

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Court Orders MIDROC to Pay Half a Billion Birr

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Two court cases involving four state enterprises, brought against MIDROC subsidiary Horizon Plantations Plc, closed with the court ordering Horizon to effect immediate payment of almost half a billion Birr to the Ministry of Public Enterprise.

Gojeb Agricultural Development, Horizon Addis Tyre, Limmu Coffee Farm and Bebeka Coffee estates were all transferred to the MIDROC Group with advance payments and a set installment payment schedule.

Horizon Plantations, the plaintiff, failed to follow the schedule set for payment. The Company admitted the failure which it claims is a result of financial crisis it faced recently.  Horizon asked to be granted a six-month grace period in which it promised to rectify what went wrong in all cases.

The 8th Bench of the High Court in the past months examined the case and uniformly denied the request in the two cases. The total amount MIDROC is expected to pay adds up to 433,571,241 Birr on which interest will be calculated if there is further delay or failure.

http://addisfortune.net/articles/court-orders-midroc-to-pay-half-a-billion-birr/

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Ethiopia, Cote d’Ivoire sign series of agreements

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Ethiopia, Cote d'Ivoire sign series of agreementsAddis Ababa, March 31, 2016  –
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Minister of Foreign Affairs of Ethiopia, Dr. Tedros Adhanom and his Ivorian counterpart, Dr. Abdallah Toikeusse held bilateral consultations today at the office of the Ministry of Foreign Affairs of Ivory Coast.
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In the event the two sides signed four agreements on diplomatic waiver, health, general cooperation and a Memorandum of Understanding between IARE and CNRA.

Dr. Tedros said the meeting is historical as it comes on the 50th anniversary of the establishment of bilateral relations between the two countries, adding that many countries in the African continent can learn much from Ivory Coast, particularly with regards to the management of agriculture.

Ivorian Foreign Minister Dr. Abdallah Toikeusse also said the visit and the signing of agreements marks the concordance of vision between the two countries.

He noted the Ivorian and Ethiopian private sector could work together for the overall development of the two nations.

He added that his country could learn from Ethiopia’s experience of livestock development.

http://www.fanabc.com/english/index.php/component/k2/item/5524?Itemid=674

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Ethiopia launches 2nd acidic soil management project

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Ethiopia launches 2nd acidic soil management projectAddis Ababa, March 31, 2016  –
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Ethiopia is going to implement the second phase of acid soil management project that enables the country to rehabilitate acid soils and enhance agricultural yield.
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This was disclosed at a workshop that opened today to launch the second project to be carried out from 2016 to 2018.

Soil Fertility Directorate Representative with the Ministry of Agriculture and Natural Resources, Tefera Solomon said the first phase project implemented in Oromia regional state from 2014 until 2016 was very encouraging to do further research on more pronounced scale in terms magnitude and type of scope.

Upon the completion of the project in Oromia regional state, a project of new dimension that has laid down a foundation for the mineral and agricultural sectors of Ethiopia to implement a cooperative research project with Finland was launched, he added.

In this regard, significant outputs that enhance soil fertility by applying carbonate mineral resources and significant increase in productivity of wheat were documented, it was indicated.

According to him, there is a need to bring change in the management of soil so as to make positive impacts.

There are about six million hectares of strongly acidic and 16 million hectares of land moderately acidic soils, which in general account for 28 percent of the total land, Tefera revealed.

He said the management of acidic soil in Ethiopia is seen as an integral aspect of production sustainability and the major focus of boosting the country’s agricultural economy.

Geological Survey of Ethiopia Director-General, Masresha Gebreselassie pointed out that the major challenge hindering agricultural productivity is soil degradation where about 40 percent of the country’s land mass is covered by acidic soil.

This second phase project will be implemented in Oromia, Amhara, Tigray and Southern Nations Nationalities and Peoples states by expanding the scope based on the results of the first phase project, it was indicated.

http://www.fanabc.com/english/index.php/component/k2/item/5523?Itemid=67

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Ethiopia, Korea sign MoU to cooperate on transportation sector

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Ethiopia, Korea sign MoU to cooperate on transportation sectorAddis Ababa, March 31, 2016  –
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The Ministry of Transport of Ethiopia and Korea Expressway Corporation have signed a memorandum of understanding (MoU) to cooperate in the transportation sector.
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The signing ceremony of the MoU between the two sides took place yesterday in Seoul, South Korea.

Shiferaw Jarso, Ambassador of Ethiopia to Korea, singed the MoU on behalf of the Ethiopian government.

Ambassador Shiferaw on the occasion said the agreement is expected to help Koreans to transfer all aspects of their knowledge on transportation to the Ethiopian side.

He added that Ethiopia has just started to construct expressway and it is the right time to learn Korean experiences.

Korea Expressway Corporation also mentioned that they are ready to support Ethiopia and to work together with the Ethiopian counterparts.

http://www.fanabc.com/english/index.php/component/k2/item/5520?Itemid=674

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Gibe III generating 500 MW of electricity into nat’l grid

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Gibe III generating 500 MW of electricity into nat’l gridAddis Ababa, March 30, 2016  –
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Ethiopia’s second biggest hydroelectric power plant, the 1, 870 MW Gibe III Hydro project, which was commissioned this year, has started test trials and is generating 500 MW of electricity into the national grid, an official has said.
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This brings Ethiopia one step closer to solving power shortages, which the government has blamed on drought conditions.

The biggest hydro-electric generator by far will be the 6,000 MW plant on the Grand Ethiopian Renaissance Dam (GERD) on the Blue Nile river where construction began in April 2011 and is halfway complete, according to the Ethiopian government.

Engineer Azeb Asnake, CEO of the Ethiopian Electric Power (EEP), said five of Gibe III’s ten turbines have started generating power.

The ten turbines each have generating capacity of 187MW, although current drought conditions means the five operational turbines aren’t producing their maximum capacity.

The Ethiopian government’s ambitious five-year development plan called the second Growth and Transformation Plan (GTP-II) 2015-2020 envisages increasing electricity generation capacity from the current 4, 400 MW to 17 300 MW to power the country’s economic growth.

Most of this will be generated by hydro plants, though geothermal, solar, waste and wind power are also part of the mix.

http://www.fanabc.com/english/index.php/component/k2/item/5514?Itemid=674

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EEP to undertake expansion at power stations to avoid power cut

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EEP to undertake expansion at power stations to avoid power cutAddis Ababa, March 30, 2016  –
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The Ethiopian Electric Power (EEP) is set to execute capacity improvement and expansion project at power distribution stations so as to avoid power cut.
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EEC signed an agreement with the Indian LARSEN & TOUBRO LIMITED for the implementation of the project at a cost of 1.2 billion birr.

Once it goes operational, the project helps to reliably supply power to industries and railway lines.

The expansion project includes boosting the Bishoftu power station’s capacity to 400KV. The capacity of Mojo, Ginchi and Dukem distribution centers will also be increased to 230 KV by the project.

Some 85 percent of the cost for the project will be financed by the loan secured from French Development Agency, while the balance will be covered by the government of Ethiopia.

Chief Executive Officer (CEO) of EEP, Engineer Azeb Asnake, said the project enables to provide sufficient power to industries and railway lines as the expansion will be carried out in close proximity to them.

The expansion project will also help to avoid power interruption, she added.

“I’m hopeful that LARSEN & TOUBRO LIMITED will execute the expansion project as per scheduled,” she added.

LARSEN & TOUBRO LIMITED Africa General Manager, Rahul Saka, pledged to use state of the art technology and finalize the project as per planned.

The expansion project will be finalized within two years, it was learnt.

http://www.fanabc.com/english/index.php/component/k2/item/5510?Itemid=674

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GERD opens door for realization of int’l water law principles: scholars

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GERD opens door for realization of int’l water law principles: scholarsAddis Ababa, March 30, 2016  –
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The construction of the Grand Ethiopian Renaissance Dam (GERD) has paved the way for the realization of principles of international water law among the Nile riparian countries, according to scholars.
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GERD, in its five-year journey, has passed through many ups and downs. Ethiopia did a lot and tired out to put in place the principle of fair share of the Nile water among the riparian countries.

Dr. Musa Mohammed, an International Water Law and Policy Advisor, had participated in the negotiation held for 8 years before 2010 representing Ethiopia to bring about cooperative framework agreement into effect among the countries.

Ahead of the commencement of the construction of the dam, the relationship between Ethiopia and Egypt was based on colonial treaties, Dr Musa says.

There was no a positive welcome from the side of Egypt when the foundation stone for the dam was laid. The then President, Mohammed Morsi, in a live TV broadcast, said his country will go to the extent of taking actions to daunt the construction of the dam.

Girma Balcha, who served as a diplomat at the Ethiopian Embassy in Cairo for six years, said the erroneous information provided for the people were the reasons for the unrest at the time.

The age-long snub of the riparian countries from the fair share of the water has required Ethiopia to do more for cooperation, Dr Musa said, adding Ethiopia’s move helped disagreements to settle down.

It was not easy to implement the recommendation of the International Panel of Experts on GERD until the meeting between President El Sisi of Egypt and Prime Minister Hailemariam Desalegn of Ethiopia in 2014 in Malabo, Equatorial Guinea, as Egypt came up with different idea.

After the meeting of the two leaders, changes have been observed. Last year, Ethiopia, Sudan and Egypt signed the declaration of principles to resolve their differences on the dam.

This is a big leap forward and shows that the principles of international water law are coming into effect on the Nile riparian countries, Dr Musa said.

Though it refused to acknowledge the cooperative framework agreement which was signed by six riparian countries and approved by three, Egypt has already signed on a document consisting of 6 principles of the cooperative framework agreement.

Although last year’s agreement was not binding, it has offered assurance for the continuation of the studies on the impact of the dam on the lower riparian countries.

President Sisi said the declaration of principles signed among the three countries is an indication of strong cooperation regarding the construction of the dam.

If activities continue in these conditions and once the dam is completed, the Nile waters and the dam will be an instrument for cooperation, nullifying distrust among the Nile riparian countries, the scholars said.

“This is the result of Ethiopia’s decades -long diplomatic efforts,” they added.

http://www.fanabc.com/english/index.php/component/k2/item/5512?Itemid=674

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Ethiopia’s agricultural sector in a period of historic transformation: ATA

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Ethiopia’s agricultural sector in a period of historic transformation: ATAAddis Ababa, March 29, 2016  –
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Ethiopia’s agricultural sector is in a period of historic transformation, as it shifts from being subsistence based to market oriented, and is employing modern techniques to make dramatic differences in its yields, practices and results.
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Khalid Bomba, CEO of the Agricultural Transformation Agency (ATA), said Ethiopia’s agriculture sector is indeed in a stage of transition and change.

ATA was formed at the beginning of GTP I to focus on more about transforming the agricultural sector- changing the dynamics of how the sector works so that it is not just producing more, but rather “How are we producing?” and “Are we producing sustainably?”, he said.

“Our primary role is to support the Ministry of Agriculture and other partners in effectively executing the specific issues within the Agricultural Transformation Agenda that we have all agreed are important for transformation,” he said.

We have been working during GTP I on 16 program areas with 84 deliverables. Each one of these 84 deliverables unlocks a particular issue, he said.

The first one is in the teff value chain. Teff is native to the country and it is one of the most important commodities for Ethiopia. It is grown by over 6.5 million farmers and it is the staple food of the country as well.

The yield of teff, when the GTP I began, was 1.2 tons per hectare. The ATA was asked to identify a technology that could increase the yield of farmers. Although many people were really worried that we were going to introduce biotechnology and GM approaches, what we found was that a very simple technology, which changed the way farmers grow teff, can increase their yield by about 70%-80%. This technology was essentially planting the teff seed in rows and reducing the amount of seed that farmers were using by 90%; so from 30-50 kilos of seeds per hectare down to 3-5 kilos instead.

In our first year of operations, only two farmers were willing to work with us. But last year we reached a milestone of 6.5 million farmers trained. Of those, nearly 2 million farmers are actually using the technology.

During the GTP I, what we have seen is over a 40% increase in the national yield of teff, from 1.2 tons per hectare to over 1.6 tons per hectare. Many individual farmers using the technology are actually achieving yields of 2.5 and 3 tons per hectare. This has been one of our most successful interventions, because it has directly affected the yield of over 2 million farmers and improved their incomes and their livelihoods.

The second example is in the fertilizer industry. Ethiopia had been using the same two types of fertilizer for 30 years. We did an analysis and came up with a new project called EthioSIS, which stands for Ethiopian Soil Information System.

This project has allowed us to map the soil fertility of the entire country’s agricultural lands using remote sensing and satellite technology, as well as collecting field samples from across the country.

In 2016, we will finish mapping the entire country. We have already finished mapping 65%-70% of the country and provided new fertilizer recommendations. So farmers are no longer just using the old fertilizers of DAP and urea, but they are now using NPS, and other fertilizers that include magnesium, calcium and sulphur.

The last one that I would mention is a project called Direct Seed Marketing. Ethiopia in the past has used its cooperative system to distribute seed and fertilizer to farmers. These cooperatives are essentially given directions from the government, through a very centralized process, for how much seed and how much fertilizer to distribute.

We made a recommendation to the government that by introducing a private sector element to seed distribution we could get better efficiency, better distribution of seeds, and ultimately lower prices for farmers. What started with only a handful of woredas, last year grew to over 400 private seed distributors in over 100 districts of the country working on seed distribution, something that the country has never had before.

Commenting on the small-scale irrigation (SSI) projects that the Ministry of Agriculture is implementing, he said this is the direction that we ultimately want to go across the whole country, to become less reliant on rain.

Irrigation is certainly one of the major ways of insuring that. What we have been working on together with the Ministry of Agriculture is the groundwater mapping; understanding how much water is under the soil, how deep it is, and how fast it recharges so that we don’t deplete it very quickly.

In addition to that, what we’re trying to do is to create a supply chain of irrigation pumps so that we are not just distributing pumps without anybody providing maintenance or spare parts. For example, we are training auto mechanics to also be able to maintain irrigation pumps, and training well drillers in local communities to go and drill these wells, instead of having international companies come and do this.

As regard to collaboration between the different stakeholders, Khalid said the engagement with investors has improved over time, but certainly, more can be done. The Ethiopian Investment Agency is now an Investment Commission that reports to the Prime Minister. That has been a very good and positive change, ensuring that there is one entity that is coordinating and supporting investors coming into the country.

That being said, the federal and regional level issues still have some additional challenges to be resolved. The one-stop shop that existed at the Ethiopian Investment Commission has to be strengthened. Some of the regulations and policies that the government is creating to support private sector investors also have to be streamlined. These are the things that the government is working on at the moment. The collaboration between different government partners has improved as well, but certainly more can be done.

When asked to highlight on the investment opportunities suitable for investors in the UK, he said, since I work in the agriculture sector, of course I am going to focus on agriculture as the opportunities that are probably best placed for UK investors.

I think one of the most important is on the sourcing side of the equation. For UK supermarkets to source fresh fruits and vegetables from Ethiopia, I think it’s a prime opportunity. But beyond fresh fruits and vegetables, there are also commodities such as the gluten-free teff that the UK market is becoming more informed about and which we can supply. So there is that kind of relationship that I think we can certainly strengthen.

But there are also opportunities for UK businesses to come to Ethiopia, similar to what Diageo & Pittards have done, and invest. Because we do have the raw materials to be able to process, add value, and export, not only to the UK but also to many regional and international markets.

http://www.fanabc.com/english/index.php/component/k2/item/5506?Itemid=674

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Ministry, Microsoft sign MoU to transform education through technology

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Ministry, Microsoft sign MoU to transform education through technologyAddis Ababa, March 28, 2016  –
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Ministry of Education has signed yesterday a Memorandum of Understanding (MoU) that will enable it to transform higher education, further innovation, and develop employability.
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During the signing ceremony held in Addis Ababa, Higher Education State Minister, Dr. Kaba Urgessa said Microsoft would provide university students with practical knowledge implantable in the actual world of work.

“Our economic competitiveness as a country depends on how our schools and universities use ICT to prepare students for the modern work place. The agreement will ensure that our technology investments are used to support our broader national education goals,” he added.

The state minister thanked Microsoft for extending support to the national education goals in general and capacity building worth over 7 million birr in particular.

Microsoft East and South Africa General Manager, Sebuh Haileleul, said on his part that it is possible to bring profound impact on the country by providing technology for millions of students throughout the country.

Corporate Vice President of Microsoft Middle East and Africa, Ali Faramawy, stated that the agreement will focus on working with university students to make software available, give training as well as create opportunity to set up their business.

He also underlined that Microsoft would focus on aligning the program with the industry requirements and employer demand centering on fostering localized content.

The MoU signed between the two parties is a transformation agreement that provides a comprehensive joint public-private program for educational excellence.

The key strategic aims are to transform learning, further innovation, and develop 21st century skills and employability, it was learned.

http://www.fanabc.com/english/index.php/component/k2/item/5501?Itemid=674

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Ethiopia launches health sector transformation plan

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Ethiopia launches health sector transformation planAddis Ababa, March 28, 2016  –
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Ministry of Health has launched today a five-year Health Sector Transformation Plan (HSTP) that aims at ensuring better and fair access to health services in the presence of Deputy Prime Minister Demeke Mekonnen.
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During the launching of the HSTP from 2016-2020 and best performing hospitals recognition ceremony, Minister of Health Kesetebirhan Admassu said the plan would play a crucial role in sustaining the successful achievements of the past years.

The plan would also help to scale up the big performance gaps among regional states and zones, and create balance, he added.

According to the minister, the plan has four agendas, namely Healthcare quality, Woreda transformation, Data revolution, and Compassionate, respectful and caring health professionals.

The woreda transformation agenda envisions creating model kebeles, reaching 100% community-based health insurance, and making all health facilities in the woredas high-performing facilities.

A model kebele will have at least 80 percent of the families in the kebele that implements the health extension packages and be free from open defecation and home birth, it was indicated.

Deputy Prime Minister Demeke Mekonnen said on his part the public, private enterprises and stakeholders should contribute their share for the success of the implementation of the plan.

The deputy premier attributed the success in the health sector to the efforts exerted by the health army, health extension workers, development partners, and the general public.

It is, therefore, important to replicate the best practices of model health institutions in order to ensure quality and fair access to health services, he added.

During the occasion, 30 best performing hospitals in child and maternal health, clean and safe health facility (CASH) and implementation of health reform were awarded 100 million birr.

The top five winners received five million birr each and the remaining won three million birr each.

http://www.fanabc.com/english/index.php/component/k2/item/5500?Itemid=674

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Ethiopia set to export potash

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Ethiopia set to export potashAddis Ababa, March 28, 2016  –
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Ethiopia will supply potash to the global market within the coming four years, according to the Ministry of Mines, Petroleum and Natural Gas (MoMPNG).
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Studies showed the existence of more than 100 million tons of potash deposit around Dalol region, Afar regional state, making Ethiopia the third country in the world to have the mineral.

Three international companies have asked for licenses to engage in potash development in the region, Tolosa Shagi, Minister of Mines, Petroleum and Natural Gas, told ENA.

Allana potash, which was previously licensed to develop potash mineral at the regional state, transferred its license to the leading Israeli Chemical Ltd (ICL) due to financial constraints, he said.

Currently, the British Circum Minerals Ltd and the Norwegian Yara International are undertaking broad activities to export the product, he said.

Many investors are also showing interest to establish potash fertilizer factory in Ethiopia, according to the minister.

http://www.fanabc.com/english/index.php/component/k2/item/5495?Itemid=674

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Horticulture generates over $185 mln in 8 months

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Horticulture generates over $185 mln in 8 monthsAddis Ababa, March 26, 2016  –
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Horticulture export in the past eight months has generated over 185 million US dollars, according to the Ethiopian Horticulture Development Agency (EHDA).
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The plan was to obtain over 269 million US dollars. However, the income surpassed by 17 percent compared to the same period the previous year, Alem Weldegrima, director general of EHDA told ENA.

Flower takes the lion’s share of the export earnings, generating more than 150 million US dollars, followed by vegetables (30 million US dollars) and fruit (3.6 million US Dollars), Alem stated.

According to the director, the agency failed to attain its target due to prices fall at the global market, inadequate land supply and other limitations.

The agency is working jointly with regional states, stakeholders and the Ministry of Foreign Affairs so as to expand overseas horticulture market destinations and to boost the income from the sector, he said.

http://www.fanabc.com/english/index.php/component/k2/item/5483?Itemid=674

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