Acknowledging the improvement of poverty reduction in Ethiopia, the latest report of the World Bank (WB) revealed that the poverty level in Ethiopia had declined from 44pc to 30pc with little contribution from the industry sector.

“Agricultural growth was the main driver of poverty reduction in Ethiopia since 2000, and poverty in Ethiopia fell from 44pc in 2000 to 30pc in 2011, which translated to a 33pc reduction in the share of people living in poverty,” said Ruth Vargas Hill, Senior Economist, Africa Region for poverty reduction and economic management.

The report attributed the decline rate of poverty was reinforced by high and consistent economic growth which now stands 10.9pc averaged annual rate, which is unacceptable for the macro economist who believed the growth rate that is used as an input is exaggerated.

Moreover, the 226 page report by the World Bank and entitled as Ethiopia Poverty Assessment Overview that was released on Monday January 19, 2014, shows the contribution of agricultural sector for the national economy is significantly decreasing and the service sector is dominating in recent years.

“Over time the importance of agriculture has fallen from 52pc in 2003/4 to 40pc in 2013/14 and the importance of the service sector has increased from 37pc to 46pc during same time,” reads the report.

It also points Gross Domestic Product (GDP) growth outpaced population growth, which has averaged about three percent and Ethiopia recorded annual per capita growth rates of 8.3pc over the last decade.

“Decline of Agriculture sector contribution to the national economy is acceptable but the growth of the service sector is not abnormal because the industry should dominate the economy for a country like Ethiopia,’’ said the macroeconomist.

“Even if the growth of the service sector did not came following the growth of the financial sector, rather following the increase of public expenditure,” he calms.

By rate of higher annual poverty reduction, the Bank ranked Ethiopia second after Uganda, with Nigeria, Malawi, Senegal and Rwanda following Ethiopia. Health, education, and living standards have also improved, with famine down from 75pc to 35pc since 1990, according to the Bank.

Since 2005, agricultural growth has been responsible for reduction in poverty of four percent a year. Increased use of fertilizer, high food price and favourable weather for the farmers were major source for higher incomes for poor farmers. It also attributes Safety Net Program alone has pushed 1.5 million people out of poverty, according to Hill.

At the same time, the report revealed the very poorest in Ethiopia have become even poorer following the high food inflation rate. The high food prices that improve incomes for many poor farmers become more challenging for the poorest. The report also point out the high food inflation has resulted 37 million Ethiopians remain either poor or vulnerable to falling into poverty.

For sustainable reduction of poverty the report urges that Ethiopia should continue focusing on agricultural growth and investments in basic services, the potential of migration and non-agricultural growth has been largely missed. Alongside ongoing efforts to support self-employment, encouraging the entry and growth of firms and helping households overcome constraints to urban migration. It also suggests safety net programs will need to adapt to the changing landscape of poverty in Ethiopia.

If this progress continues over the next decade, Hill says, Ethiopia could drive itself into a new era of prosperity.

“Agriculture has not been growing for the past four decades,” claims a macro economist Fortune talked to.

He says productivity per hectare of crops stands still at 16ql per hectare, despite the Growth & Transformation Plan (GTP) targeting to reach to 22ql per hectare.

[AddisFortune]

This year’s World Economic Situation and Prospects 2014 (WESP) Report has indicated that African economies will continue to grow in 2015 due to private investment and consumption which have been key drivers of gross domestic product (GDP) over the past years.

It said, of the five sub-regions in the continent, East Africa is expected to experience the fastest growth reaching 6.8 per cent in 2015 and 6.6 per cent in 2016.

The announcement came ahead of the 2015 edition of the United Nations report that will be launched on Thursday 22 January 2015 at the ECA Conference Center in Addis Ababa.

WESP is produced at the beginning of each year by the UN Department of Economic and Social Affairs, the UN Conference on Trade and Development, the five UN regional commissions (that include the Economic Commission for Africa) and the World Tourism Organization.

Read the full report here.

[DireTube]

A textile technology park, aiming to assist the sector in skilled manpower and technology will be set up in Ethiopia. The Ethiopia-South Korea Textile Industry Linkage summit is being held in Ethiopia.

State Minister of Industry Mebrahtu Meles (PhD) said the meeting will enable Ethiopia to share from South Korea’s vast experience in the sector. The textile technology park will be established learning from the experiences of South Korea, he added.

The park will will be piloting operations at the Bole Lemi Industrial Zone and will be replicated in other industry zones.

[FanaBroadcastingCorporation]

Specific areas will get specific fertilizer mix based on their soil type

The Ministry of Agriculture (MoA) and the Agricultural Transformation Agency (ATA), together with four cooperative unions located in four regions are constructing four fertilizer blending factories that are expected to start supplying their products after one month.

The plants are being constructed by Gibe Dedessa Farmers’ Cooperative Union in Oromia Region, Merkeb Cooperative Union in Amhara Region, Enderta Multipurpose Farmers’ Cooperative Union in Tigray Region and Melek Site in Southern Nations, Nationalities & Peoples Region (SNNPR).

The construction of the blending factories was initiated by the first ever soil fertility study and digital soil fertility mapping project done in the 2013/14 fiscal year in 162 Weredas that revealed the soil in the country needed additional nutrients other than nitrogen and phosphorus.

The Ministry and the ATA found out that sulfur, potassium, boron and zinc nutrients are deficient in many areas which indicated that one compound fertilizer NPS and five blended fertilizers namely NPSB, NPKSB, NPSZnB, NPKSZnB, and NPSZn are needed to address the key nutrient deficiencies in the tested soils according to ATA’s 2013/14 report. Now the soil fertility survey of 350 Weredas is completed, but so far only the soil map for Tigray has been completed.

The Gibe Dedessa blending factory will avail its products to six western Oromia Zones including Illubabor Zone, Jimma Zone, Half of the western Shoa, and the four Zones of Wollega, according to Arebu Ali, Deputy Manager of Union.

Through Ethiopian Soil Information System (EthioSIS) project, which undertook extensive demonstrations in 30,000 sites, both on farmers’ plots and at farmer training centers, the introduction of new fertilizers to the soil was validated.

The country, which has been using only di-ammonium phosphate (DAP) and Urea for the past 14 years, abandoned DAP and began importing a new fertilizer called NPS.

The blending factories are meant to increase the production and productivity of the farmers in the country through the supply of appropriate fertilizer to the soils.

Since 2003/04, productivity and production of cereal crops has increased by an annual average of 5.3pc and 9.1pc, respectively. Reports from the Central Statistics Agency (CSA) indicate that there is a 15.35pc increase in total cereal production over the past year, especially in teff, wheat and maize.

The national fertilizer blending program, that was launched by the signing of a memorandum of understanding (MoU) between the MoA, ATA and Allana Potash Corp in 2013, has seen the first of the planned five plants in June 2014, which, together with the new ones, is expected to benefit 11 million farmers. It was built by a 1.2 million dollar grant from the USAID Feed the Future innovation, which has also given another four million dollars for improved inputs.

The blending factories will be administered under the respective unions and they will distribute their products to the farmers in their mandated areas through the cooperatives, according to Tekalegn Mamo (Prof.), State minister and ministries advisor of MoA.

“We will have more blending factories, which will supply their respective Weredas and Kebeles appropriate fertilizers depending on their fertility,” Tekalign told Fortune.

That, he says, will increase the productivity of the farmers.

For the five factories, including the one that is operational, five international managers were hired; one for each of the factories. The staff of the factories will be hired by the unions.

[AddisFortune]

International consultants, local experts partnering with Ministry of Culture & Tourism

The Ministry of Culture & Tourism (MoCT), together with consultants from United Nations World Tourism Organization (UNWTO) has started grading and accreditation of 200 hotels in Addis Ababa and 400 hotels in the rest of the country starting mid-January, 2015.

The Technical committee from Ministry of Culture & Tourism (MoCT) prepared the document that is going to be used for the grading of the hotels. Before the grading system is approved by Ethiopian Standard Agency, which is the national standard body, different stakeholders such as Ethiopian Hotel Association, hotel owners, and hotel and Tourism Institutions had deliberated on the document.

On December 28, 2014, MoCT had signed a consultancy agreement with United Nation World Tourism Organization (UNWTO) for the implementation of the hotel grading and accreditation. The project, financed by the World Bank (WB), costs 492,414 dollars. To carry out the implementation, nine UNWTO staff members arrived in Addis starting from mid-January, 2015 accompanied by 30 Ethiopian experts for the job. The grading result of hotels will be announced on September, 2015.

Hotels, to be eligible for grading should have at least 10 rooms, fulfill all the legal regulation requirements for health, safety and security fire, environmental requirements for waste management and have certified documentary evidence of compliance, according to the Hotel-Rating Requirements & Classification document. Availability of skilled, qualified and certified staff are also required for all stars. The document listed various specifications under 12 evaluation categories that range from exterior building, parking, gardening, safety and security, housekeeping and maintenance to kitchen. And the specification goes in detail and examines decoration, lighting, electronic appliances, flooring, escalators, ceiling, space etc.

The grading will be awarded based on the score given on these evaluations. Hotels that scores more than 80pc will be awarded five stars, if it scores 70, 60, 50 or 30 it will be awarded four, three, two or one star respectively, stated the document. The five stars convey exceptional standard while the four conveys excellent, three, two and one convey very good, good and acceptable standard respectively.

The Ministry is engaged in different comprehensive and integrated interventions to address key constraints in the sector. The need for hotel grading and accreditation is one of the intervention areas identified by it.

“We are aware of the challenges in relation to hotel grading from the start but only now have we become committed and integrated the goal as one of our Growth & Transformation Plans,” stated Gezahegn Abate, international and public relation directorate director of MoCT.

It took almost four years for the Ministry to come up with the grading document and this is due to long and intensified deliberation with stakeholders to customize it in accordance with Ethiopia’s hotel status, according to Gezahegn. In the past, hotels would award themselves whatever grade they felt seemed to fit them, he added.

The set standard, however, can be difficult for some hotels to meet, especially evaluation in relation to size will need demolishing building to meet the standard, which is inconsiderable, stated Zenawi Mesfin, general manager of intercontinental hotel Addis, which has so far given itself a five-star grade. Hotels that fail to meet the standard will be given three months’ time and support to improvise their status with the set standard, according to Gizachew. But if the hotel fails after three months it will not be eligible for the grading process.

For the past six years in Addis Abeba, hotel numbers have grown by 12 on average in a year and it is expected to reach 18 hotels per year in the coming six years. The number of rooms in the past six years has grown by 5,000, which amounts to 750 rooms per year and currently there are 7,500 hotel rooms in the capital.

[AddisFortune]

Ethiopia earned over 191.4 million US dollars from the export of manufacturing products in the first half of this Ethiopian budget year, Ministry of Industry stated.

Ministry Corporate Communication Director, Melaku Taye, told WIC the revenue was obtained from the export of textile and garment, leather and leather products, meat and milk products, food, pharmaceuticals, chemicals and construction inputs.

According to Melaku, textile and garment export generated 39.9 million US dollars, while leather and leather products as well as meat and milk products made 64 million 49.9 million US dollars, respectively.

He added Food, beverages and pharmaceuticals as well as chemical and construction inputs produced 19.3 million, 8.3 million and 10.4 million US dollars, respectively.

The revenue earned from the sector during the reported period exceeded by 2. 7 percent compared to the same period last budget year, he said, attributing the increase to the export of value added products.

The revenue earned from the manufacturing sector has shown an 18 percent growth on average during the past four year, it was learnt.

[WaltaInformationCenter]

The British owned Pittards PLC announced that it has been making preparations to boost its production capacity by threefold.

Pittards Project Manufacturing General Manager,Tsedenia Mekbib, told ENA that Pittards entered the Ethiopian market in 2011 by purchasing the government owned Ethiopian Leather Company.

The factory secured 4 million USD last year by exporting 100,000 pairs of gloves, she said.

Pittards plans to increase its production by three fold in the coming two years, it was indicated.

The factory, which produces industrial and fashionable gloves,leathergarments and jackets, is working to increase the nation’sforeign currency earning income by 60 percent, according to Tsedenia.

The factory that had 80 employees three years ago has now 700 workers; and it is striving to increase the number of its employees to 1, 500, the General Manager said.

[ENA]

[Image source: www.pittards.com]

At a meeting held at the Sheraton Hotel in Addis Ababa, Ethiopia, government and industry leaders gathered to brief the local community on the Africa Hotel Investment Forum 2015 (AHIF), which will take place at the same location on 30th September and 1st October, as a platform to stimulate and attract much needed foreign hotel investment in Ethiopia.

At the conference, Bench Events, the organizer of AHIF, explained that the highest calibre group of international hotel investors of any gathering in Africa will attend AHIF 2015 and that they will support the government in seeking investment to develop one of the most important economic sectors, Travel & Tourism. According to the World Travel & Tourism Council (WTTC), the Travel & Tourism sector in 2013 was responsible for 10.3% of Ethiopia’s GDP and has generated 2.5 million jobs, 9.5% of total Ethiopian employment in 2013.

Matthew Weihs, Managing Director, Bench Events, said: “I’m absolutely delighted to be back in Addis Ababa again. The feedback from our event here last September has been very positive – it facilitated thousands of constructive high-level conversations and that made it an easy decision to return. This September, I’m expecting to see more involvement from the local market which will make AHIF more productive, because international companies are keen to find the best local partners.”

Samuel Tafesse, President, Sunshine Business said: “Last year´s event was a great success and I consider it as a great introduction of the Ethiopian market to the international investment world. We are particularly excited that AHIF is coming back again this year as it can build on last year´s event and presents the opportunity to provide access to foreign money. It still remains a big secret for me, why a stable country such as Ethiopia, with Africa’s best airline in terms of connectivity and tourism arrivals growing by 15%, is still a difficult place to attract foreign money. Therefore, I hope the 2015 event will open more eyes and foreign investors will look more closely into this particular country.”

Yenberberu Mamo, Managing Director, Mamo Kacha PLC, commented: “AHIF 2014 has accomplished the introduction of international hotel brands to Ethiopia’s hotel developers and operators. I hope AHIF 2015 will yield more partnerships between the major international brands and the Ethiopian hotel industry.”

Ato Solomon Tadesse, Chief Executive Officer, Ethiopian Tourism Organization, said: “AHIF 2014 was an absolute success because it gave local hoteliers and investors the opportunity to meet international hotel owners, service providers and investors in their own city. ETO recognizes the importance of different stakeholders in the tourism sector and is working hard to foster collaboration and alignment throughout the public and private institutions. A memorandum of understanding has been signed with the Ethiopian Wildlife Conservation Authority as well as with the Ethiopian Authority for Research and Conservation of Cultural Heritage. Many other MoU’s with e.g. Ethiopian Airlines, the Ethiopian Tour Operators Association and the Ethiopian Hotel Owners Association will be signed to ensure deeper collaboration and more efficient and effective results for 2015. I expect that AHIF 2015 will be of great help to achieve all these goals.”

The Africa Hotel Investment Forum (AHIF)

AHIF is the premier hotel investment conference in Africa, attracting many prominent international hotel owners, investors, financiers, management companies and their advisers. It is organized by Bench Events (www.benchevents.com), which is known for producing, alongside Questex Travel + Hospitality and MEED Events, several top-level hotel conferences around the world including Berlin (IHIF), Dubai (AHIC), Istanbul (CATHIC) and Moscow (RHIC).

Sponsors of AHIF 2015 are: ACCOR, Carlson Rezidor Hotel Group, Hilton Worldwide, Mangalis Hotel Group and Marriott International as Platinum Sponsors; Areen Hospitality Design, Colliers International, France24, Hotel Partners Africa, HVS, Hyatt, Movenpick Hotels & Resorts, Onlime, Starwood Hotels and Resorts International, STR Global and Wyndham Hotel Group as Gold Sponsors.

[Hospitalitynet.org]

Ethiopia could save a billion dollar due to the global oil price fall according to Zemedeneh Negatu, Managing Partner of Ernst & Young.

The significant decrease in oil price that has affected African countries either positively or negatively depending on whether they are oil importers or exporters was among several economic issues that were raised at the Emerging Africa Summit held at the UNECA on Thursday, January 29, 2015.

“While the global oil price drop has affected different African countries in different ways, Ethiopia is one of those countries that is benefiting from it” he said.

“Ethiopia, which is an oil importer, will save at least a billion dollar if oil price stays below 50 dollars per barrel for the next 12 months, as it is speculated. And luckily for Ethiopia, the price of its main export item, coffee, has gone up significantly in the world market in different exporting seasons. In addition to that, the very successful bond the country had issued in the international financial market has drawn satisfactory returns. You can see that Ethiopia is one of those countries that is actually benefiting from the simultaneous collapse of oil price and the increase in coffee prices,” Zemedeneh said.

Among countries that has been negatively affected by the oil price drop has been Nigeria which is an oil exporting country. “I was in Nigeria a month ago and there is a serious concern because the country is on the losing end of the situation. The issue needs to be analyzed based on who is importing what and who is exporting what, and that is how we actually should tell the African story of the impact,” Zemedeneh stated.

Listing further positive circumstances Ethiopia is in, he also said that he expected the yields on the Ethiopian Eurobond to be fairly stable.

The opportunities and risks of investing in Africa were among the many discussion points that were raised at the Emerging Africa Summit that lined up several high profile speakers well known in the finance, investment and economic sectors.

“The development of the economy in Ethiopia is significant; the size of the population is amongst the highest in Africa. There is a big agricultural economy here with a huge amount of opportunity. There is a lot of interest on Ethiopia from a lot of investors,” stated Colin Coleman, Managing Director of Goldman Sachs South African Office.

Coleman also stated that there is a significant amount of multinational and private equity firms who are interested in growing their African footprint. “The next 50 years in the world is going to be a very significant time for Africa and a real opportunity for the continent to make its mark in the world, in a way similar to China had done it 30 or 50 years ago,” he said.

According to an analysis by Goldman Sachs, Sub-Saharan Africa incremental growth could add 12 trillion dollars to the world’s economy in the next fifty years. Nigeria would be a 4 trillion dollar economy and South Africa would grow to a 2 trillion economy from the current half a trillion economy both.

“There is a lot of dynamism in the technology space, in communication, retail, consumer and oil and natural resource trades. Regional integration is very important because the markets of the various African countries are too small by themselves to compete. Infrastructure is needed to make people, goods and services move across Africa more seamlessly,” Coleman has commented of assignments that lay before Africa’s growth.

There is a growing interest in Africa from investors but that is not to say there are no risks, said Oumar C. Seydi, Director of International Finance Corporation (IFC) for Eastern and Southern Africa.

“There is still perception gap. We also have significant challenges such as Ebola which we are fighting very hard to tackle. The legal regulatory framework also has challenges we need to work on. We also still have skill gap despite there being a lot of improvement, and this is also the place where we have the largest number of countries that are classified as fragile and conflict affected. These are challenges that we continue to face and must address but, overall, the trend is very hopeful,” Seydi stated. He also stated that Ethiopia continues to be the sleeping giant and the country can be far more successful given the significant prospects that are coming to the country.

It was stated that investors need to keep in mind several things when exploring opportunities of investment in Africa. Among these is understanding that the continent is filled with countries with significant difference in their investment landscape. It was also stated that investors need to have an established presence to assess opportunities and get a clear view of the prospects within countries of their interest.

[CapitalEthiopia]

Ethiopian banks and microfinance firms are launching mobile money services, helping reach swathes of the population that now have little access to branches or services, the mobile technology providers and banks said.

The launch of the services, which allow customers to make payments or receive money via a mobile that is linked to a bank account, mirrors technology used in other African nations that has drawn millions of people into the financial system.

Netherlands-based BelCash is offering a technology called helloCash, while MOSS ICT, mainly owned by an Ireland-based firm, is rolling out M-Birr in the nation of 96 million people.

In both cases, Ethiopian banks and institutions will offer the service to customers and hold the cash deposited, in line with government policy that bars foreign firms or banks from investing in the financial sector or the telecoms industry.

“One of the things that the government wants to do is ensure there is financial inclusion,” said MOSS ICT deputy general manager Kidist Negeye, adding M-Birr would help reach rural areas. “Another aspect is the mobilization of domestic savings. The government wants to increase the number of deposits.”

The central bank approved the roll out for M-Birr, which will be offered by five micro finance firms, in December. It already has 5,000 to 6,000 users and expects to add 13,000 in February. Kidist said the potential was “in the millions.”

BelCash’s helloCash service could have 2-3 million users this year and 10 million by 2017 or 2018, the firm’s chief executive Vince Diop said, adding that BelCash would receive a fee for each transaction made.

Two of Ethiopia’s 16 private banks, Lion International Bank and Cooperative Bank of Oromia, as well as a microfinance firm, have signed up for helloCash. Two more banks have yet to submit applications to the central bank, he said.

The pilot project was under way and commercial services should start in about two months, Diop said.

Bankers say Ethiopia has no more than 1,500 ATM cash machines, while there was just over 2,200 bank branches as of June, or one for every 40,000 people, the central bank says. Only one in 10 people have a bank account.

In addition to branches, which are expensive to set up, banks plan to authorize thousands of agents, such as shops or merchants, in line with new regulations. Such agents will be able to take deposits and hand out cash via the mobile system.

Ethiopia’s initiative mirrors the model pioneered in Kenya, where there are now 27 million users in the nation of 45 million. Safaricom, a unit of Britain’s Vodafone, was first with such a service, launched in 2007.

[Reuters]

The Ethiopian Embassy along with the Embassies of Kenya and Tanzania and in collaboration with the US Commerce Department, have organized “Doing Business in East Africa,” an after hour Networking Series.

The information exchange event was intended to give the opportunity to network with US trade officials and members of the African diplomatic community. It also envisages an opportunity to hear about the latest momentum around Africa-US trade.

Included in the program was the opportunity to hear important announcements about Trade Winds Africa, the largest ever US- government-led trade mission to Africa, it was learnt.

Ambassador Girma Birru, Special Envoy and Ambassador Extra-Ordinary and Plenipotentiary of Ethiopia to the US, made a remark on the Networking event for the “US Business Development Conference and Trade Mission to Africa in September 2015.

Ambassador Girma noted that although there are some disparities among countries, the recent economic performance of the East African region has been remarkable by international standards. The region is one of the fastest growing regions in the continent, with average GDP growth of 5% in 2013-2014, compared to the sluggish global economic performance of 2.4% during the same period and cited Ethiopia as the third growing success economy in the world.

The region has abundant agricultural and other natural resources and provides ample opportunities for U.S. businesses. With a total population of about 320 million, the region is also a big market for food and other consumer products, he underlined.

Recognizing this immense potential, and as a follow-up to the very successful U.S. – Africa Leaders Summit, convened by President Obama in August 2014, Ambassador Girma punctuated “we are very pleased that the U.S. Department of Commerce is organizing a “Business Development Conference and Trade Mission” to 8 African countries in September 2015″.

The Trade Mission will offer you a unique opportunity to explore, first-hand, the vast business and investment opportunities that exist in Africa in the various areas, the Ambassador Extra-Ordinary and Plenipotentiary, added.

In reference to the African Growth and Opportunity Act (AGOA) which he said has served as the cornerstone of U.S.-Africa commercial relations, AGOA, he underscored has contributed to economic development in the 40 countries that benefit from this program through market access, job creation, and closer commercial ties with the United States.

Increasing number of American companies is recognizing the opportunities that exist in the continent partly through this preference program. Imports of American products (such as Boeing planes by Ethiopian Airlines) have contributed to job creation in the U.S. as well, he proclaimed.

However, he exclaimed AGOA is set to expire at the end of September, 2015. With a new Congress and many issues competing for legislative attention, it appears that AGOA’s reauthorization will not be as seamless as expected, Ambassador Girma expressed his opinion.

Given the necessary lead-time that U.S. buyers need for placing orders (such as in the textile industry), African governments and the private sector are quite concerned the delay in reauthorization of AGOA could result in unnecessary disruptions in commercial transactions between the two sides, the Special Envoy added.

It is paramount, therefore, that a call for action on AGOA needs to be taken by all concerned, particularly the U.S. business community, to ensure the uninterrupted continuation of this landmark trade relation between the U.S. and Africa he emphasized.

“I would like to take this opportunity to express our continued commitment to collaborate with the U.S. Government and the private sector to make the September Trade Mission to Africa a success, thereby contributing to the strengthening of our economic ties,” the Ambassador concluded.

Earlier Antwaun Griffin, Deputy Assistant Secretary of Commerce for US Operations made a welcoming remark. Ambassador Robinson Njeru Gthae of Kenya and Ambassador Liberata Mulamula of Tanzania, to the US have also made speeches pertaining to the occasion.

Present on the event were Ambassadors, Michael Lally, Executive Deputy Assistant Secretary of Commerce for Europe, the Middle East and Africa and John Saylor, Chairman of Virginia-Washington DC, District Export Council, Ambassador Robert Perry, Vice President, Corporate Council on Africa, Jude Kearney Chair Africa Practice, Greenberg Traurig, LLP, Marta Alonso, Verification of Conformity Manager & CCCS Supervisor, BIVAC North America, Bureau Veritas and other invited guests.

[AigaForum]

Kjell Roland, Managing Director of Norfund, said Norwegian investors are keen to invest in renewable energy and agriculture in Ethiopia.

President Mulatu Teshome and the Managing Director discussed about the various investment option in Ethiopia. Mr. Roland expressed the interest of Norwegian investors to take advantage of the peace and security in Ethiopia and the widespread investment alternatives to get involved in renewable energy generation and agricultural production.

He added, the Norwegian Government supports Norwegian companies to invest in Ethiopia and also advance technological transfer.

President Mulatu noted that Norway was Ethiopia’s friend during hard times and expressed his desire to see the relationship of the two countries to move from aid to trade and investment partnership. The President added the sectors the Norwegian investors expressed interest are also the Ethiopian Government’s priority areas and pointed that the investors will be successful.

[ENA]

KEFI Minerals said it has increased the size of the resource at Tulu Kapi, in Ethiopia, after re-analyzing existing data as it confirmed it is still on track to begin construction of its flagship gold project in the fourth quarter.

The independently verified indicated resource figure rises to 1.62mln ounces at 2.67 grams per ton from 1.52mln ounces at 2.57 grams per ton.

Work under the previous owners came up with a total of just over 1mln ounces – so this step-by-step approach is adding value.

The potential open pit down to 1,400 meters modelled by KEFI is estimated to host 1.42mln ounces, while the firm has identified a high-grade mineralization of almost 1.1mln ounces at 5.88 grams per ton.

The mine developer achieved the upgrade by ‘wire-framing’ the mineralized structures to create what it describes as ore-body solids, which was used to cross-check against the previous model.

The new JORC-compliant resource will provide the basis for a new reserve estimate, the firm said.

KEFI said in December it is talking to potential funders for Tulu Kapi as it gears up to take the project into production.

Updating on progress towards this goal, Chairman Harry Anagnostaras-Adams said: “Over the next few months we will finalize our development plans, taking into consideration contract mining submissions and existing process plants for sale.

“We are also on track for obtaining the requisite licensing, community resettlement, team building and financing.

“All this gives the board confidence that development will commence in 2015 leading to commissioning at the end of 2016 for production in 2017.”

[ProactiveInvestors]

Having reached a strategic partnership in Washington on February 4 two global companies – GeoPoll and Control Union – have announced that they are seeking partners in here after having already launched mobile surveying and agricultural certification, The Reporter learnt.

Roxana Elliot, communications head at GeoPoll responded to The Reporter via email that Control Union has been operating in Ethiopia for almost ten years, and GeoPoll and Control Union are now developing practical strategies to learn what Ethiopia’s smallholder farmers need to better produce and benefit from the products consumers love, especially its coffee. “We are currently seeking partners in Ethiopia who can utilize this program to connect smallholder farmers,” Elliot said.

Ethiopia is one of the six African countries that is set to implement the project for its world-known coffee and other agricultural products. Kenya, Uganda, Ghana, Tanzania and Nigeria are the five countries included in the program while Indonesia and Philippines made the way through the Asian continent for their rice, tea and palm oil. According to Elliot, partnering allows Control Union to tap into GeoPoll’s multi-modal mobile platform and database of 200 million users, giving them access fastest and most cost effective data collection method available in emerging markets.

Together, GeoPoll and Control Union will utilize mobile survey to engage and utilize and educate smallholder farmers in emerging economies, with the goal of reaching 1million farmers by 2020 via SMS and voice messaging. With consumers demanding increased transparency, target value chains include coffee, cocoa, cotton, palm oil, rice, tea, tobacco, and fresh fruits and vegetables.

Colin Coleman, managing director, Goldman Sachs South Africa told The Reporter that emerging African markets have been enormously viewed by many global companies across the world, and the infrastructure in Africa has to be made up to standard in order to win their interest.

The panelist, in the Emerging Africa Summit 2015, held in Addis Ababa last week also pointed out that Ethiopia’s determination in unleashing its potential of boosting economy should be led with consistent infrastructure development including the telecom industry. GeoPoll is a mobile surveying platform with a database of nearly 200 million users in emerging markets. It connects researchers, businesses and aid organizations directly to mobile phone users in just about every country in the world.

 [TheReporterEthiopia]

Chinese workers mingle with Ethiopians putting the finishing touches to a metro line that cuts through Addis Ababa, one of a series of grand state infrastructure projects that Ethiopia hopes will help it mimic Asia’s industrial rise.

Brought to its knees by “Red Terror” communist purges in the 1970s and famine in the 1980s, Ethiopia has been transformed in the last quarter century, becoming one of Africa’s fastest-growing economies.

At the heart of the state’s “Growth and Transformation Plan” are railway, road and dam projects to give the landlocked nation cheap power and reliable transport, as well as the metro line – the first urban light railway network in Sub-Saharan Africa.

“This is the future,” said Abate Yaye, 27, from the poor south as he helped complete the $475 million system being built by China Railway Engineering Corp, much of it on concrete stilts to keep it above the crowded streets of an expanding capital.

“We will become an example for the whole of Africa.”

Hefty state-led investment has kept the economy of Africa’s second most populous nation growing at more than 8 percent a year for over a decade, but economists say Ethiopia’s rulers need to relax their grip and give room for more private enterprise to maintain momentum.

Foreigners cannot invest in banking and telecoms and foreign retailers are barred, while Ethiopian banks are directed to buy low-yielding government development bonds.

“This is a country where, relative to rest of Africa, there is pretty good state capacity and a commitment to a development mission,” said S. Kal Wajid, the outgoing Ethiopia mission chief for the International Monetary Fund.

But he said private business needed room to grow and generate income so the economy could reap greater benefit from the new projects. “Where you are making a lot of infrastructure investment, there is a risk that the pay-off may not be as big as you thought,” he added.

DEBT LIMITS

Others in Africa have looked with envy at Asia’s inexorable rise but few governments, if any, have proven as single-minded as Ethiopia has in mobilizing its resources in a bid to turn an agrarian nation of 96 million people into a manufacturing hub.

Yet it comes at a cost. The IMF said last year Ethiopia was “on the cusp” of shifting from low to moderate risk of debt distress. Total debt at about 50 percent of gross domestic product was still manageable, but tougher if it rises much more.

“In the next five-year plan, there should be a clear indication of a change of emphasis and a significant emphasis on the private sector,” said Wajid, referring to the next Growth and Transformation Plan starting in July.

The government insists it will not rack up unsustainable debts because funds are used to finance infrastructure and other projects such as sugar factories and industrial zones.

Investors also say Ethiopia benefits from better security than others in a region blighted by Islamist militant attacks. And few executives cite corruption as a big hindrance in business, although it can be elsewhere in Africa.

But Ethiopia is no model for political and media freedom – there is just one opposition party member in the 547-seat parliament and international rights groups say the authorities muzzle critics. The government insists politics is open to all and that it allows free speech.

The current five-year growth program ends in June and the government has given little away about the next plan. But it remains clear about its economic goals.

“Without investing in infrastructure, it is now abundantly clear that Africa cannot sustain growth,” Finance Minister Sufian Ahmed told Reuters in December.

Sufian’s deputy Abraham Tekeste said this month the new plan would likely continue “most of the priorities” of the last one.

The government can point to a list of investors suggesting its formula works. Clothes retailer Hennes and Mauritz is starting to source supplies from Ethiopia, consumer goods maker Unilever is building a factory, Diageo and Heineken have bought breweries.

U.S. private equity giant KKR invested in a flower farm last year while an Ethiopian winery is among the investments of 8 Miles, an African-focused fund chaired by singer Bob Geldof who launched Live Aid to help Ethiopian famine victims.

LIMITED ROOM

The government’s ban on foreign retailers is aimed at encouraging local manufacturing, to cut back on imports, not wanting a consumer culture that could drain foreign exchange.

Central bank foreign reserves barely cover two months of imports – an inadequate level, according to the IMF. Other east African states have at least four months.

The government says it wants to keep banks in the hands of Ethiopians and telecoms controlled by the state as the sectors provide funding for national projects such as infrastructure. Earnings from the state telecoms monopoly are helping fund a railway linking Addis Ababa to a port in Djibouti, for instance.

But that leaves few domestic funds available in the market for businesses that could create jobs in future.

“If they are looking at achieving their goal of being a middle-income country and getting employment, you must enable access to financial options,” said James Kanagwa of pan-African lender Ecobank, one of half a dozen foreign banks with representative offices in Addis Ababa but barred from commercial work.

Ethiopia, with average annual per capita income of $470, aims to reach middle-income status by 2025, which the World Bank says starts at $1,046.

For now, even Ethiopian banks have limited room for maneuver. They must invest the equivalent of 27 percent of their loan portfolio in the development bonds, hindering their ability to lend to the private sector.

“The lending capacity of banks is growing very slowly,” said Mulugeta Asmare, president of Bank of Abyssinia, one of 16 private banks in a sector dominated by state-owned Commercial Bank of Ethiopia.

Banks must rely on equity and deposits for funding, in a nation where only one in 10 people have a bank account, because there is no developed capital market.

After launching a debut $1 billion Eurobond in December, Prime Minister Hailemariam Desalegn said tapping international markets did not herald “liberalizing the financial sector”.

“If you have an efficient effective state development model, great,” Colin Coleman, managing director for Goldman Sachs based in South Africa, told a conference in Addis Ababa last month.

“But you must allow businesses to develop in order to get the dynamism in the economy.”

[Reuters]

[Image Source: www.reuters.com]

The Ministry of Mines is going to grant a large-scale gold mining license to Ascom Mining, an international mining firm engaged in primary gold exploration project in the Benishangul Gumuz Regional State in south-west Ethiopia.

ASCOM is a multinational mining company involved in prospecting for gold in Benishangul Gumuz Regional State, Assosa Zone, Sherkole Wereda, Shungu and Nazali localities since 2009.

The firm made a discovery of a large amount of primary gold in the license area covering 268.17 sq.m. of land in a mountain commonly known as Dish Mountain. It was in March 2014 that ASCOM’s experts made presentation about the gold discovery to officials of the Ministry of Mines in Addis Ababa. The gold deposit is projected to be more than 70 tons.

The Minister of Mines, Tolossa Shagi Moti, told The Reporter that experts of Ascom presented progress report to the ministry twice. “We have informed them to expedite work on the feasibility study,” Tolossa said. According to the minister, once the company finalizes the feasibility study the ministry will review the study and grant the large-scale mining license to the company.

“They have confirmed the presence of the resource. They are now working on the final feasibility study. Once they have submitted the final study we shall grant them the mining license,” the minister told The Reporter.

It was on November 20, 2008 that ASCOM secured a gold and base metals exploration license after Ariab Gold Mining Plc, Sudanese and Ethiopian JV Company, transferred it to the former.

Shareholders of ASCOM Mining Ethiopia Plc are ASCOM Precious Metals BVI, holding 96 percent of the company, and Ariab Gold Mining Plc, owning the rest, 4 percent. Shareholders have different nationalities and are from Sudan, Egypt, the Middle East and other North African countries. In addition to the Benshangul Gumuz site, ASCOM has another exploration license in Ethiopia, in the Gambella Regional State.

Thus far the only company engaged in a large-scale gold mining in Ethiopia is MIDROC Gold. Nonetheless, two years ago in 2012 another firm, Ezana Mining Plc, secured a large-scale gold mining license from the Ministry of Mines.

[TheReporterEthiopia]

Kadisco is engaged in the manufacturing and selling of decorative paints, industrial paints, automotive paints, other coatings and adhesives in Ethiopia

Asian Paints, India’s leading paint manufacturer, has completed its deal to acquire 51% stake in the Ethiopia-based Kadisco Paint and Adhesive Industry Share Company (Kadisco) for $18.95 million. The deal, which was first announced in October, last year, is expected to further consolidate Asian Paints’ presence in the African paint market. The Indian firm had acquired the stake in Kadisco Paint through its indirect subsidiary Berger International Limited (BIL), Singapore.

“BIL has completed the aforesaid acquisition for a consideration of $ 18.95 million in cash. Certain regulatory approvals are pending from the governing authorities in Ethiopia in relation to the said acquisition,” said Asian Paints Ltd in a BSE filing on February 10, 2015.

Kadisco, one of the leading paint companies in Ethiopia, is engaged in the manufacturing and selling of decorative paints, industrial paints, automotive paints, other coatings and adhesives in Ethiopia.

[BusinessStandard]

Dr. Allan Pamba, GlaxoSmithKline’s Vice-President, Pharmaceuticals, East Africa and Government Affairs, Africa, said on Thursday that GlaxoSmithKline (GSK) considered Ethiopia as one of the strategic countries in Africa for its growth and investment plans.

He disclosed that GSK had completed its investment plans to set up a pharmaceuticals factory in Ethiopia and partner with Addis Ababa University in the areas of pharmaceuticals, manufacturing and healthcare delivery.

Meeting with State Minister for Foreign Affairs, Dr Yinager Dessie, Dr Pamba said that Ethiopia’s economic momentum had encouraged GSK to set up a pharmaceuticals factory in the country.

He emphasized that GSK was keen to position Ethiopia as a pharmaceutical supply hub for East Africa. Dr Yinager Dessie, who welcomed GSK’s commitment to set up a pharmaceuticals factory, noted that GSK’s interest in pharmaceutical production complemented Ethiopia’s priority interest in developing the manufacturing sector.

Dr Yinager said Ethiopia was keen to help GSK better the health and well-being of the people of the country. The two sides agreed to set up a joint technical team to discuss any problems and possible solutions in order to translate GSK’s investment plans into reality.

Kjell Roland, Managing Director of Norfund, said Norwegian investors are keen to invest in renewable energy and agriculture in Ethiopia.

President Mulatu Teshome and the Managing Director discussed about the various investment option in Ethiopia. Mr. Roland expressed the interest of Norwegian investors to take advantage of the peace and security in Ethiopia and the widespread investment alternatives to get involved in renewable energy generation and agricultural production.

He added, the Norwegian Government supports Norwegian companies to invest in Ethiopia and also advance technological transfer.

President Mulatu noted that Norway was Ethiopia’s friend during hard times and expressed his desire to see the relationship of the two countries to move from aid to trade and investment partnership. The President added the sectors the Norwegian investors expressed interest are also the Ethiopian Government’s priority areas and pointed that the investors will be successful.

[ENA]

KEFI Minerals said it has increased the size of the resource at Tulu Kapi, in Ethiopia, after re-analyzing existing data as it confirmed it is still on track to begin construction of its flagship gold project in the fourth quarter.

The independently verified indicated resource figure rises to 1.62mln ounces at 2.67 grams per ton from 1.52mln ounces at 2.57 grams per ton.

Work under the previous owners came up with a total of just over 1mln ounces – so this step-by-step approach is adding value.

The potential open pit down to 1,400 meters modelled by KEFI is estimated to host 1.42mln ounces, while the firm has identified a high-grade mineralization of almost 1.1mln ounces at 5.88 grams per ton.

The mine developer achieved the upgrade by ‘wire-framing’ the mineralized structures to create what it describes as ore-body solids, which was used to cross-check against the previous model.

The new JORC-compliant resource will provide the basis for a new reserve estimate, the firm said.

KEFI said in December it is talking to potential funders for Tulu Kapi as it gears up to take the project into production.

Updating on progress towards this goal, Chairman Harry Anagnostaras-Adams said: “Over the next few months we will finalize our development plans, taking into consideration contract mining submissions and existing process plants for sale.

“We are also on track for obtaining the requisite licensing, community resettlement, team building and financing.

“All this gives the board confidence that development will commence in 2015 leading to commissioning at the end of 2016 for production in 2017.”

[ProactiveInvestors]