The Ethiopian Meat & Dairy Industry Development Institute is hosting its annual African Livestock Exhibition and Ethio Poultry Expo from January 22-24 at the Millennium Hall.Associations of livestock, meat, dairy, poultry and feed, will all be participating in this event organized by Prana Promotion.

The sector had underperformed during GTP I, and the Institute hopes the exhibit will provide networking and capacity-building opportunities. The first quarter of GTP II shows some increase, as 88pc of dairy and 77pc of meat export goals have been met, earning the nation about 23 million dollars in foreign currency.

The Exhibition, which, according to Haile Selassie Weres, director of the Institute, will host 80 local and 20 international companies that specialize in equipment, fattening, trading, meat processing, dairy production and processing, feed, poultry, and veterinary products.

Meat tasting, chicken festivals, livestock shows and contests on meat fabrication and dairy production will be held. In addition, five conferences and 12 research paper presentations, focusing on various focus points within the livestock industry will be held.

[allafrica.com/]

Addis Pharmaceutical Factory (APF) signed a 42 million dollar partnership agreement with 54 Capital Ltd., a UK-based asset management equity firm, which has investments in different countries in Africa.

APF, one of the many businesses under the Endowment Fund for the Rehabilitation of Tigray (EFFORT), ceded 40.7pc of its equity in exchange for the indicated sum, which comes to 891 million Br.

“54 Capital can now play a role in technical production development and international market,” said Shimelis Mamuye, general manager of APF.

The two were brought together through the intermediation of Ernst & Young which led to the financial auditing of APF by Deloitte before 54 Capital decided to invest in the company, Shimeles said. The transfer of equity to the UK firm came to a conclusion with a signing of an agreement between the two sides on January 1, 2016.

“We made a long term strategy looking for a potential partner and they have been making a feasibility study to invest in the pharmaceutical sector in Ethiopia, which has not grown yet,” Shimelis added.

APF has now received 30 million dollars, according to Shimeles, with the remaining sum expected to come in the future. The company is aiming to use the money to expand production for domestic and export markets. It will also focus on meeting the criteria for good manufacturing practice (GMP) certification by the World Health Organization (WHO), which would enable the company to export its products.

“But it is also possible to engage in exports if the receiving country approves the drugs exported to it,” Shimeles said, adding by way of explanation, “that is how we are now exporting drugs to neighboring Somalia and South Sudan.”

Exports to these markets were worth 20,000 dollars in the last fiscal year, Shimeles said as he expressed hope that GMP certification would help the company earn more from exports, which could enable it to cover some of its import bill. APF imports most ingredients, only sourcing inputs as sugar, ethanol and starch domestically.

Thirty million Birr will be spent on upgrading manufacturing technologies, which is one requirement of the GMP. The company has also made a request to Adigrat municipality in Tigray State for an additional 60,000sqm plot of land to build a new plant. The new plant will be used to manufacture new drugs, the General Manager said. APF has one plant in Adigrat, 898Km from Addis Abeba, and another in Addis Abeba, at Akaki Kaliti District, where it produces intravenous fluids.

It started out with 20 products, which increased to 91 over the years. Following the equity transfer to 54 Capital, APF will add another 36 products, which will also be new to the country.

“The types of the drugs will mostly be injectable,” Shimeles said, but the details are confidential. “But we have made a study and the types are already listed and known,” he added.

Addis Pharmaceutical Factory’s products include antibiotics, gastro-intestinal drugs, central nervous system drugs, cardiovascular drugs, anti-diabetic agents, antihistamines, anthelmintic, analgesics, antiprotozoal, respiratory drugs, dermatological preparations, minerals and vitamins as well as large volumes of parenteral, according to the website of EFFORT Investments. The factory provides jobs for 720 regular and 200 temporary employees.

[allafrica.com/]

The Obama administration aims to strengthen commercial ties with Africa; this is reaffirmed by the U.S. Secretary of Commerce, Penny Pritzker visit to Nigeria where the launch of the second edition of the U.S. Africa Business Forum was also announced.

“What we are trying to understand is where the opportunity is and what are the challenges for doing more business in Africa and more particularly in Nigeria,” said Pitzker.

The U.S. Secretary says it has heard a lot about opportunities in sectors such as in infrastructure, transportation, healthcare, services and the information and communications technology sector.

With the opportunity for investment, there are also things about the continent they hear from matured business owners and entrepreneurs about the difficulties.

“Challenges we hear about are things like infrastructure investment or access to power, ability to transport goods throughout the country or the foreign currency exchange challenges that are being limited right now.”

Another challenge is much of the manufacturing on the continent depends on imports Pritzker said.

She says the United States wants to help Nigeria sell the country as a place for investment.

“I think Africa is understood by some and not by others and I think that there is a big opportunity to promote investment in Africa, particularly now – a time when you have a new government here in Nigeria that is committed to diversifying your economy,” said Pritzker.

The Tony Emuelu Entrepreneurship Programme is an example of what the U.S. wants more of for the continent.

“The president and I both feel very strongly that one of the most important things that can happen in Africa and in other parts of the world where you have a large young population and high youth unemployment is to help young people learn how to start a business.

“We have listened to both American companies that are doing business in Africa as well as Nigerian companies that want to do more business with American companies as well as entrepreneurs, so our advice to the president will be about what are the opportunities to address the demand for doing more business between our two countries, what are the challenges and what are the solutions to some of those challenges.”

The hope is to bring American investors and African leaders together to do business together.

“I am so pleased to announce that we are going to do the second U.S Africa business forum with our fabulous partner Bloomberg Philanthropies in New York on the margins of the U.N general assembly, in September.

[www.cnbcafrica.com/]

Ethiopia has a potential to generate over 10,000 MW from geothermal power, according to a study conducted by the Geological Survey of Ethiopia (GSE).

Tamiru Mersha, Public Relations and Communication Director, told the Amharic daily Addis Zemen that the study was conducted on 150,000 square km of the rift valley which has a very high temperature.

The study that was conducted 25 years ago confirmed over 5,000 MW could be generated from 16 potential areas. Currently, the potential areas increased to 22 showing Ethiopia’s geothermal potential in the sector, Tamiru said.

GSE is responsible for gathering basic geoscience information across the country and distribute to stakeholders. It carries out geological mapping exploration related to mineral resources, oil and natural gas, hydrogeology and engineering geology.

[www.ethpress.gov.et/herald/]

Currently, conference on tourism is coming into the spotlight around the globe. It’s regarded as essential part of tourism that brings significant return. All countries of the world are making an effort to develop a conference industry and Ethiopia is no exception.

There is a strong and correlative relation between the national economy of the countries and business tourism. This sector promotes national industry, enhance communication channels and upgrade quality of manpower in different economic sectors such as agriculture, petroleum, communications, and education.

Business tourism is able to gain many economic fruits for the interest of the national economy. It is considered as a key driver of jobs generating large number of permanent and temporary employments in the field of events’ supply chain, organization and management in addition to accompanied services.

Experts suggest that in order to develop a conference tourism, a state should approach international meetings and perform image marketing magnifying a nation’s potential to conduct mega events. The state needs to create independent convention organization and establish an administration system to promote convention tourism. Meetings are big business in their own right, and play an important role in supporting other businesses. Meetings promote investment, trade, communications, and technology. Meetings bring education and professional development to the local community, creating jobs and retaining work forces. Events also benefit to showcase for local products and services.

Organizations have been looking for growth opportunities beyond their borders for decades. Outside the business rationale for growth, business went global because of ease of doing business, access to labor, return on investment, risk management, political stability, infrastructure, members demanding increased services banking regulations and access. It has the additional benefit of including an element of leisure tourism, in the form of delegates extending their stay after the event for leisure purposes.

Although Africa’s global market share in the meeting industry stands at a little over 3 per cent, the reality is changing with more countries in the continent continue to attract major international meetings. Ethiopia is currently preparing to host MICE (Meetings, Incentives, Conference and Exhibition) which organized prominent groups and stakeholders around the globe. More than 500 international event organizers, travel agents, and destination management companies, hosted buyers, airlines, conference and hotels, international booking operators, professional conference organizers are expected to participate in the MICE Expo and Forum. Corporate and event planners, loyalty program innovators, government support authorities, travel and event planners and MICE business professionals will also come to the meeting scheduled to be conducted for three day forum starting March 17, 2016 at the United Nations conference hall. Currently MICE generates over a billion dollar annually.

Most such international meeting are held at the capital Addis Ababa; however, efforts are also underway to expand conference tourism to regional towns such as Adama, Bahir Dar, Hawassa and Bishofu so as to boost Ethiopia’s income from the sector. Conference participants stay in Ethiopia for 6 days and spend 121 dollars daily on average for accommodation, shopping and other services. In 2011, Ethiopia earned over 39 million dollars from conference tourism.

[allafrica.com/]

The Ministry of Communication & Information Technology (MCIT) is to launch in a month, 20 mobile applications (apps) for 20 government offices, which it has been working on since September, 2015. Given the mandate to introduce and implement new technology and communication systems in Ethiopia, the project operator, MCIT, has had an e-government plan since 2010. The plan vies to improve the online presence of government services and to improve access to the general public.

The Government Information System Development & Data Centre Administration team under the e-Government Directorate is managing projects targeted towards development of combined information systems to benefit government services online.

The strategy to implement the e-government plan includes the development of mobile applications for the 219 e-services that have been identified. Anyone with a smartphone can download these apps.

The 20 offices “are just the first few government offices that are selected based on the number of their clients and the number of clients that seek information,” said Abyot Byu, e-government director. Among those selected are the Ministry of Trade (MoT), Ethiopian Revenue & Customs Authority (ERCA) and Ethiopian Postal Services, each to have its own app.

Some of the e-government projects that require internal system development are undertaken by the Ministry’s own professionals, while most of the app development and the backend software development work is outsourced to Ahadoo Tech ICT Solution PLC and a German company, Meelogic Consulting AG, with which it is working in partnership. They were selected through a bid announced at the end of June, 2015. Accordingly, Ahadoo is develops all 20 apps, while Meelogic will work on the other software.

“All apps share the same feature of informing clients about the particular office and its services, but they differ in that they are specifically produced according to the specifications of each service,” Eskinder Ahadoo, founder, told Fortune.

The application for the Ethiopian Postal Services, for example, allows users to input only the weight of the good they are sending and the destination, to know how much it will cost them. Once mailed, confirmation of delivery could also come through the application.

“The aim is to make the lives of people easier. Now they can know what to do and what not do before coming to these institutions,” Eskinder added.

The government offices for which the apps are being developed are now creating content that will be accessed through the apps. An employee with the Ministry of Trade told Fortune that information required for the apps is being emailed to Ahadoo regularly.

Abiyot said that the mobile apps were preferred to websites because more people are believed to have access to mobile phones than to computers. Data from ethio telecom indicate that there were 40 million mobile subscriptions at the end of 2015.

“I know the website of the Customs Authority provides a lot of information, like lists of imported items with prices and quantities as well as a tax calculator, but it requires patience to navigate through the website and find the information you need. You also need a computer to access that information. It seems more interesting to have it available everywhere through the mobile app,” said Yared Mulugeta, an importer.

The Ministry and the federal Supreme Court have launched on January 18, 2016, a system that reminds clients about their appointment through a mobile text message. Solomon Amare, ICT department director of the federal Supreme Court has indicated that this service will be available for clients of all courts starting this week.

The text reminder is aimed at people who forget their appointments for cases.

“There are a lot of arguments every day from clients forgetting or misunderstanding their appointments. If the case was in the morning and the client comes in the afternoon then he will not be able to follow his case because the judge will have already closed the file.” Solomon added.

The text now will be sent from their own ICT center by registering only the client’s name and phone number. “I have been following my cases from the High Court to Supreme Court. I still have an appointment after six months so I am happy that this reminder has come. Even though it is late compared to their website that tells me every detail about my cases, I believe it is going to be helpful for forgetful people like me,” said Ayalnesh Desalegn, a client registering her address on a form produced for this purpose.

[addisfortune.net/]

The Ethiopian Investment Commission (EIC) said it has plans to attract more Turkish investors in the government’s priority areas.

EIC Deputy Director General Mohammed Seyed in an exclusive interview with Ethiopian News Agency (ENA) said Ethiopia plans to bring additional foreign investors including Turkey who seek to engage in the manufacturing sector.

Mohammed said since Turkey is more advanced in manufacturing sector its involvement would be significant in the process of agricultural transformation of Ethiopia.

Up to date, about 110 Turkish investment projects have gone operational. The Deputy Director noted the total capital invested by Turkish investors is about 9.2 billion Birr, of these close to seven billion Birr is invested in the manufacturing sector.

Over 17,000 jobs were created through these Turkish investment projects, where 12,000 in manufacturing, 3,800 in the services and 1,700 in the agricultural sector.

[www.ena.gov.et/en/]

The Premier assured the delegation that the City Administration will provide the Group with land at strategic place.

The Qatari Ezedan Holding Group with an estimated capital of 8.5 billion USD expressed interest to invest in Ethiopian hotel, restaurant and spa business in Addis Ababa as Group delegation held talks with Prime Minister Hailemariam Dessalegn here yesterday.

The Group said it will also allocate 22 percent of its profits to support charity organizations in the country. The Premier assured the delegation that the City Administration will provide the Group with land at strategic place.

Hailemariam also told the delegation that investing in Ethiopia particularly in Addis is profitable as the city is home to international organizations and hosts many international events.

The group has reputation in real estate development, banking and insurance, health care and other businesses.

[allafrica.com/]

Schulze Global Investments (SGI) has invested three to seven million dollars in a local milk processing company, MB PLC, for a 45pc share of the company. The deal is a package which also includes a new CEO from Kenya, Robert Kariuki.

This is the second equity investment taking place in Addis Abeba in two weeks, following the 42 million dollar investment by 54 Capital, a UK firm, in Addis Pharmaceutical Factory.

The latest deal was announced at the office of SGI at the Tensae Building, Cape Verde St, on January 21, 2016, at an event attended by Mebrahtu Meles (PhD), state minister for Industry. It was the culmination of a year-long process. Greg Metro, managing director of SGI, decline to give an exact figure on the amount of investment.

MB is the sixth company in Ethiopia in which the equity firm is investing since first arriving in the country in 2008. Its other investments include a coffee roasting factory, a cement factory and a school. MB, founded in 2001 with a capital outlay of 36 million Br, has a plant at Lebu and another at Kera, where it processes 30,000lt of milk a day. SGI’s investment will triple that production within a year by expanding the Lebu plant, according to Greg Metro, managing director. There is also a plan to triple the number of employees, which now stands at 133. Equipment for testing the safety of milk is currently being imported, CEO Kariuki said.

SGI’s Managing Director disclosed that the tests will cover feed given to the cows to check for such problems as aflatoxin levels, of which both companies are aware. Other machinery is also being selected from European markets, he added. In terms of quantity, Kariuki explained that Kenya produces more milk, five liters on average, than Ethiopia, where the average is 1.5lt, mainly because of the feed. “It all depends on the feeding system; you get what you give,” he said.

Ethiopia’s current production has reached 4.1 billion liters, according to the state minister, who spoke at the ceremony. MB is so far reliant on milk sources from Addis Abeba, Sebeta and Akaki. It now plans to go further afield expanding its source base by acquiring trucks with cooling systems following SGI’s investment. It has recruited the Indian consulting firm, 3P Consultant, to study the market chain for that purpose. MB’s deputy manager, Hailu Eshetu confirmed the expansion plan. “We will also expand our market to include areas far from Addis Abeba,” he said. Metro explained that the new CEO was picked from Kenya, because the dairy industry there is well advanced. “We believe that the CEO has advanced experience in operations management as he has worked in some of the well-known dairy processing companies in Kenya,” he said.

The government, which has formed a new Ministry of Livestock & Fisheries, plans to increase milk production to eight billion liters and to double the number of milk processing companies from 17 to 34 by the end of the second Growth & Transformation Plan (GTP II). The Ministry of Industry has identified 17 locations in the country to set up agro-processing industrial parks that are expected to increase milk processing. So far feasibility studies for one site in each of Tigray, Amhara, Oromia and Southern regional states have been completed, Mebrahtu said. These four are 250ha to 1,000ha wide; development will begin following approval by the federal government, the State Minister said. “We are expecting that the actual investment will begin in the next fiscal year,” he added.

SGI is a business established by a family with three adopted children from Ethiopia. The company is said to have raised 86.5 million dollars by 2014 focusing on Ethiopia only. Its wide-ranging interests include agriculture, manufacturing, education, healthcare, real estate, and tourism. Metro declined to identify the companies in which SGI has invested, although he added that another negotiation with a consumer goods company is approaching finalization.

[addisfortune.net/]

As global leaders met at the World Economic Forum Annual Meeting, the focus was on how the Fourth Industrial Revolution can deliver jobs and economic prosperity for all people across the world.

For the African continent, being part of this new economic revolution may seem full of challenges, yet it is also full of promise. After decades of overreliance on volatile commodities cycles, unprecedented efforts of structural transformation are currently being implemented across numerous African economies.

Over the past decade, African leaders have shown an indefatigable commitment to maintaining a stable macroeconomic framework and to setting up a business environment that is favorable to foreign investment and infrastructure upgrades. With all these changes, I am convinced that our continent will rise to the challenge of moving away from our resource-driven economies towards diversified and productivity-driven economies. In turn, the new phase of African economic development will itself influence a rise of a new generation of African entrepreneurs who are tech-savvy and able to influence global technological developments.

The debate in Davos focused on this “Fourth Industrial Revolution”, a challenge I define as creating a “bold revolution” – when some of our biggest challenges can become unique opportunities.

For our part, Africa will make a significant contribution to the Fourth Industrial Revolution. Governments across the continent have laid down their vision in the report on “The Future We Want for Africa by 2063”, adopted by the African Union Heads of States and Government. This vision has already been translated into action.

In my country, Gabon, entry into the digital age, which is the future, can be seen in numerous sectors – from telecommunications to security, finance and hospitality. Recent developments include the launch of the e-visa, electronic tax filing and payment systems, mobile banking, and satellite-assisted environmental monitoring (SEAS Gabon) to track environmental threats. The contribution of these new activities to economic growth is already being seen.

Gabon’s GRAINE scheme, for example, is a pioneering plantation programme aimed at creating a balanced agriculture economy, which will allow farmers to produce for themselves without the need for infrastructure. Farmers will be able to use digital media to trade their products at the international level – making money in a way suitable with their environment and living conditions.

My government has taken significant measures to enable the rise of the Fourth Industrial Revolution in our country. To this end, we launched the National Agency for Digital Infrastructure and Frequencies (ANINF) in 2011. The agency aims to improve the nation’s information system strategy and enable the rise of a new class of entrepreneurs.

In 2015, Gabon was awarded the ICT in Sustainable Development Award for improved access to information and communication technology network and services, reducing cost, and for having expanded internet access to young people as well as the socioeconomically disadvantaged.

Working together, we must do more. This is why I have travelled to Switzerland to drum up support for investment and jobs for Gabon. We are convinced that today’s technological revolution can help leverage existing global knowledge towards strengthening the continent’s own technology efforts, its know-how, and innovation capabilities. Put simply, this change will bring about the opportunity to make better, faster, and more cost-effective decisions for everyone in Africa, therefore increasing profitability and welfare.

Conversely, the size and increasing sophistication of our markets mean that Africa will be a place where businesses and technologies can prosper, and that the continent can power its way through this technological revolution.

Several key opportunities are within reach in a variety of sectors, including agriculture and food security, environment and natural resources security, and health. These opportunities will materialize as levels of domestic and foreign investment grow higher.

The Fourth Industrial Revolution is set to help us achieve our goal: become an emerging country by 2025. Surely it is a challenge, but we can deliver together. This is neither a slogan nor a fad, but the route that leads away from weak and erratic economic growth to a more prosperous future for all of Africa.

[www.weforum.org/]

The tide is turning for Ethiopia’s tourism industry, as the Ethiopian Ministry of Culture and Tourism recently announced it aims to triple the number of foreign visitors, to more than 2.5 million, by 2020, with an ultimate goal of making Ethiopia one of Africa’s top five tourist destinations by 2020.

To achieve that goal, Ethiopia has given the nod of approval to an ambitious five-year tourism marketing plan and strategy, developed by The Journey, a tourism consulting and marketing company.

To travelers, Ethiopia is perhaps best known for the Omo Valley, in the south of the country, where visitors can encounter a number of extraordinary tribes. Cultural experiences abound as the tribe’s traditions, songs and dances are still as vivid as they have been for hundreds of years; the valley is as close as anyone can come to “untouched” Africa.

In the north, Ethiopia’s historical route takes visitors from the current capital of Addis Ababa to the former capitals of the Gonderite and Axumite Empires as well as to the sacred city of Lalibela and the rock churches of Tigray. Lalibela, a medieval settlement in the Lasta area of Wello, is home to 11 Ethiopian Orthodox churches that were built in the 13th century on the orders of King Lalibela, not from the ground up but chiseled out of the town’s red volcanic rock hills.

“So far, Ethiopia has not really promoted its tourism very aggressively,” said Mike Fabricius, tourism strategist at The Journey. He explains that this is about to change as Ethiopia is poised for rapid tourism growth, thanks in part to the development of Ethiopian Airlines as one of the fastest-growing airlines on the continent and Addis Ababa as an aviation hub.

During the coming year, Ethiopia will roll out an international marketing campaign, which will focus on the traditional target markets, including the U.S. This marketing campaign will address common misconceptions, such as the fact that Ethiopia is a dry and arid country and that it is unsafe.

Fabricius explains that these misconceptions are already fading fast and that people are starting to see that Ethiopia is a lush and green country with fantastic scenery. He adds: “The country is scenically diverse, and it is safe and stable. The people are amazing and hospitable.”

Engagement with travel agents will be a focal point for Ethiopia, according to Fabricius, and fam trips are in the pipeline. He says: “An important part of the marketing plan is to educate the travel trade. There is major scope for Ethiopia to get more operators and agents to understand and know the destination.”

Dave Herbert, CEO of Great Safaris, explains that Ethiopia is indeed not a destination that Great Safaris currently markets, except for stopovers en route to other destinations. “In our experience, there is little demand from American luxury travelers for Ethiopia,” he said.

Fabricius explains this lack of interest is linked to a lack of knowledge. “Very few people understand the diversity that Ethiopia is offering. Once the travel trade becomes more knowledgeable, they can better inform the consumer,” he said.

Ethiopia also plans to develop new travel routes and circuits, which will help spread tourism to the lesser-known parts of the country. “It’s a very big country, so it’s quite difficult to just hop around,” Fabricius said. “You need to plan your journey. The main southern and northern route are already on the program, but now the country will also be developing circuits that branch off the main spine routes.”

Ethiopia will invest in the development of visitor information infrastructure throughout the country to help visitors find their way through Ethiopia. A new app is also in the cards, which will enable visitors to get information quickly and easily on their phones.

Investment in the country’s infrastructure is definitely a necessary step if the country wants to be a consistent competitor for the “Western tourist,” according to Michael King, co-president of Great Getaways Travel, a Virtuoso agency. He says: “The country still needs more widespread infrastructure; better security measures, especially given who a couple of their neighbors are; more upscale camps in and around the parks; and a curriculum for guides and those wanting to be guides with some type of national recognition (guide quality is still too haphazard). In short: consistent product and delivery across the country is needed.”

Not everyone is happy about Ethiopia’s resolve to massively increase tourism numbers. Tour operators in Ethiopia have warned that an increase in tourism numbers could potentially impact on the beauty of this pristine destination.

Betty Jo Curry, founder and CEO of Currie & Co, a Virtuoso agency, has her doubts about increasing tourism to Ethiopia, saying she would hate the destination to become too popular and “kill what makes it special.” She says: “Approach it like Bhutan and Botswana. Keep tourism small and limited to protect the cultures and tribes.”

However, Fabricius explains that sustainability is a key priority for everyone involved in the development of Ethiopia’s tourism. “The government will need to keep an eye on tourism numbers as well as manage the relationship between tourists and the local population, especially when it comes to popular sites such as Lalibela which is a place of worship for the local community.”

The development of the country needs to be properly landscaped so that the tourism numbers don’t impact on the value and sustainability of the destination. This could mean that the country needs to look at introducing entry numbers for example, says Dr. Fabricius. He adds however, that Ethiopia is not at that point yet. “Ethiopia is a very big country and can take large numbers, but the idea is not to blindly chase numbers. It will be a challenge and Ethiopia will have to focus on this.”

[www.travelweekly.com/]

Food security has become a global concern. In most developed markets farming yields have been maximized and there is no great untapped agricultural areas left. On the other hand, some industrializing economies are losing the ability to feed themselves. For example, China is now losing its self-sufficiency in maize.

However, despite a large agricultural deficit, Africa holds the majority of the world’s uncultivated, arable land. In a recent PwC report, titled Food security in Africa – water on oil, the continent’s opportunity to take the lead in agricultural production was compared to Brazil’s a few decades ago, with key advantages including fertile land, abundant water and cheap labor.

“African agriculture is likely to witness a transformation over the next two decades. We believe Africa will see a change similar to that of Brazil over the past forty years. Urbanization, the rise of super farms, and the need for food security are key drivers. New investment models tailored for Africa will become increasingly prevalent,” continued the report.

“Advantages in the demand side are rising food requirements, both locally and globally.”

Furthermore, the report argues that the recent decline in oil prices could be seen as an opportunity to develop agricultural production capabilities on the continent.

From oil to agriculture: reversing the resource curse

Much of Africa’s growth story over the past decade was underpinned by strong demand for its commodities. But with the decline in oil prices since the second half of 2014, a number of oil and gas producing economies – such as Nigeria, Ghana and Angola – have experienced a collapse of their currencies. For example, the Nigerian naira has since depreciated by close to 25%, resulting in a number of fiscal and monetary changes that has slowed GDP growth. According to the report, the Central Bank of Nigeria predicts GDP growth in 2015 to total 2.6%, compared to 6.3% in 2014.

However, the depreciation of currencies in these economies also presents an opportunity for the agricultural sector. It could counteract some of the effects of the ‘Dutch Disease’ and ‘resource curse’ many of these economies have been experiencing.

The Dutch Disease describes the negative economic impact of a country’s reliance on one booming export sector – such as oil and gas – which causes an inflow of foreign currency, resulting in the value of the local currency to strengthen against foreign currencies. This makes the country’s other products less price competitive for export, while imports become cheaper.

The Dutch Disease, alongside government mismanagement, is also one of the causes of the resource curse, a paradox seen when countries with an abundance of natural resources end up having poor development outcomes. This has been witnessed in a number of resource-rich African countries.

“Any Nigerian over a certain age will tell you how advanced the country’s agriculture sector was in the 1960s during the early flushes of independence. However, the discovery of oil in the Niger Delta – along with other political and economic factors – helped to weaken established industries such as palm oil, cocoa and rice production,” continued the report.

“Malaysian and Indonesian groups now dominate the palm oil industry; Nigeria has a 7% market share of global cocoa production versus a combined 65% for Côte d’Ivoire and Ghana. Meanwhile, Nigeria imports over 3m tons of rice per annum, almost 50% of consumption.”

Today Africa has a US$35bn agricultural deficit, and PwC estimates that Nigeria may account for around 15% of this deficit.

However, while a weaker local currency pushes up the cost of food for consumers domestically, it can also incentivize local production by offering greater returns for domestic producers and exporters. This has been seen in the past with the 1999 and 2001 exchange rate devaluations in Brazil and Argentina, which drove agricultural exports in both countries.

“The collapse in oil prices has forced food security and agricultural development to the top of the political and economic agenda across Africa,” summarized the research.

But “to thrive economically and socially, Africa needs first to deal with its own $35bn structural food deficit before it can play a role in alleviating long-term strategic supply impediments across the world”.

[www.howwemadeitinafrica.com/]

AGCO, a worldwide manufacturer and distributor of agricultural equipment is showcasing its new Massey Ferguson Farm Mechanization Package at the 10th Biennial US-Africa Business Summit in Addis Ababa, Ethiopia 1st-4th February 2016. The package is aimed at farmers who are taking their first step in mechanized farming and is primarily based upon the newly launched MF 300 Series tractor plus a set of MF implements and forms part of a wider package of support through the Massey Ferguson Africa distribution network. This package is at the heart of AGCO’s strategy help to transform agriculture in Africa through inclusive and sustainable mechanization solutions.

Aligned with this strategy is the announcement of a new partnership between AGCO and the international development non-profit organization ‘Cultivating New Frontiers in Agriculture’ (CNFA) to promote mechanization as a catalyst to raise farm productivity and food security in Africa.

“To be sustainable, farm mechanization needs to be environmentally-compatible, economically-viable, affordable and adapted to local conditions.” says Dr. Rob Smith, AGCO Senior Vice President and General Manager Europe/Africa/Middle East who will speak at the US-Africa Business Summit.

“The Massey Ferguson Farm Mechanization Package, you could call it a ‘farm in a box’, is designed to make staying on the land or indeed, returning to the land a viable choice. It’s especially designed to encourage more young people to get involved in agribusiness,” continues Dr. Smith. “Further support has been built into the package by the provision of training and support through the pioneering AGCO Future Farm project and our Massey Ferguson distribution network together with the assistance of partners such as CNFA.”

The new Massey Ferguson MF 300 Series tractors feature powerful and straightforward operation, robust dependability and are ideally-equipped to meet the tough challenges of African agriculture. The range will initially consist of three models from 50hp to 85ph. Further models are to be released later in the year. The new line of complementary Massey Ferguson-branded implements includes a range of harrows, ploughs, subsoilers, planters, trailers and transport boxes.

The farm mechanization package is to form the central focus of the newly-announced AGCO collaboration with Cultivating New Frontiers in Agriculture. For more than 30 years, CNFA has worked to improve agricultural productivity, competitiveness, and smallholder household wellbeing around the world through training, demonstrations, behavior activities and partnerships.

CNFA and AGCO will work together to take action to increase farmers’ access to mechanization Africa-wide. This will include channeling the expertise of CNFA’s Farm Service Centers and Agricultural Dealers to highlight the effectiveness and validity of mechanization to increase productivity. Among the activities planned will be farm machinery leasing, demonstrations and training using Massey Ferguson machines. A pilot project started in Ethiopia in January, supported by Massey Ferguson’s National Distributor, Ries Engineering, will be followed by a staged roll-out across Africa.

“Among one of CNFA’s flagship approaches is the development of privately operated agricultural dealer outlets and Farm Service Centers across Africa to improve smallholder farmers’ access to high-quality agricultural inputs and services,” CNFA President and CEO Sylvain Roy said. “In conjunction with better access to inputs, agricultural mechanization is also a critical element in making Africa more food secure.  Through this partnership with Massey Ferguson, CNFA will be able to reach more farmers and demonstrate on the ground how this machinery and technology can significantly increase crop yields, thereby generating higher incomes for both their families and communities.”

“Massey Ferguson is committed to providing high-quality machinery and appropriate technology to suit all types of farm operations all over the world,” explains Thierry Lhotte, Massey Ferguson Vice-President Marketing, Europe/Africa/Middle East. “We are a true full-line supplier of farm equipment, providing solutions to farmers no matter what their farm size or type of operation.”

The Corporate Council on Africa’s 10th biennial US-Africa Business Summit brings together business representatives and government officials, entrepreneurs and investors, decision-makers and managers from throughout Africa, the United States and beyond to discuss the achievement of business goals and forge new partnerships.

AGCO Corporation

As part of the efforts to modernize the tax system, works are underway to expand e-Tax (online tax payments) system, the Ethiopian Revenues and Customs Authority (ERCA) said.

Berhanu Mamo, Information Technology Director at ERCA, said the authority is working to extend the system at a national level.

The system helps taxpayers from anywhere to know online the amount of taxes they owed and pay taxes at any bank located within their reach, according to the director.

Their payments will be transferred to the National Bank of Ethiopia (NBE) through a core banking system, he added.

Moreover, the authority will put a system that helps to increase the number of taxpayers who gets service at a time from 1,000 to 6,000 in the coming two to three months, he said.

The implementation of the system will enable to avoid overcrowding and to make the tax service efficient, he said.

[www.fanabc.com/]

Ethiopia’s financial sector is set to open, with the government’s new plan to come up with a new policy that will open the market, albeit to a limited extent, to international actors. The move is aimed mainly at the relative liberalization of capital goods and lease financing. Hailed by experts as a historic move in the country’s financial sector, the recent decision was passed by the National Investment Board, chaired by the Prime Minister, according to the Ethiopian Investment Commission.

Strict regulations limiting any foreign investment or involvement in the financial sector have long been criticized for placing throttle hold for the sector as well as local investors.

The move towards a more inclusive financial sector stated about two and half years ago, when the government has amended a ‘capital goods leasing business law’ that allowed more access to parts of financial sector in the country. The amendment was bonded only for local investors, as with other financial investments and excluded foreign investors including Ethiopian diaspora.

Since then, few private and state financial firms were able to do business, but weaknesses in capital were apparent. The new move will allow the involvement of international companies on the hire and purchase in the financial lease sector as stated on the capital goods leasing business proclamation.

The capital goods finance business proclamation has three distinct categories; operating leasing, finance lease and a hire-purchase, while operating leasing is open only for local companies. However, the new amendment will allow investors to buy machineries on hire purchase or credit purchase via international capital goods financing companies.

The country is strictly refusal in the past to opening the financial and telecom sectors to international markets has been a major delay in Ethiopia’s decade long negotiations for a World Trade Organization (WTO) membership.

The recent move is expected to help the government’s bid to conclude negotiations with WTO in the current five year Growth and Transformation Plan period.

The capital goods financing business is commenced in the past GTP period with the aim to boost the private sector mainly the manufacturing sector. However, despite local firms’ efforts in operations and service provision, limited capacity of financing firms have limited the level of investment, and investment partnerships. Experts say that the current initiative will allow companies to access services from capital goods financing firms to solve financial shortages.

In an unrelated development, the financial institutions supervisory body, National Bank of Ethiopia, has issued a new directive about the performance reporting of capital goods financing companies.

The ‘Manner of Financial and Operational Information Reporting’ directive will be effective as of tomorrow, February 1 and capital goods financing companies have to submit their report on a quarterly basis.

NBE also stated that the directive will seek to obtain complete and relevant data from companies engaged in capital goods finance and enables the identification of inherent risks associated with each company and the sector at large.

[www.capitalethiopia.com/]

The US-Africa Business Summit is underway in Addis Ababa, Ethiopia on Tuesday as African Heads of State and American business leaders meet with the objective of boosting trade and investment between the region and the US.

Underlining that the current volume of trade and investment between the two sides was not enough, Ethiopian Prime Minister Hailemariam Desalegn highlighted the need to increase economic interaction especially in productive sectors.

“Today Africa is rising. Africa’s future is very bright. I believe the summit will help you to discover the potential for investment and doing business in Africa,” the Premier told US business representatives at the opening of the summit.

Organized by the Corporate Council on Africa and held every two years, the 2016 summit is being attended by around 1,200 participants including CEOs of major US and African companies.

Reports show that challenges such as poor infrastructure and corruption have kept American companies away despite the continent being an investment magnet for other emerging economies such as China.

“The key for all of them [the participants] is to have vibrant discussions… That is the only way you can solve some of the challenges and hurdles that occur in terms of investing here in the continent,” Adi Raval, Senior vice president of communications and public affairs at US-based engineering firm Symbion Power told The East African in Addis.

According to Mr Raval, despite these challenges, US companies have been slowly increasing their investment in the region over time.

Talba Alkali, director at Federal Ministry of Aviation in the department of safety and technical policy in Nigeria, also agrees with Mr Raval, noting that the United States has been active in supporting aviation infrastructures in the country.

“When it comes to aviation, we have always been in collaboration with the United States, especially in safety and security. I expect more of US Partnerships and their companies’ investment in Nigeria in the future,” he said.

Over the coming three days, the 10th biennial summit is expected to explore investment opportunities in various sectors in Africa and announce business deals.

According to US trade statistics, exports of merchandise to sub-Saharan Africa have steadily been on the rise, going up 58 per cent since 2009.

Merchandise exports reached nearly $24 billion in 2013, an increase of $8.8 billion since 2009, with goods exports to sub-Saharan Africa supporting over 100,000 US jobs in 2013.

However, compared to Sino-African trade, the volume of US trade with the continent is small.

Despite this, the United States has remained one of the top providers of humanitarian assistance and development aid to Africa for several decades.

With the recent economic slowdown, China’s imports from Africa fell nearly 40 per cent last year, presenting a challenge to many African economies that rely on Chinese demand for raw commodities such as iron ore and oil.

[allafrica.com/]

The Ethiopian Investment Commission (EIC) is to revise regulations that slow down the flow of foreign direct investment (FDI) to the country and implement them soon, Walta Information Center reported.

This was disclosed at the Ethiopia Ease of Doing Business Reform Validation Workshop held in Addis Ababa in cooperation with the World Bank.

Mr. Fitsum Arega, EIC commissioner, announced that the government was working with commitment to attract international investors by creating favorable trade environment. In order to achieve that, legal frameworks that waste the time and energy of investors were identified and revised. The revised proclamation is currently pending the decision of the concerned body.

He further added that the new laws would help Ethiopia become a very conductive and favored country for doing business. It has been pointed out that the status of Ethiopia with respect to doing business is low according to the benchmark set by the World Bank. The commission ensured that it would improve the status within the coming five years

Dr. Arkebe Oqubya, Special Advisor to the Prime Minister, addressed on his part that Ethiopia is working to become the leading manufacturing hub in Africa by 2025. Thus, Ethiopia is working to create favorable atmosphere and systems that enable to do business in the country.

[www.waltainfo.com/]

Ethiopia’s year-on-year inflation edged up to 10.2 percent in January from 10.0 percent in the previous month, the Country’s Central Statistics Agency (CSA) announced on Friday. The 10.2 percent rise in general inflation rate is due to a slight rise in prices of some cereals, pulses, fruits, vegetables and spices, it said.

Food inflation rose to 12.4 percent in January, from 12.1 percent the month before, it said. Non-food inflation also increased to 7.9 percent last month from 7.7 percent in December.

The rise in inflation in the non-food component is mainly due to rise in the prices of chat, clothing and footwear, construction materials, firewood and household goods and furnishings.

[www.apa.org/news/]

The past year has been difficult for many markets in Sub-Saharan Africa (SSA). Dramatic currency fluctuations, depressed prices on commodities such as oil and copper, and sluggish demand from China and Europe (Africa’s largest trade partners) have put pressure on the region’s economies. While SSA was predicted to grow above 5% year-over-year in 2015 at the beginning of the year, actual GDP growth is more likely to come in at around 3–4% year-over-year. Growth in 2016 is unlikely to be much higher.

As a result of these pressures, 2015 performance has been disappointing, leading some Western multinationals to reduce their exposure to the region, and a few are even considering leaving. Nestlé announced plans to cut its staff in some central African countries, while Barclays’s new CEO is considering selling off the bank’s Africa assets.

However, although some of our clients have been facing difficulties resulting from the current environment, primarily because of currency pressures, many others are continuing to see strong growth, even in troubled markets such as South Africa and Angola. For example, despite subdued consumer demand, new clothing retailers are moving into South Africa to tap the country’s underserved middle class. And despite government revenues having been hit hard in Angola, medical device companies are still selling expensive equipment to the ministry of health.

The continent’s long-term potential remains attractive, but a company’s success in the current environment will depend on its strategy. Businesses will have to adapt to withstand slower and more variable growth across SSA.

To understand which markets will be more successful in weathering economic challenges and providing sustainable growth to multinational companies, my company, Frontier Strategy Group, developed a Sub-Saharan Africa Resilience to External Shocks Index (RESI). It assesses SSA markets’ socioeconomic fundamentals and internal strength by looking at measures of political stability, trade exposure, economic diversification, wealth, and productivity.

In our index, countries receive a score from 0 to 100, with 100 indicating highest relative resilience. Resilience is tied to a country’s ability to maintain economic and political stability despite external shocks, due to stronger fundamentals, internal buffers, and self-sufficiency. By incorporating both quantitative and qualitative analysis that looks at historical developments and our analysts’ projections, the RESI allows for a nuanced understanding of market resilience.

Relatively mature democracies Mauritius, Botswana, Namibia, and South Africa rank highly as a result of their comparatively sound political environments and strong human capital. East African markets perform well because their dependence on commodities is low and, as oil importers, they benefit from the low price of fuel. Francophone West African markets rank well because regional currencies are less volatile, as they are pegged to the Euro.

Even though Nigeria is the region’s largest oil exporter, it emerges as resilient because its economy is far more diversified than commonly assumed. The services, retail, transport, and construction sectors make up a large share of GDP, and the country’s vast film industry, Nollywood, is good for commercial activity in the country outside oil and gas.

However, Angola, the other large oil exporter in the region, ranks close to the bottom because its economy is not diversified. Other markets ranking at the bottom do so mostly because of political volatility, poor governance, and overreliance on commodity exports.

Resilience Needs to Be Paired with Opportunity

Companies should also consider market size and growth relevant to particular industries when assessing the region. Markets that offer a combination of high resilience and growth will offer the most sustainable opportunities over the next several years.

The chart below shows the resilience index (x-axis) paired with three-year average GDP growth (y-axis), while the size of the bubbles represent our projections for the size of these economies in 2018.

For example, the chart shows East African markets, such as Ethiopia, Kenya, and Tanzania, in the upper right quadrant. They display robust growth across sectors and are benefiting from good governance, sound political reforms, and improving business environments. East African markets Kenya, Uganda, and Tanzania also enjoy strong trade integration with each other, which gives the region additional scale, as it allows businesses to easily operate across borders.

And despite subdued growth rates compared to historical levels, Nigeria remains by far the largest market across different industries and one of the most resilient markets. Companies operating in SSA cannot ignore the country, even though it will suffer substantially from the impact of low oil prices on the currency and business activity. On the other hand, while South Africa, one of the region’s more well-known markets, remains resilient, growth will disappoint over the next few years as a result of poor governance, subdued demand for its exports, and a decaying power infrastructure.

Businesses Have to Adapt Their Strategies to the New Normal

This new normal will require companies to adjust their execution strategies. Firms have to assess market resilience and opportunity with their products and industry in mind. Opportunity will look very different for a company selling medical devices and a consumer goods company selling chewing gum. The medical devices firm may decide to focus on South Africa, despite the low-growth environment, because the budget spent on health care is still considerably large there. The chewing gum company may instead want to focus on low-income but populous and fast-growing Ethiopia.

Companies that already have a presence in the region will have to focus their strategies rather than retrench altogether. In high-opportunity and resilient markets, companies should find ways to improve the efficiency of their local operations. Doing so includes investing in distributor relationships, diversifying their product portfolio, and getting a thorough understanding of customer needs, preferences, and affordability.

In less-resilient markets, companies need to determine whether they could increase growth by expanding their customer reach, or whether it’s the right time to make critical investments. For example, because local businesses face financial pressure in less-resilient markets, there are attractive M&A opportunities for companies willing to take on greater risk. However, if these investments are unlikely to yield the desired result, reallocating resources to other, more attractive opportunities may be a better option.

Smaller, less-attractive markets should be consolidated into clusters to cut costs and resources. A Francophone West African cluster could be managed out of Côte d’Ivoire, while a cluster based on historic ties combining Zambia, Zimbabwe, and Malawi could be managed out of South Africa. When clustering markets, grouping only countries that can be effectively managed as one cluster is critical, and strong distributor relationships and oversight are essential.

2016 will not be an easy year for most emerging markets across the world, but it will certainly shape the future trajectory of many countries across Sub-Saharan Africa. Companies that want to benefit from the positive development path of some markets will have to adjust their strategies accordingly. These businesses will also have to factor in setbacks and disruptions and accept that succeeding in the region will take time, effort, and plenty of financial resources.

[hbr.org]

Public Diplomacy and Regional Stability Initiatives News. The US-Africa Business Submit 2016 concluded following deliberations on “African Industrial Revolution.”

The10th Biennale US-Africa Summit was held from February 1- February 4, 2016 at the United Nations Conference Center in Ethiopia’s capital Addis Ababa. In his closing remarks Reed Kramer, the C.E.O of the African Media Group and Moderator of the US -Africa Closing Ceremony said African Economic renaissance which had been attributed, in part, to the development of its natural resources also benefited from the dynamism of its entrepreneurs who find solutions to local issues.

Mr Reed Kramer further noted that this growing prospect was expressed through endeavors that provide services for a growing middle class and creates a viable network that facilitates communications and helps to introduce technologies, reduce construction cost and time, and provides financing to make ideas reality.

Similarly one of the panelists Mossadeck Bally who is the C.E.O of Azalzai Hotel Group said this kind of unprecedented revolution creates jobs, diversifies economic and fiscal receipts and promotes the local entrepreneurship and continual industrialization. MFA

[geeskaafrika.com/]