Ethiopia was named 10th Best Performer Nation Brand of 2014 with its Brand Value increasing by $4billion and ranking three places higher than its position during the previous year. Brand USA continues its domination of the Brand Finance Nation Brands report. Germany, though not the most valuable, is this year’s strongest nation brand.

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The Commercial Bank of Ethiopia (CBE) has been contemplating the idea to open overseas branches; including in Ethiopia’s sea gateway, Djibouti.

Efrem Mekuriya, communications manager of the bank, told The Reporter that four areas have been identified so far and a feasibility study was in progress by a project office established mainly to accomplish that task.

The bank has planned to open its overseas branches mainly to serve the Ethiopian diasporas abroad and to smoothen transactions with neighboring countries whose economies have started to integrate with Ethiopia’s.  Accordingly, it identified the US and the Middle East countries to serve the huge number of Ethiopian communities stationed there and to benefit from their remittances, Efrem said.

The other countries are Djibouti and South Sudan, according to Efrem. The two countries are Ethiopia’s choice for deep economic integration. Djibouti is now Ethiopia’s main gateway to the international market where 90 percent of its import and export is transported through the Port of Djibouti. Though it is not stable politically, South Sudan is also one of the countries that Ethiopia needs to create economic integrations with. Currently CBE has four oversea branches in South Sudan serving the less-banked new state and Ethiopian business operating there.

CBE’s plan has perfectly reciprocated Djibouti’s plea which asked the former to re-institute its branch in Djibouti.

Ahmed Osman, governor of the Central Bank of Djibouti, has urged CBE to reopen its branch and serve the ever-growing business transaction the two countries conduit at present.

The governor said this last week to visiting Ethiopian journalists. According to the governor, Djiboutian will also get a chance to collect their dues in Djibouti’s frank while similarly Ethiopians will pay in birr, if CBE reopens its branch in Djibouti.

Djibouti was the first foreign country that hosted the first CBE oversees branch. However, it was closed in 2004 due to some misunderstandings.

It happened when the government of Djibouti ordered a financial reform in the year 2000 and the country’s central bank had begun updating data’s of financial institutions operating in the country among which CBE was one. The central bank found out CBE‘s bad loans as quite high, according to the governor.

Thus, to solve the bad loans, the central bank ordered CBE at the time to raise its capital but it was not acceptable and it was the reason that pushed CBE out in 2004, the governor told The Reporter.

CBE, established in 1942, has more than 876 branches across Ethiopia with a combined total asset of 242.72 billion birr as of June 2014.

[TheReporterEthiopia]

Solar energy is an ideal solution for the power needs of the developing world – except for one problem: It stops working when the sun goes down, at precisely the time power is needed to turn the lights on. The solution, according to Zev Rosenzweig, CEO of Israeli energy technology company AORA, is a hybrid system – one that utilizes solar to the fullest, and supplements it with a “backup” system to keep the power flowing when the sun is not high in the sky, using scant resources, with an operating cost of next to nothing.

It’s perfect for developing countries, said Rosenzweig – and after six years of research and pilot projects, and an investment of $40 million, AORA is ready for prime time, he said.

The company announced that it had signed a deal to build one of its Tulip solar-hybrid power plants in Ethiopia. “We are transforming our Green Economy Strategy into action and are pleased to partner with AORA to help achieve our vision,” said Alemayehu Tegenu, Minister of Water, Irrigation and Energy for Ethiopia. “AORA’s unique solar-hybrid technology is impressive and well-suited to provide both energy and heat to support local economic development in off-grid rural locations in Ethiopia.”

“Off-grid rural locations” are exactly the places Rosenzweig wants to see more Tulips installed. “Our hybrid system uses both solar power and biogas to operate a turbine, with the hot air moving the turbine to generate electricity.”

[Zegabi]

Following a sharp decline in international oil prices, Ethiopia’s oil import bill for the current fiscal year is expected to go down by 600 million dollars, an estimated 21 percent of the overall import bill.

According to information obtained from the Ethiopian Petroleum Supply Enterprise, this year’s projected oil import bill is an overwhelming 2.9 billion dollars which accounts for 1/5 of an overall import bill. However, owing to the downward trend in the international oil market starting from June this year, the Enterprise has managed to gain some 400 million dollars after decrease in the costs of oil imports which it expects to grow even larger by the end of the year.

According to Demelash Alemu, an advisor to the Chief Executive Officer (CEO) of the Enterprise, this is a trend which has never been observed in Ethiopia in the past. Ethiopia’s oil import demand has shown a successive growth over the years where the bill increased by ten or twelve percent year after year. In light of the new trend in the international oil market, this year’s import bill is expected to be much lower than last year’s — 2.494 billion dollars — declining to 2.3 billion dollars.

In fact, the gain accrued due to the decline in the international oil market is equivalent or even greater than some of the biggest export commodities of the country. Some of the major export earners in Ethiopia do not have the capacity to fetch as much foreign currency that is saved by the enterprise.

However, critics of the government have been saying that the changes in the retail price of oil do not take into account the dynamics in the international market. Especially, in light of the recent decline the adjustment in the local retail price was said to be way below the decline in the international market indicating unwarranted profit from the oil sector.

Last week after the Ministry of Trade announced a new retail price for fuel, the country witnessed a severe fuel shortage which evidently led to long queues that lasted for hours in different parts of the country.

The quandary resulted in nullifying some eleven fuel stations in the capital by the Addis Ababa City Administration Trade Bureau accused of creating artificial shortage.

This week saw a relative ease in fuel supply shortage. However, the crisis has not been fully curbed.

Global oil price has fallen by more than 40 percent since June, when it was USD 115 a barrel. It is now below USD 70. This comes after nearly five years of stability. At a meeting in Vienna on November 27 the Organization of Petroleum Exporting Countries (OPEC), which controls nearly 40 percent of the world market, failed to reach agreement on production curbs, sending the price tumbling. Also hard hit are oil-exporting countries such as Russia, Nigeria, Iran and Venezuela.

According to Demelash, what should be considered is the price of refined oil. Unlike the decline in crude  oil prices ,the price of refined oil decreased only by 22 percent which is around 50 percent than the global decline in oil prices. Demelash also said that back in June the price of one metric ton of refined oil was 945.89 dollars while now it has gone down to 737.37 dollars.

[TheReporterEthiopia]

The Ethiopian Investment Commission presented investment opportunities in the country to British and other foreign investors yesterday at the Hilton Hotel.

Ethiopian Investment Commission Director General Fitsum Arega said that Ethiopia’s economy is still young with vast untapped resources and a range of investment opportunities. The country has huge investment opportunities in the manufacturing sectors.

Fitsum briefly described the vast investment areas undertaken by many investors in Ethiopia particularly in agriculture and agro-processing. He invited the investors to engage in manufacturing, hotel and tourism sectors.

According to Fitsum, there are ample manufacturing opportunities for prospective investors in the production of food, beverages, tobacco, textiles and garments, leather goods, paper, cement and chemicals.

There are now UK investments in a range of sectors such as education, leather, mining, oil and gas, as well as food processing. British companies have been operating actively in creating local employment, transferring knowledge and management skills which contribute to building the economy.

Ambassador and Permanent Representative to the African Union, Greg Dorey said on his part that Ethiopia is truly a land of extremes in attracting investors in different investment opportunities with suitable environment. Ethiopia shows keen interest to improve the situation, including the creation of an environment conducive to private, local and foreign investment.

He also said that the Programme offers expertise to create contacts through its extensive network of specialists in the UK, and in other diplomatic offices around the world and help boost competitiveness at the global level.

According to him, UK investors have shown increased interest in the economic opportunities in Ethiopia which can also bring their high-quality investment to the country’s dynamic economy, he added.

He said: “Our bilateral relations have been developing very positively for the past many years. Ethiopia became our biggest bilateral development partner in the world, a close collaborator on investment areas.”

He added: “We have seen our trade and investment relationships take off dramatically too. I want to see them grow more in future years as high rates of growth continue and the country opens up further.”

[WaltaInformationCenter]

Company launches with 25 million dollars of capital in 2008 with a production capacity of 15,000 meals a day

Addis International Catering (AIC), a subsidiary company of the MIDROC Group, owned by Mohammed Al-Amoudi (Sheik), began giving domestic catering services three weeks ago, after securing a license for the service in July 2014.

The company was established in 2008 with a capital of 25 million dollars to provide catering services for international airways. The company initially secured a business license for international food manufacturing and aircraft cleaning services, as well as a bonded warehouse license. Addis Catering commenced operation in the same year on a 6,000sqm plot located adjacent to Bole International Airport, with a capacity of producing 15,000 meals per day.

“After we realised our capacity was above and beyond the services we were providing, we began the process of acquiring a domestic catering license, which took us almost a year to get,” says Thomas Jamtander, chief operation officer (COO) of AIC.

The company has added catering services for the local market, a laundry service, laboratory tests and training programs in personal hygiene and provides professional training. The laboratory provides tests for items such as bottled water, ice cubes, meals, raw materials and hand surfaces.

After securing the license, the company was in the process of preparing to start domestic services, which it finally began three weeks ago, according to Makida Yohannes, general manager of sales and customer service of AIC.

Currently, the Company provides catering and cleaning services to eight airways including Emirates, Egypt Air, Qatar Airways, Kenya Airways, Saudi Arabian Airlines, Yemen Airways, Turkish Airlines and Fly Dubai, with the average capacity of serving 1,000 meals on a daily basis. The new license enables Addis Catering to serve the services for embassies, NGOs, private companies and events.

Since the end of November, the AIC has provided catering services for seven companies. This includes the meeting at the European Union (EU), Swedish Embassy, International Community School of Addis Abeba and Sandford International School. Addis Catering will start serving lunch and snacks at Sandford in January 2015.

“In addition to catering for events, we are on the way to opening a coffee chain in Addis Abeba, and we have already identified its location, to be open starting early new year in Bole area, along the African Avenue,” says Jamtander.

The new coffee shop will sell bakery and pastry products, along with beverages, according to Makida.

AIC has nine refrigerated high loaders and two ramp cars to transport prepared foods to aircraft and to venues where its catering services are needed as well. It operates with 170 workers, of which 10 are from Sweden, the Philippines, India and Sri Lanka. It has added 15 new staff members for its new local service, and is in the process of hiring additional staff, according to Jamtander.

AIC mainly imports its ingredients from Europe, including Italy and Belgium and South Africa. The ingredients it imports are beef, fish and chicken. The company stated two main reasons for the import: customer preference and a lack of consistent supply from the local market.

“We want to source all of our inputs locally, but we cannot get reliable suppliers from the local market. This creates a problem as we have a contract with the airways which lasts for two to three years,” said Jamtander.

The company charges a minimum cost of 7.5 dollars per meal and a maximum cost of 30 dollars per meal for the airways, and 200 Br to 800 Br per meal for local catering. “Our prices are a little bit higher compared to other catering companies, but it is because we offer higher quality based on our customer’s preferences,” Makida claims.

Recently, the had a joint venture agreement with Chinese company Vantage Consultants, for the establishment of Addvantage Training Services, which provides training for food hygiene, safety and HACCP implementation. It has trained professionals from Sheraton Addis, Hilton Addis, Radisson Blu and Capital Hotel and Spa.

[AddisFortune]

After a successful global bond issue, Ethiopia emerges as a frontier market to watch out for. Its recent road show in India underlined its confidence and ambition to be an economic dynamo

“We promise to give an investment license to a global company within 24 hours.” This bold promise was made at an unusual road show was held across three cities in India earlier in December. The road show was held by a country keen to attract investment from Indian companies. This country is among the top ten fastest growing economies of the world and is on track for achieving millennium development goals in health and education. The country also boasts of being a gateway for a combined market of 400 million consumers.

Roadshows are common in India, but this one was by Ethiopia and highly unusual as African countries have rarely made such promises to Indian companies. The apex chambers of commerce in India have supported several initiatives to bring African markets closer to Indian Inc. But this road show was perhaps the first of its kind driven by a single African country.

What most Indian investors don’t know is that Ethiopia is growing rapidly towards middle income status. It has the ability and ambition of seeking global investment with pride and confidence. Ethiopia floated a global bond to raise more than $1 billion of external capital. The bond issue was oversubscribed two times when it closed in the first week of December. The country is being recognized by global investors as a high growth frontier market. Only 30 years ago, the Band Aid concert had been held to raise aid for the country. Today it stands tall among emerging and frontier economies.

Among all countries that have issued international bonds, Ethiopia is the poorest with the lowest per capital income. But this status may not stay for long. The funds raised will be used for railway, power and agriculture projects. Ethiopian GDP grew at 8.25 per cent this year according to International Monetary Fund. Prime Minister Hailemariam Desalegn says that Ethiopia welcomes global investment not mere aid. Ethiopia needs over $50 billion investment over next five years. Out of this about $15 billion will come in from global investors. Ethiopia received FDI worth almost $1 billion in 2014, maintaining consistent growth in inflows.

India has been present in Ethiopia for years but needs to increase its investment in the country. More than 600 Indian companies operate in Ethiopia but now the country is demanding focused attention from specific segments.

At the road show held in Pune, Bengaluru and Chennai, the Ambassador of Ethiopia to India Genet Zewide led a delegation to brainstorm with potential Indian investors. Though these were closed door meetings without media, I was invited to facilitate the discussions.

The Ethiopian effort was supported by Indian project developer Overseas Infrastructure Alliance that has been in the country for a decade and has set up rural power and agriculture projects. Global business information company Dun & Bradstreet guided Indian investors at the road show and presented a report on sectoral opportunities in Ethiopia.

The response from Indian companies was enthusiastic even though many were bewildered by the promises. In many ways Ethiopia appears to be ahead of India is providing an enabling environment for industry. Apart from giving an investment license in 24 hours, Ethiopian government is almost corruption free and offers single window approvals. A few Indian companies that already operate in Ethiopia proudly proclaimed that it was easier to do deal with government departments in Addis Ababa than in New Delhi. This is borne out by the World Bank’s ease of doing business report where Ethiopia ranks higher than India on some parameters.

There are challenges of logistics and inadequate infrastructure. But these are challenges that Indians can overcome faster than other investors.

India and Ethiopia are only a single flight away. The daily flights from Mumbai and New Delhi ensure that connectivity does not pose a problem as it does for many other countries. There is a historical connect too. As Abyssinians, Ethiopians came to India’s western region as early as 4th century. From being slaves, they grew into much admired and sought after warriors in regional kingdoms. Soon they rose in the ranks to become chieftains and even rulers of principalities in Gujarat and Maharashtra and merging with local communities.

Many decades ago Indian teachers were sent to Ethiopia by the government to teach in schools. Many generations of Ethiopians have grown with deep regard and appreciation for India. “Ethiopia is stable & peaceful, people are welcoming and policies are friendly” Says Ambassador Zewide.

Unlike India and unlike the entire African continent, Ethiopia was never colonized. It remained free of imperial powers. But like India, it nurtures vibrant culture, cuisine and commerce. In these times of globalization, it is natural that these two emerging economies will strengthen their trade and investment links.

[BusinessWorld]

The 10th Ethiopian Public-Private Consultative Forum was held yesterday in order to identify the basic problems that impede the productive capacity of the manufacturing sector and establish the possible solutions at Sheraton Addis.

Speaking on the opening of the forum, Minister of Trade Kebede Chane said: “Since our developmental and democratic government designed and implemented development strategies and policies, our country has scored considerable progress in which the citizens are benefiting. It is evident that the contribution of the private sector for this development is very significant.”

Explaining the purpose of the forum, Industry Minister Ahmed Abitew also said that the forum helps both the private sector and the government reduce the constraints on productivity on the manufacturing sector.

Taking the great deal of contribution of the sector into consideration, the government has been initiating such a forum on which the private sector and the government can discuss issues of concern that can retard the productivity of the manufacturing sector.

Public-Private Consultative Office General Manager Eyob Tekalign and the Ethiopian Chamber of Commerce Deputy Secretary presented the finding of their research entitled ‘the Problems and Solutions of the Ethiopian Productive and Competitiveness of the Productive Sector.’

According to the researchers, the key problems include lack of the provision of adequate amount of financial resources, shortage of raw materials for they are not being properly produced locally, absence of qualified human power, recurrent power interruption, inadequate application of technology and the like.

In connection with this, they put forward possible solutions such as establishing the investment bank, increasing the productivity of the agricultural outputs , capacitating the human power through continuous training, establishing well organized infrastructure, developing the ICT industry and so on.

In their presentations the researchers stressed that their role is proposing possible solutions while the government takes high responsibility in order to solve these identified problems.

After listening to the presentation, the participants commented on the findings and proposed other solutions. According to them, the financial institutions should carry out their duties in providing adequate resources so that the manufacturing sector could produce to their full capacity.

[TheEthiopianHerald]

Organizers of Dubai’s Annual Investment Meeting invited Ethiopia to take part in the event to be held in March 2015.

The organizers extended the invitation to President Mulatu Teshome today.

The delegates told the President that the meeting will give a chance to Ethiopia to promote its investment opportunities for the world and to attract foreign direct investment.

Investors from across the world are expected to take part in the event and it is a huge opportunity for Ethiopia and other African countries to do business at the forum, they added.

The organizers also expressed their plan to hold a similar event in Ethiopia during their discussion with the President.

Dr. Mulatu on his part thanked the organizers for the invitation and said it would be given due consideration.

President of the organizing committee, Dawood Al Shezawi, told reporters that the event will also enable both Ethiopia and UAE to consolidate their mutual partnership, especially in industry and business sectors.

The fifth edition of the Annual Investment Meeting will be held under the theme “Sustainable Development through FDI Induced Innovation and Technology Transfer”.

[ENA]

The Ethiopian Ministry of Industry has received an offer from Elsewedy Electric Group to establish an industrial zone in Ethiopia according to a statement from Elsewedy.

The Ethiopian government requested the details of the project in terms of area, cost, number of plants, and industrial sectors, ElSewedy said.

The project is expected to be executed over three phases and will include, in addition to the industrial zone, a residential city and a services complex that consists of schools, sports clubs, and hospitals, it explained.

Elsewedy Electric has become a significant contributor to the economic growth in Egypt through its extensive holdings, both locally and outside of Egypt in several other Middle Eastern and African countries, as well as some European and Asian countries.

Due to the huge demand of cables and energy sectors in Ethiopia and the surrounding markets, Elsewedy Cables Holding Co. has taken the strategic decision to invest US$50 million  in Elsewedy Cables Ethiopia PLC, the first cables manufacturing plant in Dukem, Ethiopia.

An Ethiopian delegation of businessmen is expected to visit Egypt in March 2015, Trade and Industry Minister Mounir Fakhri Abdel-Nour said recently.

 [EgyptIndependent]

Following the global fall in the price of oil, the percentage yield of Ethiopia, a return that investors will receive on holding a bond to maturity, increased from 6.625pc to 7.82pc.

According to Bloomberg data, reported on December 12, 2014, among sub-Saharan dollar bond issuers, only debt from South Africa and Namibia are rated as above ‘junk’. Ghana was reduced one level in October, to B-, six steps below the investment grade. Nigeria is three levels higher, at BB-, while Rwanda stands at B and Kenya at B+.

Ethiopia, which sold debut Eurobonds at a 6.6 pc yield, and which now trades at 7.82 pc, is rated B, while Ivory Coast is rated B1, one level below Nigeria, according to Bloomberg.

It was three weeks ago that the government of Ethiopia joined the international capital market by getting a one billion dollar oversubscribed debut Eurobond from Europe and the United States (US), with 6.625pc interest rate. The government is planning to utilize the money for the establishment of two new sugar factories, the installation of an electric power system and the development of two industrial zones.

“This bond has a probability of being a junk bond for the economy if the oil price goes down at this pace,’’ said a macroeconomist.

Junk bonds are bonds that are known by their higher default risk and rated below investment grade.

The bond, on the market for three weeks in Europe and America, got a subscription of 2.6 billion dollars, but the government only sold a one billion-dollar bond as of December 5, 2014: half the amount that has been approved by parliament.

“We considered our paying capacity and decided to only sell a one billion dollar bond,’’ said Sufian Ahmed, minister of Finance and Economic Development, during the press briefing he gave at his office in Sidest Kilo, located on the King George VI Street, on Tuesday, December 16, 2014.

All subscribers are institutions, such as insurance firms, and 70pc of them are from the US, with the remaining being from Europe, said Sufian. He added that Ethiopia has got a good deal, because it does not have to pay commitment fees and insurance fees, despite these two fees being the norm in the securities market. In addition, it has a lesser interest rate, compared to other conventional loans, especially project loans, he said.

Even before joining the capital market, Ethiopia took project loans that pledge for a single project after assessment, and the government receives sector loans from international financial institutions, including the World Bank (WB), African Development Bank (AfDB), and EXIM banks.

In the market, the minister mentioned the upcoming election, a probability of war between Ethiopia and Eritrea, drought and logistics problems due to the country being land-locked. The aforementioned were listed as the risks in the market, but we were rated lower by the international buyers, said Sufian.

Ethiopia has a very safe debt rating, says Sufian, mentioning the five standards to level one country’s debt rate. Net Present Value (NPV) for Ethiopia, which draws a comparison between the cash outflows and inflows, 12.6pc, according to Sufian, who says that it is safe for a country to score up to 40pc, but not more.

Ethiopia’s NPV ratio to the export also stands at 100pc, he added, while it is safe to go as far as 150pc. The ratio of NPV for domestic revenue is 108pc, where the bottom line is over 250pc. Debt service ratio per export also stands at 6.8pc, far below the standard of 20pc. Ethiopia’s status in the last measurement, in terms of debt service ratio to domestic ratio, is 7.3pc, where the alarm is over 20pc.

“We do not have a plan to go back to the capital market for the coming two Growth the Transformation Plan (GTP) periods, said Sufian. “But if things force us to go back to the international market, we will definitely do so.”

The two sugar factories are located in the Southern region and the Eastern part, according to Sufian, who declined to further disclose the exact locations of the factories. The two industrial zones are designated to be constructed at Dire Dawa, 515Km east of the capital and Hawassa, 273km south of the capital in the Southern Region. The industrial zones are part of the government plan to establish industrial zones in four towns, including in Kombolcha, 376km to the north of the capital in the Amhara region and in Shillabo, 1,140km from the capital in Somalia Region, on a total of 5,130ha of land.

The minister mentioned that electric power transmission systems will be funded from this loan, the transmission line will be extended from Ethiopia to Kenya, and Kenya’s part is funded by the WB, according to sources.

The use of this loan for the projects will help the country earn foreign currency by exporting, but these are the areas where the GTP failed, so they all need special handling and follow-up, including determining what part of the government is the contract administrator and project manager, cash flow for the projects, and detailed feasibility studies, said a macroeconomist.

The government should give special emphasis, as the carry-on cost increases until the projects are finalized and start earning foreign currency, suggests this expert.

[AddisFortune]

Euro Foods, a French-based meat processing firm, is considering setting up meat processing plants in Ethiopia as more and more foreign companies are drawn into the sector.

In his recent interview with The Reporter, Hailesilassie Weres, director of Ethiopian Diary and Meat Industry Development Institute, said that Euro Foods is on the verge of acquiring land to set up a processing plant in Ethiopia.

The company would invest USD 32 million if all goes according to plan, Hailesellaise told The Reporter.

The company is expected to raise whole fund through equity financing abroad to finance their project in Ethiopia.

Abebaw Mekonen, secretary general of Ethiopian Meat Producers-Exporters Association also confirmed that the French-based company is on the process to join Ethiopian meat industry.

Euro Foods represents the surge of growing interest for the meat processing industry in a nation with the largest cattle population in Africa.

According to Abebaw, a local firm called Kegna is well underway setting up a processing plant in south eastern Ethiopia- namely Awash Melkassa area. Companies like Jigjiga Export Slaughter House PLC are also successful new entrants in the business.

The government plans to amass quarter of a billion dollars this year from the export of honey, dairy and meat products by the end of this fiscal year. Hailesellaise said that some 49 thousand MT of meat products are expected to reach the international market mainly the Middle East.

It is to be remembered that the Indian based Allana Sons had joined the meat export business with a USD 20 million investment to set up a new plant in the Oromia Regional State at the town of Ziway some 159 km from the capital. Allana Sons was registered as Frigorifico Boran Foods PLC in Ethiopia and was able to acquire 75 hectare of land. Hailesellaise said the Indian food giant is also associated with yet another investment buying out a Turkish meat exporting company stationed in Ethiopia.

According to Hailessellasie, Organic Abattoir Slaughter, Abyssinia Export Abattoirs, Luna Export Slaughter House and Modjo Modern Export Abattoir PLC are among the fairly performing firms in the industry, while Elfora Agro Industries PLC, which belongs to the Midroc Technology Group, is among the poor performing export slaughter houses in the meat industry.

The value chain and animal feed shortages are hampering the growth of the industry according to an industry analysis by the International Livestock Research Institute (ILRI). On the other hand, quality and meat hygiene are some of the critical barriers for Ethiopian meat exporters in the international markets competence.

[TheReporterEthiopia]

The preferential tariff agreement signed between Ethiopia and Norway has increased amount of Ethiopia’s exports to the later, Norwegian Ambassador Andreas Gaarder said.

The Ambassador said this preferential agreement, which was signed in 2011 opens the door for goods originating from Ethiopia to enter into Norwegian market free of duties.

The annual trade volume between the two countries, despite fluctuations every year, has reached 107 million Kroner in 2013 from 50 million in 2009.

The trade balance is in favor of Ethiopia with 95 million Kroner worth exports in 2013.

Horticulture, coffee and honey are some of the products Ethiopia exports to Norway, while it imports mainly building materials.

“The level of trade partnership has a scope to improve; I should point out that the trade balance is solidly and in favor of Ethiopia for many years.”

Regarding Ethiopia’s economy, Ambassador Andreas said the economy is booming. “…the sustained economic growth that Ethiopia has experienced is one of the fastest in the African continent combined with a large population.”

The Ambassador remarked that Ethiopia has the potential to be a voice of the world regarding climate change issues.

“Ethiopia is an important voice globally in matters of climate which is why Norway has engaged actively with Ethiopia on climate issues as part of its development cooperation.” The Ambassador appreciated Ethiopia’s efforts to become middle income country by 2025 by building green economy.

Norway is among Ethiopia’s partners regarding green economy and provides 16 million USD annually to assist Ethiopia’s efforts since 2011.

According to Spokesperson of Ethiopia’s Ministry of Foreign Affairs, Ambassador Dina Mufti, the two countries should work to improve economic cooperation, although the partnership is progressing.

As Ambassador Dina said the relation between the two countries is growing ‘steadily’, however, there is a need strengthen further the relationship in the areas of trade and investment.

“We would like Norwegian’s involvement in our effort to fight poverty; we hope Norwegian companies could come to invest in Ethiopia because the prospect is very much good. We would like to cooperate with them in the areas of fighting terrorism. We know the Norwegian position; they have a good at standing against the menus of terrorism. We would like also to cooperate in the issues of finding long last peace and stability our diverse… the opportunities for any investment in Ethiopia is very good and we would like to say the Norwegian you will come.”

He stated that Norway is working in promoting the issues of green energy and climate negotiations along with Ethiopia that has been working in these areas on behave of Africa.

“The current relation is growing; there is cooperation in two major areas: in the areas of humanitarian assistance and energy sector, as well. Ethiopia is the target country for the Norwegian international development assistance.”

[TheEthiopianHerald]

Ethiopian state minister of transport and communication Ato Getachew Mengestie has said that Ethiopia is to start using Sudanese port for importing goods.

Till now Ethiopia was using Sudanese port for exporting items overseas. The move is said to be triggered by an expanding demand from Ethiopia’s growing economy.

To this end the Ethiopian government has signed a deal with its Sudanese counterpart to import 50 000 tons of fertilizers through the Sudanese port.

Apart from this port, efforts are being made by the Ethiopian government to use other ports like Zeyela, Berbera and others as an alternative choice.

To solve the problem of storage space, a new 5 000 meter square storage facility has been opened a week ago around Modjo.

[ENA]

A new local oil company called Tebarek oil is on the way to the market starting from the coming New Year 2015 with its depot located in Awash town, 273km from the capital city in eastern Ethiopia.

The new company plans to have five filling stations in Modjo,Dilla, Hawassa, 73km, 359km and 273kms from Addis Abeba respectively and Akaki, on the outskirts of the city, is established with an initial capital of five million Br and plans to have a 100 million Br expansion in the future.

It will create job opportunities for about 20 employees in each station that will havea minimum areaof 4,000sqm. The company will serve one stop service in which it tries to deliver different services in a single station like car wash, laundry and pharmaceutical services, according to the company.

The oil company is coming into the market where there are nine distributors namely Oil Libya, Total, National Oil Ethiopia (NOC), YetebaberutBeherawi Petroleum (YBP), Kobil, Dalol Oil S.C., WadiAlsundus, a Sudanese Company,Nile and TAF oil S.C. the first four of these companies account for the 89pc of the total fuel distribution in the country while the remaining take 11pc.

[AddisFortune]

The Ministry of Trade announced that promising results have gained from the activities carried out to modernize the value chain for coffee.

Because of the efforts, amount of coffee supplied to the Ethiopia Commodity Exchange (ECX) has been increasing, Coffee Marketing Director at the Ministry Getahun Dipara said.

More than 40,000 tons coffee has been sold to the ECX over the past five months from coffee growing areas.

With the law issued in 2008, the government mandated all coffee exports to be traded through the ECX, aiming to both drive volumes through the exchange and control price manipulation.

Ethiopia over the past five months has exported 64.2 tons coffee and in return secured over 274 million USD revenue.

The revenue secured during the reported period exceeded the previous year same time by over 37 per cent, Getahun said.

According to him, activities are being carried out to export 235,950 tons coffee during this fiscal year.

For his part, Ethiopian Coffee Exporters Association PR Head, Getachew Admasu said the Association is overseeing to earn over 900 million USD by exporting 250,000 tons coffee this fiscal year.

The Association is working to improve export amounts so as to get more foreign earnings, he added.

[TheEthiopianHerald]

Julphar Pharmaceutical expands existing factory to create insulin factory with aim to make Ethiopia the insulin hub of Africa

Julphar Ethiopia Pharmaceutical Industry, which was inaugurated in February 2013, is introducing what it says will be Africa’s first insulin factory, as an expansion of the existing factory.

The company was established with a capital of 170 million Br, with a 55pc share being owned by UAE-based Julphar Gulf Pharmaceutical Industries, and a 45pc share by Ethiopian company, Med-tech Ethiopia. The insulin facility will begin construction in a month’s time in front of the existing facility at Gerji, in Bole District.

“We are hoping that the land for construction will be handed over to us in the next two weeks,” Mukemil Abdella, country director of Julphar Pharmaceutical Industry told Fortune.

There have been 32 small and micro enterprises doing business since 2006 on the plot Julphar is interested in, who are now arguing with the Woreda administration.

“Our government has taken a strong commitment towards the development and expansion of big industrial plants. That is why we decided to handover the land to Julphar by evacuating the enterprises,” said Heyru Nuru, land management head at Bole District.

Despite this, different members of the association have lamented the decision on the grounds that they would be left without land.

“If we are going to leave this place, I do not know where to go, as I cannot afford rent,” Niguse Wubishet, a member of one of the associations stated.

The decision is based on the signed memorandum of understanding between the Woreda seven micro and small enterprises bureau and members of the association. The Woreda had a discussion with the association before reaching a decision, Abate Sisay, head of micro and small enterprises at Woreda seven, told Fortune.

“We will give replacement land to those who have worked for less than five years, but as for the rest, it is not our concern as they should have left long ago, as per our agreement,” he added.

The factory will be constructed on an 11,051sqm plot of land.

Mukemil did not specify the production capacity of the plant, only saying that the company aimed to make Ethiopia the insulin hub of Africa by reaching across the continent. The Ethiopian side of the company, Med-tech Ethiopia, is a privately owned pharmaceutical and medical supplies importer and distributer. It has a 45pc share in the company, with Julphar Ethiopia Pharmaceutical, holding the majority share.

Julphar Ethiopia Pharmaceutical, which was established in February 2013, has the capacity to produce 25 million bottles of suspensions and syrups, 500 million tablets and 170 million capsules annually.

Julphar claims to be one of the largest pharmaceutical manufacturers in the Middle East and North Africa, and distributes medicine to over 40 countries. Established in 1980 in the United Arab Emirates (UAE), it operates in 12 internationally certified manufacturing facilities globally, produces over a million boxes of medicines daily and holds 3,483 product registration certificates. Eleven of its facilities are based in the UAE, covering production areas including tablets, syrups and suspensions. In 2013, Julphar launched a manufacturing facility in Ethiopia, as part of its ongoing international expansion strategy.

The Ethiopian pharmaceutical industry currently consists of 21 pharmaceutical and medical supply manufacturers, producing only 15pc of the total demand. The remaining 85pc, worth 300 million dollars, is imported, according the World Bulletin News website.

The factory, worth one Billion Br, is expected to begin production by the beginning of 2017.

[AddisFortune]

Newaman Metal Packaging Manufacturing Plc to start manufacturing by July 2015

A new Ethio-Italian company is to join the print and packaging industry in Ethiopia. The company is owned by the Italian NewBox S.P.A and Ethiopian investor Alemayehu Negussie.

The company, named Newaman Metal Packaging Manufacturing Plc was showcasing its sample products to potential customers at the Fifth Afri Print and Packaging Expo between December 11 and 13, 2014. Afri Print and Packaging Expo is an international trade fair for services, equipment and technologies for printing and packaging that is held in Ethiopia every year.

Newaman Metal Packaging Manufacturing Plc was established with a capital of 73 million Br. Alemayehu owns 55pc of the company while the rest of the shares go to NewBox. The company has been building its factory for the past year on a 6000sqm plot of land leased in Alem Gena town, 24Km from Addis Abeba, says the general manager.

The company will go through the commissioning process by March and start manufacturing in June or July, 2015, said the manager, who declined to be named. It will start with crown caps manufacturing and printing, according to Ottaviano Lucatello, NewBox S.A.P president. The company will have the capacity of manufacturing one billion crown caps a year, stated Ottaviano. After two years it will commence production of ornamented and regular cans, he added. The principal raw materials required for the production is sheet metal, which will be imported from abroad, according to the manager.

The local demand for crown cork is met through both local production and import. Ethiopian Crown Cork and Can Manufacturing S.C., CGF-crown Cork and Aluminum Cap Manufacturing Factory, Daylight Applied Technologies Pvt. Ltd Co. and Metal Crown are the four local factories in Ethiopia. Based on the existing production trend, it is estimated that 1.3 billion pieces of crown caps has been produced locally in 2013, showing 12.6pc production growth compared to the 2012 fiscal year, according to Central Statistics Agency (CSA).

At present, the major source of supply to the local market for crown cork is mainly import. During the period between 2011 and 2013, on average, about 93.24% of the total imports of crown corks were supplied by five countries, namely, India (42.39%), Spain (14.34%), Egypt (14.2%), Italy (12.97%) and France (9.35%), according to Ethiopian Revenue & Custom Authority (ERCA). Other countries supply the remaining.

There is a disproportional supply of crown corks when compared to the high demand, stated Fitsum Getu, One Cent Management & Marketing S.C. (OCM), chief investment and research director. The demand for crown cork depends mainly on the performance of its end-users such as beverage, mineral water and cosmetics industry, explains Fitsum. The current demand for the crown caps in Ethiopia from these industries, which is 3.3 billion pieces, is expected to grow to 5.5 billion pieces in 2015, according to a research by OCM, May, 2014. OCM is an Ethiopian private equity and assessment management share company established on December 3 2010. Newaman engagement will have greater significant to meet the increased demand, stated Ottaviano.

The fifth Afri Print and Packaging Expo was organised by Prana Promotion, Expo team and the Ethiopian Publishers and Printers Association. Prana promotion was established in 2008 with a mission to promote and fill the gap in potential sectors and industries in Africa. This exhibition is held in order to promote the print and packaging industry as well as to identify and fill gaps in the industry, said Nebyou Lemma, Prana Promotion’s managing director. Around 41 companies from all over the world had participated in the exhibition. This is a great way to keep ourselves up-to-date with the latest technology and share experiences, stated Mekdes Nega, a visitor from Akoatet Printing Plc. Though there is a great potential for the industry, it is characterized by a lack of educated human resource in the sector, according to Mekdes. Next year the exhibition will be held in Addis Abeba in a much bigger arena, stated Nebyou.

[AddisFortune]

Ethiopia’s Extractive Industries Transparency Initiative (EEITI) national secretariat brought together national stakeholders for a conference on 24-25 December 2014, on the contribution of the mining sector to Ethiopia’s economy as well as familiarizing them on the EITI process.

The national secretariat is hosted by the Ministry of Mines and Ethiopia has also set up an EEITI multi-stakeholder national steering committee, comprising the government, private sector, and CSOs.

The meeting raised awareness among federal and regional relevant personnel of the key implementing partners with regards to federal and regional mining, environmental protection, audit, finance and economic development and Inland Revenue bureau on EITI process. The conference also examined licensing and administration of minerals and petroleum; revenue management; environmental protection; supporting and coordinating artisanal mining; natural resource management and CSO concerns; as well as value chains and marketing.

Nigeria, which has been compliant (meeting all requirements in the EITI standard) since 2011, was represented by the national EITI executive manager who shared experience on the EITI process and also that country’s challenges and success in implementing the EITI.

Countries meeting the EITI Standard disclose taxes and all payments made to the government by gas, oil and mining companies allowing for an effective multi-stakeholder oversight of the use of the country’s natural resource; with the minorities and indigenous recognized as stakeholders in the extractive industry and their rights of safeguarded.

Ethiopia’s candidacy was accepted by the EITI in 2014 and the country says it is working on the compliance process to meet the EITI Standard and become a member by 2017.

Ethiopia earned USD 540.5 million in 2014 from the export of gold, tantalum and gemstones; however, the contribution of the mining industry to the GDP remains below 2%. The sector’s contribution to job creation is growing. In 2010, 2000 jobs were created in the sector and this figure has shot up to 50,000 in 2013. In 1991, Ethiopia legalized the artisanal mining sector, which now provides livelihood for more than five million people.

“The EITI is helping to improve governance by creating a platform for open discussion about the management of the natural resource among important government organizations and local communities,” said Mining Minister and EEITI National Steering Committee Chair Tolessa Shagi.

Underlining the importance of good governance and strong long-term development planning, UNDP Ethiopia Resident Representative Eugene Owusu said “Countries can avoid the pitfalls of the resource curse, and provide quality services, such as water, sanitation, education and healthcare to their citizens

UNDP is working with the Government of Ethiopia on two-year program costing over half a million US dollars that promotes inclusive growth through strengthening accountability and transparency in the extractive sector. This initiative, which falls under UNDP Ethiopia’s Democratic Governance & Capacity Development intervention, complements UNDP’s global work around the extractive sector, which focuses on sustainable and equitable management of the sector to promote human development.

[AddisStandard]

The East African Community (EAC) has made the most progress on integration and is the most ambitious of all regional economic communities (RECs) in Africa.

According to the latest report on regional integration by the African Development Bank, the EAC is top on the list of RECs in Africa.

“The EAC has developed a fully functional free trade area, first by implementing a Customs Union more comprehensively since July 2009, when both Rwanda and Burundi joined,” says the AfDB report.

Apart from establishing a Common Market in July 2010, AfDB says, the trade bloc’s most recent achievement on the journey towards economic union was the adoption of a protocol in 2013 outlining its plan to launch a monetary union in 10 years, a move that has not been matched by other RECs.

The study assessed eight RECs: EAC, the Arab Maghreb Union (AMU), the Common Market for Eastern and Southern Africa (COMESA), the Community of Sahara-Sahel States (CEN-SAD), the Economic Community of Central African States (ECCAS), the Intergovernmental Authority on Development (IGAD), the Economic Community of West African States (ECOWAS) and the Southern African Development Community (SADC).

Unlike EAC, the other blocs are in the process of establishing either a free trade area or Customs Union. Of the eight, it is only EAC that has commenced establishing a common market.

Regional integration, viewed as an important factor in Africa’s economic growth and development, is a favorite agenda of the United Nations Economic Commission for Africa (UNECA).

Like AfDB, UNECA acknowledges that EAC has made progress on intra-regional trade, though there is still room for improvement.

According to UNECA, between 2000 and 2012, EAC member states traded more with Africa, compared with countries belonging to other trading blocs, boasting average intra-regional export as a percentage by destination, of 19.5 per cent.

SADC came second with an intra-regional export average of 10.9 per cent, followed by IGAD at 9.2 per cent and ECOWAS, coming fourth with 8.7 per cent.

To monitor progress made, early this year, the EAC secretariat launched The East African Common Market Score Card 2014: Tracking EAC Compliance in the Movement of Capital, Services and Goods, which revealed that Tanzania and Burundi retained the highest number of restrictions to cross-border trade.

The scorecard reviews laws and regulations to gauge the level of conformity by each partner state to the Common Market Protocol that came into force in July 2010. It is one of the evaluation mechanisms that made the EAC stand out from the rest.

On overlapping membership, which has been criticized as a challenge to regional integration, AfDB sees no major problem with African states belonging to more than one REC. In fact, most African countries belong to more than one regional integration organization, with only Algeria, Cape Verde and Mozambique being party to just one agreement.

“By contrast, 14 countries have signed up to two regional economic communities, 19 to three, and 16 to four. Côte d’Ivoire is a member of five regional organizations.”

[TheEastAfrican]