_files/image001.gif)
The Monthly Publication of The Ethiopian Embassy in London
Volume 5 Number 7 January 2008
PM Engages with communities
Building national consensus is a key priority in Ethiopia and the government has been conducting a consultation process in which Prime Minister Meles has played a leading role. Over the past five months the PM has held discussions with a wide range of communities including women’s groups, youth groups, farmers and academics, in a national debate that has been given impetus by the new millennium. The PM has also held discussions with representatives of the Ethiopian diaspora many of whom are now investing in Ethiopia. These discussions and debates have laid the groundwork for a better understanding of the political and economic vision of Ethiopia at a time when Ethiopia’s development and investment endeavours are really taking off.
Investment Opportunities
Investment is on the increase and incentive packages exist for investment in eight key areas – textiles, horticulture and cut flowers, leather and leather goods, oil seeds, agro-processing, tourism, privatization of state-owned enterprises and building materials. As a result of the fast-growing construction industry, cement is very much in demand and needs cannot currently be met. Ethiopia offers a strong domestic market to cement manufacturers, as does the sub-region as a whole. Over the next five years Ethiopia will make $1.4billion from flower exports.
UK Visitors to Ethiopia
Baroness Shriti Vadera, as UK International Development Minister, visited Ethiopia in November 2007 when she met the Prime Minister, Foreign minister and announced a new £75m water & sanitation project. Lord Malloch Brown, Minister of State at the Foreign and Commonwealth Office with responsibility for Africa, Asia and the UN, visited Ethiopia in early February to attend the AU Summit.
Ethiopia, fastest growing economy
Ethiopia had the fastest growing economy of Africa’s non-oil producing countries in 2007. An IMF report indicates that Ethiopia had a 10.5% GDP growth in 2007, well above the 6.1% average for Sub-Saharan Africa. The IMF said Ethiopia remained a good performer last year, as emerging sectors were challenging the dominance of Ethiopia’s coffee revenue.
On a recent visit to Ethiopia, Professor Jeffrey Sachs, Special Economic Adviser to the UN Secretary General and Director of the Earth Institute at Columbia University said “Ethiopia’s phenomenal economic growth, ignited by the combination of good policies, private investment and conducive global conditions is manifest across the country, where there is construction of many new buildings and roads, farmers making a lot of money, and the country exporting a lot of new crops.” In January, visiting American millionaire Victor Ozeri stated that, with current economic growth trends and all the potential starting to be exploited, Ethiopia could become the next China. The millionaire, who owns five companies in the USA and Asia, and 20 factories in China producing 38 million handbags and a factory producing 20 million mobile phone cases for Motorola annually, said “in the last five years that I’ve been here I have seen so much potential in Ethiopia. I believe Ethiopia can be the next China. I'm sure of it. I look at what Prime Minister Meles is doing here – he is building roads, he is building bridges. I come every six months and I look from balcony of my hotel and I see a skyline being born. He knows what he is doing. And I certainly realize that what's happening in Ethiopia now is what happened in China 25 years ago. The Ethiopian economy is about to explode. The Ethiopian people may not see it and if I had not been in China 25 years ago I couldn't notice it.”
Ethiopia, World Bank sign $256m deal
Minister of Finance and Economic Development, Sufian Ahmed, signed two financing agreements with the World Bank worth $256 million on 17th January. The first is for a grant of $215 million which will support the ongoing Protection of Basic Services programme. The grant will contribute to the deepening of transparency and accountability and will finance projects in the health, education, agriculture, and water sectors. It will help Ethiopia meet health sector MDGs. A $41 million loan will finance the implementation of the Ethio-Sudan Power Interconnection Project. The project is aimed at promoting the country’s power export. (see Energy Update, p3)
India’s $640m for sugar industry
India will give Ethiopia $640 million of credit out of a total $1.3 billion needed to boost Ethiopia's sugar production. The remaining $660 million will be covered by the Ethiopian government. Ethiopia plans to increase its annual sugar production to 1.3 million tonnes by 2011 from a current 300,000 tonnes. India's Exim Bank will offer the $640 million. "It is the largest ever line of credit that India has provided to any country so far," Gurjit Singh, India’s ambassador to Ethiopia, said while signing the agreement. The money will go mainly towards building a new factory at Tendaho in the Afar region, and expansion of Finchaa, one of four existing sugar factories in Ethiopia within the next two years. Tendaho will be Ethiopia's largest sugar factory and will be located along the Addis Ababa-Djibouti highway and railway line. Another Indian company, Sainik, has signed a contract with the Ministry of Mines and Energy to develop a 160m tonne potash mineral deposit, used for fertiliser production, in the Afar Region.
Exports hit $1.7 Billion Mark
Ethiopia's export trade has been increasing fast in the last three years and the export trade which was $1.008 billion two years ago has now reached $1.2 billion. “The income just collected is a 29% increase compared to last year,” said the Ministry of Trade and Industry. The country earned some $443.7 million from the export of items in the last five months of the Ethiopian fiscal year (from July
in the European calendar). Coffee, oils seeds, khat, cereals, leather and leather products, gold and cut flowers have generated the highest earnings. Coffee exports brought in $127m." The volume of cotton, cereals, tantalum, beef and cattle exported in the period exceeded the target set. Ethiopian and foreign investors are flooding in to take advantage of favorable investment conditions. Tax-free loans from banks, land provision and other incentives such as low labour costs, plentiful power and Ethiopia’s benevolent geography are attracting many investors. Increasing investment is aiding the efforts to cut unemployment and poverty. More than 100 foreign investors from America, Asia, Europe, the Middle East and Africa who have been licensed over the past five months alone will create job opportunities for 107,607 citizens according to Ethiopia’s Investment Authority.
China, Ethiopia step up cooperation
Prime Minister Meles Zenawi welcomed Chinese Foreign Minister Yang Jiechi in January and thanked China for offering Ethiopia considerable aid projects, debt relief and zero tariff treatment. He praised the 2006 Beijing Summit of the Forum on China-Africa Cooperation, which encouraged future development of Africa-China ties. Yang Jiechi said China will work with African countries to promote the Forum's sustainable development and enhance cooperation. During talks with Gao Jian, deputy governor of the China Development Bank, PM Meles said China is proving to be a true partner. Meles was keen for the assistance China is providing, particularly in the infrastructure development sector, to be "further strengthened" and expressed his desire to obtain wide assistance from the China Development Bank for the implementation of housing, infrastructure development and other priority areas. Gao said the bank is currently assisting road construction, housing, power generation and other infrastructure development projects underway in Ethiopia. Also in January, China signed a deal with the African Union to build a $61 million convention centre at the organisation's headquarters in Addis Ababa. Beijing will fund the project, to be finished by 2011, and is committed to helping the continent develop itself. Yang said "Africa has every right to develop its resources to become a far more prosperous continent and China is committed to help."
Ethiopia secures coffee trademarks
Ethiopia has won its battle to have exclusive use of its coffee trademarks – Sidamo, Harar and Yirgacheffe. Resistance to Ethiopia's rightful claims from companies in Japan, Germany and the U.S. was successfully countered, according to Ethiopia’s Intellectual Property Office.
Starbucks, the world's largest coffee shop chain, has announced that it will open a support centre for coffee farmers in Addis Ababa this year. The announcement was made by Starbucks Chairman Howard Schultz on a visit to Ethiopia in December. "The facility, the first in Africa, will enable Starbucks to work with Ethiopian farmers to raise both the quality and production of the country's high-quality speciality coffees," Schultz said at a joint press conference with PM Meles Zenawi. Starbucks is also in talks with an Ethiopian apparel factory to manufacture the black aprons worn by its 27,000 staff. In June 2007, Starbucks and the Ethiopian government reached an agreement that allowed the coffee shop chain to use and promote the Harar, Sidamo and Yirgacheffe coffee designations in markets where trademarks exist, as well as where they don't. PM Meles said. "The farmers' support centre will have tremendous impact on 15 million Ethiopians dependent on the coffee business. We will be working closely with Starbucks to bring brand recognition and promotion for our high-grade Arabica beans."
Fuel from Plastic
An Indian and Mauritian joint venture is to start production of fuel from waste plastics in the Oromia region using new technology. “The joint venture has secured financing from the State Bank of India and is expecting waste plastic data from the Ministry of Trade and Industry to gauge its production potential,” says Premdut Doongoor, Ambassador of Mauritius to Ethiopia who invited the investors to Ethiopia. Indian scientist Professor Alka Umesh Zadgaonkare’s 2003 innovation, turns all plastic materials (PVC) into fuel in a four hour process that will cut environmental pollution and clean up waste such as the ubiquitous plastic bags.
Ethiopia is also growing the bio-fuel jatropha. More that 10k hectares have been planted so far.
Energy Update - The future is hydro
In New York for President Clinton’s Global Initiative conference in September 2007, Prime Minister Meles Zenawi stressed that Africa need not pollute as it grows. “Africa has the potential to grow in a green fashion. I will give you two examples, Ethiopia and Congo [DRC], these two countries alone can generate enough electricity through hydro-power to electrify the whole of the [African] continent.”
By 2011, when a total of three hydro-electric power projects - Anabeles, Gilgel Gibe and Tekeze - go functional Ethiopia will be exporting electricity to neighbouring countries Kenya, Sudan and Djibouti, earning more foreign currency revenue than it earns from its current main export, coffee. The Tekeze hydro-power station will begin generating power in 2008/9 - the dam will hold nine billion cubic metres of water, produce more than 10 species of fish and irrigate over 60,000 hectares of land. The Sudan project transmission line will run between the Ethiopian towns of Bahir Dar and Metema and up to the border with Sudan connecting the countries’ grids.
Minister of energy, Alemayehu Tegenu, said that over $41 million in loans has been obtained from the World Bank to accomplish the Ethio-Sudan joint project. Ethiopia may build as many as nine hydropower plants over the next 10 years. The aim is an 11-fold increase in capacity to 9,000 megawatts by 2018 with surplus power exported. A feasibility study for Gibe River dam in southern Ethiopia should be finished by the middle of the year.
Ethiopia is seeking finance for three of the four proposed projects while the UK and the Ireland-based FairFund Foundation will help fund the 470 million-euro Halele Worabese dam on a tributary of the Gibe. Italy's Salini Costruttori SpA is building three of the five dams currently under construction, including the $1.7 billion Gibe III. Ethiopia is also considering a 26-kilometer (16 mile) undersea transmission line for exporting electricity to Yemen via Djibouti. A feasibility study on the $196 million project to connect Ethiopia and Kenya with transmission lines should be finished by April. Those lines may eventually link Ethiopia's hydropower plants to the 12-nation Southern Africa Power Pool via Tanzania.
Surge in Agri-Production Expected
State Minister of Agriculture and Rural Development, Dr. Abera Deressa, has announced that this year's harvest will register a 30-40% increase as a result of good, even rainfall distribution and the efficient use of inputs (high-yield seeds and fertilisers). Access to basic education, healthcare, water supply, and agriculture extension services have expanded hugely, as have roads, telephones and electricity, which have all encouraged production. The general income level of farmers has increased significantly. The export of cash crops saw an increase of 11 percent, earning $787.9 million in foreign currency last year.
Millennium Update
Almost a billion trees have been planted in Ethiopia since July 2007 when the first trees were planted in a campaign whose initial aim was to plant 40,000 trees during the course of the millennial year. The UN Environment Programme recently praised Ethiopia for its drive to combat climate change by planting trees.
Kalabash Events marked Ethiopia’s Millennium with films, including Black Gold, and with Ethiopian music at a cultural event on 17th January. The story of King Solomon and the Queen of Sheba was the theme of storyteller, Sally Pomme Clayton’s 2007 Barbican theatre event which will be duplicated in Newcastle this year. Ethiopia flora specialist at Kew Botanic Gardens, Sally Bidgood will give an illustrated talk entitled The Unique Flora of Ethiopia on 21st February in Kirtlington, Oxfordshire. Oxford University is to hold a workshop on Ethiopian culture and history entitled Ethiopia Day, on 12th April at St Cross College, Oxford. Iyassu Berhe, dramatist and poet, will perform. The line-up will also include Cambridge Professor of African Archaeology, David Phillipson who will be the keynote speaker. Email Dr Hammond at jenny@ronandjenny.co.uk to book. Places are limited so book early.
Farmers Day celebrated
Farmers Day was marked nationally on 14 January in Hawssa, capital of the southern SNNPR State. Last year, the Day was marked in Bahir-Dar in the Amhara region. The Agriculture Ministry said over 525 “development heroes” were given awards, selected from among farmers, their trainers, investors, organisations, institutions and local administrations. The criteria were the ability to achieve food self-sufficiency in the face of natural disasters such as drought. "Some of the winners have acquired wealth in millions and many have hundreds of thousands of Birr in cash and assets." Farmers are behind the remarkable growth Ethiopia has registered over the last five years.
News in Brief
ERA sign 403.3m Birr contract
Ethiopia’s Road Authority (ERA) and local private company COMAND have signed a 403 million Birr agreement to asphalt the 65km Mojjo to Ejere gravel road with government funding, to be completed within three years.
All school age children will go to school before the 2015 MDG, the Education Ministry has announced. The ministry is implementing a quality improvement package with six programmes - teacher development, and improvement in schools, curriculum, information & communication technology, leadership and management.
The upsurge in the construction of quality hotels in Addis Ababa and regional capitals and the activities of investors in the eco-tourism business are tapping Ethiopia’s massive tourism potential. The Millennium celebrations are helping to change the world view of the nation.
By 2010 free retroviral drugs will be available to all HIV-AIDS sufferers. Meskele Lera, deputy director of the HIV/AIDS Prevention and Control Office, said: "It is an ambitious target, but a necessary one.” A number of other measures would be put into place as well, including wider access to condoms and more testing and awareness-raising.
A fuller version of this newsletter is available at www.ethioembassy.org.uk. Please email us if you would prefer to receive an email version at info@ethioembassy.org.uk