Newsletter (April)

ETHIOPIAN NEWS April/May 2008

The Monthly Newsletter of Ethiopian Embassy in London

April/May 2008

For the whole of this year Ethiopia is marking its third Millennium and dedicating the celebration to securing the renaissance of Ethiopia by making a difference in every facet of the country’s national life. This year the Millennium Celebration coincides with that of the 17^th anniversary of the fall of the dictatorial “Derg” regime and the establishment of the new Federal Democratic Ethiopia. In addition to political solutions, the government has brought about multi-faceted economic policies and strategies that have resulted in double digit economic growth for the last five consecutive years, a trend that is set to continue. The day of victory addressed the decisive issues of peace, development and democratisation, which the nations, nationalities and peoples of the country sought for their survival.

The main purpose of celebrating May 28 and the Millennium are one and the same: to secure the renaissance of Ethiopia by making poverty and oppression history. The celebration of the May 28 Victory signifies Ethiopia’s bright future and the renaissance of the people and of the country.

Polls were held on two consecutive Sundays, the 13^th (local) and 20^th April (federal by-elections) and over 30 political parties stood for election.

Election board chief, Merga Bekana, said both elections went ahead peacefully and "some 93% of the 26 million registered voters had cast votes". About 3.7 million local and federal council seats were up for grabs. The opposition fielded only a few thousand contestants. "The casting of the votes was concluded peacefully and successfully across the nation," Merga said. The elections were given a clean bill of health. Out of 623 districts, the EPRDF won 559 seats and won all but one of 39 parliament seats. The EPRDF coalition also won all major seats in the administration of the capital Addis Ababa.

Ethiopia has branded three of its finest coffees, Sidamo, Harar and Yirgacheffe. The branding follows on from the trademarks that Ethiopia took out worldwide for the same three coffees.

“This is a landmark project for Ethiopia and we are proud to acknowledge our Fine Coffees in this way. This is an unprecedented level of investment in a truly innovative programme and we are looking forward to seeing our coffee farmers reap the rewards in the short, medium and long term,” said Ambassador Berhanu Kebede. It is the first time that an African nation has undertaken such an innovative approach to protecting its economy, and represents a new era in Africa’s economic development, according to the branding company involved, Brandhouse. The UK Company designed a logo which includes a sunrise and an “e” in the shape of a coffee bean (see page 1).

Crispin Reed, Managing Director of Brandhouse said: “We have always known the power that great brands can have commercially, but to apply strategic and creative thinking to a project of this scale and with such social benefit is incredible. Ethiopia must be congratulated on taking such a savvy and forward-thinking approach.” Coffee originated in Ethiopia, and it exports more than 177,000 tones of coffee a year, representing about 15% of the world's total coffee production. The logo will be used wherever the coffees are distributed and sold. Ethiopia’s Trade marking and Licensing Initiative was launched less than 18 months ago by Getachew Mengistie, Director General of the Ethiopian IP Office, and has made spectacular progress already. Licensing agreements are now in place with more than 70 companies in eight consuming countries.

Brandhouse and the Ambassador will host a photographic exhibition entitled “New Dawn, a Fresh Perspective on the Birthplace of Coffee” on 16^th July, by invitation only.

The Ethiopian Commodity Exchange (ECX) launched live operations on 4^th April. Dr Eleni Zaude Gebre-Madhin, Chief Executive Officer of the Exchange, disclosed that a partnership agreement was signed with Dashen Bank and CBE. “This is a major step for ECX as we have secured the first ever electronic banking gateway, which is a key move towards launching the market system,” Dr. Eleni said. The ECX trading system combines a physical trading floor located in Addis Ababa and transition to an electronic trading platform over time. The trading floor relies on open outcry price bidding where all interested sellers and buyers verbally negotiate simultaneously during trading hours. Only ECX members or their authorized representatives can use the ECX trading system on their behalf or on behalf of clients. ECX has transformed the commodity trading business in Ethiopia by providing accurate, reliable and timely data on a continuous basis to all market players. In addition to this, ECX is providing weighing, sampling, handling, and product certification (weight and quality), inventory control and management, warehouse receipting and central depository transfer of title and transaction order services.

China and India's explosion of trade with Africa, and greater investment and tolerance by traditional partners, have boosted the continent's development climate, Prime Minister Meles said. "The external environment has been more conducive for African development. We have more latitude to be authors of our own destiny," Meles told a meeting of finance and economy ministers in Addis Ababa. "There has been a significant change in attitudes among our traditional developmental partners. There has also been more willingness to tolerate alternative paths of development on the continent," Meles said. The interest shown by India and China "has created a new source for investment and technology for Africa's economy and a significant jump to foreign direct investment, hence Africa's rapid growth." But Meles added that China and India's growing appetite for food, raw materials and commodities was a mixed blessing for Africa - "These developments have contributed to a steep rise in commodity prices and the associated risks to African economies.”

Prime Minister Meles Zenawi attended the fourth Tokyo International Conference on African Development (TICAD IV) which was held in Yokohama from May 28-30, 2008. Over 40 heads of states and government took part. The theme for this year's conference was "Towards a Vibrant Africa". Three priority points discussed at the conference were boosting economic growth, ensuring human security and addressing environmental issues/climate change. While in Japan, Meles held private talks with his Japanese counterpart Yasuo Fukuda and met the President of the World Bank, the UNCTAD Secretary General and the Mayor of Yokohama, Hiroshi Nakata. TICAD was launched to promote high-level policy dialogue between African leaders and development partners. Since its inception, TICAD has provided comprehensive policy and guidelines on African Development. Policy recommendations at this year's conference will feed into the world's G8 Summit to be hosted by Japan. Japan announced plans to provide up to $4 billion in soft loans to African countries over the five years to 2012, for use in construction of cross-border infrastructure such as road networks and power grids.

Boosted by its agriculture and services sectors, and despite rising inflation, Ethiopia has reiterated its earlier economic growth forecast of 10.8 percent in 2008. Finance Minister Sufian Ahmed also told Parliament that Ethiopia has signed loan and grant agreements worth $912 million so far this year. "Performance in the agricultural and services sector indicates that Ethiopia will register a 10.8 per cent economic growth for the fifth consecutive year in 2008," he said. However, the price of food grains had soared in the last two years and annual inflation stood at 19 percent in March, up from 18 percent in February, he added. A joint U.N./Africa Development Bank report said Ethiopia's industry grew at 11 percent of GDP in 2006/07 and manufacturing at 10.5 percent.

Ethiopia's export earnings rose 32 percent year-on-year to $854.5 million for the first eight months of the 2007-2008 fiscal year, said Trade and Industry Minister Girma Birru. Last year, Girma predicted that Ethiopia's export earnings for the full 2007-2008 year would rise by roughly 30 percent to between $1.6 billion and $1.8 billion. He based the forecast on bigger volumes of coffee, flowers and pulses. Coffee was the largest contributor to the gains so far, earning $251.1 million from the export of 85,442 tonnes during the eight months beginning in July 2007. The forecast for 2007-2008 is 220,000 tonnes with earnings of about $500 million. So far in 2007-2008, oil seeds, grains, spices and flowers have generated $217.8 million while exports of leather goods, hides and skins, beef and livestock, gold, khat, textiles, garments and flowers have all increased. The export share of the leather and leather products, which used to be below 10 percent, has jumped to 36.7 percent following activities undertaken in search of markets. The licensing of 3,761 investors with over 77.5 billion birr capital again clearly demonstrates the increase in investment in the country. Ethiopia's exports have diversified to 30 items from a single export - coffee - a decade ago. Ethiopia now sells its products to 120 countries, compared with 57 just 10 years ago.

Prime Minister Meles Zenawi expressed Ethiopia's readiness to solve the border dispute with Eritrea peacefully. The Premier held talks with UN Secretary General Ban Ki-moon during
his stay in New York in early April. The PM has assured the UN chief that Ethiopia is ready to solve the border dispute peacefully and has no intention of taking military action against Eritrea. Meles urged the UN Security Council to confront Eritrea's anti-peace activities which is causing conflict in the Horn of Africa. The premier has been in New York to attend the first joint meeting of the AU peace and the United Nations peace and Security Council. Meanwhile, Eritrea has invaded Djibouti once again.

Axum obelisk to be re-erected by mid September

The Axum obelisk that was returned from Italy over two years ago is being re-erected, the Authority for the Research and Conservation of Heritage has announced.

The re-erection began on 4^th June and will be finalised in this, the Millennium year, in good time for the winding up celebrations in September. The ornately decorated 24-metre (78ft) obelisk is regarded as an outstanding example of architecture from the ancient city of Axum, capital of one of the four great kingdoms of the ancient world. The Italian government will fully cover the budget for the re-erection of the obelisk that amounts to $4m.

Ethiopia’s efforts to bring peace in the Horn region, have helped to encourage the signing of a ceasefire agreement between Somalia’s Transitional Federal Government (TFG) and the opposition Alliance for the Re-liberation of Somalia. On 9^th June in Djibouti, the parties agreed that, within 30 days, there would be “a cessation of armed confrontation throughout the national territory” [Somalia], approved for an initial period of ninety days, renewable for another 90 days. In addition, it states that “within a period of 120 days of the signing the TFG will act in accordance with the decision that has already been taken by the Ethiopian Government to withdraw its troops from Somalia after the deployment of a sufficient number of UN Forces”.

Ethiopia's intervention in Somalia in late 2006 was in response to an imminent threat from extremist elements within the Islamic Courts Union (ICU). In addition, Ethiopia was invited to intervene in Somalia by the TFG, which came to power after protracted negotiations among the various political groups in Somalia. Ethiopia’s intervention was and is supported by the international community including the African Union, the United Nations, IGAD and the Arab League. Ethiopia has always clearly declared its intention to withdraw from Somalia, but would not leave a security vacuum. Ethiopia’s Foreign Minister Seyoum Mesfin said that stabilising Somalia and building up its institutions is as important as the ongoing activities to maintain peace and development in Ethiopia. Training and material and financial support are crucial in organising the institutions of the TFG and in further strengthening its security forces. Ethiopia is doing its level best in this sector and in May, held a 3-week training seminar on public finance management systems for 34 senior Somali government officials in the town of Debre Zeit, Ethiopia. The trainees, drawn from various ministries of the Somali TFG, prepared a draft budget proposal which will be tabled in the Somali parliament. Deputy Prime Minister and Minister of Justice and Religious Affairs of the Somali TFG, Salim Aliyo Ibro, said that the TFG is committed to installing an effective budgetary system during the current year. He also urged the international community to meet its promises to provide financial and technical assistance to Somalia.

At the All African Leather Fair in January, PM Meles Zenawi said that Ethiopia would become a world centre of the leather industry. One hundred and sixty-six tanning, footwear and other leather goods producers have so far obtained licences from the Ethiopian Investment Agency.

Six tanners, seven footwear and nine leather goods factories are under construction, with 144 companies receiving investment licences. Among these, twenty are tanners, seventeen are footwear producers and eighty-seven companies are engaged in producing other leather goods. Abdissa Adugna of the Ethiopian Leather Industries Association said: “Development in this sector, including advanced technology, has increased national income and will create job opportunities for many people.” Ethiopia generated close to $90m in foreign currency from leather and leather products in the last fiscal year. Leather is fourth after coffee, oil seeds and gold. Currently there are 60

factories: 22 tanners, 16 footwear and 24 leather goods producers. Abdissa said “Three weeks ago the House of Peoples’ Representatives passed a proclamation to charge export taxes of up to 150 percent on raw and semi processed hides and skins. This declaration will help to develop the leather industry and our association is encouraging this measure.” According to Girma Birru, Minister of Trade and Industry, the Ethiopian government has plans to produce 60 to 70 thousand pairs of shoes per day by 2010. Ethiopian shoe factories now produce 24,000 pairs a day. Ethiopia supplies 1.3m raw hides and 16m raw skins (goat and sheep) per annum. The livestock population of Ethiopia is estimated at 90m head.

The Ethiopian Electric Power Corporation (EEPCo) has planned to construct 10 hydro-power plants worth over 13.1 billion dollars, in the next 10 years. Fan, with a capacity of generating 100 MW, Hallele-Werabessa 422-MW, Tekeze II 450-MW, Gibe IV 1900-MW, Genale III 258-MW, Genale IV 256-MW, Geba I & II 366-MW, Karadobi 1600-MW, Boarder 1200-MW, and Mendaya 2000-MW, will be built or launched under the corporation’s 25-year master plan. The corporation has slated capital of over 128 billion Birr for construction of transmission lines. According to EEPCo’s short- to mid-term power system expansion plan, the corporation is to construct power plants that would generate 8,552 MW. Twenty percent of the construction of Gibe III is completed. Work on Ethiopia’s largest hydro power project was officially started at the end of January 2008 and will double the nation’s current electricity production when completed in eight years time. A project that could generate 1870 MW, Gibe III is also expected to generate 300 million Euros annually. When completed Gibe would enter the East African power pool, where it would supply electric power for the Southern and Eastern African regions. Power would mainly be supplied to Kenya, Uganda, Tanzania among others. Gibe III, the third cascade on the Omo-Gibe river is currently the largest power project in the country. The country generates over 800 MW of electric power but has capacity to generate an astounding 45,000 MW with proper utilisation.

Global Energy (GEE), an alternative energy innovator focusing on the processing of organic solid and energy waste into usable products, has announced that it has successfully finalised the first stage of its agricultural activities, namely to plant, harvest and produce non-edible oil for the biodiesel industry and a myriad of other uses. GEE expects to commence seeding of castor in April 2008 and harvest in August/September this year. The expected yield of the harvest is 28,000 tonnes of seed, producing approximately 12,000 tonnes of castor oil. The current commodity price for castor ranges from $700.00 to $1100.00 a tonne. During the past five months, GEE has developed the infrastructure for an agricultural cooperative, in the regions of Wolaita and Goma Gofa, Ethiopia. This includes, signed agreements with over 25,000 families, to farm castor on approximately 7,500 hectares of their land. GEE has a logistics centre, a computer centre and a staff of company-trained agricultural supervisors. The initiative is situated 320 km south of Addis Ababa. The Company is training local personnel with twelve agronomists.

The Federal Supreme Court has launched an E-Litigation Service this millennial year that has enabled members of the public to litigate their cases through the internet rather than having to travel to court. Membere–Tsehay Tadesse, vice-president of the Supreme Court, has high hopes for the changes the new system may bring. “The new service will create greater efficiency on the part of those responsible in discharging public duties at the Court and it creates an environment where service seekers and other stakeholders can put pressure on; it offers an opportunity to measure the level of transparency”, he said. Called the “Information and Communication Technology (ICT) Service” it constitutes a breakthrough for the Ethiopian courts and is “a Millennium gift” to the people of Ethiopia, according to Zewdineh Haile (PhD, JSD), an international consultant who was at the launch. “This development makes Ethiopia the first in Sub-Saharan Africa in terms of service provision”, he said. Through the service the public can follow court trials from the beginning to the final hearing. It also lays open the number of appearances made, the duration of cases and the number of times the hearing is adjourned and to when. Micro Sun and Solution Plc (MSS) have launched a voice message system that allows the public to access specific case information on a touch-tone phone. The service is part of the efforts by the government to realize the Court Administration Reform Programme (CAR). “The work we have done at the court will allow professionals in the IT sector to invent technology instead of concentrating on making profits by selling hardware,” Micro Sun System’s CEO, Bluye Haddis said “Our intention was to do good things and being remembered was our objective in developing the software, not making money.”

Ethiopia plans to build a railway network spanning 5,000 km (3,107 miles) to connect different parts of the country as it develops its energy and mineral resources. Transport and Communication Minister, Junedine Sado, said work on the railway line is expected to start in the near future and that the government had established an agency to oversee the construction of the railway line. "As the country develops its natural resources in the field of mining - exploiting its vast deposits of iron ore in the west, gas and oil fields in the east and commercial agriculture - it requires an effective transportation system”, he said.

The Ethiopian Road Sector Development Program has won a prestigious Good Practice Award from the World Bank's Independent Evaluation Group (IEG). The Road Sector Development Program Support Project was selected from among hundreds of projects worldwide. The Bank is keen to support sectors that significantly contribute towards accelerating a sustained and people-centered economic development. IEG awards recognize strong Bank performers in design, implementation, and/or monitoring and evaluation and contribution to positive development outcomes. "I believe today's award recipients will provide examples for other work that can contribute to strengthening the impact of the World Bank Group's partnership with countries," said Vinod Thomas, the Director General of the Bank's Independent Evaluation Group. The Ethiopian Government plans to increase the total road lengths throughout the country from 37,018 km in 2004-5 to 48,990 km by fiscal year 2009-10. With 110% of the target goals for 2006-7 met, the Ethiopian government is on course to fully meet the plan's five-year benchmarks.

Ethiopia will play a key role in the world flower market within two years if the present growth trend continues in the floriculture sector. The country has highly favourable agro-climatic conditions for growing all varieties of roses, summer flowers, pot plants, shrubs and trees.

Floriculture greenhouse coverage is expected to reach 1,000 hectares by mid 2008. Leaving aside the new investors coming into the sector, with existing investors land holding, it is expected that greenhouse coverage will reach 2,000 hectares in the coming two to three years. There is a need to diversify the market and expand exports to other European countries. Some 70 per cent of the country's flowers are exported to the Netherlands while 10-15 per cent are exported to Germany.

The Rezidor Hotel Group has announced that it is to build a brand new Radisson hotel in Addis Ababa. The hotel will have 209 rooms and will open at the end of 2009. “With this signing we are adding a new country to our portfolio and are now present in 52 countries across EMEA [Europe, Middle East and Africa]”, commented Kurt Ritter, President and CEO of Rezidor. “In the Middle East and Africa we now have 47 hotels with almost 11,500 rooms in operation and under development.” The new hotel, owned by The Emerald Addis Hotels plc, will be perfectly located in the business and diplomatic centre of Addis Ababa in close proximity to the African Union Conference Centre. The Radisson Hotel Addis Ababa will include an all-day restaurant, a bar lounge, meeting facilities, and a fitness & wellness centre.

The double CD album The Very Best of Ethiopiques has received rave reviews since it came out last year. One of the musicians Mulatu Astatge played to an ecstatic crowd at the Cargo club in London in April. He and some of the other musicians on the album, such as Mahmoud Ahmed, will play Glastonbury this summer (28^th June) and the Barbican (27^th June), which is already sold out. The album was shortlisted in the best compilation album in the Mojo Awards this year. It can be found on Manteca Records.

Ethiopian marked World Environment Day by launching the second phase of its much acclaimed tree planting campaign in the presence of HE President Girma Woldegiorgis, government ministers and MPS, religious leaders and Ambassadors. The first phase saw over six hundred million trees planted in the “Two Trees for the Millennium” campaign. This phase is called the “Three Trees for the Third Millennium”.

The wonders of Ethiopia’s indigenous grain teff, used for making the staple injera pancakes, which has a slightly sour taste and is free of the protein gluten, are now being recognised around the world. Research shows it can boost the body's vitality and reduce fat production. Realising its potential, plans are afoot to introduce the crop to the West with safeguards against "biopiracy". One investor said: "We understand teff is not ours and want Ethiopians, who have cultivated, conserved and refined it for centuries to benefit from its use elsewhere.”