Issue #42 News From Ethiopia February, 2017 Updates From the Embassy in Canberra In This Issue Feature Topics Unilever Global to Expand Investment in Ethiopia Government giving appropriate responses at drought hit pastoralist areas UN urges support for Ethiopian government's 'remarkable' efforts Companies to launch construction of over $850 million hydroelectric power project E: info@ethiopianembassy.net W: www.ethiopianembassy.net twitter@ethembassy1
Contents Premier laid cornerstone for Bure agro-processing industrial park... 2 Ethiopia took advantage of WEF to Promote Investment Atmosphere... 2 Minister positive about changing image through tourism... 3 Government giving appropriate responses at drought hit pastoralist areas... 4 Unilever Global to Expand Investment in Ethiopia... 5 Ethiopia 5th largest investor in renewable energy in Africa, says report... 6 UN urges support for Ethiopian government's 'remarkable' efforts... 7 Ethiopia among Top 10 Economic Performers in 2016: UN Report... 8 House approves draft proclamation for establishment of 10 billion birr youth revolving fund... 10 Ethiopia looks to mining to add shine to its success... 10 France's Axereal to build malt processing factory in Ethiopia... 12 MIDROC Licensed to Produce Gold, Silver in Benishangul-Gumuz... 12 Companies to launch construction of over $850 million hydroelectric power project... 13 1
Premier laid cornerstone for Bure agro-processing industrial park Source: www.fanabc.com A cornerstone was laid by Prime Minister Hailemariam Desalegn for the construction of Bure agro-processing industrial park in Amhara regional state. In order to attain Ethiopia s plan to shift from agricultural led economy to industrial one, works are in progress to create sustainable and strong bond between the agricultural and industrial sectors, the Premier said. Bure agro-processing industrial park could be a model for government s ambition to move to industrial led economy. The Premier finally called on relevant bodies to give due attention towards supplying the necessary raw materials so as to make the industrial park a success. Dr Mebrhatu Meles, State Minister of Industry, on his part said four agroprocessing industrial parks will be established in Amhara, Oromia, SNNP and Tigray regional states. Construction of Bure agro-processing industrial park will be completed this year, including furnishing it with the necessary infrastructural facilities, to enable investors to begin production next fiscal year, he said. Bure industrial park will be erected on 1,000 hectares of land, of which 260 hectares will be developed earlier. It will consist of among others, model agro-processing buildings, warehouses, laboratories, a one-stop-shop, residential units and a training centre. Development of agricultural products, such as pulses, oilseeds, vegetables, fruits and animal products will be carried out in the area to use them as inputs for the industrial park. Bure agro-processing industrial park is expected to create several employment opportunities. Ethiopia took advantage of WEF to Promote Investment Atmosphere Source: www.ena.gov.et Ethiopia has taken advantage of the World Economic Forum held in Davos, Switzerland this week to promote its investment friendly atmosphere, Prime Minister Hailemariam Desalegn said. 2
The Forum has created an opportunity for Ethiopia to confer with development partners and representatives of giant international companies, the Premier said. The Premier has discussed with leaders of various countries including Switzerland, China and UK on various issues. Hailemariam said the discussions were fruitful. The discussions with investors and various company representatives was focused on four major areas, he said, adding that consensus was reached with them in the areas. Creating more jobs by modernizing the agriculture sector is the first focus area, he said. The discussion with companies that are desirous to engage in the agriculture sector was concluded with agreement to support agricultural transformation in the country. The other priority area, substituting imported pharmaceutical products, was aimed at encouraging companies to engage in the sector thereby to substitute imports with locally manufactured products. The nation imports 80 percent of pharmaceuticals products to meet the local demand. The discussions held with a number of companies in this regard were successful. Encouraging companies to engage in the ICT area thereby to improve national capacity is the other priority area. In this regard, consensus has reached with the companies to support the nation in the area, the Premier said. In the health area, the country's desire is to attract companies engaged in health services especially tertiary health services, Hailemariam said. In this regard, agreement has reached with companies engage in the discussion to support Ethiopia's efforts. Hailemariam said that Ethiopia has taken advantage of the Forum to attract more companies in the priority areas and reached consensus with world leaders to further enhance ties. Minister positive about changing image through tourism Source: www.ena.gov.et The Minister of Culture and Tourism Hirut Woldemariam has commended the expansion and positive role of starred hotels in growing the economy and promoting the nation's positive image. With specific reference to the growing trend of hotels in the Capital, the Minister Dr. Hirut said 20 per cent of hotels being 3
built in Addis Ababa fulfil international standards. Dr. Hirut was speaking during the inaugural event of Azman Hotel in Addis Ababa at a cost of 200 million Birr. She said the emergence of such big and modern hotels in the city contributes immensely to the growth of the economy. The expansion of the tourism industry creates ample job opportunities for citizens besides availing facilities for tourists, the Minister added. The newly inaugurated Azman Hotel which took four years to complete has created jobs to over 120 citizens. Government giving appropriate responses at drought hit pastoralist areas Source: www.fanabc.com The federal government has been providing assistance for people living at drought hit pastoralist areas by allocating over 1 billion birr, said Government Communication Affairs Office (GCAO). In a press conference he gave here yesterday, Office Minister, Dr Negeri Lencho, responded to questions raised by journalists regarding the current State of Emergency, deep-reform program, drought, conflicts at Oromia and Ethiopian Somali border areas and recently concluded 28th AU summit. Dr Negeri said the government has been giving appropriate response at the drought hit low land areas of Afar, Ethiopian Somali, Southern Nations, Nationalities and People s (SNNP) as well as Oromia regional states. According to the Minister, the government officially announced last month that 5.6 million people are in need of emergency food assistance as a result of the drought that hit some pastoralist areas this fiscal year. In order to reach these people, the government needs 948 million US dollars, he said, adding the government has so far committed 1 billion birr and the regional states are also allocating budget by themselves. Commenting on the gains made after the State of Emergency declared last October, Dr Negeri said peace had been restored following the effective implementation of the emergency law during the past four months. Speaking on the deep-reform program being conducted to address bad governance, he said, it is bearing fruit. The Minister further said works are underway with the involvement of elders to resolve the conflict that occurred at Ethiopian Somali and Oromia border areas. 4
Explaining Ethiopia s current diplomatic ties with Egypt and South Sudan, he said, it has good relations with both countries, and cited the recent discussion leaders of the three countries held on the sidelines of the 28th AU summit as cases in point. Regarding the recently concluded AU summit, he said, the country hosted the continental meeting successfully. Unilever Global to Expand Investment in Ethiopia Source: www.ena.gov.et The British-Dutch multinational consumer goods company, Unilever Global, has expressed interest to expand its investment in Ethiopia. Prime Minister Hailemariam Dessalegn had discussion with Unilever CEO Paul Polman on the sidelines of the World Economic Forum at Davos, Switzerland. The consumer goods company has built a factory that has gone operational last June with 13 million Euros in Eastern Industrial Zone, not far from the capital Addis Ababa. Unilever CEO Paul Polman said the company has a plan to engage in tea production too. It will soon conduct feasibility study, according to the CEO. On the other hand, the company announced that it would expand its investment in cleaning agents and personal care products. The recently inaugurated factory has been producing nine kinds of products, including soaps and powder soap, it was learned. The company based in London and Amsterdam has many branches across the world and the factory it built in Ethiopia is its 90th factory, Polman said. The factory has created 100 jobs and more that 500 participate in the distribution of its products, he further added. According to the CEO, Unilever wants Ethiopia to be included in a commission which is established by its initiation to assess the negatives impacts the Global Climate Change Convention has on trade activities. Prime Minister Hailemariam Dessalegn said his government will support the investment expansion plans of the company. Ethiopia is also willing to become a member of the commission and ready to collaborate with it, he added. 5
Ethiopia 5th largest investor in renewable energy in Africa, says report Source: www.fanabc.com Ethiopia is the 5th largest investor in renewable energy at 100 million US dollars, according to the Renewable, Global Status Report. South Africa leads in renewable energy investment followed by Morocco, the second largest renewable energy investor at two billion US dollars. Kenya comes to third with investments worth 357 million US dollars and Uganda at 134 million US dollars is fourth. Ethiopia has over half a million solar lighting systems and over four million installed clean cooking stoves, making the country among the top five in Africa when it comes to using these technologies, according to the report. Many African countries have increased their policy commitments in the power sector during 2015 and that has continued with all renewable power generating technologies being deployed across the continent. The report further states that the largest markets for off-grid solar products has been Sub-Saharan Africa with 1.37 million units sold in the region followed by South East Asia with 1.28 million units sold. When it comes to global trends, data shows investment in renewable energy has increased to record highs in spite of plunging fossil fuel prices, the strength of the US dollar, which reduced the dollar value of non-dollar investments, and the continued weakness of the European economy. For the sixth consecutive year, renewable energy outpaced fossil fuels for net investment in power capacity additions. Estimates so far indicate that green energy has created 8.1 million direct and indirect jobs. The report shows that solar and bio-fuels provided the largest numbers of renewable energy jobs. Large-scale hydropower accounted for an additional 1.3 million direct jobs. Considering all renewable energy technologies, the leading employers in 2015 were China, Brazil, the United States and India. Renewable energy sources are now established around the world as mainstream sources of energy, the report states. Rapid growth, particularly in the power sector, is being driven by several factors, including the improving costcompetiveness of renewable technologies, dedicated policy initiatives, better access to financing, energy security and environmental concerns, growing demand for energy in developing and emerging 6
economies, and the need for access to modern energy. Consequently, new markets for both centralized and distributed renewable energy are emerging in all regions. UN urges support for Ethiopian government's 'remarkable' efforts Source: www.un.org Commending the Ethiopian government and humanitarian partners on the response to last year's El Niño drought that left 10.2 million people needing food assistance, UN Secretary-General António Guterres and UN aid chief Stephen O'Brien yesterday said the international community must show total solidarity with country as it faces a new drought. This High-Level event must express our total solidarity with the Ethiopian people and the Ethiopian government. And let's be clear: that solidarity is not a matter of generosity. It is a matter of justice and of self-interest, the Secretary-General told those gathered for the event, held earlier yesterday in the Ethiopian capital, Addis Ababa, on the margins of the 28th Summit of the African Union. It is a matter of justice in relation to the enormous generosity of the Ethiopian people themselves, he said, recalling that during his 10 years as UN High Commissioner for Refugees, he had witnessed the way Ethiopia became not only the largest African refugee-hosting country but the country with the most determined policy of keeping all its borders open, even in the most difficult security situations; an example that, I would say, needs to be thought about in a world where unfortunately, so many borders are being closed. Moreover, he said, the current situation has not caught the government and the people of Ethiopia unprepared, even if the magnitude of the drought clearly is above the capacity of the Horn of Africa country to resolve. Ethiopia has persistently applied a policy of building resilience in relation to the natural disasters that unfortunately with climate change have come to be more and more frequent and intense, explained Mr. Guterres. Showing solidarity with Ethiopia is a matter of self-interest because the link between humanitarian and development with peace and security is growing everywhere, and to invest in building resilience of populations and to invest in the best humanitarian needs in situations of stress like the one we are facing is also to contribute to strengthen peace and security, said Mr. Guterres, noting that a 7
number of countries around Ethiopia are in the midst of deep crises Somalia, South Sudan and Eritrea. Describing Ethiopia as a pillar of stability in the region, he said the international community cannot allow the effect of drought to be a promoter of additional instability, social unrest, or conflict as this would have dreadful consequences not only in relation to the conflicts in the area but in connection to displacements of populations, in a world that is so little inclined to receive more migrants, and to global terrorism that is now a threat everywhere. With all this in mind, he urged the participants to transform this session of solidarity in a commitment to work together not only to address the pressing humanitarian needs of Ethiopia but to join efforts in addressing the challenges from a development perspective, a sustainable development perspective and from a peace and security perspective the world faces today. Just back from a three-day visit to Ethiopia to see first-hand the impact of failed rains in the southern parts of the county, Mr. O'Brien, who is the UN Emergency Relief Coordinator, said that in Warder zone in Ethiopia's Somali Region, he had witnessed the immense impact the drought is having on people's lives and livelihoods. Below average rains in south and south eastern parts of the country caused by the negative Indian Ocean Dipole have led to a new lowland drought. Among the most affected areas are parts of Somali and Afar regions and a number of lowland areas of Oromia and SNNP regions. The new drought has led to shortages of water and pasture in the pastoral and agropastoral communities. Deteriorating livestock body condition and loss of livestock are also being reported. We need to act now before it is too late, said Mr. O'Brien, calling on the international partners to join the Ethiopian government in funding the 2017 Humanitarian Requirements Document, which seeks 948 million US dollars to assist 5.6 million people. Ethiopia among Top 10 Economic Performers in 2016: UN Report Source: www.ena.gov.et In spite of a marked deceleration in real GDP growth rate in the World in general and in Africa in particular Ethiopia remains one of the top ten performers UN report displays. 8
The report indicated that despite the decline in world economic growth, El Nino induced drought that affected harvests and the global low commodity prices the nation has registered a real GDP growth rate of 5.4 percent in 2016. The report entitled World Economic Situation Prospects, 2017" says the world s economic growth just expanded to 2.2 percent in 2016 compared with 2.5 percent in 2015. A decline in growth of world economy is due to weak investment, increasing uncertainty, low commodity prices and slow growth of trade. Africa s growth has also declined to a decade low level of 1.7 percent from 3.7 in the previous year, the report indicated. The economic growth in Africa dropped due to weak global economy condition, persistent low oil and commodity prices and adverse weather condition. The decline in overall continental growth also reflects the weakening economic conditions in the Africa s largest economies of Nigeria, South Africa and Angola, and the deceleration in Algeria, Egypt and Morocco. Despite this condition, Ethiopia remains one of the top ten performers in the continent in terms of real GDP growth, however, the overall growth slowdown due to the effects of the El Nino induced drought that affected harvests and the global low commodity prices, it said. It indicated that the economic growth in Ethiopia is driven by huge government investment in infrastructure development and development sending as well as private investment. On the supply side, the better performance in the industrial sector as well as service sector positively and significantly affected growth, while the agricultural sector marginally contributed to the GDP growth. The industrial sector expanded due to continued investment in infrastructure and the construction of industrial parks, while the growth in hotels and restaurants, wholesale and retail trade as well as renting businesses led to the growth of the service sector, it added. The marginal contribution of the agriculture sector is because of low harvest as a result of drought. In terms of structure, the economy is still dominated by service sector followed by the agricultural and industrial sectors. It is projected that Ethiopia is expected to register a 7 percent growth in 2017, the report indicates. A moderate economic growth recovery is projected in Africa from 2017-2018, even as the global economy continues to be trapped in a prolonged period of slow growth. The global growth is projected to see a moderate improvement to 2.7 and 2.9 percent in 2017 and 2018 respectively while in Africa it is expected to expand by 3.2 and 3.8 percent in 2017 and 2018 respectively. 9
House approves draft proclamation for establishment of 10 billion birr youth revolving fund Ethiopia looks to mining to add shine to its success Source: www.fanabc.com Source: www.fanabc.com In its regular session held today, the House of People s Representatives (HPR), approved the draft proclamation tabled for the establishment of a 10 billion birr youth revolving fund. The Commercial Bank of Ethiopia (CBE) will administer the fund allotted for youth job creation. According to the proclamation, the loan will be distributed via micro financial institution. But, if there are no financial institutions, it will be disbursed via CBE. The Commercial Bank of Ethiopia is also responsible to supervise the fund and report to the Ministry of Finance and Economic Cooperation. Regional states and city administrations, including the Ministry of Youth and Sports, were entrusted with the task of getting the fund implemented. Training and recruiting the youth, including project designing, are nearing completion, it was indicated. Youth aged 18-34 will benefit from this job creation scheme. Already a gem of an economic growth story, Ethiopia looks set to add significant shine to its economy through the development of its mineral resources sector. The East African country s Minister of Mines, Petroleum and Natural Gas, Motuma Mekassa, told delegates gathered for a country case study at the Investing in Mining Indaba in Cape Town on Monday that the country had identified the mining sector as a priority for development. And, according to a statement from the country s Ministry of Mines, Petroleum and Natural Gas, the potential is great. The chief geologist at the Geological Survey of Ethiopia, Hundie Melka, told the session that the geologically diverse country was rich in minerals, including gold, gemstones, platinum and soda ash. Ethiopia is virtually untapped, diverse and vast mineral resources offer huge potential opportunities for exploration and development, according to the Ministry of Mines, Petroleum and Natural Gas statement. 10
The focus on developing its mineral resources is part of the government s plan to shift from an agriculture-led economy to an industrial one. At the moment the agricultural sector accounts for 46 percent of gross domestic product, 80 percent of employment and 85 percent of export revenues. Recognizing the potential of the mineral sector to trigger further industrialization and wider economic development, Ethiopia s policy framework envisages the minerals sector to be the backbone of industry by 2023. The government s ambitious plans for mining include a target to increase the sector s contribution to GDP from today s 1.5 percent to 10 percent by the year 2025. Motuma noted that the country, which was among Africa s fastest growing economies, had recorded double digit growth for many years. But he added that there was no room for complacency. We are on a good track, he said, but we are late. He noted also that the targeted growth was from a low base. Considering its potential, today s contribution from the mining sector was insignificant, the minister said. The ambitious targets were, however, also matched by an impressive programme of action and interventions to make the sector and the country attractive to investors. Because it was a latecomer to developing this sector, the minister said, Ethiopia didn t have much experience, one reason the country s plans were largely focused on attracting foreign investment and international partners. As a government, we are trying to create a conducive environment for investment, the minister said. In addition to the development of infrastructure and the provision of quality geo-scientific information, policies and practices put in place to attract investment include a clear and transparent legislative environment and an enabling fiscal and tax regime. The government is ready to welcome investors from anywhere in the world, Motuma said. He said they were working very hard to provide the infrastructure needed by mining companies and added that they were aware that transparency was very important for investors and financiers. Ethiopia had made a strong commitment to work with companies, both big and small, to develop mineral resources, whether that be by providing infrastructure or improving rules and regulations. Whenever their efforts stumbled on a lack of experience, the government sought help from outside parties. The minister said transforming the sector was a priority but we lack capacity in a wide array of areas, from management of 11
licensing to environmental issues and even community development We are trying to increase capacity ourselves but we need partners. France's Axereal to build malt processing factory in Ethiopia Source: www.reuters.com French grain co-operative group Axereal is to build a malt processing factory in Ethiopia as it seeks to tap into rising demand for beer in emerging market countries. Axereal is one of France's biggest grain handlers and its Boortmalt division is also one of the world's largest malt makers, behind fellow French groups Soufflet and Vivescia. In Ethiopia, Boortmalt will develop a malt processing site with an annual capacity of 60,000 tonnes, with the aim of starting production by the end of 2018, Axereal said on Tuesday. "The market for beer is growing in emerging countries, and in Africa in particular," it said in a statement. "Axereal Group will leverage its expertise by working alongside its brewing customers to develop local barley and malt production in these countries," it added. Boortmalt will also add a fourth production facility at the Belgian port of Antwerp, which will make its hub there the world's largest malt production site with 470,000 tonnes in annual capacity, it said. Financial details of the investments were not disclosed. Rising worldwide consumption of beer, in which grain-based malt is a key ingredient, has led Boortmalt's 10 existing malt factories in Europe to run at full capacity of 1.1 million tonnes, Axereal said. The planned investments will bring its total annual malt capacity to 1.3 million tonnes, the company added. MIDROC Licensed to Produce Gold, Silver in Benishangul- Gumuz Source: www.ena.gov.et The Ministry of Mines, Petroleum and Natural Gas has licensed MIDROC Ethiopia Group to produce gold and silver in the regional state of Benishangul-Gumuz. The license will enable MIDROC to produce gold and silver within the 27.06 square kilometre areas in Metekel Zone of the region for 15 years. MIDROC expected to produce over 46,000 kilogram of gold and silver during the coming 11 years, according to the Ministry. 12
Upon expiration, the license will be renewed for a period not exceeding 10 years. The Minister Motuma Mekassa said during the occasion that the government encourages companies that have the capacity and experience to invest in the mining sector. MIDROC is expected to undertake its activities in the areas based on the principles of environmental protection and the well-being of the local communities. Upon completion of the investment, MIDROC is also expected to remove any harmful wastage, materials and buildings and clean the area. Companies to launch construction of over $850 million hydroelectric power project Source: www.fanabc.com President Mulatu Teshome said his government would provide all the necessary support for investors that engage in power generation. The President made the pledge upon holding discussion with a delegation from Globeleq and Contingent companies at the National Palace today. He assured members of the delegation that Ethiopia would support all investors, including the Globeleq and Contingent British companies, which engage in power generation in the country. A member of the delegation and Cambridge Industries Limited Corporate Affairs and General Counsellor, Alex Stewart told journalists that the president is very hopeful and has guided them in the right direction. He stated that the companies had carried out environmental and social impact assessments for Genale Dawa 6 Hydroelectric Power Project during the past three years. The general counsellor revealed that "we are very excited to announce that Globeleq and contingent companies have been able to secure over 850 million US dollars to fully finish both the project with power generation capacity of 250 megawatt and a dam that irrigates up to 27,000 hectares of land in Oromia and Somali regional states, it was indicated. The project would generate over 55,000 jobs. Genale Dawa 6 Hydroelectric Power Project is financed by CDC Fund of UK and the Norwegian government. The construction of the project will begin this fiscal year and completed within five years. 13