Prime Minister A special report on Newsweek

RETHINKING ETHIOPIA

 

In times of economic uncertainty, nations tend to focus on domestic concerns and lose sight of issues of global importance. This March, Ethiopia’s Prime Minister, Hailemariam Desalegn, called on the world not to forget his country as it faces its worst drought in 50 years, which has put more than 10 million people at risk of famine and could erode the remarkable achievements Ethiopia has made in the last quarter of a century.

Compared to many of its African peers, Ethiopia is a beacon of political stability, economic growth, and social advancement. In 2014, the United Nations Industrial Development Organization (UNIDO) chose it as one of two nations on the continent, and just three worldwide, for its pilot Programme for Country Partnership, in recognition of its commitment to inclusive and sustainable growth.

Under the leadership of Meles Zenawi and, since 2012, Prime Minister Desalegn, Ethiopia has been one of the world’s fastest growing economies over the past decade and secured significant human development gains. According to the World Bank, it boasts ‘strong, broad-based growth’, expanding by a mean annual 10.8% from 2004-2014, more than twice the regional average.

Agriculture accounts for the lion’s share of Ethiopia’s GDP and exports, and employs three in four locals. Now, in line with the government’s second Growth and Transformation Plan (GTP2), the sector will provide the means for Ethiopia to transition to a new, value-added economic model, based on building its agro-industrial and manufacturing sectors at home to maximise export earnings and boost investment from beyond its borders.

Home to around 100 million, Ethiopia has slashed poverty levels from 39% in 2004 to be on target for 22.2% by the end of last year. It has also made major strides towards its Millennium Development Goals, reducing child mortality, rolling out primary education, doubling access to drinking water in just five years, and extending its Productive Safety Net Program to cover eight million vulnerable citizens.

 

  Read more at: http://d.europe.newsweek.com/en/file/6/ethiopia-special-report.pdf

Over the week, several delegations with investment interests in Ethiopia have visited the country according to Arkebe Oqubay (PhD), Special Advisor to the Prime Minister, who said that about five delegations from different countries have also met top government officials.

The delegations were from China Hunan province, South Korea, and clothing retail giant H&M. At a discussion held with Chinese investors at Eliliy Hotel, Arkebe said that the country has caught the attention of international investors.

Investors from Hunan province’s heavy equipment industry, represented by officials from the province, expressed their interest in investing in the country throughout their visit, which includes site visits and meetings with top officials in Ethiopia.

About a month and half ago, a delegation from Ethiopia visited the province and met the province’s officials and companies’ representatives.

Fitsum Arega, Commissioner of the Ethiopian Investment Commission (EIC), told the media that the Chinese visit was conducted as a follow up to the Ethiopians’ visit.

Sanny, an earthmoving equipment manufacturer, Tebian Electric Apparatus Stock Co. Ltd. (TBEA), producer of transformers and other energy products, and CGCOC a civil contractor engaged in several private and public big projects in the country, are the companies that have agreed to establish an industry park in Adama.

As per the deal with government, the stated companies will be the lead developers of the park to be named Ethiopia Hunan Equipment Manufacturing Industry Park, to be located on 300 hectares of land. The Chinese Export Import (EXIM) Bank has also agreed to provide USD 1 billion to establish the park.

“Sanny and TBA will be anchor investors in the park, while others will be linked with the two major firms to supply their product for local and international markets,” Fitsum said.

He added that these companies are engaged mainly on manufacturing import-substituting products.

The Industry Park Development Corporation (IPDC), a state owned park development enterprise, is in the process of commencing the park’s development in Adama, 90km east of Addis Ababa. The park will mainly accommodate textile manufacturers.

Chinese Jiangsu Sunshine Group and Kingdom, and the South Korean Yanguan Corporation have also agreed to join the Adama Park. Sunshine, which will produce wooland Kingdom to produce Lynen fabric, will invest on 80 and 30 hectares of land respectively at the park.

“The Korean firm shall develop 100 hectares, but it is very big company that will need more land in the future,” the commissioner added Fitsum said that the IPDC Park in Adama is not like the Hawassa Park; in Adama, the state corporation shall develop land, while the companies develop the buildings on their own.

 

Source Capital Ethiopia June 3, 2016

At: https://asokoinsight.com/news/high-number-of-foreign-delegations-of-investors-visit-ethiopia-this-week/

hasan muraChairman of the Executive Board for 2016 World Energy Congress has said Ethiopia’s drive towards building environmentally friendly energy is a pulling factor for more FDI.

In an exclusive interview with ENA, the Chairman Assistant Professor Hasan Mura Mercan, who is also Turkish Deputy Minister of Energy and Natural Resources, said Ethiopia is becoming one of the most preferred countries in sub-Saharan Africa for foreign companies due to its cheep and sustainable energy potential.

Ethiopia is hugely investing in energy especially in renewable energy which enables the country to be the leading manufacturing hub and power exporter in Africa, the WEC chairman said.

Ethiopia’s effort to generate and supply cheap renewable energy to manufacturers and neighboring countries is exemplary, he stated.

He also appreciated the country’s strong environmental mitigation policy in the energy sector which is a major feature to tackle challenges of climate change.

Ethiopia has been at the front of the energy debate for nearly a decade, he said, adding the country represented the whole of Africa at events of importance to the continent.

Assistant Professor Mercan also said the world should promote the sustainable supply and use of energy for the greatest benefit of all.

He urged Turkish companies to invest more in Ethiopia particularly in the energy sector. Ethiopia’s improved investment climate will attract other investors to look for more options in the investment sector, he added.

Read more at: http://www.ena.gov.et/en/index.php/economy/item/1651-huge-investment-on-green-energy-attracts-more-fdi-to-ethiopia-says-wec

bole lemiEthiopia, which wants to become a hub for light manufacturing industries, plans to build four industrial parks in the next two years investing up to $500 million in each, a senior government official said on Monday.

Offering cheap labor, improving power supply and transport infrastructure, the Horn of Africa country has made strides to attract low-end manufacturing businesses seeking new factory locations as wages soar in China.

It has so far finalized the construction of the 156-hectare Bole Lemi Industrial Zone south of Addis Ababa. Korean garment-maker Myungsung Textile Company and Taiwan's George Shoe Corporation have operations in the park, which is currently undergoing expansion work.

Another hub in Awassa, a 270-hectare site some 300 kilometers south of Addis Ababa, was set for completion in three months' time.

Trade and industry State Minister Tadesse Haile said studies have been finalized to enable the launch of four more parks in the eastern town of Dire Dawa, Kombolcha and Mekelle in the country's north, and Adama in the capital's south.

"It could cost $500 million per park. But the construction of industrial parks is a good attraction for investment," Haile told Reuters.

"Our target for the coming five years is to be a leader in light manufacturing industry in Africa. This is inevitable," he said.

Read more at: http://www.reuters.com/article/2015/11/09/ethiopia-industrialoutput-idUSL8N1343EO20151109#6dogDdEMHqrPcs4e.97

potashCircum Minerals Ltd., a closely held Canadian miner, held talks with Chinese and Indian companies about establishing a partnership to develop a $2.58-billion Ethiopian potash plant as it awaits a mining license from the government, its chief executive officer said.

Several companies from other nations are also interested in the world’s “lowest-cost” potash mine in the northeast Afar region that may generate $1 billion of the fertilizer ingredient a year by 2022, Brad Mills said by phone from Toronto on Wednesday. Chemical producers, industrial engineering companies and Chinese and Indian potash-sellers with valuations of at least $25 billion are the type of partners being considered, he said.

Read more at: http://www.bloomberg.com/news/articles/2015-11-06/circum-mulls-china-partner-for-2-6-billion-ethiopia-potash-mine