Ethiopia
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Ethiopia signs $600 million loan, grant deal with World Bank

Comments (0) Actualites, Africa, Economy, Infrastructure

ADDIS ABABA (Reuters) – The World Bank agreed a $600 million loan and grant to Ethiopia on Tuesday to fund roads and other infrastructure projects in urban areas.

The Washington-based bank said the funds would “help strengthen the capacity and performance of local urban governments, expand sustainable urban infrastructure and services, as well as promote local economic development”.

Ethiopia’s urban population is growing by 3.8 percent annually on average, one of the fastest rates in sub-Saharan Africa and presenting challenges to infrastructure, services and jobs, the bank said.

“To successfully manage urbanisation … cities are likely to require fiscal transfers for the foreseeable future. This programme will help cities to realise their revenue potential,” Abebaw Alemayehu, the World Bank’s team leader for the project, said in a statement.

The programme will also support projects in 73 towns across the country and benefit more than 6.6 million people, he said.

Under a 2015-2020 development plan, Ethiopia plans to set up less than 10,000 “rural development centres” in a bid to ease the influx of people to its capital Addis Ababa.

Earlier this month, the World Bank also approved a $375 million loan to Ethiopia to fund a national electrification project.

 

(Reporting by Aaron Maasho; Editing by Susan Fenton)

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Ethiopia plans to offer firms shares in road projects: finance minister

Comments (0) Latest Updates from Reuters

By Aaron Maasho

ADDIS ABABA (Reuters) – Ethiopia plans to offer shares in its road-building and maintenance projects to private investors, its finance minister said on Tuesday, the latest step to open up and modernise the state-led economy.

The Horn of Africa country has over 113,000 kilometres (68,0000 miles) of paved roads and plans to increase that to 220,000 kilometres by 2019/20, official data showed.

“We do not have private-run roads. Through public-private partnerships, the private sector is interested to develop roads,” Minister of Finance and Economic Development Abraham Tekeste told Reuters in an interview.

“Through this arrangement, we could work to share the risks and create an environment whereby the private sector can recoup returns on its investment.”

The move to partly liberalise the sector follows Ethiopa’s decision to offer foreign companies stakes in the government-operated Ethiopian Shipping and Logistics Services Enterprise early this year and its energy sector in 2013.

Ethiopia is one of the fastest-growing economies in Africa, but the expansion has mainly been fuelled by huge public investment. The spending has gone into roads, schools, new highways and dams for hydroelectric power.

It opened an electrified railway linking the landlocked nation to a port in neighbouring Djibouti this year.

Abraham said the government expected gross domestic product to grow 11 percent in the 2016/17 fiscal year, up from 8 percent the previous period.

Earlier this month, Ethiopia’s parliament passed a 320.8 billion-birr ($13.9 billion) budget for the 2017/18 financial year (July 8-July 7), an increase of nearly 17 percent on the previous year. About a quarter of that amount is set to be spent on roads.

The International Monetary Fund has said Ethiopia needs to attract more private investment to maintain growth. But the government has in the past tended to brush off such advice and said it would keep charge of key sectors.

“Why do we continue to invest in infrastructure? To make private investment feasible. With no roads, private investment will not be worthwhile,” Abraham said.

Though starting from a low base, foreign investment has also been rising the last five years, including for farms producing flowers and other horticultural products for export and in textiles.

Abraham said Ethiopia took in over $3 billion in foreign direct investment last year and expected that number to rise by the end of this year.

 

 

(Editing by Duncan Miriri, Larry King)

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An African leader for global health?

Comments (16) Africa, Featured, Leaders

Tedros Adhanom Ghebreyesus

The African Union supports Ethiopian Tedros Adhanom Ghebreyesus to become the first head of the World Health Organization from the continent.

With Africa bearing much of the brunt of disease globally, who better to lead the United Nation’s World Health Organization than an expert from the continent?

That is the reasoning as the African Union throws its support behind the candidacy of Tedros Adhanom Ghebreyesus, Ethiopia’s foreign minister and former health minister. As Africa recovers from the recent Ebola epidemic, an official from the continent would bring the perspective of someone who has seen its health problems on the ground.

U.N. members will choose a new WHO leader in May 2017 and the campaigning is well under way. Tedros is one of three candidates for the top post. The others are Phillippe Douste-Blazy, a former foreign minister and health minister from France, and Sania Nishtar, a former minister of health and education from Pakistan.

The 8,000-person health agency was founded by the United Nations after World War II to set global health policy and tackle major health emergencies. It has the authority to spur urgent drug development and push governments to fund essential drugs, as well as to declare public health emergencies.

“Someone with fresh experience from Africa can bring you a fresh view,” Tedros said.

Ethiopian growth cited

Tedros points to Ethiopia’s economic growth, as well as achievements in improving health care. He cites his government’s quick reaction to the region’s current drought, which avoided famine.

He said his experience reforming Ethiopia’s health system and reorganizing finances of the Global Fund supported his qualifications for the World Health Organization job.

Tedros became minister of foreign affairs in Ethiopia in 2012 after serving as health minister since 2005. He has also served in leadership roles in federal and regional government.

Tedros as minister of foreign affairs in Ethiopia

Tedros as minister of foreign affairs in Ethiopia

He earned a Ph.D. in community health and a master’s degree in immunology. He began his career in health in 1986. In addition to being the first African leader of the agency if he is elected, Tedros would be the first who is not a medical doctor.

Renowned for malaria research

A globally recognized researcher on malaria, he published a study of the incidence of malaria among children living near dams in northern Ethiopia, a key contribution to the field in 1999, and was named ‘‘Young Investigator of the Year’’ by the American Society of Tropical Medicine and Hygiene. He was the first non-American to receive the “Jimmy and Rosalynn Carter Humanitarian Award” in 2011 for significant achievements in improving human health.

According to the Global Fund, Ethiopia’s health programs are well managed and report significant achievements, including a 50 percent drop in the incidence of HIV and an even greater drop in AIDs-related deaths.

Still, Tedros’ tenure as health minister was not without controversy. Several groups of Ethiopians living abroad are opposing his candidacy, citing his refusal to declare a cholera epidemic when he was health minister that led to thousands of deaths. Tedros responded that the deaths could have had many causes, but a report said laboratory checks confirmed cholera was the cause.

The ministry also had to return $6 million to the Global Fund amid accusations that funds to fight HIV were misspent on health clinics. Tedros denied the money was misspent. He said the funds were returned because they were spent after a deadline had passed.

African Union backs candidacy

The African Union endorsed his candidacy in January.

“He is Africa’s candidate,” said Abdelmalek Boudiaf, Algeria’s health minister.

Margaret Chan, the current WHO chief, said half the regions of the world had never had one of their own leading the health agency. Eight chiefs have come from Europe, the Americas or the Western Pacific, which includes China and Japan.

The French candidate, Douste-Blazy, dismisses the importance of geopolitics, saying strong leadership ability is the key.

Sania Nishtar, the Pakistani candidate, said the argument for an African leader could just as easily apply to South Asia.

Vote “a nail biter”

Geopolitics could give the African candidate an edge in the voting. This year, for the first time, each of the U.N.’s 194 members gets a vote rather than the executive board making the selection.  With 54 states, the continent will account for more than a quarter of the votes.

Still, in spite of the backing of the African Union, delegates from at least two West African nations that are former French colonies said they preferred the French candidate.

Nothing is certain. “It will be a nail biter,” said Suerie Moon, research director at Harvard Global Health Institute.

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Western-trained talent returns to Ethiopia

Comments (0) Africa, Business, Featured

Talented Ethiopians who grew up abroad are returning to their homeland, sparking hope and driving change in the once stagnant nation.

For a long time, Ethiopia has struggled as one of the poorest countries in Africa. 1974 saw the end of the iconic Haile Selassie’s rule, as the brutal Derg communist dictatorship seized power. The following years were harsh, and so began a long-lasting trend, whereby many of Ethiopia’s most skilled citizens left the nation to seek better lives in the western world. The once great kingdom languished under corruption, war, famine and drought.

Prior to the Derg regime, mass migration from Ethiopia was non-existent; sadly that was due to change. George Mesfin, an American-Ethiopian who fled with his family at the age of 14, summed up the situation by saying, “During the Derg years, for a while, everyone who could get out, got out.”

After the despotic government fell in 1991, it took a long time for the country to start making progress. However, members of the Ethiopian diaspora have started returning to their homeland, attracted by a growing economy and a more stable political situation. Making a difference seems to be the motivation that drives some to give up their comfortable lives in the western world. Many of the diaspora recognize the opportunity to use their western skills for the betterment of Ethiopia. The chance to become leaders who drive the nation forward resonates deeply within the souls of the patriotic. Those who have chosen to go back are helping to change the country in dramatic ways.

Returning Home

One of Ethiopia’s more famous returnees is Tadiwos Belete. Belete moved back to Ethiopia after developing a successful luxury spa business in Boston. He has since used his skills to create a thriving Ethiopian spa empire which employs over 1,500 people and focuses on using a solely local supply chain. In a 2013 interview Belete said, “The profitability is here, you can see it, you can feel it, you can touch it. But as well, as a human being you can make a difference here.”

While official figures are not available, Ethiopian economist Bisrat Teshome estimated that Ethiopians returning from other countries have injected more than $1 billion into the economy while starting over 2,000 new businesses. The influx of foreign-earned capital that comes with the returning migrants is a welcome source of investment for the country, where access to foreign currency and corporate investment are still lacking.

Western Influences

In the nation’s capital Addis Abbaba, a profusion of cafes, restaurants, fashion boutiques and other western-inspired businesses have appeared. Less visible, but no less important, the returning diaspora is investing in property development, agriculture, technology and a host of other sectors.

Kaldi's Coffee located in Addis Ababa

Kaldi’s Coffee located in Addis Ababa

However, Tesholme feels that improvements can be made “if that money was pumped into the industry sector, then it creates more jobs.” He went on to say that the manufacturing sector is underdeveloped in Ethiopia, and that manufacturing has the scope to create significantly more jobs for similar start-up costs, while also benefiting from foreign trade.

Ethiopia is also growing culturally through the return of its lost children. Some have found that their presence has positively influenced cultural attitudes towards workplace productivity and business best practices. Others have commented that Ethiopia has started adopting western standards of health and hygiene. Perhaps even more significantly, Ethiopia may stand to gain from the homecoming in a political sense. Shanta Devarajan, head of the Africa region at the World Bank, feels that the returnees have a positive role to play in political reform: “The diaspora might bring strengthened governance to African societies. These are people who have been outside the system and are able to observe it from afar, and that might actually strengthen government, something that we need so badly.”

Looking to the Future

Ethiopia faces issues such as a bloated bureaucracy, which is criticized as being slow to act and is an obstacle to international business. Additionally, the government is criticized for being ineffectual at a local level. Ethiopians who have experienced a more sophisticated system are well positioned to drive for reform and facilitate positive change.

The success of the diaspora is encouraging ever more ethnic Ethiopians to consider returning. In the last six months 2,600 have already made the trip home, a fourfold increase on the same period last year. If the new arrivals continue in the same vein as those who came before them, then Ethiopia’s reemergence on the world scene looks exceedingly likely.

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SoleRebels: An Ethiopian success story

Comments (2) Africa, Business, Featured

SoleRebels

The eco-friendly shoe manufacturer, launched by a young woman entrepreneur, sees rapid growth and global demand.

A young Ethiopian entrepreneur has turned her concern for unemployed artisans from her home community into a global shoe brand with millions of dollars in revenue.

Bethlehem Tilahun Alemu’s SoleRebels produces eco-friendly shoes that are sold internationally by large retailers including Whole Foods and Amazon as well as in a growing number of the company’s own standalone stores.

SoleRebels also complies with fair trade standards set by the World Fair Trade Association, according to Alemu. The company pays employees three or four times the minimum wage in Ethiopia and provides medical insurance and transportation to and from work.

Helping jobless artisans

Alemu, 35, started the company in 2005, shortly after she finished college. She had seen that skilled artisans lived in squalor and chronic unemployment in her small, impoverished community of Zenebework in Addis Ababa.

“I wanted to find a way to share my love for the amazing artisanship of Ethiopia with the world while creating well-paid meaningful work for the people in my local community, while leveraging their immense creative skills,” she said.

At the start, the company was Alemu, her husband, her teenage brother and two artisans. It has grown to employ 300 people in Ethiopia and several hundred more in its international stores.

Shoes from local fibers, recycled tires

SoleRebels produces comfortable, hand-crafted sandals, slip-ons and laced shoes using recycled tires for the soles and local natural fibers, including hand-spun cotton, jute, and Koba, an indigenous plant cultivated in Ethiopia for thousands of years.

The design of the shoes draws on Ethiopia’s famous Selate and Barabasso shoes that soles that were worn by Ethiopian rebel fighters who opposed Italian forces attempting to colonize the country nearly a century ago. Those shoes used recycled tire material for the soles.

The name SoleRebels derives in part from that historic connection.

However, the name also reflects Alemu’s goal of countering a dominant narrative – a legacy of the famine years – that Ethiopians are destined to rely on international aid.

SoleRebels in Stores

Ethiopia’s economy booming

Alemu said the success of Sole Rebels is “living proof” that her country, one of Africa’s poorest, is ready to move from being dependent on foreign aid to taking charge of its economic future with home grown skills and resources.

Eugene Owusu, who represents Ethiopia with the United Nation’s Development Program said SoleRebels is “blazing a trail’’ for other companies as his country seeks to reduce its need for foreign aid.

Owusu said nation’s booming private sector would help the country continue to grow its economy and reduce poverty.

The economy of Ethiopia has grown at a rate of about 10 percent a year in the past decade with growth domestic product reaching an estimated $50 billion in 2014.

As one of the fastest growing non-oil economies in Africa, Ethiopia has become a destination for foreign investment. Ethiopia seeks to grow exports as a share of its economic output largely with the sale of minerals and manufactured goods.

International recognition

With her own exporting success, Alemu has been widely recognized for her achievements.

The World Economic Forum named her a Young Global Leader in 2011. She was featured on Forbes list of “100 Most Powerful Women” and listed by Business Insider as one of “Africa’s Top 5 Female Entrepreneurs” in 2012. The following year, Fast Company named her one of its “100 Most Creative People in Business 2013,” while The Guardian called her one of “Africa’s Top Women Achievers.”

SoleRebels shoes are sold in more than 30 countries through online sales and major retailers plus a growing number of the company’s own shops. In addition to its flagship store in Addis Ababa, SoleRebels has more than a dozen standalone retail outlets in the United States, Taiwan, Japan, Greece, Switzerland, Spain, Austria, and Singapore.

$10 million in revenue projected

One of the world’s fastest growing footwear brands, the company projects it will have 50 stores by 2018 and forecasts revenue of $10 million or more this year.

Alemu said her business model shows that eco-friendly production and community empowerment go hand in hand with financial success. But as much as her product helps her community, Alemu said quality is the key to her company’s success.

“We don’t want to make a pity product; we want people to buy our shoes because they look good.”

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China’s Development of Ethiopia : Investment in a Country, or in an Industry ?

Comments (0) Business, Featured

ethiopia

Ethiopia, a country of about 90 million people, covers just 1,127,127km2—less than 10% of the territory of China. Despite its comparably tiny size, Ethiopia is proving to be a massively important resource for China’s demand for essential minerals necessary in its insatiable demand for technological goods.

Some experts, British-born Ethiopia specialist Richard Pankhurst, believe that trade between the two countries could date back more than 1400 years. Though China’s demand on Ethiopia has evolved from exotic animals and jewelry to minerals and leather, their trade partnership has an unbroken past.

(more…)

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