Wednesday, August 2, 2017

Somaliland's $442m record investment deal -

Loading a cargo ship in the Port of Berbera in Somaliland, which is about to receive a major overhaul.

Story highlights

  • Somaliland to receive record foreign investment of $442 million
  • Semi-autonomous region aspires to statehood
  • Berbera port development will boost international standing
(CNN)The unrecognized nation of Somaliland, a semi-autonomous region of Somalia, has secured its largest ever foreign investment deal.
Dubai-based development firm DP World will pump $442 million into transforming the country's Berbera Port on the Gulf of Aden, with the ambition of creating a regional trade hub.
    DP World has committed to managing the port for 30 years. The company plans to develop an ambitious new shipyard, quay, and free trade zone on the site.
    The Somaliland government hopes the development will enable it to rival neighboring Djibouti as a point of entry for East African trade, and the project could also prove a much-needed economic boost.
    Somaliland hopes to rival neighboring Djibouti as a regional trade hub.


    Somaliland declared independence in 1991, breaking away from war-torn Somalia.
    But despite maintaining relative stability and holding free elections, not a single country has recognized its statehood. The international community has prioritized the development of Somalia as a united country.
    The deal with DP World represents a major coup for Somaliland as it demonstrates the country's clout on the world stage.
    The investment is timely. Somaliland is blighted by youth unemployment of over 60%, and its worst drought in years has affected 1.5 million people - over 30% of the population.
    The development divides opinion among the local population.
    Jama Jusse Jama, the director of the Red Sea Cultural Association in Somaliland's capital Hargeisa, believes the project will create opportunities.
    "Berbera Port is extremely fundamental for Somaliland," he told CNN. "(This investment) will boost the connection with the rest of Africa, especially Ethiopia. It's too early to say it's all positive, but I am confident it's a step forward."
    But there are fears that land around the site will be bought up by wealthy businessmen at the expense of the wider population.
    "The makeup of Berbera will definitely change," Mohamed Aden Hassan, head of local news channel StarTV, told Reuters. "It is already showing signs of becoming an increasingly exclusive club."
    The port development could improve Somaliland's international standing.

    Strategic location

    DP World's interest in this little-known fishing town is largely explained by its location, sitting conveniently at the apex of trade routes in the Red Sea, the Gulf of Aden and East Africa.
    "The Horn of Africa is a fast growing region with some of the fastest growing economies in the world," says DP World CEO Sultan Ahmed Bin Sulayem. "DP World Berbera builds on growth in the region where we are enabling trade."
    The location also offers opportunities to landlocked Ethiopia, which is heavily reliant on neighboring Djibouti, with 90% of trade passing through the tiny state.
    Ethiopia currently imports limited quantities of food through Berbera, but the imminent development will allow it to vastly scale up traffic through the port.
    The Somaliland government claims it has an agreement for Ethiopia to take a 19% share of the port, which should deliver mutual benefits.
    "Ethiopia having access to the sea is a major deal for Somaliland, and Ethiopia," says Laura Hammond, an East Africa specialist at the School of Oriental and African Studies (SOAS) in London.
    "Ethiopia has already built a road up to the border with Somaliland basically advertizing the fact that they're waiting to do business."
    For its part, Somaliland will gain a powerful partner and ally. Ethiopia is one of the most dynamic economies in Africa, the host nation of the African Union, and a key driver of international diplomacy.
    After two decades in the economic and political wilderness, the unrecognized state may finally be establishing itself on the world stage.

    Wednesday, July 26, 2017

    Shops Close In Ethiopian Capital Over Tax Dispute

    By AFP
    Added 26th July 2017 06:00 AM
    Small businesses receiving their annual assessments have found themselves taxed at rates up to four times higher than in previous years.
    Oromia 703x422

    Shops in two towns have closed in Oromia state Ethiopia, similar to this 2016 scene of closed shops in Burayu, Oromia state. /AFP/ Photo
    Shops closed their doors in Addis Ababa's largest market on Tuesday in protest at a recent hike in business taxes, bringing anger over the policy to the nation's capital.

    Small businesses receiving their annual assessments have found themselves taxed at rates up to four times higher than in previous years.

    That is according to residents of two towns outside Addis Ababa where strikes started earlier this month.

    Both towns are in Oromia, where violent anti-government protests broke out in 2015 that were only quelled when a nationwide state of emergency was imposed last October.

    Since then, Oromia has mostly been at peace, but this week's strike is one of the first instance of widespread, organised resistance against the government since the emergency decree.

    Shops and bus companies in the Oromia town on Incinni closed for three days last week in protest of the tax hike, a local resident told AFP on condition of anonymity for fear of retaliation.

    Protesters who marched from a market to the district administration to demand the levies be decreased were turned back by security forces, the resident added.

    They are "angry because the tax promulgation is unfair, and scared to protest because if they do a shooting might occur," the resident said.

    Businesses also closed in Ambo, a flashpoint during the 2015-2016 unrest, a resident there said.

    Federal police officers in the town threatened shopkeepers who weren't open during business hours.

    On Tuesday, an AFP reporter said a minority of shops in the capital's largest market Mercato hadn't opened, and some striking shopkeepers said they had received letters threatening consequences if they did not come to work.

    Many merchants declined to speak in detail about the strike for fear of government retaliation, and around 10 plainclothes security officers forced an AFP reporter to leave Mercato.

    The strike comes at a sensitive time for Africa's second most-populous nation, still under emergency rule.

    The government has denied raising taxes, with Fasika Belay, a spokesman for the Ethiopian Revenues and Customs Authority (ERCA), saying that perhaps businesses are "confused" on how levies are calculated.

    Wednesday, July 12, 2017

    Ethiopia to inaugurate 2 Chinese built industrial parks - Business -

    Xinhua | Updated: 2017-07-11 10:58

    ADDIS ABABA — Ethiopia is to inaugurate two Chinese built industrial parks in September, as the East African nation strives to become the continent's manufacturing hub.
    The statement was made on Monday by Tadesse Haile, state minister of economic affairs at the office of the Ethiopian Prime Minister Hailemariam Desalegn.
    The two industrial parks are the Dire Dawa Industrial park 446 kilometers east of Ethiopia's capital city Addis Ababa and the Adama Industrial Park 99 km east of Addis Ababa.
    Dire Dawa Industrial Park and Adama Industrial parks are both being built by China Civil Engineering Construction Company (CCECC) at a cost of $190 million and $125 million respectively.
    Both industrial parks are primarily aimed at full filling Ethiopia's ambitions to be a textile and apparel manufacturing hub in Africa earning the country $1 billion by 2020 and providing ample employment opportunity for its estimated 45 million workforce.
    Li Zhiyuan, deputy project manager at CCECC on his part says industrial parks are a means for Ethiopia to enhance local employment, increasing investment attractiveness and boost its competitive advantage.

    Tuesday, July 11, 2017

    Ethiopia livestock plan offers route to middle-income

    Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of T&Cs and Copyright Policy. Email to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here.

    Ethiopia livestock plan offers route to middle-income

    Government targets private investment to help speed up change, driving rural and urban growth
    Read next
    Ethiopians in need of food aid could double to 16m

    A boy herds cattle in the Ogaden region of Ethiopia. The government has put livestock at the centre of its plans to boost economic growth © AFP
    Share on Twitter (opens new window)
    Share on Facebook (opens new window)
    Share on LinkedIn (opens new window)
    2 Save
    YESTERDAY by: Barry Shapiro, ILRI
    Often dubbed an “African tiger” after a decade of economic growth averaging 10 per cent a year between 2004 and 2014, Ethiopia is in a state of transformation.

    In an ambitious bid to achieve the status of a middle-income country by 2025, the government has developed an extensive blueprint for progress — its Growth and Transformation Plan 2015-2020 — which has prioritised the development of agriculture.

    More specifically, the plan identifies the role of the livestock sector in helping to achieve some of the most critical sustainable development goals: reducing poverty by almost 20 per cent, raising national incomes, increasing exports and greatly improving the food and nutritional security of rural and urban people.

    Sounds too good to be true? When carefully researched and mapped out in a do-able plan, the many benefits of the country’s growing livestock sector promise just such a revolution.

    Emerging markets guest forum
    beyondbrics is a forum on emerging markets for contributors from the worlds of business, finance, politics, academia and the third sector. All views expressed are those of the author(s) and should not be taken as reflecting the views of the Financial Times.
    Until now, most developing countries that rely heavily on small-scale agriculture, including varied livestock production systems, have not invested well or sufficiently in the livestock sector, largely due to the lack of a clear, strategic roadmap.

    The International Livestock Research Institute (ILRI), as part of a project funded by the Gates Foundation, has supported efforts led by Ethiopia’s Ministry of Livestock and Fisheries to draw up a detailed plan to develop the livestock sector that will maximise the country’s chances of reaching middle-income status.

    The Ethiopia livestock master plan is a comprehensive assessment of the investment opportunities to increase meat, milk and egg production, respectively, by 58, 83 and a massive 828 per cent over 2012 levels by 2020.

    It projects that such greater productivity and the resulting higher income levels would end poverty for more than 2.3m of Ethiopia’s 11m livestock-keeping households.

    Achieving this would cost just over $760m over a five-year period, with interventions in three keys areas: animal genetics, feed and health.

    While most livestock in Ethiopia are local breeds, research shows that crossbred cattle, if adequately fed, can produce 10 times more milk than their local counterparts. Putting into action a livestock breeding strategy to raise the number of crossbreds could pave the way for improved cattle breeds that could, with health and feeding improvements, nearly double the dairy production of Ethiopia’s small-scale farmers and herders.

    Genetic livestock improvement is not enough on its own. Genetically improved crossbred animals need to be given better feeds if they are to produce higher yields of milk, meat and eggs. To accomplish this, Ethiopia will need to overcome chronic shortages of animal forage and processed feeds and increase its investment in new, improved feeds.

    Finally, realising the potential of the country’s livestock sector will also need improvements to its animal health services to tackle high calf mortality rates, inadequate veterinary supplies and inefficient veterinary services. To this end, the master plan calls for more and better public and private animal health services and a more effective regulatory body at federal and regional levels.

    The bounty for attracting sufficient private and public investment, and adopting new policies to enact the livestock master plan, would be the transition of millions of Ethiopia’s family farmers and herders from subsistence to market-based livestock producers.

    This would have the dual benefit of feeding Ethiopia’s growing population and helping to drive the country’s GDP growth to even higher levels.

    For example, the plan forecasts achieving a surplus of 2.5bn litres of fresh milk by 2020. Not only would this provide the country with greater food and nutritional security; it would also create new opportunities for Ethiopian businesses to process the country’s fresh milk into products for domestic and export markets.

    The plan also outlines how improved rural livestock livelihoods will benefit people in towns and cities through lower prices for milk, meat and eggs and the opening of new job opportunities.

    The Ethiopian government has set up four agro-industry parks to attract private sector investment in agro-processing, to help speed up the transformation of the livestock sector.

    Having worked with partners to develop this master plan, I am confident that solid investments that focus on small-scale livestock producers, processors and marketers can jump-start the engines of the economic powerhouses of the future, not just of Ethiopia but of other developing countries.

    Last year, ILRI scientists began working with Tanzanian and Rwandan scientists and government officials to develop livestock master plans in those countries. It is our hope that successful implementation of Ethiopia’s plan will lead to a “chain reaction” across the continent.

    We know that success of these plans lies in their execution, and that such execution requires significant effort and co-operation among local, national, regional and international livestock partners.

    But as the livestock sector is already a huge contributor to GDP in agriculturally dependent low to middle-income countries, investments in the right areas and at the right levels offer unprecedented potential for sustainable, broad-based growth and development.

    The Ethiopia livestock master plan makes the case for targeted investments in livestock both clear and compelling. What remains is to find the best ways for the plan to be realised to help give this African tiger its roar.

    Barry Shapiro is senior livestock development adviser at the International Livestock Research Institute.

    Wednesday, July 5, 2017

    Can jobs in Ethiopia keep Eritrean refugees out of Europe? - BBC News

    • 7 hours ago
    • From the sectionAfrica

    People working in Eritrea
    Image captionSome 30% of the new jobs will be reserved for refugees

    Many thousands of Eritreans have fled the country for Europe in search for a better life. A multinational initiative is now trying to stem the flow of migrants to Europe by training refugees and giving them jobs in neighbouring Ethiopia.
    "I was not sure we would make it across. I am so relieved we are here," says 19-year-old Salama - not his real name.
    Together with his friend Abiro, they have been walking for two days from Eritrea, without any food or water. At one point, they claim to have been shot at by government soldiers who are stationed along the heavily militarised border between Ethiopia and Eritrea.
    "The reason for fleeing from our country is because the Eritrean government keeps on forcing us to join the national service and we are wanted in our homeland.
    "We walked through the bushes hiding not to be seen by the Eritrean soldiers and we were able to escape," says Salama, the more talkative of the two.

    poster in Ethiopia discouraging people from trying to go to Europe
    Image captionThe UN has launched a campaign to warn people about the dangers of trying to get to Europe

    Recent weeks have seen hundreds of Eritreans arrive at refugee camps and reception centres along Ethiopia's northern border.
    Many of those who reach Ethiopia intend to move on to Sudan and then Libya, hoping to eventually get to Europe via the Mediterranean Sea but some end up settling in Ethiopia.
    It's a risky journey that involves thousands of dollars and an intricate network of smugglers.
    More than 2,000 people have died so far this year trying to make the crossing.
    "I am not sure where we will go from here. It's our first time out of Eritrea. Maybe we can settle here and get jobs," says Abiro, speaking in his mother tongue Kunama.
    "If not, we will move as far away as possible. Maybe Europe."
    Through the translator, I ask them what they know about Europe and they shake their heads, indicating they know nothing.
    Eritreans make up the seventh largest group of people who arrive in Europe each year seeking asylum, according to the UN, even though the total population is less than 6 million.

    Migrants on a boatImage copyrightGETTY IMAGES
    Image captionA high proportion of African migrants trying to reach Europe are from Eritrea

    But the government in Eritrea has dismissed such figures and says that people from other countries are posing as Eritrean refugees.
    Information Minister Yemane Gebre Meskel told the BBC that the number of Eritrean refugees leaving the country was much lower.
    "The numbers of Eritreans leaving the country is much inflated; by most accounts 40 to 60% are from Ethiopia and/or other countries in the Horn."
    Donors and the UN refugee agency (UNHCR) are trying to dissuade young people like Salama and Abiro from making that journey by creating jobs for refugees in Ethiopia as part of a multinational deal.
    The UK, European Union (EU) and the World Bank have already invested $500m (£400m) into the programme.
    According to the plan, the industrial parks will be set up in the towns of Mekelle, Jimma and Ziway, creating more than 100,000 jobs.

    Map showing Central Mediterranean migrant routes

    Some 30,000 of the jobs will be reserved for refugees. Ethiopia hosts nearly 800,000 refugees, mainly from Eritrea, Somalia and South Sudan.
    "This becomes even more important in a country like Ethiopia, where most of the refugees are dreaming to continue onward and the reason they give is that they don't see their future here and don't know what to do," says UNHCR regional head Fafa Attidzah.
    At the refugee camps, authorities are already preparing for the job opportunities by training refugees in areas such as masonry, carpentry, cookery and sewing. There are also computer classes for some of the younger inhabitants.

    Eritrea at a glance:

    • Gained independence from Ethiopia in 1993 but relations remain tense
    • Opposition parties and private media banned
    • Conscription can last for decades, human rights groups say
    • One of largest countries of origins for Africa refugees arriving in Europe
    • Government says problems exaggerated and blames problems on Western backers of Ethiopia

    The UN has started a programme to make sure more people are warned about the dangers of making the journey.
    Eritrea says its tense relations with neighbouring Ethiopia are behind its system of national conscription, which can last for decades.
    Eritrea gained independence from Ethiopia in 1993 after a long civil war and the two countries then fought a 1998-2000 border war that left an estimated 80,000 dead.
    Eritrea has also dismissed the job creation programme, with the information minister calling it "ludicrous... with a sinister political agenda".
    "What we need is peace and for Ethiopia to respect international decisions [meaning the decision to award Eritrea the disputed border town of Badme]."

    Refugees at camp in Ethiopia
    Image captionEritrea's government says the number of refugees has been inflated and that many are actually Ethiopians

    But will jobs in Ethiopia be enough to stop the movement of refugees?
    Teklemariam, who has twice attempted to get to Europe and failed, tells me much more needs to be done in refugee host countries to sway those who want to move to Europe.
    "I try to tell them that it is not safe trying that journey. Sometimes they listen to me, sometimes they don't, but training like this is good, because if they learn some trade, maybe they will stay."
    Ethiopian Prime Minister Hailemariam Desalegn says such programmes are not just important for refugees but also for millions of young unemployed people in his country.
    "We have to address this issue critically because we understand our situation well and that's why we are investing resources in making sure our children are safe, and can make a living."
    While many refugees here are happy at the prospects of getting jobs and restarting their lives in a foreign land, many more remain unconvinced, and are determined to risk everything for a chance at a better life in Europe.

    Monday, June 26, 2017

    Climate change could lower the quality of your coffee and Ethiopia could lose 60%

    Your morning cup of coffee may not taste as good if climate change keeps pummeling Ethiopia, a study shows.

    Story highlights

    • Rising temperatures cause coffee beans to ripen too quickly and lose complex flavors
    • By 2050, the global demand for coffee will double. But there will be half as much suitable land to grow it on
    (CNN)What will it take for people to care about climate change? For some, the thought of a crummier cup of coffee in the morning just might do it.
    A new study finds that Ethiopia, the world's fifth-largest coffee producer, could lose up to 60% of its suitable farming land by the end of this century because of climate change.
      The study, published Monday in Nature Plants, found the combination of low rainfall and rising temperatures could have substantial effects on the coffee-growing areas in the country.
      As temperatures steadily climb, so does the demand from coffee junkies, who might not be able to find a cup of joe that's up to their standards.

      What this means for coffee drinkers

      According to a report from World Coffee Research, the demand for coffee will have doubled by 2050, but the suitable land to grow it on will be cut in half.
      And the effects of climate change don't just lower how much coffee is produced -- they can also hamper its quality.
      In areas with lower temperatures, coffee quality is generally higher, World Coffee Research spokeswoman Hanna Neuschwander told CNN.
      Cooler temperatures allow the coffee to ripen more slowly -- and that means more time to develop more complex flavor elements like acidity and sweetness.
      But when temperatures rise, as they have slowly been doing in Ethiopia for years, the warmth causes the coffee to ripen too quickly, which means less flavorful beans.
      A shift in quality is the main difference consumers will see. Even though a decline in suitable farming land would logically lead to a decline in supply, Neuschwander said it's not likely that coffee drinkers will see any hike in price.
      Even if production drops in one country, such as Ethiopia, prices could drop at the same time in other major coffee-exporting countries, like Brazil or Vietnam, Neuschwander said.
      "It takes a lot longer for consumer effects to travel," Neuschwander said. "It's a very distorted market as a commodity market."

      What this means for Ethiopia's economy

      Coffee junkies may not see any big changes in price, but the impact on Ethiopia's economy could be huge.
      Arabica coffee production makes up about one quarter of the country's total export earnings. Fifteen million people, or 16% of the population, make a living through coffee farming.
      Ethiopia Coffee

      Ethiopia Coffee 01:43
      Most of those coffee farmers are smallholders, according to World Coffee Research. Smallholders manage modest, usually family-owned farms, which means they might not have the resources available to adapt to these climate changes. With less ability to adjust, they are more likely to stop growing coffee altogether.
      "The problem is coffee producers aren't paid enough, so helping them adapt to a very difficult complex, changing situation like you see with climate change and extreme weather events is very, very difficult to do," Neuschwander said.

      What this means for the environment

      Ethiopian coffee farmers have noticed climate changes that have harmed production, including warmer nights, a shorter wet season, irregular precipitation patterns and more extreme weather.
      And there's science to back up the farmers' observations: Research cited in the Nature Plants study shows an uptick in warmer days in various areas where coffee is grown.
      On top of the observable effects, Ethiopia's average annual temperature increased by 1.3 degrees from 1960 to 2006. That's a rate of .28 degrees per decade, and that average could push up temperatures another 3.1 degrees by the 2060s.
      Ethiopia has also seen big changes in precipitation. Since the mid-1970s, rainfall has decreased by 15% to 20% in the southern part of the nation, and droughts have become more common in all parts of the country for the last 10 to 15 years.
      None of this is great news for lovers of Ethiopian coffee, who may eventually want to look to other countries for their coffee fix.