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Diaspora Business Gets Ethiopia Africa’s First SCAA Certified Coffee Lab
By Omer Redi

The Addis Ababa based METAD/Kabu Coffee Quality Control Laboratory has become the first African coffee laboratory certified by the Specialty Coffee Association of America (SCAA), the world's largest coffee trade association.

Equipped with state-of-the-art coffee tasting technology, METAD/Kabu Coffee Quality Control Laboratory was certified on May 17, 2013 by Skip Finley, a Director on the SCAA Board, who inspected the lab with and Marty Curtis, a Coffee Quality Institute Instructor.

“When you walk into METAD’s lab you feel like you are in the known coffee quality laboratories in the U.S. or Korea,” Finley said.
The laboratory is established by its sister companies, METAD Agricultural Development Plc and Kabu Coffee Plc, to help improve Ethiopia’s coffee industry. METAD is owned by the former DHL and Ethiopia Commodity Exchange executive, Ethiopian-American Aman Adinew, while Kabu is owned by the legendary performer Aster Aweke.

By sourcing certified quality coffee from Ethiopia, the lab will contribute to coffee farmers earning higher prices for their beans, and fetching higher foreign currency for the country. It also increases the number of coffee quality professionals in Ethiopia.

“As the birthplace of coffee, you guys (Ethiopia) should have been the first to be certified. But now you are jumping into that position,” Curtis added.

Accordingly, the proprietors of METAD/Kabu Coffee Quality Laboratory say this is part of their efforts to position Ethiopia into its rightful place in the global coffee market.      

METAD Plc was established in 2010 to participate in the coffee value-chain, specifically farming, processing and exporting specialty coffee to the world. Kabu Coffee was established a year ahead to retail high quality roasted coffee for both local and export markets. It is currently expanding the retail/cafe business within Addis Ababa, North America and Russian markets, according to Aman. 

 

Agriculture in Ethiopia: Opportunities, Incentives and Privileges
By Tesfalem Waldyes


Ethiopia’s economy is predominantly agrarian. In 2011/12 alone, agriculture accounted for 41 percent of the Gross Domestic Product (GDP) and contributed 90 percent of the foreign currency earning. The sector also covered 85 percent of the country's employment. Its incontestable share in the overall economic growth of the country and potential for further growth, therefore, makes it a worthwhile sector for many to consider investing in. But broad facts and figures are not just enough for business people to make informed decisions before they put their hard earned fortunes into something. Hence, The Ethiopian American has identified some of the paramount information and summarized them into 15 most important points you should know - including opportunities, incentives and duty-free privileges tied to investment in agriculture - before you make any decision.  

  1. Of Ethiopia’s about 111.5 million hectares total landmass, 74.3 million hectares is considered suitable for crop production. An estimated 4.3 million hectares of land has irrigation potential. Currently, only 15 million hectares is utilized.  

  2. The federal government delineated around 3.7 million hectares of land for agriculture investment.  Close to 1.6 million hectares with information about their agro-ecological, soil, water potential and other details, is deposited in the federal land bank. The designated plots of land located in Gambella, Benishangul Gumuz and Southern regional states are suitable for growing food crops, oil seeds, coffee and tea, cotton, palm oil, biofuel plants and livestock husbandry.   

  3. Investors shall have the right to acquire and develop plots of land either leasing from the government or reaching agreement with a landholder to transfer permanently his/her holding rights. Any investor can rent rural land on contractual basis after fulfilling a lease agreement. One can secure a mortgage right to use his land or an asset produced on it, or both for agreed lease period.  

  4. Investors can mobilize laborers from region to region without any restriction. They are also allowed to introduce or employ scientists and technicians in cases of local unavailability.   

  5. The livestock population of Ethiopia, which stands first in Africa and 10th in the world, is considered to be the next big thing on the agricultural transformation of Ethiopia. This segment of the agricultural sector has large resources: 50.8 million cattle, 25.9 million sheep, 21.8 million goats and 42 million poultry. The government encourages investors to venture in rearing, breeding, fattening and exporting of livestock. Those who are interested on meat processing have a great opportunity for export due to the proximity of high demand markets of North Africa and the Middle East.

  6. Ethiopia is estimated to have some 10 million bee colonies and has a potential of producing over 500,000 tons of honey per year. This puts the country to be Africa’s leading producer of honey and beeswax. Globally, the country also has got a fourth and tenth position in the production of beeswax and honey, respectively. Despite the country's potential and an aged tradition of beekeeping, the current productivity is far less than what it is expected. Current productivity is estimated to be 20 – 30kg/hive/year. The production of honey and beeswax remains untapped and investors who are interested on processing are likely benefit from the country's long history of exporting honey and bee products, besides marketing locally.   

  7. Ethiopia's diversified agro-climatic weather conditions, the long production season and the availability of irrigation, makes it suitable for the production of a broad range of fruits, vegetables and flowers. The country has a potential to produce 12.8 million quintals of fruits and vegetables. Currently, the production of fruits and vegetables is undertaken on around 152,600 hectares of land. Fruits and vegetables export is  among the fast growing business in the country with 9,000 tons of fruits and vegetables and 10 tons of flowers exported in 2011/12 production year. With such potential and the government's priority of expanding and supporting the manufacturing sector, there is a big opportunity for investors to venture on agro-processing of fruits and vegetables.

  8. Any investor will get an income tax exemption extending from two to five years depending upon the area of investment, the volume of export and the location where the investment is undertaken. Companies that suffer losses during the tax holiday period can carry forward such losses for half of the income tax exemption period, after the expiry of such period.

  9. Income derived from an expansion or upgrading of an existing agricultural company is exempted from income tax for a period of two years. The government has also totally exempted the payment of import customs duty and other taxes levied on imports for goods and construction materials necessary to establish new companies or for the expansion or upgrading of existing ones. The privilege extends to spare parts worth up to 15 percent of the value of the imported capital goods. These incentives can be transferred to investors enjoying similar privileges.  

  10. The government also granted two to five years land rent payment grace period based on the commercial crop harvest period.  

  11. Raw materials and packing materials necessary for the production of export goods are exempted from customs duties or other taxes levied on imports. Taxes and duties paid are drawn back at the time of exports of finished products.

  12. Most areas in agriculture investments are worthy for credit policy of the government. When such projects are accepted by the state owned Development Bank of Ethiopia (DBE), investors are requested to deposit 30 percent of the project investment in cash and the bank advances up to 70 percent loan. Projects that involve horticulture and floriculture, cotton, livestock and others that are considered to have potential to generate foreign currency are automatically considered credit-worthy.
  13.  
  14. Borrowers who seek financing for expansion are required to provide an initial equity contribution. The demanded amount, which can be in the form of cash or in assets, should be equivalent to 30 percent of the total capital of the expansion. Banks give a maximum grace period of three years for clients.  

  15. The Ethiopian Investment Proclamation guaranteed capital repatriation and remittance of dividends and interest to foreign investors.  

  16. The ongoing privatization program offers opportunities to both local and foreign investors. Agriculture is one of the top three sectors that with a number of state owned enterprises ready to be privatized. In addition to buying state owned enterprises through competitive bidding, investors can also use various modalities like provide equity finance, joint venture, lease and management contract to privatize.
  17.    
 

 

Ethiopian Camels Strut to Export Markets Despite Challenges
By Elias Gebreselassie


Tefera Hailu (MD), a veterinarian turned businessman, is adamant with what he sees as opportunities in the livestock export business.
He says the business he has been in for the last 17 years is strutting to a good prospect despite tough challenges with the export of camels one area of hope. His company, Tefera Hailu PLC, exports sheep, goats, camels and cattle.

“In the just concluded Ethiopian fiscal year 2012/13, we exported about $2.5 million worth of camel, which accounts for about 35 percent of our total livestock export,” Tefera said. “But this is far below the potential.”

The major export destinations are Libya, Saudi Arabia and Egypt, while the places of origin for camels are parts of Oromia and Somali Region with preferences for types of camels also determining their destination. Big camels are destined to Egypt while the medium ones go to Libya and the smallest ones to Saudi Arabia.

Tefera’s optimism for business on camels is not without a reason. Official data, for example, shows compared to the country’s huge potential in this sector, the current export is just the tip of the iceberg. In fact it is often reported that the country is endowed with a huge livestock reserve ranking 10th in the world and first in Africa.

The Central Statistical Agency (CSA) report for the just concluded budget year states that there are about 54 million cattle, 25.5 million sheep, 24.6 million goats and nearly a million camels.

About 60 percent of Ethiopia’s landmass is covered by pastoralist areas, even though they represent only 11 percent of its population. Despite the potential, Ethiopia’s o only earning from cattle export reached is $155 million in the same year, according to the Ministry of Trade (MoT).

MoT figures show during the 12 months, camel exports were about $39 million, accounting for 25 percent of the total revenue from livestock exports to the Middle East and North Africa (MENA) region.

The top importer of camels from Ethiopia was Egypt followed by Djibouti, Sudan, Somalia, Libya, Lebanon, Saudi Arabia and United Arab Emirates, in that order.

Kelifa Hussein, Director of Live Animal, Hide and Skin Marketing Directorate at MoT stated that camel exports during the last fiscal year was only 48 and 59 percent of the target in terms of quantity and monetary earnings. He attributed this shortfall to economic hardships faced in Sudan - a major buyer of Ethiopian camels - illegal flow of livestock to neighboring countries, lack of awareness on the benefits of the sector, lack of international standard quarantine center and outdated and too long marketing chain.

“For the past year and half, we have undertaken a sector study involving all stakeholders, and prepared a draft proclamation,” said Kelifa adding that the proclamation has made its way to the Council of Ministers, and is expected to be ratified by parliament next year.

There are two proclamations currently - one on Rawhide and Skin Trade and a second  on Live Animal Trade - with a particular desire to streamline the livestock and associated sectors, stop illicit flows of livestock and improve quality

Kelifa, however, reiterated that his ministry and other responsible Ethiopian government institutions are not waiting for the proclamations to be ratified to act on issues in the industry. For example, five quarantine centers in areas bordering with neighboring countries are under construction, while also working on bilateral agreements with these countries on  trans-boundary animal disease and illegal trade.

Three of the quarantine centers under construction by the Ministry of Agriculture (MoA) are each located near borders with Sudan, Djibouti and the self-declared breakaway republic of Somaliland. Nevertheless, the projects have reportedly faced setbacks including change of original venue of construction, and delays related to contractors’ faults.

However, the MoA - a major actor in the industry - says the proclamations under preparation are will go way beyond just putting a legal framework to the trade. Getachew Bekele, Livestock By-products Quality Improvement Senior Expert at MoA, says the two proclamations will define who can participate in the trade, what kinds of animals are eligible for trading, hygiene and nutrition standards, and transportation criteria.

Currently, the export of livestock is reserved for Ethiopian nationals and members of the Diaspora community, who have not changed their citizenship, since Ethiopia does not allow dual citizenship. However, exports of meat and associated products are open to any business people because it is deemed a value adding sector. 

“Once the proclamations are passed, trade license will be handled by MoT, competency accreditation and route of travel by MoA, customs authority will follow the appropriate regimen has been followed, while Ministry of Industry (MoI) will ensures the quality of goods arriving at markets,” added Getachew.

 

Trend of Ethiopia’s export commodities in the past two budget years 

Export items EFY 2011/12
11 months performance
EFY 2012/13, 11 months performance Performance difference in revenue Performance difference in percentage
Coffee 714,361 653,833 60,528 8.5
Oil seeds 430,161 404,143 26,018 6.0
Khat 221,118 246,684 25,565 11.6
Meat 73,419 67,636 5,783 7.9
flowers 180,262 169,391 10,871 6.0
Livestock(including camels) 191,599 152,946 36,854 20.2
 


The revenues are in terms of 000s
*This data is obtained from the Ministry of Trade     


However another expert from the MoA who asked not be identified, cautioned against putting all the responsibilities on the government.

“At the end of the day the exporters have a responsibility to make sure their export products are hygienically good, competitive in price and better quantity, if they are to catch up with the likes of Australia, Brazil and India, which are major livestock and beef exporters,” the expert argues.

The expert’s arguments are largely in line with the findings of a recent research published by the International Livestock Research Institute (ILRI). This research found that shortage of animal feed resulting from drought and land use change has resulted in high feed prices in turn leading to high domestic prices and reduced competitiveness. This reduces incentives for uniform feeding regimes, resulting in non-uniform lines of animals being marketed.

Another area the ILRI report touches has to with administrative and structural factors such as lack of minimum weight and pricing regulations at border, and access to working capital, in addition to late payments from importers. Hence, the report suggested the establishment of a task force including government, industry and research community to address the issues and conduct further researches in a number of areas including market driven feed provision, costs and barriers.

This proposals, while welcomed by Tefera cannot come soon enough for the numerous challenges his business is facing trying to export livestock including camel.

“We have to face issues of contraband, market volatility such as the economic and political crisis affecting top export destinations like Egypt,” Tefera said.

The issue of inland transportation for camels has also been a major challenge, according to him. The ceasing of cargo and passenger transportation through the Ethio-Djibouti rail line which forced the business to use the alternative route by way of pick up cars could only worsen the situation, at times causing injuries and deaths on the camels.

Tefera is, however, optimistic that his business will grow better in the future once the construction of a new Ethio- Djibouti rail line is completed allowing him to exploit better the abundance of arid areas in the country which is suitable for raising camels, and the high demand from buyers and the expected regulatory effects of the draft proclamations.

Kelifa shares this optimism; one of the quarantine centers is set to start operations soon, and when the four are completed new export destinations such as Oman, Kuwait and Qatar are on the cards, with the long term target of reaching Middle Eastern communities Europe and other regions.

“Although it is only live camels exported at the moment, there are plans by some companies to start exporting camel meat products,” said Kelifa. Elfora PLC, owned by the Ethiopian born Saudi tycoon, Sheik Mohammed Hussein Al-Amoudi, is reportedly among the companies interested.

The cumulative effects may eventually enable the nation to meet its plans of exporting over one million heads of livestock, earning $285.3 million, in the 2013/14 budget year.

 

Has New Diaspora Policy Addressed All Diaspora Concerns?
By Emnet Assefa


Just last month, the Ethiopian government officially launched its Diaspora Policy marking the beginning of its implementation few months after it was ratified by the legislature. The development of the policy, crafted by the Ministry of Foreign Affairs, took close to three years.

Over these years, the government held series of discussions with all stakeholders including members of the Diaspora residing in different parts of the world.

A number of issues ranging from rights and benefits of the Diaspora to government’s role in assisting and recognizing their participation, are enshrined in the Policy.

Targeting more than two million Ethiopians living outside their country, the Policy’s aim is defined as “informing the various services rendered to ensure participation of the Ethiopian Diaspora and their rights and benefits on one hand, and ensuring the utilization of Diaspora transfer of Knowledge, finance, interaction and other contributions on the other.”

The Policy, accordingly, features a number of issues that are hoped to improve the relationship between the Ethiopian Diaspora and the government as well as the community at large.

It encourages the Diaspora to be involved and share their experiences in import-export, tour organization, market intelligence, brokerages and salesmanship activities and suggests incentives for young members of the Diaspora who want to come back and volunteer.

Aiming to promote the flow of foreign currency to the country, be it in the form of investment or remittances, the Policy promises to facilitate the establishment of rewarding systems. Diaspora participation on good governance and democracy of the country is stated in a manner that broadens their role in research and policy formulation. Mechanisms that enable the Diaspora to participate in national policy research and formulation will be established, according to this document.

Tax-incentives on imports of equipment for non-profit making activities run by members of the Diaspora are also said to improve the involvement of the Diaspora in humanitarian and charity activities in their home country. The Policy also assures of putting in place mechanisms to enable the Diaspora to get housing in all regions as well as Addis Ababa and Dire Dawa city administrations through saving and help returnees find jobs in the country.

Taking information exchange as the top most input for the implementation of the Policy, information data base, website and other information delivery mechanisms are going to be established in the near future. An intended celebration of National Diaspora Day at home also aims to pull the Diaspora to their country.

The  greater end result of the Policy, which is also hoped to bring about an organized system to deal with Diaspora issues throughout the government structure, is improving relations between government and the Diaspora; hence, the Policy pushes for strengthening of existing and new diaspora associations, giving especial emphasis to organized youth Diaspora participation.

Accordingly, the Ministry of Foreign Affairs has brought together its previously separate activities regarding Diaspora to one organized system.

According to Feisel Aliyi, Director of Diaspora Participation and Engagement Directorate at the MoFA, the Policy puts in place a clear direction in how members of the Diaspora can take part in the socio-economic developments of the country.

But do these provisions in the Policy mean the document addressed on all concerns repeatedly raised by the Diaspora?

Though the ratification of the Policy is an achievement on its own, some members of the Diaspora believe it has not gone far enough. They would have liked to see a clear policy on how Diaspora professionals could participate in Ethiopia's development.

According to Yohannes Assefa (Esq), an Ethiopian-American Securities Lawyer, a number of issues have been raised by members of the Diaspora on forums organized abroad. He stated the need to open up sectors, such as banking and telecom, for the Diaspora as well as enabling them to practice law in Ethiopia as examples of  questions raised on forums he participated on.

Diasporas like Yohannes are particularly alarmed by incidents like a legislation issued by the Ministry of Justice last year banning the Diaspora from practicing law.

“Although the bill was never implemented, it sends the wrong message to those who want to return and participate in Ethiopia's development,” Yohannes said.

A number of other issues such as consumer protection in the area of real estate investment were also raised in many of the consultative forums, according to Yohannes; and “the Government since has responded with a draft legislation to address these issues.”

The Director of Diaspora affairs at MoFA, however, sees the fact that members of the Diaspora can participate in any business that they want - including law but not banking, aviation and telecom - as a good enough start. “Proclamation 270/94 is the latest proclamation and whatever comes later overwrites the previous..... with the exceptions on the proclamations otherwise, they (Diasporas) can practice,” the Director said. He, nonetheless admitted that there have been a number of problems regarding this. However, these problems have been solved through discussion with the Ministry office, he added.

Yohannes, however, says he is to the large part satisfied with the Policy considering it as a milestone and hopes that the policy will allow the Diaspora to access better government services in regional and local governments where land, tax and other related issues affect Diaspora investors.  He also hopes it opens the door for further engagements between the Diaspora and the government. But he still doubts the capacity and structural readiness of MoFA for the implementation of the Policy. “The government needs to provide MoFA with ample resources to implement the policy.”

Faisel’s Directorate, in the meantime, is waiting for the establishment of National Diaspora Council representing various senior federal and regional officials and stakeholders as well as Advisory Council that comprises of members of the Diaspora both in the country and abroad to facilitate the implementation of the Policy. Soon to be established regional Diaspora offices are also expected to direct and coordinate Diaspora participation in every region.

Faisel also suggests that though the Policy included opinions of members of the Diaspora worldwide and experiences of other countries, and testifies government’s desire to engage Ethiopians abroad on matters of their motherland, the document will be improved through time.

“We have assessed experiences of other countries and taken what is best and what fits our context,” Faisel said explaining that close to 15,000 members of the Diaspora had the chance to discus on the draft Policy.

According to him, this document is different from earlier initiatives because it exclusively addresses Ethiopians residing outside of their country.

A number of legislatives, regulations, directives and supporting implementation documents will be prepared to implement this Policy launched in Addis Ababa in the first week of June, according to the Director.“A policy isn’t a bible or Quran,” said Faisel indicating that there is enough room for improvement.

 

Thriving Mining Sector Sees Rising Share in Ethiopia’s Economy
By Andualem Sisay

It was in 1999 the idea of engaging in the mining business first crossed Yegoraw Zewdalem’s mind when he came back from California to visit his family in Addis Ababa, 12 years after he left.

“I looked at all sectors in Ethiopia and found gemstones export more promising. Hence, I decided to take samples to the United States at the end of my visit,” Yegoraw said. 

Then came venturing into the business with the initial ups and downs, which caused him to lose money in his first mining attempt in Somali region, between 2003 and 2005. That was due to lack of experience; he now sees bright future in the business. 
Just last year, he exported some 700 kilograms of gemstones, including high quality opal with price tag of $25,000 – 30,000 for ten grams.

He gets the stones from middlemen who collect them from traditional miners’ cooperatives. It is estimated that currently there are around 30 cooperatives engaged in gemstones mining in Ethiopia, each having 20 to 50 members.

Catching up fast on coffee
The history of coffee as the leading foreign currency generating commodity of Ethiopia began to fade away over the past five years. Its share is now down to about 25 percent of the total $3 billion annual export income of the country from about 40 percent five years ago.

The diversification of export items, which brought flower and other produces to the major export commodities list; the shift of traditional miners from contraband to formal line of business; and the fluctuations of the global coffee market, among others, are the reasons for the decline of coffee’s share.

Since last year, the less known mining sector has become the source of Ethiopia’s second export commodity. It took over oil-seeds’ position earning $526 million in the past 11 months (July 2012 – May, 2013) catching up fast on coffee, which generated $654 million.

The latest geology survey shows that Ethiopia is endowed with natural resources ranging from tantalum, which is used for manufacturing of mobile phones, laptops and other electronic gadgets, to coal and potash. The list includes, platinum, nickel, copper, silica, diatomite, bentonite, soda ash, gemstones, phosphorus, salt, geothermal, other industrial and construction minerals, among others. 

Gold mine
The recent data from the Ministry of Mines (MoME) shows that out of the total earnings from mineral export $419 was earned from one million traditional gold miners operating in six regions of the country.

The rest of this earning is attributed to MIDROC Gold Mining Company, which the government privatized in 1997 to the Ethiopian born- Saudi tycoon, Sheikh Mohammed Hussein Ali Al-Amoudi, whose MIDROC Ethiopia Group Investment has over 40 companies  and affiliates in Ethiopia.

While the promising potash is expected to take over the lead role in the coming few years, gold is Ethiopia’s top hard currency earner mineral generating an average of half a billion US Dollars annually since the previous fiscal year./

Potash is one natural resource from which the country expects huge revenue in the near future. The Canadian firm, Allana Potash and Fertilizer Company, co-founded by an Ethiopian diaspora, has invested in the Danakhil Depression of Afar Region.

It has secured financing from two significant strategic investors - the International Finance Corporation (IFC), a private sector financing arm of the World Bank Group, and Liberty Metals and Mining, a member of Liberty Mutual Group.

Anticipating to start production of one million tons a year by mid-2015, Allana has also got green light from Africa Export Import Bank (Afrexim Bank), while offering shares on the Toronto Stock Exchange, at the same time.

The new Ethiopia- Djibouti railroad, which recently secured some $300 million loan from the Indian Export Import Bank, is among the ingredients that are expected to boost performance of mining and other export businesses in Ethiopia. This is also expected to ease transportation of potash and fertilizer, indicating a promising future for the sector.

“Had it not been for the decline of gold prices globally, mining could have generated more foreign currency to the country than coffee,” says Bacha Faji, Public Relations Director at MoME.

Estimations by the Ministry indicate that the western part of Ethiopia - around Lega Dembi and Sakaro - alone has production potential of about five tons of gold per annum.  In addition, gold production has recently started in Tigray, Gambella, southern parts of the country and Guji and Borena zones of Oromia.

Much Anticipated Oil & Gas
For the past two decades, there has been aggressive exploration for oil and natural gas in the four major sedimentary basins of Ogaden, Gambella, Blue Nile and Southern Rift Valley. Though none of the companies prospecting for oil and gas in Ethiopia have announced the much anticipated production news so far, there have been growing interests on the sub-sector.

Most recent developments are elevating hope of the people. The discoveries of oil in neighbouring countries, Kenya and Uganda, by Tullow Oil Company (partner of Africa Oil), which Ethiopia has also welcomed to its territories, and recent news from the company are boosting hope of the country.

“The most significant well results during the period were the Etuko-1 oil discovery in Kenya and encountering an oil prone system in Ethiopia with the Sabisa-1 well,” Tullow stated in its 2013 half year report released on July 2, 2013.

Coal Production
One of the natural resources the country has started utilizing is coal. Currently Ethio-Pak Coal Mining firm, which was established as a joint venture by two endowment companies (Ezana Mining with 40% share and Mesobe Cement Factory with 25% share) partnering with a Pakistani company with 35% share, seems to be on the lead. It has started producing coal since 2009 near Jimma area of Oromia Region, 300km west of Addis Ababa. The area is said to have 14 million tons coal reserve.

In addition, to further utilize the huge coal potential around Yayou area of Oromia Region, the government has decided to invest solo after its repeated attempt to attract private investors has failed.

Yayou Coal Phosphate project is one of the largest of about a dozen coal reserve sites in Ethiopia. It is estimated to have a potential of producing 300,000 tons of urea for fertilizer and 90 megawatts of electricity per year.

The Big Picture
Though Ethiopia has listed over 875 mineral occurrences in SIG Afrique mineral resources database, the share of the mining sector to the country’s gross domestic Product (GDP) is currently 1.5 percent. The Ministry of Mines envisages boosting the current annual revenue earnings from minerals export tenfold ($5-6 billion/year) by 2020 while at the same time producing most of the currently imported industry inputs locally; hence, import substitute. 

To encourage investment in the sector, the government has recently reduced the income tax from 35 to 25 percent. Lower royalty payment levels, exemption from customs duty and taxes on mining equipment, guarantees in respect of the right to sell minerals locally or abroad are also included in the new law.

With no investment capital limits, government also provides guarantees for opening of a local account in a foreign currency.
“What we need from investors in the sector is only detailed work plan with budget breakdown,” Bacha says.

Out of the total of 135 mining companies currently operating in the country, 55 are engaged in production of various minerals ranging from gold, coal and tantalum to various gemstones such as opal. The remaining are at exploration level searching  and analyzing economic viability of other natural resources including potash and crude oil.

In addition, the country has also engaged Russian Geological Survey, Zaru Bezggeologia, and its Ethiopian counterpart to analyze the major input for nuclear power development - uranium deposit - found six years back in Bale zone of Oromia Region.

Any Room for Diaspora?
Recent statistics show that the engagement of the Ethiopian Diaspora in the mining sector is encouraging. Of the total 135 mining companies registered 36 are owned by Ethiopians while 33 are joint ventures between Ethiopians and foreigners.  Most of these investors are Ethiopian Diasporas like Yegoraw, according to Bacha.

The government is now encouraging both foreign and Ethiopian Diaspora investors to invest on areas where technology and value addition is need the most. This includes improving traditional miners’ performance investing on upgrading their skills and equipments and engaging in cutting and polishing gemstones business before export.

“Though there are challenges, this is the sector I am pushing my fellow Diasporas into,” Yegoraw said while urging the authorities to decrease the week-long period consumed on paper works at customs just to clear duty free imported machineries.

 

Turning Athletics into Business While Inspiring Champions
By Edom Kassaye

Dejene Shewakena was about to give up on his athletics dreams before turning 27 because he couldn't afford training expenses while sustaining his life. The past six years, life has showed him its darkest side pushing him to the edges. But just on the brink of time, he was given a chance to keep his dream alive, thanks to an opportunity to train at Yaya Village, the first of its kind high-altitude training facility in Sululta town, one of the ideal training places for athletes in Ethiopia.

“Aspiring to win world cross country championship could have been impossible had it  not been for Yaya Village's contribution to keeping young Ethiopian athletes vision,” said Dejene who is now training full time at Yaya Village to emerge victorious at the Coca Cola Challenge in Addis Ababa this September.

A high-altitude training center and a four star resort, Yaya Village is built on 50,000 sqm plot at an altitude of 2,700 meters above sea level on the Sululta plateau, 11kms north of the capital, right on the Addis Ababa-Gojam road. On smooth driving day, it is just 40 minutes drive from Bole International Airport.

Joseph Kibur, 40, an Ethiopian born Canadian investor is the main brain behind this facility. Him being a major shareholder and Haile Gebrselassie and two other business persons having stakes, Yaya Village is partly a path to realize a grand vision of springing more future Olympic champions from Ethiopia. Construction started in 2009 and when completed by 2015, it will become a prominent village of athletics and other leisure activities attracting local and foreign professional and aspiring athletes as well as tourists who wish to experience training in the Ethiopian high altitude.

The Journey to Yaya
Eleven years old Joseph left his country to join his father who was then studying M.Sc in Chemistry in Montreal. In 1990, after graduating from high school, Joseph won a scholarship and joined Simon Fraser University.
When he was in college he started athletics and won many cross country running including the Canadian Cross Country champion at the age of 21 and represented Canada in many World Cross Country Championships.  He once ran with Haile Gebreselase, representing Canada.

Upon concluding his study in 1996, he launched his web hosting company and worked till he sold it in 2003 for 10 million USD.
After living in Canada for more than two decades, the Business and Computer Science graduate, returned home initially anticipating to engage in the field he knows better, information technology.

However, when Joseph met Haile in 2009 through a common friend, things took a different turn leading to the birth of the 80 million Birr project now called Yaya Village.

“It is a dream come true. I wish I could have this facility when I was 20 years old,” he said recollecting his short career as an athlete.
“It is possible,”  was not the only answer Joseph got from Haile when he invited the dozens Olympic and world records holder to be part of his dream athletic center. Haile also connected him to another friend who was already in a possession of the plot in Sululta Yaya Village is now built on.

Yaya Village has breathetaking landscape, picturesque green scenery and revitalizing fresh air. Add to that all the facilities including a gymnasium, massage service, sauna, physiotherapy and football and volleyball pitches along with horse riding ground.

It started operation in January 2012, after first phase construction was completed consuming about 20 million Birr.

“It was a very insightful business from the very beginning. However, that little distance from Addis Ababa which caused associated infrastructure problems make it challenging,” Joseph, who is President of Yaya Village, added.

Joseph initially thought that within a snap of a finger he can change everything and when that did not happen it naturally led to disappointments. “I have to slow down to the level of the system I am in,” he then told himself. “My to do list kept on growing every day. What I thought I can do in one day ends up taking a month,” he remembers the challenges he has gone through. “For example, it took us about a year to get electricity and water. There is no landline telephone service yet that we are using wireless connection.”
Accordingly, he advises that while investing in Ethiopia one shouldn't assume what they know is sufficient. As much as he was, one may spend almost every day dealing with the bureaucracy than on creative thinking. “Always do as a trial; start small, don't jump and put all your money at once, you may end up disappointing yourself.”

Nevertheless, going through their own share of, at times frustrating, challenges,  Joseph and his business partners have now brought Yaya Village to a blossoming stage to the delight of  not only the proprietors but also aspiring champions like Dejene and other locals who have got jobs at the centre.

It currently employs 75 permanent and 25 temporary workers full time with the figure  expected to triple upon the total completion of the project in 18 months.

Local businesses, NGO's and different embassies use the center as for their retreat, training, workshop and vacation purposes.
The second phase construction is currently underway consuming about 10 million Birr so far. As it provides services with the completed facilities, the remaining construction works such as international standard swimming pool, will be completed in the coming one and half year.  

And just one year into the business, Yaya Village registered a five million Birr profit. “It is an untapped market, it can be more profitable in the long run,” Joseph said.

The Ethiopian National Athletics team is currently training at this center in preparation for the upcoming World Athletics Championship. Foreign Olympic and world champions from various countries also camp at Yaya Village and use its facilities crowning Sululta as an athletics town, according to Joseph.

Most foreign athletes used to go only to Kenya because the neighboring country, whose athletes always present the fiercest challenges to Ethiopian runners, had high altitude training centers for about ten years now. The team that has come together courtesy of Joseph's initiative has now presented an alternative with standard treatment in 4-star resort with specially prepared food for athletes and other guests, just less than an hour drive from Addis Ababa.

For example, athletes from the west have to train at high altitudes through October to May for the climate in their country is cold, while Kenya, Morocco, South Africa and Ethiopia have hot weather at that same season.  This make the four countries the best options for athletes from the Northern Hemipshere. 

But Yaya Village has competitive advantages, according to Elshadai Negash, Communication Consultant and sports commentator specializing in athletics. “It is near the capital, the logistic burden is not as big as any of its competitors while at the same time keeping privacy as it is outside of the city.

“Yaya show cases Ethiopia as a successful athletics country as well as a destination for high altitude training facility,” Elshadai added.
It will also be a medium to connect Ethiopian athletics family with the international athletics community, according to him.
Hence, Yaya Village is not only earning the country highly needed hard currency, it also opened doors for skills exchange on different athletics training tactics.

Local athletes have no more to climb all the way to Suluta mountains, training and get back to Addis without even taking shower “We are putting together all that they need; they run in the forest right, beside the forest there is the sole compound,” said Joseph.
Yaya Girls Running Program is also an initiative aiming to improve the lives of women by giving them chance to train in athletics and accommodation, job skills and English language.  “Yaya village gives opportunity and makes a difference in people's life. Making a difference in others is something I can't do easily in other country,” Joseph expressed his satisfaction.

Through Sululta Athletics Club, local athletes are also given a chance to train at Yaya Village free of charge using the facilities including running court. Dejene is, therefore, one the beneficiaries who are encouraged to keep the flame of hope lit in their heart by the support from the center.

The same way Abebe Bikila and other legendary athletes remain inspirations to the current and future athletics champions from Ethiopia,  Yaya Village aims to remain a beacon directing both its proprietors and beneficiaries to a better future. 

 

Reframing The African Renaissance
By Tariku Abas-Etenesh

Africa rising?
Since May 2013, boldfaced and prominent big billboards greet passersby in Addis Ababa reading: Arise Africa. It is arguably the most frequently heard avowal during the recently celebrated golden Jubilee of the African Union (AU), under the theme: Pan-Africanism and African renaissance.

The theme’s comfortingly deserved meaning is attributed to the current economic development, according to IMF data, in various African countries including Ethiopia. What a positive spirit to celebrate the anniversary with! As a Nigerian proverb says it, when a man says yes, his Chi (his personal god) says yes; and so, when a continent says I am rising, the spirits of her citizens rise up with it.
Despite the sense of positivism and audacity the slogan entails, however, I believe it is high time for us, Africans, to deliberate with caution not only the realities that gave ‘Africa rising’ its meaningful context, but also the direction Africa is rising. And allow me one more question, is Africa claiming ‘to be rising’ because it is so, or it is claiming so, because the West declared it?’

Anyone who knows about the great infrastructure developments and recent discoveries of precious minerals and fossil oil that changed the economic trajectory of a number of African countries might assume the question is ill constructed or playing evasive of the facts on the ground. Well, this is not my intention. Denying the facts would be a self debasing attempt and condescending to AU. Rather, mine is an honest worry that our continent should be insisting on framing its renaissance on a grassroots Pan-African drives in order to avoid repeating the mistakes of the 1960’s.

Do not look where you fell, but where you slipped

The world is in recession and the corollary challenges are spewing in forms of revolutions against governments, tensions between religions, and xenophobic tendencies against the scapegoat “others”.

Against such backdrops, the rise that is being positively pronounced about Africa could also be regarded as a caution call for the continent. Why? For the obvious reason as the liberation movements of the 1960’s were thwarted into not completing the liberation project and ended up being nominal political freedoms. And the dream for economic liberation was stalled by nightmares of mishandled euphoria that gave way for the former colonial masters to hijack the much needed stability and prosperity and turn it into hotbeds of coups. As an African proverb puts it ‘when a cock is drunk, he forgets the hawk.’

The year of Africa - the 1960 – was not only a time when Africa woke up free against all odds into a hostile world that was not willing to allow her enough time to gather her breath. A polarized world that was caught up in cold war engulfed the continent to not only take sides but also disorient the fragile freedom it just had won. The scares of the cold war coupled with conflict ridden economies the continent has spent a good part of the past half century wasting indebted to the West and in some terms still paying the price through the malignant dependence on aid.

Now after half a century, Africa is set on another proud stride; yet it does so into a world reality with no less a cause for polarization than was furnished during the 1960’s. It is waking up and flexing its muscles yet in another tumultuous time of tensions. For instance, religious extremism which used to be rare in the African continent hast spread, especially after the recession, thus risking the stability of a continent that has just started to positively paint herself. And like the 'cold war' the former colonial powers are exploiting the tensions, as in the case in Mali, to further strengthen their presence as well as safeguard their interests in the continent.

Africa is not an island and what is happening elsewhere directly affects it. And often times, the effects come from the greedy hawks who mean exploitation and filling their pockets. A recently released report on oil and mining industry practices in Africa indicates the continent is suffering from secret deals whereby multinational corporations and elites in various countries cut the mass out from sharing the wealth. And the trends, except in a few countries, seem to be the same and not changing.

Adding fire to fuel is the other face of the development trend that some of the countries like Ethiopia, applauded for being on the rise, are doing taking growth as excuse for the carelessness to uphold human rights and free speech as stipulated in their constitutions. In Ethiopia, for instance, the construction section is in a boom that buildings sprout like mushroom and roads spread in a blink. However, the country’s human rights record is one of the bleakest, according to Amnesty International. This is then the challenge. Authoritarian governments, despite the economic muscle flexing in various sectors, could use the positive trend as license to impose human right abuses even more.

So where is the worry? One might even ask that the mentioned challenges have been in Africa since independence and what makes them different now? The challenge for me is twofold. The first is the attraction of foreign investors who would like to take part in the positive development in the continent. This is not bad in itself, but inviting investors with no check and balance in place to guarantee the inclusion of the mass in sharing the profit made from the economic development, would only graven the burden of the mass. And such is the reality that would challenge the stability and security of the continent. As seen in many of the land grab trends in various counties in the continent, the front line bearer of the harsh burden of huge infrastructure developments as well as evictions are the disfranchised mass. The people who are being taken out of their farms are not the elites in their palaces but the poor.

With the positive tint that had been unheard of in the media coverage on Africa, and the development drives on the ground across the continent a great causation and maturity and above all leadership is required to avoid the pitfall of the euphoria in to the tide of galvanizing unity through maturing and leadership from the AU that promises to lead the next half century with a vision focused on and owned by the people of the continent. I say the involvement of the people should take a naivety that has never been tried in the past half century. 

Diorama of African experiences
One of the new developments during the AU celebrations in May was the announcement of the African Vision 2063. The vision promised to be owned by the peoples of Africa at all of its stages. The strategic plan included priorities such as Growth and transformation, regional integration, peace and stability, gender equality and agriculture.

In line with this 'people led' Vision 2063, I believe that the AU should start to lead the continent into soul-searching. But what sort of soul searching do I mean? I mean a grassroots, committed and honest Pan-Africanism drive that could be spearheaded by the AU that depart from the gradualism and mediocrity of the past. A roaring lion kills no game.

Africa should not set her sail using someone else’s star and thus the experiences on which the designing of the vision should be based should come out of Africa. For the Vision to be, a vision of the mass, the tone of renaissance should be reframed with a take on the continent’s history. The AU should launch drive that commences from examining a metaphorical diorama of the experiences African nations that portray the dreams that the AU should live up to.  As clearly inscribed in the AU anthem that goes:

“Let us all unite and toil together,
To give the best we have to Africa,
The cradle of mankind and fount of culture,
Our pride and hope at break of dawn,

the native vision, I propose should have three chapters that represent our continents aspirations. The chapter should be named Ethiopia, Ghana and Congo respectively.

Chapter one Ethiopia:
If renaissance is rebirth, the rebirth that Africa seeks to have is an Ethiopian reality. AU should start the renaissance by reclaiming Ethiopia. I don’t mean a reality only of the current Ethiopia, but the Ethiopia of the ancient, the word that means Africa grace and greatness. Ethiopia that represented the great African fortitude, and civilization and the pride of civilization, religion and defiance.

By it, I mean that what Africa had and lost due to the great misfortunes of in human history such as slavery and colonization, has left its hint in Ethiopia. Ethiopia is the only surviving African nation that exhibits to the world what colonization and slavery has done to the rest of Africa. If the rest of Africa was not subjected to slavery and colonization, culture and language should have been maintained.

Chapter one Ghana:
Though the worst crime in human slavery perpetrated on it and prolonged dehumanizing colonization practically left the continent with nothing to start herself as a continent ready enough to compete the community of nations that has deprived her, Africa can point at Ghana as phoenix the continent has grown out of the ashes and Freon nothing stated to deal with democracy and system of governments that the rest of the world took centuries to exercise.

Africa should have Ghana in the vision to say that despite the pitfall of coups that raged the rising freedom in the continent, Ghana has proven that too could be put behind and make strides to development and progress. Africa could rise above all her problems. That is Ghana.

Chapter one Congo:
Despite the great promises in the natural resources and the potential to change the face and fate of the continent, the Congo remains one of the great samples of inefficiency of the continent that clearly put the prophecy line of Franz Fanon who said “whoever controlled the Congo basin controls Africa”. And the Congo is the greatest challenges of the Renaissance. What the AU and the people of Africa should do is to make sure they are the masters of their own fates and the owner of their own resources and the arbiter of their own conflict and the designers of their own futures. But is Africa in control of the Congo basin?
That is the summary of the three chapter vision 2063.

 

The 2016 PIONEER ETHIOPIAN DIASPORA BUSINESS PERSON AWARDS

The Pioneer Award is bestowed up on Diaspora entrepreneurs who have introduced innovation(s) in business that have significantly and positively affected business practices with long-term results in Ethiopia or in the Diaspora. This year's Awards Dinner will be held on August 6, 2016 at The City View Room overlooking the City of Washington DC at The George Washington University 7.30PM to 10.30PM.

It is to be recalled that the 2015 Pioneer Ethiopian Diaspora Business Person Awards was awarded to unique and deserving individuals: Dr. Akeza Teame, Founder & Medical Director, St. Yared Hospital and the American Medical Center, and Ato Tamrat Bekele, Founder & CEO of International Clinical Laboratories. The 2016 Pioneer Ethiopian Diaspora Business Person Awards Committee will announce the winner(s) of this year's Award very soon. Stay tuned!!!

Photos: Past Events