Archive for December, 2009
Dec. 31 (Bloomberg) — Until last year, people in the Ethiopian settlement of Elliah earned a living by farming their land and fishing. Now, they are employees.
Dozens of women and children pack dirt into bags for palm seedlings along the banks of the Baro River, seedlings whose oil will be exported to India and China. They work for Bangalore- based Karuturi Global Ltd., which is leasing 300,000 hectares (741,000 acres) of local land, an area larger than Luxembourg.
The jobs pay less than the World Bank’s $1.25-per-day poverty threshold, even as the project has the potential to enrich international investors with annual earnings that the company expects to exceed $100 million by 2013.
“My business is the third wave of outsourcing,” Sai Ramakrishna Karuturi, the 44-year-old managing director of Karuturi Global, said at the company’s dusty office in the western town of Gambella. “Everyone is investing in China for manufacturing; everyone is investing in India for services. Everybody needs to invest in Africa for food.”
Companies and governments are buying or leasing African land after cereals prices almost tripled in the three years ended April 2008. Ghana, Madagascar, Mali and Ethiopia alone have approved 1.4 million hectares of land allocations to foreign investors since 2004, according to the International Institute for Environment and Development in London.
Emergent Asset Management Ltd.’s African Agricultural Land Fund opened last year. On Nov. 23, Moscow-based Pharos Financial Advisors Ltd. and Dubai-based Miro Asset Management Ltd. announced the creation of a $350 million private equity fund to invest in agriculture in developing countries.
“African agricultural land is cheap relative to similar land elsewhere; it is probably the last frontier,” said Paul Christie, marketing director at Emergent Asset Management in London. The hedge fund manager has farm holdings in South Africa, Mozambique and Zimbabwe.
“I am amazed it has taken this long for people to realize the opportunities of investing in African agriculture,” Christie said.
Monsoon Capital of Bethesda, Maryland, and Boston-based Sandstone Capital are among the shareholders of Karuturi Global, Karuturi said. The company is also the world’s largest producer of roses, with flower farms in India, Kenya and Ethiopia.
One advantage to starting a plantation 50 kilometers (31 miles) from the border with war-torn Southern Sudan and a four- day drive to the nearest port: The land is free. Under the agreement with Ethiopia’s government, Karuturi pays no rent for the land for the first six years. After that, it will pay 15 birr (U.S. $1.18) per hectare per year for the next 84 years.
Land of similar quality in Malaysia and Indonesia would cost about $350 per hectare per year, and tracts of that size aren’t available in Karuturi Global’s native India, Karuturi said.
Labor costs of less than $50 a month per worker and duty- free treaties with China and India also attracted Karuturi Global, he said. The $100 million projected annual profit will come from the export of food crops, including corn, rice and palm oil, he said. The company also is plowing land on a 10,900- hectare spread near the central Ethiopian town of Bako.
The project will give the government revenue from corporate income taxes and from future leases, as well as from job creation, said Omod Obang Olom, president of Ethiopia’s Gambella region and an ally of Prime Minister Meles Zenawi’s ruling party.
“This strategy will build up capitalism,” he said in an interview in Gambella. “The message I want to convey is there is room for any investor. We have very fertile land, there is good labor here, we can support them.” The government plans to allot 3 million hectares, or about 4 percent of its arable land, to foreign investors over the next three years.
Workers in Elliah say they weren’t consulted on the deal to lease land around the village, and that not much of the money is trickling down.
At a Karuturi site 20 kilometers from Elliah, more than a dozen tractors clear newly burned savannah for a corn crop to be planted in June. Omeud Obank, 50, guards the site 24 hours a day, six days a week. The job helps support his family of 10 on a salary of 600 birr per month, more than the 450 birr he earned monthly as a soldier in the Ethiopian army.
Obank said it isn’t enough to adequately feed and clothe his family.
“These Indians do not have any humanity,” he said, speaking of his employers. “Just because we are poor it doesn’t make us less human.”
Obang Moe, a 13-year-old who earns 10 birr per day working part-time in a nursery with 105,000 palm seedlings, calls her work “a tough job.” While the cash income supplements her family’s income from their corn plot, she said that many days they still only have enough food for one meal.
The fact that the project is based on a wage level below the World Bank’s poverty limit is “quite remarkable,” said Lorenzo Cotula, a researcher with the London-based IIED.
Large-scale export-oriented plantations may keep farmers from accessing productive resources in countries such as Ethiopia, where 13.7 million people depend on foreign food aid, according to a June report by Olivier De Schutter, the United Nations special rapporteur on the right to food. It called for ensuring that revenue from land contracts be “sufficient to procure food in volumes equivalent to those which are produced for exports.”
Karuturi said his company pays its workers at least Ethiopia’s minimum wage of 8 birr, and abides by Ethiopia’s labor and environmental laws.
“We have to be very, very cognizant of the fact that we are dealing with people who are easily exploitable,” he said, adding that the company will create up to 20,000 jobs and has plans to build a hospital, a cinema, a school and a day-care center in the settlement. “We’re going to have a very healthy township that we will build. We are creating jobs where there were none.” The project may help cover part of the $44 billion a year that the UN Food and Agriculture Organization says must be invested in agriculture in poor nations to halve the number of the world’s hungry people by 2015.
“We keep saying the big problem is, you need investment in African agriculture; well here are a load of guys who for whatever reason want to invest,” David Hallam, deputy director of the FAO’s trade and markets division, said in an interview in Rome. “So the question is, is it possible to sort of steer it toward forms of investment that are going to be beneficial?”
Buntin Buli, a 21-year-old supervisor at the nursery who earns 600 birr a month, said he hopes Karuturi will use some of its earnings to improve working conditions and provide housing and food. “Otherwise we would have been better off working on our own lands,” he said. “This is a society that has been very primitive. We want development.”
ADDIS ABABA, Dec 19 (NNN-ENA) — The Arba-minch Crocodile Breeding and Conservation Center announces plant to secure over 700,000 US dollars from the sale of crocodile skins in this Ethiopian fiscal year.
Center representative Tifases Beyene told ENA on Friday that the center has planned to export crocodile skins valued at 700,000 USD during the reported period.
She said one centimeter of crocodile skin is sold at seven dollar in the global market.
There are 2,715 crocodiles in the center presently.
The center has also planned to build a slaughter-house and other facilities at a cost of two million Birr. — ENA
Another set of strong financials put Dashen Bank in the running to be named Bank of the Year in Ethiopia for an impressive fifth time. For the year ending June 2006, the bank reported an 88% rise in net profits and its RoE climbed from 29.3% to 34.6%.
But the clincher for the judges was Dashen Bank’s bold (and risky) investment in a new state-of-the-art core banking system that was successfully implemented, achieving efficiency gains in both back and front office operations. “Dashen has led the market in applying appropriate technologies to bring about modern banking services,” says Lulseged Teferi, president of the bank.
Aside from improving internal efficiencies, the new technology permitted Dashen to launch payment cards into the market, attracting large numbers of new clients and bolstering the image of the bank in the market, according to Mr Teferi.
“In the coming years, as the government builds an IT backbone and creates affordable local-level access to information technologies, Dashen has the chance to become the unparalleled leader in providing banking services electronically,” says Mr Teferi.
The judges also noted Dashen Bank’s efforts to address its non-performing credits, recording a modest improvement in its NPL ratio
Source: The Banker
In April, U.S. Trade Representative, Ron Kirk, stated that “an aggressive effort to keep trade flowing and open more markets to American goods and services absolutely must be a big part of our economic recovery here at home. To get our economy back on track, we need to increase exports.” This article shares some of the efforts to encourage exports and stimulate the economy.
The Export-Import Bank of the United States raised the upper limit of its small business multi-buyer export credit insurance policy from $ 5,000,000 to $7.5 million. This change is designed to allow more small businesses to export their goods and services more easily. Effective December 1, U.S. exporters designated as small businesses under Small Business Administration standards, and with annual export credit sales of $7.5 million or less, will be eligible for enhanced coverage under Ex-Im Bank’s short-term small business multi-buyer insurance policy. Click HERE to learn more about the Ex-Im Bank and other programs launched during the past year to increase support for small business exporters trying to survive the during the current economic crisis.
U.S. Commercial Service
The U.S. Commercial Service (USCS), a division of the International Trade Administration within the U.S. Department of Commerce, provides a variety of opportunities to assist U.S. exporters sell overseas and help overseas buyers learn about U.S. exports.
· The USCS helps U.S. small and medium-sized businesses grow international sales by providing:
· Online and customized market research.
· Support for U.S. exhibitors in selected overseas and domestic trade shows to attract qualified business partners.
· Fee-based programs to introduce exporters of U.S. products to qualified buyers and distributors.
· Individualized counseling and advocacy.
· Training programs on subjects such as export documentation, export controls and the basics of exporting.
Click HERE to learn more about the U.S. Commercial Service.
Export.gov brings together resources from 19 U.S. Government Agencies to assist American businesses in planning their international sales strategies and succeeding in today’s global marketplace. Using these government resources, providing market research and trade leads Export.gov helps American exporters navigate the international sales process and avoid pitfalls such as non-payment and intellectual property misappropriation. Launched by Export.gov, Exports Live is an 8-city seminar tour designed for small and medium-sized businesses wanting to start or grow their international sales with government solutions. Speakers from the SBA, Department of Commerce, Ex-Im Bank and various exporters provide strategies used by local small and medium-sized businesses that have already discovered how to increase profitability through exporting.
Click HERE for other export news and training opportunities sponsored by Export.gov.
A truly historic moment has arrived. The United Nations Climate Conference in Copenhagen, Denmark began this week, and the eyes of the world are on the United States, gauging our commitment to a global solution to the greatest challenge facing our planet.
Leaders from across the world, including President Obama, will come together to forge an agreement that will guide international action to reduce greenhouse gas pollution and lay the foundation for a new and prosperous 21st century clean energy economy.
In advance of his trip to Copenhagen, President Obama has already made a commitment to take on the climate crisis here in the U.S. — now we have to show that the American people are ready to lead too.
Show the world that the American people want bold action on climate and clean energy solutions. Share your message of support on The Wall now.
The United States has a crucial role to play in any international efforts related to the climate crisis — including the dialogue that continues in Copenhagen this week.
Our principles and our economic strength have traditionally made us a leader in the world community — but we are also one of the largest emitters of global warming pollution. For these reasons, the rest of the world expects we will also play a leadership role in developing a climate agreement. Given the urgency of the challenge that is before us, the U.S. can’t wait any longer.
Solving the climate crisis begins with action and commitment, right here at home. The best way we can prove our leadership and demonstrate that we are ready to take meaningful action is by passing comprehensive clean energy and climate legislation in Congress.
That legislation has passed the House of Representatives and is now in the Senate. We’re not done yet, but we are closer than ever before — and we are going to keep up the pressure to pass a bill until our leaders have done it.
NAIROBI (Reuters) – The African Development Bank (ADB) will lend Kenya 12.5 billion shillings to build a road connecting east Africa’s biggest economy with its northern neighbour Ethiopia, officials said on Tuesday.
The new 123 km (76 mile) route is designed to open up remote regions of Kenya’s north that have been isolated from the rest of the country, as well as encourage regional trade.
“(The project) is aimed at improving the socio-economic situation of the people in the regions through which it will pass,” Kenyan Finance Minister Uhuru Kenyatta said, adding that water wells would be drilled in communities along the route.
“The road will open up a vast territory … (and) will greatly improve the flow of trade between the two countries.”
No good road connects the countries. The current route cannot be used in all-weather conditions and is in a very bad state, Kenyatta said. The new road will enter Ethiopia at Moyale.
The Tunis-based ADB has committed 140 billion shillings to various Kenyan development programmes to date, Kenyatta said. Currently 18 projects funded by the bank are underway, including energy, health and agriculture schemes.
© Thomson Reuters 2009 All rights reserved
8 December 2009 – Some 4.8 million Ethiopians will require emergency food and related aid costing $270 million for the first six months of 2010 in a country already plagued by prolonged drought and crop failure, according to United Nations estimates released today.
“Despite the collaborative efforts of the Government and humanitarian partners to address ongoing humanitarian challenges in Ethiopia, humanitarian needs are expected to remain,” the UN Office for the Coordination of Humanitarian Affairs (OCHA) said, citing a joint plan led by Ethiopian authorities, UN agencies, non-governmental organizations (NGOs) and donors.
Food requirement stands at 529,148 tons. Considering the possible carry-over stock from 2009 and confirmed pledges available for 2010, totalling to 272,612 tons, the net food requirement for regular relief is estimated to be 256,536 tons, at $195.2 million.
A further 26,500 tons of supplementary food, amounting to $24 million, is also required, while $50.9 million is needed for non-food requirements in heath and nutrition, water and sanitation, and agriculture and livestock sectors.
In October this year Ethiopia needed an additional $175 million to help feed 6.2 million people, a number that had risen steadily from 4.9 million in January. The food security situation had already been weakened by poor rains in 2008 and the impact of the high food prices globally.
|Midroc Gold may generate over half a billion dollars|
|Midroc Gold, one of Sheik Mohammed Hussein Ali Al-Amoudi’s many investments in Ethiopia, has announced that it hopes to generate 564 million dollars from the new gold mine.
The Sakaro Mine, located in Oromia Regional State, is the second gold mine operated by Midroc Gold, which started operation back in 1998 after acquiring Legedembi open gold mine pit and its processing plant through a privatisation deal at a cost of 172 million dollars.
Since then it has been intensively searching for more accessible gold deposits, according to Arega Yirdaw (PhD), general manager of the company.
The Sakaro Mine exploration and feasibility studies undertaken since 2004 have revealed 20.4 tonnes of gold. At a price of 1000 dollars per ounce, the mine will generate 564 million birr dollars revenues and 189 million birr net profit.
The revenues are also expected to generate a total of 130 million birr in tax and royalty payments to the national treasury and an increase in the workforce of about 10 percent from the current 1, 400 employees until 2021.
After signing a deal with Dr. Arega that authorises the company’s production of gold it has mined, Alemayehu Tegenu, the Minister of Mines and Energy (MoME) last Tuesday at Sheraton Addis said the revenues from the mine sector, particularly from gold exports, has been growing and he expects Midroc to further boost them.
According to the minister, last year the nation pocketed 105 million birr from gold exports and in the first quarter of this year it received 50 million dollars. The budget year’s overall performance is projected to be around 150 million birr, nearly a 50 percent increase from the previous year.
According to official estimations, the nation is endowed with 500 tonnes of gold reserves. Including two firms that recently announced the discovery of 40 tonnes of gold, estimated to be worth 1.7 billion dollars, 44 companies have been searching for the reserves, but so far only Midroc Gold is actually producing.
“It is not due to the lack of incentive or lack of exploration, the challenge has been to go to actual production after the exploration,” Alemayehu said last Tuesday, emphasising that that the use of traditional methods of gold production have been a factor.
According to the minister, four to 10 kilos of gold is being bought by the national bank every day from the traditional producers and is being exported oversees to earn increasing revenues. He added that more corporate mines are expected to be launched shortly.
“It is because others are not coming,” Dr. Arega of Midroc Gold said, “both local and foreign companies were not coming. When
we first started working we had 34 foreign nationals and now we only have just two, so we are making the investment Ethiopiansed while pioneering the investment.”
Midroc Gold during the first ten years of its operation produced 34,000 kg of gold and 10, 000 kg of silver and earned 466 million dollars in revenues.
With global prices for gold shooting up to over 1,113 dollars per ounce this week, the new gold mine, which stretches over 9.7 square kilometres, could well generate even larger sales for the sole corporation in the sector.
Source the Capital’s
ADDIS ABABA (ST) – Ethiopia is importing 80 percent of its petroleum need from Sudan, easing the horn of Africa country’s massive cost on oil imports, said Sudan’s Nile Petroleum Company (NPC).
Ethiopia spends over 50 % of its total export earnings to meet nation’s fuel demand and Sudan has now become the major source for the fact that it is only next door. According to Ethiopia petroleum enterprise, Ethiopia saves millions of dollars every year by importing from neighboring Sudan than using Saudi Arabia and the Gulf States.
Company director Khidir Al-Badri in a statement said that NPC is assigned to prepare country’s rich ethanol source for the use of fuel. The bio-fuel development and usage strategy is expected to make the oil company a leading stalk holder in the Ethiopian oil energy market.
According to the director, the company currently has opened fuel stations in the capital Addis Ababa and in other major cities of Ethiopia. He further said that Nile Petroleum Company has established partnership with German company for production of petroleum lubricants that are complying with the international standards to meet requirements of the Ethiopian market.
Ethiopia and Sudan have a number of agreements on cultural, social economic, security education, health and political matters. Many other cooperation agreements are also signed between the two neighbors to enhance the people-to-people ties, to harmonize the two people living along the common border and also aimed at fostering trans-boundary trade beyond their official trade.
The vast country imports agricultural products and livestock from Ethiopia. It actually is one of the biggest importing countries of Ethiopian products.
Sudan is now the largest oil producer in the sub-Saharan Africa, next to Nigeria and Angola. Recent figures indicate that the country currently produces over 400,000 barrels of crude oil every day.
According to oil and gas journal, Sudan holds proven reserves of 563 million barrels in 2006.more than twice with what was proven in 2001.With oil exploration efforts still underway the Sudanese energy minister estimates country’s total oil reserves at 5 billion barrels.
Long years of civil war in Sudan are said to have limited oil exploration efforts to only central and south central of the country. The oil industry is now pushing country’s gross domestic product. 70 % of its total revenue is a return from its oil exports.