Archive for April, 2011
ADDIS ABABA (Reuters) – Ethiopia’s income from horticulture exports is expected to more than triple to $550 million in five years due to rising investment, the head of a growers’ association said on Monday.
More than 90 companies, including foreign firms, have set up in the sector, where investors have taken up 1,600 hectares for flower production, and 1,200 for vegetables.
Tsegaye Abebe, head of the Ethiopian Horticultural Producers and Exporters Association said land leases are likely to double for flower production and expand by ten-fold for fruits and vegetables.
“With the current rate of requests, revenue from the export of horticultural products will reach $550 million by that (five years) time,” Tsegaye told Reuters.
The Horn of Africa nation earned $110 million from flower exports and $45 million from vegetables in 2010, and it projects that the earnings will rise to $195 million and $60 million respectively in 2011.
“Every year there is a progress of 25 to 30 percent (in export earnings),” Tsegaye said.
“From 2012 onwards, our forecast is more than 35 percent. Flower farms are expected to expand and new projects opened in different parts of the country.”
Government officials have identified the sector as key to diversification in an economy long dependent on coffee exports, which usually account for 60 percent of total earnings.
Tsegaye said investors are attracted by incentives from the government which include a five-year tax break, scrapping of import duties and access to financing from banks.
Ethiopia’s government has begun selling some basic food items directly to consumers after imposing price controls that created shortages in the marketplace. Long lines are becoming a regular sight in Addis Ababa as people queue at government shops for sugar and edible oil.
Tesfanesh Zewde stood in line for more than an hour in the hot sun this week to buy a liter of cooking oil and two kilograms of sugar for her family.
Tesfanesh says she was forced to leave her office during work hours and queue at a government-operated fruit stand for items that until recently had been easily available in neighborhood shops.
Sugar, cooking oil and other items disappeared from store shelves in January, after Ethiopia imposed price ceilings on 18 basic commodities. The controls were ordered about the time food riots in Tunisia triggered the political unrest that spread across North Africa and the Middle East.
Local media hailed state intervention in the market as a bold move to help cash-strapped consumers cope with soaring global food prices.
But shop owners rebelled. They complained the ceilings were too low to allow them a fair profit, and refused to sell at what they said was a loss.
When price-controlled items became scarce, the government accused suppliers of creating artificial shortages. Prime Minister Meles Zenawi last month announced that the market had effectively failed. He said the government would bypass retailers and sell directly to consumers until the business community accepted the lower prices.
“We plan to flood the market to overcome artificial shortages that have been created through inefficiencies in the market system. This includes artificial shortages in edible oil and sugar. We intend to import lots of edible oil and sugar and flood the market to ensure it is stabilized,” Zenawi said.
Ethiopia’s Trade and Industry Ministry was assigned the job of setting fair prices and profits for controlled items.
Efrem Woldesellassie, head of the ministry’s regulatory affairs department, says a government survey determined that the market failure was due to excessive profits charged by wholesalers and retailers. He said the ministry decided to limit profits to 4-6 percent on sugar and cooking oil.
“These people. They used to get big profits, even without paying any tax to the government, but this time they got a profit [of] 6 percent for sugar, 4 percent for palm oil. To my understanding, covering all costs, this profit margin is sufficient for them to survive,” Woldesellassie said.
Efrem says price controls and government sales outlets are a temporary measure until the market stabilizes. But market economists and business people argue any state interference in the buyer-seller relationship is ultimately counterproductive.
Ethiopian Chamber of Commerce President Eyessus Work Zafu says the price ceilings are another step in a long-term trend in Ethiopia toward greater state control over the economy.
“The government is becoming more and more preponderant in the economy in recent years, more than even 10 years ago. The long-term solution is not working on the assumption that government alone could bring about the balanced and rapid sustainable econ growth and development. It cannot. That paradigm has been tried for many years and failed.” Eyessus said.
Eyessus says he sees great danger in the state’s increasing tendency, when economic policies don’t work, to demonize the private sector.
“When the first price control measures were announced, we started reading in the paper a very serious malignant hate campaign, letters, articles in the papers, and many have been engaged in widening the split between consumers and merchants or business people. [The] government will have to take the initiative to normalize things, because if the government does not, the differences will widen, and the ultimate consequences could be serious,” Eyessus said.
Economists also question whether the price caps are helping to keep down rising costs. The government statistics agency reports an inflation rate of 14 percent in February, the first full month the caps were in effect.
And when the controls are inevitably removed, experts say prices are bound to jump to where they would have been anyway.
People waiting to purchase cooking oil and sugar this week wondered whether, given the rapid rise of global prices, Ethiopia might again see the day when local governments distribute food, as they did during the Communist era.
By Xan Rice (Guardian.co.uk)
On a continent not known for its intolerance of leaders who refuse to give up power, the Ivory Coast‘s Laurent Gbagbo now stands increasingly isolated. His last remaining ally, Angola, which provided key support during the early days of his “constitutional coup”, called for his immediate resignation on Thursday at a meeting of southern African leaders, sealing his isolation.
The response of African leaders to the intransigence of Gbagbo, who rejected the official UN-endorsed election results after the much-delayed poll on 28 November, appears to have taken him – and many observers – by surprise. Most of the impetus has come from his neighbours.
Just a day after Gbagbo was sworn in on 4 December, Ecowas, the regional bloc of 15 west African states, said it “strongly condemns any attempt to usurp the popular will of the people” of Ivory Coast. Two days later, it suspended the country’s membership, and called on Gbagbo to cede power to Alassane Ouattara, who comfortably won the presidential election.
The perceived importance of the poll in uniting Ivory Coast after the conflict in the early 2000s was one reason for the firm action. Equally crucial were fears that a new civil war could affect regional stability, as had happened before in inter-linked conflicts involving Ivory Coast, Liberia, Sierra Leone and Guinea.
But individual countries had their own motivations. Rinaldo Depagne, west Africa senior analyst at the International Crisis Group, said Burkina Faso was the country most concerned by Gbagbo’s stance. More than 2 million of its citizens live and work in Ivory Coast. If they all suddenly were forced to return home – anti-foreigner sentiment is high among Gbagbo’s hardline supporters – it would present huge challenges for President Blaise Compaoré, who had previously served as a mediator in Ivory Coast.
“He does not have the resources to feed all those mouths,” said Depagne.
The second country exerting strong influence, he said, was Nigeria, under President Goodluck Jonathan, who is eager to boost his country’s image and reputation on the world stage.
As per protocol, the Africa Union followed the lead of the regional bloc, and suspended Ivory Coast on 9 December, until Gbagbo ceded power. There were dissenters, however, most notably Angola, which sent representatives to observe Gbabgo’s swearing-in. While not openly supportive of Gbagbo, South Africa trod carefully, urging the need for reconciliation – and attracting much criticism in the process.
But even as mediation efforts were stepped up, Ecowas became bolder, declaring on Christmas Eve that it might use “legitimate force” if Gbagdo did note cede power. The Central Bank of West African States transferred authority over Ivorian funds to Ouattara.
Dimpho Motsamai, a researcher in the African conflict prevention programme at the Institute for Security Studies in South Africa, described Ecowas’s swift action as “momentous”. Besides seeking to prevent conflict, she said it was also designed to set a precedent in west Africa, where several elections were due to take place this year.
With all attempts at mediation failing – Gbagbo has repeatedly rejected offers of a “safe and dignified” exit – the African Union reaffirmed its recognition of Ouattara as the rightful leader of Ivory Coast in March. South Africa also called on Gbagbo to step aside last month before Angola did so too, at a meeting of the Southern African Development Community last week.
BY NEW BUSINESS ETHIOPIA REPORTER
Prime Minister Meles Zanawi this morning (April 2, 2011) laid the corner stone for the Millennium Dam construction, which Ethiopia is going to build on the Nile River 40 kilometers to the Sudanese border.
The ceremony is transmitted live on the national television. The government vow to fully finance the dam on the Nile River, which will cost 80 billion birr (around 4.8 billion US dollars at the prevailing exchange rates).
Briefing local and foreign press this week (March 30, 2011) at the Sheraton Addis, Minister of Water and Energy, Alemayehu Tegenu, noted that the government is forced to finance the project alone because Egypt has been engaged in a continuous campaign telling international creditors and donors not to finance Ethiopian projects on the Nile River.
“,,,Using its standing in multilateral financial institutions and the donor community, Egyptian leadership constantly campaigns to0 block any provision of loans and grants to Ethiopia intended to development projects cantered on the Nile,” the Minister said.
“Partly as a scheme to divert attention from its internal weakness, the leadership creates commotion whenever the issue of water resources development is raised. It is in the consequence of such underhanded machination why the Ethiopian government alone bears the cost of the Nile hydroelectric project, despite the well-known fact that ultimately the project benefits both the Sudan and Egypt,” he said.
Recalling that Ethiopia has fully invested a total of 10 billion birr (around 600 million US dollars at the current exchange rates) on dams Tekeze and Beles hydroelectric dams, which began operation last year, Alemayehu said: “Alas, Ethiopia’s resolve has now reached a point of no return”.
The hydroelectric project X, which is now renamed as ‘Millennium Dam on the Nile’, is expected to hold double the size of Lake Tana water (62 billion cubic meters). It will be constructed 20 to 40 kilometers at the east of Sudanese border and will generate 5,250 Mega watts electricity.
Referring to the study conducted on the project by foreign consultants, the Minister indicated that the project will not reduce the amount of water that is flowing to Egypt and the Sudan. He argued it rather enables the two countries to develop more land in irrigation as the Millennium Dam will regulate the water flow.
“…For instance, with only a slight reduction in the water levels of the Aswan Dam of Egypt, more than 7.5 billion cubic meters of water could be saved from evaporation. Moreover, through the implementation of Egypt’s own efficient and effective utilization o0f the Nile River project, up to eight billion cubic meters of water could be saved,” he said.
According to the minister Millennium Dam will be completed in 44 months and two of its units will start generation 700 mega watts of electricity at initial stage. He calls upon the Ethiopian people both the local and the diaspora to buy bonds for the construction of Millennium Dam and leave their mark on Ethiopia’s transformative development.